Algorithmic Antitrust (Economic Analysis of Law in European Legal Scholarship, 12)

Description

Algorithms are ubiquitous in our daily lives. They affect the way we shop, interact, and make exchanges on the marketplace. In this regard, algorithms can also shape competition on the marketplace. Companies employ algorithms as technologically innovative tools in an effort to edge out competitors. Antitrust agencies have increasingly recognized the competitive benefits, but also competitive risks that algorithms entail. Over the last few years, many algorithm-driven companies in the digital economy have been investigated, prosecuted and fined, mostly for allegedly unfair algorithm design. Legislative proposals aim at regulating the way algorithms shape competition. Consequently, a so-called “algorithmic antitrust” theory and practice have also emerged. This book provides a more innovation-driven perspective on the way antitrust agencies should approach algorithmic antitrust.  To date, the analysis of algorithmic antitrust has predominantly been shaped by pessimistic approaches to the risks of algorithms on the competitive environment. With the benefit of the lessons learned over the last few years, this book assesses whether these risks have actually materialized and whether antitrust laws need to be adapted accordingly. Effective algorithmic antitrust requires to adequately assess the pro- and anti-competitive effects of algorithms on the basis of concrete evidence and innovation-related concerns. With a particular emphasis on the European perspective, this book brings together experts and scrutinizes on the implications of algorithmic antitrust for regulation and innovation.  Contents Prologue: Algorithmic Antitrust-A Primer 1 Introduction 2 What Are Algorithms? 3 Are Algorithms Inherently Secret? 4 ``Algorithmic Antitrust´´: Competition Policy for Algorithm-Driven Decisions 5 Is The Digital Hand Malicious? 6 Algorithmic Antitrust: A Primer 7 Presentation of the Book References Algorithmic Antitrust: A Critical Overview 1 Context 2 Some First Principles 2.1 What Is an Algorithm? 2.2 The Economics 2.3 Multisided Markets 2.4 Big Data 3 Dominance 4 Algorithmic Pricing and Collusion 4.1 Algorithmic Pricing 4.2 Machine-Based Collusion 4.3 Why Machine-Based Algorithmic Collusion Is Not a Problem 5 Mergers 5.1 Killer Acquisitions 5.2 Conglomerate Mergers 5.3 Merger Reforms 6 Concluding Observations References Algorithmic Antitrust and Consumer Choice 1 Introduction 2 Competition Law in Digital Markets 2.1 Algorithm Input 2.2 Consumer Benefits 2.3 Antitrust Issues 2.3.1 Leverage and Nudging Strategies 2.3.1.1 AI and Data 2.3.1.2 Nudge and AI 2.3.2 Consumer Choice 2.3.3 Price Algorithms 2.3.4 Tacit Collusion and Personalized Pricing 3 The Google Shopping Case: Leverage, AI, and Nudge 4 Conclusion References Algorithms, Big Data, and Merger Control 1 Introduction 2 Horizonal Unilateral Effects 2.1 Mergers Between Algorithm/Analytics Software Providers 2.2 Platform Mergers/Acquisitions 2.2.1 Analysing a Merger´s Impact on the ``Paying´´ Side of a Market 2.2.2 Analysing a Merger´s Impact on the ``Free´´ Side of the Market 2.2.2.1 Privacy as a Parameter of Competition? 2.2.2.2 Degrading the Quality of the Algorithm 2.2.2.3 Use of Data to Exploit Customers 3 Non-Horizontal Foreclosure 3.1 Interoperability 3.2 Accumulation of Data 4 Looking Forward: Dynamic Theories of Harm 5 Conclusion References Reasons to be Cheerful: The Benevolent Market Power of Decentralised Blockchains 1 Introduction 2 Clarifying Terminology 3 The Nature of a Permission-Less Blockchain´s Role Within a Market 3.1 A Platform 3.2 Pricing 3.3 Control 4 Reasons to be Cheerful 4.1 Reducing Transaction Costs and Expanding Output 4.2 Clashing with the Tech Titans 4.2.1 Tokenisation 4.2.2 Creating a Decentralised Alternative to Digital Platforms 4.2.3 The Benevolent Market Power of a Decentralised Permission-Less Blockchain 4.2.4 User Control of Their Data 4.3 Innovative Remedies 4.4 Ways of Working 5 Conclusion References Can Antitrust Trust Blockchain? 1 Introduction 2 Distributed Ledger Technologies Toolkit 2.1 Blockchain Origin 2.2 Blockchains 2.2.1 Bitcoin Blockchain 2.2.2 Public, Private and Permissioned Blockchains 2.2.3 Smart Contracts and Ethereum 2.2.4 Blockchain Tokens 2.2.5 Recent Developments in DLT 3 DLT and for Competition 3.1 From Centralized to Decentralized Platforms 3.1.1 The Internet Centralization 3.1.2 Is It the Time for a Blockchain Era? 3.1.3 Blockchain Standards 3.2 DLT as Antitrust Tool 3.3 Conclusions 4 Do Blockchain Raise Antitrust Concerns? 4.1 Anti-trust in Trustless Technologies 4.2 What Kind of Entity Is Blockchain? 4.3 Forms of Collusion 4.3.1 Private and Consortium Blockchains 4.3.2 Public Blockchain 4.3.3 United American Corp v. Bitmain 4.3.4 Delegate Proof of Stake (DPS) 4.4 Blockchain Concentration 4.4.1 ASICs 4.4.2 Vertical Concentration 4.5 Exclusionary Conduct 5 Conclusions References The Technology Innovation Time Gap in Competition Law Enforcement: Assessing the European Commission´s Approach 1 Introduction 2 Why The Vertical Block Exemption and Vertical Guidelines are Inadequate to Respond to the Technology Time Gap 3 The Commission´s New Tools for Bridging the Technological Time Gap 4 Conclusion References Epilogue: Algorithmic Antitrust-A Questioning References