District of Columbia
The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings
Consumer-facing internet platforms rely on experiment-based behavioral economics to design and entrench their products; when they achieve dominance and begin abusing their positions in the market, these firms rely on neoclassical economic arguments such as, "competition is only a click away," to defend their illegal conduct. The debate over the adequacy of the consumer welfare standard to evaluate alleged abuses of dominance by large consumer-facing internet firms is a red herring. Neither side of the debate appears to have hands-on experience in designing these products. The consumer welfare framework is not the problem; the problem is the reliance on outdated economic tools to detect loss of welfare. It is truly an exciting time for enforcement agencies. The same dynamics that have allowed large digital firms to paralyze enforcement agencies with fear of type 1 errors can now be exploited by enforcers themselves, creating a Moore's Law for agencies grappling with the speed and sophistication of digital markets. Tools such as Mechanical Turk offer a "crystal ball" into the user behavior on digital platforms, enabling enforcers to detect previously invisible examples of high switching costs, increasing prices, and general welfare reduction. Such tools provide the ability to test and iterate upon remedies in a petri dish before releasing them to the market. The attached papers offer a sample of both applied examples and general discussion of the advantage agencies can enjoy by embracing the techniques and ideas of technologists to restore competitiveness within the technology markets.