Advertising as Monopolization in the Information Age

CPI Antitrust Chronicle (April 2019)

7 Pages Posted: 22 Jul 2019

See all articles by Ramsi Woodcock

Ramsi Woodcock

University of Kentucky College of Law

Date Written: April 5, 2019

Abstract

Economists have long recognized that advertising has two main functions: to inform and to persuade. In the information age, the information function is obsolete, because consumers can get all the product information they want from a quick Google search. That makes virtually all advertising today purely persuasive in function. The courts have long recognized that purely persuasive advertising is anticompetitive, because it induces consumers to buy products that they do not really prefer, harming consumers and placing sellers of consumers’ preferred products at a competitive disadvantage. Antitrust enforcers must respond to the obsolescence of the information function of advertising by treating advertising as a per se illegal form of monopolization under the Sherman Act.

Keywords: advertising, marketing, promotion, antitrust, product differentiation, monopoly, persuasive, informative, information age, product reviews, electronic word of mouth, innovation, monopoly, consumer welfare, refusal to deal, trademark, intellectual property

JEL Classification: M30, M31, M37, M38, L40, L41, K21, D80, D18, Z10

Suggested Citation

Woodcock, Ramsi, Advertising as Monopolization in the Information Age (April 5, 2019). CPI Antitrust Chronicle (April 2019) . Available at SSRN: https://ssrn.com/abstract=3391841

Ramsi Woodcock (Contact Author)

University of Kentucky College of Law ( email )

620 S. Limestone Street
Lexington, KY 40506-0048
United States

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