Big Tech’s Buying Spree and the Failed Ideology of Competition Law: The Example of Facebook

61 Pages Posted: 30 Dec 2020 Last revised: 3 Mar 2021

See all articles by Mark Glick

Mark Glick

University of Utah - College of Social & Behavioral Sciences - Department of Economics; Parsons Behle & Latimer

Catherine Ruetschlin

University of Utah

Darren Bush

University of Houston Law Center

Date Written: December 11, 2020

Abstract

Big Tech is on a buying spree. Companies like Apple, Google, Facebook, and Amazon are gobbling up smaller companies at an unprecedented pace. But the law of competition isn’t ready for Big Tech’s endless appetite. Today’s antitrust law is controlled by the Chicago School of law and economics. The Chicago School’s ideological frame is toothless when a dominant firm purchases a start-up that could be a future competitor. Under the “potential competition” doctrine, the Chicago School is impotent to face the anti-competitive thread of big tech.

This Article shows how the Chicago School of law and economics hobbles antitrust law and policy on potential competition mergers. It illustrates this problem with a close study of public information regarding Facebook. The article assembles a database of Facebook’s completed acquisitions—ninety in all— and shows how the “potential competition” doctrine renders competition law entirely impotent to protect the consumer interest in this space. What is true for Facebook applies to the market generally. While we offer no opinion on any particular merger, protecting the consumer against the ravenous appetite of Big Tech requires rejecting the potential competition test and adopting the empirically tractable structural approach to potential competition mergers.

Suggested Citation

Glick, Mark A. and Ruetschlin, Catherine and Bush, Darren, Big Tech’s Buying Spree and the Failed Ideology of Competition Law: The Example of Facebook (December 11, 2020). Hastings Law Journal, Forthcoming, U of Houston Law Center No. 2020-A-42, Available at SSRN: https://ssrn.com/abstract=3746728 or http://dx.doi.org/10.2139/ssrn.3746728

Mark A. Glick

University of Utah - College of Social & Behavioral Sciences - Department of Economics ( email )

1645 Central Campus Dr.
Salt Lake City, UT 84112
United States

Parsons Behle & Latimer

United States

Catherine Ruetschlin

University of Utah ( email )

1645 Central Campus Dr.
Salt Lake City, UT 84112
United States

HOME PAGE: http://https://economics.utah.edu/

Darren Bush (Contact Author)

University of Houston Law Center ( email )

4604 Calhoun Road
Houston, TX 77204-6060
United States
713.743.3346 (Phone)

HOME PAGE: http://www.law.uh.edu/faculty/main.asp?PID=1365

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