Discriminatory Antitrust in the Realm of Potential and Nascent Competition

CPI Antitrust Chronicle, February 2022, No. 1 (2022)

George Mason Law & Economics Research Paper No. 22-04

11 Pages Posted: 1 Mar 2022 Last revised: 7 Mar 2022

See all articles by John M. Yun

John M. Yun

George Mason University - Antonin Scalia Law School, Faculty

Date Written: February 28, 2022

Abstract

How should competition agencies and courts consider acquisitions by “big tech” (that is, Amazon, Apple, Google, Facebook, and Microsoft) of smaller, startup companies? There are several competing visions. On one end of the spectrum is the view that these companies have strong incentives to engage in anticompetitive acquisitions of nascent and potential competitors; consequently, agencies and courts should implement strong presumptions of harm. On the other end of the spectrum is the view that there is little reason to change current merger presumptions or to treat acquisitions by big tech companies differently than “medium tech” or “small tech” companies.

To inform the issue, this Article reviews a recent FTC report on acquisitions by the largest technology platforms. While the report is largely descriptive using aggregated data and, therefore, offers modest insights, there is little in the findings that raise alarms. As a point of contrast, the Article examines several recent acquisitions by Spotify, a technology company that sits outside of the “big tech” classification. Specifically, Spotify has expanded beyond its core music streaming business through a series of startup acquisitions—namely, into podcasts and audiobooks. Interestingly, these acquisitions have not raised concerns from agencies, practitioners, or academics. Consequently, if Spotify’s recent series of acquisitions can reasonably be considered procompetitive, then why is the same not true for Apple and Amazon, who are chasing Spotify in music streaming services and podcasts? Administering antitrust laws based on the mere identity or market capitalization of a company—rather than on specific market factors—is engaging in what could be called “discriminatory antitrust.”

Keywords: antitrust, potential competition, nascent competition, killer acquisitions, big tech, startups, Spotify, Clayton Act, Section 7, mergers, acquisitions, FTC, Federal Trade Commission, venture capital funding, entry

JEL Classification: K2, K20, K21

Suggested Citation

Yun, John M., Discriminatory Antitrust in the Realm of Potential and Nascent Competition (February 28, 2022). CPI Antitrust Chronicle, February 2022, No. 1 (2022), George Mason Law & Economics Research Paper No. 22-04, Available at SSRN: https://ssrn.com/abstract=4045644 or http://dx.doi.org/10.2139/ssrn.4045644

John M. Yun (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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