Welcome to this month’s run-down of all things antitrust.
We recently saw major verdicts in the Illumina/GRAIL and Axon cases, with the former posing a potential tragedy for American lives, and the latter putting the FTC’s very future in danger. Looking across the pond, we also witnessed the European Commission take a harder line on purported exclusionary conduct by major firms, with a more positive development in Britain as the UK’s entry into the CPTPP means good things for world trade and challenging the Chinese government’s dubious market-distorting conduct. From our end, I was pleased to finally launch the treatise on trade liberalization, competitive markets and property rights that I co-authored with Shanker Singham. My Mercatus colleague Liya Palagashvili and I also filed a public comment that critiques the FTC’s proposed near-blanket ban on noncompete clauses in employment agreements.
Public Comment To The FTC
In our public comment to the FTC on their notice of proposed rulemaking on noncompete clauses, which seeks to ban them entirely, Liya Palagashvili and I argue that the agency should consider an alternative consumer protection rule that would require firms to make ex ante disclosures of their noncompete clauses to prospective employees. We also explain that the notice fails to address the substantial economic arguments in favor of many noncompetes, and ignores the federalism arguments for allowing noncompete policy to continue to develop at the state level.
Book Release: Singham and Abbott, Trade, Competition and Domestic Regulatory Policy (Routledge, 2023)
On March 29, my new book (coauthored with trade and competition scholar Shanker Singham) was released by Routledge Press (see here). It explores issues that arise at the intersection of competition, international trade, intellectual property, and regulatory law. Private property rights protection and consumer welfare enhancement serve as overarching organizing principles in discussing these legal regimes. Singham and I explain how anticompetitive market distortions imposed by governments limit the ability of these laws to promote economic innovation and consumer welfare. We also propose remedies to deal with these distortions since they can’t generally be blocked under existing antitrust and trade law provisions. For instance, bilateral and plurilateral international trade agreements could be used to establish sanctions against anticompetitive trade agreements. A publisher’s book summary follows:
“Trade, Competition and Domestic Regulatory Policy presents a unique combination of analysis of both international trade and investment policies, and competition and regulatory policies. Increasingly, policymakers, businesses and the law and economics professions need to better understand how changes and policy developments in international trade and competition developed and how their interaction affects global business.
In addition to providing a comprehensive analysis of the attempts of international trade theory and practice to deal with tariffs, non-tariff barriers, market distortions and failures to protect various kinds of property rights, this book contains a detailed treatment of how property rights protection, including intangible property rights, is a critical element of ensuring open trade and competitive markets. It examines how these rights have developed over time, and how they have been integrated into trade and competition policy.
This book will be of significant interest to students of international business, professors of economics, law and business, and policymakers at the intersection of trade, investment, competition and property rights.”
Articles
What the European Commission’s More Interventionist Approach to Exclusionary Abuses Could Mean for EU Courts and for U.S. States | Truth on the Market
Alden Abbott, 5 April 2023
The European Commission recently announced a more interventionist approach to punishing exclusionary firm conduct by penalizing “abuses of dominance,” and U.S. state governments that are contemplating similar ideas are likely to be taking notes. In this commentary, I argue that such aggressive moves threaten economically unsound enforcement of single-firm conduct, and impose harmful uncertainty for business in the near-term even if courts eventually constrain the regulators.
When Bad Antitrust Costs Lives: The Illumina/GRAIL Tragedy | Truth on the Market
Alden Abbott, 4 April 2023
In this commentary, I argue that the FTC’s recent decision to order DNA-sequencing provider Illumina Inc. to divest multi-cancer early detection test producer GRAIL Inc. sacrifices clear and substantial near-term welfare benefits to patients in need of life-saving cancer tests based on spurious theoretical claims that the vertical merger would stifle competition and innovation.
The UK joining CPTPP is a seismic moment for the global trading system | CapX
Alden Abbott, Shanker Singham & Peter Allgeier, 31 March 2023
In this commentary, we welcome the UK’s entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The move will not only bring dynamic long-term benefits to the British economy, but will also help in achieving western nations’ foreign policy objective of challenging China’s market distortions that are imperiling the global trade system.