The EU would have sued MySpace, given time
21 Jul 2018 Leave a comment
in applied price theory, entrepreneurship, industrial organisation, law and economics, survivor principle Tags: competition law
Demsetz on why anti-competitive mergers are rare
10 Jul 2018 Leave a comment
in applied price theory, economics of regulation, entrepreneurship, industrial organisation, law and economics, survivor principle Tags: competition law, Harold Demsetz
Interesting point by Richard Epstein
02 Jul 2018 Leave a comment
in applied price theory, discrimination, economic history, economics of regulation, gender, labour economics, law and economics, Public Choice, rentseeking, Richard Epstein, transport economics Tags: competition law, creative destruction, racial discrimination
Monopolistic demons of recent yesteryear slayed by the Guardian
26 Jun 2018 Leave a comment
in economic history, industrial organisation, survivor principle Tags: competition law, creative destruction
Net neutrality explained in the spirit of Schumpeter
26 May 2018 Leave a comment
in applied price theory, Austrian economics, economics of regulation, entrepreneurship, industrial organisation, Joseph Schumpeter, law and economics, property rights, Public Choice, rentseeking, survivor principle Tags: antitrust economics, competition law, creative destruction
Remember MySpace?
15 Apr 2018 Leave a comment
in entrepreneurship, industrial organisation, survivor principle Tags: competition law, creative destruction
HT Lorenzo Warby
Conclusive evidence that Amazon takeover is pro-competitive
27 Jun 2017 Leave a comment
in applied price theory, financial economics, industrial organisation, law and economics Tags: antitrust economics, competition law
Failing firm defence for legacy media mergers
03 May 2017 Leave a comment
in industrial organisation, law and economics, politics - New Zealand Tags: anti-trust law, commerce commission, competition law, creative destruction, failing firm defence, legacy media
There is a large literature on the failing firm defence to merger law. I wrote an Australian Law Journal article about that defence many years ago.
The essence of the argument is that when a firm is to fail, the choice is between a high cost single plant monopoly and a lower cost multi-plant monopoly that absorbs the asset failed firm. For today’s purposes, that would be newspapers that would otherwise close but for the now blocked Fairfax/NZME media merger
Some think allowing mergers of market leaders with failing firms is good for competition.
To get a merger clearance on the basis of the failing firm defence, the merging companies must provide sufficient, compelling evidence that the failing firm will inevitably leave the market without the merger and there is no less anti-competitive alternative.
The basic rationale behind the doctrine is that since the failing firm would have left the market anyway due to its financial collapse, any harm to competition caused by the loss of an independent market player would arise regardless of the merger. Allowing the merger saves scrapping the assets of the failed firm.
Posner and Easterbrook described the failing firm defence as one of the most pernicious doctrines to ever arise in antitrust law. They did not elaborate much.
Utopia, you are standing in it! 
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