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Sunday, September 9, 2018

NY Times: Is Yale Law Student Note ('Amazon’s Antitrust Paradox') Seminal Reframing Of Monopoly Law Or 'Hipster Antitrust'?

Amazon logo (2018)New York Times, Amazon’s Antitrust Antagonist Has a Breakthrough Idea:

With a single scholarly article, Lina Khan, 29, has reframed decades of monopoly law.

Amazon has more revenue than Facebook, Google and Twitter put together, but it has largely escaped sustained examination. That is beginning to change, and one significant reason is Ms. Khan.

In early 2017, when she was an unknown law student, Ms. Khan published Amazon’s Antitrust Paradox [126 Yale L.J. 710 (2017)] in the Yale Law Journal.  Her argument went against a consensus in antitrust circles that dates back to the 1970s — the moment when regulation was redefined to focus on consumer welfare, which is to say price. Since Amazon is renowned for its cut-rate deals, it would seem safe from federal intervention.

Ms. Khan disagreed. Over 93 heavily footnoted pages, she presented the case that the company should not get a pass on anticompetitive behavior just because it makes customers happy. Once-robust monopoly laws have been marginalized, Ms. Khan wrote, and consequently Amazon is amassing structural power that lets it exert increasing control over many parts of the economy. ...

The paper got 146,255 hits, a runaway best-seller in the world of legal treatises. That popularity has rocked the antitrust establishment, and is making an unlikely celebrity of Ms. Khan in the corridors of Washington.

She has her own critics now: Several leading scholars have found fault with Ms. Khan’s proposals to revive and expand antitrust, and some have tried to dismiss her paper with the mocking label “Hipster Antitrust.” Unwilling or perhaps unable to accept that a woman wrote a breakthrough legal text, they keep talking about bearded dudes.

Ms. Khan was born in London to Pakistani parents who emigrated to the United States when she was 11. She is now 29, an Amazon critic whose Amazon account is largely inactive, newly married to a Texas doctor who uses his Amazon Prime account all the time. Ms. Khan was supposed to move this summer to Los Angeles, where she had a clerkship with Stephen Reinhardt, the Ninth Circuit Court of Appeals judge and liberal icon, but he suddenly died in March. Instead, Ms. Khan is set to start a fellowship at Columbia this fall, and is considering other projects as well. There is no shortage of parties that want her advice on how to reckon with Big Tech. ...

Rohit Chopra, a new Democratic commissioner at the Federal Trade Commission, pulled her in as a temporary adviser in July, at a time when urgent questions about privacy, data, competition and antitrust were suddenly in the air. The F.T.C. is holding a series of hearings this fall, the first of their type since 1995, on whether a changing economy requires changing enforcement attitudes.

The hearings will begin on Sept. 13 at Georgetown University Law Center. Two panels will debate whether antitrust should keep its narrow focus or, as Ms. Khan urges, expand its range. “Ideas and assumptions that it was heretical to question are now openly being contested,” she said. “We’re finally beginning to examine how antitrust laws, which were rooted in deep suspicion of concentrated private power, now often promote it.”

Genuinely original voices are rare in Washington policy circles, and Mr. Chopra is pleased to have Ms. Khan in his camp. “It’s rare to come across a legal prodigy like Lina Khan,” he said. “Nothing about her career is typical. You don’t see many law students publish groundbreaking legal research, or research that had such a deep impact so quickly.”

Ida Tarbell, the journalist whose investigation of Standard Oil helped bring about its breakup, wrote this about John D. Rockefeller in 1905:

It takes time to crush men who are pursuing legitimate trade. But one of Mr. Rockefeller’s most impressive characteristics is patience. … He was like a general who, besieging a city surrounded by fortified hills, views from a balloon the whole great field, and sees how, this point taken, that must fall; this hill reached, that fort is commanded. And nothing was too small: the corner grocery in Browntown, the humble refining still on Oil Creek, the shortest private pipeline. Nothing, for little things grow.

When Ms. Khan read that, she thought: Jeff Bezos.

Her Yale Law Journal paper argued that monopoly regulators who focus on consumer prices are thinking too short-term. In Ms. Khan’s view, a company like Amazon — one that sells things, competes against others selling things, and owns the platform where the deals are done — has an inherent advantage that undermines fair competition. ...

“It’s one thing to say that antitrust enforcement has gotten far too weak,” said Daniel Crane, a University of Michigan scholar who doesn’t agree with Ms. Khan but credits her with opening up a much-needed debate. “It’s a bridge much further to say we should go back to the populist goal of leveling playing fields and checking ‘bigness.’ ” As Mr. Crane writes in a forthcoming law review article [Antitrust’s Unconventional Politics, 117 Mich. L. Rev. ___ (2018)]: “Antitrust law stands at its most fluid and negotiable moment in a generation.”

The resistance is fierce and prominent. Herbert Hovenkamp, an antitrust expert at the University of Pennsylvania Law School, wrote that if companies like Amazon are targeted simply because their low prices hurt competitors, we might “quickly drive the economy back into the Stone Age, imposing hysterical costs on everyone” [Antitrust Policy and Inequality of Wealth]. ...

The battle for intellectual supremacy takes place less these days in learned journals and more on social media, where tongues are sharp and branding is all. This is not Ms. Khan’s strong suit. She is always polite, even on Twitter. One consequence is that she didn’t give much thought about what to call the movement to reboot antitrust. Neither did anyone else.

That presented an opening for the reformers’ critics, who have tried with a limited degree of success to popularize the term “Hipster Antitrust.” Konstantin Medvedovsky, an antitrust lawyer in New York, came up with the label last summer in a tweet that was responding to a tweet that was responding to a tweet by Ms. Khan.

“Antitrust Hipsterism,” he wrote. “Everything old is cool again.”

Mr. Medvedovsky, who calls Ms. Khan’s article “the face of this movement,” said the term was designed to be “playful rather than pejorative.”

Admirers of Ms. Khan and her fellow reformers have sometimes called them the New Brandeis School or the New Brandeisians, after Louis Brandeis, the Progressive Era foe of big business. As brands go, these are somewhat less catchy than “Hipster Antitrust.”

The April issue of the journal Antitrust Chronicle, edited by Mr. Medvedovsky, features a drawing of a bearded man on the cover right above the words “Hipster Antitrust.” In the middle of an article by Philip Marsden, a professor of competition law and economics at the College of Europe in Bruges, there’s a photograph of a bearded man taking a selfie next to the chapter heading “Battle of the Beards.” It is perhaps relevant that only one of the 12 authors or experts in the issue is female. ...

Ms. Khan was not the first to criticize Amazon, and she said the company was not really her target anyway. “Amazon is not the problem — the state of the law is the problem, and Amazon depicts that in an elegant way,” she said.

From Amazon’s point of view, however, it is a problem indeed that Ms. Khan concludes in the Yale paper that regulating parts of the company like a utility “could make sense.” She also said it “could make sense” to treat Amazon’s e-commerce operation like a bridge, highway, port, power grid or telephone network — all of which are required to allow access to their infrastructure on a nondiscriminatory basis. ...

Politico just named her one of the Politico 50, its annual list of the people driving the ideas driving politics. Balancing the attention and the achievement, the expectations and the demands, is difficult, perhaps impossible. “I don’t think of my work in grandiose terms. I feel an urgency but I’m also wary of hubris,” Ms. Khan said. “Nobody has been expecting this to succeed. I’m awed by the challenge.”

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Comments

If Google, Amazon etc are not monopolies then what exactly is?

Posted by: Mike Livingston | Sep 9, 2018 2:19:06 PM

Mike, In what area is Amazon a monopoly? There are hundreds upon hundreds of on-line shopping sites unaffiliated with Amazon. There is virtually nothing that Amazon sells that cannot be purchased elsewhere, and often for the same amount or less.

Posted by: D. Palmer | Sep 10, 2018 7:45:56 AM

If Amazon is a monopoly, what is Walmart?

Posted by: Michael Gordon | Sep 10, 2018 9:16:08 AM

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