The new definition of antitrust

Updating monopoly law for the age of aggregators

I’d push-back on the idea of qualifying open source licenses according to licensees’ revenue magnitude. After all…

Antitrust qualification needs updating. A more modern definition could start something like this…

“Control of supply, demand, data, and/or any other resource — whether tangible or intangible, acquired organically or inorgancially — that creates or has the potential to create artificial scarcity and/or disequilibrium.”

Per that definition, note that Facebook’s acquisition of Instagram would’ve never been passed, due to the potential for consolidation of supply (ad inventory), demand (attention), and data. Regulators approved that Instagram acquisition because they mischaracterized it as a mere redundancy in Facebook’s social media niche, but even as such the gross and net incremental resources between the two combine companies represented substantial horizontal and vertical integration.

Given that potential, the DOJ would not have needed to block the Facebook/Instagram deal. Instead, they could have provisionally approved the deal, subjecting Facebook to regular regulatory reviews to assure ongoing compliance with the “artificial scarcity and disequilibrium” clause.

Another example per that definition: Many of Amazon’s horizontal and vertical expansion efforts would’ve been nipped-in-the-bud. Vertically, they would’ve never been allowed to manufacture and distribute private-label, proprietary goods and services like Amazon Prime batteries — especially without a Chinese Wall to thwart their platform’s “agency bias.” Horizontally, they would’ve never been allowed to consolidate competitors like Zappos,, etc. In contrast, their acquisition of Kiva Systems, which upped the ante for fulfillment logistics, would’ve absolutely passed.

This even applies to Apple, whose vertical integration of “Services” has created artificial scarcity with its App Store, which locks developers into [often] unsustainable, one-size-fits-all, take-it-or-leave-it revenue-sharing economics — not to mention platform risk from Apple’s principal-agent conflict of interest. That’s abuse of platform power in an already vulnerable, duopoly market. On the other hand, Apple’s vertical integration of devices — from silicon to sales — would not qualify as monopolistic behavior, because it does not have the potential to create artificial scarcity or disequilibrium, given the vibrant, competitive marketplace.

I don’t want to trivialize this, because antitrust is (and always has been) incredibly complex. Obviously, far more than this facile proposed definition would have to bolster new antitrust legislation. I suppose that’s the point I’m trying to make in the first place: This is necessarily far more of an art than science.

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