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> Bork’s consumer-based theory had many flaws. One of the most obvious was that it did not anticipate the rise of online companies such as Facebook and Google,

by gist 7y ago

> Bork’s consumer-based theory had many flaws. One of the most obvious was that it did not anticipate the rise of online companies such as Facebook and Google, which offer their products to consumers for free. Not entirely true [1]. For one thing there were close and similar models at that time. For example yellow pages were given out for free and advertising was sold. Second there were (and still are) many local newspapers that make money solely off of advertising. And along those lines I would argue that even paid newspapers are close. Why? They give a great deal of value for the small amount that is paid in exchange for viewing advertising. Ditto for tv broadcasts the content is free (as long as you have a tv set) and they make money off advertising. [1] And I wouldn't call something that in no way could have anticipated the future in the way it rolled out 'a flaw' anyway.

asr 7y ago
Not only is this not "entirely" true--it's not at all true. The author is disguising a (hotly contested) opinion/minority position as a well-accepted fact. The mainstream position in the antitrust world, even among liberals (at least until recently), is that Bork's theory is generally right. (For example, Barack Obama's antitrust appointees would generally have agreed with it.) What Bork did was bring economic models (i.e. math) to bear in antitrust analysis. Before Bork, antitrust law was basically run on judges' intuition about whether business practices were good or bad. After Bork, there is more structure to the analysis--if we are trying to figure out whether things are good or bad for consumer prices, there's an economic framework we can use so that we're not just making random guesses. You can quibble with the math, but it seems crazy to go back to a world where we just say "big mergers are bad." Some mergers are bad, sure. But some are not. For example, I have yet to hear anyone explain why Amazon's purchase of Whole Foods is bad for anyone other than other grocery stores (who have to try to compete as Amazon figures out grocery delivery).

by gist 7y ago

asr 7y ago

Not only is this not "entirely" true--it's not at all true. The author is disguising a (hotly contested) opinion/minority position as a well-accepted fact. The mainstream position in the antitrust world, even among liberals (at least until recently), is that Bork's theory is generally right. (For example, Barack Obama's antitrust appointees would generally have agreed with it.) What Bork did was bring economic models (i.e. math) to bear in antitrust analysis. Before Bork, antitrust law was basically run on judges' intuition about whether business practices were good or bad. After Bork, there is more structure to the analysis--if we are trying to figure out whether things are good or bad for consumer prices, there's an economic framework we can use so that we're not just making random guesses. You can quibble with the math, but it seems crazy to go back to a world where we just say "big mergers are bad." Some mergers are bad, sure. But some are not. For example, I have yet to hear anyone explain why Amazon's purchase of Whole Foods is bad for anyone other than other grocery stores (who have to try to compete as Amazon figures out grocery delivery).