Structural Separation: antitrust's tried-and-true weapon for monopolists who bottleneck markets

Back in 2017, a law student named Lena Khan made waves in policy circles with the publication of her massive, brilliant, game-changing 24,000-word article in the Yale Law Journal, Amazon's Antitrust Paradox, which revisited the entirety of post-Ronald-Reagan antitrust orthodoxy to show how it had allowed Amazon to become a brutal, harmful monopoly without any consequences from the regulators charged with ensuring competition in our markets.

Now, Khan (who is now a Columbia Law fellow) is back with The Separation of Platforms and Commerce -- clocking in at 61,000 words with footnotes! -- that describes the one-two punch of contemporary monopolism, in which Reagan-era deregulation enthusiasts took the brakes off of corporate conduct but said it would be OK because antitrust law would keep things from getting out of control, while Reagan-era antitrust "reformers" (led by Robert Bork and the Chicago School) dismantled antitrust).

As Khan points out, it's hard to find a theory of antitrust that monopolist-friendly courts and theoreticians will accept. Bork and his pals said that the only time that antitrust should kick in was when there was "consumer harm" in the form of higher prices in the short term (which effectively makes it impossible to enforce antitrust against free-to-use internet services, where there are no prices); but in last year's Ohio v. American Express Co, the Supremes ruled that in "two-sided markets" (like a credit card company, but also like, say, Ebay, Itunes, Amazon, etc), you had to show harm to both the buyers and the sellers, "effectively creating an insurmountable hurdle." And despite innovation's centrality to "dynamic efficiency and long-term welfare," "innovation harms seem to go unaddressed under the consumer welfare framework."

In the meantime, regulators have continued to allow megamergers between giant, market-dominating companies (NBC-Universal, Ticketmaster-Live Nation) on the condition that the new conglomerates accept "conduct remedies" -- rules barring them from doing nasty stuff with their new position, like using Ticketmaster's dominance to get acts to book Live Nation venues, or using Live Nation's dominance to force acts to sell their tickets through Ticketmaster, but the agencies that are supposed to monitor this activity are not structured to do so, and find it nearly impossible to keep up with abuses, or mete out punishments when they do manage to catch an abuse ("a highly enfeebled and impoverished set of tools for confronting dominant intermediaries in network industries"). Read the rest