Thibault Schrepel (Vrije Universiteit Amsterdam) and Teodora Groza (Sciences Po Paris) have posted “Computing ‘Innovation Competition’” on SSRN. Here is the abstract:

The digitalization of markets is shifting competitive dynamics away from price-based strategies toward ‘innovation competition,’ where companies compete through new technologies. While traditional antitrust frameworks often struggle to capture the complexities of innovation-driven markets, we show that ‘computational antitrust’ provides opportunities for improvement. Drawing on a review of the latest literature, case law, and cutting-edge computational methods, we conclude with an overview of current and potential solutions to give innovation a central role in antitrust analysis.

Michael Denga (Martin-Luther-University Halle-Wittenberg) and Lars Hornuf (Technische U Dresden) have posted “Data, Artificial Intelligence, and Platforms as a Triple Challenge for Economic Regulation” on SSRN. Here is the abstract:

The digital single market is the site of major social and technological upheavals. Big data, artificial intelligence, and platforms pose fundamental challenges for legislators and global businesses alike. This chapter provides an overview of the salient features, challenges, and research gaps in the analysis and regulation of the digital single market, setting the stage for the in-depth contributions in this volume.

Barak Orbach (U Arizona) and Eli Orbach (Phillips Exeter Academy) have posted “The US Is Not Prepared for the AI Electricity Demand Shock” on SSRN. Here is the abstract:

The United States power grid is increasingly strained by the surging electricity demand driven by the AI boom. Efforts to modernize the power infrastructure are unlikely to keep pace with the rising demand in the coming years. We explore why competition in AI markets may create an electricity demand shock, examine the associated social costs, and offer several policy recommendations.

Robin Feldman (UC Law) and Caroline A. Yuen (UC Law) have posted “AI and Antitrust: “The Algorithm Made Me Do It”” on SSRN. Here is the abstract:

As the dawn of AI rises rapidly, competition authorities may wish to contemplate the potential for hazy days ahead. Undoubtedly, AI offers exciting possibilities for society-from sparking innovation, to enhancing efficiency, to easing life’s burdens, to leveling the playing field for non-native speakers. Nevertheless, the future of AI may bring more than the opportunity to bask in its glow. As AI becomes a more accurate and skillful tool, it could conceivably lead to more anticompetitive hub-and-spokes arrangements that current competition laws may not be fully equipped to evaluate. Using the pharmaceutical supply chain as an example of an industry with concentrated intermediaries, this article discusses how such structures are tacit collusion, and how AI is likely to exacerbate the issue.

Lazar Radic (IE U IE Law) has posted “What is the Relevant Product Market in AI?” on SSRN. Here is the abstract:

AI has taken the world by storm, and competition law is no exception. Policymakers, academics, and commentators are struggling to make sense of how to apply competition law principles to burgeoning AI markets. The question is spurred by an impending sense that inaction is likely to lead to monopolistic outcomes that will later be impossible to revert. What is feared is that AI will become dominated by a few large technology companies and, more spuriously, that these will be the same companies that already control vast swathes of the so-called digital sphere. In other words: it will make big tech even bigger.
One difficulty with this narrative, however, is that, strictly speaking, there is no such thing as an “AI market” because AI is not a unitary, monolithic technology. In this chapter, we argue that the first step to ensuring that antitrust law stays relevant in the age of AI is developing a principled approach to defining AI relevant markets; one that is legally, economically, and technologically sound. We suggest how this can be achieved by grasping the internal heterogeneity of AI and by understanding what makes AI similar to Human Intelligence powered tasks, thus eschewing simplistic narratives about AI’s supposed ubiquity and uniqueness that are bound to result in both the over and the under-estimation of relevant product market definition in antitrust law.

Maurice E. Stucke (U Tennessee Law) and Ariel Ezrachi (Oxford Law) have posted “Antitrust & AI Supply Chains” on SSRN. Here is the abstract:

Will AI technology disrupt the current Big Tech Barons, foster competition, and ensure future disruptive innovation that improves our well-being? Or might the technology help a few ecosystems become even more powerful?

To explore this issue, our paper outlines the current digital market dynamics that lead to winner-take-most-or-all ecosystems. After examining the emerging AI foundation model supply chain, we consider several potential antitrust risks that may emerge should certain layers of the supply chain become concentrated and firms extend their power across layers. But the anticompetitive harms are not inevitable, as several countervailing factors might lessen or prevent these antitrust risks. We conclude with suggestions for the policy agenda to promote both healthy competition and innovation in the AI supply chain.

Nikolas Guggenberger (U Houston Law Center) has posted “Moderating Monopolies” (Berkeley Technology Law Journal, Vol. 38, No. 1, 2023) on SSRN. Here is the abstract:

Industrial organization predetermines content moderation online. At the core of today’s dysfunctions in the digital public sphere is a market power problem. Meta, Google, Apple, and a few other digital platforms control the infrastructure of the digital public sphere. A tiny group of corporations governs online speech, causing systemic problems to public discourse and individual harm to stakeholders. Current approaches to content moderation build on a deeply flawed market structure, addressing symptoms of systemic failures at best and cementing ailments at worst.

Market concentration creates monocultures for communication susceptible to systemic failures and raises the stakes for individual content moderation decisions, like takedowns of posts or bans of individuals. As these decisions are inherently prone to errors, those errors are magnified by the platforms’ scale and market power. Platform monopolies also harm individual stakeholders: persisting monopolies lead to higher prices, lower quality, or less innovation. As platforms’ services include content moderation, degraded services may increase the error rate of takedown decisions and over-expose users to toxic content, misinformation, or harassment. Platform monopolies can also get away with discriminatory and exclusionary conduct more easily because users lack voice and exit opportunities.

Stricter antitrust enforcement is imperative, but contemporary antitrust doctrine alone cannot hope to provide sufficient relief to the digital public sphere. First, a narrowly understood consumer welfare standard overemphasizes easily quantifiable, short-term price effects. Second, the levels of concentration necessary to trigger antitrust scrutiny far exceed those of a market conducive to pluralistic discourse. Third, requiring specific anticompetitive conduct, the focal point of current antitrust doctrine, ignores structural dysfunction mighty bottlenecks create in public discourse, irrespective of the origins or even benevolent exercise of their power.

In this Article, I suggest three types of remedies to address the market power problem behind the dysfunctions in the digital public sphere. First, mandating active interoperability between platforms would drastically reduce lock-in effects. Second, scaling back quasi-property exclusivity online would spur follow-on innovation. Third, no-fault liability and broader objectives in antitrust doctrine would establish more effective counterweights to concentrating effects in the digital public sphere. While these pro-competitive measures cannot provide a panacea to all online woes, they would lower the stakes of inevitable content moderation decisions, incentivize investments in better decision-making processes, and contribute to healthier pluralistic discourse.

Haggai Porat (Harvard Law; Tel Aviv Economics) has posted “Algorithmic Personalized Pricing in the United States: A Legal Void” (in Cambridge Handbook on Price Personalization and the Law) on SSRN. Here is the abstract:

The United States is the Wild West of algorithmic personalized pricing. It is practiced (and researched) extensively, possibly more than anywhere else in the world, and at the same time, it is less regulated than in many of the jurisdictions surveyed in this Handbook, most notably the EU and China. This is not necessarily puzzling. American corporations have been the driving force behind many of the technological innovations associated with the rise and development of algorithmic personalized pricing. However, there is a long tradition in the US of opposition to regulating markets, and algorithmic personalized pricing exemplifies this approach. On this background, the goal of this Chapter is twofold.
First, the Chapter considers legal rules from various fields that can be used to regulate algorithmic personalized pricing. In mapping out and analyzing these rules, a primary aim of this Chapter is to demonstrate that many legal rules designed for seemingly unrelated purposes are, in fact, often well-suited to regulating algorithmic price personalization, with specific focus on antitrust law, consumer contracts law, and data protection law. While these legal fields have evolved, respectively, to protect competition, regulate consumers’ access to information, and protect consumers’ privacy (“data subjects,” in European terminology), each arguably has the potential to improve how the US legal system contends with algorithmic personalized pricing.
Second, using economic analysis, the Chapter seeks to develop analytical approaches to understanding how the legal rules it considers can be expected to affect algorithmic personalized pricing in ways that may not be immediately apparent. The analysis demonstrates the importance of understanding the economic (and technological) foundations of the phenomenon as well as the rules that regulate it. It is important to note that economic analysis here is not aimed at a normative evaluation of the extent to which the law should regulate algorithmic personalized pricing, which is a stance this Chapter refrains from taking given the theoretical and empirical ambiguity surrounding the welfare implications of algorithmic personalized pricing. Instead, focus is set on the potential effectiveness of certain legal rules for regulating algorithmic personalized pricing to any desired extent, without making any assertions about what that extent should be. Specifically, the Chapter demonstrates how economic analysis can inform two main lines of inquiry: first, whether a legal rule applies to algorithmic personalized pricing given the conditions stipulated by the former and the characteristics of the latter; and, second, how the legal rule, if applied, can be expected to affect sellers’ ability to engage in algorithmic personalized pricing. As such, the analysis attempts to develop the strongest claims for both sides of the debate over whether algorithmic personalized pricing should be limited or expanded.

Thibault Schrepel (Vrije Universiteit Amsterdam; Stanford Codex; Sorbonne; Sciences Po) has posted “Decoding the AI Act: A Critical Guide for Competition Experts” on SSRN. Here is the abstract:

The AI Act is poised to become a pillar of modern competition law. The present article seeks to provide competition practitioners with a practical yet critical guide to its key provisions. It concludes with suggestions for making the AI Act more competition friendly.

Nikolas Guggenberger (University of Houston Law Center) has posted “Moderating Monopolies” (Berkeley Technology Law Journal, Vol. 38, No. 1, 2023) on SSRN. Here is the abstract:

Industrial organization predetermines content moderation online. At the core of today’s dysfunctions in the digital public sphere is a market power problem. Meta, Google, Apple, and a few other digital platforms control the infrastructure of the digital public sphere. A tiny group of corporations governs online speech, causing systemic problems to public discourse and individual harm to stakeholders. Current approaches to content moderation build on a deeply flawed market structure, addressing symptoms of systemic failures at best and cementing ailments at worst.

Market concentration creates monocultures for communication susceptible to systemic failures and raises the stakes for individual content moderation decisions, like takedowns of posts or bans of individuals. As these decisions are inherently prone to errors, those errors are magnified by the platforms’ scale and market power. Platform monopolies also harm individual stakeholders: persisting monopolies lead to higher prices, lower quality, or less innovation. As platforms’ services include content moderation, degraded services may increase the error rate of takedown decisions and over-expose users to toxic content, misinformation, or harassment. Platform monopolies can also get away with discriminatory and exclusionary conduct more easily because users lack voice and exit opportunities.

Stricter antitrust enforcement is imperative, but contemporary antitrust doctrine alone cannot hope to provide sufficient relief to the digital public sphere. First, a narrowly understood consumer welfare standard overemphasizes easily quantifiable, short-term price effects. Second, the levels of concentration necessary to trigger antitrust scrutiny far exceed those of a market conducive to pluralistic discourse. Third, requiring specific anticompetitive conduct, the focal point of current antitrust doctrine, ignores structural dysfunction mighty bottlenecks create in public discourse, irrespective of the origins or even benevolent exercise of their power.

In this Article, I suggest three types of remedies to address the market power problem behind the dysfunctions in the digital public sphere. First, mandating active interoperability between platforms would drastically reduce lock-in effects. Second, scaling back quasi-property exclusivity online would spur follow-on innovation. Third, no-fault liability and broader objectives in antitrust doctrine would establish more effective counterweights to concentrating effects in the digital public sphere. While these pro-competitive measures cannot provide a panacea to all online woes, they would lower the stakes of inevitable content moderation decisions, incentivize investments in better decision-making processes, and contribute to healthier pluralistic discourse.