Jonathan Sallet

Multisided Platforms and Antitrust Enforcement

Multisided platforms are ubiquitous in today’s economy. Although newspapers demonstrate that the platform business model is scarcely new, recent economic analysis has explored more deeply the manner of its operation. Drawing upon these insights, we conclude that enforcers and courts should use a multiple-markets approach in which different groups of users on different sides of a platform belong in different product markets. This approach appropriately accounts for cross-market network effects without collapsing all of a platform’s users into a single product market.

Antitrust is Law Enforcement

[Commentary] At the end of October, Jonathan Baker, Fiona Scott Morton, and I organized a day-long conference entitled Unlocking the Promise of Antitrust Enforcement. Our premise was simple: In a time when the purpose and future of antitrust is again an important topic of political discourse, we need to understand what antitrust enforcers can do today with the laws that exist right now. Laws that have been on the books for a long time – The Sherman Act was passed in 1890 – but which retain their vitality. And their importance.

The internet of (economic) things

[Commentary] There are economic issues that may arise as the “internet of things” IoT matures; Here are six that bear watching:

  1. Economic Productivity: some believe now that IoT can boost productivity growth by increasing the efficiency of traditional business operations such as manufacturing, transportation, and retail.
  2. The Nature of Competition: In antitrust terms, many more kinds of products and services could occupy adjacent levels of a value chain in a “vertical” relationship. This occurs where consumer demand for two products is closely related.
  3. How open will IoT be? History suggests that policymakers may scrutinize any IoT players that wield excessive power over consumers, perhaps in the antitrust context or as a separate question of regulation.
  4. Who Owns Big Data, Your Data? Big banks and Silicon Valley are waging an escalating war over your personal financial data.
  5. Standards Set Terms of Competition: An established standard can boost competition by allowing different devices to communicate with each other. It can also grant the winner a big marketplace advantage.
  6. Economic Regulation and the Impact on Competition: Regulation can either intentionally or inadvertently shape competition.

[Sallet is a visiting fellow at Brookings in Governance Studies. Previously, he served as deputy assistant attorney general for Litigation at the U.S. Department of Justice’s Antitrust Division from 2016-17. Prior to joining the Division in 2016, Mr. Sallet was general counsel at the Federal Communications Commission.]

Better together: Broadband deployment and broadband competition

Who has access to broadband in America, and who reaps the benefits of broadband competition? Data from a recent Federal Communications Commission study provides insights into both important questions.

First, the importance of access. For the very first time, the FCC concluded in 2015 that the disparity between urban and rural access to broadband provided the basis for direct agency action. Time has proven that conclusion right – and increasingly important. As my colleague Nicol Turner-Lee recognized immediately after the 2016 election, the Americans who lack access to broadband services – more rural, more middle income, less likely to have attended college – are the same ones who voted for change in economic policies.

Second, the question of marketplace competition is important as well. It can be tempting to accept the view that, in an environment of scarce government resources and competing interests, merely ensuring broadband access from a single provider is enough – especially as an improvement on a status quo with little or no access at all. History tells a cautionary tale, though. In 1913, the U.S. Department of Justice settled an antitrust lawsuit against AT&T by essentially accepting AT&T’s monopoly in exchange for the build-out of the nation’s telephone system. AT&T worked hard to uphold its end of the bargain, but it was decades before competitive markets were free to serve consumers, stimulate innovation, and avoid unnecessary regulation. In other words, as a nation, we should embrace both expanded broadband deployment and expanded broadband competition. Without competition, the pressure from consumers for better and cheaper broadband will naturally ease, and rural America could fall even further behind.

The common origins of science and democracy

[Commentary] This is the Scientific Revolution, but part of its reawakening is the recognition that truth-finding forms the basis for technological innovation, for capitalism and for democratic rule. All rest on the single, and simple, concept that individuals matter and that the very ability of individuals to think for themselves creates scientific propositions to be tested, technological innovations to be imagined, market outcomes to be respected and democratic outcomes to be treated as legitimate – even outcomes that some voters may deeply regret.

The March for Science on April 22 is not about partisan politics; it’s a time to stand on the shoulders of giants. And to remind ourselves to see what they foresaw.

[Jonathan B. Sallet is a visiting fellow in Governance Studies. Previously, he served as deputy assistant attorney general for Litigation at the US Department of Justice’s Antitrust Division from 2016-17. Prior to joining the Division in 2016, Sallet was general counsel at the Federal Communications Commission.]