Ruled by Reason

In this podcast, AAI President Diana Moss talks with two experts in the agriculture sector about corn, a leading U.S. crop. Many farmers bow face serious margin “squeezes.” They pay higher and higher prices to oligopolies and cartels for inputs that are necessary to grow their commodities. But growers then sell into markets where commodity prices are often controlled by only a few firms, such as in proteins, or are subject to the significant vagaries of price fluctuations. This episode of Ruled by Reason will focus on how corn growers are paying high input costs, especially for fertilizer. Economic studies, including a recent one authored by a guest on this podcast, reveal serious concerns about high fertilizer prices. These prices have been set for years by a small group of global fertilizer producers that likely coordinate, rather than compete. Anticompetitive fertilizer prices hurt corn growers and consumers, and imperil the stability and integrity of a vital agricultural supply chain.

In this episode, AAI Vice President of Policy Laura Alexander discusses third-party litigation funding and its impact on private antitrust class actions with two experts in the field, one of the country’s foremost litigators of antitrust class actions and a representative from a leading litigation funder with deep experience in antitrust.  Antitrust class actions are expensive to bring and prosecute.  Historically, plaintiffs’ lawyers have used their own assets and traditional bank loans to finance them, in a high-risk/high-reward business model.  In the last decade, however, an alternative funding model has emerged: litigation funding firms have begun financing plaintiff-side antitrust litigation for profit using non-recourse debt, shifting risk and reward from the lawyers to the funders and, in the process, changing the landscape of private antitrust litigation and class actions.  The conversation starts with a primer on litigation funding, and goes on to discuss how funding decisions factor into leadership and settlement dynamics, how litigation funding impacts which cases are brought and who brings them, and how monetization of claims is changing incentives for opt outs and what that might portend for class actions.  Finally, the episode concludes with an analysis of the different role that litigation funding plays in collective actions abroad, and what lessons we might draw from foreign jurisdictions for funding class actions in the U.S.

In this episode Diana Moss sits down with Carl Shapiro, Distinguished Professor of the Graduate School at the University of California at Berkeley, to unpack the debate over the role of antitrust and how to invigorate enforcement of the antitrust laws in the United States. In framing the dialog over where antitrust should go, they create a multi-faceted conversation that reveals why competition is a broader and important public policy issue problem for a market-based economy and democratic society. Major themes include the controversy over indicators of declining competition, recent changes to the antitrust ideological spectrum, proposed legislative reforms to the antitrust laws, revisions to the Horizontal Merger Guidelines, and the challenges that face the Biden antitrust chiefs at the U.S. Department of Justice Antitrust Division and Federal Trade Commission. These threshold questions have critical implications for the effectiveness of antitrust enforcement moving forward in promoting competition and for protecting consumers and workers.

In this episode, AAI Vice President of Competition Laura Alexander and Gwendolyn Cooley, Wisconsin’s Assistant Attorney General for Antitrust and Chair of the Multistate Antitrust Task Force for the National Association of Attorneys General discuss the state of state antitrust enforcement.  The conversation covers “antitrust federalism” and the current relationship between state and federal antitrust enforcers, unique hurdles faced by state antitrust enforcers, the special expertise state enforcers bring to antitrust enforcement, and the priorities of states in enforcing state and federal antitrust laws.  State antitrust enforcers have been leading the charge on everything from non-compete clauses to privacy, and with a reinvigoration of antitrust enforcement at the federal level, new avenues for cooperation and coordination are opening up for states to take on an even bigger role.

In this episode, Diana Moss sits down with Scott Hemphill, the Moses H. Grossman Professor of Law at the New York University School of Law, to chat about his award-winning article: Nascent Competitors (Vol. 168 (No. 7), Penn. L. Review, 2020). Hemphill co-authored the article with Timothy Wu, currently serving as Special Assistant to President Biden for Technology and Competition Policy at the National Economic Council. The article highlights major issues and debate around how antitrust enforcers and the courts go about evaluating acquisitions of nascent competitors that could violate Section 7 of the Clayton Act. Nascent competitors are firms whose prospective innovation is a “threat” to firms in a market. This threat is neutralized if a nascent rival is acquired, sometimes with serious implications for competition and consumers. Attention to acquisitions of nascent competitors has exploded across a number of sectors, including digital technology, fintech, healthcare, digital farming, and others. For business models that are driven by “growth by acquisition,” revisiting antitrust enforcement and competition policy around nascent rivals is particularly timely and important.   Antitrust scholarship that is considered and selected for the Jerry S. Cohen award reflects a concern for principles of economic justice, the dispersal of economic power, the maintenance of effective limitations upon economic power or the federal statutes designed to protect society from various forms of anticompetitive activity. Scholarship reflects an awareness of the human and social impacts of economic institutions upon individuals, small businesses and other institutions necessary to the maintenance of a just and humane society–values and concerns Jerry S. Cohen dedicated his life and work to fostering.

In this episode, AAI President Diana Moss sits down with two experts to discuss the state of play in competition in freight rail. Freight rail is a vital part of the U.S. transportation system. It is the second largest mode of transportation in the U.S. and industry sources estimate that freight rail shipments will increase 30% by 2040. Railroads, and the shippers that transport on them, are responsible for the movement of critical commodities and products involving agriculture, energy, automotive, chemical, construction, and forestry. But we don’t hear much in the news about the state of competition in freight rail in the U.S. That’s unfortunate, since the sector has been home to massive consolidation over the last half a century. Since about 1950, there have been over 80 railroad mergers in the U.S. Today, there are only 5 domestic Class I railroads operating in the U.S.—two in the west, two in the east, and one down the middle.  My two guests on this episode are experts in rail competition. We will unpack the state of competition and consolidation in freight rail and what it means for shippers and consumers. We start at the 10,000 foot level, explaining why competition in rail transportation matters and walking through a brief history of U.S. rail consolidation. Next, we do some deeper dives into how railroad mergers diminish competition and who is harmed. We finish with how harmful railroad mergers are remedied by the government and some of the major, current regulatory policy initiatives for addressing competition issues, including reciprocal switching, and others. 

In this episode, Roger Noll, AAI Senior Fellow and Professor Emeritus at Stanford University, talks with winners of the 2020 Jerry S. Cohen award for antitrust scholarship. Nancy Rose and Jonathan Sallet unpack key aspects of efficiencies in horizontal mergers in their article The Dichotomous Treatment of Efficiencies in Horizontal Mergers, Too Much? Too Little? Getting it Right (Vol. 168, Penn. L. Rev., 2020). The article highlights that the extent to which horizontal mergers deliver competitive benefits that offset any potential for competitive harm is a critical issue in antitrust enforcement. Based on their economic analysis of merger efficiencies, the authors find that a substantial body of work casts doubt on their presumed existence and size. Rose and Sallet discuss the major implications of their work in this Ruled by Reason conversation, including the likely need for changes in current enforcement approaches. Antitrust scholarship that is considered and selected for the Jerry S. Cohen award reflects a concern for principles of economic justice, the dispersal of economic power, the maintenance of effective limitations upon economic power or the federal statutes designed to protect society from various forms of anticompetitive activity. Scholarship reflects an awareness of the human and social impacts of economic institutions upon individuals, small businesses and other institutions necessary to the maintenance of a just and humane society–values and concerns Jerry S. Cohen dedicated his life and work to fostering.

In this episode, AAI Vice President of Legal Advocacy Randy Stutz sits down with Professor Herb Hovenkamp for a wide ranging conversation about current debates over first principles of antitrust law.  When the Supreme Court says, “the antitrust laws protect competition,” what exactly is it saying they protect?  While there seems to be confusion in the popular press about the meaning of antitrust law’s “consumer welfare” goal, is there confusion (or disagreement) among antitrust experts, too? In exploring these fundamental questions, Stutz and Hovenkamp discuss whether competition can be defined other than by reference to its effects; the price and non-price effects caused by competition; the proper definition of consumer welfare; how antitrust applies to labor markets and handles welfare tradeoffs; the Supreme Court’s decision in NCAA v. Alston; how to evaluate behavior that has effects in multiple markets; how to deal with evidentiary challenges associated with measuring output effects, including in exclusionary conduct and merger cases involving nascent competitors; how output effects should be considered in light of the need for “sustainable competition”; and the problem of biased error-cost analysis in the federal courts. Moderator: Randy Stutz, Vice President of Legal Advocacy, American Antitrust Institute Guest: Prof. Herbert Hovenkamp, James G. Dinan University Professor, University of Pennsylvania Carey Law School and The Wharton School

In this episode, two the world’s leading competition experts, William Baer and Frederic Jenny, have a one-on-one conversation about key issues in the international competition arena that should be front and center on the enforcement and policy radar screens. The exchange took place at AAI’s 22nd annual policy conference in June 2021. AAI is delighted to provide access to it on Ruled by Reason. Baer and Jenny cover topics ranging from legislative and institutional responses to big tech concerns, to the intersection of antitrust and regulation, substantive and procedural convergence, competition policy versus industrial policy, and incorporation of “non-competition” values into competition law. The unique perspective revealed in their conversation comes at a critical time, where concerns over declining competition and concentrated market power are high on the enforcement and policy agendas of enforcement authorities across the globe. Moderator: Diana Moss, President, American Antitrust Institute Guests: William Baer, Former Assistant Attorney General for the Department of Justice Antitrust Division; Visiting Fellow, Governance Studies, The Brookings Institution Frederic Jenny is Professor of Economics, ESSEC Business School, Paris and Chairman, Competition Committee, OECD

In this episode, AAI Vice President of Policy Laura Alexander and Patrick Woodall, Senior Researcher at Americans for Financial Reform, discuss the impact of private equity investment on competition, consumers, and communities.  This discussion was inspired by a recent report on private equity from AAI and the Petris Center, Soaring Private Equity Investment in the Healthcare Sector: Consolidation Accelerated, Competition Undermined, and Patients at Risk. Beginning with the unique structure and financial incentives of private equity funds, and the resulting investment strategies, the discussion quickly turns to the consequences of those investment strategies.  Laura and Patrick discuss how private equity funds avoid antitrust scrutiny by using “buy-and-build” and “roll-up” strategies, and why existing antitrust law is insufficient to address many of the anticompetitive effects of private equity investment.  The episode concludes with a discussion of potential legislative and policy changes that could be used to curb private equity abuses.