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Follow us on Twitter @CompetitionLaws and join the conversation using #GlobalAntitrustEconomics
Follow us on Twitter @CompetitionLaws and join
the conversation using #GlobalAntitrustEconomics
08.45 WELCOME REMARKS
Luis CABRAL I Chair, Department of Economics, NYU Stern School of Business, New York
Lawrence WHITE I Professor, Department of Economics, NYU Stern School of Business, New York
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the conversation using #GlobalAntitrustEconomics
09.00 OPENING KEYNOTE SPEECH
Noah Joshua PHILLIPS I Commissioner, US Federal Trade Commission, Washington, DC
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09.30 ANTITRUST IN SPORTS
Roger NOLL I Professor of Economics, Emeritus, Stanford University, Stanford
Andrew ZIMBALIST I Professor of Economics, Smith College, Northampton
Brad HUMPHREYS I Professor of Economics, West Virginia University, Morgantown
Rodney FORT I Professor of Sport Management, University of Michigan, Ann Arbor
Michael HAUSFELD I Partner, Hausfeld, Washington, DC
James KEYTE I Director, Competition Law Institute, Fordham Law School, New York
Moderator: Lawrence WHITE | Professor, Department of Economics, NYU Stern School of Business, New York
10.45 Coffee Break
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the conversation using #GlobalAntitrustEconomics
11.00 TELECOM MERGERS
Gail LEVINE I Deputy Director, Bureau of Competition, US Federal Trade Commission, Washington, DC
Tim BRENNAN I Professor of Public Policy & Economics, University of Maryland, Baltimore
Gregory ROSSTON I Senior Fellow, Stanford Institute for Economic Policy Research, Stanford
Dennis CARLTON I Professor of Economics, University of Chicago Booth School of Business, Chicago
John HARKRIDER I Partner, Axinn, New York
Cristina CAFFARRA I Vice President, Head of European Competition, CRA, London/Brussels
Moderator: Katja SEIM I Associate Professor of Business Economics and Public Policy, The Wharton School,
University of Pennsylvania, Philadelphia
12.15 Lunch
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BT/ EE (2015)
the conversation using #GlobalAntitrustEconomics
TeliaSonera/
Telenor TeliaSonera/
O2/Three (2014) (2015X) Tele2 (2014)
T-Mobile-Tele2 Vodafone/
O2/Three (2015) (2018) KDG (2013)
e-plus/ O2
Ziggo/LGI (2014) (2014)
Mobile and mobile Vodafone/Ziggo (2016)
Cable and cable
Hybrid mobile and cable/fixed Telenet/ Base (2015)
Network and content LGI/De Vijver (2014, 2019) Vodafone/LGI (2019)
LGI/KBW (2013)
Numericable/
SFR (2014) Orange//H3G (2012)
Sunrise/UPC (2019)
Bouygues/
Orange Three/ Wind (2016)
(2016, abandoned)
Cabovisao /
PTT (2015)
Orange/Jazztel (2014)
Altice/Media Vodafone/ Wind Hellas
Capital (2017) TIM/Vivendi/Mediaset (2012 – abandoned)
(2017)
Optimus/ ZON Vodafone/Ono (2014)
(2013)
Cellcom/Golan
(2016)
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the conversation using #GlobalAntitrustEconomics
01.45 PRICING ISSUES IN PHARMA: PAY-FOR-DELAY, PRODUCT
HOPPING...
Paul CSISZÁR I Director, European Commission - DG COMP, Brussels
David GILO I Professor of Law, Tel Aviv University, Tel Aviv
George ROZANSKI I Partner, Bates White, Washington, DC
Ingrid VANDENBORRE I Partner, Skadden Arps, Brussels
Jack PACE I Partner, White & Case, New York
Moderator: Robert WILLIG I Professor of Economics and Public Affairs, Emeritus, Woodrow Wilson School
of Public and International Affairs, Princeton University
03.00 Coffee BreakFollow us on Twitter @CompetitionLaws and join
the conversation using #GlobalAntitrustEconomics
03.15 IN-HOUSE COUNSEL SESSION: PLATFORMS
Samantha KNOX I Associate General Counsel, Facebook, San Francisco
Martin D’HALLUIN I VP, Associate General Counsel, News Corp, New York
David HIGBEE I Partner, Shearman & Sterling, Washington, DC
Boris BERSHTEYN I Partner, Skadden Arps, New York
Moderator: Harry FIRST I Professor, NYU School of Law, New YorkFollow us on Twitter @CompetitionLaws and join
the conversation using #GlobalAntitrustEconomics
04.30 CLOSING KEYNOTE SPEECH
Hal VARIAN I Chief Economist, Google, San Francisco
05.00 DrinksThe Seven Deadly Sins of Tech?
Hal Varian
NYU
May 2019
The views in this presentation are those of the author and do
not represent the views of his employer or any other party.alleged!
The /Seven Deadly Sins of Tech?
Hal Varian
NYU
May 2019
The views in this presentation are those of the author and do
not represent the views of his employer or any other party.The alleged seven deadly sins of tech
● Concentration
● Competition
● Innovation
● Acquisitions
● Entry
● Lock-in
● Fixed costsConcentration
Concentration
● Autor, et. al. (2017) describe two interpretations of concentration
increase
○ “...super-star firms with higher productivity increasingly capture a
larger slice of the market,”
○ “...arise from anticompetitive forces whereby dominant firms are
able to prevent actual and potential rivals from entering and
expanding.”
● Their conclusion: industries that became more concentrated were those
in which productivity increased the most
● Related findings by Ganapati [2017], Bessen [2017], OECD, and others.Competition
Where’s the competition in search? Follow the money.
● General purpose search is a tough business: you can only sell
6% of what you produce.
○ Just ask AOL, Ask Jeeves, Yahoo, Inktomi, Excite, Lycos…
○ Why? Only 6% of clicks are commercial clicks (ads)
○ Competition is intense for commercial clicks: Amazon,
eBay, Yelp, Travelocity, Expedia, Orbitz, Trip Advisor, and
thousands of comparison and review sites
● By contrast no one cares about non-commercial search from
an antitrust perspective: book search, scholar search, patent
search, encyclopedia search, etc.Why is competition intense for commercial clicks?
● Companies want users to go directly to them, so they try to build
a strong brand, good reputation. For example, now 54% of
shopping journeys in the US start on Amazon.
● Companies advertise heavily now so they don’t have to advertise
so much in the future.
○ The widespread use of apps (Amazon, Yelp, Maps) reinforce
this trend. Yelp gets 35M visitors via its mobile app.
○ This competition for commercial clicks is great for users.
● If Google provides great answers for [ancient history], people will
use Google to provide great answers to [sushi near me].Competition Tech firms compete intensely against each other. That’s why prices are low, and innovation is high.
Innovation
Innovation Tech companies are leading spenders on R&D. Source: Bloomberg
Innovation Tech companies are leading spenders on R&D. Even more if you group GAFA + Tech Source: Bloomberg
Acquisitions
Acquisitions by Google ● Median number of hires per acquisition: 6 ● 25% had 3 or fewer employees ● 75% had 18 or fewer employees ● These were primarily acqui- hires.
There are 5 times as many exits via acquisitions than IPOs
Silicon Valley BankEntry
Kill zone: where is it? ● Kill zone: “areas not worth operating or investing in, since defeat is guaranteed.” ● Google, Apple, Amazon, Microsoft, Facebook, China, Europe, and many others have all announced major AI initiatives. ● Surely no startup would want to enter this “kill zone”
Kill zone: where is it?
● Kill zone: “areas not worth operating
or investing in, since defeat is
guaranteed.”
● Google, Apple, Amazon, Microsoft,
Facebook, China, Europe, and many
others have all announced major AI
initiatives.
● Surely no startup would want to enter
this “kill zone”
● Or would they?
Source: AIindex.org 2018Entry: VC finance of US startups Source: Sand Hill Econometrics and VentureSource
Entry: VC finance of European startups Source: Sand Hill Econometrics and VentureSource
Lock-in
Switching costs and data portability
● Google Takeout: June 2011
○ Download your data to
desktop, Gdrive,
OneDrive, Dropbox
● Data Transfer Project 2018
○ Transfer your data
between Google,
Facebook, Microsoft
Twitter… and others!
● Research
○ OpenImage (9.5M),
YouTube Video (8M),
and many othersFixed costs
Fixed costs 1999: data centers centers, hardware, software, networking. Much of the software was proprietary, internal to the data center operator, and needed to be re-developed for everyone who used the datacenter. Example: Map/Reduce, Hadoop, BigTable, BigQuery, etc. 2019: Tools are open sourced, standardized and available at data centers built by Google, Amazon, Microsoft, IBM, etc. Everyone has access to technology that only the richest companies could afford a decade ago. Image recognition, communications, coordination, etc. In fact, now anybody can offer a new search engine.
DuckDuckGo and Qwant ● DuckDuckGo uses 400 sources, and syndicates search results from Bing and Yahoo. It gets 45 million searches per month and has been profitable since 2014 ● Qwant does essentially the same thing, with 50 million unique queries per month, and is now the official search engine for the French government. ● Tech entrants no longer have fixed costs on the supply side. ● Fixed costs: that’s so 1990s, grandpa! ● But there is still a cost in attracting users: “Marketing fixed costs, though frequently overlooked, are often the more important of the two.” (Spence 1976.) ● Have to have a differentiator which in this case is privacy focus.
How to start up a startup
● Fund your project on Kickstarter ● Set up a Kaggle competition
● Hire employees using LinkedIn ● Use Nolo for legal documents
(company, patents, NDAs)
● Office space from WeWork ● Use QuickBooks for accounting.
● Cloud cloud computing and ● Use AdWords, Bing, Facebook for
network from Google, Amazon, marketing
Microsoft
● Use open source software like ● Use Salesforce for customer
Linux, Python, Tensorflow, etc relations
● Manage your software using ● Use ZenDesk for user support
GitHub
● Use Skype, Hangouts, Google Docs, ● Become a micro-multinational
for team communicationSeven sins or seven virtues? ● Concentration ● Competition ● Innovation ● Acquisitions ● Entry ● Lock-in ● Fixed costs
The End
Economic stats
● Most valuable stock
○ Amazon: currently less than 3% of the total value of all U.S. stocks
○ AT&T was 13% of total U.S. stock-market value back in 1932;
○ General Motors, 8% in 1928;
○ IBM, 7% in 1970.
● Revenue of top 4 companies
○ 1969: GM, Ford, GE and IBM totaled 5.4% of US GDP and 2.0% of global GDP.
○ 2019: Apple, Amazon, Google, and Facebook totals 2.9% of US GDP and 0.7 percent of GDP.
● Economic performance
○ “The tech/telecom/ecommerce sector has outperformed the rest of the non-health private sector
across a wide range of important economic measures since the tech boom started in 2007”
● What does tech provide?
○ Hi wages, low prices, rapid innovation
Source: WSJ, PPIFollow us on Twitter @CompetitionLaws and join
the conversation using #GlobalAntitrustEconomics
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