Delrahim Says Antitrust Enforcers Can Learn From ‘Zero-Price’ Profit Models
Understanding how firms like Facebook and Google profit from zero-price models can help enforcers identify anticompetitive behavior, said DOJ Antitrust Division Chief Makan Delrahim at a Silicon Flatirons event Monday. Offering products for “free” is nothing new, he said, citing…
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radio, broadcast TV and newspaper models that existed before the internet. He argued internet users have become the “input” of products sold to advertisers. Enforcers shouldn’t exempt zero-price model firms from antitrust scrutiny, he said. Just because there’s no price doesn’t mean there’s no market or potential for abuse, he argued. Market power isn't unlawful on its own, he said: The question is whether an incumbent, regardless of size, is harming competition. Privacy is best dealt with through legislation, not antitrust law, said FCC Chief Economist Babette Boliek. EU enforcers might have “merger remorse” over Facebook’s buys of Instagram and WhatsApp, she said, citing recent antitrust action against Facebook in Germany (see 1902070060). State attorneys general and federal agencies are “rightfully focusing more attention on whether [tech] firms are living up to existing [competition] laws on the book,” said FTC Commissioner Rohit Chopra Sunday: “Three threats and challenges” posed by the tech sector relate to fair economic competition, civil rights and threats to democracy. Enforcers should question whether merger activity promotes innovation or allows “corporate royalty to hold on to their reign,” he said.