Mooney, Jr., Randal Picker, Eric Posner, Morgan Ricks, Ganesh Sitaraman, Thom Thank John Armour, Brandon Becker, Anthony Casey, Nakita Cuttino, LucaĮnriques, Yuliya Guseva, Howell Jackson, Louis Kaplow, Saul Levmore, Charles Professor of Law, University of Chicago Law School. Professor of Law, Cornell Law School Assistant Still improve market efficiency by exposing incumbents to the threat of newĪuthors. Interoperability are unlikely to forestall monopoly control, though they might Where this is not possible, open access and Open access and interoperability are unlikely toĬonstrain market power unless larger firms are unable to dictate decisionsĪbout innovation and investment, and unless the costs of building, maintaining,Īnd connecting to common infrastructure are allocated in a way that does notĭiscriminate against smaller firms. Interoperability requirements to curb growing market power in Big Tech, social media,įinance, and elsewhere. More broadly, our analysis offers aĬautionary tale for policymakers seeking to employ open-access and securities clearing and depository markets still exhibit relatively high It also helps explain why, despite their highly concentrated structure, Important components of our financial infrastructure have become too big toįail. In these ways, open access and interoperability can exacerbate the very These requirements can prevent smaller firms from competing with their larger Innovation and investment, and reducing the scope for product differentiation, Infrastructure, allowing dominant firms to dictate the direction and pace of Specifically, by imposing high fixed costs to connect to common Serve as instruments by which dominant firms obtain and entrench their monopoly Markets, it demonstrates that open-access and interoperability requirements can By tracing the Depository Trust and ClearingĬorporation’s path to monopoly in the U.S. Examples of successful coordination include the provision of electricity, intermodal transportation, and credit-card networks. In theory, by compelling firms to coordinate in the development of common infrastructure, these requirements can replicate the advantages of scale without leaving markets vulnerable to monopoly power. For markets characterized by significant economies of scale, scholars and policymakers often advance open-access and interoperability requirements as superior to both regulated monopoly and the breakup of dominant firms.
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