Stigler Center In the News 2022

Indian Big Business
December 20, 2022 | Phenomenal World
“The systemic, long-term nexus between the political elites and big business will not go away anytime soon,” wrote journalist M. K. Venu in 2015. Writing in the aftermath of Obama’s second visit to India, Venu suggested that “crony capitalism” had to be grasped in a deeper sense to reflect not the odd favors bestowed on this or that industrialist by the government of the day, but the system that cemented the ties between state and capital.

FTC swings big against Microsoft, Meta, but may have a losing strategy
December 15, 2022 | Straight Arrow News
The federal government is cranking up the heat on Big Tech as the Federal Trade Commission takes on two major antitrust cases. The commission just voted 3-1 to sue Microsoft to block its $69 billion acquisition of Call of Duty maker Activision Blizzard. At the same time, it’s in court against Meta, Facebook’s parent company, to block the company from acquiring fitness virtual reality startup Within for $400 million.

2022 Hurdles Failed To Deter DOJ Antitrust Enforcement Goals
December 15, 2022 | Law360
The U.S. Department of Justice Antitrust Division's criminal enforcement efforts were marked with a few wins and significant losses in 2022. The division suffered blows in major criminal cases, including trial losses and dismissals in the sprawling poultry price-fixing investigation and mostly acquittals in its first two labor collusion cases to face trial.

Shareholder Democracy Doesn’t Work. Here’s How It Can.
December 8, 2022 | The Washington Post
The ambitious idea that companies can be run like democracies, with widely dispersed shareholders exerting influence over management, has long failed in practice. Many people own shares, but very few bother to vote at company meetings — in part because they have other concerns, in part because systems of corporate governance have silenced their voices. That’s now changing — and a simple voting reform could go a long way toward making shareholder democracy a reality.

The 9 Best Economics Podcasts
November 30, 2022 | Podcast Review
Whether you’ve attended business school or learned everything you know about mortgages from Animal Crossing, economics saturates almost every aspect of our lives — and this is reflected in the many podcasts dedicated to the subject. From lessons in investment to deep dives into central banking, what may on the surface seem like a boring field proves to be diverse and thought-provoking. And while some might scoff at the efficacy of learning everything you know about money from a podcast, well, at least it’s not an animated raccoon.

Beware FTC's Expanded Focus On Private Equity, Individuals
November 21, 2022 | Law360
In the wake of U.S. Supreme Court precedent in the 2021 AMG Capital Management LLC v. Federal Trade Commission decision,[1] the FTC is doubling down and expanding its enforcement efforts to target executives, directors and owners, including private equity, in an effort to hold accountable anyone profiting from anti-competitive conduct or conduct harmful to consumers.

United States: Antitrust Division files its first criminal attempted monopolization case in decades
November 14, 2022 | Global Compliance News
On 19 September 2022, the US Attorney for the District of Montana and the US Department of Justice (DOJ), Antitrust Division (“Division“) filed a criminal information against and plea agreement with the president and owner of a paving and asphalt company (“Company A“) to resolve a charge of attempted monopolization¹. The company owner pled guilty to engaging in anticompetitive conduct with the intent to gain monopoly power in the markets for highway crack sealing services in Montana and Wyoming by proposing to a competitor (“Company B“) that they enter into a market-allocation agreement in which the two companies would stop competing against each other by dividing territories in Montana and Wyoming. The company owner also agreed to pay a fine of USD 27,000

It’s Time for ESG to Fight Back
November 11, 2022 | Barron's
ESG refers to the use of environmental, social, and governance factors in investing. The idea has been around for years, but opposition to it exploded on the national scene this summer in a mix of coordinated action and fortuitous timing, arriving in the middle of the energy crisis triggered by Russia's invasion of Ukraine. This movement included the launch of a new anti-ESG investment fund, state-level anti-ESG model bills from the American Legislative Exchange Council, anti-ESG pronouncements from Florida and Texas, and an anti-ESG open letter to Blackrock CEO Larry Fink from 15 Republican state attorneys general.

3 female CFOs tackle courage, soft voices and unchecked boxes
November 10, 2022 | CFO Dive
At the tail end of a lively morning business panel discussion Wednesday on topics around tactics for surviving an economic downturn, the moderator addressed the veritable elephant in the room. All three finance chief panelists at the Crain’s Chicago Business CFO Breakfast were women: Deidra Merriwether, CFO of Lake Forest, Ill.-based industrial supplier W.W. Grainger; Katie Rooney, CFO of Lincolnshire, Ill.-based tech consulting company Alight Solutions and Natalie Laackman, CFO of the Elmhurst, Ill-based medical courier business Medspeed.

Monopoly and Barriers to Entry: Old Wine in New Bottles
November 7, 2022 | Econlib
The year 2022 marks the 75th anniversary of the founding meeting of the Mont Pèlerin Society organized by F. A. Hayek. What is particularly interesting is the fact that—as highlighted in the transcripts of that meeting recently published by Bruce Caldwell as Mont Pèlerin 1947 (2022)—the role of public policy in regulating market power and the necessity of laws enforcing competition remain a current academic debate.

The rise of the borderless trustbuster
September 15, 2022 | The Economist
It was to be the biggest industrial merger ever. In late 2000 General Electric (ge), the world’s most valuable company at the time, agreed to pay $43bn for Honeywell, a smaller American manufacturer of, among other things, aircraft electronics. Jack Welch, ge’s ceo and America Inc’s capitalist-in-chief, put off his retirement to see it through. The transaction, codenamed “Project Storm”, seemed a done deal. American authorities gave their blessing, finding no threat to competition (ge made jet engines but not avionics).

Amazon/iRobot: The flywheel spins once more
September 8, 2022 | Platform Law Blog
It was reported last week that the US Federal Trade Commission has started investigating Amazon’s $1.7 billion acquisition of iRobot, the maker of Roomba smart vacuum cleaners. It seems to us that the UK and EU authorities will also have jurisdiction to investigate. Why should anyone (apart from iRobot’s shareholders) care about a large retailer buying a smart vacuum cleaner manufacturer?

Planet Money Summer School 8: Productivity & Getting Lit
September 2, 2022 | NPR's Planet of Money
Hello, and welcome to PLANET MONEY Summer School. I'm Stacey Vanek Smith. And this class - this is a special one. It is really hard to believe, but the summer is very nearly over, and this is our very last summer school class. It's making me a little sad, but we've got a great show ahead of us full of amazing economics, fire - actual fire - and the long-awaited diploma. We'll talk about that a bit later, but for now, I am so thrilled to introduce, for the very last time, our summer school professors, our guides extraordinaire through the hallowed halls of macroeconomics - economists Kristen Broady and Luigi Zingales. Hey, guys.

Planet Money Summer School 2: GDP & What Counts
July 20, 2022 | NPR's Planet of Money
This is Season 3. And this season, we are getting back to basics - the big economic questions, aka macroeconomics. Every Wednesday through Labor Day, we call class into session and bring you one big idea per episode - how to fight inflation, how recessions happen, things like that. We take a classic PLANET MONEY episode and pair it with insights from our esteemed professor guides. And this semester, they are Kristen Broady, economist with the Federal Reserve Bank of Chicago.

Ten years on, Italy faces debt crisis Draghi may not solve
July 15, 2022 | Reuters
Ten years after Mario Draghi's "whatever it takes" pledge saved the euro, Italy is once again in the middle of a debt crisis - but the country's prime minister and former head of the European Central Bank may struggle to solve this one. Just like a decade ago, investors are questioning whether some euro zone countries can continue to roll over their public debts, which have ballooned during the pandemic and are becoming more expensive to refinance as the ECB prepares to raise interest rates.

Planet Money Summer School 1: Recessions & Rap Battles
July 13, 2022 | NPR's Planet of Money
Hey, everyone. I'm Stacey Vanek Smith, and this is PLANET MONEY Summer School, your guide to understanding the economy. Now, I do realize that learning economics might seem like a questionable summer activity, right? Like, shouldn't you be going to the beach or to a baseball game or something? But that is the beauty of PLANET MONEY Summer School.

Uber paid academics six-figure sums for research to feed to the media
July 12, 2022 | The Guardian
Uber paid high-profile academics in Europe and the US hundreds of thousands of dollars to produce reports that could be used as part of the company’s lobbying campaign. The Uber files, a cache of thousands of confidential documents leaked to the Guardian, reveal lucrative deals with several leading academics who were paid to publish research on the benefits of its economic model. The reports were commissioned as Uber wrestled with regulators in key cities around the world.

This is how investors can really help mitigate climate change
July 7, 2022 | 24/7 Wall St.
Embedded in the markets may be a solution that goes a long way toward solving climate change’s intractable free-rider problem. That’s the surprising conclusion of a study that has been accepted for publication at the Journal of Political Economy. Titled Exit vs. Voice, its authors are Eleonora Broccardo of Italy’s University of Trento, Oliver Hart of Harvard University, and Luigi Zingales of the University of Chicago.

India’s high unemployment is ‘real danger’: Raghuram Rajan
June 13, 2022 | Fortune
Former Reserve Bank governor Raghuram Rajan, who's now a professor of finance at U.S.-based Chicago Booth School of Business, says the high unemployment rate in India is a real danger, especially for the lower-middle-class, as it creates room for "entrepreneurial politicians who cater to these divisions" rather than focussing on actually enhancing jobs. Rajan, during an interview with Promarket, a publication funded by the Stigler Center at the University of Chicago Booth, says tensions could grow in India if minorities including Muslims and women are not part of strong, sustainable and equitable growth.

Higher unemployment may give space to politicians catering to divisions: Raghuram Rajan
June 12, 2022 | The Economic Times
Former Reserve Bank of India Governor Raghuram Rajan has said that if unemployment rates in India remain high, it may lead to 'entrepreneurial' politicians who cater to religious divisions, rather than focusing on actually enhancing jobs.

Divestment: are there better ways to clean up ‘dirty’ companies?
June 6, 2022 | Financial Times
In 2020 Cambridge university announced that it would strip its £3.5bn endowment fund of all fossil fuel investments by 2030. Shedding its near-£100mn of exposure to the energy sector was necessary to align its investment strategy with climate science which showed the need to cut carbon emissions to net zero to avoid catastrophe, it explained. By divesting, said vice-chancellor Stephen Toope, Cambridge was “responding comprehensively to a pressing environmental and moral need for action”.

A ‘once-in-a-century inflection point’: DoJ’s antitrust chief on curbing corporate power
June 2, 2022 | Financial Times
One of the most striking pictures in Jonathan Kanter’s office is a cartoon of a wrecked airship called “High Finance”, featuring business magnates of early 1900s America as stranded passengers. The doomed aircraft’s splintered blades bear the names of large trusts and a broken-up corporation, while hovering above it is the apparent cause of the crash: a black cloud labelled “investigation”, “merger decision” and “law”.

When Picking Judges, Democrats Need to Stop Ignoring Economics
June 1, 2022 | The New York Times Opinion
President Biden has argued more forcefully than any other president in recent decades that the government needs to limit corporate concentration and to prosecute abuses of corporate power. He has installed leading proponents of an antitrust revival at the White House, and at the Justice Department and the Federal Trade Commission, the major regulatory agencies.

Live from the archives: Thoughts on competition between the largest global audit firms
May 22, 2022 | The Dig
I am more or less done with my move to Philadelphia — anyone an expert on getting an old LG flat screen to sound right? — and my official duties as a full-time Wharton faculty member will start on July 1. I’ve got several newsletters in the hopper but, in the meantime, I thought we could spend some time thinking about the hot topic of monopoly concentration in the context of the Big 4.

CAA’s ICM Buy Suffers Deal Fatigue as Agents Defect While Feds Take Long Look
May 16, 2022 | The Hollywood Reporter
“Never leave a deal open” is a phrase agents know too well. The longer it stays open, the more it invites scrutiny, and the more chances there are for it to go sideways or south. The CAA acquisition of rival agency ICM Partners has now been open since September, when the mega agency first unveiled its plans, at the same time signaling its expectation that the buy would close by the end of the year, if not by the beginning of this one.

The FTC at Full Strength: What to Expect Next
May 16, 2022 | Gibson Dunn
The Federal Trade Commission (FTC) stalemate ended on Wednesday, May 11, 2022, with Vice President Kamala Harris breaking the 50-50 Senate tie to confirm Alvaro Bedoya.  The addition of Commissioner Bedoya establishes the first Democratic majority at the FTC since Commissioner Rohit Chopra left the agency to lead the Consumer Financial Protection Bureau in October 2021 and creates a pathway for Chair Lina Khan’s ambitious agency agenda.  Commissioner Bedoya, a privacy scholar, brings with him substantial interest in privacy and algorithmic fairness which are issues at the top of the FTC’s priorities.

DMA: EU, Turkey and Beyond
May 13, 2022 | Lexology
Over the recent years, digitalisation and digital services have been at the core of many innovative advantages for businesses and end users alike. These benefits range from online intermediation services to software application stores. This variety offers better and more efficient choices for users while increasing competition within the digital markets industry.

Two brave female journalists in Ukraine show us the value of a free press
May 13, 2022 | Evening Standard
Last week I spent an hour on Zoom in conversation with two remarkable, brave women. The editor of the Kyiv Independent, Olga Rudenko, is on the front of Time magazine this week as one of their “next generation leaders”. Her passionate chief executive Daryna Shevchenko, whose phone was constantly blasting air raid warnings as we spoke, laughed darkly that she should be locking herself in the bathroom for safety. Rudenko was stationed that week not far from the Donetsk region, seeing family she is increasingly concerned about, as fierce fighting moves ever closer.

Olga Rudenko and the Kyiv Independent Are Giving the World a Window Into a Devastating War
May 11, 2022 | Time
The staff of the Kyiv Independent knew war was coming. They had spent long days in February reporting on an invasion that high-level sources had told them was imminent. Editor in chief Olga Rudenko and the other senior editors had consulted with the outlet’s two dozen or so staff members to make sure each had an evacuation plan and had withdrawn cash so they could keep operating if the banks closed.

How Disney and DeSantis clashed over power and policy, and what it means for business and politics in Florida
May 10, 2022 | WLRN Miami
The battle between Gov. DeSantis and Disney CEO Bob Chapek is a rare public display of big business and hard knuckle politics. It was both a slow burn and a rapid firestorm that engulfed the Magic Kingdom in Florida politics and the national culture war.

The failures of stakeholder capitalism
May 1, 2022 | Financial Times
People who care about creating a fairer and more sustainable market system tend to think about things like “ESG” investing (environmental, social and governance issues) and “stakeholder capitalism”. But what they need to start thinking about is power.

US agencies considering conglomerate issues during merger guideline review, Khan says
April 25, 2022 | Global Competition Review
Federal Trade Commission chair Lina Khan has said the US antitrust agencies are considering ways in which to evaluate deals involving conglomerate effects as the enforcers consider revisions to their merger guidelines.

Optimal policy for acquisitions of potential competitors under financial constraints
March 27, 2022 | VoxEU CEPR
Potential competitors are firms that currently do not exert competitive pressure but might do so in the future. The acquisition of these firms is a widespread phenomenon. As Figure 1 shows, since the mid-1990s there has been a dramatic shift in the exit strategy of start-ups backed by venture capital, from IPOs towards acquisitions (obviously, not all the targets of such acquisitions are potential competitors). In the digital economy alone, hundreds of start-ups have been bought in the last few years by incumbents such as Alphabet (Google), Amazon, Apple, Meta (Facebook) and Microsoft, but this phenomenon extends beyond the digital industries.

We aren’t going after Russian oligarchs in the right way. Here’s how to do it
March 9, 2022 | The Guardian
We’re sanctioning Russian oligarchs up the wazoo, hoping it’s a way to get Putin to stop his deadly attack on Ukraine. But for this tactic to work, two conditions must be met: first, the US and our allies must be able to locate and tie up Russian oligarchic wealth. Second, Russian oligarchs must have enough power to stop Putin.

War and Sanctions
March 4, 2022 | NR Capital Matters
If Putin had hoped for a successful, surgical strike against Ukraine, he must be disappointed. He may well also have been taken aback by the West’s reaction to the invasion. Its run-up was accompanied by the usual disunity within both NATO and the EU, but both NATO and the EU have closed ranks, and taken far stronger action than many (including me) had anticipated, particularly perhaps in Germany.

Retro Book Reviews: A Capitalism for the People: Recapturing the Lost Genius of American Prosperity by Luigi Zingales
January 06, 2022 | Competitive Enterprise Institute
University of Chicago economist Luigi Zingales’s book A Capitalism for the People: Recapturing the Lost Genius of American Prosperity, which celebrates its 10th anniversary this year, attempts to frame free-market policies in terms that appeal to populists, who generally oppose free markets.

A ‘once-in-a-century inflection point’: DoJ’s antitrust chief on curbing corporate power
June 2, 2022 | Financial Times
One of the most striking pictures in Jonathan Kanter’s office is a cartoon of a wrecked airship called “High Finance”, featuring business magnates of early 1900s America as stranded passengers. The doomed aircraft’s splintered blades bear the names of large trusts and a broken-up corporation, while hovering above it is the apparent cause of the crash: a black cloud labelled “investigation”, “merger decision” and “law”.

When Picking Judges, Democrats Need to Stop Ignoring Economics
June 1, 2022 | The New York Times Opinion
President Biden has argued more forcefully than any other president in recent decades that the government needs to limit corporate concentration and to prosecute abuses of corporate power. He has installed leading proponents of an antitrust revival at the White House, and at the Justice Department and the Federal Trade Commission, the major regulatory agencies.

Live from the archives: Thoughts on competition between the largest global audit firms
May 22, 2022 | The Dig
I am more or less done with my move to Philadelphia — anyone an expert on getting an old LG flat screen to sound right? — and my official duties as a full-time Wharton faculty member will start on July 1. I’ve got several newsletters in the hopper but, in the meantime, I thought we could spend some time thinking about the hot topic of monopoly concentration in the context of the Big 4.

CAA’s ICM Buy Suffers Deal Fatigue as Agents Defect While Feds Take Long Look
May 16, 2022 | The Hollywood Reporter
“Never leave a deal open” is a phrase agents know too well. The longer it stays open, the more it invites scrutiny, and the more chances there are for it to go sideways or south. The CAA acquisition of rival agency ICM Partners has now been open since September, when the mega agency first unveiled its plans, at the same time signaling its expectation that the buy would close by the end of the year, if not by the beginning of this one.

The FTC at Full Strength: What to Expect Next
May 16, 2022 | Gibson Dunn
The Federal Trade Commission (FTC) stalemate ended on Wednesday, May 11, 2022, with Vice President Kamala Harris breaking the 50-50 Senate tie to confirm Alvaro Bedoya.  The addition of Commissioner Bedoya establishes the first Democratic majority at the FTC since Commissioner Rohit Chopra left the agency to lead the Consumer Financial Protection Bureau in October 2021 and creates a pathway for Chair Lina Khan’s ambitious agency agenda.  Commissioner Bedoya, a privacy scholar, brings with him substantial interest in privacy and algorithmic fairness which are issues at the top of the FTC’s priorities.

DMA: EU, Turkey and Beyond
May 13, 2022 | Lexology
Over the recent years, digitalisation and digital services have been at the core of many innovative advantages for businesses and end users alike. These benefits range from online intermediation services to software application stores. This variety offers better and more efficient choices for users while increasing competition within the digital markets industry.

Two brave female journalists in Ukraine show us the value of a free press
May 13, 2022 | Evening Standard
Last week I spent an hour on Zoom in conversation with two remarkable, brave women. The editor of the Kyiv Independent, Olga Rudenko, is on the front of Time magazine this week as one of their “next generation leaders”. Her passionate chief executive Daryna Shevchenko, whose phone was constantly blasting air raid warnings as we spoke, laughed darkly that she should be locking herself in the bathroom for safety. Rudenko was stationed that week not far from the Donetsk region, seeing family she is increasingly concerned about, as fierce fighting moves ever closer.

Olga Rudenko and the Kyiv Independent Are Giving the World a Window Into a Devastating War
May 11, 2022 | Time
The staff of the Kyiv Independent knew war was coming. They had spent long days in February reporting on an invasion that high-level sources had told them was imminent. Editor in chief Olga Rudenko and the other senior editors had consulted with the outlet’s two dozen or so staff members to make sure each had an evacuation plan and had withdrawn cash so they could keep operating if the banks closed.

How Disney and DeSantis clashed over power and policy, and what it means for business and politics in Florida
May 10, 2022 | WLRN Miami
The battle between Gov. DeSantis and Disney CEO Bob Chapek is a rare public display of big business and hard knuckle politics. It was both a slow burn and a rapid firestorm that engulfed the Magic Kingdom in Florida politics and the national culture war.

The failures of stakeholder capitalism
May 1, 2022 | Financial Times
People who care about creating a fairer and more sustainable market system tend to think about things like “ESG” investing (environmental, social and governance issues) and “stakeholder capitalism”. But what they need to start thinking about is power.

US agencies considering conglomerate issues during merger guideline review, Khan says
April 25, 2022 | Global Competition Review
Federal Trade Commission chair Lina Khan has said the US antitrust agencies are considering ways in which to evaluate deals involving conglomerate effects as the enforcers consider revisions to their merger guidelines.

Optimal policy for acquisitions of potential competitors under financial constraints
March 27, 2022 | VoxEU CEPR
Potential competitors are firms that currently do not exert competitive pressure but might do so in the future. The acquisition of these firms is a widespread phenomenon. As Figure 1 shows, since the mid-1990s there has been a dramatic shift in the exit strategy of start-ups backed by venture capital, from IPOs towards acquisitions (obviously, not all the targets of such acquisitions are potential competitors). In the digital economy alone, hundreds of start-ups have been bought in the last few years by incumbents such as Alphabet (Google), Amazon, Apple, Meta (Facebook) and Microsoft, but this phenomenon extends beyond the digital industries.

We aren’t going after Russian oligarchs in the right way. Here’s how to do it
March 9, 2022 | The Guardian
We’re sanctioning Russian oligarchs up the wazoo, hoping it’s a way to get Putin to stop his deadly attack on Ukraine. But for this tactic to work, two conditions must be met: first, the US and our allies must be able to locate and tie up Russian oligarchic wealth. Second, Russian oligarchs must have enough power to stop Putin.

War and Sanctions
March 4, 2022 | NR Capital Matters
If Putin had hoped for a successful, surgical strike against Ukraine, he must be disappointed. He may well also have been taken aback by the West’s reaction to the invasion. Its run-up was accompanied by the usual disunity within both NATO and the EU, but both NATO and the EU have closed ranks, and taken far stronger action than many (including me) had anticipated, particularly perhaps in Germany.

Retro Book Reviews: A Capitalism for the People: Recapturing the Lost Genius of American Prosperity by Luigi Zingales
January 06, 2022 | Competitive Enterprise Institute
University of Chicago economist Luigi Zingales’s book A Capitalism for the People: Recapturing the Lost Genius of American Prosperity, which celebrates its 10th anniversary this year, attempts to frame free-market policies in terms that appeal to populists, who generally oppose free markets.