Preferential treatment rachel sabatini sga install#
So, for example, the iPhone comes preinstalled with a flashlight and Windows with spell-check, even though consumers could purchase and install them from other vendors. For instance, Microsoft Windows comes with preinstalled software, and smartphone companies preinstall apps that compete with other companies’ apps in their integrated smartphones. A distributor/platform preinstalling products and services on a device (i.e., “pre-installation”).For instance, Apple introduced the Lightning plug for iPhones to replace the micro-USB connector mostly because the Lightning could be used more effectively in the newly introduced device iPad. A distributor/platform requiring a complementary product in order to use the main product (i.e., “tying”).For instance, Google made its front page customizable by users to have news clips or other content appear, even though that competes with other Internet news sites such as Flipboard. A distributor/platform favoring a complementary product from its market position (i.e., “market leveraging”).For instance, Amazon promotes Amazon Basics products over third-party sellers’ products, much like supermarkets promote their own private-label products. A distributor/platform favoring its private labels over third-party products (i.e., “prominent placement”).The vague term of “self-preferencing” includes many different practices: Mimicking the European Commission’s Digital Markets Act prohibiting self-preferencing, Senate and the House bills would degrade consumers’ experience and undermine competition, since self-preferencing often benefits consumers and constitutes an integral part, rather than an abnormality, of the process of competition. However, the legislation would ban self-preferencing only for a handful of designated companies-the so-called “covered platforms,” not the thousands of brick-and-mortar sellers that daily self-preference for the benefit of consumers. They introduced legislation in October 2021 aimed at prohibiting the practice. Amy Klobuchar (D-MN) and Chuck Grassley (R-IA). The latest example of such weaponization of self-preferencing by antitrust populists is provided by Sens. To indiscriminately prohibit the widespread practice of self-preferencing without considering its benefits would distort competition, not reinvigorate it. Yet, despite the overwhelmingly positive effects of self-preferencing on strengthening competition, antitrust populists aim to weaponize self-preferencing to target only a few companies, while allowing self-preferencing for the rest of the economy. The antitrust literature acknowledges the proconsumer, procompetitive effects of self-preferencing. In addition, antitrust populists use their critique of self-preferencing to bolster their case for a structural separation of platforms (i.e., breakup) or, slightly less radically, for functional separation of the platform (i.e., requiring the platform business to be operated separately from the product sales business). The critique has materialized under the new moniker of “self-preferencing.” It holds that antitrust should prohibit Internet platforms from favoring their own products and services, even if such prohibition improves consumer welfare. The Regulatory Framework of Self-PreferencingĪntitrust populists, in their desire to reduce the size of large companies and protect competitors-especially small businesses-rather than consumers, argue that Internet platforms should not be allowed to promote their own products and services. Toward a Useful Antitrust Distinction: Two Types of Self-Preferencing Why Self-Preferencing Is a Common Business Practice How Self-Preferencing Has Gained Antitrust Prominence
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