[{"id":131,"date":"2026-02-05T19:46:56","date_gmt":"2026-02-05T19:46:56","guid":{"rendered":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/?p=131"},"modified":"2026-02-05T19:46:56","modified_gmt":"2026-02-05T19:46:56","slug":"netflix-warner-bros-is-a-marriage-made-in-competition-heaven","status":"publish","type":"post","link":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/2026\/02\/05\/netflix-warner-bros-is-a-marriage-made-in-competition-heaven\/","title":{"rendered":"Netflix-Warner Bros is a marriage made in competition heaven"},"content":{"rendered":"\n<p>By Thomas Hazlett<br>Feb. 4, 2026<\/p>\n\n\n\n<p>In his most&nbsp;recent&nbsp;article in Barron\u2019s, Professor Tom Hazlett argues that antitrust regulators should approve Netflix\u2019s proposed acquisition of Warner Bros. Discovery, contending that fears of excessive market consolidation are overstated. While critics point to Netflix\u2019s growing scale, Hazlett notes that the streaming market is highly competitive, with rivals such as Disney+, Hulu, Paramount+, YouTube and TikTok commanding substantial audiences and revenue. Hazlett says that even after the merger, Netflix\u2013WBD would not dominate video markets, especially when measured by viewing hours or total video-related revenue, where YouTube and Google remain larger. Hazlett also suggests political and industry hostility toward Netflix, rather than genuine concern over competitive harm, helps explain resistance to the deal. Overall, the piece frames the merger as a continuation of consumer-benefiting disruption that expands choice and intensifies competition rather than stifling it.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.barrons.com\/articles\/netflix-anti-trust-hearing-warner-bros-deal-4d0b88e2?st=wksPSf\" target=\"_blank\" rel=\"noreferrer noopener\">Read the full article in Barron&#8217;s.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Thomas HazlettFeb. 4, 2026 In his most&nbsp;recent&nbsp;article in Barron\u2019s, Professor Tom Hazlett argues that antitrust regulators should approve Netflix\u2019s proposed acquisition of Warner Bros. Discovery, contending that fears of excessive market consolidation are overstated. While critics point to Netflix\u2019s growing scale, Hazlett notes that the streaming market is highly competitive, with rivals such as [&hellip;]<\/p>\n","protected":false},"author":3599,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[16904],"class_list":["post-131","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"fimg_url":false,"_links":{"self":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/131","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/users\/3599"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/comments?post=131"}],"version-history":[{"count":0,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/131\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/media?parent=131"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/categories?post=131"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/tags?post=131"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/coauthors?post=131"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":129,"date":"2025-01-13T14:47:55","date_gmt":"2025-01-13T14:47:55","guid":{"rendered":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/?p=129"},"modified":"2025-01-13T14:47:55","modified_gmt":"2025-01-13T14:47:55","slug":"thomas-hazlett-tiktok-regulation-sparks-debate-over-balancing-national-security-with-free-speech-protections","status":"publish","type":"post","link":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/2025\/01\/13\/thomas-hazlett-tiktok-regulation-sparks-debate-over-balancing-national-security-with-free-speech-protections\/","title":{"rendered":"Thomas Hazlett: TikTok regulation sparks debate over balancing national security with free speech protections"},"content":{"rendered":"\n<p><em>Contributed by: Thomas Hazlett, Hugh H. Macaulay Endowed Professor of Economics at<\/em>\u00a0<em>Clemson University<\/em><\/p>\n\n\n\n<p>Judge Srinivasan\u2019s lower court opinion analogizes regulation of the TikTok platform, otherwise left to the protections of free speech, because of \u201cthe government\u2019s well-established practice of placing restrictions on foreign ownership or control where it could have national security implications.\u201d That references the 1927 Radio Act, legislation that did indeed ban ownership of broadcasting licenses. Three key facts are forgotten, however. <a href=\"https:\/\/www.newsweek.com\/tiktok-ban-us-trump-options-2012270\" target=\"_blank\" rel=\"noreferrer noopener\">Read the full article in Newsweek.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Contributed by: Thomas Hazlett, Hugh H. Macaulay Endowed Professor of Economics at\u00a0Clemson University Judge Srinivasan\u2019s lower court opinion analogizes regulation of the TikTok platform, otherwise left to the protections of free speech, because of \u201cthe government\u2019s well-established practice of placing restrictions on foreign ownership or control where it could have national security implications.\u201d That references [&hellip;]<\/p>\n","protected":false},"author":3599,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[16904],"class_list":["post-129","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"fimg_url":false,"_links":{"self":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/129","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/users\/3599"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/comments?post=129"}],"version-history":[{"count":0,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/129\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/media?parent=129"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/categories?post=129"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/tags?post=129"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/coauthors?post=129"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":124,"date":"2024-04-24T15:07:56","date_gmt":"2024-04-24T15:07:56","guid":{"rendered":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/?p=124"},"modified":"2024-04-24T15:12:18","modified_gmt":"2024-04-24T15:12:18","slug":"tullock-lecture-the-fabric-of-civilization","status":"publish","type":"post","link":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/2024\/04\/24\/tullock-lecture-the-fabric-of-civilization\/","title":{"rendered":"Tullock Lecture: The Fabric of Civilization"},"content":{"rendered":"\n<p>On April 15, 2024, the Information Economy Project Center hosted Virginia Postrel to give the Tullock Lecture on Big Ideas About Information. She is a world-renowned author, columnist, speaker and Greenville native. Her work spans a broad range of topics, from social science to fashion, concentrating on the intersection of culture, commerce and technology, with an eye toward understanding the personal and social meaning of life in a dynamic, commercial culture. Her talk focused on her recent book, \u201cThe Fabric of Civilization: How Textiles Made the World.\u201d<\/p>\n\n\n\n<figure class=\"wp-block-embed-youtube wp-block-embed is-type-video is-provider-youtube\">\n<iframe loading=\"lazy\" title=\"The Fabric of Civilization Tullock Lecture\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/gLY2DBveLrg?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/figure>\n","protected":false},"excerpt":{"rendered":"<p>On April 15, 2024, the Information Economy Project Center hosted Virginia Postrel to give the Tullock Lecture on Big Ideas About Information. She is a world-renowned author, columnist, speaker and Greenville native. Her work spans a broad range of topics, from social science to fashion, concentrating on the intersection of culture, commerce and technology, with [&hellip;]<\/p>\n","protected":false},"author":3599,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[],"class_list":["post-124","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"fimg_url":false,"_links":{"self":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/124","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/users\/3599"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/comments?post=124"}],"version-history":[{"count":0,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/124\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/media?parent=124"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/categories?post=124"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/tags?post=124"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/coauthors?post=124"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":121,"date":"2024-03-13T17:31:28","date_gmt":"2024-03-13T17:31:28","guid":{"rendered":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/?p=121"},"modified":"2024-03-13T17:31:28","modified_gmt":"2024-03-13T17:31:28","slug":"video-thomas-hazlett-interviewed-in-award-winning-2023-documentary","status":"publish","type":"post","link":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/2024\/03\/13\/video-thomas-hazlett-interviewed-in-award-winning-2023-documentary\/","title":{"rendered":"Video: Thomas Hazlett interviewed in award-winning 2023 documentary"},"content":{"rendered":"\n<p>A fascinating award-winning 2023 documentary details how opening staid telecoms markets to new rivalry unleashed robust innovation. Director and producer Jennifer Manner details the history of how the Ma Bell monopoly was replaced by satellites, cable, smartphone rivalry, igniting disruptions that helped create The Information Economy. Clemson University economist Thomas Hazlett, one of the experts interviewed in this film, provides commentary with notable regulators, scholars, and industry players in this important saga, which has aired on PBS stations nationwide. <a href=\"https:\/\/www.whenwirewasking.com\/\" target=\"_blank\">Watch the video.<\/a><br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A fascinating award-winning 2023 documentary details how opening staid telecoms markets to new rivalry unleashed robust innovation. Director and producer Jennifer Manner details the history of how the Ma Bell monopoly was replaced by satellites, cable, smartphone rivalry, igniting disruptions that helped create The Information Economy. Clemson University economist Thomas Hazlett, one of the experts [&hellip;]<\/p>\n","protected":false},"author":3599,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[],"class_list":["post-121","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"fimg_url":false,"_links":{"self":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/121","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/users\/3599"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/comments?post=121"}],"version-history":[{"count":0,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/121\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/media?parent=121"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/categories?post=121"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/tags?post=121"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/coauthors?post=121"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":119,"date":"2024-03-11T20:21:15","date_gmt":"2024-03-11T20:21:15","guid":{"rendered":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/?p=119"},"modified":"2024-03-11T20:23:37","modified_gmt":"2024-03-11T20:23:37","slug":"tullock-lecture-featuring-virginia-postrel","status":"publish","type":"post","link":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/2024\/03\/11\/tullock-lecture-featuring-virginia-postrel\/","title":{"rendered":"April 15 Tullock Lecture featuring Virginia Postrel"},"content":{"rendered":"\n<p> The Information Economy Project at Clemson University is delighted to host one of America&#8217;s most interesting thinkers and writers, Virginia Postrel. As the former editor of Reason Magazine and long-time columnist for Bloomberg, Virginia writes about social innovation in ideas, culture and fashion. Her lecture at Clemson will focus on her latest book, &#8220;The Fabric of Civilization,&#8221; a truly remarkable exploration of how cloth &#8212; cloth &#8212; has formed a rich part of economic development and the human experience. Join us on April 15, 2024, 4-5:30, in 121 Hendrix. Admission is free, but space is limited.<\/p>\n\n\n\n<div class=\"wp-block-file\"><a href=\"https:\/\/blogs.clemson.edu\/informationeconomyproject\/files\/2024\/03\/Postrel.Flyer_.4.15.24.X.pdf\">View Inforamtional Flyer<\/a><a href=\"https:\/\/blogs.clemson.edu\/informationeconomyproject\/files\/2024\/03\/Postrel.Flyer_.4.15.24.X.pdf\" class=\"wp-block-file__button\">Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Information Economy Project at Clemson University is delighted to host one of America&#8217;s most interesting thinkers and writers, Virginia Postrel. As the former editor of Reason Magazine and long-time columnist for Bloomberg, Virginia writes about social innovation in ideas, culture and fashion. Her lecture at Clemson will focus on her latest book, &#8220;The Fabric [&hellip;]<\/p>\n","protected":false},"author":3599,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[],"class_list":["post-119","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"fimg_url":false,"_links":{"self":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/users\/3599"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/comments?post=119"}],"version-history":[{"count":0,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/119\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/media?parent=119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/categories?post=119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/tags?post=119"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/coauthors?post=119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":117,"date":"2024-02-21T14:20:28","date_gmt":"2024-02-21T14:20:28","guid":{"rendered":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/?p=117"},"modified":"2024-02-21T14:20:28","modified_gmt":"2024-02-21T14:20:28","slug":"mergers-can-benefit-consumers-insights-thomas-hazlett-economics-professor","status":"publish","type":"post","link":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/2024\/02\/21\/mergers-can-benefit-consumers-insights-thomas-hazlett-economics-professor\/","title":{"rendered":"Mergers can benefit consumers: Insights Thomas Hazlett, economics professor"},"content":{"rendered":"\n<p>On Squawk Box, Thomas Hazlett,  H.H. Macaulay Endowed Professor of Economics, details the consumer benefits of mergers, challenging the perceived skepticism surrounding them. Explaining the case for lighter merger regulations, he uses his expertise to clarify the advantages of reducing regulations. <a href=\"https:\/\/www.cnbc.com\/video\/2024\/02\/20\/clemson-universitys-thomas-hazlett-on-why-mergers-can-benefit-consumers.html\" target=\"_blank\">Watch the interview.<\/a><br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On Squawk Box, Thomas Hazlett, H.H. Macaulay Endowed Professor of Economics, details the consumer benefits of mergers, challenging the perceived skepticism surrounding them. Explaining the case for lighter merger regulations, he uses his expertise to clarify the advantages of reducing regulations. Watch the interview.<\/p>\n","protected":false},"author":3599,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[],"class_list":["post-117","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"fimg_url":false,"_links":{"self":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/117","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/users\/3599"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/comments?post=117"}],"version-history":[{"count":0,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/117\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/media?parent=117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/categories?post=117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/tags?post=117"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/coauthors?post=117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":114,"date":"2024-02-13T19:51:00","date_gmt":"2024-02-13T19:51:00","guid":{"rendered":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/?p=114"},"modified":"2024-02-13T20:04:00","modified_gmt":"2024-02-13T20:04:00","slug":"revolutionizing-the-cellular-network-landscape-professor-of-economics-provides-perspective-on-the-t-mobile-spirit-merger","status":"publish","type":"post","link":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/2024\/02\/13\/revolutionizing-the-cellular-network-landscape-professor-of-economics-provides-perspective-on-the-t-mobile-spirit-merger\/","title":{"rendered":"Revolutionizing the cellular network landscape: Professor of economics provides perspective on the T-Mobile-Sprint merger"},"content":{"rendered":"\n<p>Thomas Hazlett, an H.H. Macaulay Endowed Professor in Economics, speaks on T-Mobile\u2019s merger with Sprint in April 2020 and how it defied initial skepticism. Considering the merger between the two companies as pro-competitive rather than anti-competitive, he states how it reshaped the cellular network industry. Hazlett explains the merger&#8217;s success, how it benefits consumers and the potential for other efficient mergers in the future. Read the full article in <a href=\"https:\/\/www.wsj.com\/articles\/t-mobile-proves-that-mergers-can-benefit-consumers-8fab2890?mod=latest_headlines\" target=\"_blank\" rel=\"noopener\">The Wall Street Journal<\/a>.<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Thomas Hazlett, an H.H. Macaulay Endowed Professor in Economics, speaks on T-Mobile\u2019s merger with Sprint in April 2020 and how it defied initial skepticism. Considering the merger between the two companies as pro-competitive rather than anti-competitive, he states how it reshaped the cellular network industry. Hazlett explains the merger&#8217;s success, how it benefits consumers and [&hellip;]<\/p>\n","protected":false},"author":3599,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[],"class_list":["post-114","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"fimg_url":false,"_links":{"self":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/114","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/users\/3599"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/comments?post=114"}],"version-history":[{"count":0,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/114\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/media?parent=114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/categories?post=114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/tags?post=114"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/coauthors?post=114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":122,"date":"2024-02-13T17:31:30","date_gmt":"2024-02-13T17:31:30","guid":{"rendered":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/?p=122"},"modified":"2024-03-13T17:53:20","modified_gmt":"2024-03-13T17:53:20","slug":"thomas-hazlett-discusses-historical-policy-reform","status":"publish","type":"post","link":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/2024\/02\/13\/thomas-hazlett-discusses-historical-policy-reform\/","title":{"rendered":"Thomas Hazlett discusses historical policy reform"},"content":{"rendered":"\n<p>The Nixon Presidential Library and the National Archives co-presented Launching the Telecommunications Revolution: The Story of the Office of Telecommunications Policy. In 1970, the office was tasked with eliminating burdensome regulations and introducing market-based opportunities to American telecommunications &#8212; paving the way for satellite and cable television. In 1969, only three television networks and only one company, AT&amp;T, provided all telecommunications services except for video. This changed when a young visionary named Clay \u201cTom\u201d Whitehead created a revolution in human communication through his leadership of the OTP. Clemson economist Thomas Hazlett is part of the panel discussing this important if little-known, historical policy reform. <a href=\"https:\/\/www.nixonfoundation.org\/2024\/02\/latest-nixon-legacy-forum-explores-the-telecommunications-revolution\/\" target=\"_blank\">Watch the C-SPAN video of the event.<\/a><br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Nixon Presidential Library and the National Archives co-presented Launching the Telecommunications Revolution: The Story of the Office of Telecommunications Policy. In 1970, the office was tasked with eliminating burdensome regulations and introducing market-based opportunities to American telecommunications &#8212; paving the way for satellite and cable television. In 1969, only three television networks and only [&hellip;]<\/p>\n","protected":false},"author":3599,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[],"class_list":["post-122","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"fimg_url":false,"_links":{"self":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/122","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/users\/3599"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/comments?post=122"}],"version-history":[{"count":0,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/122\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/media?parent=122"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/categories?post=122"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/tags?post=122"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/coauthors?post=122"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":111,"date":"2024-01-26T18:45:22","date_gmt":"2024-01-26T18:45:22","guid":{"rendered":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/?p=111"},"modified":"2024-01-26T18:45:22","modified_gmt":"2024-01-26T18:45:22","slug":"you-cant-save-low-cost-flying-by-undermining-spirit","status":"publish","type":"post","link":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/2024\/01\/26\/you-cant-save-low-cost-flying-by-undermining-spirit\/","title":{"rendered":"You Can\u2019t Save Low-Cost Flying By Undermining Spirit"},"content":{"rendered":"\n<p>\nThomas W. Hazlett, H.H. Macaulay, endowed chair of economics at Clemson \nUniversity, discusses the benefits and shifts in customer experience, \nservice and profits if JetBlue is allowed to acquire Spirit Airlines.<br \/><a href=\"https:\/\/www.barrons.com\/articles\/spirit-jetblue-merger-low-cost-airline-travel-flights-prices-f8210316?st=bsrfvucq5pwplaz\" target=\"_blank\" rel=\"noreferrer noopener\">Read the full article from Barron\u2019s.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Thomas W. Hazlett, H.H. Macaulay, endowed chair of economics at Clemson University, discusses the benefits and shifts in customer experience, service and profits if JetBlue is allowed to acquire Spirit Airlines.Read the full article from Barron\u2019s.<\/p>\n","protected":false},"author":3599,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[],"class_list":["post-111","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"fimg_url":false,"_links":{"self":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/111","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/users\/3599"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/comments?post=111"}],"version-history":[{"count":0,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/111\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/media?parent=111"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/categories?post=111"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/tags?post=111"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/coauthors?post=111"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":108,"date":"2022-11-17T10:11:51","date_gmt":"2022-11-17T10:11:51","guid":{"rendered":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/?p=108"},"modified":"2022-11-17T15:12:44","modified_gmt":"2022-11-17T15:12:44","slug":"thomas-w-hazlett-the-ftcs-rendition-of-the-cellophane-fallacy-oct-27-2022","status":"publish","type":"post","link":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/2022\/11\/17\/thomas-w-hazlett-the-ftcs-rendition-of-the-cellophane-fallacy-oct-27-2022\/","title":{"rendered":"Thomas W. Hazlett: The FTC\u2019s Rendition of the \u201cCellophane Fallacy\u201d (Oct. 27, 2022)"},"content":{"rendered":"<p><span class=\"e2ma-style\">Originally appearing in <a href=\"https:\/\/www.networklawreview.org\/hazlett-cellophane-fallacy\/\" target=\"_blank\" rel=\"noopener\"><strong>Network Law Review<\/strong><\/a><strong>.<\/strong><\/span><\/p>\n<p>Dear readers, the Network Law Review is delighted to present you with this month\u2019s\u00a0<a href=\"https:\/\/www.networklawreview.org\/category\/guests\/\">guest article<\/a> by\u00a0<a href=\"https:\/\/www.clemson.edu\/business\/about\/profiles\/hazlett\"><span lang=\"EN-US\">Thomas W. Hazlett<\/span><\/a>,\u00a0<span lang=\"EN-US\">Hugh H. Macaulay Endowed Professor of Economics, Clemson University.<\/span><\/p>\n<p>****<\/p>\n<p>In the pending case of <em>FTC v. Facebook<\/em>, the Government alleges price increases for the \u201cfree\u201d service. In this zero-price offering, the FTC argues that effective prices have been increased by Facebook by relaxing rules that protect against the use of personal information. These instances have not led to observed declines in quantities demanded (for Facebook services), says the Commission. The conclusion offered is that the non-responsiveness of consumers provides evidence of Facebook\u2019s market power. The characterization of price increases is problematic, while the FTC\u2019s identified \u201cinelastic\u201d demand response constitutes an inverse \u201cCellophane Fallacy.\u201d<\/p>\n<p><strong>Introduction<\/strong><\/p>\n<p>In a major antitrust case brought against Facebook (aka, Meta), the Federal Trade Commission alleges that the social media platform has achieved a monopoly, largely through mergers, and has abused its market power by raising prices and restricting output.<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_1\" class=\"footnote_plugin_tooltip_text\">1<\/sup><\/a><\/span> In digital platforms, however, it is thought to be a difficult argument to make when consumers access services not by directly paying fees but by forming audiences for advertisers. How is a price equal to $0.00 set above the competitive level?<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_2\" class=\"footnote_plugin_tooltip_text\">2<\/sup><\/a><\/span><\/p>\n<p>The FTC supplies a potential answer. While Facebook launched its application (in 2004) and developed its services by providing competitively superior products to industry incumbents Friendster and MySpace, it switched strategies after surpassing its rivals. Aided, pointedly, by its purchases of Instagram (2012) and WhatsApp (2014), the newly dominant platform allegedly raised the price of access above competitive levels by relaxing privacy protections for users, enabling Facebook to more profitably monetize its sales of advertising. These charges drive the FTC to prosecute Facebook for \u201canticompetitive conduct and unfair methods of competition\u201d that violate the FTC Act. Moreover, the Commission\u2019s analysis of postulated price changes incorporates the agency\u2019s conclusion that consumer demand scarcely budged, supporting the monopoly power that is asserted.<\/p>\n<p>This short paper suggests that the quality-adjusted price increases are predicated on uncompelling theory and evidence, while the economic supposition surmising that price increases had no impact on consumers exhibits the Cellophane Fallacy \u2013 inverted. First, the Cellophane Fallacy is discussed. Second, we turn to the Price Increase argument made by the FTC. Third, we briefly detail the form of the Cellophane Fallacy made in the FTC\u2019s Complaint.<\/p>\n<p><strong>The Cellophane Fallacy<\/strong><\/p>\n<p>In an antitrust case decided in 1956 by the U.S. Supreme Court,<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_3\" class=\"footnote_plugin_tooltip_text\">3<\/sup><\/a><\/span> the defendant \u2013\u00a0du Pont \u2013 was accused of monopolizing the market for cellophane. The company countered the allegations by introducing evidence of the many competing products available to consumers, including aluminum foil, waxed paper, and polyethylene. Considering \u201call flexible wrapping materials\u201d, du Pont was given a modest share and many alternative products were prosed as substitutes. This seemed to demonstrate that du Pont faced an elastic demand for its cellophane products; the company claimed it could exercise no substantial ability to profitably raise prices.\u00a0 Consumers would simply switch away.<\/p>\n<p>The Supreme Court found this approach compelling, and du Pont prevailed. The Court\u2019s reasoning was:<\/p>\n<blockquote><p>If a slight decrease in the price of cellophane causes a considerable number of customers of other flexible wrappings to switch to cellophane, it would be an indication that a high cross-elasticity of demand exists between them; that the products compete in the same market.<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_4\" class=\"footnote_plugin_tooltip_text\">4<\/sup><\/a><\/span>.<\/p><\/blockquote>\n<p>Alas, the decision has become well-known committing the Cellophane Fallacy. In fact, price theory suggests that monopoly firms face demand curves that are necessarily <em>elastic.<\/em><span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_5\" class=\"footnote_plugin_tooltip_text\">5<\/sup><\/a><\/span>.<\/p>\n<p>Consider the textbook case wherein a firm faces a linear demand curve for its products. The absolute value of demand elasticity (with <em>e<sub>d<\/sub> <\/em>= <em>%<\/em><em>\u2206<\/em><em>Q<sub>d<\/sub>\/%<\/em><em>\u2206<\/em><em>P<\/em>) increases as the market price rises. This is seen by first supposing a very low price is charged by the firm. From this starting point, as higher prices are charged, the price increases tend to be large in terms of percentage change, and quantity declines proportionally low. As <em>Total Revenues = Price * Quantity<\/em>, these higher proportional price increases raise revenues (outputs decline with the price increases, but by a lower percentage). Because <em>Total Costs<\/em> are constant (if marginal costs = 0) or declining (if marginal cost &gt; 0) as outputs decline, profits increase as prices begin to rise. This is true along the <em>inelastic<\/em> <em>portion<\/em> of the demand curve. But above a certain price, the demand curve facing the firm becomes <em>elastic<\/em>. To maximize profits, the firm always adjusts prices (and outputs) to insure it faces a marginal demand that is in the elastic portion, as price increases in the inelastic portion are inevitably profitable.<\/p>\n<p>The trick that du Pont\u2019s lawyers performed was to ignore how the company had come to price its cellophane product, directing attention to the end result: at the price du Pont charged, there were many effective substitutes. Had more competitive prices been in place, a counterfactual construction, the cellophane product might have been unique, with many inferior substitutes. Lawrence J. White identifies the difficulty in producing such a hypothetical market alternative as the great challenge of market delineation in monopolization cases.<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_6\" class=\"footnote_plugin_tooltip_text\">6<\/sup><\/a><\/span>. This price theory analysis, despite its wide acceptance since Donald Turner\u2019s 1956 critique of the du Pont opinion,<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_7\" class=\"footnote_plugin_tooltip_text\">7<\/sup><\/a><\/span> yet complicates antitrust analysis.<\/p>\n<p>Indeed. The erroneous application of price theory continues in the current FTC case against Facebook, with a twist.\u00a0What is characterized as an Inverse Cellophane Fallacy will be discussed after the FTC\u2019s asserted observation of Facebook price increases.<\/p>\n<p><strong>Facebook\u2019s Alleged Price Increases<\/strong><\/p>\n<p>Facebook allows users to access its social media platform without monetary payment, acquiring data about its users that it monetizes via advertising availabilities. The user-side transaction \u2013 software access for data \u2013 is via contract. The privacy of the users is a key issue in such agreements, and the Federal Trade Commission has federal jurisdiction in enforcing relevant consumer protection laws.<\/p>\n<p>The FTC alleges that, upon acquiring monopoly power in social media, Facebook exploited the situation to effectively raise prices by lowering privacy protections: \u201cWithout meaningful competition, Facebook has been able to provide lower levels of service quality on privacy and data protection than it would have to provide in a competitive market.\u201d<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_8\" class=\"footnote_plugin_tooltip_text\">8<\/sup><\/a><\/span> While Facebook was forced, as a start-up, to offer superior terms to users, this allegedly gave way to \u201clower levels of service\u201d in the monopolization phase. This allowed greater data flow to advertisers, profiting Facebook.<\/p>\n<p>The claim is not generated by privacy breaches \u2013 such failures by Facebook are subject to legal, regulatory, and economic sanctions. When contract terms are violated, users can pursue civil actions for compensation, and regulators can impose sanctions. The FTC, indeed, imposed a $5 billion fine on Facebook in 2019 for violations established by the agency.<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_9\" class=\"footnote_plugin_tooltip_text\">9<\/sup><\/a><\/span> And consumer demand, upon disclosure of such violations, would presumably be reduced, inducing a loss of profits.<\/p>\n<p>By revealing preferences, consumers enjoy the ability to trade personal information for \u201cfree\u201d services. That explains why social media platforms, and many other Internet-based businesses, often (even <em>typically<\/em>) operate with pricing structures based on advertisements rather than subscription models, or hybrid approaches bundling a mix.<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_10\" class=\"footnote_plugin_tooltip_text\">10<\/sup><\/a><\/span> In each instance, there is some level of protection for the personal data collected, and firms compete to supply offers that consumers accept. It is not the case that the most restrictive models are inherently more protective of consumers\u2019 interests, just as it is not true that the most relaxed consumer protections are advantageous for platforms to offer. Compromises govern behavior. Privacy law regulates. Market rivalry selects.<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_11\" class=\"footnote_plugin_tooltip_text\">11<\/sup><\/a><\/span><\/p>\n<p>Indeed, data generated by the online behavior of Facebook users is very valuable in targeting third-party ads \u2013 for Facebook <em>users<\/em>. Irrelevant banners consuming screen space, download time, and bandwidth raise the effective price of the access paid by these agents, while better-targeted ads that increase the probability of relevance tend to improve it. The assertion that there is an unambiguous decline in consumer welfare when personal data collection is increasingly deployed to segment audiences for commercial messages is uncompelling.<\/p>\n<p><strong>The Inverse Cellophane Fallacy<\/strong><\/p>\n<p>The FTC claims, however, that Facebook has opportunistically ratcheted up its data collection, lowered service quality, and increased quality-adjusted prices. Moreover, further proof of its monopoly position is evidenced in the market reaction: \u201cthe ability to withstand significant user dissatisfaction while experienc[ing] a minimal loss of user engagement\u201d is an indicator of market power.\u201d<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_12\" class=\"footnote_plugin_tooltip_text\">12<\/sup><\/a><\/span><\/p>\n<p>The FTC here characterizes the <em>lack of substitution <\/em>following alleged quality-adjusted price hikes as evidence of Facebook\u2019s monopoly:<\/p>\n<blockquote><p>\u201c[H]istorical events indicate that even when Facebook\u2019s conduct has caused significant user dissatisfaction, Facebook does not lose significant users or engagement to competitors. This is an indicator of market power\u2026 Facebook\u2019s ability to withstand significant user dissatisfaction while experiencing a minimal loss of user engagement on Facebook Blue [the social media platform] indicates inelastic demand and market power.\u201d<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_13\" class=\"footnote_plugin_tooltip_text\">13<\/sup><\/a><\/span><\/p><\/blockquote>\n<p>This is a form of the Cellophane Fallacy, where marginal demand conditions are taken for a general characterization of the marketplace. Instead of seeing abundant competition as in the du Pont case, however, it sees no competition. Yet the price theory exposing the Cellophane Fallacy posits that the demand facing the monopolist is <em>elastic<\/em>. Moreover, the observation reported by the FTC that consumers were unresponsive to the asserted price increase (as per a contract policy change) suggests, in fact, that consumers did not value the asserted change as the Commission hypothesized.<\/p>\n<p>The argument that price increases meet with little resistance does not \u2013 lacking a specific, contemporaneous change in market structure reducing substitution options \u2013 imply that market power is in evidence. A similarly erroneous argument appeared in the debate over the XM-Sirius merger in 2007-2008.<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_14\" class=\"footnote_plugin_tooltip_text\">14<\/sup><\/a><\/span> The National Association of Broadcasters, which opposed the combination as \u201cmerger to monopoly,\u201d advanced the theory that XM radio had raised (pre-merger) prices for its satellite radio service from $9.95 to $12.95 and yet \u201csubscriber growth continued at such a rapid pace [after] the price increase\u201d that the evidence was said to \u201cunderscore the low elasticity of demand faced by\u201d satellite radio providers \u2013\u00a0the \u201cInverse Cellophane Fallacy.\u201d<span class=\"footnote_referrer\"><a role=\"button\"><sup id=\"footnote_plugin_tooltip_12653_1_15\" class=\"footnote_plugin_tooltip_text\">15<\/sup><\/a><\/span><\/p>\n<p><strong>Conclusion<\/strong><\/p>\n<p>The case\u00a0<em>FTC v. Facebook<\/em> is expected to go to trial in 2023 or 2024. It is a substantial undertaking for the Government, one of the biggest monopolization cases of the past quarter century. It will feature the prosecution appealing to evidence about inelastic responses to price increases by a purported monopolist. Du Pont won with its presentation on the Cellophane Fallacy. Will the FTC?<\/p>\n<p><strong>Thomas W. Hazlett<\/strong><\/p>\n<p><span lang=\"EN-US\">The author has no involvement in the Facebook litigation and no conflicts to disclose.\u00a0<\/span><\/p>\n<p>***<\/p>\n<table>\n<tbody>\n<tr>\n<td width=\"604\"><strong><u>Citation<\/u><\/strong>: Thomas W. Hazlett,\u00a0<em>The FTC\u2019s Rendition of the \u201cCellophane Fallacy\u201d<\/em>,<em><br \/>\n<\/em>Network Law Review, Fall 2022.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span class=\"e2ma-style\">Originally appearing in <a href=\"https:\/\/www.networklawreview.org\/hazlett-cellophane-fallacy\/\" target=\"_blank\" rel=\"noopener\"><strong>Network Law Review<\/strong><\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Originally appearing in Network Law Review. Dear readers, the Network Law Review is delighted to present you with this month\u2019s\u00a0guest article by\u00a0Thomas W. Hazlett,\u00a0Hugh H. Macaulay Endowed Professor of Economics, Clemson University. **** In the pending case of FTC v. Facebook, the Government alleges price increases for the \u201cfree\u201d service. In this zero-price offering, the [&hellip;]<\/p>\n","protected":false},"author":3599,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[],"class_list":["post-108","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"fimg_url":false,"_links":{"self":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/108","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/users\/3599"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/comments?post=108"}],"version-history":[{"count":0,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/posts\/108\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/media?parent=108"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/categories?post=108"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/tags?post=108"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.clemson.edu\/informationeconomyproject\/wp-json\/wp\/v2\/coauthors?post=108"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}]