The exercise of monopsony in labor markets is limited to one degree or another by public policy. Employer conduct aimed at creating monopsony power is governed by the Sherman Act of 1890, which forbids collusion among employers as well as competitively unreasonable conduct by a single employer.

This chapter discusses private suits and the prohibition of §1 and the sanctions for violations. Corporations are subject to fines while individuals may be fined and/or imprisoned. Section 1 forbids collusive restraints of trade. In the past, there was some confusion regarding the applicability of §1 to labor markets. These days are gone. The Department of Justice and Federal Trade Commission have issued their Antitrust Guidance for Human Resource Professionals in which the agencies make it crystal clear that they will pursue criminal convictions for collusion in labor markets. In addition to public sanctions, §4 of the Clayton Act provides a private right of action for antitrust victims.

In our final chapter, we summarize the antitrust law and economics of monopsony in the labor market. We provide some policy recommendations that are consistent with economic principles and empirical reality.

Monopsony is the label that Joan Robinson attached to a market in which a single employer faces a competitively structured supply of labor. For some reason, her early theoretical analysis, along with the insights of A. C. Piguo and J. R. Hicks, did not gain much traction. Recently, however, economists and policymakers have recognized the ill effects of monopsony and have offered some actions aimed at mitigating – if not eliminating – the monopsony problem. In our view, vigorous enforcement – both public and private – of the antitrust laws can play a large role in reducing the ill effects of monopsony power in the labor market.

One of the world’s greatest experiments in open innovation is mobile wireless. Technology enterprises have invested billions of R&D dollars to develop 2G, 3G, 4G, now 5G, and hopefully 6G soon. Technology developers make investments and look to the patent system and associated regulators to reward them for risky investments, should their patented technologies become included in the standards. In recent years there has been an uptick in the number of technology implementers. But because patents are not self-enforcing, unlicensed use occurs, which is corrosive of the open innovation system that allows non-vertically integrated firms to compete at the device level. This chapter reviews antitrust theories that some implementers have used to avoid paying royalties to patent owners. This is examined in the context of the FRAND licensing regime established by ETSI, a standards development organization. “Hold up” and “hold out” theories are examined. Hold up theories lack empirical support and are misused by some implementers—particularly those in China—who would prefer to free ride on the R&D investments of others. Restoring and revitalizing technology markets for mobile wireless likely requires limits to be placed on the availability of FRAND licenses with respect to recalcitrant technology implementers. Otherwise, the innovation ecosystem will be harmed, and open innovation (that is, licensing) business models will collapse.

Times are changing as our global ecosystem for commercializing innovation helps bring new technologies to market, networks grow, and interconnections and transactions become more complex around standards, all to enable vast opportunities to improve the human condition, to further competition, and to improve broad access. The policies that governments use to structure their legal systems for intellectual property, especially patents, as well as for competition—or antitrust—continue to have myriad powerful impacts and raise intense debates over challenging questions. This chapter explores a representative set of debates about policy approaches to patents, to elucidate particular ideas to bear in mind about how adopting a private law, property rights-based approach to patents enables them to better operate as tools for facilitating the commercialization of new technologies in ways that best promote the goals of increasing access while fostering competition and security for a diverse and inclusive society.

In response to concerns that inefficiencies in standard essential patent (SEP) licensing may have a negative impact on the development of emerging 5G and Internet of Things (IoT) markets, the European Commission (EC) convened an Expert Group on Licensing and Valuation of Standards Essential Patents (SEP Expert Group) which produced a report including 79 proposals aimed at improving the SEP licensing market. A proposal formulated by an individual member of the SEP Expert Group regarding Licensing Negotiation Groups (LNGs) has recently generated a renewed interest in the topic in the context of IoT, where a large increase in the amount of SEP licensing activity is predicted as connectivity becomes ubiquitous across most industries. While LNGs have been previously promoted to solve the perceived problem of patent holdup, we propose that LNGs should be used to solve patent holdout, which is aggravated by a collective action problem among similarly situated IoT implementers. Applying legal, economic, and management principles and norms, the resulting LNG design seeks to significantly reduce transaction costs and patent holdout while curtailing potential antitrust risks, especially regarding SEP implementers situated in the “long tail” of new IoT markets.

The separation of powers principle and antitrust both relate to power and, notably, deal with the concentration of power. However, they are usually conceptualized, analyzed, and promoted separately. Separation of powers primarily refers to branches of government or to the main functions of the state and, in this respect, to public or state power or powers, while the economic power of private or, to a lesser extent, public firms is at the core of antitrust. Though appealing, this distinction is not clear-cut. These powers interact with one another. The concentration of politico-economic power in one or a few hands also raises fundamental issues in a democracy. Currently, and in the future, special attention must be given to the fact that a few digital platforms contribute to the digital infrastructure of democracy.

If internet platforms experience similar governance problems as weak states, as this chapter argues, then it follows that one possible solution to resolving the social harms they cause is to do the same sort of thing that developed companies do when real-world states are unable to govern their territory: help them build institutions to govern more effectively. This chapter defends such an approach against criticisms related to the risk of overly empowering private companies or developed western countries.

The Conclusion to the Networked Leviathan calls on political states to act to enable the governance reforms proposed by this book, and to impose additional governance reforms on platform companies. Governments have particular leverage over platform companies via the threat of antitrust regulation, their capacity to bring it about that workers (and particularly offshore contract workers, such as social media content moderators) have more influence over corporate outcomes, and promoting the public disclosure of information about company operations. They should use that leverage. Finally, the responsiblity to protect framework from international human rights law should be applied directly to platform companies.

US academic discourse on director interlocks isn’t new. Yet, the increased attention to common ownership has also brought to light the increased tendency of interlocked directors to serve in the same industry. I termed these directors as horizontal directors in my earlier work – shining a light on the benefits they bring to investors and companies but also the risks they pose to corporate governance and antitrust law. This chapter further revisits the prevalence of horizontal directors, armed with six additional years of data, and shows that the prevalence of horizontal directors has remained steady, even as attention to common ownership has increased in recent years. These findings should serve as a clarion call to regulators – urging them to directly address the perils of horizontal directors while maintaining some of their key benefits.

Since their creation, corporations have proven to be vehicles for incredible aggregate wealth creation. It was, however, recognised at the outset that in creating a unique set of legal features that would make the company attractive for private investment, the state was not only creating a co-investor in public wealth but there was also the possibility that the company would pose a threat to the state itself. As such, since its inception, the corporation has been involved in a delicate dance with the state both to route its productive capacity towards socially desirable ends and to control the corporation’s power. Today, as technological development and the mobilisation of international financial capital allow the power of the corporation to transcend that of the state, the tools of the past that were used to constrain the corporation are increasingly relevant. Corporate law and antitrust were once used to maintain the balance between the power of the corporation and the power of the state. The now-separate conversations about corporate responsibility in the corporate governance sphere and about corporate power within competition policy circles have always, in fact, been fundamentally connected and targeted at the same set of risks.

Common ownership is the talk of the town in antitrust land. The competitive implications of rival firms being partially owned and controlled by a small set of overlapping owners are both fascinating and hotly contested. Could the source of potential harm be minority shareholder control in a setting of widely held companies? Critics question the extent and mechanisms of common owners’ influence driving any pro- or anticompetitive effects. This chapter aims to present a comprehensive account of partial ownership, capturing the incentives and effects of both individual and institutional investors and also cross- and common shareholding. It illustrates the early historical unity between corporate and competition laws in regulating shareholding acquisitions but also their progressive quiet disconnect. Triggered by the contemporary common ownership (hypo)thesis, it puts forward a taxonomy of shareholding types and their control characteristics from a competition law perspective, with emphasis on commonly thought passive and diversified investment holdings. The chapter concludes by urging competition and corporate governance and finance policymakers towards harmonic regulatory solutions to address common ownership. It also offers a quantum theory of the corporate property “atom”, drawing cautionary tales about the dynamic and ambiguous qualities of minority common shareholding for antitrust enforcers.

This paper provides a framework for evaluating policy proposals aimed at invigorating competition and improving corporate governance amid a high and increasing level of common ownership of product market competitors. In particular, I propose that any effective proposal must have the effect of separating the level at which diversification is achieved from the level at which corporate governance is exercised. Several extant proposals are likely to have that effect. I also discuss conceptual breakthroughs on several issues that regulators and industry stakeholders considered necessary to address before changing policy, including (i) the joint recognition of vertical and horizontal common ownership links, (ii) agency problems, (iii) informational and organizational frictions, (iv) methods to infer causality, (v) a better understanding of how investors portfolio choice depends on firms’ strategic interactions, and (vi) improving data quality.

If a firm is a nexus of contracts, then it is just the sum of its counterparties. It follows that when a firm monopolizes a particular market and exploits its power to impose unfavourable terms on a counterparty, the firm necessarily exploits one counterparty for the benefit of another, because the additional profits the firm generates from the unfavourable terms must be paid out eventually to some other counterparty of the firm. One alternative to attacking monopoly power through breakup of large firms or limits on anticompetitive conduct in the marketplace is therefore to prevent any one counterparty of the firm from so dominating firm governance as to be able to induce the firm to oppress other counterparties for its benefit. Creating a balance of power in firm governance, by giving each class of counterparties (i.e., workers, suppliers, investors, and consumers) an equal say over the choice of board members, would eliminate the internal forces that induce firms to exercise monopoly power. But it would not prevent firms from engaging in productive, pie-expanding, behaviour, because such behaviour tends to expand the business that the firm does with all of its counterparties—or at least enables the firm to use a share of the gains to compensate those counterparties that lose out—and therefore benefits them all.

This chapter explores the interaction between the director’s duty of loyalty and competition. It suggests that the interaction between corporate opportunity rules, which protect the company against the exploitation of business opportunities by the director, and its effects on competition and innovation require closer empirical analysis. This chapter provides a basic overview of corporate opportunity rules and then shows how such rules, which exist in numerous jurisdictions, may in certain cases have negative unilateral effects on competition and how they might also affect dynamic competition.