Antitrust In the Age of Aggregation
December 16, 2020
Aggregation Theory was developed by Ben Thompson, a business, technology, and media analyst. He posits that distribution was controlled by manufacturers until the internet, when aggregators like Amazon took over. Producers now compete to get on Amazon’s front page. That’s where the customers are. Now there is a heated debate about what aggregation theory means for antitrust. Columbia Law professor Tim Wu and Thompson are having a public back-and-forth about the details of switching costs and the mechanics of how Google, in particular, enforces its dominance. Their dialogue could have significant consequences in court, where the operative theory is that internet companies grew by using market power to drive out competitors through acquisitions, predatory pricing, or other exclusionary deals, a much simpler case than aggregation theory.
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