One thing I especially liked was that the panel session chaired by Gilbert & Tobin's Luke Woodward on 'Riding the Wave of Digital Platform Regulation' included one of the Big Tech companies - Facebook, represented by Mia Garlick, director of policy for Australia and New Zealand - as well as the ACCC's Morag Bond (previously featured here), Ashurt's Peter Armitage, and Allens' Jacqueline Downes. It's easy for lawyers and economists to talk to (or past) each other in the abstract, but distinctly more helpful to have someone from the coalface (I'd felt the same about TradeMe's representation at the Commerce Commission's conference last year).
Mia said that the view of the big techs as being all-powerful was not at all how it felt inside the organisation. The industry felt highly dynamic, there'd been a large rise in competition for people's attention, and Facebook's engineers would be "flummoxed" by any suggestion that they enjoyed "superdominance".
The ACCC's Rod Sims had wondered, as part of his introductory Q&A session with Clayton Utz's Linda Evans, whether, if Adam Smith came back today and saw the relatively concentrated state of many markets, he'd think there was enough competition for his invisible hand to do its stuff: Sims guessed he wouldn't. In the tech space Mia described, though, I suspect if Schumpeter came back and saw the Googles and Amazons and Facebooks, he'd be quite relaxed. Indeed, given Schumpeter's ego, I'd expect him to be crowing "Told you so!" - temporary monopolies, each anxiously looking over its shoulder for the next disrupter. I'm also currently leaning towards the Schumpeterian view that, even if the current incumbents have their own market power, they've arguably done us all a favour by dealing to the (rather larger?) market power of the previous lot. How many people think we're worse off with Google ads than we were with the newspapers' classifieds?
Overall, the thoughts I took away from the discussion were that concerns about the tech titans represent a range of different issues (competition and market power, privacy, unfair trade practices, political influence, fake news) which are often unhelpfully conflated. And while it's hardly rocket science, one implication is that you need to reach for the right policy tool for the right issue. It's also clear that different countries are on very different policy trajectories. While it would normally make sense for relatively peripheral countries like Australia and New Zealand to wait for the big guys to do the heavy lifting on, say, privacy, there's little chance of a single settled global policy regime emerging anytime soon. So we're left with an unappealing alternative of doing our own limited and perhaps fragmentating thing in the meantime (as the Aussies have with their digital platform service inquiry and its recommendations).
Then we had an entertaining panel chaired by King & Wood Malleson's Caroline Coops on 'Litigating Merger Cases', with Ruth Higgins from Banco Chambers, Judge Amit Mehta from the US District Court for the District of Columbia, Washington DC, Richard Parker from Gibson Dunn and Crutcher also in Washington, and Wendy Peter, general counsel for the ACCC.
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| L-R: Messrs Peter, Parker, Mehta, Higgins |
The topic I was most interested in was the role of economic experts. Richard Parker said that what you most want is a "teacher" - someone who can explain the underlying logic and make complex facts understandable. Judge Mehta strongly agreed. First and foremost what he valued was the ability to present ideas, which was far more important than the credentials of the expert: often he got dense expert opinions that didn't need to be. He also said that experts tend to think they're going to win or lose the case, but actually they're only part of the jigsaw, and their evidence needs to meld with the rest of the story being argued. Ruth Higgins echoed Parker's comments about the role of giving "a normative narrative" explaining what is going on, and also cautioned about expert hubris: the issues in competition cases aren't more exotic than others that judges are routinely dealing with, and counterfactual analysis has been in the law "for centuries".
Wendy Peter gave a big thumbs up to "hot tubs", pre-trial conclaves of experts to exchange and debate views. They allow courts to see and explore the reasons why people have different takes on what is happening in a merger. Ruth Higgin added that the hot tub process leads to more intellectual honesty, in front of one's professional peers, than may get elicited in cross-examination.
Both panel sessions canvassed "killer acquisition" mergers that allegedly take out potential challengers before they get going. I think there's something to this line of argument, and I asked the panel whether merger jurisprudence was up to the challenge. Richard Parker felt that it was. He argued for example that one of the cases often raised, Facebook's US$1 billion purchase of Instagram in 2012, didn't stand up to much scrutiny: at acquisition the company had zero revenues, few employees, and was one of several companies doing the same sort of thing at the time. It was hard to see, in his view, that there was anything especially disruptive about its potential. He felt the existing law on nascent competition was working fine. We'll find out a bit more as some big US cases on alleged killer mergers progress: Fiona Schaeffer from Milbank in New York, who runs this global seminar series, pointed me to Sabre/Farelogix and Schick/Harry's.
Good seminar - let's have more of them down our neck of the woods.
