Cognitive Foreclosure

Details: In this session, we will be joined by Peter O'Loughlin and discuss his paper titled ‘Cognitive Foreclosure’. Those who cannot attend in person are welcome to join online via Teams. You will receive the Teams link prior to the event. Sandwich lunch will be available from 13:30 in the area outside the seminar room and the event will start at 14:00.

Abstract: Digital markets now fundamentally intertwine with our social and economic lives. International enforcement actions—the United States (U.S.) and European Union (E.U.) Google cases in particular—demonstrate from a behavioral economic perspective how digital platforms may be beginning to implicate antitrust’s two most fundamental doctrinal components—conduct and market power—in nuanced ways. In short, the regulatory and policy landscape showcases that we may be moving closer towards an antitrust world whereby firms can manipulate consumers’ psychological shortcomings to foreclose competition—a new form of nefarious conduct that might appropriately be termed “cognitive foreclosure.” Yet as a demand-side market failure, one should be cautious about categorizing behavioral market failures as antitrust issues. The behavioral deviation from perfect competition, then, would need to be “substantial” and “sustainable” if such market failures are to justifiably attract antitrust scrutiny.