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The works of Professors Stucke and Ezrachi always arouse great interest and their collaboration has provided one of the most striking works in the antitrust world with Virtual Competition. The Promise and Perils of the Algorithm-Driven Economy. This new book is in this vein. The form is not academic, as it is aimed at a wide audience that can be grasped by the four major narratives and the historiographies that dot the development. Situations are sketched out with humour and distancing. The reader is thus brought to an awareness that will be sealed at the end of each chapter by a development entitled "Reflections" clearly setting out the authors’ personal analysis.
From the outset, such a book can provoke criticism. The authors anticipate this by presenting the criticism of "conservatives" as well as "progressives". The former will argue that it is nothing more than a collection of market failures, isolated but pinned together to justify regulatory pushes that will then stifle innovation. The second group will criticise the idea of an overdose, because the problem is that too few markets have healthy competition. The signatory of these lines willingly falls into the second category and regrets the term "overdose" all the more since it only appears in the first and last lines. On the other hand, the expression "toxic competition" is hammered throughout the book and should have been propelled in the title to reflect the authors’ intention as accurately as possible. In fact, it appears in the titles of the first two parts: "When is Competition Toxic?". "Who Promotes Toxic Competition?" The third and last part is intended to be a propositional force: "What to do?" In other words, these two teachers are not giving up. After denouncing a toxic ideology that instrumentalizes competition, they intend to defend a more authentic approach to competition.
To describe toxic competition, the authors begin with a most disturbing account of the practices of American universities. It consists of buying the names and addresses of high school students, in order to solicit as many of them as possible - including a schnauzer bitch named Geneviève - by claiming that their personal qualities give them the profile required for admission. Attracting a large number of applications, the university rejects most of them and boasts a very high selection rate in view of its popularity. After tuition fees of an aberrant amount close to creating a new financial crisis in the United States, this practice of artificial selection will end up giving a poor image of the American university system in French universities, whatever its level of excellence. The second story is about the horse-meat scandal in the United Kingdom, which we have also experienced in France. It is reinforced by the illustration of a large number of quality frauds. It may be objected that this is not a competition issue, but rather a matter of criminal fraud law. However, the authors intend to describe the mirage of an endless aspiration towards low prices and the spiral of quality levelling that results from the absence or failure of consumer protection regulations to detect deception. The story of booking practices by establishments in Las Vegas still tells of how consumers can be duped into offering low prices and charging extra fees on their credit cards. The last major story tends to denounce the perverse effects of an abundance of choice. The cognitive effort it requires is such that the choice is only an illusion: on the one hand, the consumer gives up the real choice, so difficult is it; on the other hand, the so-called "aids" or "assistance" on the Internet to make the choice are only a method of investment in return for payment by the producers.
Who are the supporters and promoters of this toxic competition? In the first place, the Chicago School and its ideologues of competition understood as "laissez-faire". The authors describe here the mantra, so well chanted by Ronald Reagan and Margaret Thatcher, which is still prevalent in the Anglo-Saxon world: "more competition and less regulation". To illustrate its disastrous consequences, the authors opportunely return to the influence of Alan Greenspan, an ardent defender of the deregulation of banking and financial activities, and to his statements before and after the financial crisis of 2007. Next come the lobbyists, whose actions are compared to those who plant or allow an invasive plant such as kudzu to grow, hence the neologism "kudzu-ing" to describe those who spread the mantra. Privatizers are also mentioned, with an interesting etymological search for the term. It seems to go back to the phenomenon of the massive sale of state activities by the Nazi power to industrialists in return for their support. We find here the vulnerability of democracy due to the collusion between political power and economic power. Thus, we can see that "political capture" is not only at the origin of regulation, as defended by the Public School movement within the Chicago School, but is also at the source of deregulation and privatization. Finally, there are the new gaming masters who hold the power of the Internet: "the Gamemakers", as the famous film is called. The "surveillance capitalism" was born. We now know a little more about its workings: the creation of an addiction, the pseudo-gratuity that hides the extraction of our private life, the illusion of choice and control over use. But it was not useless to tell the story of the Fun Kid Racing app developed by de Tiny Lab Productions, a Lithuanian smart-up bought by Google.
After describing this competition that is harmful to all, at the antipodes of the promise of prosperity or well-being, the authors offer us a vision of competition that they intend to strip of an association with war and greed. They envisage a sort of gradation in the sanitization of the vision of competition, from "toxic competition", to "zero sum competition", still mired in selfish blindness, then to "positiv sum competition", which is based on ethical considerations, and finally to the idealized vision of "noble competition". The latter should be imbued with loyalty and social awareness, values that behavioural economics identifies as vectors of trust and positive emulation for true well-being in society. In short, it is a question of making economic activity a servant rather than a master.
The book is an interesting account of the ideological battle that is ongoing in the Anglo-Saxon world... and of the gap between the Anglo-Saxon cultural background and that of continental Europe in the vision of competition. The authors regret that the term "loyalty" is not more associated with competition in official doctrine and discourse. But Margrethe Vestager has hammered it into many speeches, notably about the unfair use of Google’s algorithm in the Google Shopping case. As for the relationship between competition and regulation, opposition in the Anglo-Saxon world is not appropriate in continental Europe. The application of the prohibition of cartels can lead to an awareness of the need for new regulation, as has been the case in the banking sector in the Union. Moreover, the violation of a regulatory standard can lead to characterise a practice that restricts competition, such as the violation of the RGPD with the condemnation of Facebook by the Bundeskartellamt or the misuse of French law creating a new neighbouring right in favour of press publishers invoked by the French Competition Authority to pronounce against Google a protective measure with a view to negotiating for a fairer sharing of values. As for the distinction between competition as a means and competition as an absolute end, rightly advocated by the authors, it has been well rooted in France since the 1970s thanks to Pierre Bonassies and in Germany in ordoliberal thinking since the 1936 Manifesto.