- Winner of the 2016 ‘Concurences’ prize for best article on collusion.When government officials argue for purity, one would expect raised eyebrows. But few question competition officials who, in speeches in foreign lands, praise the “purity” of competition law. They warn the hosts of polluting competition policy with social, ethical, and moral concerns. They warn of industrial policy, regulation, and rent-seeking. After the hosts provide dinner, the competition officials leave for the airport, where they prepare the same speech for another audience. The hosts will politely agree on the key objectives that competition policy should promote, but beneath this veneer, ill-defined terminology, open-ended goals and differences in enforcement philosophy remain. Differences, in one’s understanding of the ends of competition law often transform into a ‘purity battle’ – the claim that competition analysis has been polluted by some, and that a pure approach, as propagated by others, would deliver better, optimal results. Often, these claims accompany large transactions, state aid, and foreign jurisdictions, possibly threatening the domination of national champions through enforcement of their competition laws. Sometimes these claims will be made by the competition agency. Sometimes by politicians or leading corporations. At times, the true source of the claim – politics, business, law or economics – may be hard to ascertain. This is not to say that purity arguments are without merit. A consensus exists that competition law cannot be all things to all people: a panacea for every policy concern, ranging from labour to the protection of national champions. And yet, the pretence of purity may be misleading as it propagates a mirage of objectivity, clarity and analytical superiority – traits that are not always present. Indeed, competition law is often perceived as a stable discipline. In fact, one is often reminded that competition law must be based on economic considerations and reject external social, or political objectives. This paper argues that this appealing view – which embodies a sense of purity – is merely an illusion. It ignores the ‘sponge-like’ characteristics of the law – its susceptibility to national peculiarities originating in its design and evident in its application and its exposure to intellectual and regulatory capture. While the idea of a stable, predictable and economically-based antitrust discipline is in all of our interests, these traits are not inherent to the law. They are forced onto the sponge in an attempt to ‘discipline’ its natural tendencies, and propagated as reality, to support its legitimacy.The strive for tighter control of distribution, quality and price - has led an increasing number of producers to include restrictions on the use of online marketplaces in their selective distribution agreements. This paper considers the effects of such restrictions and the legal approach they call for. While acknowledging the legitimacy of proportionate restrictions on distribution, the article illustrates how an absolute ban on the use of online marketplaces may have a detrimental effect on market transparency, price competition, entry and expansion. The discussion illustrates how the legitimate interests of producers may be protected through less onerous means, without the increase in consumers’ search costs and the dampening of price competition. With that in mind, it is argued that these restrictions should be analysed on a case-by-case basis and should not benefit from the Vertical Block Exemption. Furthermore, the article considers whether absent proportionality and objective justification, the harmful effect of online marketplace bans, justifies their condemnation as anticompetitive by object.“This is a groundbreaking, critical work—a major contribution to the field of competition law.”—Frank Pasquale, author of The Black Box Society “Ezrachi and Stucke provide a compelling analysis challenging the orthodoxy that modern technology empowers consumers. Their findings will send a shiver down the spine of consumers, businesses, public policy makers and anyone working in the competition field. Virtual Competition is a fast-paced, mind-boggling thriller that you can’t put down; a thriller in which we are all set to be the victim.”—Alan Giles, Saïd Business School, University of Oxford “Virtual Competition provides an intriguing and provocative look at the potential dark side of big data and big analytics. The debate over digital competition is just beginning, and Ezrachi and Stucke have laid down a marker that is likely to capture wide attention.”—Jonathan Levin, Stanford Graduate School of Business “Ezrachi and Stucke’s insights into data-driven opportunities, collusion scenarios, discrimination, and ‘frenemies’ will help authorities distinguish between true efficiencies and anti-competitive problems, and ensure that most enforcement at least keeps up with technological developments. Forward-thinking competition authorities can use these insights proactively to help craft government policies that ensure that innovation and competition are real, while problems are addressed quickly and thus—hopefully—remain virtual.”—Philip Marsden, Inquiry Chair, Competition and Markets Authority “A thought-provoking, clearly written examination of the coming effects on markets and competition of computer algorithms, big data, big analytics, and ‘super-platforms,’ drawing on real-life examples, on neoclassical and behavioral economics, and on the authors’ deep understanding of U.S. and EU competition law.”—Harry First, New York University School of LawA look at the international competition law landscape reveals consensus as to the main goals of competition law. Indeed, core economic reasoning and market analysis serve as the backbone to competition analysis and support assimilation of thought and policy worldwide. Orbiting that core, one may identify a wider, heterogeneous, range of policies advanced by competition regimes. These policies are sometimes viewed as external to the pure competition analysis and, as such, may be regarded as illegitimate. Overall, the in and out methodology presupposes the presence of a legal and analytical structure which defines competition law and to which jurisdictions are expected to align. This paper explores that proposition. It considers the inherent properties of the law and questions the presence of a clear dividing line between competition law and external considerations. It argues that the law, by its nature, provides for an absorbent and flexible platform which soaks up national values and interests. Accordingly, the inherent scope and nature of modern competition laws are not necessarily as consistent and objective as one might like them to be.