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Our Curious Amalgam

Is the MFN Paradox Harming Competition?

Alicia L. Downey and Bernard A Nigro Jr

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When are MFNs good and when are they bad? A "most favored nation" (MFN) price requirement ensures that a buyer receives the lowest price that a seller is offering to other buyers. Under U.S. antitrust law, such MFNs are typically viewed as a procompetitive outcome of price bargaining between parties. But recently, the use of MFNs by Amazon's internet retailing platform has been challenged as an anticompetitive business practice. In this episode, Alicia Downey and Barry Nigro talk to economist Tasneem Chipty about the potential competition concerns raised by MFNs generally and platform MFNs specifically. Listen and learn in what circumstances most favored nation requirements might raise antitrust red flags.