Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Friday, April 29, 2016

A Commentary on Article 101 TFEU

Rick Busscher, University of Groningen - Faculty of Law, Martin Herz, University of Groningen, and Hans H. B. Vedder, University of Groningen offer A Commentary on Article 101 TFEU.

ABSTRACT: Article 101 TFEU is one of the most prominent Treaty provisions on competition. It concerns hard core restrictions of competition like cartels as much as efficiency enhancing agreements. Moreover, competition is a primarily economic phenomenon, that can be understood, measured and appraised in many different ways. This means that a fundamental challenge in the interpretation of Article 101 follows from the necessity to provide adequate legal certainty and low compliance costs to undercover cartels as well as innocent cooperation agreements. This distinction between these two categories of cooperation coincides largely with the structure of Article 101 that distinguishes between agreements that have the object of restricting competition and those that have this effect.

This bifurcated approach and its effects on the legal and economic appraisal involved will be central to this commentary.

In this paper we will first discuss the general framework of Article 101 and the preliminaries of its application. After that the first and third paragraph of Article 101 TFEU will be discussed on the basis of the Court’s interpretation as well as the decisional practice of and guidance by the Commission. Finally, Article 101(2) will be discussed. In doing so, we will also engage in a comparison with US antitrust law, given that many of the issues surrounding Article 101 can be found in other jurisdictions and comparative approach may provide valuable insights.

April 29, 2016 | Permalink | Comments (0)

ICC publishes Leniency Manual and the Proposal for a One-Stop-Shop Mechanism for Leniency Markers

he ICC Task Force on Cartels and Leniency has recently issued two publications on leniency and leniency markers – the ICC Leniency Manual and the Proposal for a One-Stop-Shop Mechanism for Leniency Markers – illustrating its engagement in the discussion on current cartels and leniency issues worldwide.

ICC Leniency Manual / ICC Proposal to ICN for a one-stop-shop for leniency markers

Leniency Programmes, differing very much in their design from country-to-country, have become a crucial element in the detection and ending of cartels. There is an increasingly strong demand to align their key features in order to improve their implementation. While they have expanded globally, the question of alleviating multiple filings has become a key discussion point, as these multiple files are a major impediment to getting cartel participants to come forward.

This is why the ICC Task Force has put together a proposal to create a one-stop-shop for leniency markers, which aims to facilitate international cooperation among competent authorities and to increase the legal safety of applicants for leniency; and an ICC Leniency Manual, which provides a factual and visual overview of a number of countries' leniency programmes.

Both publications represent first steps towards a harmonization / convergence of leniency regimes.

The ICC Task Force on Cartels and Leniency is co-chaired by Luciano Di Via, Partner at Clifford Chance Italy and Marcin Trepka, Co-Head of the Antitrust, Competition and Trade Regulation practice at K&L Gates Poland.

For more information about the ICC Commission on Competition and its Task Forces:
http://www.iccwbo.org/about-icc/policy-commissions/competition/

ICC's Contributions

  • application/pdfICC Proposal to ICN for a one-stop-shop for leniency markers [0M]

    The issues paper on the creation of a one-stop-shop for leniency markers puts forward a proposal to create a one-stop-shop marker system to provide a mechanism for applicants to seek leniency with a marker application before a sole agency. This measure will enable a successful applicant to reserve its place in the queue in all jurisdictions participating in the system by applying for the marker in only one of them. The ICC proposal strives to enhance inter-agency cooperation on the issue of leniency programmes.

  • application/pdfICC Leniency Manual_Launch Edition [0M]

    The ICC Leniency Manual : Launch Edition is the first release of the ICC Task Force on Cartels and Leniency and the third publication "designed by business for business" of the ICC Commission on Competition. Intended as a living document, the Manual aims to demystify the leniency application process and assist business with filing local or multi-jurisdictional applications. The leniency practices gathered in the launch edition of the Manual span over 20 countries. It is being presented at the Roundtable to benefit from consultation during the ICN. The First Edition will be released in June 2016.

April 29, 2016 | Permalink | Comments (0)

Competition Authorities: Prosecutorial/Non-Prosecutorial Systems and the Fight Against Cartels

Marianela Lopez-Galdos, George Washington University-Competition Law Center and Gargi Yadav describe Competition Authorities: Prosecutorial/Non-Prosecutorial Systems and the Fight Against Cartels.

ABSTRACT: In recent years, considerable attention has been paid to the structures of different governmental institutions and the impact of such institutional structure on the outcomes and efficacy of goal attainment. At the same time, there is a global trend to impose criminal sanctions (i.e. imprisonment, fines, seizure of personal property, etc.) on people found to be engaging in cartelization. This paper focuses on institutional design and examines its impact regulation of cartels by way of criminalization of cartelists. The paper summarizes and describes what the main institutional characteristics of competition authorities are and unveils the international trends with regards to decision-making functions and the criminalization of cartelist. The paper then details the interaction and implications of decision-making function and criminalization of the cartels.

 

 

April 29, 2016 | Permalink | Comments (0)

Thursday, April 28, 2016

Why vertical restraints? New evidence from a business survey

Oxera produced a report for the CMA on Why vertical restraints? New evidence from a business survey.  The report suggests pro-competitive benefits to online vertical restraints.

April 28, 2016 | Permalink | Comments (0)

Concurrences Award Winning Articles (and Video reactions) now online

See here.

April 28, 2016 | Permalink | Comments (0)

Patents and Innovation in Economic History

Petra Moser has written on Patents and Innovation in Economic History.

ABSTRACT: A strong tradition in economic history, which primarily relies on qualitative evidence and statistical correlations, has emphasized the importance of patents as a primary driver of innovation. Recent improvements in empirical methodology – through the creation of new data sets and advances in identification – have produced research that challenges this traditional view. The findings of this literature provide a more nuanced view of the effects of intellectual property, and suggest that when patent rights have been too broad or strong, they have actually discouraged innovation. This paper summarizes the major results from this research and presents open questions.

April 28, 2016 | Permalink | Comments (0)

Getting Closer? The Application of Competition Laws to Regulatory Bodies in the USA and the EU

William H. Rooney, Christine N. Cea and Agathe M. Richard (all Willkie Farr) ask Getting Closer? The Application of Competition Laws to Regulatory Bodies in the USA and the EU.

ABSTRACT: A recent decision by the U.S. Supreme Court has limited the state action doctrine as it applies to state regulatory bodies. Following that decision, questions had emerged regarding the extent to which states can delegate power to regulatory bodies in a manner that insulates them from the application of competition rules. In response to those questions, the Federal Trade Commission of the United States (FTC) has issued guidelines bringing some clarity to the matter but, at the same time, reserving considerable latitude to the FTC to enforce the antitrust laws against state regulatory bodies.

April 28, 2016 | Permalink | Comments (0)

Extraterritorial Reach of Swiss Competition Law: The BMW Case and Its Consequences for Worldwide Distribution Agreements

David Mamane and Karin Hummel, both Schellenberg Wittmer Ltd discuss Extraterritorial Reach of Swiss Competition Law: The BMW Case and Its Consequences for Worldwide Distribution Agreements.

ABSTRACT: Swiss competition law is applicable to restrictive practices adopted by companies outside its national territory, to the extent they have effects in Switzerland, which is very broadly interpreted. This has consequences for all firms outside of Switzerland, among others, EU producers with distribution agreements with companies outside of Switzerland that prevent or hinder sales into Switzerland. Under Swiss competition law, obstacles of parallel imports that lead to absolute territorial protection are in principle regarded as inadmissible. Justification based on economic efficiency is theoretically possible, but it remains open how the appropriate evidence could be provided.

April 28, 2016 | Permalink | Comments (0)

Europe is an antitrust outlier

Thomas Lenard of the Tech Policy Institute has an op-ed in The Hill titled Europe is an Antitrust Outlier. He concludes:

Antitrust laws should benefit consumers. Google has created a popular smartphone platform with an operating system and apps, all available for free. The EU's antitrust action against Google threatens to upend a business model that has benefited consumers, device manufacturers and app developers. Without Android, it's safe to say, that market would be substantially less competitive. The European Commission should get on the same page as other competition authorities and drop this case.

April 28, 2016 | Permalink | Comments (0)

Will Its Provisions Serve Its Goals? Directive 2014/104/EU on Certain Rules Governing Actions for Damages for Competition Law Infringements

Emmanuela Truli, Athens University for Economics and Business asks Will Its Provisions Serve Its Goals? Directive 2014/104/EU on Certain Rules Governing Actions for Damages for Competition Law Infringements.

ABSTRACT: As some time has passed since its adoption, it now appears that Directive 2014/104/EE on Damages Actions for Antitrust Infringements contains useful procedural rules but is mostly characterised by general and vague goal-setting provisions, which are very often not applicable as such and cannot be incorporated in the national compensation systems without further specification. The Directive might hence not achieve a large degree of harmonisation of the national antitrust damages rules. In view of the increased complexity of some of the compensation rules, it is also questionable whether we will see an overall improvement in the effectiveness of private enforcement in most Member States. If there is one objective that the Directive could achieve, it is probably to establish better coordination between private and public enforcement.

April 28, 2016 | Permalink | Comments (0)

Wednesday, April 27, 2016

Fordham 43rd Annual Conference on International Antitrust Law and Policy, 22–23 September 2016

Fordham Competition Law Institute
43rd Annual Conference on International Antitrust Law and Policy

THE FUTURE OF ANTITRUST IN ASIA

22–23 September 2016
Day 1 | 9 a.m.–5 p.m., reception immediately following
Day 2 | 8:30 a.m.–1:45 p.m. Pre-Conference Workshops: 21 September 2016
Heads of Authority Workshop (invitation only) | 9 a.m.–5:30 p.m. Antitrust Economics Workshop | 8:30 a.m.–4:30 p.m.

Fordham Law School Skadden Conference Center | 150 West 62nd Street New York City

Learn more and register: law.fordham.edu/fcli

April 27, 2016 | Permalink | Comments (0)

Regulation, Innovation, and Growth: Why Peer-to-Peer Businesses Should Be Supported

David Stallibrass (Fingleton Associates) and John Fingleton (Fingleton Associates) examine Regulation, Innovation, and Growth: Why Peer-to-Peer Businesses Should Be Supported.

ABSTRACT:

New technology has enabled peer-to-peer (P2P) businesses to create decentralised networks of individual suppliers, shrinking the minimum efficient size of a firm to a part-time individual.

Such businesses challenge regulatory tools designed to govern traditional business models.

Regulators should seek to accommodate the development of P2P businesses since their success is often based on resolving the same market failures that led to the establishment of regulation in the first place.

April 27, 2016 | Permalink | Comments (0)

Evaluating Joint Ventures: Economic Analysis Checklist

Steve Salop, Georgetown is Evaluating Joint Ventures: Economic Analysis Checklist.

ABSTRACT: This short article (for a symposium on joint ventures) provides practitioners and law professor with a 20 question checklist to guide the competitive effects analysis of the formation of a joint venture and the specific restraints and conduct of the venture. The questions mainly focus on ventures among actual or potential competitors, though some of the questions also are relevant for ventures involving complementary product firms. The questions concern potential competitive harms, potential competitive benefits, and the determination of net competitive effects. While this sequencing follows the standard burden-shifting formulation of the rule of reason decision process, the article notes that this sequencing should not be approached rigidly. A finding of a lack of efficiency benefits might suggest that the motivation of the JV is to achieve and exercise market power to the detriment of consumers, thereby supporting an inference of harm. Moreover, under a quick look to condemn standard, efficiency benefits are examined first, albeit with a possibly lower burden of proof placed on the venture to justify its formation and restraints.

April 27, 2016 | Permalink | Comments (0)

‘Taking Advantage’ of Substantial Market Power, and Other Profit-Focused Tests for Unilateral Anticompetitive Conduct

Katharine Kemp, University of New South Wales - Law Faculty is ‘Taking Advantage’ of Substantial Market Power, and Other Profit-Focused Tests for Unilateral Anticompetitive Conduct.

ABSTRACT: In 2015, the Australian Competition Policy Review Panel controversially recommended substantial changes to the prohibition against misuse of market power in s 46(1) of the Competition and Consumer Act 2010 (Cth). One critical change recommended by the Panel was that the long-standing requirement that a firm ‘take advantage’ of its substantial market power be removed from the provision, on the basis that it does not effectively fulfill its purpose of identifying unilateral anticompetitive conduct. In March 2016, the Prime Minister announced the government's intention to adopt this recommendation. This article examines the Australian ‘take advantage’ test in the context of the broader international debate over unilateral anticompetitive conduct rules, arguing that it can be viewed as a ‘profit-focused’ test, with important similarities to other profit-focused tests proposed by United States antitrust agencies and commentators, including the ‘no economic sense’ and ‘profit sacrifice’ tests. It makes a comparative analysis of these tests, and concludes that the ‘take advantage’ standard is less certain and less inclusive than its counterparts in this category.

April 27, 2016 | Permalink | Comments (0)

Europe’s Misguided Anti-Google Crusade

Philippe Legrain discusses Europe’s Misguided Anti-Google Crusade in Foreign Policy.

April 27, 2016 | Permalink | Comments (0)

Oceanic Disparities in Cartel-Recidivism Attitudes and Penalties

John M. Connor, Purdue University; American Antitrust Institute (AAI) examines Oceanic Disparities in Cartel-Recidivism Attitudes and Penalties.

ABSTRACT: There is a wide gulf between EU and US antitrust authorities on the prevalence of serial cartel conduct. These attitudinal differences have resulted in disparate anti-cartel enforcement practices with regard to enhanced penalties for corporate recidivism. Cartel recidivism is regarded as a serious, large-scale problem among EU antitrust officials. In contrast, I note a shift in the tone in the few speeches by DOJ officials that mention recidivism, from one of concern and vigilance years ago to denial. Today, recidivism is rarely mentioned in DOJ documents or speeches, and when it is raised as an issue, it is dismissed as empirically unimportant for cartel conduct in the United States. While the EC has incorporated and implemented more severe fine enhancements for recidivists since 2007, the DOJ leadership has largely ignored the culpability enhancement called for in the U.S. Sentencing Guidelines.
 
I have located about 20 instances of serial cartelists that appear to meet the most stringent legal requirements for upward adjustments in cartel-fine recommendations to the courts by the DOJ. That is, the DOJ seems to be ignoring its responsibilities to follow the Sentencing Guidelines when proposing cartel fines.

April 27, 2016 | Permalink | Comments (0)

Tuesday, April 26, 2016

Merger Policy at the Federal Trade Commission: What, If Anything, Has Changed?

Malcolm B. Coate, U.S. Federal Trade Commission (FTC) asks Merger Policy at the Federal Trade Commission: What, If Anything, Has Changed?

ABSTRACT: The modern Merger Guidelines have controlled merger enforcement decisions for the last thirty years. Economic theory has evolved (and continues to evolve) and revisions of the Guidelines have integrated some of these thoughts into the merger review methodology. This paper tabulates and evaluates information from Federal Trade Commission (FTC) merger analyses using data for 1989 to 2014. The FTC’s workload focuses on horizontal mergers, with particular interest in health care, consumer goods, and a specific group of intermediary product industries. The evidence suggests that a shift away from coordinated interaction (collusion) cases occurred after the introduction of the 1992 Merger Guidelines, with a further shift focused on differentiated products after the 2010 revision in the Guidelines. Abstracting from a large number of mergers to monopoly studied, the structural characteristics of investigations reviewed with unilateral effects or collusion theories appear similar, but not identical. Most three-to-two and four-to-three mergers end up challenged, while other transactions often pass through the review process. Evidence suggests that the 2010 Merger Guidelines may have led to some convergence of staff analyses on entry and efficiency issues. Statistical analysis of the merger review process detects a little populism, but no evidence of partisan political influence on the enforcement decision. Merger challenge decisions appear fact driven, with the choice of theory not influencing the weights given to the specific structural factors. Weak evidence suggests the 2010 revisions might have had an effect on policy, but more information is needed before any strong conclusions can be drawn. Overall, it is the fact-based staff findings that appear to drive the merger review process.

April 26, 2016 | Permalink | Comments (0)

Mergers and Innovation: Evidence from a Panel of U.S. Firms

Mahdiyeh Entezarkheir, Huron at Western University and Saeed Moshiri, University of Saskatchewan - Saint Thomas More College analyze Mergers and Innovation: Evidence from a Panel of U.S. Firms.

ABSTRACT: The impact of changes in market structure on innovation after mergers is a concern for anti-trust policies. However, studies on merger changes of innovation are limited. Combining four different data sets, we construct a unique panel data set of mergers among publicly traded U.S. manufacturing firms from 1980 to 2003 and investigate merger impacts on innovation controlling for endogeneity and factors such as market share, size, industry, and time. Our proxy for innovation is based on the citation-weighted patent stocks, which includes information on not only the merged entities in the post-merger period similar to previous studies, but also both target and acquiring firms in the pre-merger period and the merging year. We find that mergers are positively and significantly correlated with firms' innovation, and firms with large market share experience a greater boost in innovation from mergers. Merger effects on innovation are larger in the long-run and heterogeneous across industries. Our findings are robust to alternative measures of innovation.

April 26, 2016 | Permalink | Comments (0)

Catching Trolls or Pirates?

Shubha Ghosh (Syracuse) has a podcast on  Halo Electronics v. Pulse Electronics and Styker Corp. v. Zimmer, which he has titled Catching Trolls or Pirates?

April 26, 2016 | Permalink | Comments (0)

Writing Better Jury Instructions: Antitrust as an Example

Joshua P. Davis, University of San Francisco - School of Law, Shannon Wheatman, Kinsella Media LLC, and Cristen Stephansky, Kinsella Media LLC have an interesting paper on Writing Better Jury Instructions: Antitrust as an Example.  Worth reading!

ABSTRACT: Understanding the law is difficult. Getting juries to understand the law is more difficult. Yet we provide evidence that it can be done, even in complex areas such as antitrust. This Article tests whether jury instructions can be written in a way that maintains fidelity to the law - indeed, improves on fidelity to the law compared to standard jury instructions - while also permitting jurors to understand the relevant legal standards. But it goes further than that. It proposes making empirical testing an integral part of drafting model jury instructions. It also shows that such empirical testing is feasible by harnessing the power of the Internet. It undertakes those efforts by drafting and testing jury instructions in two challenging areas of antitrust law. The results of the empirical testing provide reason for optimism about the prospects of juries understanding the law, if those who draft jury instructions test whether they are comprehensible and modify draft jury instructions in light of empirical results.

April 26, 2016 | Permalink | Comments (0)