Thursday, May 26, 2005
Daniel Crane, professor of law at Cardozo Law School, has been invited to present his paper The Paradox of Predatory Pricing at the prestigious Stanford-Yale Young Scholars Conference Program. Professor Crane's paper offers an innovative take on predatory pricing by focusing on the strategic uses of predatory pricing litigation for anticompetitive purposes.
California AG Bill Lockyear won a ruling yesterday in his challenge to a profit sharing plan among major grocery chains in Southern California. A district court judge rejected the chains' argument that the plan was immune from antitrust scrutiny because it was enacted to deal with a labor walkout.
The June 1 deadline looms for Microsoft to comply with the EU competition commission's ruling to distribute versions of the operating system without Media Player and to pay the hefty fine of 497 million euros. Meanwhile, Microsoft competitors have expressed concern about pricing of the unbundled operating system, seeking differential pricing for the two versions of the operating system.
Tuesday, May 24, 2005
Bernard Wysocki reported in yesterday's Wall Street Journal on the push in the US (particular at Berkeley) to move towards open access journals. Daniel Greenstein, associate vice provost of the UC system, is quoted: "We have to take back control from the publishers," viz. Reed-Elsevier and other academic publishers. According to the article, the US system spends $ 30 million a year on scholarly periodicals.
Tim Ferguson has a book review in today's Wall Street Journal of Paul London's The Competition Solution: The Bipartisan Secret Behind American Prosperity, a recent publication from the American Enterprise Institute Press. Mr. London was an economist in the Clinton administration from 1993 to 1997, and consequently his insights are portrayed, in Ferguson's review, as Democrats finally seeing the Republican light. I am a bit dismayed by attempts to to portray this Paul as on the road to free market Damascus (see the essay on the AEI website that provides an excerpt from the book). It is more than condescending to portray Democrats or other groups in the center or the left as somehow not getting the importance of markets. Just read Charles Lindbloom's work on markets and democracy for a taste not only of how liberals view the marketplace but also of how to think about markets in a constructive manner. Nonetheless, despite the lovefest of bipartisanship and the dancing around the laissez-faire maypole it attempts to stimulate, Mr. London's book seems to provide a worthwhile synthesis of the benefits of competition and the role of antitrust law and other regulations to promote it.
Sunday, May 22, 2005
In a 5-4 decision, the US Supreme Court struck down Michigan and New York state laws that prevented direct sales to consumers from out of state wineries. The case focused on the relationship between the dormant commerce clause and the 21st amendment.
The majority opinion was authored by Justice Kennedy and held that the state laws discriminated against out of state businesses without a legitimate local purpose. The states had justified the restrictions under the state's powers to regulate the market for alcohol and the ability of out of state sales to evade state taxes.
The four dissenting justices (Stevens, Thomas, O'Connor, and Rehnquist) argued that the state regulations were justified by the history of prohibition. Justice Thomas read the history, particularly the Webb-Kenyon Act from the prohibition era, to leave the regulation of alcohol to state law and take the issue away from federal judges and Congress. Justice Stevens and O'Connor signed onto Justice Thomas's dissenting opinion but also had a separate shorter dissent in which they argued that while the majority's opinion might vindicate the philosophy of Adam Smith at the time of the drafting of the constitution, state regulation of alcohol needs to be understood in terms of the country's history with prohibition. This last comment is a nice jab at originalism as an interpretative mode.
Whatever one thinks of originalism, however, my opinion is that the decision is an important victory for commerce clause jurisprudence.
Dr. Hanno Kaiser has an interesting comment on the federal district court's recent decision in the MSG case. The decision is the first to apply the Supreme Court's decision in Empagran last Summer to find that US federal courts have jurisdiction over an international cartel when there are effects on the domestic market. As Dr. Kaiser points out, the Supreme Court's decision in the Empagran inelegantly balanced the need for comity with the need to combat cartels that have affects on domestic markets. The MSG decision provides a nice model of how to apply the Supreme Court test.