Antitrust & Competition Policy Blog

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

Saturday, March 17, 2007

The Future of Monopoly and Monopolization

Posted by D. Daniel Sokol

The topic for this year's AAI Annual Conference (June 21, 2007) is The Future of Monopoly and Monopolization.  More information is available here.  The academic literature, recent cases across jurisdictions and several recent policy reviews in this area – by the AMC, EC, Canadian Competition Bureau, ICN, OECD, and FTC/DOJ – highlight the problems commonly perceived in the antitrust community in monopolization.  Yet, in all of these efforts, we lack consensus probably more than in any other area of antitrust of how to craft effective responses.

The AAI conference has a number of interesting panels that articulate a series of questions and responses from academics and practitioners who are suspicious of some of the assumptions and policy implications of Chicago School antitrust.

March 17, 2007 | Permalink | Comments (0) | TrackBack (0)

Friday, March 16, 2007

Rivalry Among Supermarket Retailers

Posted by D. Daniel Sokol

What is it about Sokol and posting on supermarkets?  Yes, this is a pet issue.  It probably has to do with a number of related factors:

1. I have a very high metabolism rate (At 6'3, I weigh 152 lbs.), so we are often running out of food. 

2.  I have a pregnant wife and a two year old daughter.  Between the two of them, we are at the supermarket quite a bit.

3.  Supermarkets make for very interesting academic study.

I focus the rest of this post on the third of these topics (though if my mother was guest blogging, she would focus on the first-- she is convinced that I need to put on some weight and has been since I was 16.  Then again, she still calls sometimes to make sure that I am dressing warmly during the winter).

A recent article that appeared in the American Journal of Agriculture Economics by Timothy Richards and Stephen Hamilton examines Rivalry in Price and Variety Among Supermarket Retailers.

ABSTRACT: Recent theoretical models of retail competition suggest that product heterogeneity is critical to retail price and variety strategies. This article provides empirical evidence on supermarket retailers' price and variety strategies using a nested constant elasticity of substitution (NCES) modeling framework. The model is estimated using chain-level scanner data for four major grocery chains in a large, urban West Coast market. The results show that retailers compete for market share using both price and variety. While they all tend to follow moderately cooperative pricing strategies, the extent to which they follow cooperative strategies in variety is less homogeneous.

March 16, 2007 | Permalink | Comments (0) | TrackBack (0)

Thursday, March 15, 2007

Drug Patent Settlements Between Rivals: A Survey

Posted by D. Daniel Sokol

Scott Hemphill of Columbia University Law School has an important new paper out on a subject that has been at the forefront of many policy discussions in recent years on patent settlements.  His paper is entitled Drug Patent Settlements Between Rivals: A Survey.

ABSTRACT: This survey provides a detailed account of patent settlements reached between innovator drug companies and their generic rivals over the past fourteen years, and the antitrust suits and investigations initiated in response. Twenty-nine settlements of patent litigation involving twenty drugs fall within the scope of the study. Three basic patterns emerge from the data. First, antitrust activity in this area has continued to expand, including more than a dozen pending antitrust suits and agency investigations. Second, repeat players have emerged. For example, a single generic firm has reached settlements with respect to eight different drugs. Third, drug patent settlements have grown more sophisticated. A second wave of settlements, in which a generic firm provides value to the innovator that is distinct from delayed entry, complicates antitrust evaluation of the agreements.

March 15, 2007 | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 14, 2007

Trans-Atlantic Antitrust Dialogue

Posted by D. Daniel Sokol

The British Institute of International and Comparative Law will hold its 7th Annual Trans-Atlantic Antitrust Dialogue from May 1 to May 2.   Registration and conference details are available here.   Topics include:

  1. Phase 1 merger remedies;
  2. What is consumer harm?;
  3. Private enforcement and consumer redress;
  4. Consistency of decisions across jurisdictions … or chaos?;
  5. Markets working poorly;
  6. Agencies roundtable;
  7. Substantive Merger Analysis in Recent Cases: Old Theories, New Theories, Empirical Evidence and Efficiency Defences; and
  8. What is your theory of harm?

March 14, 2007 | Permalink | Comments (0) | TrackBack (0)

Contestability and Regulation Revisited and Applications to Pro-Competitive Mergers

Posted by D. Daniel Sokol

Yesterday in my seminar, we focused on procedural issues in international merger control, including agency coordination, increased harmonization of standards and approaches, and why divergences remain.  Next week we focus on comparative substantive merger analysis.  Helping out my class on these difficult issues are Joe Krauss of Hogan & Hartson (yesterday) and Ken Heyer of DOJ (next week).  As a comment on teaching pedagogy, the class has found that  real world enforcers and practitioners (both the lawyers and economists) have been extremely beneficial and insightful in rounding out the more theoretical readings and case analysis.

On the topic of mergers, Michael Ryan of the University of Hull Business School has a new working paper on SSRN entitled Contestability and Regulation Revisited and Applications to Pro-Competitive Mergers.

ABSTRACT: The purpose of this paper is to revisit the contestability idea and to formalize distinctions between industrial contestability and market contestability (analogous to those between industrial and market diversification) as well as the definition of regulated contestability. Applications to mergers and merger policy are then developed in a context of positive spillovers, with reference to brand enhancing effects and with reference to R&D and other cost reducing effects. A major conclusion of the paper is that, far from raising barriers to entry, mergers may have contestability enhancing effects and in such cases should be actively encouraged by regulators.

March 14, 2007 | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 13, 2007

Conference on Comparative Perspectives on Multi-Jurisdictional Antitrust Enforcement

Posted by D. Daniel Sokol

Details of the Centre for Competition Policy's annual summer conference are up on the web here.  The conference aims to explore where the line can and should be drawn between antitrust/competition law enforcement at the higher level (Federal/Supranational) and/or the lower level (State, Member State).  It will include examples and lessons from both EU and US systems. 

Speakers include: Professor Stephen Calkins (Wayne State University), Firat Cengiz (CCP, University of East Anglia); Professor Andrew Gavil (Howard University); Dr. Michael Harker (CCP, University of East Anglia); Professor Scott Hemphill (Columbia University); Professor William Kovacic (FTC); Dr. Philip Marsden (BICL); Professor Stephen Wilks (Exeter University).

March 13, 2007 | Permalink | Comments (0) | TrackBack (0)

Monday, March 12, 2007

Antitrust Movie Showing on a PBS Station Near You

Posted by D. Daniel Sokol

The American Antitrust Institute has been an active antitrust advocate in cases, hearings, and proposed legislation.  Recently they have expanded their advocacy role with a new movie entitled Fair Fight in the Marketplace.

From the film website:

When companies secretly fix prices, who pays? When one company controls supplies, who suffers? When one company dominates the desktop, who loses? These questions are at the core of a new half hour film, Fair Fight in the Marketplace. Produced by San Francisco's Filmmakers Collaborative for the American Antitrust Institute, the film provides an engaging look at our antitrust laws that give protection to both American consumers and businesses. The program also considers a more fundamental question: can a set of regulations created by the Sherman Act at the end of the 19th century be relevant in today's era of digital technology and high-speed communications?

Hosted by NPR and Fox News commentator Mara Liasson, the program provides a short, colorful history of the antitrust laws in America and features three recent case studies:

Archer Daniels Midland Company leading a worldwide price-fixing conspiracy

Mylan Pharmaceuticals cutting off supplies to competitors to inflate product pricing

Microsoft's bullying behavior to eliminate Netscape as an effective competitor in the internet browser market

Hopefully the movie will increase awareness of antitrust issues to a larger public.  I eagerly await an antitrust related feature length film, perhaps about an international cartel bent on world domination and consumer overcharges.   Oh wait, I think that we call this OPEC.

March 12, 2007 | Permalink | Comments (0) | TrackBack (0)

Sunday, March 11, 2007

Top 10 Most Downloaded Papers for Antitrust Law & Policy

Posted by D. Daniel Sokol

The following are the Top 10 most downloaded papers on SSRN from January 10, 2007 to March 11, 2007 in the subject area of Antitrust Law & Policy.

1. The European Commission's 2006 Guidelines on Antitrust Fines: A Legal and Economic Analysis
Wouter P.J. Wils,
European Commission - Directorate General for Legal Service,

2. Antitrust
Louis Kaplow, Carl Shapiro,
Harvard Law School, University of California, Berkeley - Economic Analysis & Policy Group,

3. Economics of the Internet
Nicholas Economides,
New York University, Stern School of Business,

4. Public Vs. Private Enforcement of Antitrust Law: A Survey
Ilya R. Segal, Michael D. Whinston ,
Stanford University, Northwestern University - Department of Economics,

5. Beyond Schumpeter Vs. Arrow: How Antitrust Fosters Innovation
Jonathan B. Baker,
American University - Washington College of Law,

6. Monopolists Without Borders: The Institutional Challenge of International Antitrust in a Global Gilded Age
D. Daniel Sokol,
University of Wisconsin Law School,

7. The Admissibility of Expert Economic Testimony in Antitrust Cases
Gregory J. Werden,
U.S. Department of Justice - Antitrust Division,

8. Rethinking RPM: Did the Courts Have it Right All Along?
Ittai Paldor,
University of Toronto - Faculty of Law,

9. Discovering Cartels: Uncovering Dynamic Interrelationships Between Criminal and Civil Antitrust Investigations
Vivek Ghosal,
Georgia Institute of Technology - School of Economics, and

10. Antitrust Process and Vertical Deference: Judicial Review of State Regulatory Inaction
Jim Rossi,
Florida State University College of Law.

March 11, 2007 | Permalink | Comments (0) | TrackBack (0)