Antitrust & Competition Policy Blog

Tying Conspiracies

Posted by D. Daniel Sokol

Christopher Leslie at Chicago Kent College of Law has a new article out titled Tying Conspiracies.

ABSTACT: Antitrust law has long condemned tying arrangements when they are imposed by a single dominant firm. However, tying jurisprudence does not recognize that tie-ins can also occur as the result of a conspiracy among competitors. Consequently, antitrust doctrine fails to appreciate the unique anticompetitive dangers of concerted tying arrangements. After providing real-world examples of tying conspiracies, Professor Leslie explains how concerted tying arrangements present a far greater threat to competitive markets than traditional, unilaterally imposed tying arrangements. Because tying jurisprudence evolved without considering the existence or effects of concerted tie-ins, the current test for evaluating the legality of tying arrangements is inappropriately lenient to tying conspiracies. This is completely inconsistent with one fundamental principle of American antitrust law: concerted action should be treated more harshly than unilateral conduct. Finally, the Article advocates per se illegality for tying conspiracies and argues that greater appreciation of concerted tie-ins can inform the ongoing academic debate about tying arrangements more generally.

Governance, Issuance Restrictions, And Competition In Payment Card Networks

Posted by D. Daniel Sokol

A new NBER working paper, Governance, Issuance Restrictions, and Competition In Payment Card Networks, by Robert S. Pindyck of MIT's Sloan School of Management takes on the antitrust payment network debate.

ABSTRACT: I discuss the antitrust suit brought by the U.S. Department of Justice against Visa and MasterCard in 1998.  Banks that issue Visa cards are free to also issue MasterCard cards, and vice versa, and many banks issue the cards of both networks.  However, both Visa and MasterCard had rules prohibiting member banks from also issuing the cards of other networks, in particular American Express and Discover.  In addition, most banks are members of both the Visa and MasterCard networks, so governance is to some extent shared.  The DOJ claimed that restrictions on issuance and shared governance were anticompetitive and should be prohibited.  Visa and MasterCard argued that these practices were procompetitive.  The case raised important questions:  Given that many banks issue both Visa and MasterCard, and that most merchants that accept one also accept the other, do the two networks really compete, and if so, how? And do Visa and/or MasterCard have market power, if so, in what market, and how is it exercised?

Argentina and Competition Policy

Posted by D. Daniel Sokol

As reported by the Global Competition Review and sister publication Latin Lawyer, the current administration in Argentina has proposed to include "macro-economic" factors in antitrust analysis.  This is code for an approach that would include political economy considerations into antitrust analysis and move Argentina away from an economics based consumer welfare approach.  This would be a terrible development as it would lead to greater unpredictability and false prosecutions based on a political agenda.

On the topic of Argetine antitrust, there is an upcoming conference worth attending.

SEMINARIO
“CONDICIONAMIENTOS A LAS CONCENTRACIONES ECONÓMICAS”
Martes 17 de Julio de 2007

Programa

8:30 - 9:00 Acreditación. Universidad Austral, Garay 125, 4° piso, Aula 400.

9:00 - 10.45 Panel 1: Conveniencia de establecer parámetros generales en materia de condicionamientos a las concentraciones económicas.

Panelistas:
- Luis Barry, PAGBAM
- Mauricio Butera, vocal de la CNDC.
- Bernardo Cassagne, Estudio Beccar Varela
- Germán Coloma, Universidad del CEMA
- Humberto Guardia Mendonça, vocal de la CNDC
- Santiago Urbiztondo, FIEL
Moderador: Julián Peña, Allende & Brea

10:45 - 11:15 Café.

11:15 - 13:00 Panel 2: Efectos suspensivos o resolutorios de los condicionamientos a las operaciones de concentración económica.

Panelistas:
- Miguel del Pino, Marval, O’Farrell & Mairal
- Marcelo den Toom, M&M Bomchil
- Ismael Malis, ex Presidente de la CNDC
- Graciela Medina, Presidenta de la Cámara de Apelaciones en lo Civil y Comercial Federal
- Julián Peña, Allende & Brea.
- Diego Povolo, vocal de la CNDC
Moderador: Humberto Guardia Mendonça, vocal de la CNDC

Informes e inscripción: Contactarse con Julián Peña (4318-9907, jp@allendebrea.com.ar) o Humberto Guardia Mendonça (4349-4097, hmendo@mecon.gov.ar). Cupos limitados.

Chambers Individual Antitrust Lawyers Rankings: Who Are Among the Best of the Best?

Posted by D. Daniel Sokol

Following up on last week's post, Chambers has released its individual lawyer rankings in antitrust for the United States.  The DC listing is here.  The NY listing is here.  Congrats to all the lawyers who made the rankings. 

Sharfman on Billing

Posted by D. Daniel Sokol

Keith Sharfman of Rutgers-Newark Law School provides an interesting analysis of the implications of Billing on eCCP's website.  An early paragraph sums up Sharfman's take on the case's implications:

Credit Suisse has important implications for antitrust practice. The decision’s effect is to narrow the scope of antitrust law and to invite efforts by regulated industries to narrow it still further. The court’s “clearly incompatible” standard is new and (though it purports not to) seems to water down considerably the old “plain repugnancy” test of Gordon v. New York Stock Exchange, Inc. 422 U.S. 659, 682 (1975). Under the new incompatibility standard, there no longer has to be an actual conflict between antitrust and other federal law for antitrust implicitly not to apply. Even a mere regulatory overlap may now be sufficient to trigger antitrust immunity. (Recall that in Credit Suisse the Court assumed that both antitrust and the SEC disapproved of the tying and other practices in question, and yet the Court still considered the two bodies of law incompatible on account of the regulatory overlap.)

Monday Morning Wrap Up: More on Sony/BMG

Posted by D. Daniel Sokol

Whereas last week we discussed the implications of Sony/BMG in the EU, this week we report that in a 5-0 decision, the FTC has approved a final consent order in Sony/BMG .

Antitrust Panel at Law and Society Annual Conference

Posted by D. Daniel Sokol

For those attending the annual Law and Society conference later this month (with Berlin a step up from last year's Baltimore venue) there is an interesting antitrust panel-- Market Access, Intellectual Property Rights, and Competition Policy.  The  presentations include:

The New Economic Feudalism: The Expansive Use of Patent Licenses to Destroy Market Competition
Peter Carstensen (University of Wisconsin)

Identifying Norms of Competition in Intellectual Property Law
Shubha Ghosh (Southern Methodist University)

Distribution Restraints: The "Free Rider" Explanation
Marina Lao (Seton Hall University)

Essential Facilities, Infrastructure, and Open Access
Spencer W. Waller (Loyola University, Chicago), Brett Frischmann (Loyola University Chicago)