Antitrust & Competition Policy Blog

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

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Friday, September 14, 2007

Microsoft, Microsoft and More Microsoft

Posted by D. Daniel Sokol

This coming week will be a big one for Microsoft.  On September 17, the European Union's Court of First Instance rules on the appeal of the European Commission's 2004 decision against Microsoft,Case T-201-04, Microsoft v. Commission.  The CFI decision has the potential to be the most important (and perhaps most troubling) antitrust decision in the CFI's history.  I will not try to predict the outcome of the case- in part because at the IBA annual antitrust conference in Fiesole, a number of antitrust experts already did so.  These experts are: Greg McCurdy of Microsoft, Ian Forrester, QC of White & Case, and Jean Francois Bellis of Van Bael & Bellis. Download McCurdy.pdf Download Forrester.pdf Download Bellis.pdf

As an additional treat, we will have distinguished professors William Page of the University of Florida Levin College of Law and John Lopatka of Penn State Dickinson College of Law guest blogging with us to discuss their new excellent book The Microsoft Case: Antitrust, High Technology, and Consumer Welfare (University of Chicago Press 2007).  If you do not yet have this book, order it asap!

Full disclosure: I have in the past received money to pursue scholarship from Microsoft but it has not been on any of the issues discussed in this blog post.  Instead, the money has allowed me to continue to pursue work in technical assistance in antitrust.  The fruits of that labor will be unveiled at the Canadian Law and Economics Association annual conference later this month at the University of Toronto.

 

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

Thursday, September 13, 2007

India Passes New Competition Law

Posted by D. Daniel Sokol

With all the focus recently on the Chinese AML, an equally important development in India has been under-played.  The Indian Parliament has just passed the Competition (Amendment) Bill of 2007.  This bill provides statutory teeth to the Competition Commission of India (CCI). Once India's President assents to the Bill, the result will be the operationalization of the CCI.  Details are available here.

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

Antitrust as a Way to Pick Up Smart and Good Looking Women

Posted by D. Daniel Sokol

Today is the first day of Rosh Hashana, the Jewish new year.  It is a time of spiritual rebirth, self-examination and repentance.  I want to focus on the first of these issues.  In a time in which there is increasing assimilation and intermarriage among Jews in the United States, how might a nice Jewish boy pick up a nice Jewish girl and start dating?  The answer is to talk about antitrust, at least if the nice Jewish boy is former Federal Reserve Chairman Alan Greenspan and the nice Jewish girl is NBC reporter Andrea Mitchell.  According to yesterday's Washington Post, Alan brought Andrea back to his apartment after their first date in 1984 by promising to show her an essay he had written on the Sherman Act.  The details will appear this Sunday on CBS' 60 minutes interview, where Greenspan will discuss his new book.  For someone accustomed to discussion in the somewhat difficult to understand "Fedspeak", Greenspan was both pithy and clear about the sex appeal of antitrust.  According to the Washington Post, Greenspan remarked on his antitrust strategy "It worked."

Hat tip to my former college classmate and current DOJ antitrust attorney Ihan Kim.   

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

Wednesday, September 12, 2007

Theory Meets Practice: Barriers to Entry in Merger Analysis

Posted by D. Daniel Sokol

Analysis of agency actions is a critical part of ensuring that antitrust agencies understand how their policies work in practice.  They also give agencies an opportunity to reflect upon their own work and whether the theoretical assumptions on which they base this work need to be updated.  In an important contribution to the literature, Malcolm Coate of the US Department of Justice Antitrust Division examines the impact of merger analysis regarding barriers to entry in Theory Meets Practice: Barriers to Entry in Merger Analysis.

ABSTRACT: Barriers to entry are a necessary, but not sufficient condition for a merger to adversely affect competition. As a barrier definition must be linked to the specific theory of competitive concern under review to be meaningful, a theoretical barrier definition is unlikely to be useful. Instead, an
operational definition of barriers to entry is required. This paper explores the operationalization of the Merger Guidelines barrier to entry concept. A review of the files observes that most matters involve multiple entry scenarios, so it is often impossible to draw strict conclusions for the individual characteristics of timeliness, likelihood or sufficiency. However, by following each entry scenario through the three-stage analysis, it is possible to identify barriers to entry in 109 of the 138 matters reviewed. Within this analysis, the timeliness consideration is generally supported by the best evidence, while the likelihood characteristic leaves the most room for improvement. A total of 55 matters exhibit evidence of recent entry and 46 files report expectations of future entry. A few files detail innovative net present value analyses to determine the profitability of entry into the market. This type of financial analysis offers the promise of a quantitative approach to likelihood analysis.

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

Forensic Economics: An Introduction With Special Emphasis on Price Fixing

Posted by D. Daniel Sokol

Jconnor Keeping with the theme of forensic economics, there is another working paper worth reading on the topic, this one by cartel maven John Connor of Purdue's Agricultural Economics Department titled Forensic Economics: An Introduction With Special Emphasis on Price Fixing.

ABSTRACT: In this paper I aim to explain accepted methods of forensic analysis and how forensic economics is used in the context of competition-law enforcement. I illustrate forensic analysis with examples from antitrust cases involving price fixing.

I define forensic economics as economic analysis delivered to government authorities in public places. (The adjective ?forensic? is derived from the Roman Latin word forum). Here, ?government? is construed broadly as administrative agencies, regulatory commissions, and judicial bodies. Because regulatory and judicial proceedings are necessarily fact-laden, it follows from this definition that forensic economics is inherently, if not exclusively empirical.

Forensic analyses ? whether delivered orally or in writing ? are prepared at the behest of a client and generally support the client's interest. Forensic analyses are public in the sense that they are prepared with in anticipation that they will be subject to scrutiny and rebuttal by the client's opponent, and it is often the case that that debate will be carried on in a public setting or be made publicly available later. For that reason, forensic expert opinions are highly strategic documents prepared with an eye to anticipating the opponent's arguments. They are rhetorical in the best Aristotelian sense of that term, and they are in a curious sense peer-reviewed.

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

Tuesday, September 11, 2007

Forensic Economics in Competition Law Enforcement

Posted by D. Daniel Sokol

Mpschinkelphoto Reading through a number of new working papers this weekend, I found a very interesting one that dealt with how we conceptualize the role of economic experts in antitrust cases.  Given the importance of economic analysis to antitrust, this is (and should be) a key issue to be thinking about, one that Maarten Pieter Schinkel of the University of Amsterdam, Amsterdam Center for Law and Economics does with Forensic Economics in Competition Law Enforcement.

ABSTRACT:  This paper delineates the specialty field of forensic IO as the application of theoretical and empirical industrial organization economics in the legal process of competition law enforcement. Four stages of that process which can benefit from forensic IO techniques are distinguished: detection and investigation; case development; decision making and litigation; and remedies, sanctions and damages. We survey the use of economics in such aspects as identifying potential forms of anticompetitive behaviour, screening markets for competition law violations, determining causality, advising on appropriate remedies and assessing antitrust damages. The paper discusses the role of expert economic witnesses in competition cases. It calls for an organization of forensic IO within the context of existing forensic institutes.

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

Monday, September 10, 2007

News from AAI

Posted by D. Daniel Sokol

AAI has announced two important developmentsMichal Gal of the University of Haifa Law School (visiting this year at Georgetown law School) has been named a Senior Fellow while David Balto, a well known antitrust lawyer from his private and government work, has joined the Advisory Board.

September 10, 2007 | Permalink | Comments (0) | TrackBack (0)

Sunday, September 9, 2007

Commercial Agency Agreements, Vertical Restraints and the Limits of Article 81(1) EC: Between Hierarchies and Networks

Posted by D. Daniel Sokol

Ioannis Lianos of University College London has an excellent article in the newest issue of the Journal of Competition Law and Economics on Commercial Agency Agreements, Vertical Restraints and the Limits of Article 81(1) EC: Between Hierarchies and Networks.

ABSTRACT: Commercial agency agreements benefit from a specific competition law regime with regards to the application of Article 81 of the Treaty of the European Communities (hereinafter Article 81). Although they may contain clauses that can produce anticompetitive effects, such as minimum price fixing, these are generally found outside the scope of Article 81 paragraph 1 [hereinafter Article 81(1)]. In comparison, if a franchise or selective distribution agreement contains resale price maintenance clauses, Article 81(1) may apply. The existence of a distinct competition law regime for commercial agency agreements constitutes a paradox, as from an allocative efficiency perspective it makes no sense to distinguish between the two situations. By adopting a new-institutional economics perspective, this study will provide a justification for this specific competition law regime. The agency agreements exception will be considered as a specific form of the single entity defense that operates in situations of hierarchy. Other vertical restraints are mainly organizational mechanisms used in situations of network forms of organization. The distinction established between these agreements could thus be theoretically defended. More generally, the comparative institutional analysis of vertical restraints will provide a useful insight to delimit the boundaries of Article 81(1).

September 9, 2007 | Permalink | Comments (0) | TrackBack (0)