Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, September 29, 2007

Hovenkamp on The Harvard and Chicago Schools and the Dominant Firm

Posted by D. Daniel Sokol

When Herb Hovenkamp writes, we should all take notice.  His latest piece is The Harvard and Chicago Schools and the Dominant Firm.

ABSTRACT: The Chicago School has produced many significant contributions to the antitrust literature of the last half century. Thanks in part to Chicago School efforts today we have an antitrust policy that is more rigorously economic, less concerned with protecting noneconomic values that are impossible to identify and weigh, and more confident that markets will correct themselves without government intervention. This Chicago School revolution came at the expense of the Harvard structural school, which flourished from the 1930s through the 1950s. That school rested on a fairly rigid theory of Cournot oligopoly, exaggerated notions about barriers and impediments to entry, and a belief that certain types of anticompetitive conduct were more-or-less inevitable given a particular market structure. However, the chastised Harvard School that emerged in the late 1970s in the writings of Phillip E. Areeda and a converted Donald F. Turner were much less ambitious about the goals of antitrust, more concerned with conduct as such, and significantly more skeptical about the benefits of aggressive judicial intervention.

This story of a victorious Chicago School and a humbled and disciplined Harvard School is incomplete, however. The antitrust case law reveals something quite different. On most of the important issues this chastised Harvard School has captured antitrust decision making in the courts, and largely in the enforcement agencies. This paper explores these differences, focusing mainly on dominant firm practices.

September 29, 2007 | Permalink | Comments (0) | TrackBack (0)

Thursday, September 27, 2007

Canadian Law and Economics

Posted by D. Daniel Sokol

Tomorrow Shubha and I will both be at the annual meeting for the Canadian Law and Economics Association annual meeting.  There will be an excellent group of people from around the world with whom to discuss antitrust and related issues.  I will be presenting my working paper Why is this Chapter Different from All the Others? An Examination of Why Countries Enter into Non-Enforceable Competition Policy Chapters in Free Trade Agreements.  I have a slide of Moses parting the Red Sea for those that didn't get the Passover reference in the title.

September 27, 2007 | Permalink | Comments (0) | TrackBack (0)

An Antitrust Analysis of Google’s Proposed Acquisition of DoubleClick

Posted by D. Daniel Sokol

Robert Hahn of Brookings and Hal Singer of Criterion Economics have a new working paper out titled An Antitrust Analysis of Google’s Proposed Acquisition of DoubleClick.

ABSTRACT: By serving as a key revenue source for online content providers, online advertising has been instrumental in the development of innovative websites. Continued innovation among content providers, however, depends critically on the competitive provision of online advertising. Suppliers of online advertising provide three primary inputs—(1) advertiser tools, (2) intermediation services, and (3) publisher tools. Certain suppliers such as Google provide a platform that combines the inputs into one integrated service. In this paper, we focus on the overlapping products sold to advertisers by Google and DoubleClick—namely, the supply of advertiser tools. Because the supply of advertiser tools is highly concentrated, Google's proposed acquisition of DoubleClick raises important questions for antitrust authorities. Proponents of this acquisition argue that Google and DoubleClick do not compete—that is, buyers of search-based or contextual-based advertising (the two advertising channels in which Google participates) do not perceive graphic-based advertising (the advertising channel in which DoubleClick participates) to be substitutes. Thus, they conclude that the proposed acquisition would not lead to higher prices.

In this paper, we examine economic evidence and legal precedent to help identify the relevant antitrust product market for Google's proposed acquisition of DoubleClick. According to the Federal Trade Commission and Department of Justice Horizontal Merger Guidelines, product markets are defined by the response of buyers to relative changes in prices. To inform how buyers—in this case, online advertisers—would respond to relative changes in price across the three online advertising channels (search, contextual, and display), we analyze the results of a survey of online retailers. The survey suggests that (1) a significant share of online advertisers would substitute among the three channels in response to relative changes in prices, and (2) a significant share of DoubleClick customers would turn to Google before any other supplier in response to an increase in the price of DoubleClick's advertiser tools. In particular, the survey indicates that a combined Google-DoubleClick would likely have a greater incentive to increase the price of DoubleClick's advertiser tools relative to a stand-alone DoubleClick offering.

September 27, 2007 | Permalink | Comments (0) | TrackBack (0)

Global Antitrust Enforcement

Posted by D. Daniel Sokol

Tom Barnett gave a speech yesterday on Global Antitrust Enforcement at the Georgetown Law Global Antitrust Enforcement Symposium.

September 27, 2007 | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 26, 2007

100 Academic Blogs Every Professional Investor Should Read...

The End of the Microsoft Case?

Posted by D. Daniel Sokol

THE END OF THE MICROSOFT ANTITRUST CASE? PUBLIC POLICY CONFERENCE

The Searle Center at Northwestern University School of Law
November 15th (11:30 AM)-16th (3:30 PM) 2007

Most of the historic Microsoft Antitrust Consent Decree expires on November 12, 2007. This is an appropriate occasion for a retrospective on the government's case against Microsoft in light of rapidly evolving markets, refinements in economic theories of technology, and the increasing challenges of operating a global business under multiple antitrust regimes.

CONFIRMED SPEAKERS:
George Bittlingmayer, University of Kansas
Nicholas Economides, New York University, Stern School of Business
David Evans, LECG Europe
Shane Greenstein, Northwestern University, Kellogg School of Management
David A. Heiner, Microsoft Corporation
Renata B. Hesse, Wilson Sonsini Goodrich & Rosati, Washington
Thomas N. Hubbard, Northwestern University, Kellogg School of Management
Keith Hylton, Boston University School of Law
Marco Iansiti, Harvard Business School
F. Scott Kieff, Washington University School of Law
William E. Kovacic, Federal Trade Commission
Pierre Larouche, Tilburg University, The Netherlands
Stan Liebowitz, University of Texas at Dallas
Abbott (Tad) B. Lipsky, Latham & Watkins LLP, Washington
John E. Lopatka, Penn State University, Dickinson School of Law
Fred S. McChesney, Northwestern University School of Law
William H. Page, University of Florida, Levin College of Law
Randall C. Picker, University of Chicago Law School
Robert Porter, Northwestern University, Department of Economics
George L. Priest, Yale Law School
J. Robert Robertson, Kirkland & Ellis, Chicago
William Rogerson, Northwestern University, Department of Economics
Gregory Sidak, Georgetown University School of Law
James B. Speta, Northwestern University School of Law
Daniel Spulber, Northwestern University, Kellogg School of Management
Michael D. Whinston, Northwestern University
Joshua Wright, George Mason University School of Law

REGISTRATION:

Space is limited. Please register no later than November 5th. Checks should be made payable to Northwestern University.  The conference registration fee is $495, but will be waived for academic affiliates and government employees who work on antitrust issues. To reserve a space at this event, you must send a message with name, affiliation and contact information to:

Email: searlecenter@law.northwestern.edu

Tel: (312) 503-1811

Postal: The Searle Center
Northwestern University School of Law
357 E. Chicago Avenue
Chicago, IL 60611

September 26, 2007 | Permalink | Comments (0) | TrackBack (0)

Amendments to the Mexico' Law of Economic Competition and the Economics of the Anticompetitive Use of Monopolistic Practices Lawsuits

Posted by D. Daniel Sokol

Ramiro Tovar Landa of Instituto Tecnológico Autónomo de México (ITAM) has an informative new working paper concerning Mexico's competition law system Amendments to the Mexico' Law of Economic Competition and the Economics of the Anticompetitive Use of Monopolistic Practices Lawsuits.

ABSTRACT: One of the main characteristics of the amendments to the Federal Law of Economic Competition (LFCE, as per its abbreviation in Spanish) is that it includes, in explicit manner, several unilateral conducts of the economic agents, broadening the catalogue of relative monopolist practice. Some of these practices were only established in the LFCE Regulations or Guidelines and, as such low legal ranking level, the sanctioning capacity was obstructed by unconstitutionality in its application. Now, at statute level, there is a broad array of practices that are easily seen in markets and that, generally, have an economic justification since they generate efficiencies in the competition process. There is consensus that the existence or magnitude of such efficiencies are not conditioned to the fact that the agent that carries them out has or does not have substantial market power. Consequently, the analysis needed to distinguish between practices that have an anticompetitive effect, from those which have a pro-competitive effect is complex and, therefore, are subject to error. In this case, the Mexican Federal Competition Commission (CFC, as per its abbreviation in Spanish) operates as a regulator and, like any other regulator; it operates with inherently imperfect information.

September 26, 2007 | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 25, 2007

Majoras Before the Antitrust Task Force of the Committee on the Judiciary, United States House of Representatives

Posted by D. Daniel Sokol

Today, Chairman Majoras of the FTC provided U.S. House with overview of recent Antitrust activities.  Some highlights from her statement include:

"Through 11 months of fiscal year 2007, the agencies have received 1967 premerger filings, an increase of 23 percent from the same time period of fiscal year 2006... Thus far in fiscal year 2007, there have been 21 mergers in which the Commission brought merger enforcement actions to preserve competition or the parties abandoned proposed mergers after Commission staff expressed concerns about anticompetitive harm."

Issues covereed included: health care, energy, real estate, technology and defense, retail and other industries, merger review process improvements, competition advocacy, amicus briefs, hearings, conferences, workshops, reports, international coordination and technical assistance, and outreach innitiatives.

September 25, 2007 | Permalink | Comments (0) | TrackBack (0)

Third Annual ForoCompetencia Conference

Posted by D. Daniel Sokol

The third annual ForoCompetencia Conference will be held on November 2 in Pilar, Argentina (near Buenos Aires).  The conference details are available below.

Download 3er_coloquio_forocompetencia.doc

September 25, 2007 | Permalink | Comments (0) | TrackBack (0)

EC Competition Law

Posted by D. Daniel Sokol

The Microsoft ruling has prompted many on this side of the Atlantic to wonder about the structure and development of EC Competition Law.  Filling the knowledge gap in this area is the new book EC Competition Law by Giorgio Monti, published by Cambridge University Press.

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The development of competition law in the EU can be explored through three interrelated perspectives: the extent to which controversies in economic thinking affect the design of the law; how changing political visions about the objectives of competition law have caused shifts in the interpretation of the rules; and the institution in charge of applying the rules. The economic and political debates on competition law show that it is a contested terrain, and the way courts and competition authorities apply the law reflects their responses to the objectives and economics of competition law. By characterising the application of competition law as a continuous response to policy and economic debates, the author casts fresh perspectives on the subject. Written with competition law students in mind, Monti sets out economic concepts in a non-technical manner and explores the policy dimension of competition law by referring to key cases and contemporary policy initiatives.

• Non-technical reviews of the relevant economic literature allow all readers to participate fully in the discussion of competition law • Detailed case studies illustrate the operation of rules in specific circumstances, as well as their general application for a fuller understanding • The introduction of new topics for study gives the student the broadest possible perspective on the subject

Contents

1. Competition law - policy perspectives; 2. The core values of EC competition law in flux; 3. Economics and competition law; 4. Competition law and public policy; 5. Market power; 6. Abuse of a dominant position: anticompetitive exclusion; 7. Abuse of a dominant position: from competition policy to sector-specific regulation; 8. Merger policy; 9. Oligopoly markets; 10. Distribution agreements; 11. Institutions: who enforces competition law?; 12: Competition law and liberalisation; 13. Conclusions.

September 25, 2007 | Permalink | Comments (0) | TrackBack (0)

Monday, September 24, 2007

American University Lecture on the New Chinese Antimonopoly Law

Posted by D. Daniel Sokol

American University Washington College of Law Presents
The International and Comparative Antitrust Law Lecture Series

China’s Recently Enacted Antimonopoly Law 

Tuesday September 25, 2007

5:30 pm – 7:30 pm

American University Washington College of Law
Room 603
4801 Massachusetts Avenue, NW

Download china_lect_publicity_9_25.pdf

September 24, 2007 | Permalink | Comments (0) | TrackBack (0)

AAI - In Defense of the EU's Microsoft Ruling

Posted by D. Daniel Sokol

Lest you think that the blog does not cover a diversity of viewpoints on various antitrust matters, this morning I read the American Antitrust Institutes' comments on the Microsoft decision.  The AAI  defends the decision and lambastes AAG Tom Barnett's comments on the EU.  Highlights of the AAI paper include the following statements:

On the DOJ Press Release

"[O]ne might think that it was the DOJ that had been found guilty and that it is the DOJ that will handle the appeal for Microsoft (if there is one) to the European Court of Justice."

On the Remedy
"Frankly, neither the US remedy nor the European remedy has proven to be very effective. It may be necessary at some point for the Europeans to impose even stronger remedies against Microsoft, such as the break-up originally contemplated by our government."

On the DOJ
"Thus, Barnett’s statement smacks of remorse that the US government did anything at all to stop Microsoft’s exclusionary practices."

On the EC
"The EC’s position, upheld now on appeal, shows the proper concern for practices by dominant firms that eliminate both actual and potential competition which could benefit consumers. The EC has appropriately targeted strategies that would have the effect of deterring investment in innovations that might lead to a reduction of the monopolist’s power and new benefits for consumers."

September 24, 2007 | Permalink | Comments (0) | TrackBack (0)