Antitrust & Competition Policy Blog

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

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Saturday, October 6, 2007

Getting the Most from Your Economic Expert

Posted by D. Daniel Sokol

One of the most important elements to an antitrust case is the use of economic experts.  In what may be one of the best ABA Antitrust Section presentations this year, Michael Baye, the Director of the Bureau of Economics of the FTC will speak on Getting the Most from Your Economic Expert on October 17.

October 6, 2007 | Permalink | Comments (0) | TrackBack (0)

Why Intellectual Property May Create Competition Problems

Posted by D. Daniel Sokol

Denis Borges Barbosa of Pontifícia Universidade Católica do Rio de Janeiro address the IP-Antitrust interface in a Brazilian and Latin American context in his paper Why Intellectual Property May Create Competition Problems.

ABSTRACT: Market economies historically led the stimulus to creation to a model where the author has an exclusive right to exploit economically its work. Such exclusiveness is however ?artificial?, as long as the information, once effected to the public, naturally spreads out without inherent constraints, therefore undermining the initial scarceness, which would drive its production. The concoction of exclusive rights, introducing an extrinsic constraint to general access to information, fulfills the need to adequate the production of technological and expressive creations to the market environment.

This brief study, which is an extract of a longer research on the intersection of Intellectual Property and competition policies in South America, weights the comparative legal approaches of treating those exclusive rights as monopolies or property, with the purpose to enlighten such intersections in a cross-doctrinal environment.

October 6, 2007 | Permalink | Comments (0) | TrackBack (0)

Thursday, October 4, 2007

Weyerhaeuser and the Search for Antitrust's Holy Grail

Posted by D. Daniel Sokol

LamberttThom Lambert of the University of Missouri School of Law (ie, the guy with the office down the hall from mine) has just posted his newest paper Weyerhaeuser and the Search for Antitrust's Holy Grail .

ABSTRACT: A general definition of exclusionary conduct has become a sort of Holy Grail for antitrust scholars. At present, four proposed definitions appear most promising: (1) conduct that could exclude an equally efficient rival; (2) conduct that raises rivals' costs unjustifiably; (3) conduct that, on balance, impairs consumer welfare by creating market power without providing countervailing consumer benefits; and (4) conduct that makes no economic sense but for its exclusionary effect on rivals.

In Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., 127 S. Ct. 1069 (2007), the U.S. Supreme Court implicitly weighed in on this debate over a generalized exclusionary conduct test. The issue before the Weyerhaeuser Court -- should the legal standards governing predatory pricing similarly apply in predatory bidding cases? -- appears on first glance to be rather narrow. In resolving that seemingly narrow issue, though, the Court seems implicitly to have rejected the second, third, and fourth definitions of exclusionary conduct (i.e., the raising rivals' costs approach, the consumer welfare effects test, and the no economic sense test). The Court's holding and reasoning are consistent with only the equally efficient rival approach.

This article asserts two primary claims, one descriptive and one normative. As a descriptive matter, the article asserts that the Supreme Court has implicitly rejected all the proposed exclusionary conduct definitions except for the equally efficient rival approach. As a normative matter, the article argues that this is a salutary development -- that the equally efficient rival test, while somewhat underdeterrent, is the best of the proposed generalized definitions.

October 4, 2007 | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 3, 2007

Annual Report on JFTC Activities

Posted by D. Daniel Sokol

The Japanese Fair Trade Commission has published its review of its activities this past year.  See here.

October 3, 2007 | Permalink | Comments (0) | TrackBack (0)

Strong Spine, Weak Underbelly: The CFI Microsoft Decision

Posted by D. Daniel Sokol

First Harry First of NYU Law School weighs in on the CFI decision with his piece titled Strong Spine, Weak Underbelly: The CFI Microsoft Decision.



October 3, 2007 | Permalink | Comments (1) | TrackBack (0)

Patents and Antitrust: Application to Adjacent Markets

Posted by D. Daniel Sokol

The impact of the intersection of antitrust and IP is an important one.  Between the AMC Report and the FTC'/DOJ latest report on this intersection, Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition, this is an issue at the forefront of antitrust policy.  Adding to this debate are Nicholas Economides of the Stern School of Business, NYU and William N. Herbert of Calvo & Clark LLP with their paper Patents and Antitrust: Application to Adjacent Markets.

ABSTRACT: We examine the intersection of patents and antitrust where a patent holder uses the monopoly power it possesses in the market for a patented product to exclude competitors in an adjacent market and attempt to monopolize or monopolize the adjacent market. The present scheme for awarding patents cannot judge when the issuance of a patent will lead to the appropriate balance between innovation and efficiency. Where a patent holder's invention uses an interface with adjacent products, the patent holder may be tempted to extend its patent monopoly into adjacent markets that depend upon the interface with the patented invention. Economic theory suggests that it is inappropriate to immunize a patent holder from antitrust liability when it attempts to extend its patent monopoly into adjacent markets, because it could decrease consumer surplus. Courts have expressed their reluctance to scrutinize a patent holder's innovations and design changes, because of the potential benefits of the innovations and their reluctance to second-guess the marketplace.

However, applying traditional antitrust principles, courts have found that monopolists could be liable for unlawfully extending their monopoly positions into adjacent markets in the areas of computer peripherals and software applications; aftermarkets for replacement parts, service and maintenance of durable goods; design changes to medical devices; and changes in drug formulas. While the patent laws provide a spur to innovation by granting limited monopoly rights, the antitrust laws curb the excessive reach of these monopoly rights by acting as a check on excessive expansion of the scope of the patent grant.

October 3, 2007 | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 2, 2007

Are Bank Mergers Efficiency Enhancing?

Posted by D. Daniel Sokol

John Ashton of Norwich Business School and the ESRC Centre for Competition Policy, University of East Anglia and Khac Pham of the ESRC Centre for Competition Policy, University of East Anglia have a new working paper that analyzes banking mergers in the UK titled Efficiency and Price Effects of Horizontal Bank Mergers.

ABSTRACT: This study provides an empirical assessment of the efficiency and interest rate changes occurring during 61 UK retail bank mergers. Key findings of the work include the general efficiency enhancing influence of UK bank mergers and the limited effect of merger on retail interest rates. Furthermore, different banking products appear to be influenced differently by mergers. It is proposed that future assessments of bank competition and mergers require an accommodation of different types of bank customer.

October 2, 2007 | Permalink | Comments (1) | TrackBack (0)

Monday, October 1, 2007

Uruguayan Law of Promotion and Defense of Competition Enacted

Posted by D. Daniel Sokol

I missed it earlier this summer but Uruguay has entered the club of Latin American countries with a complete and systematic competition law. Uruguay's Parliament enacted Law Number 18,159, "Law of Promotion and Defense of Competition", on July 10, 2007. The competition law covers: substantial issues (definitions, prohibition of anticompetitive practices and abuse of dominant position, merger control and sanctions), powers and competence of the competition authority and general rules for the proceedings.

The law repeals previous rules (articles 13, 14 and 15 of the Law 17.243 of 2000 and articles 157 and 158 of the Law 17.296 of 2001) which were not enforced effectively.

Hat tip to Juan David Gutierrez Rodriguez.

October 1, 2007 | Permalink | Comments (0) | TrackBack (0)

The Future of US Federal Antitrust Enforcement

Posted by D. Daniel Sokol

What does the future hold for antitrust in the US? James Langenfeld of LECG and Daniel Shulman of Gray Plant Mooty give prediction a shot in The Future of US Federal Antitrust Enforcement: Learning from Past and Current Influences, which appears in the fall issue of the Sedona Conference Journal.

October 1, 2007 | Permalink | Comments (0) | TrackBack (0)