Antitrust & Competition Policy Blog

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

Saturday, November 3, 2007

Dominance with 15 Percent of Market Share?

Posted by D. Daniel Sokol

The Russian Federal Anti-Monopoly Service has proposed amendments to its Trade Act (antitrust law).  According to its press release:

     Currently FAS Russia has developed some amendments to the Trade Act, changing the market
     dominance threshold for trading organizations from 35% to 15%. Also it will introduce special
     collective dominance thresholds.

I am unaware of any country with a dominance threshold as low as 15 percent.  Is this a new low for what a "dominant" firm might be?

HT to Charles Hoffman of Axinn Veltrop.

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

Friday, November 2, 2007

Structural Remedies in Merger Regulation in a Cournot Framework

Posted by D. Daniel Sokol

Andrei Medvedev of the Competition Policy Centre at the University of East Anlgia provides a sense of Structural Remedies in Merger Regulation in a Cournot Framework.

ABSTRACT: To prevent possible abuse of market power in the future an antitrust agency can force merging firms to divest some of their assets. The divested assets can be sold via auction either to existing competitors or to a new entrant. Divesture of assets extends the range of parameters when a merger satisfies a consumer surplus standard and should be approved. If the agency takes a more active stance toward the selection of a purchaser of the assets, then it could lead to a favorable outcome for consumers and merging firms.

November 2, 2007 | Permalink | Comments (0) | TrackBack (0)

The Price Effects of Horizontal Mergers

Posted by D. Daniel Sokol

Matthew Weinberg of the University of Georgia Department of Economics provides a useful literature review in his article The Price Effects of Horizontal Mergers

ABSTRACT: This paper surveys the literature on the price effects of horizontal mergers. Most mergers examined in the nine studies conducted over the past 22 years resulted in increased prices for both the merging parties and rival firms, at least in the short run. There is some evidence that product prices increase after mergers are announced, but before they are consummated. Recent evidence from consumer product markets suggests that a stricter merger policy is needed to protect consumer welfare.

November 2, 2007 | Permalink | Comments (0) | TrackBack (0)

Thursday, November 1, 2007

Rankings News

Posted by D. Daniel Sokol

After reading about rankings over at the web site of our friends at Truth on the Market, I discovered that Antitrust and Competition Policy has been ranked number 68 among economics blogs by Brian Gongol's blog based on blog traffic.  Maybe if we cut the number of students admitted into our program, we could break into the top 50 by next year-- oh wait, that is our strategy for US News Rankings. 

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

Regime Shift in Antitrust

Posted by D. Daniel Sokol

Vivek_ghosal I came across one of the most interesting papers in recent months on antitrust and one that is perfect for a citation I was looking to fill in a footnote for a forthcoming work.  Vivek Ghosal of Georgia Tech's School of Economics has attempted to quantify the shift in antitrust enforcement that has resulted from the Chicago School antitrust revolution in his work Regime Shift in Antitrust.

ABSTRACT: This paper empirically models the longer-run deep-seated shift in intellectual thinking that followed the Chicago School's criticism of the older antitrust doctrine, the shorter-run driving forces related to switches of the political party in power, merger waves, changes in economic activity and the level of funding and quantifies their impact on enforcement by the Antitrust Division of the U.S. Department of Justice over the period 1958-2002. The key findings are: (1) a distinct regime-shift in antitrust enforcement during the 1970s and, post-regime-shift, there has been a marked compositional change with a quantitatively large increase (decrease) in criminal (civil) antitrust court cases initiated; (2) post-regime-shift, there appears to be a change in the role played by politics with Republicans initiating more (less) criminal (civil) court cases than Democrats and the estimated quantitative effects are large; (3) disaggregating the total number of court cases into the main categories under which they are initiated (price-fixing, mergers, monopolization and restraints-of-trade) shows that individual types of cases have widely differing responses to changes in the driving forces; and (4) in a horse-race between the regime-shift and political effect on one side and the remaining variables on the other, the former forces win hands-down in explaining broad shifts in enforcement. Modeling the longer-run shift and disaggregating the court cases emerge as crucial to gaining insights into the intertemporal shifts in enforcement. The paper elaborates on the causes for the shift in enforcement and on the effectiveness of antitrust.

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

Abuse Below the Threshold of Dominance? Market Power, Market Dominance, and Abuse of Economic Dependence

Posted by D. Daniel Sokol

Pranvera Pranvera Këllezi of the University of Geneva Faculty of Law adds to the literature on Article 82 with her analysis Abuse Below the Threshold of Dominance? Market Power, Market  Dominance, and Abuse of Economic Dependence.

ABSTRACT: This article discusses the case law in the European Union as it relates to the concept of dominant position in connection with dependency relationships. To answer the question whether the concept of economic dependence is covered by Article

82 EC, this article discusses first the economic definition of market power and the relation to market shares. It follows with the concept of economic dependence in competition laws of some European countries. It shows that economic dependence relates to market power that does not result from a paramount market position. Other factors and forms of market power are responsible for the dependence of particular customers to their suppliers or buyers. Then the concept of economic dependence is compared with the definition of dominant position under European competition law, focusing on the relevant case law. We conclude that economic dependence of customers on the dominant undertaking constitutes one of the factors that can be taken into account for the assessment of the dominant position. In relation to market shares, economic dependence is an additional element that could complete the analysis of the dominant position, in particular when the undertaking under investigation has low market shares.

Finally, the article examines the abusive conduct and remedies.  It concludes that while the extension of the concept of the dominant position may allow for the covering of more types of market power and reducing in that way the importance of market shares, the wide interpretation of abuses and the regulatory nature of remedies in cases of economic dependence increase the risk of over-intervention.

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

Wednesday, October 31, 2007

Competition and Regulation in India

Posted by D. Daniel Sokol

CUTS International has released a report entitled Competition and Regulation in India, 2007.  The report is comprehensive in its coverage.

October 31, 2007 | Permalink | Comments (0) | TrackBack (0)

University of Chicago Law and Economics Fellow

Posted by D. Daniel Sokol

The John M. Olin Program in Law and Economics

Law and Economics Fellow

The Law School's Program in Law and Economics seeks to appoint a law and economics fellow for the 2008-9 academic year.


Each candidate's record must demonstrate distinguished work in legal or economic scholarship.


To be considered as a candidate for this position please send a cover letter, resume, research statement and writing samples to:

CONTACT: Marjorie Holme
John M. Olin Program in Law and Economics
University of Chicago Law School
1111 East 60th Street
Chicago, IL 60637

The deadline for submission of applications is June 1, 2008. The University of Chicago is an Affirmative Action/Equal Opportunity Employer. If you have any questions about the position or the hiring procedures, please contact Marjorie Holme at:

October 31, 2007 | Permalink | Comments (0) | TrackBack (0)

Milestone Reached

Posted by D. Daniel Sokol

At some point last night while I was sleeping (or perhaps while I was changing a diaper of my almost 5 month old daughter), the Antitrust and Competition Policy Blog reached its 100,000th visit.  Shubha and I want to thank all of the readers of this blog for your continued interest.  When I joined the blog in January 2007, we averaged 1,000 hits a month.  We are now up to 7,000 hits a month and continue on an upward trajectory. 

October 31, 2007 | Permalink | Comments (1) | TrackBack (0)

Sharpening Canada’s Competitive Edge

Posted by D. Daniel Sokol

The Canadian Competition Policy Review Panel  released its consultation paper: Sharpening  Canada’s Competitive Edge.

The report includes an analysis of competition policy in Canada. 

The Competition Policy Review has invited written submissions that respond to the paper. Submissions will be accepted to a maximum of 20 pages (including attachments), until January 11, 2008.  See here for details.

October 31, 2007 | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 30, 2007

The Place of Competition Law in the Future Community Legal Order

Posted by D. Daniel Sokol

A November 8 conference in Brussels is perhaps the most important conference of the year in European competition law.  See here for registration and details for The Place of Competition Law in the Future Community Legal Order.

October 30, 2007 | Permalink | Comments (0) | TrackBack (0)

Mueller Graduate Fellowship in Idustrial Organization

Posted by D. Daniel Sokol

The Agriculture and Applied Economics Department at the University of Wisconsin-Madison is seeking applicants for the Muller Graduate Fellowship. Preference will be given to top applicants studying applied industrial organization (IO), which can be combined with other interests including finance, trade, econometrics, policy, environment, development, or other related fields. Research interests may include:  performance of the U.S. and global food systems, competition law and policy analysis, international competition analysis, regulated monopolies, and the interactive role between competition policy and investment, foreign direct investment, trade and technical innovation.

Applicants to the AAE graduate program for Fall 2008 should specify their interest in being considered for the fellowship: there is no special application form.

If you know of a top undergraduate or MS candidate at your institution that might be interested, please forward this email to him/her. Information about the department's industrial organization research activities, IO course offerings, and some example curriculum plans, is available at the web page for the Food System Research Group ( Please contact Kyle W. Stiegert with further questions.

Kyle W. Stiegert, Director
Food System Research Group

October 30, 2007 | Permalink | Comments (0) | TrackBack (0)

Competition and Mergers Among Nonprofits

Posted by D. Daniel Sokol

Jens Prufer of the University of Tilburg Department of Economics questions whether the analysis in mergers among nonprofits should be different than among profit maximizing firms in his paper Competition and Mergers Among Nonprofits.

ABSTRACT: Should mergers among nonprofit organizations be regulated differently than mergers among for-profit firms? The relevant empirical literature is highly controversial, the theoretical literature is scarce. I analyze the question by modeling duopoly competition with quality-differentiated goods. I compare welfare effects of mergers between firms with the effects of mergers between nonprofits dominated by consumers, workers, suppliers, and pure donors respectively. I find that mergers both among firms and among most types of nonprofits do not increase welfare. Mergers among consumer-dominated nonprofits, however, can improve welfare. These results imply for competition law and regulation that ?nonprofit? might be too crude a label for organizations with varying goals. Consequently, mergers among certain nonprofit organizations should not necessarily be treated in the same way as mergers among for-profit firms ? a notion that is absent in current merger guidelines both in the US and the EU.

October 30, 2007 | Permalink | Comments (0) | TrackBack (0)

Monday, October 29, 2007

Wintel Under the Antitrust Microscope: A Comparison of the European Intel Case with the U.S. Microsoft Cases

Posted by D. Daniel Sokol

Norman W. Hawker, AAI Senior Fellow and Associate Professor, Haworth College of Business, Western Michigan University, offers a comparative analysis of the Intel and Microsoft cases in Wintel Under the Antitrust Microscope: A Comparison of the European Intel Case with the U.S. Microsoft Cases.

ABSTRACT: The European Union has issued a statement of objections to Intel regarding the company’s conduct aimed at suppressing competition from Intel’s chief rival, AMD. Although the statement of objections remains confidential, the allegations in AMD’s private litigation are public and provide a useful basis for analysis. Intel dominates the PC chip market almost to the same degree that Microsoft dominates the PC operating system market. As in the Microsoft case, Intel’s aggressive marketing tactics prevented OEMs from offering rival products to consumers. And like Microsoft, Intel has engaged in this conduct to maintain its existing monopoly. These parallels between the Microsoft and Intel suggest that Intel’s anticompetitive practices harm consumers, including American consumers, by denying them the access to innovative products at lower prices from rivals. The United States established that Microsoft repeatedly and willfully violated the antitrust laws, but failed to achieve an effective remedy. The EU, however, should have an easier time achieving an effective remedy. First, unlike the OS market, a viable competitor still exists in the chip market, i.e., AMD. Second, Intel has relied primarily on exclusionary rebates, not commingling of intellectual property, to maintain its monopoly. Consequently, the EU should be able to fashion a remedy that does not require Intel to redesign its product.

October 29, 2007 | Permalink | Comments (1) | TrackBack (0)

Sunday, October 28, 2007

DG Comp Seeks Comments on Settlement Procedure for Cartels

Posted by D. Daniel Sokol

Details are available here.  Hat tip to Latham's Susanne Zuehlke.

October 28, 2007 | Permalink | Comments (0) | TrackBack (0)