Antitrust & Competition Policy Blog

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

Friday, February 9, 2007

Waldman and Carlton on Aftermarkets

Posted by D. Daniel Sokol

Dennis Carlton and Michael Waldman have a new working paper on an increasingly hot topic in antitrust- aftermarkets.  Their paper suggests that judicial interventions in aftermarkets may come with risks.

"Competition, Monopoly and Aftermarkets"
Johnson School Research Paper Series No. 10-06

ABSTRACT: Consider a durable goods producer that potentially has market power in the aftermarkets associated with its own products. An important question is to what extent, if any, should the antitrust laws restrict the firm's behavior in these aftermarkets? In this paper we explore three models that illustrate how various behaviors that hurt competition in aftermarkets can, in fact, be efficient responses to potential inefficiencies that can arise in aftermarkets. Our results should give courts pause before intervening in aftermarkets.

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

Thursday, February 8, 2007

Are You Paying Too Much for Vegetables and Cereal? Congress to Explore Competition Issues in the Grocery Industry

Posted by D. Daniel Sokol

Democratic control of Congress has prompted new committee chairs to flex their legislative muscles.  The latest to do so is Dennis Kucinich (D-Ohio), chairman of the new House Oversight and Government Reform Domestic Policy Subcommittee.  Kucinich, a declared presidential candidate for the 2008 race, has vowed to investigate the cost of groceries and  competition in the marketplace, according to today's BNA Antitrust Report (subscription required).  Is this motivated by Albertson/Supervalu, industry consolidation generally or another forum to politicize WalMart (always a good move for someone running for president), the nation's top grocer?

Hat tip to Minnesota's Tom Cotter from bringing the story to our attention.

February 9 Update

My colleague Kyle Stiegert who heads the University of Wisconsin's Food System Research Group in the Agricultural and Applied Economics Department alerted me to an issue sheet he wrote recently on supermarket mergers and supercenters on prices.  His conclusion is that "[r]ecent changes in the industry have muted competition effects. The rise of supercenters does not seem to increase competition nor have a significant impact on prices. Supermarket mergers increase supermarket profits, but prices to consumers also rise."

February 8, 2007 | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 6, 2007

$2,000 Student Prize Offered by Berkeley Technology Law Journal

Posted by D. Daniel Sokol

The Berkeley Technology Law Journal is soliciting entries for our annual student writing competition.  They will accept submissions from JD candidates (sorry LLM and SJD students!) on a wide variety of topics at the intersection of law and technology, including but not limited to: intellectual property, antitrust, First Amendment, entertainment and new media, telecommunications, biotechnology, Internet, and cybercrime.  First prize includes $2,000 and publication in the Fall 2007 issue, if the winning article meets the Journal's publication standards.  The submission deadline is February 28, 2007.

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

Competition for the Best Antitrust Scholarship of 2006

Posted by D. Daniel Sokol

The American Antitrust Institute is holding its annual competition for the Jerry S. Cohen Award for the Best Antitrust Scholarship of the Year.

From the AAI press release:

The Jerry S. Cohen Memorial Charitable Trust is again seeking nominations for its annual award for best antitrust scholarship. Legal, economic, and business articles, monographs, and books published during 2006 are eligible for this award of approximately $8,000-10,000. The Award will be presented during the American Antitrust Institute Annual Conference on June 21, 2007, in Washington, D.C.

Although the Cohen Award's judges search the literature for worthy scholarship, your nominations, including self-nominations, will help make sure they do not accidentally overlook any important candidates.

The award is made through a trust set up in the memory of antitrust attorney and author Jerry S. Cohen, brought about by efforts and donations of friends, colleagues and his former law firm. This year's award will be selected by a committee consisting of Professors John Flynn, Eleanor Fox, Robert Lande and Steven Salop, antitrust practitioners David Romine and Charles Goodwin, and Judge Ann Yahner.

Last year's recipient was Professor Barry Nalebuff for his article, Exclusionary Bundling, 30 Antitrust Bull. 321 (2005). Previous winners include Professor Andrew Gavil, for Exclusionary Distribution Strategies by Dominant Firms: Striking a Better Balance, Professor John Connor, for his book Global Price Fixing, and Professors Joseph F. Brodley, Patrick Bolton, and Michael H. Riordan for Predatory Pricing: Strategic Theory and Legal Policy.

To be selected for the award, submissions should address substantive, procedural, or evidentiary issues important to the statutes designed to protect consumers and society as a whole from anticompetitive activity. Submissions should include such concerns as the maintenance of effective limitations upon economic power, principles of economic justice, the dispersal of economic power, and an awareness of the human and social impacts of economic institutions upon individuals, small businesses and other institutions necessary to the maintenance of a just and humane society. All these are values and concerns that Jerry S. Cohen dedicated his life and work to fostering.

Please send a copy of your nomination before April 1, 2007 to Herbert E. Milstein, at, or at Cohen, Milstein, Hausfeld & Toll, P.L.L.C., 1100   New York Avenue, N.W., West Tower, Suite 500, Washington, D.C. 20005. For a detailed statement of the Award's eligibility and selection criteria, or if you have any questions about the Cohen Award, please also contact Herbert E. Milstein, at 202-408-4600 or at

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

Monday, February 5, 2007

FTC Issues Final Opinion and Order in Rambus Matter

Posted by D. Daniel Sokol

An FTC press release today reports that the FTC has issued a final opinion and final order on Rambus, one of the more exciting IP-Antitrust cases in the past few years.

From the FTC Press Release:

The Federal Trade Commission today issued a final opinion and order in the legal proceeding against computer technology developer Rambus, Inc. In addition to barring Rambus from making misrepresentations or omissions to standard-setting organizations, the order requires Rambus to license its SDRAM and DDR SDRAM technology and sets maximum allowable royalty rates it can collect for the licensing, bars Rambus from collecting or attempting to collect more than the maximum allowable royalty rates from companies that may already have incorporated its DRAM technology, and requires Rambus to employ a Commission-approved compliance officer to ensure that Rambus’s patents and patent applications are disclosed to industry standard-setting bodies in which it participates. The order is designed to remedy the effects of the unlawful monopoly Rambus established in the markets for four computer memory technologies that have been incorporated into industry standards for dynamic random access memory – DRAM chips. DRAMs are widely used in personal computers, servers, printers, and cameras.

The release continues:

The Commission’s majority opinion states that the Supreme Court has “emphasized the Commission’s wide discretion in its choice of remedy, and stated the expectation that the Commission would ‘exercise a special competence in formulating remedies to deal with problems in the general sphere of competitive practices.’”                   

Thus, “The Commission enjoys ‘wide latitude for judgment’ in fashioning a remedial order, subject to the constraint that the requirements of the order bear a reasonable relationship to the unlawful practices that the Commission has found.”

“Having found liability, we want a remedy strong enough to restore ongoing competition and thereby to inspire confidence in the standard-setting process. At the same time, we do not want to impose an unnecessarily restrictive remedy that could undermine the attainment of pro-competitive goals,” it says.                   

“[T]he Commission has previously declared, and we agree, that ‘where the circumstances justify such relief, the Commission has the authority to require royalty-free licensing.’ . . . We conclude, however, that Complaint Counsel have not satisfied their burden of demonstrating that a royalty-free remedy is necessary to restore the competition that would have existed in the ‘but for’ world – i.e., that absent Rambus’s deception, JEDEC would not have standardized Rambus technologies, thus leaving Rambus with no royalties. . . .We have examined the record for the proof that the courts have found necessary to impose royalty-free licensing, but do not find it. ”

“We therefore are left with the task of determining the maximum reasonable royalty rate that Rambus may charge those practicing the SDRAM and DDR-SDRAM standards. Royalty rates unquestionably are better set in the marketplace, but Rambus’s deceptive conduct has made that impossible. Although we do not relish imposing a compulsory licensing remedy, the facts presented make that relief appropriate and indeed necessary to restore competition,” the opinion states.        

“[W]e find that a maximum royalty rate of .5% for DDR SDRAM, for three years from the date the Commission’s Order is issued and then going to zero, is reasonable and appropriate. We also find that a corresponding .25% maximum rate for SDRAM is appropriate. Halving the DDR SDRAM rate reflects the fact that SDRAM utilizes only two of the relevant Rambus technologies, whereas DDR SDRAM uses four.”

The opinion explains that the order bars Rambus “from collecting royalties relating to the sale, manufacture or use of any JEDEC-compliant DRAM or non-DRAM products that are greater than those that Rambus is allowed to collect under the terms” of the order. “The purpose of this provision . . . is to preclude Rambus from continuing to collect monopoly rents” with respect to these products.

February 5, 2007 | Permalink | Comments (4) | TrackBack (0)

Sunday, February 4, 2007

A New Understanding of State Action?

Posted by D. Daniel Sokol

A new SSRN paper by Jim Rossi of FSU on state action brings up some new points on one of my favorite topics. A number of interesting papers have come out recently discussing the appropriate role and scope of the state action immunity, an immunity in which the state may displace competition. These papers come at a time in which the FTC produced a long and detailed report on how the state action immunity has expanded in scope and in which the Antitrust Modernization Commission has made recommendations regarding the scope of state action (finding "The federal lower courts in some cases have misinterpreted or misapplied the state action doctrine to override the federal policy in favor of free-market competition in ways inconsistent with prior Supreme Court rulings."). Some of the more recent articles in the debate include those by Darren Bush (Mission Creep: Antitrust Exemptions and Immunities as Applied to Deregulated Industries), Richard Squire (Antitrust and the Supremacy Clause), and Jim Rossi (Antitrust Process and Vertical Deference: Delegation and Reasons for Agency Inaction in State Economic Regulation) (Rossi contrasts his approach with that of Squire). 

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