Saturday, March 3, 2007
Three Tenors Decision: Its Not Over Until the George Mason University Foundation Professor of Law Sings
ABSTRACT: Professor Wright mischaracterizes both the legal basis and the factual context of the FTC's Three Tenors opinion, recently affirmed by Judge Ginsburg's opinion for a unanimous panel of United States Court of Appeals for the District of Columbia Circuit. Neither opinion's legal analysis relies on the timing of the moratorium agreement. Under either opinion, the agreement to eliminate advertising and price competition would have been proscribed even had it occurred when the joint venture was formed. Moreover, the factual underpinnings of the case differ from Professor Wright's assertions. In particular, the facts demonstrate that the joint venture did not attempt to promote the combination of various three tenors products. The only coordination with the first two albums was a restriction on their discounting and advertising. There was none of the production, distribution, and promotion among the three albums normally associated with an integrated effort.
Update of March 4, 2007
Josh Wright correctly points out that I should have included the larger context of Muris' comment as this topic has a long history in the scholarly literature. Josh's article appears here. This in turn was a comment about articles by Muris and Goldberg here and here.
Posted by D. Daniel Sokol
Two sets of hearings are upcoming in US antitrust. The first is before the US senate. The Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights has scheduled a hearing on Oversight of the Enforcement of the Antitrust Laws for Wednesday, March 7, 2007 at 2:00 p.m. in Room 226 of the Dirksen Senate Office Building. Both Debbie Majoras and Tom Barnett will testify.
The second hearing is the next session of the FTC/DOJ Section 2 Hearings.
The panels on March 7 & 8 will explore different methods
of evaluating monopoly power in single-firm conduct cases, including issues
relating to market definition, the Cellophane fallacy, the use of direct
evidence, single-firm markets, and technology markets. The sessions will be
held at the FTC’s
March 7, 2007 Sessions
Session 1 (9:30 A.M.–12:30 P.M.):
Andrew I. Gavil is a Professor of Law, Howard University School of Law.
Richard J. Gilbert is a Professor of Economics and the Chair of the Berkeley Competition Policy Center, University of California, Berkeley, and a former Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice.
Michael L. Katz holds the Sarin Chair in Strategy and
Leadership, Haas School of Business, and is also a Professor of Economics,
Philip B. Nelson is a Principal at Economists, Inc.
Joseph J. Simons is a Partner, Paul, Weiss, Rifkind, Wharton & Garrison LLP, and a former Director, Bureau of Competition, Federal Trade Commission.
Lawrence J. White is the Arthur E. Imperatore Professor of Economics, Leonard N. Stern School of Business, New York University, and a former Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice.
Session 2 (2:00 P.M.–4:30 P.M.):
Simon Bishop is a Partner and co-founder, RBB Economics.
Thomas G. Krattenmaker is Of Counsel, Wilson Sonsini Goodrich & Rosati.
Miguel de la Mano is a Member of the Chief Economist Team, Directorate General for Competition, European Commission.
Joe Sims is a Partner, Jones Day, and a former Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice.
Irwin M. Stelzer is the Director of Economic Policy Studies and a Senior Fellow, Hudson Institute.
March 8, 2007 Session
Session 3 (9:30 A.M.–12:00 P.M.):
Andrew Chin is an Associate Professor, University of North Carolina School of Law.
Robert H. Lande is the Venable Professor of Law, University of Baltimore School of Law.
Richard Schmalensee is the John C. Head III Dean and Professor of Economics and Management, Sloan School of Management, Massachusetts Institute of Technology.
Alan H. Silberman is a Partner, Sonnenschein Nath & Rosenthal LLP.
Michael A. Williams is a Director at the ERS Group.
Wednesday, February 28, 2007
Posted by D. Daniel Sokol
In Trinko, the U.S. called cartels the supreme evil of antitrust. Yet, there is much to learn on this subject. A new working paper entitled Discovering Cartels: Uncovering Dynamic Interrelationships Between Criminal and Civil Antitrust Investigations by Vivek Ghosal of George Tech furthers our understanding of this critical issue.
ABSTRACT: This paper focuses on the genesis, taxonomy and timeline of U.S. criminal antitrust investigations, and uses time-series data on enforcement to examine the interrelationships between the various criminal enforcement variables as well as the linkages between criminal and civil enforcement. The key findings are: (1) there appears to be considerable dynamic interplay between the criminal variables. For example, an increase in grand jury investigations or criminal cases initiated or the number of individuals or firms convicted generates increases in most of these (endogenous) variables in future periods. A broad conclusion that can be drawn is that information unearthed during a given criminal investigation and prosecution often reveals information about other conspiracies leading to future investigations and prosecutions; (2) an increase in civil enforcement leads to future increases in the criminal cases and firms and individuals convicted. This suggests that information gleaned during civil investigations, such as mergers or monopolization cases, may reveal information about collusive behavior in markets leading to criminal investigations and prosecutions; and (3) criminal enforcement follows a counter-cyclical pattern with the number of criminal cases prosecuted increasing following an economic downturn. We relate this to the literature which points to cartel instability during economic downturns. Overall, our results point to complementarities in the investigative process within different facets of criminal investigations as well as between criminal and civil investigations.
Tuesday, February 27, 2007
Posted by D. Daniel Sokol
I am off to DC tomorrow for my presentations to the World Bank (Thursday) and the Inter-American Development Bank/OECD mini-conference on competition policy (Friday). While in DC, I will will have a chance to meet up with George Mason Professor Todd Zywicki (and blogger on the Volokh Conspiracy). This is a special treat for me because Todd just posted a working paper version of his book chapter for my forthcoming edited book on Latin American Antitrust Developments. Todd and his co-author James Cooper of the FTC were part of the dynamic duo within the FTC Office of Policy Planning who brought us the important State Action Task Force Report. Based on their experiences in competition advocacy in the US, they have a number of lessons to share with Latin American enforcers. Given the larger role of the state in Latin America economies, these may be critical lessons.
ABSTRACT: Competition authorities have several tools at their disposal in crafting a competition policy. Most prominent are litigation and merger review. A less-recognized but often effective tool, however, is competition advocacy. Broadly, competition advocacy is using persuasion, rather than coercion, to convince government actors to pursue policies that further competition and consumer choice. Competition advocacy can be especially useful in attacking government-created regulatory barriers to competition and in cultivating a culture of competition to educate the public on the economic benefits of competition as the organizing principle of the economy. From a cost-benefit analysis, competition advocacy can often generate substantial pro-consumer outcomes at low marginal cost.
Fostering a vigorous competition advocacy program can be especially valuable in Latin American countries that historically have had heavily-regulated economies and a weak culture of competition. This article draws on the experience of the Competition Advocacy Program of the United States Federal Trade Commission during the past 30 years to provide lessons for Latin American competition authorities seeking to build competition advocacy programs. This article is a chapter in a book on Latin American antitrust law and explains how competition advocacy can be an important and fruitful element of a vigorous competition policy in these developing economies.
Posted by D. Daniel Sokol
I have posted a few times in the last few weeks on the US supermarket industry. Excitement about supermarkets is not limited to the United States. Reuters reports that WalMart, the UK's #2 supermarket may bid for the #3 player, Sainsbury. See the story here. Just recently, the British Competition Commission released an interim report on supermarket antitrust issues. I don't know UK competition law well enough to place any bets on such a proposed merger going through, but in the US mergers that change the number of players from 4 to 3 generally do not present serious antitrust concerns.
Monday, February 26, 2007
Posted by Shubha Ghosh
This, from Dean Podgor at the White Collar Crime Blog:
Posted by D. Daniel Sokol
Across the Atlantic, Christoph Engel of the Max Planck Institute for Collective Goods has just posted a paper on indexing collusion entitled "How Much Collusion? A Meta-Analysis on Oligopoly Experiments."
ABSTRACT: Oligopoly has been among the first topics in the experimental economics. Over half a century, some 150 papers have been published. Each individual paper was interested in demonstrating one effect. But in order to do so, experimenters had to specify many more parameters. That way they have generated a huge body of evidence, untapped thus far. This meta-analysis makes this evidence available. More than 100 of the papers lend themselves to calculating an index of collusion. The data bank behind this paper covers some 500 different settings. The experimental results may be normalised as a percentage of the span between the Walrasian and the Pareto outcomes. The same way, results may be expressed as a percentage of the distance between the Nash and the Pareto outcomes. For each and every of the parameters, these two indices make it possible to answer two questions: how far is the market outcome away from the competitive equilibrium? And how good is the Nash prediction? Most importantly, however, the meta-analysis sheds light on how features of the experimental setting interact with each other. Most main effects and many interaction effects are indeed statistically significant.