Antitrust & Competition Policy Blog

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

Saturday, January 12, 2008

Australia Gets Tough on Cartels

Posted by D. Daniel Sokol

There have been a number of news stories recently on Australian efforts to toughen their anti-cartel laws.  Yesterday, the Austrailian government "released draft laws that would impose jail terms of up to five years, and fines of up to $10 million, for corporations."  Kudos!

January 12, 2008 | Permalink | Comments (0) | TrackBack (0)

Friday, January 11, 2008

Antitrust and the Airline Industry: A Performance Review of 30 Years of Deregulation

Posted by D. Daniel Sokol

Darren Bush of the University of Houston Law Center has put together an excellent program on Antitrust and the Airline Industry: A Performance Review of 30 Years of Deregulation, sponsored by the University of Houston Law Review.

January 25, 2007 8:30 a.m.– 3:30 p.m.
University of Houston Law Center CLE Credit: 5.5 Hours
Registration Fee: $200
($100 for academics, students and government employees)

Thirty years after airline deregulation took to the friendly skies, opinions remain sharply divided. Proponents cite effi ciencies of operation and reduced costs to passengers, while detractors say deregulation continues to threaten the industry.

This provocative one-day symposium will look at all sides of deregulation as it covers topics ranging from competition issues to proposed “mega-mergers” among large U.S. carriers.

J. Bruce McDonald, former Deputy Assistant Attorney General, U.S. Department of Justice Antitrust Division, now partner at Jones Day.

Diana Moss, American Antitrust Institute
Shubha Ghosh, Southern Methodist University Dedman School of Law
Darren Bush, University of Houston Law Center
Paul Stephen Dempsey, McGill University

Michael Levine, NYU School of Law
Rufus W. Oliver III, Baker Botts L.L.P., Houston, TX.
Chris Sagers, Cleveland State University
James V. Dick, Squire, Sanders & Dempsey L.L.P., Washington, D.C.
Peter Carstensen, University of Wisconsin Law School
Joseph J. Simons, Paul Weiss, Washington, D.C.


January 11, 2008 | Permalink | Comments (2) | TrackBack (0)

The Concept of an Agreement and Beyond: How to Block Parallel Imports of Pharmaceuticals to Protect the Heart of Competition

Posted by D. Daniel Sokol

Luis F. Souto Soubrier of the European University Institute has posted on The Concept of an Agreement and Beyond: How to Block Parallel Imports of Pharmaceuticals to Protect the Heart of Competition.

ABSTRACT: This research was my contribution to the book EC Competition Law: A Critical Assessment (Hart Publ. 2007) and it is posted here with the publisher's kind permission. The paper analyzes in detail the borderline between collusion and unilateral conduct by elaborating on the concept of an agreement within the meaning of Article 81 of the EC Treaty as applied to vertical deals. Comparisons are made with US antitrust law where appropriate. By way of implication, I also address the analysis of the second prong in Article 81, namely, the consideration of when an agreement has as its object or effect the restriction of competition. Both prongs are in inverse proportion: when one of them is broadly construed, it becomes imperative to narrow down the interpretation of the other to achieve an optimal scope of Article 81. The thesis put forward in this work is that reforms in relation to the definition of agreement should be accompanied with the adoption of a more refined interpretation of when an agreement restricts competition. Only the consistent narrowing of the latter expression will take undue pressure from the definition of agreement. Finally, since all of the vertical cases discussing the concept of agreement deal with parallel trade, the paper also delves into this underlying substantive issue. The discussion concentrates on the thorny question of reimportation of pharmaceuticals within the Single market.

January 11, 2008 | Permalink | Comments (0) | TrackBack (0)

NY Goes After Intel

Posted by D. Daniel Sokol

If the European investigation of Intel was not enough (see here for developments from this past week regarding Intel's response to the Commission), as of this week Intel must now also contend with NY state, led by NY's AG Andrew Cuomo.  Yesterday Cuomo subpoenaed Intel over monopolization questions.  As might be expected, AAI issued a statement in support of Cuomo.

January 11, 2008 | Permalink | Comments (0) | TrackBack (0)

Thursday, January 10, 2008

The Impact of Entry on Prices and Costs

Posted by D. Daniel Sokol

Rosa M. Abrantes-Metz (LECG) and Pedro Pereira (Autoridade da Concorrência-Portugal) analyze The Impact of Entry on Prices and Costs in the Portuguese Portuguese mobile telephony sector.

ABSTRACT:   In this article, we propose a very simple methodology to evaluate the impact on prices and costs of the entry of a firm in a market, and apply it to the entry of a third firm in the Portuguese mobile telephony industry. Using quarterly firm level data, we characterize the evolution of the firms' prices and costs. We argue that the more plausible explanation for the behavior of these variables is the competition hypothesis. The entry of the third firm forced the other two firms to reduce their prices. The decrease in their profit margins led the two firms to improve their internal efficiency. As a consequence, their costs fell.

January 10, 2008 | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 9, 2008

Supermarket Mergers Update

Posted by D. Daniel Sokol

This week the FTC voted 5-0 for the final consent order in Great Atlantic & Pacific Tea Company (A&P)/Pathmark Stores.  Between this and Whole Foods/Wild Oats, we have a better sense of what to think about US supermarket mergers.  I also enjoyed the recent piece by Deborah L. Feinstein and Michael B. Bernstein (of law firm Arnold and Porter- ie, the other A&P) All Over the Map: Grocery Store Enforcement from Von's to Whole Foods in the most recent issue of Antitrust Magazine.

January 9, 2008 | Permalink | Comments (1) | TrackBack (0)

Cartels: The Probability of Getting Caught in the European Union

Posted by D. Daniel Sokol

In an era with improved anti-cartel enforcement capacity among European countries and improved cross-country cooperation against cartels, Emmanuel Combe (Université Paris I Panthéon-Sorbonne, Department of Economics), Constance Monnier (Université Paris I Panthéon-Sorbonne, Department of Economics) and Renaud Legal suggest that it is harder to catch cartels now than ever before in Europe in their paper Cartels: The Probability of Getting Caught in the European Union.  Does this mean that cartel members have gotten smarter?

ABSTRACT: In 1991, Bryant and Eckard estimated the annual probability that a cartel would be detected by the US Federal authorities, conditional on being detected, to be at most between 13% and 17%. 15 years later, we estimated the same probability over a European sample and we found an annual probability that falls between 12,9% and 13,3%. We also develop a detection model to clarify this probability. Our estimate is based on detection durations, calculated from data reported for all the cartels convicted by the European Commission from 1969 to the present date, and a statistical birth and death process model describing the onset and detection of cartels.

January 9, 2008 | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 8, 2008

Merger Enforcement: Procedural and Substantive Review Reflections and the Importance of International Cooperation

Posted by D. Daniel Sokol

Dina Kallay of the FTC's International group presented remarks titled Merger Enforcement: Procedural and Substantive Review Reflections and the Importance of International Cooperation, before the State Administration for Industry and Commerce International Symposium on Enforcement of the Antimonopoly Law, Beijing, China, December 13, 2007.

January 8, 2008 | Permalink | Comments (0) | TrackBack (0)

Supreme Court Denies Cert in Truck-Rail Handling v. Burlington Northern

Posted by D. Daniel Sokol

Yesterday, the Supreme Court denied cert for a case (Truck-Rail Handling Inc. v. Burlington Northern & Santa Fe Railway Co.) that would have addressed issues of tying and restraints of trade under Section 1 of the Sherman Act according to BNA.

January 8, 2008 | Permalink | Comments (0) | TrackBack (0)

What has Competition Done for Europe? An Inter-Disciplinary Answer

Posted by D. Daniel Sokol

A few months ago the Swiss Journal Aussenwirtschaft set up a contest for the best paper “to promote a debate among economists, lawyers, government officials, journalists, and other knowledgeable practitioners about the effects that competition law and its enforcement has had within the European Economic Area.” The contest winner would receive a prize of 5,000 euros and would have the article published in a special issue of Aussenwirtschaft in December 2007. I am happy to announce the contest winners- Robert D. Anderson (World Trade Organization ) and Alberto Heimler (Autorità Garante della Concorrenza e del Mercato) for their paper What has Competition Done for Europe? An Inter-Disciplinary Answer.

ABSTRACT: In recent policy debates in Europe, the question ‘what has competition done for Europe?’ has been posed at the highest levels. This question merits careful reflection. Competition as it is understood by mainstream economic and legal scholars refers not to an ideology but to inter-firm rivalry in markets. Such rivalry ensures that consumers enjoy choice, low prices, and good value for money. The authors consider the historical origins and development as well as the current role and effects of competition policy in Europe. The latter includes legal provisions that address anti-competitive practices by firms and activities aimed at promoting competition in respect of potentially anti-competitive government measures. They conclude that such policy has made essential contributions to the high standard of living enjoyed by European citizens, to the policy and institutional infrastructure of Europe, to related international initiatives and, indeed, to the creation of Europe itself.

Download evenett_final_ssrn.doc

January 8, 2008 | Permalink | Comments (0) | TrackBack (0)

Monday, January 7, 2008

India's Amended Competition Act

Posted by D. Daniel Sokol

The ABA will be hosting a tele-conference on India's Amended Competition Act. 

This program will focus on the recent amendments to India's Competition Act, 2002, with a particular focus on the provisions relating to premerger notification. The faculty will be:

Vinod Dhall - Acting Chairman, Competition Commission of India
Pallavi Shroff - Senior Partner, Amarchand Mangaldas (New Delhi)
David Lewis - Chairperson, Competition Tribunal of South Africa
Paul Crampton (Moderator) - Partner, Osler, Hoskin & Harcourt LLP (Toronto)

January 7, 2008 | Permalink | Comments (1) | TrackBack (0)

Guideline Institutionalization: The Role of Merger Guidelines in Antitrust Discourse

Posted by D. Daniel Sokol

Hgreene Hillary Greene of UConn's law school has written on Guideline Institutionalization: The Role of Merger Guidelines in Antitrust Discourse.  For those involved in antitrust merger work, her conclusion that the merger guidelines matter should come as no surprise though her institutional analysis raises some interesting questions.

ABSTRACT:  With the growth of the administrative state, agency-promulgated enforcement policy statements, typically referred to as guidelines, have become ubiquitous in the U.S. federal system. Yet, the actual usage and impact of such guidelines is poorly understood. Often the issuing agencies declare the guidelines to be nonbinding, even for themselves. Notwithstanding this disclaimer, the government, private parties, and even the courts frequently rely on the guidelines in a precedent-like manner. In this Article, Professor Greene examines the evolution of one system of enforcement policy guidelines - the U.S. federal antitrust merger guidelines - and finds that these guidelines have acted as a stealth force on the development of antitrust merger law. The influence of this guideline system, she hypothesizes, emerges from a process of institutionalization through which the guidelines become valued for more than the persuasive power of their ideas. This institutionalization process arguably has had an undue influence upon common law development, as courts have failed to fully engage the legal and economic substance of the guidelines. These findings raise the more general concern that the courts have frequently ceded their role as checks on administrative agency power operating through nonbinding policy statements such as enforcement guidelines. Such questions regarding the judiciary's role in the separation of powers are broadly analogous to those raised by Theodore Lowi regarding Congress's role in the legislative process. Professor Greene chronicles the history of the guidelines through a series of case studies involving key elements in merger analysis. Then, based on a review of all rulings from 1969 to 2003 concerning section 7 of the Clayton Act, she generates basic quantitative measures regarding judicial references to the guidelines and then qualitatively assesses the extent to which judicial reference to the guidelines reflects substantive reliance on them. Both the case studies and statistical data provide strong evidence supporting the institutionalization theory. Having raised normative questions regarding guideline institutionalization, she then evaluates several strategies to counter that influence and proposes conduct-oriented recommendations. Though specifics may vary, the unacknowledged phenomenon of guideline institutionalization is not unique to antitrust law. As such, Professor Greene concludes this Article with an examination of guideline institutionalization in other contexts, including the FCC and FERC, state consumer protection, and federal sentencing.

January 7, 2008 | Permalink | Comments (0) | TrackBack (0)

Sunday, January 6, 2008

Law, Development and Antitrust Capacity Building Website

Posted by D. Daniel Sokol

In a positive development, the OECD has begun to keep track of various antitrust capacity building events around the world.  Looking at the list, it seems a bit incomplete but it is still a very good start to give a sense of the breadth of such activities around the world.

January 6, 2008 | Permalink | Comments (0) | TrackBack (0)