Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, May 17, 2008

Looking Towards Implementation of China's Anti-Monopoly Law

Posted by D. Daniel Sokol

William Blumenthal, the FTC's General Counsel has provided a short and yet deeply anaylitcal view of the implications of the Chinese AML.  It is worth a read.

Download 20080404_aba_intl_sec_ny_re_china_aml.pdf

May 17, 2008 | Permalink | Comments (1) | TrackBack (0)

Friday, May 16, 2008

Fourth Annual Conference of the Global Competition Law Centre: Cartels and Enforcement Proceedings: Current Legal Issues

Posted by D. Daniel Sokol

The College of Europe's Global Competition Law Centre will hold its 4th Annual conference on June 19-20, 2008 at the Hilton Hotel, Boulevard de Waterloo 38, 1000 Brussels.

Details are available here.  Speakers include:

Jacques Bourgeois, President of the GCLC
Damien Geradin, Director of the GCLC
Neelie Kroes, European Commissioner for Competition
Richard Whish, Professor of Law, King’s College London
Edurne Navarro, Partner, Uria Menéndez
Sven Voelcker, Partner, WilmerHale LLP
Maarten Peter Schinkel, Professor of Economics, University of Amsterdam
Johan Ysewyn, Partner, Linklaters LLP
Ewoud Sakkers, Head of Unit, DG COMP, European Commission
Sir Christopher Bellamy, Legal consultant, Linklaters LLP,
Former President of the UK Competition Appeal Tribunal (CAT)
Flavio Laina, Deputy Head of Unit, DG COMP, European Commission
María Tierno Centella, Deputy Head of Unit, Cartels II, DG COMP, European Commission
Denis Waelbroeck, Partner Ashurst LLP, Professor, College of Europe
Stanisław Sołtysinski, Professor at the Law and Administration School of Poznan University, Partner SK & S Legal
Christof Swaak, Partner, Stibbe LLP
Jacques Derenne, Partner, Lovells LLP
John Temple Lang, Counsel, Cleary Gottlieb
Pierre Bos, Partner, BarentsKrans
Matthew Levitt, Partner, Lovells LLP
Rainer Becker, European Commission
Philip Collins, Chairman, Office of Fair Trading
Alan Wiseman, Partner, Howrey LLP
Till Schreiber, CDC Cartel Damage Claims Holding SA
Michel Waelbroeck, Emeritus Professor, Free University of Brussels
Floris Vogelaar, Professor of Law, University of Amsterdam
James Flynn QC, Brick Court Chambers

May 16, 2008 | Permalink | Comments (0) | TrackBack (0)

The Law and Economics of Monopolization Standards

Posted by D. Daniel Sokol

Keith Hylton of BU Law School brings us The Law and Economics of Monopolization Standards.

ABSTRACT:  This chapter provides a survey of the law and literature on monopolization. The focus is American law, but the issues considered are equally applicable to European law. After briefly reviewing the history of monopolization law in the U.S., I review various approaches to the legal standard for monopolization suggested in the literature. I then attempt to model monopolization standards, and assess their desirability in light of error costs.

May 16, 2008 | Permalink | Comments (0) | TrackBack (0)

Review of Antitrust Stories

Posted by D. Daniel Sokol

Kovacic_oval_146x183Commissioner William Kovacic of the FTC provides a Review of Antitrust Stories (Eleanor Fox and Dan Crane, editors, Foundation Press 2007). 

ABSTRACT: In the eye of the historian, published judicial decisions are badly incomplete accounts of the disputes they resolve. Some incompleteness stems from the nature of the judicial process. For example, courts have neither the means nor the duty to recount the parties’ choice of litigation strategies. Nor can a judge discuss, except by speculation, the actual effects of a decision just taken. Other gaps can result from the court’s vanity. Wanting to seem unassailably correct, judges sometimes replace the losing party’s best facts and arguments with flimsy strawmen, who collapse beneath the tribunal’s awesome logic. Some decisions give such lopsided portrayals of events that one wonders why the vanquished party ever joined the battle.

To give the fuller historical context and consequences of famous law cases, Foundation Press created its Stories series of texts. The essays assembled by Eleanor Fox and Daniel Crane in Antitrust Stories show the wisdom of theendeavor. The antitrust collection serves two valuable ends. First, the essays will help experts and novices understand the origins, disposition, and consequences of thirteen disputes that shaped the U.S. antitrust system. Foundation’s Stories series mainly targets students in U.S. law schools, but even competition policy experts who think they know it all are likely to come away from this well-conceived volume with renewed intellectual curiosity and excitement about U.S. cases they have heard about, debated, or even read dozens of times.

A second major contribution of Antitrust Stories is to inspire broader reflections about how an economic system evolves. Antitrust is a natural home for the social scientist. Extensive discussion about the influence of economics on antitrust has overshadowed the power of other social science disciplines to explain the development of law and policy. Antitrust Stories shows why literacy in history should be standard equipment for competition economists and lawyers.

This review assesses Antitrust Stories from two perspectives. It first considers how well the contributors met the editors’ challenge “to scratch the legalistic surface and unveil the human dimension” of the cases. This discussion considers the techniques the contributors have used to tell their “stories” and, more generally, discusses how one might best prepare histories of antitrust cases.

The second focus of this review is the interpretations that the authors give to their case histories. The main weakness of Antitrust Stories is the lack of a standalone, critical essay that identifies important themes that link individual chapters, assesses the soundness of the narrators’ stories, and alerts the audience to important alternative interpretations. This omission matters most for the volume’s three first-person accounts, where the narrators were contestants in the disputes. For an audience that will consist substantially of those new to the U.S. antitrust system, the volume ought to have tried harder at least to alert readers to plausible alternative interpretations that students of competition law ought to know.

May 16, 2008 | Permalink | Comments (0) | TrackBack (0)

Thursday, May 15, 2008

Help Needed From US Academics

Posted by D. Daniel Sokol

I am organizing a signature campaign from US academics to Congress for direct appropriations for the DOJ and FTC for technical assistance (see my papers on antitrust technical assistance here and here).  There is currently movement in Congress to get direct funding this year, which would acoord with the AMC's recommentation that Congress “should provide budgetary authority, as well as appropriations, directly to the Federal Trade Commission and the Antitrust Division of the Department of Justice to provide international antitrust technical assistance.”

Email me if you want to sign on to the letters.  I attach the current draft versions.  I need a response from academics no later than June 12, 2008.

Download doj_letter.doc
Download ftc_letter.doc  

May 15, 2008 | Permalink | Comments (1) | TrackBack (0)

Fordham Competition Law Training Institute Programs for Summer 2008

Posted by D. Daniel Sokol

In Summer 2008, the Fordham Competition Law Training Institute Training Center will offer the following courses:

1.  Course for competition authority economists, June 16 to 20, 2008: Following the successful first course for agency economists in June 2007, FCLI will offer a one week course for economists from competition authorities. Through discussion and practical examples, the course will enable competition economists to refresh their knowledge of key economic concepts, learn about recent developments in economic theory, and develop the skills apply economic theory in case work. The course is open to competition authority economists with at least three years experience in an authority. A PhD in economics is not required.

2.  Workshop for judges, June 24 to 27, 2008: This three day workshop for judges will include a review of basic antitrust law & economics concepts as well as a discussion of issues arising in the context of judicial review and litigation in competition cases, in particular the use of economic experts and models and practices in assessing damages in competition cases. Applications from members of courts are welcome.

3.  Refresher course for experienced competition authority officials and judges, July 7 to 11, 2008: This year's refresher course will closely follow the successful programs in the previous years. The course will cover major areas of competition policy, economics and law enforcement, including basic economic concepts, horizontal agreements, mergers, single firm conduct, vertical agreements and remedies. FCLI encourages applications by competition authority officials and judges with at least three years of experience.

A highly experienced, geographically diverse faculty from competition authorities, academia and the judiciary will lead the courses and workshop, taking an interactive approach and utilizing case studies.

May 15, 2008 | Permalink | Comments (0) | TrackBack (0)

What's Wrong With Royalties in High Technology Industries?

Posted by D. Daniel Sokol

Damien Geradin (College of Europe, Tilburg University, and Howrey) asks What's Wrong With Royalties in High Technology Industries?

ABSTRACT: Over the past few years, there has been an unprecedented degree of interest among competition authorities, scholars, Standard-Setting Organizations (hereafter, SSOs) and trade associations with respect to the level of royalties that are charged by holders of intellectual property rights (IPRs).  For instance, in the past two years, the US Department of Justice (DoJ) granted business letter clearance to two SSOs - VITA and IEEE - to implement new IPR policies designed to control the IPR costs.  In April 2007, the DoJ and the Federal Trade Commission (FTC) jointly released a report on "Antitrust Enforcement and Intellectual Property Rights".  But the interest is not limited to the United States. The European Commission is currently investigating the compatibility of certain licensing regimes and conduct within SSOs against EC competition law.  Reflecting the debate at the policy level, scholars have produced a large body of legal and economic literature on IPR and standardization issues, including patent hold-up (where the patent holder exploits ill-gotten market power in "excessive" licensing fees) and royalty stacking (where multiple patents must be licensed and thus the royalty rates stack up to "excessive" amounts).

Against this background, this paper addresses the issue of whether something has gone wrong with royalties in high technology industries. This paper seeks to answer this question first by looking at a number of concrete scenarios where firms holding IPRs seek to obtain a return on their patent portfolios by licensing them. As will be seen, the behaviour of these firms essentially depends on whether they are vertically-integrated  or non vertically-integrated. Vertically-integrated firms engage in research and development activities, patenting at least some of their inventions, and also manufacturing products based on their own innovations and the innovations produced by others. Non vertically-integrated firms, in contrast specialize in one or the other layers of production. Pure upstream firms conduct research and development activities and patent their innovations, but they do not engage in manufacturing. Downstream firms specialize in manufacturing, but do not engage in R&D.

May 15, 2008 | Permalink | Comments (1) | TrackBack (0)

Wednesday, May 14, 2008

A Practical Guide to the Hypothetical Monopolist Test for Market Definition

Posted by D. Daniel Sokol

Malcolm Coate and Jeffrey Fischer, both of the Federal Trade Commission, provide A Practical Guide to the Hypothetical Monopolist Test for Market Definition.

ABSTRACT: The hypothetical monopolist test has been used to define antitrust markets for over 20 years. However, many of these applications occur within the enforcement agencies and thus the implementation process is not fully transparent to antitrust practitioners. This paper provides a study of 116 market definition decisions from the Federal Trade Commission's archives. We find that the agency rarely has trouble defining both product and geographic markets; in fact, the demand-side market definition process is relatively simple in over half of the cases reviewed. In many of the remaining matters, critical loss, analysis of natural experiments, and various studies of data patterns are undertaken to identify the relevant market. These studies show a remarkable variety in data requirements, sophistication, and analytical technique. Supply-side considerations affect a few markets and price discrimination supports more focused analysis in about 10 cases.

May 14, 2008 | Permalink | Comments (0) | TrackBack (0)

Competition Policy in Mexico and Its Implications on Economic Development

Posted by D. Daniel Sokol

Mexico's CFC has published a study on the impact of competition policy on the Mexican economy.  See here for details.

May 14, 2008 | Permalink | Comments (0) | TrackBack (0)

The State of Antitrust in 2008

Posted by D. Daniel Sokol

FTC Commissioner Tom Rosch recently provided The State of Antitrust in 2008 in which he discusses three recent Supreme Court decisions (Twombly, Weyerhaeuser, and Leegin) and broader themes from the Supreme Court’s recent antitrust jurisprudence.

May 14, 2008 | Permalink | Comments (1) | TrackBack (0)

Ninth ACCC Regulatory Conference

Posted by D. Daniel Sokol

Australia's ACCC (Australian Competition and Consumer Commission) is hosting its Ninth ACCC Regulatory Conference on July 24-25, 2008 at the Surfers Paradise Marriott Resort, Gold Coast, Queensland.

The theme for this year's conference is 'Revisiting the Rationale for Regulation'.

International Speakers include:
Professor George Yarrow, University of Oxford
Dr. Mark Jamison, University of Florida
Professor Paul Kleindorfer, Wharton School of the University of Pennsylvania
Russell Pittman, US Department of Justice
Giuseppe Nicoletti, OECD
Professor John Cubbin, City University, London
Dr. David Gabel, CEO Gabel Communications Ltd.
Dr. Stan Besen, Vice President - CRA
Phillip Dixon, Head of Competition - Ofwat
Professor Ravi Jagannathan, Kellogg School of Management, Northwestern University

Topics to be discussed include:
What do today's regulators and regulated firms need to know?
Does economics provide all the answers for regulation?
What can we learn from economic studies of regulatory policies?
Environmental issues in the regulation of energy Sources of market power in broadband
Achieving competitive outcomes in the urban water & wastewater sector
Regulating Intellectual Monopolies The CAPM - Should regulators be looking at alternatives?
The role of the courts and tribunals in providing greater guidance to regulators

May 14, 2008 | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 13, 2008

Will There Be Article 82 Guidelines and What Are the Implications?

Posted by D. Daniel Sokol

Liza Lovdahl-Gormsen (ESRC Centre for Competition Policy, University of East Anglia) asks Will There Be Article 82 Guidelines and What Are the Implications?

ABSTRACT: The question that is the title of this article is very topical as the five-year anniversary of the initiation of the Commission’s June 2003 internal policy review of Article 82 EC approaches.

The answer to the question is currently unknown—at least to this author. This short contribution does not predict the future, but presents an educated guess.

First, it sets the state of play in the modernization process: what has gone before and how far along are we.

Second, it questions the aim of guidelines. In other words, what is the European Commission’s Directorate-General for Competition (DG Comp) trying to achieve by issuing guidelines in this area of law? While this may not be all that clear, an answer may be available in DG Comp’s Discussion Paper on the Application of Article 82 of the Treaty to Exclusionary Abuses in December 2005.

Third, it examines whether some recent case law or policy statements give any indications as to whether guidelines are the way forward.

Finally, it looks at implications. Not implications of guidelines as DG Comp has yet (if ever) to issue guidelines, but the implications of issuing guidelines as opposed to not issuing guidelines.

May 13, 2008 | Permalink | Comments (0) | TrackBack (0)

Unlocking Technology: Innovation and Antitrust

Posted by D. Daniel Sokol

Spulber_d Dan Spulber of Northwestern's Kellogg School of Business has a forthcoming article that is a worthwhile read on Unlocking Technology: Innovation and Antitrust.

ABSTRACT: Technology lock-in advocates argue that governments should step in to coordinate technology adoption decisions. Due to the presence of network effects, advocates warn that consumers may fail to adopt the best technology, thus missing out on potential benefits. Even worse, consumers may split, adopting multiple technologies and thus missing out on the benefits of network effects. Due to coordination problems, consumers cannot mitigate the effects of bad technology choices and the economy becomes stuck with inferior innovations. This article demonstrates that consumer coordination solves the underlying network effects problem, thus eliminating technology lock-in. Network effects are confined at most to the information and communications technology and selected electronics industries, which have developed mechanisms for interconnection and interoperability. Firms have incentives to provide interconnection and interoperability when it is efficient to do so. Rapid technological innovation is apparent whereas technology lock-in is a rare phenomenon. Antitrust policy founded on technology lock-in arguments is misguided and is likely to damage incentives for innovation.

May 13, 2008 | Permalink | Comments (0) | TrackBack (0)

5th Annual Seoul International Competition Forum

Posted by D. Daniel Sokol

The 5th Annual Seoul International Competition Forum in conjunction with the Asian International Competition Policy Conference and the 13th International Workshop on Competition Policy, together perhaps Asia's most important competition policy conference, is soon approaching-- September 3-5, 2008 in Seoul, Korea. 

May 13, 2008 | Permalink | Comments (0) | TrackBack (0)

Are Joint Negotiations in Standard Setting 'Reasonably Necessary'?

Posted by D. Daniel Sokol

Anne Layne-Farrar (LECG), Gerard Llobet  (Centro de Estudios Monetarios y Financieros) and A. Jorge Padilla (LECG) ask Are Joint Negotiations in Standard Setting 'Reasonably Necessary'?

ABSTRACT:  The quote in the title refers to a recurring principle in the Antitrust Guidelines for the Licensing of Intellectual Property, issued jointly by the US Department of Justice and the Federal Trade Commission in 1995. That report states that "The Agencies' general approach in analyzing a licensing restraint under the rule of reason is to inquire whether the restraint is likely to have anticompetitive effects and, if so, whether the restraint is reasonably necessary to achieve procompetitive benefits that outweigh those anticompetitive effects." We apply this standard of evaluation to recent proposals for joint licensing negotiations in standard setting contexts, which have been offered as a solution to the problem of opportunistic licensing and patent hold up. We find that, to the contrary, joint negotiations are not "reasonably necessary" to prevent hold up. Instead, other more moderate policy solutions that take advantage of existing institutional features within standard setting bodies have a greater likelihood of preventing hold up without running the risk of anticompetitive licensee collusion that is present with joint negotiations. In particular, we posit that standard setting bodies should set voting rules to obtain majority support in the selection of technologies for a standard and should consider means of encouraging ex ante bilateral negotiations. In addition, competition authorities could focus on the enforcement of non-discriminatory licensing as a means of preventing anticompetitive opportunistic hold up.

May 13, 2008 | Permalink | Comments (0) | TrackBack (0)

Monday, May 12, 2008

Most Downloaded Antitrust Law Professors of the Last 12 Months

Posted by D. Daniel Sokol

The following is the list of the most downloaded antitrust professors based on downloads within the past year. To make the list, the majority of recent articles uploaded to SSRN must have been written on antitrust related topics.

1. Damien Geradin (College of Europe and Tilburg University) – 4,301
2. David Evans (University College London) – 2,932
3. Spencer Waller (Loyola Chicago) – 2,122
4. Jonathan Baker (American University) – 1,759
5. Keith Hylton (Boston University) – 1,476
6. Phil Weiser (University of Colorado) – 1,436
7. Randal Picker (University of Chicago) – 1,293
8. Josh Wright (George Mason) – 1,287
9. Herb Hovenkamp (University of Iowa) – 1,194
10. Daniel Sokol (University of Florida) – 1,014

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

Microsoft: What Sort of Landmark?

Posted by D. Daniel Sokol

Daniel Beard of Mockton Chambers asks Microsoft: What Sort of Landmark?

ABSTRACT: The Microsoft judgment was a big decision in the sense that it is long and concerns an important company. If it can be called a landmark decision, what sort of landmark is it? This article considers whether — at least on the interoperability side of the case — the Microsoft judgment can really be seen as important and, in doing so, makes certain observations about the tests applied and problems remaining in relation to refusal to supply cases. The article concludes that, at least on the interoperability side of the case, the decision does not break new ground and leaves unresolved various problems in relation to the relevant legal tests.

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

The Commission on Velvet: Why it will probably not issue Article 82 guidelines any time soon

Posted by D. Daniel Sokol

Damien Gerard of the University of Louvain explains The Commission on Velvet: Why it will probably not issue Article 82 guidelines any time soon.

ABSTRACT: The publication of the Discussion Paper in December 2005 sparked tremendous interest in the EC antitrust community and, indeed, much beyond. The Commission received no less than 107 contributions from all over the world in the framework of the public consultation and one cannot begin to estimate the number of seminars, colloquia, or symposia devoted to the enforcement of Article 82 EC in the months preceding and following the publication of the Discussion Paper.

However, since the public hearing on June 14, 2006, silence has prevailed on the side of the Commission. Officially, it is “currently reflecting carefully on the comments received from the public and on the issues at stake, to determine the best way to move forward with the review.” That careful reflection has been ongoing for almost two years and no announcement has been made as to the outcome of the review process.

Is the Commission likely to issue some sort of “Article 82 enforcement guidelines” any time soon? The fact is that, in spite of the silence of the Commission, a lot has happened on the Article 82 front since June 2006. In particular, the EC Courts have released five important judgments (Wanadoo, British Airways, Grüne Punkt, Microsoft, and Deutsche Telekom) since then, dealing with most of the issues addressed in the Discussion Paper (and more). In all of these cases, the EC Courts have sided with the Commission.

More importantly, the EC Courts have at times ratified the approach advocated in the Discussion Paper—which contained some sections clearly drafted with pending cases in mind—and have in other places resorted to loose language that goes beyond the positions advocated in the Discussion Paper.

This paper discusses these examples in detail and weighs the pros and cons of releasing guidelines.

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

TOP 10 Most Downloaded New Papers on SSRN for Antitrust Law & Policy March 12 - May 11

Posted by D. Daniel Sokol

Below are the most downloaded newly posted SSRN antitrust papers of the last two months.

1. Loyalty Discounts and Naked Exclusion
Einer Elhauge,
Harvard Law School,

2. The Roberts Court after Two Years: Antitrust, Intellectual Property Rights, and Competition Policy
Rudolph J.R. Peritz,
New York Law School ,

3. The Fundamental Goal of Antitrust: Protecting Consumers, Not Increasing Efficiency
John B. Kirkwood, Robert H. Lande,
Seattle University - School of Law, University of Baltimore,

4. Innovation and the Domain of Competition Policy
Herbert J. Hovenkamp,
University of Iowa - College of Law,

5. Take Two: Stare Decisis in Antitrust - The Per Se Rule Against Horizontal Price-Fixing
Randal C. Picker,
University of Chicago - Law School,

6. Competition Law Enforcement and Intellectual Property Rights
Alberto Heimler,
Autorita Garante della Concorrenza e del Mercato,

7. Competition Policy in Auctions and 'Bidding Markets'
Paul Klemperer,
University of Oxford - Department of Economics,

8. Should the Government Prosecute Monopolies?
Maurice E. Stucke,
University of Tennessee, Knoxville - College of Law,

9. Network Neutrality and the False Promise of Zero-Price Regulation
C. Scott Hemphill,
Columbia University - Columbia Law School,

10. The Microsoft Judgment and its Implications for Competition Policy Towards Dominant Firms in Europe
Christian Ahlborn, David S. Evans,
Linklaters & Alliance, Law and Economics Consulting Group (LECG), LLC - Cambridge, MA Office,

 

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

Sunday, May 11, 2008

Competition Policy in Hong Kong -- Implications for Supermarkets and Other Highly Concentrated Sectors

Posted by D. Daniel Sokol

As regular readers of the blog know, I am very interested in supermarket competition issues.  A news story on the soon to be implemented competition law in Hong Kong focuses on the potential application of the law to the duopoly in the supermarket sector.  I guess it comes down to how seriously the competition authorities take the arguments of Sutton (among others) regarding entry barriers.  In Chile, for example, Sutton gets taken seriously when it comes to competition policy issues in supermarkets.

The article gives a number of other different areas of potential application of the competition law too-- it is worth a read given its brevity.

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