Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, February 9, 2008

Best 40 Under 40 in Antitrust/Competition Law

Posted by D. Daniel Sokol

The Global Competition Review is running perhaps the most important survey in terms of bragging rights- the 40 Best People under 40 in Antitrust/Competition Law.  As they explain, "Every five years Global Competition Review runs a survey named '40 under 40' in the world of competition law. We would like to invite readers to propose candidates for the next survey."

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

Beyond Microsoft: Intellectual Property, Peer Production and the Law's Concern with Market Dominance

Posted by D. Daniel Sokol

Is it just me or does a quarter of recent antitrust scholarship seem to be about Microsoft?  The latest entry in this literature is Beyond Microsoft: Intellectual Property, Peer Production and the Law's Concern with Market Dominance by Daryl Lim, Max Planck Institute for Intellectual Property Competition and Tax Law.

ABSTRACT: This paper argues that in the United States and the European Union's efforts to fine-tune the analytics of regulating innovation through antitrust or competition law, and in particular with regard to refusals to license, it would be timely to consider 'wikinomics', or peer production, as well as the conditions that make this production possible. Wikinomics may offer a perspective for reconciling the need to preserve the incentive to innovate with the desire to promote effective competition in certain intellectual property (IP) markets.

IP owners have cited digitisation and advances in mass communication to justify the need for stronger legislative protection in order to safeguard their incentives to innovate. Ironically, these same forces may now offer them a limited sanctuary against compulsory access under competition law. IP markets today are more highly porous than ever before. Technological change has provided entrants and competitors with unprecedented access to alternative sources of basic infrastructure to build competing IP products. It may therefore no longer be accurate to estimate the anticompetitive potential of refusing to license IPRs in accordance with industrial-age market considerations.

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

Friday, February 8, 2008

European Competition Policy in the Age of Globalisation – Towards a Global Competition Order?

Posted by D. Daniel Sokol

DG Comp has put up a speech that Neelie Kroes, European Commissioner for Competition Policy, gave yesterday at the First Symposium in Innsbruck, Forschungsinstitut für Wirtschaftsverfassung und Wettbewerb (FIW) titled European Competition Policy in the Age of Globalisation – Towards a Global Competition Order?

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

Collusion in Vertical Relations Under Article 81 EC

Posted by D. Daniel Sokol

A_lianos Ioannis Lianos of the Faculty of Laws, University College London discusses Collusion in Vertical Relations Under Article 81 EC in his latest paper.

ABSTRACT: The paper's starting point is that EC competition law does not draw any distinction between horizontal and vertical relations when it comes to the definition of the concept of agreement. This approach could make sense if vertical and horizontal agreements were considered as equally harmful to competition. However, since the enactment of Regulation 2790/99 and the emergence of a more economic approach in interpreting Article 81, EC competition law focuses less on the protection of the freedom of action of distributors and recognizes that vertical agreements may bring important efficiency gains from which the consumers may ultimately benefit. The concept of agreement, which is of little practical significance in cartel cases, has thus been interpreted restrictively so as to limit the scope of Article 81 with regard to vertical restraints. It is submitted that, while the aim of reducing the scope of Article 81 to vertical agreements may be legitimate, the formalistic approach currently followed by the courts in defining the concept of agreement under Article 81 EC is theoretically and practically flawed. The study will advance an alternative approach for the definition of the concept of agreement, in particular for vertical relations.

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

Thursday, February 7, 2008

Women in Antitrust Networking Opportunity and Panel Discussion

Posted by D. Daniel Sokol

The ABA Antitrust Section will hold the first gathering of the

WOMEN’S ANTITRUST NETWORK
for a
PANEL DISCUSSION

Wednesday, February 27, 2008 at 6pm
Competition Policy Associates Conference Center
1101 K Street, NW, Washington DC

Please join us for an off-the-record discussion featuring a distinguished panel of antitrust professionals,
who will share their stories of being pioneering women in the field of antitrust. The discussion will focus
on their paths to success, as well as how they surmounted personal and professional challenges along the
way.

A complimentary networking cocktail reception will be held following the discussion. In addition to the
women listed below, many other prominent female antitrust professionals will be in attendance.
Please share this invitation with your friends and colleagues in the antitrust bar.

Panelists
Margaret Guerin-Calvert, President, Competition Policy Associates
Commissioner Pamela Jones Harbour, Federal Trade Commission
Elinor R. Hoffman, Antitrust Bureau of the New York State Attorney General
Janet L. McDavid, Partner, Hogan & Hartson LLP
Leslie C. Overton, Partner, Jones Day

Moderator
Andrea Agathoklis, Federal Trade Commission

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

FTC Unilateral Effects Workshop

Posted by D. Daniel Sokol

Yesterday's DOJ/FTC workshop on technical assistance was really great (particularly from comments by Bill Kovacic, Eleanor Fox, Jim Rill, Michal Gal and Angel Lopez).  While at the FTC building, I was reminded that next week (Feb. 12) will be another great workshop by the FTC on Unilateral Effects.  There is an all star cast of characters providing presentations including agency people, top practitioners and academics.

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

What is the Right Balance Between Regulation and Competition Policy?

Posted by D. Daniel Sokol

CCP Fourth Annual Conference, 7-8 July 2008
What is the Right Balance Between Regulation and Competition Policy?

The 2008 Annual Conference will explore the boundaries of competition policy, and the appropriate balance between regulation and competition, both in general terms and using examples from particular sectors. The object of the conference is to use insights from leading economists, legal scholars and political scientists to understand where the application of competition policy is constrained or may need to be tempered. Similarly it will identify how other objectives may be affected by the application of competition policy.

Much of the Centre's work is devoted to analysing condition in which Competition Policy can flourish and improve welfare. This conference extends that perspective by identifying limits to competition policy, both intrinsically because of internal ambiguities, and in interaction with other social or economic objectives.

Confirmed speakers at the 2008 Conference include Jim Bushnell (University of California Energy Institute, USA), Andrew Scott (London School of Economics), Howard Shelanski (University of California, Berkeley, USA), Cosmo Graham (University of Leicester), John Panzar (Northwestern University, Illinois, USA), Yves Smeers (University of Leuven, Belgium), Severin Borenstein (University of California, Berkeley, USA), Antonio Estache (Universite Libre de Bruxelles), Michael Grubb (University of Cambridge), Ruth Hancock (University of East Anglia), and Joe Farrell (University of California, Berkeley).

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

Areeda, Epithets, and Essential Facilities

Posted by D. Daniel Sokol

Spencer Waller at Chicago Loyola Law School takes a new look at essential facilities (which, as I read Trinko, is almost totally dead in US antitrust jurisprudence) in his article Areeda, Epithets, and Essential Facilities.  According to Spencer, perhaps we need to rethink its death.

ABSTRACT: The late Phillip Areeda's 1990 article Essential Facilities: An Epithet in Need of Limiting Principles has had a profound impact on the development on the essential facilities doctrine in antitrust law. It has become the intellectual basis for the critique and roll back of a doctrine that has been around for approximately the same amount of time as the rule of reason.

Apart from Professor Areeda's distinguished stature in the antitrust field, there was little reason to think this short essay would represent the start of a sea change in antitrust. The article was a short symposium piece based on a panel discussion held at a Fall 1989 program of the ABA Antitrust Section. Moreover, Professor Areeda's comments somewhat bucked the trend of the contemporary case law, commentary, and the remarks of the other panelists.

Although Professor Areeda was not altogether negative about the essential facilities doctrine, his article has proved to be one of the influential pieces in the canon of antitrust literature and represented the beginning of a counter-revolution in antitrust thought that has left the essential facilities doctrine, charitably speaking, hanging by a thread. In this article, I want to critically reexamine Areeda's analysis of the essential facilities doctrine and suggest that while many of his concerns were valid in the time of its publication, most of his concerns are no longer applicable in today's antitrust climate. Other of Professor Areeda's concerns were overblown to begin with, and more significantly, most have been taken out of context by critics of the essential facilities doctrine.

Part II briefly summarizes the essential facilities doctrine in US antitrust law. Part III then summarizes Professor Areeda's critique of the doctrine. Part IV examines how the Areeda critique has been used in the subsequent case law and scholarly debate beyond the more limited critique he may have envisioned.

Parts V and VI suggest there is a better way based on infrastructure theory which responds to most, if not all, of Professor Areeda's legitimate critiques and creates a sound theoretical basis for an economically based essential facilities doctrine. Infrastructure theory better ties the essential facilities doctrine to related doctrines in other areas of the law and suggests that essential facilities doctrine is one of better, not worse, ideas that antitrust has offered in its 100 plus years.

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

Wednesday, February 6, 2008

Did Mandatory Unbundling Achieve Its Purpose? Empirical Evidence from Five Countries

Posted by D. Daniel Sokol

Jerry Hausman (Department of Economics - MIT) and Greg Sidak (Georgetown Law) ask Did Mandatory Unbundling Achieve Its Purpose? Empirical Evidence from Five Countries.

ABSTRACT: In this article, we examine the rationales offered by telecommunications regulators worldwide for pursuing mandatory unbundling. We begin by defining mandatory unbundling, with brief descriptions of different wholesale forms and different retail products. Next, we examine four major rationales for regulatory intervention of this kind: (1) competition in the form of lower prices and greater innovation in retail markets is desirable, (2) competition in retail markets cannot be achieved with mandatory unbundling, (3) mandatory unbundling enables future facilities-based investment (stepping-stone or ladder of investment hypothesis), and (4) competition in wholesale access markets is desirable. We proceed by testing empirically the major rationales in the United States, the United Kingdom, New Zealand, Canada, and Germany. For each case study, we review the mandatory unbundling experience with respect to retail pricing, investment, entry barriers, and wholesale competition. We review the lessons learned from the unbundling experience. We also identify which rationales were incorrect in theory and which rationales were correct in theory yet were not satisfied in practice. For the second category of rationales, we attempt to provide alternative explanations for the failure of mandatory unbundling to achieve its goals.

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

Tuesday, February 5, 2008

The Microsoft Judgment: Article 82 Revisited?

Posted by D. Daniel Sokol

Denis Waelbroeck of Ashurst has some interesting thoughts on the meaning of The Microsoft Judgment: Article 82 Revisited?

ABSTRACT: The judgment of the European Court of First Instance in Microsoft raises several issues. In this article, we will look in particular at the main findings regarding the two abuses (refusals to license and product integration).

Under the applicable case law before Microsoft  (i.e., the IMS Health and Magill judgments), the refusal by a dominant undertaking to allow access to a product protected by intellectual property rights (IPR) was regarded as abusive only in exceptional circumstances, where three conditions were met:

  • (i) where the IPR is “indispensable” to exercise an activity in a neighboring market;


  • (ii) where the refusal is likely to “eliminate all competition” on such market; and


  • (iii) where the undertaking intends to use its IPR to hinder the production of “new products” that it does not offer and for which there is a potential consumer demand.


  • It is essentially with regard to this third condition, the “new product” condition, that the Microsoft judgment introduces significant changes to the existing case law.

    February 5, 2008 | Permalink | Comments (0) | TrackBack (1)

    More Money for DOJ and FTC

    Posted by D. Daniel Sokol

    Today's BNA reports that the new proposed FY2009 Bush budget would increase the funding of the DOJ and FTC.

    February 5, 2008 | Permalink | Comments (0) | TrackBack (0)

    The Paradox of the Exclusion of Exploitative Abuse

    Posted by D. Daniel Sokol

    Bruce Lyons of the University of East Anglia explains The Paradox of the Exclusion of Exploitative Abuse.

    ABSTRACT: Monopoly pricing is a textbook market failure that is taught in the first year of any economics course. The implied welfare loss (or 'exploitative abuse') justifies a whole range of competition policy towards cartels, mergers and regulated industries. Yet there is widespread hostility to prosecuting the same exploitative abuse in the textbook monopoly case (i.e. under Article 82EC)! This paper seeks to understand this paradox. I conclude that, while there are important problems with prosecuting Article 82 exploitation cases (because of problems relating to measurement, market dynamics, multi-sided markets and remedy issues), it is important to keep open the possibility of prosecution; for example, in the forthcoming Article 82 Guidelines.

    February 5, 2008 | Permalink | Comments (0) | TrackBack (0)

    Monday, February 4, 2008

    This Week's Events

    Posted by D. Daniel Sokol

    I am off tomorrow to DC.  I will testify at the DOJ/FTC workshop on international technical assistance titled  2008 International Technical Assistance Workshop: Charting the Future Course of International Technical Assistance at the U.S. Department of Justice and the Federal Trade Commission.

    Later this week, MU law school has the pleasure of hosting a talk by George Mason's Josh Wright (FTC visiting scholar).

    February 4, 2008 | Permalink | Comments (0) | TrackBack (0)

    Handbook of Antitrust Economics

    Posted by D. Daniel Sokol

    One of the most important edited volumes to have on your bookshelves is the forthcoming Handbook of Antitrust Economics edited by Paolo Buccirossi.

    ABSTRACT: Over the past twenty years, economic theory has begun to play a central role in antitrust matters. In earlier days, the application of antitrust rules was viewed almost entirely in formal terms; now it is widely accepted that the proper interpretation of these rules requires an understanding of how markets work and how firms can alter their efficient functioning. The Handbook of Antitrust Economics offers scholars, students, administrators, courts, companies, and lawyers the economist’s view of the subject, describing the application of newly developed theoretical models and improved empirical methods to antitrust and competition law in both the United States and the European Union. (The book uses the U.S. term "antitrust law" and the European "competition law" interchangeably, emphasizing the commonalities between the two jurisdictions.)

    After a general discussion of the use of empirical methods in antitrust cases, the Handbook covers merger agreements, abuses of dominance (or unilateral effects), and market features that affect the ways firms compete. Chapters examine such topics as analyzing the competitive effects of both horizontal and vertical mergers, detecting and preventing cartels, theoretical and empirical analyses of vertical restraints, state aids, the relationship of competition law to the defense of intellectual property, and the application of antitrust law to "bidding markets," network industries, and two-sided markets.

    Contributors:
    Mark Armstrong, Jonathan B. Baker, Timothy F. Bresnahan, Paolo Buccirossi, Nicholas Economides, Hans W. Friederiszick, Luke M. Froeb, Richard J. Gilbert, Joseph E. Harrington, Jr., Paul Klemperer, Kai-Uwe Kuhn, Francine Lafontaine, Damien J. Neven, Patrick Rey, Michael H. Riordan, Jean-Charles Rochet, Lars-Hendrik Röller, Margaret Slade, Giancarlo Spagnolo, Jean Tirole, Thibaud Vergé, Vincent Verouden, John Vickers, Gregory J. Werden.

    February 4, 2008 | Permalink | Comments (0) | TrackBack (0)

    Triggering Inspections Ex Officio: Moving Beyond a Passive EU Cartel Policy

    Posted by D. Daniel Sokol

    Hans W. Friederiszick and Frank P. Maier-Rigaud provide us a normative assessment of EU cartel policy in Triggering Inspections Ex Officio: Moving Beyond a Passive EU Cartel Policy.

    ABSTRACT: The implementation of leniency programs is considered a success both at EU Community level and in individual member states. The paper discusses the value of ex officio investigations for cartel detection in light of leniency and complaint-based cases. Are ex officio investigations still needed? Should a competition authority concentrate its scarce resources exclusively on the prosecution of leniency or complaint-based cases or follow a proactive market monitoring policy? It is argued that investigations triggered ex officio are an important complementary enforcement tool to the other passive instruments available to a competition authority. A bottom-up methodology for triggering inspections based on economic criteria is presented allowing for a more proactive cartel policy.

    February 4, 2008 | Permalink | Comments (0) | TrackBack (0)

    Sunday, February 3, 2008

    The Role of Competition Policy in the APEC: Comparative and Japanese Case Studies

    Posted by D. Daniel Sokol

    Filling a void in our understanding of Asian antitrust, Koki Arai, Senior Planning Officer, Japan Fair Trade Commission (JFTC), Acting Convener, Competition Policy and Deregulation Group, Asia-Pacific Economic Cooperation, and visiting associate professor, Osaka University discusses The Role of Competition Policy in the APEC: Comparative and Japanese Case Studies.

    ABSTRACT: This paper conducts an analytical and comparative study on competition policy in each APEC economy and the experiences from recent developments in Japanese law. This paper aims to:

    (i) systematically analyze the competition policy of each member economy of the Asia-Pacific Economic Cooperation (APEC),

    (ii) discuss the importance of competition policy in the context of the historical as well as developing economic situation of each economy, and

    (iii) provide concrete and realistic solutions based on the Japanese experience.

    The paper is organized as follows. Section II considers the present state of competition law in each economy. Sections III and IV provide a comparative study of the competition law of each economy, independently examining each aspects of competition law, such as cartel articles, consumer protection, enforcement, and authority. By examining the guidelines of the recent Japanese competition law developments, Section V investigates the following three aspects of recent developments in Japanese competition law: revision of the Antimonopoly Act (AMA), positive enforcement of the AMA, and transparency and accountability in the implementation of the law. Section VI summarizes the conclusions of the paper.

    February 3, 2008 | Permalink | Comments (0) | TrackBack (0)