Antitrust & Competition Policy Blog

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

Tuesday, May 12, 2009

Richard Brunell on RPM

Posted by D. Daniel Sokol

Richard Brunell (AAI) provided testimony before the House Judiciary Committee's antitrust subcommittee on RPM.  Click here for his testimony.

May 12, 2009 | Permalink | Comments (0) | TrackBack (0)

Entry in Collusive Markets: An Experimental Study

Posted by D. Daniel Sokol

Marie Goppelsröder (Amsterdam Center for Law and Economics) discusses Entry in Collusive Markets: An Experimental Study.

ABSTRACT: In this paper we present an experiment in which we test the effects of sequential entry on the stability of collusion in oligopoly markets. Theoretical as well as experimental research suggests that a larger number of firms in an industry makes collusion harder to sustain. In this study, we explore to what extent collusion can be upheld with exogenous entry when groups start off small and when it is common knowledge that the entrant is informed about the history of her group prior to entry. We find that collusion is indeed easier to sustain in the latter case than in groups starting large. We conjecture that an implicit coordination problem is resolved more easily in a smaller group and that coordination, once it has been established, can be transferred to the enlarged group by means of a common code of conduct. Moreover, the results suggest that entrants emulate the behavior of their group upon entry.

May 12, 2009 | Permalink | Comments (0) | TrackBack (0)

The Incentives Balance Test in the EU Microsoft Case: A More 'Economics-Based' Approach?

Posted by D. Daniel Sokol

Simonetta Vezzoso, University of Trento - Faculty of Economics - Law Department has written The Incentives Balance Test in the EU Microsoft Case: A More 'Economics-Based' Approach?

ABSTRACT:Microsoft's claim that it had an objective justification for its refusal to supply interoperability information covered by intellectual property rights was dismissed by the EU Commission. To substantiate this, the Commission applied a newly framed incentives balance test and concluded that the need to protect Microsoft's incentives to innovate, under the specific circumstances of the case, could not objectively justify the undertaking's refusal to license. On the contrary, Microsoft's incentives to innovate were most likely to increase if it were required to license its interoperability information to competitors. This new balancing test is very controversial, both from the economic and legal perspective. It can also be questioned whether the balancing test to justification has been correctly applied in the case at issue. However, the paper purports to show that, for future discussion under the expected policy debate on a more "economics-based" approach to Article 82 of the EU Treaty, valuable insights can be gained from a careful scrutiny of the incentives balance test. In particular, the test helps realizing that a dynamic competition approach on the abuse of dominant position should devote considerable efforts to better understand the working of innovation processes at different industry layers. Moreover, that at least equally challenging is the identification of the appropriate competition remedies in industries characterized by, on the one side, Schumpeterian modes of innovation, and, on the other, strenuous stasis forces like network effects.

May 12, 2009 | Permalink | Comments (0) | TrackBack (0)

Monday, May 11, 2009

DOJ Section 2 Report Withdrawn!

Posted by D. Daniel Sokol

More to follow once we get Varney's speech but I predicted this long before today's NY Times Story.  My exact quote "I suspect that under the Obama administration the DOJ Report on Unilateral Conduct will be consigned to some large room, like the one that houses the Ark of the Covenant in the end credits of the movie, Raiders of the Lost Ark."

12:15pm Update:  It is official.  See the press release from DOJ.

4pm Update: You can download the speech here.

May 11, 2009 | Permalink | Comments (0) | TrackBack (0)

Ex-post Evaluation of Competition Policy

Posted by D. Daniel Sokol

This looks like one of the best conferences of the year.

Centre for European Economic Research (ZEW)
Mannheim, 3 to 4 June 2009
Preliminary Program (as of May 6, 2009)

Timetable for June 3, 2009
9.00-9.15 Welcome
Georg Licht (ZEW, Mannheim)
Effectiveness of competition policy
Chair: Georg Licht (ZEW, Mannheim)

9.15-10.00 Keynote Speech
William Kovacic (Federal Trade Commission)

10.00-10.35 Development and Application of a Methodology for Evaluating the Effectiveness of Competition Policy
Lorenzo Ciari (European University Institute)

10.35-11.00 Coffee Break
Evaluation of competition law and practice
Chair: Patrick Beschorner (ZEW, Mannheim)

11.00-11.35 Evaluation of Swiss Cartel Act
Sven Michal (State Secretariat for Economic Affairs SECO, Bern)

11.35-12.10 The Design of National Merger Remedies - a Comparative Evaluation of Merger Decisions in 7 European Countries
Thomas Hoehn (PricewaterhouseCoopers and Imperial College Business School, London)

12.10-12.45 Lessons Learnt from the Ex-post Evaluation of the Impact of the Supply of Extended Warranties on Domestic Electrical Goods Order 2005
Fiammetta Gordon (Office of Fair Trading)

12.45-14.00 Lunch Break
Ex-post merger evaluation from competition practice
Chair: Matthew Weinberg (Federal Trade Commission)

14.00-14.35 Ex Post Analysis of the Actual Effects of a Dutch Hospital Merger on Prices – a Case Study
Astrid Severijnen (Netherlands Competition Authority)
Ron Kemp* (Netherlands Competition Authority)

14.35-15.10 Separating the Ex-post Effects of Mergers: an Analysis of Structural Retail Gasoline Market
Gergely Csorba* (Hungarian Competition Authority (GVH) and Institute of Economics (Hungarian Academy of Sciences))
Dávid Farkas (Hungarian Competition Authority (GVH))
Gábor Koltay (DG for Economic and Financial Affairs of the European Commission and Central European University)

15.10-15.45 Using Mergers to Test a Model of Oligopoly
Matthew C. Weinberg* (Federal Trade Commission)
Daniel Hosken (Federal Trade Commission)

15.45-16.15 Coffee Break
Price and non-price effects of airline mergers
Chair: John Kwoka (Northeastern University)

16.15-16.50 Mergers and Business Models Assimilation: Evidence from Low-Cost Airlines
Paul W. Dobson (Loughborough University)
Claudio A. Piga* (Loughborough University)

16.50-17.25 Dynamic Non-Price Effects of Multimarket Contact: Evidence from an Airline Merger
Volodymyr Bilotkach (University of California, Irvine)

17.25-18.00 The Price Effect of Eliminating Potential Competition: Evidence from an Airline Merger
John Kwoka* (Northeastern University)
Evgenia Shumilkina (Northeastern University)

20.00 Conference Dinner
Timetable for 4 June 2009
Deterrence effects
Chair: Joseph A. Clougherty (WZB, Berlin and CEPR)

9.00-9.35 The Deterrence Effect of Excluding Ringleaders from Leniency Programs
Jesko Herre (University of Cologne)
Alexander Rasch* (University of Cologne)

9.35-10.10 Deterrence of Horizontal Mergers: Empirical Evidence from U.S. Industries
Jo Seldeslachts (WZB, Berlin)
Joseph A. Clougherty* (WZB, Berlin and CEPR)

10.10-10.30 Coffee Break
Chair: Maarten P. Schinkel (University of Amsterdam, ACLE, ENCORE and CEPR)

10.30-11.05 Private Enforcement of Competition Law - an Empirical Study from Germany
Sebastian Peyer (ESRC Centre for Competition Policy & Norwich Law School, University of East Anglia)

11.05-11.40 Analysis of Cartel Duration: Evidence from EC Prosecuted Cartels
Oindrila De (Center of Competition Policy and University of East Anglia)

11.40-12.15 Using Accounting Data in Cartel Damage Calculations - Blessing or Menace?
Johannes Paha (Justus-Liebig-University Giessen)

12.15-13.30 Lunch
Methodologies of merger enforcement assessment
Chair: Kai Hüschelrath (ZEW, Mannheim and WHU, Vallendar)

13.30-14.15 Keynote Speech
Stephen Davies (Center of Competition Policy and University of East Anglia)

14.15-14.35 Coffee Break
Theory of ex-post evaluation
Chair: Marco Ottaviani (Kellogg School of Management, Northwestern University)

14.35-15.10 Exclusive Dealing: the Interaction between Foreclosure and Investment Promotion
Chiara Fumagalli (Univ. Bocconi, Milano and CEPR)
Massimo Motta (European University Institute, Univ. Di Bologna and CEPR)
Thomas Rønde* (University of Copenhagen and CEPR)

15.10-15.45 Market Dominance and Behaviour-Based Pricing under Horizontal and Vertical Differentiation
Thomas Gehrig (University of Freiburg and CEPR)
Oz Shy (University of Haifa, WZB, and University of Michigan)
Rune Stenbacka* (Hanken School of Economics)

15.45-16.20 Approval Regulation with Learning: Ex Ante or Ex Post Merger Control?
Marco Ottaviani* (Kellogg School of Management, Northwestern University)
Abraham L. Wickelgren (Northwestern University School of Law)

16.20 Farewell
Kai Hüschelrath (ZEW, Mannheim and WHU, Vallendar)
+ Drinks
* denotes presenter

May 11, 2009 | Permalink | Comments (0) | TrackBack (0)

Distinguishing the Right of Publicity: Property Rights, Free Speech Privilege, and Competition Policy

Posted by D. Daniel Sokol

Steven Semeraro, Thomas Jefferson School of Law has a new piece on Distinguishing the Right of Publicity: Property Rights, Free Speech Privilege, and Competition Policy.

ABSTRACT: The right of publicity is an enigmatic property right. Its many critics argue that it should not be a property right at all, because (1) it is unnecessary to stimulate the pursuit of fame; (2) unneeded to manage the value of publicity; and (3) undeserved in any recognized moral sense. Yet, this ostensibly persuasive critique has had little practical impact. The right of publicity today is stronger than ever.

This article contends that the prevailing critique of the right of publicity has failed to influence the courts in large part because each quiver in its arsenal would be just as fatal were it aimed at any form of property right. To justify denying property-right status to the right of publicity, one needs to distinguish that right from other types of property. Because the existing critique applies across the board, it cannot justify singling out the right of publicity.

In rejecting the broad critique and accepting the right of publicity as a valid property right, many courts have been nonetheless uncomfortable with the right's broad reach. The prevailing view has been that it restricts too much speech, and must be limited to conform to the First Amendment. This approach has been criticized for being insufficiently sensitive to speech interests, because courts are incompetent to judge the social value of particular forms of speech. This article contends that attempting to shape a property right with reference to free speech interests is doomed to fail, because individuals generally have no right to use the property of another to speak. If publicity is property, then it will restrain speech interests just as other forms of property do. After all, you cannot lawfully set up a soap box in my front yard.

If one accepts the right of publicity as a valid property right, competition policy is the most fruitful ground on which to restrict publicity rights. Unlike free speech interests, competition policy does limit the scope of property rights, and courts are fully competent to judge the competitive effects of recognizing publicity rights in different contexts. To the extent that recognizing a right of publicity would restrain competition and create market power in a celebrity, a court would be fully justified in limiting the celebrity's publicity rights, just as antitrust law generally limits a monopolist's other property rights. Where a celebrity has no market power, by contrast, publicity rights would be fully enforceable. Applying this approach would (1) validate the results in a number of controversial right-of-publicity cases; (2) compel a different result in a few cases; and (3) more effectively justify court decisions in areas such as advertising, news reporting, and biography, that have been relatively uncontroversial.

May 11, 2009 | Permalink | Comments (0) | TrackBack (0)

Optimal Collusion with Limited Severity Constraint

Posted by D. Daniel Sokol

Etienne Billette De Villemeur (Toulouse - Economics), Laurent Flochel (Charles River Associates) and Bruno Versaevel (EMLYON - Business) have an interesting paper on Optimal Collusion with Limited Severity Constraint.

ABSTRACT: Collusion sustainability depends on firms’ aptitude to impose sufficiently severe punishments in case of deviation from the collusive rule. We characterize the ability of oligopolistic firms to implement a collusive strategy when their ability to punish deviations over one or several periods is limited by a severity constraint. It captures all situations in which either structural conditions (the form of payoff functions), institutional circumstances (a regulation), or financial considerations (profitability requirements) set a lower bound to firms’ losses. The model specifications encompass the structural assumptions (A1-A3) in Abreu (1986) [Journal of Economic Theory, 39, 191-225]. The optimal punishment scheme is characterized, and the expression of the lowest discount factor for which collusion can be sustained is computed, that both depend on the status of the severity constraint. This extends received results from the literature to a large class of models that include a severity constraint, and uncovers the role of structural parameters that facilitate collusion by relaxing the constraint.

May 11, 2009 | Permalink | Comments (0) | TrackBack (0)

Varney Speech Preview - Watch Out Dominant Firms!

Posted by D. Daniel Sokol

The NY Times previews the first major policy speech of Christine Varney of DOJ on unilateral conduct.

May 11, 2009 | Permalink | Comments (0) | TrackBack (0)

Tropical Island Paradise of Mauritius Looking for a Visiting Competition Economist

Posted by D. Daniel Sokol

The new Competition Commission of Mauritius (CCM) is seeking to appoint a contractor for a one-year assignment to carry out research into competition in the Mauritius economy and build capacity for economic analysis within the institution.

The position might particularly suit an economist with perhaps 3-5 years experience working for an established competition agency, on secondment for a sabbatical year.  The CCM would aim to match the existing compensation of a secondee from another agency, or could employ an independent contractor on a strictly limited one-year contract.

If interested, please email a short CV and an indication of current salary (or financial expectations, if an independent contractor), to, by 12 noon GMT on Thursday May 14th.  Shortlisted candidates will be contacted, with a view to finalising an appointment in May, to begin work in July.

To find out more about the new Competition Commission of Mauritius, please visit our web site at


May 11, 2009 | Permalink | Comments (0) | TrackBack (0)

Sunday, May 10, 2009

OFT and CC Publish Joint Merger Guidelines

Posted by D. Daniel Sokol

I have a bit of a backlog for the blog so I apologize for the lack of a timely posted but for those of you who do not follow UK competition law closely, the OFT and CC have published joint merger guidelines.

May 10, 2009 | Permalink | Comments (0) | TrackBack (0)

State Aid - Increased Challenges in a Globalised Economy

Posted by D. Daniel Sokol


Book now to secure your place at GCR's forthcoming State Aid conference.


- Christian Ahlborn, Partner, Linklaters LLP, Brussels
- Andrea Biondi, Professor of Law and Head, Centre of European Law, King's College London Barbara Brandtner, Head of Unit, Enforcement, and Procedural  Reform, DG Competition, European Commission, Brussels
- Robin Griffith, Professor of Law, King's College London, Consultant, Clifford Chance LLP
- Tim Hammond, Head of Transport, Reynolds Partners, London
- Conor Quigley QC, Brick Court Chambers, London
- Niamh McCarthy, Competition and Regulatory Lawyer, British Airways, London
- Cyrus Mehta, Partner, Nabarro, London
- Dr. Gunnar Niels, Director, Oxera, Oxford
- Rodrigo Peduzzi, Confindustria, Brussels
- Dr. Michael Schütte, Attorney at Law, Brussels
- Edith Templeton, State Aid Branch, Department for Business, Enterprise and Regulatory Reform (BERR), London
- Christopher Vajda QC, Monckton Chambers, London


- Taking stock - an overview of recent developments
- The Commission's Procedural Reform package - completing the State Aid Action Plan
- State aid and services of general economic interest - recent case law after Altmark
- UK policy issues: state aid handling, procedural reform and the role of BERR State Aid Team
- Policy response to the financial crisis
- Remedies for unlawful aid
- The business perspective - current policy challenges

Download your copy of the brochure here-

The regime governing the control of state aids and subsidies in the EU is undergoing profound change and is one of the most active fields of contentious law in the EC. In the past few years, the Commission has turned its attentions, through the State Aid Action Plan, to updating and modernising the framework of state aid regulation, streamlining its procedures, and introducing greater economic rigour in the assessment of state aids. In addition, there has been a series of landmark rulings from the European Court (Ryanair, BUPA etc) which have created important precedents in terms of defining what is a subsidy.

Undoubtedly the global financial crisis has also played a huge part in highlighting the role of state aid regulation. The series of bank bailouts, and the growing clamour by many sections of industry for more subsidies to help ride the current economic climate, have vigorously stress-tested the Commission's handling of state aid. It has also raised significant question marks over the robustness of the current regime, and the future direction of state aid policy in the Member States once Europe comes out of recession.

This conference is a timely opportunity to take stock of recent developments in case law and policy, to consider current enforcement priorities, and also to look at the broader trends in state aid regulation and their likely impact on business.

This conference is designed for:

- State aid lawyers
- Competition lawyers both in-house and in private practice
- Company executives
- Economists
- Enforcement agencies
- Regional Development Agencies
- Regional and Local Government representatives

SRA and Bar Standards Board Accreditation 6.5 hours


Standard rate £495 (+ 15% VAT = £569.25) In House Lawyers and Government Agencies £395 (+ 15% VAT = £454.25)


Discounts available for multiple bookings (please call +44 (0) 20 7908 1185 or email for details)

May 10, 2009 | Permalink | Comments (0) | TrackBack (0)