Antitrust & Competition Policy Blog

Enforcing competition law in the UK, Europe and the US

Posted by D. Daniel Sokol

The Global Competition Review will host Enforcing competition law in the UK, Europe and the US .

Antitrust Litigation 2009 Enforcing competition law in the UK, Europe and the US Friday 2 October 2009, London

Early booking before 31 July 2009 - SAVE £100

Co-Chaired by John Pheasant, Partner, Hogan & Hartson LLP and Elizabeth Morony, Partner, Clifford Chance LLP, GCR's 2009 Antitrust Litigation conference brings together speakers from the European Commission's DG Competition together with leading competition and litigation experts from the Bar, the Judiciary, law firms and industry.

Register online here

Daniel Beard QC, Monckton Chambers Ingo Brinker, Partner, Gleiss Lutz Helen Davies QC, Brick Court Chambers Eddy de Smijter, Private Enforcement Unit, DG Competition European Commission Judge Nicholas Forwood QC, Court of First Instance of the EC Lord Hoffmann, Brick Court Chambers Mark Hoskins QC, Brick Court Chambers Stephen Kon, Partner, SJ Berwin LLP Jon Lawrence, Partner, Freshfields Bruckhaus Deringer LLP Anthony Maton, Partner, Hausfeld LLP Samantha Mobley, Partner, Baker & McKenzie LLP Nicola Northway, Head of Group Competition Law, Barclays Bank plc Robert O'Donoghue, Barrister, Brick Court Chambers Michael O'Kane, Partner, Peters and Peters Michael Sanders, Partner, Linklaters LLP Mario Siragusa, Partner, Cleary Gottlieb Steen & Hamilton LLP Romano Subiotto QC, Partner, Cleary Gottlieb Steen & Hamilton LLP Christoph Swaak, Partner, Stibbe Melanie Thill Tayara, Partner, Salans Alan Wiseman, Partner, Howrey LLP Bill Wood QC, Brick Court Chambers

Download the conference brochure here

Topics include:

A review of recent competition damage claims Jurisdiction, choice of law and privilege - where to bring your claim Forum shopping and implications of Rome II on choice of law Delaying tactics in national litigation: the 'torpedoes' Disclosure, privilege and access to the file of competition authorities Criminal investigations Arbitration and mediation in competition law cases Actions for damages: representative actions, opt-in and opt-out; compensatory damages, pass-on defence, direct and indirect purchaser claims, burden of proof Attempts to rely on EC law in the US courts Funding private actions A view from the judiciary - is competition law litigation different?

Cost of the conference

Book before 31 July and save £100! Early bird rates: Standard registration: UK£500 (+ 15% VAT = £575) In-House Lawyer and Government Agency registration: UK£400 (+ 15% VAT = £460)

Register online here

Discounts available for multiple bookings (please call +44 (0) 20 7908 1185 or email GCRconference@GlobalCompetitionReview.com for details)

New to the Antitrust and Competition Policy Blog

Posted by D. Daniel Sokol

June 14 - Back to the front

I have created a Linkedin site for readers of the blog to network and post announcements on substantive issues and also on any job announcements and tenders.  Click here to join.  If anyone can create a logo for the site, please let me know.

Audio and Materials from AAI June Events Available Online

Posted by D. Daniel Sokol

10th Annual Conference
The AAI held its 10th annual conference June 18th at the National Press Club in Washington, D.C. This year, the conference was titled "International Antitrust in a World without a Center" and focused on international challenges facing the antitrust community.  Click here for audio from the keynote address, panel discussions and luncheon program.  Reports from the eight breakout sessions will be posted in July.

 

Invitational Symposium on Systems Competition
On June 17, the AAI hosted an invitational symposium focusing on recent policy changes surrounding systems competition.  The symposium built on existing economic and legal analysis of systems and offered insights into how antitrust enforcement should address competitive issues that are arising with increasing frequency.  Click here for the audio recordings, presentations and materials.

Market Power versus Efficient-Structure in Arab GCC Banking

Posted by D. Daniel Sokol

Saeed Al-Muharrami - Sultan Qaboos University, Oman and Kent Matthews - Cardiff Business School look at Market Power versus Efficient-Structure in Arab GCC Banking.

ABSTRACT: This paper evaluates the performance of the Arab GCC banking industry in the context of the Structure-Conduct-Performance hypothesis in the period 1993-2002. The paper uses panel estimation differentiating between bank fixed effects and country fixed effects. It examines the Relative-Market-Power and the Efficient-Structure hypotheses differentiating between the two by employing a non-parametric measure of technical efficiency, and finds that the banking industry in the Arab GCC countries is best explained by the mainstream SCP hypothesis. The empirical results do not find any support for the Hicks (1935) "Quiet Life" version of the market power hypothesis.

The Neglected Effects of Demand Characteristics on the Sustainability of Collusion

Posted by D. Daniel Sokol

Andrea Gallice, University of Siena - Economics, discusses The Neglected Effects of Demand Characteristics on the Sustainability of Collusion.

ABSTRACT: According to traditional IO models, the characteristics of market demand (intercept, slope, elasticity) and of technology (level of symmetric marginal costs) do not play any role in defining the sustainability of collusive behaviors in Bertrand oligopolies. The paper modifies this counterintuitive result by showing that all the above mentioned factors do affect the sustainability of collusion when prices are assumed to be discrete rather than continuous. The sign of these effects is unambiguous. Their magnitude varies greatly: in some cases it is totally negligible, in others it becomes extremely relevant.

Judicial Decision in Argentina Tackles the Interplay between Enforcing Patent Rights and Antitrust Law within the Dispute between Monsanto and the Argentine Government on the “GM soy-seed RR”

Posted by D. Daniel Sokol

Mariano Municoy (Moeller IP Advisors) explains how a Judicial Decision in Argentina Tackles the Interplay between Enforcing Patent Rights and Antitrust Law within the Dispute between Monsanto and the Argentine Government on the “GM soy-seed RR”.

ABSTRACT: The conjunction between intellectual property rights and antitrust law has recently become a very important issue worldwide and Latin America is not an exception. Therefore, the relevance of this case, which is the first judicial decision on the topic in Argentina, cannot be overrated.

On September 30, 2008 the Federal Court of Appeals for Civil and Commercial Matters located in the city of Buenos Aires decided to stop an antitrust investigation conducted by the National Commission for the Defense of Competition (or “CNDC” as it is known in Spanish ) against Monsanto Europe NV, Monsanto Technology LLC. and Monsanto Argentina SAIC (hereinafter all referred to as “Monsanto”).

A preliminary phase within the administrative proceeding was initiated in early 2006 when the Argentine National Secretary of Agriculture, Livestock, Fishing and Food (“SAGPyA”) accused Monsanto of abusing its dominant position and therefore of violating Argentine Antitrust Law No. 21,156. The argument was based on the fact that Monsanto had enforced the patent rights it held in Europe (the company did not hold any Argentine patent right on the technology at stake here).

According to a preliminary resolution issued by the CNDC in September 2007, the authority was of the opinion that there were sufficient grounds for dismissing the defensive arguments of the company and therefore for converting the preliminary phase of the proceeding into a full antitrust investigation. However, the resolution was overturned by the decision of the Court of Appeals; the result is analyzed below.

Michael Jackson and Antitrust

Posted by D. Daniel Sokol

As you probably known by now, Michael Jackson - the King of Pop and among the most bizarre celebrities (if not the most bizarre) is dead.  I checked westlaw and found no articles written on antitrust that have a Michael Jackson angle to them. However, his Off the Wall is one of the best albums of all time.

Competition in Recession

Posted by D. Daniel Sokol

The UK Competition Commission has posted materials from its very interesting Competition in Recession: A Members' Roundtable Meeting held at the Competition Commission 30 March 2009.

Programme (pdf, 40kb)

Background paper prepared by the CC economics staff (pdf, 164kb)

Foreword by Peter Freeman, Competition Commission Chairman (pdf, 35kb)

Report (pdf, 56kb)

Competition in Recession: Implications for competition in the wider economy - a few thoughts - Michael Waterson (pdf, 44kb)

Economic Crisis and Competition Policy - Bruce Lyons (pdf, 63kb)

Competition Policy, Bailouts and the Economic Crisis - Bruce Lyons (pdf, 58kb)

Competition in recession: What are the implications for competition in the financial sector? - Alan Gregory (pdf, 111kb)

Implications for the wider economy - Anthony Stern (pdf, 69kb)

Attendance List (pdf, 53kb)

Competition Policy and Property Rights

Posted by D. Daniel Sokol

John Vickers (Oxford - Economics) explains Competition Policy and Property Rights.

ABSTRACT: One of the most controversial questions in current competition policy is when, if ever, should competition law require a firm with market power to share its property, notably intellectual property, with its rivals? And if supply is required, on what terms? These questions are discussed with reference to recent law cases including the EC Microsoft judgment of 2007 and the US linkLine case of 2009. The analysis focuses on whether competition law and regulation are complements or substitutes, and on incentives for investment and (sequential) innovation.

The Cartel Offences: An Elemental Pathology

Posted by D. Daniel Sokol

Caron Beaton-Wells and Brent Fisse (both University of Melbourne Law School) have posted The Cartel Offences: An Elemental Pathology.

ABSTRACT: The main purpose of this paper is to review the requirement of a contract, arrangement or understanding, including the amendments proposed by the Australian Competition and Consumer Commission (ACCC) to the meaning of ‘understanding’ (section 3) and the fault elements of the new cartel offences (section 4). We do not attempt here to provide a detailed analysis of the definition of a ‘cartel provision’ in s 44ZZRD. The main problems likely to be occasioned by s 44ZZRD have been discussed elsewhere and are summarised in section 2 of the paper. Examples of the problems of over-reach and uncertainty precipitated by s 44ZZRD are set out in Attachment 1 should those problems arise for discussion at the workshop.

Download Beaton-Wells & Fisse LCAFCA Paper 4 April 2009

Harmonizing Essential Facilities and Refusals to Deal

Posted by D. Daniel Sokol

Spencer Waller (Chicago Loyola Law) and William Tasch explain Harmonizing Essential Facilities and Refusals to Deal.

ABSTRACT: The United States and the rest of the world have taken markedly different views of the essential facilities doctrine in recent years. Although the essential facility doctrine has many defenders in the United States, it has been criticized by the Supreme Court in dicta, in the report of the Antitrust Modernization Commission, and the more recent monopoly report of the Bush administration Justice Department.

The situation is quite different everywhere else. In Europe, the essential facilities doctrine, also called unilateral refusals to deal, has been applied over the past thirty years by the European Commission, the Court of First Instance, the European Court of Justice, and increasingly courts of the twenty-seven Member States. In addition, the European Commission’s recently-issued draft guidelines on the abuse of dominance endorse the doctrine and sensibly describe its application and limitations.

The situation is similar in countries outside of the European Union. Most jurisdictions, both common law and civil law, apply some form of the essential facility doctrine to unjustifiable denials of access to infrastructure and other forms of facilities that are impossible to duplicate, but nonetheless essential for competition.

Of course, just because everyone does something does not make it right. However, there is a growing international consensus that it is sometimes appropriate to require a regime of nondiscriminatory access to infrastructure and related facilities. The extent to which the international community is applying some version of the essential facilities doctrine in a thoughtful and consistent manner suggests that the United States is an outlier and should rethink its position. A revitalized essential facilities doctrine more in line with the international consensus would be beneficial domestically as well as internationally.

In this essay, we look briefly at the law of the essential facilities doctrine in the United States and abroad in order to analyze which jurisdictions have applied these rules in a sensible and economically efficient manner, and which have used the doctrine in a more ad hoc and arbitrary fashion. Part One analyzes the situation in the United States. Part Two examines the law of essential facilities and unilateral refusals to deal in the European Union and its member states. Part Three looks at the rest of the world and the variety of approaches followed in diverse common and civil law jurisdictions that have examined this question. Part Four looks at the prospects for harmonization of these divergent approaches through the International Competition Network and the more constructive role that the United States must play if these efforts are to be successful. Part Five offers substantive suggestions to better harmonize U.S. law and practice with the developing consensus that antitrust law has an important role to play when dominant firms deny access to essential facilities in economically and socially harmful ways.

FTC Issues Interim Report on "Authorized Generic" Drugs

Posted by D. Daniel Sokol

From the FTC press release:

• The Federal Trade Commission today issued “Authorized Generics: An Interim Report,” which presents the first set of results from a study conducted to examine the short-term and long-term effects of “authorized generics” on competition in the prescription drug marketplace. An authorized generic exists when a pharmaceutical manufacturer sells a drug under both a brand-name and generic label. The FTC conducted the study in response to requests from Congress. Issues related to generic drug competition are relevant to current legislative debates and health care reform.

You can download the report here.

Numerical Comparative Competition Law: Effects of Competition Law Structures on Competition Intensity Perceptions in Latin America and the Caribbean

Posted by D. Daniel Sokol

Pablo Márquez (Oxford - Law) explores Numerical Comparative Competition Law: Effects of Competition Law Structures on Competition Intensity Perceptions in Latin America and the Caribbean.

ABSTRACT:  This paper goal is to define a method to measure the index of restrictiveness of competition law focused on Latin America and the Caribbean and to determine if there are statistically significant causal relationships between competition law goals and the restrictiveness of CL. The index is defined based on the patterns and characters of statutory law and to determine what the incidence of the legal arrangement of competition law institutions in agent's perceptions of the institutional environment of competition is. Regarding causal relationships among competition law and competition intensity Results are not successful to determine a relationship of restrictiveness of competition law and subjective or objective measures of competition intensity. Further research is necessary as measures of competition intensity and policy perceptions are highly correlated.

Removing Obstacles to Generic Drug Competition: A Critical Priority for Health Care Reform

Posted by D. Daniel Sokol

Along with holding Chairman Leibowitz's speech on exclusion payments yesterday, the Center for American Progress released a paper on pharmaceutical antitrust enforcement by David Balto titled Removing Obstacles to Generic Drug Competition: A Critical Priority for Health Care Reform.

ABSTRACT: The paper focuses on a variety of potential anticompetitive conduct including exclusion payments, product hopping, authorized generics, and sham regulatory filings and recommends that:

• Congress should pass legislation expressly prohibiting exclusion payments in patent settlements
• The Federal Trade Commission should investigate and bring cases to challenge product hopping where it has anticompetitive effects
• Congress should enact a ban on authorized generics and the Federal Trade Commission should bring cases to prevent their use
• The Federal Trade Commission should investigate and challenge the use of sham regulatory filings, such as citizen petitions and other efforts to subvert the regulatory process.

Call for Papers - Antitrust in the Energy Sector

Posted by D. Daniel Sokol

Oil, Gas and Energy Law Intelligence (www.ogel.org) invites submissions for a Special issue covering antitrust issues in energy. The guest editor for this special issue is Prof. Nicolas Petit (Lecturer in Competition Law and Economics at the University of Liege in Belgium and Associate at Howrey LLP).

The energy sector is one of the areas where antitrust enforcement in the EU has been the most intensive in recent years. In addition to the very significant sector inquiry 2005-2007 and the cases that are now resulting from that inquiry, the remedies (e.g. divestiture of significant network assets, energy release programmes, etc.) that have been ordered by the European Commission in the energy sector have sparked a lot of controversy. Whilst the EU seems to lean towards increased antitrust intervention in energy markets, including access issues, downstream markets, long-term agreements, LNG imports, etc. other jurisdictions, such as the United States, apparently promote less intrusive approaches (as a result, amongst others, of some US Supreme Court decisions such as Trinko). Finally, a number of antitrust agencies inside and outside the EU have a significant record in the enforcement of antitrust rules in the energy sector.

We encourage submission of relevant papers, studies, and brief comments on various aspects of this subject. The topics may cover all aspects of antitrust enforcement (vertical/horizontal cooperation agreements, abuse of dominance, merger control, etc.) relevant for oil, gas, electricity and other energy sub-sectors including LNG and nuclear.

Papers should be submitted by the end of November 2009 to:
Prof. Nicolas Petit
University of Liège
email: Nicolas.Petit@ulg.ac.be.

Facilitating Practices in the Israeli Retail Banking Sector

Posted by D. Daniel Sokol

Shlomi Parizat (Israeli Antitrust Authority) explains Facilitating Practices in the Israeli Retail Banking Sector.

ABSTRACT: On April 26th 2009, the Director General of the Israel Antitrust Authority exercised her authority under § 43(a)(1) of the Restrictive Trade Practices Law (Antitrust Law), and determined that information exchanges among Israel's five largest banks constituted a restrictive arrangement. In particular, it was established that these practices harmed competition in the market for the provision of retail banking services to households and small businesses in Israel. This short article outlines several key findings and analyses underlying the determination....

...This is the first time the Director General of the Israel Antitrust Authority has enforced an information exchange case. In her decision, DG Kan sends a clear message to both the business community and to the general public that practices whose goal is to soften, relax, or otherwise mitigate competition or act to artificially increase search or switching costs for consumers are illegal and will not be allowed to go unchecked.

Pay for Delay Settlements in the Pharmaceutical Industry: How Congress Can Stop Anticompetitive Conduct, Protect Consumers' Wallets, and Help Pay for Health Care Reform

Posted by D. Daniel Sokol

FTC Chairman Leibowitz's speech on Pay for Delay Settlements in the Pharmaceutical Industry:  How Congress Can Stop Anticompetitive Conduct, Protect Consumers' Wallets, and Help Pay for Health Care Reform (the $35 billion solution), delivered earlier today, is now available on the web.

European Competition Journal Conference

Posted by D. Daniel Sokol

European Competition Journal Conference
THURSDAY 16th JULY, 2009 (18.30 – 21.30)
FRIDAY 17th JULY, 2009 (9.00 – 17.00)
Jesus College, Turl Street, Oxford, OX1 3DW

Hart Publishing and the Editors of the European Competition Journal are pleased to invite you to the European Competition Journal Conference. The conference promises to be of extremely high quality, with excellent chairs and panels dedicated to analysing developments in 2009. > click here to book your place     > click here for directions

PROGRAMME

THURSDAY 16th JULY 18.30 REGISTRATION 19.30 Jones Day Dinner   FRIDAY 17th JULY 9-10.30 Panel 1: Cartels Chair: Mark Clough QC Philippe Chappatte, Philip Collins, Sir Jeremy Lever QC, Thomas Sharpe QC, Wouter P.J. Wils 10.30 – 11 REFRESHMENTS 11.00-12.30 Panel 2: Transatlantic Views on Law and Economics (Focusing on Exclusionary Abuse) Chair: Philip Marsden Christian Ahlborn, Pinar Akman, Liza Lovdahl Gormsen, Frank Maier-Rigaud 12.30-13.30 LUNCH 13.30-15.00 Panel 3: Use of Economic Evidence in Merger Cases Chair: Simon Bishop Nick Levy, Damien Neven, Bo Vesterdorf, Gregory Werden 15.00-15.30 REFRESHMENTS 15.30-17.00 Panel 4: Modernisation Chair: Vincent Brophy John Colahan, Alberto Pera, Wouter P.J. Wils 17.00 END   (All programme details subject to change)

The Strong Get Stronger - Jones Day adds David Wales

Posted by D. Daniel Sokol

The Antitrust powerhouse firm of Jones Day has just announced that it has added former FTC Bureau of Competition head David Wales to the firm.

Multi-Market Collusion with Demand Linkages and Antitrust Enforcement

Posted by D. Daniel Sokol

Jay Pil Choi, Michigan State University - Department of Economics, and Heiko A. Gerlach, University of Auckland - Department of Economics address Multi-Market Collusion with Demand Linkages and Antitrust Enforcement.

ABSTRACT: This paper analyzes dynamic cartel formation and antitrust enforcement when firms operate in demand-related markets. We show that cartel prosecution can have a knock-on effect: desisting a cartel in one market reduces profits and cartel stability and leads to the break-up of the cartel in the adjacent market. Cartel prosecution can also have a waterbed effect: desisting a cartel increases cartel stability in the adjacent market and induces cartel formation in previously competitive markets. We also consider policy implications of our analysis regarding an antitrust authority's investment decision in cartel enforcement.