Antitrust & Competition Policy Blog

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

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Monday, October 12, 2009

Distributive and Regional Effects of Monopoly Power

Posted by D. Daniel Sokol

Carlos M. Urzúa (Tecnológico de Monterrey, Campus Ciudad de México) describes Distributive and Regional Effects of Monopoly Power.

ABSTRACT; This paper estimates the distributive and regional effects of firms with market power in the case of Mexico. It presents evidence that the welfare losses due to the exercise of monopoly power are not only significant, but also regressive. Moreover, the losses are different for the urban and rural sectors, as well as for each of the states of Mexico, being the inhabitants of the poorest ones the most affected by firms with market power.

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

Article 82 EC – The Problems and The Solution

Posted by D. Daniel Sokol

John Temple Lang (Cleary Gottlieb Steen & Hamilton LLP, Trinity College) explains Article 82 EC – The Problems and The Solution.

ABSTRACT: The Commission's Guidance paper on exclusionary abuse under Article 82 EC is open to three fundamental criticisms. First, it leads to less legal certainty, because the rules suggested are vague and imprecise, because dominant companies will not have the information needed to apply them, and because the Commission is trying to change the law, which it has no power to do. Second, it would lead to some anticompetitive effects, because in practice it discourages price competition, by discouraging individualised price negotiations and retroactive rebates, and by suggesting that the Commission will protect not-yet-as-efficient competitors from price competition. Third, it leads to too many "false positives", i.e., findings of exclusionary abuse that are not justified in economics or law. The solution is to return to the test in the Treaty as interpreted by the Court of Justice: an exclusionary abuse must involve limiting the p! roduction, marketing or technical development of competitors of the dominant company, if harm is caused to consumers.

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