Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, October 24, 2009

Most Downloaded Antitrust Law Papers - August 25, 2009 to October 24, 2009

Posted by D. Daniel Sokol

Rank Downloads Paper Title
1 247 Why the Google Books Settlement is Procompetitive
Einer Elhauge,
Harvard University - Harvard Law School,

2 224 Dynamic Competition in Antitrust Law
J. Gregory Sidak, David Teece,
Criterion Economics, L.L.C., Tilburg University - Faculty of Law, University of California, Berkeley - Business & Public Policy Group,

3 162 ‘Judging’ Economists: Economic Expertise in Competition Law Litigation - A European View
Ioannis Lianos,
University College London - Faculty of Laws,

4 140 Intellectual Property and Standard Setting
Bruce H. Kobayashi, Joshua D. Wright,
George Mason University - School of Law, George Mason University - School of Law, Faculty,

5 116 Abuse of Dominance in the Postal Sector – The Contribution of the Guidance Paper on Article 82 Ec
Damien Geradin, David Henry,
Howrey LLP - Brussels, Belgium Office, Howrey LLP,

6 108 Regulating Innovation: Competition Policy and Patent Law under Uncertainty
Geoffrey A. Manne, Joshua D. Wright,
Lewis & Clark College - Law School, International Center for Law & Economics, George Mason University - School of Law, Faculty,

6 108 The Puzzling Persistence of the Single Entity Argument for Sports Leagues: American Needle and the Supreme Court's Opportunity to Reject a Flawed Defense
Gabe Feldman,
Tulane School of Law,

8 105 Antitrust, Multi-Dimensional Competition, and Innovation: Do We Have an Antitrust-Relevant Theory of Competition Now?
Joshua D. Wright,
George Mason University - School of Law, Faculty,

9 97 Chinese Merger Control: Patterns and Implications
Xinzhu Zhang, Vanessa Yanhua Zhang,
Chinese Academy of Social Sciences (CASS) - Research Center for Regulation and Competition, Law and Economics Consulting Group, LLC,

9 97 Limiting Anti-Competitive Government Interventions that Benefit Special Interests
D. Daniel Sokol,
University of Florida - Levin College of Law,

October 24, 2009 | Permalink | Comments (0) | TrackBack (0)

GCR's 2009 Competition Law Review – Recent developments in competition law and policy

Posted by D. Daniel Sokol

GCR's 2009 Competition Law Review –
Recent developments in competition law and policy

Monday 16 and Tuesday 17 November 2009,
The Conrad Hotel, Brussels

A unique opportunity to hear some of the most influential speakers debate and analyse the key developments in competition law. The programme will focus on developments in four major areas: cartel enforcement, merger control, enforcement of Article 82 and damages actions for the breach of EC antitrust rules.

Download the conference brochure here

Keynote speakers

Commissioner J. Thomas Rosch, Federal Trade Commission, Washington DC
Philip Lowe, Director General, DG Competition, European Commission, Brussels

Chairmen and speakers include:


Peter Alexiadis
Partner, Gibson Dunn & Crutcher LLP, Brussels

Lars-Hendrik Röller
President, ESMT, Berlin

Philippe Chappatte
Partner, Slaughter and May, London

Olivier Guersent
Director, DG Competition, European Commission, Brussels

Bruno Lasserre
President, Autorité de la Concurrence, Paris

Frédéric Jenny
Director for International Relations ESSEC; Judge Supreme Court of France, Paris

Lars Kjølbye
Partner, Howrey, Brussels

Tony Reeves
Partner, Clifford Chance LLP, Brussels

Gerwin Van Gerven
Partner, Linklaters LLP, Brussels

Gary Spratling
Partner, Gibson Dunn & Crutcher LLP,
San Francisco

Jürgen Schwarze
Director, Instititute of Public Law, Department of European and Public International Law, Freiburg

Wouter Wils
Legal Service, European Commission, Professor, King's College, London

Robbert Snelders
Partner, Cleary Gottlieb Steen & Hamilton LLP, Brussels

Luc Peeperkorn
Senior Administrator, DG Competition,
European Commission, Brussels

Stephen Kinsella OBE
Partner, Sidley Austin LLP, Brussels

Nikos Vettas
Professor, Athens University of Economics

 


Mélanie Thill Tayara
Partner, Norton Rose, Paris

Guillaume Loriot
Antitrust and Merger Case Support, DG Competition, European Commission

Simon Priddis
Partner, Freshfields Bruckhaus Deringer LLP, London

Matthias Planz
Vice President, Charles Rivers Associates, London

James W. Lowe
Partner, Wilmer Cutler Pickering Hale and Dorr LLP

Thomas Vinje
Partner, Clifford Chance LLP, Brussels

Nick Banasevic
Deputy Head of Unit, DG Competition, European Commission, Brussels

James S Venit
Partner, Skadden Arps Slate Meagher & Flom LLP, Brussels

Petri Kuoppamäki
Vice President Corporate Legal, Nokia Corporation, Helsinki

Phillip Gasparon
Deputy Head of Unit, DG Competition, European Commission

Stephen Kon
Partner, SJ Berwin LLP, London and Brussels

David H. Rosenberg
Industry Affairs, Corporate IP, GlaxoSmithKline

Jorge Padilla
Managing Director, LECG, London and Brussels

Daniele Calisti
Private Enforcement Unit, DG Competition

Robert O'Donoghue
Barrister, Brick Court Chambers, London

Gunnar Niels
Director, Oxera, Oxford

Tim Reher
Partner, CMS Hasche Sigle, Hamburg





October 24, 2009 | Permalink | Comments (0) | TrackBack (0)

Friday, October 23, 2009

Competition and Cooperation between Professional Sports Franchises: The Impact on Ticket Prices

Posted by D. Daniel Sokol

Greg Pelnar (Compass Lexecon) explains Competition and Cooperation between Professional Sports Franchises: The Impact on Ticket Prices.

ABSTRACT: An important issue in many antitrust lawsuits involving professional sports leagues and their member teams is the extent to which franchises within the same, and across different, professional sports leagues compete with one another for fans and advertisers. Complicating the issue is the fact that some sports franchises also cooperate with other franchises in the same or different leagues by, for example, participating in a joint venture to build and operate the stadium in which they will play their games or a regional sports network joint venture to televise their games. An extreme form of cooperation is common ownership: some franchises in different sports leagues have common ownership. This study investigates the impact of competition and cooperation among the franchises of the four major professional sports leagues (i.e., the National Football League, National Basketball Association, National Hockey League, and Major! League Baseball) on ticket prices for the 2008 season. The regression results suggest that the existence of one or more rival sports franchises in the same metropolitan area does not have a statistically significant impact on ticket prices. On the other hand, there is at best weak evidence that cooperation between sports franchises impacts ticket prices. These findings are consistent with a number of alternative hypotheses.

October 23, 2009 | Permalink | Comments (1) | TrackBack (0)

Collective Dominance to Coordinated Effects in EU Competition Policy

Posted by D. Daniel Sokol

Juan Briones (e-Konomica) discusses Collective Dominance to Coordinated Effects in EU Competition Policy.

ABSTRACT: Since the Commission first tackled the oligopoly issue under the Merger Regulation, there has been considerable development of the Commission's policy in this area and, also, very significant clarifications from the Court of Justice and the Court of First Instance. To begin with, the Commission published guidelines for its assessment of coordinated effects under the merger regulation.

Quite naturally, the oligopoly issue has arisen often, not to say systematically, since nowadays most markets do present an oligopolistic structure of supply. This is even more valid if we consider the relatively narrow relevant antitrust markets, which are typically defined by reference to substitution in demand. More often than not, leading groups of less than four suppliers account for a large combined share of output in almost any antitrust market. However, is an oligopoly in a collective dominant position? The decision in the Airtours/ First Choice case vastly extended the boundaries of the situations under which the Commission found this may be the case.

October 23, 2009 | Permalink | Comments (0) | TrackBack (0)

GCR 2010 European Antitrust Review

Posted by D. Daniel Sokol

The Global Competition Review has published the comprehensive 2010 European Antitrust Review.

October 23, 2009 | Permalink | Comments (0) | TrackBack (0)

Thursday, October 22, 2009

Repealing Insurers’ Antitrust Exemption Under McCarran-Ferguson: Less There Than Meets the Eye?

Posted by D. Daniel Sokol

Tim Greaney (St. Louis Law) has a posted a discussion on Repealing Insurers’ Antitrust Exemption Under McCarran-Ferguson: Less There Than Meets the Eye?

October 22, 2009 | Permalink | Comments (0) | TrackBack (0)

Bundling and Competition for Slots: On the Portfolio Effects of Bundling

Posted by D. Daniel Sokol

Doh-Shin Jeony (Toulouse School of Economics, Universitat Pompeu Fabra) and Domenico Menicucci (Università degli Studi di Firenze) explain Bundling and Competition for Slots: On the Portfolio Effects of Bundling.

ABSTRACT: We consider competition among sellers when each of them sells a portfolio of distinct products to a buyer having limited slots. We study how bundling affects competition for slots. Under independent pricing, equilibrium often does not exist and hence the outcome is often inefficient. When bundling is allowed, each seller has an incentive to bundle his products and an efficient equilibrium always exists. Furthermore, in the case of digital goods, all equilibria are efficient if slotting contracts are prohibited. We also identify portfolio e¤ects of bundling and analyze the consequences on horizontal mergers. Finally, we derive clear-cut policy implications.

October 22, 2009 | Permalink | Comments (0) | TrackBack (0)

The Doctrine of Collective Dominance: All Together Forever?

Posted by D. Daniel Sokol

Frederic Depoortere (Skadden) & Giorgio Motta (Skadden) ask The Doctrine of Collective Dominance: All Together Forever?

ABSTRACT: What are the policy objectives underlying the collective dominance (“CD”) doctrine under Article 82 of the EC Treaty and what is the legal test governing its application? Even today these questions remain partially unanswered. EC competition law still appears to lack a robust and consistent legal standard for identifying when companies should be held “collectively dominant” and when their conduct constitutes an abuse. In addition, the lack of clear policy objectives has not assisted the debate on these issues. They may even have lead to a significant decrease in the European Commission’s interest in CD situations: the recent Guidance on Enforcement Priorities (“Enforcement Guidance”), which presumably sets out the Commission’s enforcement priorities under Article 82, does not cover collective dominance at all.

Possible policy objectives for CD are outside the scope of this article, which concentrates on providing some observations on the test currently endorsed by the Community Courts (“Courts”) to identify abuses of CD. In its Compagnie Maritime Belge judgment (“CMB”), as confirmed by subsequent case law, the ECJ proposes a three-prong test: (i) the existence of a collective position/entity, (ii) such collective position being dominant, and (iii) the abuse by the collectively dominant entity. The first and third prongs are the main focus of this article.

October 22, 2009 | Permalink | Comments (0) | TrackBack (0)

Competition and Antitrust Policy in the Enlarged European Union - A Level Playing Field?

Posted by D. Daniel Sokol

Jens Hölscher, University of Brighton and Johannes Florian Stephan, Technical University Freiberg address Competition and Antitrust Policy in the Enlarged European Union - A Level Playing Field?

ABSTRACT: With the central and east European countries (CEECs) increasingly included into the international division of labour in the European economic space, we are prompted to ask whether this integration operates on a level playing field with respect to competition policy. In fact, our analysis reveals that effectiveness of implementation of competition law and policy and intensity of competition are lower in the CEECs. We find no reason to believe that the new eastern EU members struggle with the recent reforms of competition policy in the EU, nor do we see the necessity for policy action to spur effective implementation.

October 22, 2009 | Permalink | Comments (0) | TrackBack (0)

From Formalism to Effects? – The Commission’s Communication on Enforcement Priorities in Applying Article 82 EC

Posted by D. Daniel Sokol

Nicolas Petit (University of Liege - Law) addresses From Formalism to Effects? – The Commission’s Communication on Enforcement Priorities in Applying Article 82 EC.

ABSTRACT: The purpose of the present article is to offer thoughts on the “Guidance Communication on the Commission’s Enforcement Priorities in Applying Article 82 of the EC Treaty” and, in particular, to review the requirements which the Commission must meet in Article 82 EC cases when it purports to apply the Communication’s economics-oriented, effects-based. In addition, this article seeks to assess whether the Communication’s effects-based approach really entails a paradigmatic shift towards increased competition economics, comparable to the (r)evolution that has taken place in other areas of EC antitrust enforcement since the early 2000. It comes to the conclusion that whilst the Communication marks a welcome economic sophistication of the Commission’s Article 82 EC enforcement policy, it nonetheless often fails to go beneath the surface of modern antitrust economics, and thus provide only limited guidance to firms and their counsels.

October 22, 2009 | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 21, 2009

It's the Market Power, Stupid! Stock Return Patterns in International Bank M&A

Posted by D. Daniel Sokol

Yassin Hankir, Frankfurt School of Finance & Management - FIPEMA, Christian Rauch, E-Finance Lab, and Marc P. Umber, Frankfurt School of Finance & Management, Goethe University Frankfurt - Department of Finance explain It's the Market Power, Stupid! Stock Return Patterns in International Bank M&A.

ABSTRACT: This paper analyzes capital market reactions to international bank M&A. We investigate combined stock return patterns of targets, bidders, and their peers upon takeover announcement, and closing or withdrawal. We distinguish five common M&A hypotheses and relate characteristic and mutually exclusive abnormal stock return patterns to each hypothesis. We find that investors believe in gains through the exploitation of market power by the post-merger entity. In a multinomial logistic model we show that patterns related to market power significantly concur with large relative target size, intra-industry mergers, and increasing market concentration, suggesting a substantial lessening of competition through M&A.

October 21, 2009 | Permalink | Comments (0) | TrackBack (0)

Competition Among the Big and the Small

Posted by D. Daniel Sokol

Ken-Ichi Shimomura, Kobe University and Jacques-François Thisse, Catholic University of Louvain - Center for Operations Research and Econometrics explain Competition Among the Big and the Small.

ABSTRACT: Armchair evidence shows that many industries are made of a few big commercial or manufacturing firms, which are able to affect the market outcome, and of a myriad of small family-run businesses with very few employees, each of which has a negligible impact on the market. Examples can be found in apparel, catering, publishers and bookstores, retailing, finance and insurances, and IT industries. We provide a new general equilibrium framework that encapsulates both market structures. Due to the higher toughness of the market, the entry of big firms leads them to sell more through a market expansion effect, which is generated by the exit of small firms. Furthermore, the level of social welfare increases with the number of oligopolistic firms because the procompetitive effect associated with the entry of a big firm dominates the resulting decrease in product variety.

October 21, 2009 | Permalink | Comments (0) | TrackBack (0)

Antitrust/Competition Professors - Separated at Birth

Posted by D. Daniel Sokol

Back by popular demand.  Fell free to suggest additional names. 

Ariana Arianna Andreangeli (Liverpool Law) and Mendes  Eva Mendes


DarrenBush Darren Bush (Houston Law) and Hoffman Philip Seymour Hoffman 

Mcarrier Michael Carrier (Rutgers - Newark Law) and Mclovin McLovin

Crane.jpg Dan Crane (Michigan Law) and Hyde pierce David Hyde Pierce

German German Coloma (Universidad del CEMA - Econ) and Statham Jason Statham 

First Harry First (NYU Law) and Schiff Richard Schiff

Fox Eleanor Fox (NYU Law) and 220px-Valerie_Harper Valerie Harper

Froeb Luke Froeb (Vanderbilt - Management) and Daley Tim Daley

Gavil Andy Gavil (Howard Law) and Dreyfuss Richard Dreyfuss 

GeradinD_1 Damien Geradin (Tilburg - Law) and Keifer Keifer Sutherland

Herbert-hovenkamp.php Herb Hovenkamp (Iowa Law) and Kenobi Obi Won Kenobi

Korah Valentine Korah (UCL Law) and Dench Judy Dench 

Kovacic2_oval_146x183 Bill Kovacic (GW Law and FTC) and Krisopherson Kris Kristofferson 

Lambert-t Thom Lambert (Missouri Law) and Gaga Lady Gaga


Lopatka John Lopatka (Penn State Law) and Langella Frank Langella


Page_big Bill Page (Florida Law) and Bill Gates  Gates 

Picker Randy Picker (Chicago Law) and Grammer Kelsey Grammer

Sokol Daniel Sokol (Florida Law) and Steve Steve from Blues Clues  

Sprigman Chris Sprigman (Virginia - Law) and Cryer John Cryer

Stancil Paul Stancil (Illinois Law) and Hauer Rutger Hauer

Florian Florian Wagner-von Papp (UCL Law) and Wood Elijah Wood

Waller Spencer Waller (Chicago Loyola Law) and Begni Roberto Benigni

Weiser  Phil Weiser (Colorado Law) and Silverman Jonathan Silverman

Wright Josh Wright (George Mason Law) and Rapaport Michael Rapaport

October 21, 2009 | Permalink | Comments (9) | TrackBack (0)

‘Judging’ Economists: Economic Expertise in Competition Law Litigation - A European View

Posted by D. Daniel Sokol

Ioannis Lianos (UCL - Law) explains ‘Judging’ Economists: Economic Expertise in Competition Law Litigation - A European View.

ABSTRACT: The study focuses on the admissibility and assessment of economic expertise in EC competition law litigation. I start by exploring the broader issues raised by the integration of economic expertise in litigation: in particular the risk of moral hazard and adverse selection because of the epistemic asymmetry between judges and experts and the risk of expert bias. The analysis of these problems will bring me to the question of the conception of science and of the relations between science and law that underpins the concept of scientific expertise and, more specifically, economic expertise. I will then identify the extent of the problem of epistemic asymmetry and expert bias by looking to the degree and the locus of the intrusion of economic analysis in competition cases. I will examine the instruments, procedural and substantive, employed by the legal system, in order to mitigate the risks flowing from the epistemic asymmetry and the expert bias claims. First, I will highlight the different institutional and procedural frameworks that were adopted at the European Union level and in some selected member states in order to integrate economic expertise in litigation. My objective will be to understand how these institutional solutions may address each of the identified problems. Second, I will look to 'substantive' law approaches in the adjudication of expertise, such as the development of specific standards for the admissibility and the sufficiency of economic expertise in courts, as an alternative or as an additional option to deal with the challenges raised by economic expertise. The paper will conclude that the possible adverse effects of the epistemic asymmetry and expert bias between judges and experts raise important concerns that the legal systems should tackle. The current procedural/institutional and substantive legal framework governing economic expertise does not however take sufficiently into account important concerns that are specific to economics and other social sciences, such as the preservation of the scientific 'competition' in the supply of economic theory and consequently methodological or assumptions-related pluralism in economic thought. In particular, I will argue against adopting specific standards of admissibility of economic expertise in Europe. This is a US context-specific solution which does not necessarily fit with the specific characteristics of the European legal system. It is also an approach that represents an outdated and partial view of the scientific as well as of the judicial adjudication process.

October 21, 2009 | Permalink | Comments (0) | TrackBack (0)

The Decision of the Commission of 13 May 2009 in the Intel Case: Where is the Foreclosure and Consumer Harm

Posted by D. Daniel Sokol

Damien Geradin (Tilburg Law and Economics Center, Howrey) has an interesting new paper that asks, The Decision of the Commission of 13 May 2009 in the Intel Case: Where is the Foreclosure and Consumer Harm.

ABSTRACT: On 21 September 2009, the European Commission published a provisional non-confidential version of its 13 May 2009 Decision in which it condemned Intel to a record fine of € 1.06 billion on the ground that it had granted conditional rebates and payments to a number of OEMs and a large retailer of consumer electronics purchasing its x86 CPUs, and that it had paid OEMs to delay, cancel or in some other way restrict the commercialization of specific AMD-based products. 

This paper shows that the Commission Decision contains a number of flaws. They include the facts that the Decision: (i) relies in substance on a per se prohibition of conditional rebates recognized by the formalistic case-law of the Community courts, notwithstanding that the Commission had clearly indicated in various important policy documents, including its Guidance Paper on Article 82 EC, its intention to move away from this approach for an effects-based analysis; (ii) states, contrary to sound policy, that it need not conduct an “as efficient competitor” test, but conducts a misguided one anyway; (iii) insufficiently supports its speculative theory that the OEMs’ purchasing policy was influenced by their understanding of Intel’s alleged intention to reduce or eliminate their rebates should they buy x86 CPUs from AMD; (iv) fails to demonstrate its contention that Intel’s rebates harm competition and consumers; and (v) conducts an excessively restrictive analysis of the efficiencies created by Intel’s rebates.

The Intel decision thus stands for the dangerous proposition that any dominant firm is at risk under Article 82 EC if there exists evidence that employees of a customer believe that reducing present purchases from it could have repercussions with regard to the availability and terms of future purchases, even if the belief is ambiguous, equivocal or contrary to written assurances of the firm or its executives, and without any showing of foreclosure. While the foregoing may be considered as an overstatement and that an “agreement” on conditions (not a mere unilateral belief on the part of the customer) is necessary to find a violation, the Commission accords itself so much latitude on how it collects, interprets and weighs evidence that the distinction is illusory.

The compatibility of the Commission Decision with EC competition law will now be examined by the Court of First Instance of the European Communities to which Intel lodged an appeal. Because of the wide-ranging implications of this Decision, not only for Intel but for all large corporations having to negotiate price incentives with their customers, it is to be hoped that the Court of First Instance of the EC will review this decision carefully and hold the Commission to the same rigorous standards it has applied in the merger control area.

An important question (that will not be addressed by the Court of First Instance, but which is nevertheless relevant from a policy standpoint) is whether antitrust intervention was at all needed in a market characterized by increasing output, decreasing prices and sustained innovation. These characteristics alone should raise serious doubt about claims of anti-competitive foreclosure and consumer harm, especially when they are made by competitors. These characteristics also question the Commission’s wisdom of investing large enforcement resources in what turned to be a long and protracted investigation. As this paper will demonstrate, the market for x86 CPUs was competitive and there is no convincing evidence that Intel’s conduct was anti-competitive and foreclosed AMD and harmed consumers.

October 21, 2009 | Permalink | Comments (1) | TrackBack (0)

Tuesday, October 20, 2009

How to Measure the Deterrence Effects of Merger Policy: Frequency or Composition?

Posted by D. Daniel Sokol

Pedro P. Barros, Universidade Nova de Lisboa, Joseph A. Clougherty, Wissenschaftszentrum Berlin für Sozialforschung (WZB), and Jo Seldeslachts, Wissenschaftszentrum Berlin für Sozialforschung (WZB) ask How to Measure the Deterrence Effects of Merger Policy: Frequency or Composition?

ABSTRACT: We show that the number of merger proposals (frequency-based deterrence) is a more appropriate indicator of underlying changes in merger policy than the relative anti-competitiveness of merger proposals (composition-based deterrence). This has strong implications for the empirical analysis of the deterrence effects of merger policy enforcement, and potential implications regarding how to reduce anti-competitive merger proposals.

October 20, 2009 | Permalink | Comments (1) | TrackBack (0)

Optimizing Private Antitrust Enforcement

Posted by D. Daniel Sokol

Daniel A. Crane, University of Michigan Law School discusses Optimizing Private Antitrust Enforcement.

ABSTRACT: Private litigation is the predominant means of antitrust enforcement in the United States. Other jurisdictions around the world are increasingly implementing private enforcement models. Private enforcement is usually justified on either compensation or deterrence grounds. While the choice between these two goals matters, private litigation is not very effective at advancing either one. Compensation fails because the true economic victims of most antitrust violations are usually downstream consumers who are too numerous and remote to locate and compensate. Deterrence is ineffective because the time lag between the planning of the violation and legal judgment day is usually so long that the corporate managers responsible for the planning have left their corporate employer before the employer internalizes the cost of the violation. Private litigation needs to be entirely reconceptualized and redirected toward a forward-looking, problem-solving approach to market power issues.

October 20, 2009 | Permalink | Comments (0) | TrackBack (0)

Competitive Effects of Vertical Integration with Downstream Oligopsony and Oligopoly

Posted by D. Daniel Sokol

Simon Loertscher (University of Melbourne) and Markus Reisinger (University of Munich) address Competitive Effects of Vertical Integration with Downstream Oligopsony and Oligopoly

ABSTRACT: We analyze the competitive effects of backward vertical integration by a partially vertically integrated firm that competes with non-integrated firms both upstream and downstream. We show that vertical integration is procompetitive under fairly general conditions. It can be anticompetitive only if the ex ante degree of integration is relatively large. Interestingly, vertical integration is more likely to be anticompetitive if the industry is less concentrated. These results are in line with recent empirical evidence. In addition, we show that even when vertical integration is procompetitive, it is not necessarily welfare enhancing.

October 20, 2009 | Permalink | Comments (0) | TrackBack (0)

Antitrust Hotch Potch is Back

Posted by D. Daniel Sokol

Damien Geradin (Tilburg Law and Economics Center, College of Europe, Howrey) has resumed the Antitrust Hotch Potch blog.

October 20, 2009 | Permalink | Comments (0) | TrackBack (0)

Foreclosing Competition through Access Charges and Price Discrimination

Posted by D. Daniel Sokol


Angel Lopez (IESE Business School) and Patrick Rey (Toulouse - Economics) address Foreclosing Competition through Access Charges and Price Discrimination.

ABSTRACT: This article analyzes competition between two asymmetric networks, an incumbent and a new entrant. Networks compete in non-linear tari¤s and may charge di¤erent prices for on-net and o¤-net calls. Departing from cost-based access pricing allows the incumbent to foreclose the market in a pro…table way. If the incumbent bene…ts from customer inertia, then it has an incentive to insist in the highest possible access markup even if access charges are reciprocal and even in the absence of actual switching costs. If instead the entrant bene…ts from customer activism, then foreclosure is pro…table only when switching costs are large enough.

October 20, 2009 | Permalink | Comments (1) | TrackBack (0)