Antitrust & Competition Policy Blog

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

Saturday, February 14, 2009

ICN Unilateral Conduct Workshop

Posted by D. Daniel Sokol

Prior to the ABA Antitrust Spring Meeting, the ICN will hold a Unilateral Conduct Workshop.

February 14, 2009 | Permalink | Comments (0) | TrackBack (0)

Friday, February 13, 2009

A Reduction of Barriers to Competition for Foreign Lawyers in India: Can the Reduction Mean US/UK Law Firms Will Open Up Offices in India?

Posted by D. Daniel Sokol

For those who have followed FTC work on anti-competitive conduct by various business associations in the US (medical professionals, real estate professionals, etc.), I read an interesting piece on the WSJ Blog that suggests that the high barriers to entry for foreign firms opening up law offices in India may fall soon.  This means that international law firms might set up offices in New Delhi, Mumbai, Bangalore and elsewhere.  If so, this would create a number of new antitrust specialists among lawyers and by extension economists (who wiould be brought in for important situations to provide expert work) that will help increase the level of specialization of antitrust in India.  Hopefully this will also mean more classes in competition law and IO economics in Indian universities to handle the increased demand. 

February 13, 2009 | Permalink | Comments (0) | TrackBack (0)

Some Critical Comments on the Commission's Guidance Paper on Art. 82 EC

Posted by D. Daniel Sokol

Yannis Katsoulacos (Athens University of Economics and Business) makes Some Critical Comments on the Commission's Guidance Paper on Art. 82 EC.

ABSTRACT: The Paper, which was preceded by the 2005 DG-COMP Staff Discussion Paper ("DP") on reforming decisional procedures for Art. 82 EC exclusionary conduct by dominant firms, was particularly needed as the DP, along with a number of recent (sometimes controversial) decisions, had established the Commission’s intention to apply an economics- or effects-based approach to its assessment. But, up to now, there have not been any clear formal guidelines concerning the Commission’s exact objectives and the legal standards to be applied in enforcement.

The fact that the Paper “outlines a general framework that the Commission will apply to assess… allegedly abusive conduct” under A rt. 82 EC is, in principle, very welcome. However, a number of important shortcomings severely limit, in our view, the potential value of the Paper.

February 13, 2009 | Permalink | Comments (0) | TrackBack (0)

Advances in the Analysis of Competition Policy

Posted by D. Daniel Sokol

Advances in the Analysis of Competition Policy

CRESSE Conferences deal with Competition and/or Sectoral Regulation issues with emphasis on the policy relevance of recent research. The objective is to give the opportunity for a limited number of high quality papers to be presented and discussed in detail. A second objective is to provide a forum for economists and legal experts to meet and exchange ideas. An important aspect of the Conference is the organisation of Round Tables with participants from academia but also from policy practice, regulated enterprises, the EU Commission etc.

The 2009 Conference will take place on the 3rd – 5th of July 2009, at KALLISTON GRECOTEL HOTEL (see Accomodation) which is located in the seaside resort of Galatas in Chania (Crete, Greece).

The 2009 CRESSE Conference Policy Lecture will be given by Professor Joe Harrington (John Hopkins University).

The J-J Laffont Lecture will be given by Professor Paul Klemperer (Oxford University).

For details on research subthemes and special policy-related sessions see Call for Papers.

The special sessions on Dynamic Efficiency and on the Commission’s Guidance Paper are co-organised with Prof. Damien Geradin and the Tilburg Law and Economics Center. The Conference Program will be finalized by May 2009.

Summer School participants will be able to attend all the Conference Sessions free of charge and for as long as their teaching schedule allows that. Conference Scientific Committee The Conference and School Scientific Committee is composed of Prof. M. Motta (European University Institute, Florence), Prof. P. Rey (University of Toulouse), Prof. D. Ulph (University of St. Andrews) and Prof. Y. Katsoulacos (AUEB) who also acts as Chairman and Coordinator. Conference Advisory Committee Prof. Bernardo Bortolotti, Prof. Claude Crampes, Prof. Vincenzo Denicolo, Prof. Federico Etro, Prof. Damien Geradin, Prof. Peter Mollgaard, Dr. Jorge Padilla, Prof. Michelle Polo, Prof. Pierre Regibau, Prof. Rune Stenbacka, Prof. Dimitris Tzouganatos, Prof. Tommasso Valletti, Prof. Frank Verboven, Prof. Nikolaos Vettas

Conference Participation (for non-School Participants) Non-School participants can register to attend the Conference – please fill in the on-line Registration Form or print [ .doc version (100 Kb)] and send it back by email ( or by fax (+30 210 8223259) to the Summer School Secretariat. The fee for non-School participants in order to attend the Conference is 400.00 Euros. Conference fees cover the conference folder with the articles that will be presented during the Conference, coffee breaks and light snacks during coffee breaks, as well as participation in the Conference Dinner. Payment should be received by June 15th 2009. There is a 50% discount for all those paying registration fees before April 30th 2009 (see Payment Method). Postgraduate Students Special rates apply for Postgraduate (and Doctoral) Students wishing to attend the Conference. For further information, please contact Summer School Secretariat.

February 13, 2009 | Permalink | Comments (0) | TrackBack (0)

Dividing Bundled Surplus: The Case of the Cable Television Industry

Posted by D. Daniel Sokol

Nodir Adilov, Indiana University-Purdue University, Peter J. Alexander, Federal Communications Commission, and Brendan Michael Cunningham, U.S. Naval Academy provide insights into Dividing Bundled Surplus: The Case of the Cable Television Industry.

ABSTRACT: A cable operator chooses to bundle or provide programs 'a la carte by striking a balance between the incentive to maximize total surplus and minimize transfer payments to program providers. Importantly, a cable operator's decision to bundle or provide programs 'a la carte maximizes total producer surplus if the cable operator's bargaining power (i.e., capacity to extract a greater share of surplus in negotiations with program suppliers) is sufficiently high. However, a cable operator in a weak bargaining position might strategically choose to bundle or unbundle viewer channels in order to enhance its bargaining position with individual program suppliers, even when this decision reduces total surplus. Thus, it is plausible that regulations which cap the market share or impose 'a la carte on cable operators may reduce total surplus.

February 13, 2009 | Permalink | Comments (0) | TrackBack (0)

Thursday, February 12, 2009

Journal of Corporation Law Symposium: Invention, Creation, and Public Policy

Posted by D. Daniel Sokol

Journal of Corporation Law Symposium
Invention, Creation, and Public Policy

Friday, February 13, 2009
Boyd Law Bldg., Levitt Auditorium
University of Iowa

3:00 – 3:15 Welcoming Remarks
Dean Carolyn Jones
Herbert Hovenkamp
3:15 – 5:30 Panel I: Patent Reform and Innovation Incentives
Michael Meurer, Boston University
John Duffy, George Washington University
Christopher A. Cotropia, University of Richmond
Kevin Collins, Indiana University-Bloomington
Mark Janis, University of Iowa – Moderator
5:30 – 6:30 Break
6:30 – 9:00 Banquet and Reception, Brown Deer Country Club, Coralville, IA
Saturday, February 14, 2009 – Boyd Law Bldg., Levitt Auditorium
8:30 – 9:30 Breakfast, Main Lobby
9:30 – 11:45 Panel II: The Copyright Act and the Public Interest
R. A. Reese, University of Texas
Sara Stadler, Emory University
Abraham Drassinower, University of Toronto
Laura Heymann, The College of William and Mary
Christina Bohannan, University of Iowa - Moderator
11:45 – 12:45 Lunch
12:45 – 3:00 Panel III: Innovation and Competition Policy
Christopher Leslie, Chicago-Kent Law School
Thomas Cotter, University of Minnesota
Shubha Ghosh, University of Wisconsin
Herbert Hovenkamp, University of Iowa
Gerald Wetlaufer, University of Iowa - Moderator
3:00 – 3:15 Concluding Remarks
Casey Kannenberg, Editor in Chief, The Journal of Corporation Law

February 12, 2009 | Permalink | Comments (1) | TrackBack (0)

Conspiracy at the Pump

Posted by D. Daniel Sokol

A worthwhile read is Conspiracy at the Pump by Can Erutku and Vincent A. Hildebrand, both of York University - Department of Economics.

ABSTRACT: Based on evidence of price-fixing, the Competition Bureau targeted in May of 2006 retail gasoline outlets in some local markets in the province of Quebec. In June 2008, criminal charges were laid against many individuals and companies operating in those local markets. We employ a differences-in-differences approach to determine whether the public announcement of the antitrust investigation triggered a reaction in one of the targeted market. We find that the price in the targeted market fell by 1.75 cents per liter after the public announcement of the investigation. We also briefly discuss how well the Stiglerian theory of collusion performs in this real-world conspiracy.

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

Institute for Consumer Antitrust Studies Research Fellowship

Posted by D. Daniel Sokol

Institute for Consumer Antitrust Studies
Loyola University Chicago School of Law
Research Fellowship

    The Institute for Consumer Antitrust Studies invites applications for a Research Fellowship for the upcoming academic year (2009-10).  The Research Fellowship is designed to encourage junior scholars in law, economics, business and related fields to pursue theoretical, empirical, and or applied research in antitrust and/or consumer protection law in keeping with the Institute’s mission of promoting a more consumer friendly competitive economy.  The Research Fellowship will consist of:                   

    •    A Stipend of $39,000 plus standard Loyola University Chicago benefits

    •    A small research and travel budget

    •    Office space, computer facilities, and library privileges

    •    Opportunities to present Work-in-Progress

    •    The possibility of teaching one course or seminar in the winter semester for additional compensation depending on the applicant’s background, experience, and teaching interests and the Law School’s needs

    •    A Faculty Mentor to assist with the anticipated research program

    •    Participation in the intellectual life of the Institute and the Law School

    Applications will be accepted on a rolling basis starting February 1, 2008 and may be submitted electronically to with a copy to  Applications should consist of:

    •    a current c.v. including a list of all publications and copies of all publications not available electronically

    •    a research proposal of not more than 2,000 words

    •    One or two writing samples of preferably published work

    •    Two letters of reference discussing the applicant’s ability to successfully complete their proposed research project

    •    A statement of teaching interests (if applicable) including a course description and any available syllabi

    The Fellowship would begin on either July 1st or August 1st, 2009 and would be a for a twelve month non-renewable period.  More information about the Institute is available at htpp://  Inquiries about the Institute and the Research Fellowship may be directed to Professor Spencer Weber Waller, Director, Institute for Consumer Antitrust Studies, or 312-915-7137.

    LUC is an Equal Opportunity/Affirmative Action employer and educator with a strong commitment to a diversified faculty.

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

The Dominant Firm Revisited

Posted by D. Daniel Sokol

Timothy J. Tardiff (Huron Consulting Group) and Dennis L. Weisman (Kansas State Economics) provide their analysis on The Dominant Firm Revisited.

ABSTRACT: This paper presents a framework for evaluating whether a firm lacks dominance in a particular market despite manifesting relatively high market shares. We show that demand complementarities and high price–cost margins combine with multi-market participation to reduce the significance of market share in drawing inferences about dominance. We further show the equivalence between this multi-market measure of market power and the critical elasticity for the dominant firm. These findings suggest that the use of traditional (single-market) measures of market power commonly used to infer dominance can lead policymakers to maintain regulatory oversight when market forces are sufficient to provide the requisite degree of "competitive" discipline.

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

Enforcement of Competition Law in the Republic of Moldova: One Year On

Posted by D. Daniel Sokol

Alexandr Svetlicinii, European University Institute - Department of Law addresses Enforcement of Competition Law in the Republic of Moldova: One Year On.

ABSTRACT: Discusses: (1) the legislative background for competition enforcement in Moldova; (2) the structure and powers of the country's national competition authority, the National Agency for the Protection of Competition (ANPC); and (3) the ANPC's enforcement activities and emergent enforcement policy during its first year of operation.

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

Wednesday, February 11, 2009

Policy Implications of Endogenous Sunk Fixed Costs in Banking: Has U.S. Antitrust Policy Been on the Wrong Track?

Posted by D. Daniel Sokol

David D. VanHoose, Baylor University - Department of Economics asks about the Policy Implications of Endogenous Sunk Fixed Costs in Banking: Has U.S. Antitrust Policy Been on the Wrong Track?

ABSTRACT: The application of U.S. antitrust policy toward mergers in the banking industry is based on past research suggesting that there is a trade-off between adverse effects on consumer welfare owing to potentially augmented market power and possible welfare-improving effects arising from efficiency gains. Recent research applying the theory of endogenous sunk fixed costs to the banking industry suggests that the current focus of bank antitrust policy on this trade-off may be misplaced. According to initial results obtained by work along these lines, the presence of endogenous sunk fixed costs arising from non-price competition among banks on the basis of product quality yields a lower bound on concentration in banking markets, implying that a few large banks typically will predominate. This policy brief provides an overview of the current basis of U.S. antitrust policy with regard to bank mergers, outlines the theory of endogenous sunk fixed costs, explains why and how the theory might apply to the banking industry, and evaluates whether antitrust policy should be altered in light of evidence offered to date.

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

Complementary Patents and Market Structure

Posted by D. Daniel Sokol

Klaus M. Schmidt, Ludwig Maximilians University of Munich - Faculty of Economics discusses Complementary Patents and Market Structure in his latest working paper.

ABSTRACT: Many high technology goods are based on standards that require access to several patents that are owned by different IP holders. We investigate the royalties chosen by IP holders under different market structures. Vertical integration of an IP holder and a downstream producer solves the double mark-up problem between these firms. Nevertheless, it may raise royalty rates and reduce output as compared to non-integration. Horizontal integration of IP holders (or a patent pool) solves the complements problem but not the double mark-up problem. Vertical integration discourages entry and reduces innovation incentives, while horizontal integration always encourages entry and innovation.

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

2009 GCR 100 is Out

Posted by D. Daniel Sokol

For those interested in global rankings of best competition practices, the annual GCR 100 is now out.  Their top 10 firms in competition/antitrust law:

1. Freshfields Bruckhaus Deringer
2. Cleary Gottlieb Steen & Hamilton LLP
3. Howrey LLP
4. Slaughter and May Working Group
5. Linklaters
6. Wilmer Cutler Pickering Hale and Dorr LLP
7. Arnold & Porter LLP
8. Gibson Dunn & Crutcher LLP
9. Allen & Overy LLP
10. Latham & Watkins LLP

My own thought on the rankings is that it is difficult to rank a firm in the top 10 in the world unless you have a serious practice in both Brussels and Washington, let alone no practice in at least one of these cities.  I give the GCR lots of credit because most of the firms in their list did not take out advertisements.  This suggests that there is no self interest on the part of GCR in terms of gaming the rankings on their part in favor of potential advertizers.      

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

Sirius XM and Competition

Posted by D. Daniel Sokol

One of the mergers that DOJ approved that has been one of the standard repertoire of cases by those who claim inaction by the Antitrust Division under Bush was Sirius/XM.  The thought was that the deal, which DOJ approved unconditionally, would reduce competition.  Fast forward just one year later and it looks like Sirius XM is in some serious trouble - a banckruptcy filing is likely on the firm's horizon.

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

Abuse of Dominance in China: A Paradigmatic Shift?

Posted by D. Daniel Sokol

Adrien Emch of Sidley asks about Abuse of Dominance in China: A Paradigmatic Shift?

ABSTRACT: The Anti-Monopoly Law (AML) represents a significant step in China's march towards a market economy. The concept of a "dominant market position" (DMP) in the AML exemplifies the move towards market economy principles. In the past, the DMP concept was largely absent in Chinese antitrust law. The rules on single-firm conduct in principle applied to all companies -whether or not they were in a DMP. Post-AML, the DMP concept aims to ensure that only companies with market power are subject to the rules on single-firm conduct. Essentially, the DMP concept works as a screen in the AML's attempt to prevent companies from abusing their market power vis-a-vis customers or competitors.

Nonetheless, while the DMP concept appears now firmly established, its introduction into Chinese antitrust law has been a gradual process, and it is not clear whether the AML's adherence to the DMP principle is indeed complete and unequivocal.

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

Tuesday, February 10, 2009

Foreclosure, Predation and Competition on the Merits: A Comparative Analysis of Bundled Discounts

Posted by D. Daniel Sokol

Gianluca Faella of Cleary Gottlieb Steen & Hamilton discusses Foreclosure, Predation and Competition on the Merits: A Comparative Analysis of Bundled Discounts.

ABSTRACT: The controversial debate on the appropriate standard for the assessment of bundled discounts echoes the difficulties encountered by courts, antitrust authorities and scholars in their ongoing attempt to develop a coherent theoretical framework to distinguish exclusionary conduct from legitimate competition. Currently, there is no general consensus on the treatment of the practice. Even the recent DOJ report on single-firm conduct and Commission guidance on Article 82 EC have not definitely clarified the proper approach to bundled discounting. The application of general principles on foreclosure could prevent the use of an effective competitive tool and may result in reduced price competition and protection of inefficient competitors. On the other hand, a total bundle predation-style safe harbor would not detect above-cost bundled discounts that are capable of excluding or limiting the competitive capacity of equally efficient rivals. The US discount allocation test aims at tempering the excesses of the two above-mentioned approaches, but it is too simplistic, does not fit most actual cases and may be both over-deterrent and under-deterrent. The test proposed by the Commission guidance may give rise to similar inconveniences, although it is more likely to be over-deterrent. This paper proposes a refined cost-based standard, aimed at establishing whether equally efficient competitors could reasonably compete for the contestable portions of customers' demand for different products included in a bundle. This standard is based on the idea that a practice should be considered a legitimate form of competition on the merits if, notwithstanding the possible existence of one or more competitive advantages that cannot be reasonably replicated or overcome by rivals in an acceptable time frame, a hypothetical competitor that is equally efficient under all remaining aspects could react to the dominant firm's behavior through a conduct that would benefit consumers. When a lack of sufficient data and information makes it impossible to apply a suitable cost-based test, a proper allocation of the burden of proof could reduce the risk of type I and type II errors. 

February 10, 2009 | Permalink | Comments (1) | TrackBack (0)

Pass-Through as an Economic Tool

Posted by D. Daniel Sokol

E. Glen Weyl, Harvard Society of Fellows discusses Pass-Through as an Economic Tool.

ABSTRACT: Pass-through rates (at which a monopolist passes on increases in her cost to consumers) play the same role in the comparative statics of monopoly that elasticities do in competitive markets. This makes simple assumptions about them (e.g. that they stay on the same side of 1 over a range of prices) useful for the identification and testing of a wide range of industrial organization models, if data on exogenous cost variations are available. I review the notion of pass-through, establishing a number of new results that show why it is a crucial parameter of monopoly optimization. I then use it to provide a complete (novel) characterization of the relationship between firm and industry mark-ups and profits within and across industrial organization in the classic Cournot (1838)-Spengler (1950) double marginalization problem. I discuss a variety of other applications, some novel to this paper (Cournot competition and the effects of increases in competition on prices) and some from my work elsewhere (two-sided markets) and the work of others (conjectural variations models, mergers in differentiated Bertrand markets and international macroeconomics). I briefly discuss the implications of these results for empirical work, emphasizing the weakness of common functional forms. Finally, I highlight a parametric class of demand functions, first proposed by Bulow and Pfleiderer (1983) based on the stronger assumption of constant pass-through, that has a number of useful properties.

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

Getting The Deal Through: Getting the Fine Down: Cartel Regulation 2009

Posted by D. Daniel Sokol

The Global Competition Review has published Getting The Deal Through: Getting the Fine Down: Cartel Regulation 2009.

ABSTRACT: Global Competition Review is delighted to publish the fully revised and updated ninth edition of Getting the Fine Down - Cartel Regulation, a volume in the Getting the Deal Through series of annual special reports providing comparative international analysis in key areas of law and policy for corporate counsel, cross-border legal practitioners and business people.

The globalisation of the world's economy means that cartel investigations are increasingly likely to be faced simultaneously in multiple jurisdictions. In the format adopted throughout the series, the same key questions are answered by leading practitioners in 38 jurisdictions worldwide. New jurisdictions this year include China, India and the Ukraine.

Contributing editors:

William Rowley QC and Martin Low QC of McMillan Binch Mendelsohn.

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

Competition Enforcement in the Recently Acceded Member States

Posted by D. Daniel Sokol

Competition Enforcement in the Recently Acceded Member States

Location: Budapest - Pázmány Péter Catholic University, Faculty of Law and Political Sciences
Date: 08 May 2009

 Keyonote address

The keynote address is delivered by Zoltán Nagy, the President of Gazdasági Versenyhivatal, the Hungarian competition authority

Assessment of Anticompetitive AgreementsChair: Tihamér Tóth, (President of the Competition Council, GVH)

Tibor Szántó, (Member of the Competition  Council, GVH)

Małgorzata Kozak, (Vice President of the Office of Competition and Consumer Protection,  Poland)

Dorothy Hansberry, (Partner, Wardyński i  Wspólnicy sp.k.)

Gábor Fejes, (Hungarian Competition Law  Association)

Assessment  of Unilateral Conduct

Chair: Philip Marsden (Board Member, Office of Fair  Trading and British Institute   of International and Comparative  Law)

Gergely  Csorba, (Chief Economist, GVH)

Robert  Neruda (Vice Chairman, Office for the Protection of Competition, Czech Republic)

Assimakis Komninos (Senior Associate, White and Case)

Pál Szilágyi, (Director, Competition Law  Research Centre, PPKE-JAK)

Impact of the Financial Crises in Developing Economies

Chair: Hilary Jennings,  (Head of Competition Outreach, OECD)

Antonio  Capobianco, (Senior Competition Expert, OECD)

Ioannis Kokkoris, (Principal Case  Officer, Office of Fair Trading, City   University)

Rodrigo Olivares-Caminal, (University of Warwick)

Krisztian Katona, (US Federal Trade  Commission)

Closing address

The closing address is delivered by Robert Neruda, the Vice Chairman of the Office  for the Protection of Competition, Czech Republic. 


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

Monday, February 9, 2009

On the Tacit Collusion Equilibria of an Investment Timing Game

Posted by D. Daniel Sokol

Richard Ruble and Bruno Versaevel (both of EMLYON Business School, Ecully) have written On the Tacit Collusion Equilibria of an Investment Timing Game.

ABSTRACT: This note further characterizes the tacit collusion equilibria in the investment timing game of Boyer, Lasserre and Moreaux. Tacit collusion equilibria may or may not exist, and when they do may involve either finite time investments (type 1) or infinite delay (type 2). The relationship between equilibria and common demand forms is not immediately apparent. We provide the full necessary and sufficient conditions for existence. A simple condition on demand primitives is derived that determines the type of equilibria. Common demand forms are then shown to illustrate both finite-time and infinite-delay tacit collusion.

February 9, 2009 | Permalink | Comments (0) | TrackBack (0)