Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, January 16, 2010

Second Annual Conference on Competition Enforcement in the Recently Acceded Member States

Posted by D. Daniel Sokol

Why?

Countries that recently acceded to the European Union have long history with competition law. Most of these countries also represent smaller, open market economies, which have faced a rapid privatisation process. Czech Republic, Poland and Hungary have also endured several common historical events that make them face similar market situations and problems including inter alia excessive pricing, bid rigging, refusal to access as well as issues related to the current financial crisis.

Topics include...

The aim of this conference is to address issues that arise in competition enforcement in these rapidly developing economies with ever increasing competition expertise. The conference will address topics on the recent development of competition enforcement, merger control, economic expertise and vertical agreements.

Speakers

Our speakers include Rafaj, Petr (Chairman of the Office for the Protection of Competition); Padilla, Jorge (LECG); Schweitzer, Heike (European University Institute); Marsden, Philip (Office of Fair Trading, BIICL); Bányaiová, Lucie (Senior Associate, Salans); Bednářová, Barbora (Office for the Protection of Competition); Neruda, Robert (Office for the Protection of Competition); Brouček, Milan (Director, Chief Economist Department, Office for the Protection of Competition); Bejcek, Josef (Masarykova univerzita); Csorba, Gergely (Chief economist, Hungarian Competition Authority (GVH)); Hansberry-Bieguńska, Dorothy (Wardyński i Wspólnicy sp.k.); Katsoulacos, Yannis (Athens University of Economics and Business); Kokkoris, Ioannis (Visiting Professor, Bocconi University, Office of Fair Trading); Petr, Michal (Head of the Legislative and International Section, Office of Competition and Consumer Protection); Szakadát, László (Competition Council, Hungarian Competition Authority (GVH)), Szilágyi, Pál (Competition Law Research Centre, Hungary); Tóth, Tihamér (Professor at Pazmany Peter Catholic University and White & Case; former Vice President of the Hungarian Competition Authority (GVH))


January 16, 2010 | Permalink | Comments (1) | TrackBack (0)

Friday, January 15, 2010

Does cartel leadership facilitate collusion?

Posted by D. Daniel Sokol

Marc Escrihuela-Villar (Universitat de les Illes Balears) asks Does cartel leadership facilitate collusion?

ABSTRACT: We discuss the implications of a Stackelberg sequence of play between a cartel and the fringe. We consider two different approaches to collusion: (i) one-stage static model and (ii) a multi-period oligopoly model. Our main result is that in the static model with quantity-setting firms a stable cartel only exist when cartel firms behave as a Stackelberg leader. It is also shown that in the supergame approach the cartel is always more easily sustained with the leadership than in the simultaneous-moves game. The opposite result is obtained in a price-setting supergame with differentiated products.

January 15, 2010 | Permalink | Comments (0) | TrackBack (0)

Predatory Pricing, Recoupment, and Consumers’ Reaction

Posted by D. Daniel Sokol

Lisa Bruttel - University of Konstanz, Faculty of Economics and Jochen Glöckner - University of Konstanz, Faculty of Law explain Predatory Pricing, Recoupment, and Consumers’ Reaction.

ABSTRACT: This paper tests two basic assumptions underlying court made or statutory provisions prohibiting predatory pricing on the economic grounds that monopolistic pricing likely to occur in the long run will cause harm to competition and consumers. The first assumption under scrutiny is that customers will accept monopolistic prices during the subsequent phase of recoupment, even though they have become accustomed to low prices during the price war. The second assumption is that even in the subsequent phase of recoupment neither any displaced nor any other competitor will (re-)enter the market to undercut the monopolistic prices. We can confirm earlier data according to which predatory pricing occurs rarely in an experimental environment. Moreover, the experiment indicates that both assumptions are not backed up by actual decision making both of consumers and of competitors.

January 15, 2010 | Permalink | Comments (0) | TrackBack (0)

Model for Studying Commodity Bundling with a Focus on Consumer Preference

Posted by D. Daniel Sokol

Jungwoo Shin, Chang Seob Kimi, and Jongsu Lee (Technology Management, Economics and Policy Program(TEMEP), Seoul National University) create a Model for Studying Commodity Bundling with a Focus on Consumer Preference.

ABSTRACT: This research complements demand side analysis of previous commodity bundling studies in which oligopoly models and game theory were used. According to demand side analysis, this study proposes the use of discrete-continuous consumption behavior applied to a commodity bundling model that incorporates consumer heterogeneity to analyze the effect of bundling strategies. Previous researchers have assumed a simple consumer utility model such that the heterogeneity of consumer preference is not reflected. Most analyzed effects of commodity bundling by focusing on firm behavior. However, to measure the results of the competition of bundling strategy, analysis of commodity bundling that is based on consumer preference is useful. Unlike previous research, this study proposes a model that directly analyzes consumer behavior for commodity bundling. This study conducted empirical analysis, obtained from data on information communic! ation technology (hereafter, ICT) service subscription and usage in Korea, to validate the proposed model. The empirical results show that the proposed model is useful to analyze the effects of bundling for various services and products.

January 15, 2010 | Permalink | Comments (0) | TrackBack (0)

Thursday, January 14, 2010

Anticompetitive vertical mergers waves

Posted by D. Daniel Sokol

Johan Hombert (CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique), Jérôme Pouyet (Department of Economics, Ecole Polytechnique - CNRS), and Nicolas Schutz (Department of Economics, Ecole Polytechnique - CNRS examineAnticompetitive vertical mergers waves.

ABSTRACT: This paper develops an equilibrium model of vertical mergers. We show that competition on an upstream market between integrated firms only is less intense than in the presence of unintegrated upstream firms. Indeed, when an integrated firm supplies the upstream market, it becomes a soft downstream competitor to preserve its upstream profits. This benefits other integrated firms, which may therefore choose not to cut prices on the upstream market. This mechanism generates waves of vertical mergers in which every upstream firm integrates with a downstream firm, and the remaining unintegrated downstream firms obtain the input at a high upstream price. We show that these anticompetitive vertical mergers waves are more likely when downstream competition is fiercer.

January 14, 2010 | Permalink | Comments (0) | TrackBack (0)

Job Opening in the OECD Competition Division in Paris – Deadline for applications is 22 January 2010

Posted by D. Daniel Sokol

From the OECD announcement:

We are looking for a Senior Competition Expert to organise and lead seminars and other activities with a view to enhancing competition law enforcement and competition policy in member and non-member economies. S/he will work under the supervision of the Head of Outreach in the Competition Division of the Directorate for Financial and Enterprise Affairs. Further information on the vacancy can be found on our careers website (Ref. 3459) www.oecd.org/hrm/vacancies.

January 14, 2010 | Permalink | Comments (0) | TrackBack (0)

Upstream Competition between Vertically Integrated Firms

Posted by D. Daniel Sokol

Marc Bourreau (Institut Télécom, Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique), Johan Hombert (Centre de Recherche en Économie et Statistique - INSEE - ), Jérôme Pouyet (Department of Economics, Ecole Polytechnique), and Nicolas Schutz (Department of Economics, Ecole Polytechnique) explain Upstream Competition between Vertically Integrated Firms.

ABSTRACT: We propose a model of two-tier competition between vertically integrated firms and unintegrated downstream firms. We show that, even when integrated firms compete in prices to offer a homogeneous input, the Bertrand result may not obtain, and the input may be priced above marginal cost in equilibrium, which is detrimental to consumers' surplus and social welfare. We obtain that these partial foreclosure equilibria are more likely to exist when downstream competition is fierce. We then use our model to assess the impact of several regulatory tools in the telecommunications industry.

January 14, 2010 | Permalink | Comments (0) | TrackBack (0)

Best Antitrust Conference of the Year - Next Generation of Antitrust Scholarship Conference at NYU

Posted by D. Daniel Sokol

The best conference of the year is free!

NYU School of Law
American Association of Law Schools – Antitrust
American Bar Association – Section of Antitrust Law

are co-sponsors of the

Next Generation of Antitrust Scholarship Conference

Friday, January 29, 2010
8:20 AM - 4:15 PM

NYU School of Law
108 West 3rd Street, Lipton Hall
[View on Google Map]

Registration
Email Patricia Harris at [email protected]

Agenda
8:20-8:50am: REGISTRATION AND CONTINENTAL BREAKFAST

8:50-9:00am: INTRODUCTORY COMMENTS

9:00-10:30am: SESSION 1
Speaker: Thom Lambert (Missouri) - “A Decision-Theoretic Rule of Reason for Minimum Resale Price Maintenance”
Discussant: Janusz Ordover (NYU)
 
Speaker:  Avishalom Tor (Haifa) - “Behavioral Antitrust: A New Approach to the Rule of Reason after Leegin”
Discussant:  Patrick Bolton (Columbia)
 
Speaker:  Maurice Stucke (Tennessee) - “Am I a Price-Fixer? A Behavioral Economics Analysis of Cartels
Discussant:  Tim Greaney (St. Louis)

Panel Discussant: James Yoon (NY AG)
Moderator:  Richard Steuer (Mayer Brown)

10:30-10:45am: BREAK

10:45-12:15pm: SESSION 2
Speaker: Shahar Dillbary (Alabama) - “Predatory Bundling and the Exclusionary Standard
Discussant:  Harry First (NYU)
 
Speaker:  Scott Hemphill (Columbia) - “Generic Drug Challenges Prior to Patent Expiration”
Discussant:  David Hyman (Illinois)
 
Speaker:  Barak Orbach (Arizona) - “The Antitrust Consumer Welfare Paradox”
Discussant:  John Lopatka (Penn State)

Panel Discussant: Steven Edwards (Hogan & Hartson)
Moderator:  Stacey Mahoney (Gibson Dunn)

12:15-1:00pm: LUNCH

1:00-2:30pm: SESSION 3
Speaker: Salil Mehra (Temple) - “Paradise is a Walled Garden”
Discussant:  Spencer Waller (Chicago Loyola)
 
Speaker:  Hillary Greene (Connecticut) - “Antitrust Censorship of Economic Protest”
Discussant:  Marina Lao (Seton Hall)
 
Speaker:  Ariel Katz (Toronto) - “Beyond “Essential Facilities”: Innovation, Intellectual Property and Competition Policy across the Atlantic”
Discussant:  Eleanor Fox (NYU)

Panel Discussant: Jay Himes (Labaton)
Moderator:  Robert Hubbard (NY AG)

2:30-2:45pm: BREAK

2:45-4:15pm: SESSION 4
Speaker: Daniel Sokol (Florida) - “Antitrust, Institutions and Merger Control”        
Discussant:  Tom Arthur (Emory)
 
Speaker:  Ioannis Lianos (University College London) - “Generalist Judges, Specialized Tribunals, Sector Specific Regulators and Competition Authorities: Close Encounters of the Third Kind”
Discussant:  Peter Carstensen (Wisconsin)
 
Speaker:  Max Huffman (IU-Indy) - “Lessons from New Economics for Old Antitrust”
Discussant:  Ned Cavanaugh (St. Johns)

Panel Discussant: Michael Weiner (Skadden)
Moderator:  Stephen Houck (Menaker & Herrmann)

Conference Co-sponsors
NYU School of Law
American Association of Law Schools – Antitrust
American Bar Association – Section of Antitrust Law

Conference Co-organizers
Harry First – NYU School of Law
Ilene Knable Gotts – Wachtell, Lipton, Rosen & Katz
Edward Cavanaugh – St. John’s School of Law
D. Daniel Sokol – University of Florida Law Levin College of Law

Abstract
This conference is the first ever conference for the Next Generation of Antitrust Scholars.  Much has changed in both the law and economic theory of antitrust in the past 30 years.  The purpose of this event is to convene a conference of the next generation of antitrust law professors (people who started their teaching career in or after 2000) and provide them an opportunity to present their latest research.  Senior antitrust scholars and practitioners in the field will comment on the papers.

For more information, visit the American Bar Association - Section of Antitrust Law website at http://www.abanet.org/antitrust/scholars2010/.

January 14, 2010 | Permalink | Comments (0) | TrackBack (0)

CARTEL SANCTIONS AND THE BALANCE OF OPTIMAL ENFORCEMENT

Posted by D. Daniel Sokol

The UCL Jevons Institute for Competition Law and Economics is pleased to announce its Fifth Annual  Forum on Antitrust and Regulation:


CARTEL SANCTIONS AND THE BALANCE OF OPTIMAL ENFORCEMENT


to be held on 4 February 2010  from 5.30 - 8.00pm, at University College London
accredited with 2 CPD hours by the Bar Standards Board and the Solicitors Regulation Authority


About this event:

Use of cartel sanctions and the effectiveness of public and private enforcement against cartels is coming under renewed scrutiny.  Some of the issues that are being considered in Europe include: enhanced penalties for recidivism, full waivers for leniency applicants who are also ringleaders, co-operation outside the leniency process, the role of private damages and the issue of parent-company liability.  The issue of criminal sanctions is being considered at national level.  The incoming Commissioner Almunia and DG Comp will have to tackle all these issues in the coming months.  These themes have implications also national level for both national authorities and courts, particularly in the UK where private damages are taking off and cartelists can be exposed to criminal prosecutions.  Judge Douglas Ginsburg of US Court of Appeals for the DC Circuit will discuss some of those issues from a US and international perspective and the Jevons Forum will include contributions from John Fingleton of the OFT, Ewatt Sakker of the European Commission and a judge from the newly-renamed EU General Court.  Sir Christopher Bellamy a former CFI judge and President of the UK Competition Appeal Tribunal will chair the debate.

To book your place at this event please click on the link below.


You are invited to the following event:
Jevons Forum 2010: Cartel Sanctions and the Balance of Optimal Enforcement

Date:
Thursday, February 04, 2010 from 5:30 PM - 8:00 PM (GMT)

Location:
UCL Gustave Tuck Lecture Theatre
Gower St
London
United Kingdom
 
  Can you attend this event?  Respond Here  
 
For more information click here

January 14, 2010 | Permalink | Comments (1) | TrackBack (0)

Chinese Merger Control: Patterns and Implications

Posted by D. Daniel Sokol

Xinzhu Zhang (Jiangxi University of Finance and Economics (JXUFE); Special-term Professor, Shanghai University of Finance and Economics (SHUFE); Director of the Research Central for Regulation and Competition (RCRC), Chinese Academy of Social Sciences) and Vanessa Yanhua Zhang (LECG) explain Chinese Merger Control: Patterns and Implications.

ABSTRACT: China's Anti-Monopoly Law went into effect on August 1, 2008. Even though enforcement authorities tend to build their capacity progressively, China has already seen three milestone case decisions in the past year: InBev/Anheuser-Busch, Coca-Cola/Huiyuan, and Mitsubishi Rayon/Lucite. In this article, we elaborate the background of each case and provide in-depth analysis of each decision. In particular, we explore the common characteristics of the cases, the economic theories on which the merger control authority has relied in its merger decisions, and the patterns regarding China's merger policy.

January 14, 2010 | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 13, 2010

American Needle Supreme Court Transcript

Posted by D. Daniel Sokol

Available here.

January 13, 2010 | Permalink | Comments (0) | TrackBack (0)

China’s Antimonopoly Law—One Year Down Part 7 - “The Emperor is Far Away”: Administrative Monopolies in China

Posted by Wentong Zheng

A discussion of antitrust in China would not be complete without discussing the problem of “administrative monopolies,” or anticompetitive conducts by government agencies.  Because of the ubiquity of administrative monopolies in China, it is befitting to devote my final post in this blog series to this very subject. 

As many commentators have noted, one salient feature of the AML is that it devotes one entire chapter to the prohibition of administrative monopolies.  Administrative monopolies in China take many forms, including mandated use of products or services of specific providers designated by government agencies, discriminatory treatment of non-local firms or products by local governments (known as “regional blockades” in China), and other anticompetitive measures by government agencies.  All of these forms of administrative monopolies found their way into the list of prohibited governmental acts under Articles 32 through 37 of the AML.

To be sure, administrative monopolies are not a problem unique to China.  Anticompetitive state action—or public restraints on competition—exists in every country to varying degrees.  But administrative monopolies are particularly problematic in China, perhaps due to three reasons.  First, governments at different levels in China still wield enormous power in intervening in the economy, creating more room for anticompetitive abuses than in developed countries.  Second, government agencies in China do not always act pursuant to statutory authority in promulgating regulations or taking specific regulatory actions.  Finally, in Western countries, there are certain mechanisms, typically outside of antitrust law (such as the Dormant Commerce Clause under the federal constitutional law in the United States), that rein in at least some forms of public restraints.  But as I will discuss in more details below, administrative monopolies in China do not really have an effective solution, at least not within China’s current political framework.

Although the AML explicitly prohibits administrative monopolies, the enforcement provisions of the AML indicate that the drafters of the AML had no intention for the courts to play any role in enforcing the prohibition.  Article 51 of the AML provides that administrative monopolies are to be “corrected by superior government agencies,” with the antimonopoly enforcement agency serving a role of “providing suggestions to superior government agencies as to punishment in accordance with law.”  Article 50 of the AML, the lone provision that grants private right of action under the AML, states that “undertakings that are engaged in monopolistic conducts and cause damages to other parties assume civil liabilities in accordance with law.”  The term “undertakings” (jing ying zhe), or more precisely “business operators,” apparently does not include government agencies.  So, essentially, the AML in one breath condemns administrative monopolies as illegal, and then in the next throws the ball right back to the court of China’s political bureaucracy to deal with the problem.

The drafters of the AML shunned China’s judiciary in the enforcement scheme for administrative monopolies for good reasons.  It is now a cliché to say that China lacks an independent judiciary, but that is indeed one of the main problems with having the courts arbiter disputes involving administrative monopolies in China.  Furthermore, even if the courts were perfectly willing and able to render independent judgments in suits against administrative monopolies, having the judgments enforced would be an even more difficult task.

Despite that the drafters of the AML wanted to keep the courts out of the enforcement process for administrative monopolies, Chinese citizens filed private lawsuits against administrative monopolies in courts anyway.  On August 1, 2008, the very first day the AML took effect, four companies filed a lawsuit in Beijing No. 1 Intermediary People’s Court against China’s General Administration of Quality Supervision, Inspection and Quarantine (“AQSIQ”), China’s standard setting agency, for allegedly requiring companies in China to use the anti-counterfeiting products of a company partially owned by AQSIQ.  But given the institutional constraints on the courts mentioned above, the courts are not all that eager to get involved in such lawsuits.  About one month after the suit against AQSIQ was filed, in September 2008, the Beijing court dismissed the suit on grounds that the statute of limitations for raising claims against AQSIQ under China’s Administrative Litigation Law had already run by the time the plaintiffs filed the suit (see here for a report in English of the lawsuit and its dismissal).  There is an interesting question about whether China’s Administrative Litigation Law provides an alternative cause of action against administrative monopolies despite that the AML does not provide one, a question I will not discuss in details here.  Those who are interested can see here for a compilation of email discussions on the AQSIQ case between me and several others on the Chinalaw listserv.  As I also argued there, assuming that the Administrative Litigation Law does provide an alternative cause of action against administrative monopolies, the Beijing court’s dismissal of the AQSIQ case on statute-of-limitations basis lacks support in the Administrative Litigation Law.  It seems, to me at least, that the reason given for the dismissal is little more than a pretext for avoiding taking up the suit.

So back to the court of China’s political bureaucracy the ball is.  Now the question is: does China’s political bureaucracy have an effective solution to administrative monopolies?  In other words, will “superior government agencies” be able to “correct” administrative monopolies created by government agencies at lower levels?  This is where I depart from the optimistic views on this issue.  One such view (see here) holds that although China does not have an independent judiciary, the AML’s ban on administrative monopolies may nonetheless succeed because, in part, China has “recourse to a binding central enforcer—China’s central government.”  For reasons I will explain below, this view is simplistic at best and is based on a misinformed understanding of how China’s political bureaucracy works (or not work).

In my view, the AML’s ban on administrative monopolies may not or even will not succeed precisely because it relies on China’s central government as the enforcer.  For decades, China’s central government has been trying to rein in administrative monopolies, particularly “regional blockades,” but to little avail.  It is hard to imagine that simply adding a provision in the AML declaring administrative monopolies to be illegal will help change matters.  The reason for the inefficacy of the central government’s efforts is that, contrary to the optimistic view cited above, enforcement through China’s central government is anything but “binding.”  As a matter of fact, China’s central government has many problems controlling local governments and, to a lesser extent, its own lower-level agencies.  It seems to be the ultimate paradox that a bureaucratic system built on authoritarian control cannot effectively enforce its administrative orders, but that has been the case in China for almost as long as history has been recorded.  Chinese sayings dating back to times immemorial are vivid illustrations of this problem: “the mountain is high and the emperor is far away” (shan gao huang di yuan); “where there are policies from above, there are counter-policies from below.” (shang you zheng ce, xia you dui ce). And more recently, “policies and commands stop at the gate of zhongnanhai (the central government’s compound in Beijing)” (zheng ling bu chu zhongnanhai).

Making sense of China’s political bureaucracy would perhaps require a book-length treatise, but let me try to explain in a couple of paragraphs what I understand to be the root cause of China’s bureaucratic noncompliance as it relates to administrative monopolies.  Between China’s central and local governments, their relationship on the surface is one of domination and subordination.  But indeed, the relationship between the two should be best viewed as a symbiotic one, with both relying on each other to maintain their collective legitimacy.  The central government can, and does, order local governments to carry out its policies, sometimes against the latter’s self-interests.  But the central government can only go so far in its push against local governments without risking cooperation of the latter.  When disputes between the two arise, they usually can work out their differences, but not without gives and takes that meet each other’s demand somewhere halfway.  When the two cannot resolve their differences, in extreme cases they do not turn to courts, but turn to use of force or even war.  One of the most dramatic episodes of the perpetual struggle between China’s central and local governments in history is the Revolt of Three Feudatories, an almost decade-long civil war led by the Kangxi emperor of the Qing dynasty against three generals who were granted enormous power at the local level but later went rebellious against the emperor.

The same dynamics also exists as to the relationship between China’s central government and its own lower-level agencies, only to a lesser extent.  Long story short, the central government does not always get its way even when dealing with its supposedly “subordinate” agencies.  The important point to make here is that no one in China’s political bureaucracy—not even the head of the central government—has absolute power.  To see examples of this Chinese-style checks and balances, I recommend the book 1587, A Year of No Significance by the late great historian Ray Huang.  If you do not want to read the entire book, be sure to review the colorful account in chapter three of how the Wanli emperor of the Ming dynasty boycotted his emperor’s duties for thirty years in protest of the oppositions of his high officials to his plan to choose his third oldest son, rather than his oldest son, as the heir to the throne.  The Wanli emperor’s case is an extreme one since he is considered a particularly weak emperor in Chinese history, but I think most China historians would agree that the institutional constraints the Wanli emperor was facing are present in China’s political bureaucracy throughout most periods of Chinese history, including today.

With this I conclude this blog series on the first year (or the first seventeen months by now, to be more precise) of the AML.  I want to thank Danny and Shubha again for inviting me to guest blog on this space, and I look forward to sharing more of my thoughts on issues related to antitrust in China as future developments unfold.



January 13, 2010 | Permalink | Comments (0) | TrackBack (0)

The Private Competition Enforcement Review - 2nd Edition

Posted by D. Daniel Sokol

The Law Reviews: The Private Competition Enforcement Review - 2nd Edition

ALTME
  • ISSN: 0-9542890-8-0
  • $375 (USD)

Editor:
Ilene Knable Gotts
Wachtell Lipton Rosen & Katz

Visit The Law Reviews website

View Sample

Private antitrust litigation has been a key component of the antitrust regime for decades in the United States. The United States litigation system utilises extensive discovery, pleadings and motions, use of experts and, in a small number of matters, trials to resolve the rights of the parties. The process imposes high litigation costs (in time and money) on all participants and promises great rewards for prevailing plaintiffs. Despite attempts by Congress and the US Supreme Court to curtail some of the more frivolous litigation and class actions, the environment remains ripe for high litigation activity in the near term, particularly involving intellectual property rights and cartels.

Private competition enforcement is largely a work-in-progress in many other parts of the world. Many of the issues raised in this book, such as pass-on defence and the standing of indirect purchasers, are unresolved in many countries. Our authors have provided their views regarding how these issues are likely to be clarified in all of the most significant jurisdictions. Also unresolved in some jurisdictions is the availability of information obtained by the competition authorities during a cartel investigation, both from a leniency recipient and a party convicted of the offence. Other issues, such as privilege, are subject to proposed legislative changes. The one constant across all jurisdictions is the increase of cartel enforcement activity, which is likely to be a continuous source for private litigation in the future.

Each contributor to The Private Competition Enforcement Review is a distinguished legal practitioner in his or her local jurisdiction. All practising competition lawyers need to be familiar with the issues most relevant to the commercial operation of their international clients, and the Review represents an immediate and accessible summary of developments across the most significant jurisdictions worldwide.


January 13, 2010 | Permalink | Comments (0) | TrackBack (0)

Job Opening in the OECD Competition Division for Position in Mexico – Deadline for applications is 15 January 2010

Posted by D. Daniel Sokol

From the OECD announcement:

We are looking for a senior expert with experience in competition policy analysis, regulation and the application of policies to regulations. This expert would be a key member of a team working with Mexico’s Federal Competition Commission (CFC) on the development of proposals to eliminate unnecessary restrictions of competition in various laws and regulations. The expert will be based at the OECD Centre in Mexico City under the supervision of the Head of the Competition Division. Further information can be found on our careers website (Ref. 3447) www.oecd.org/hrm/vacancies.

January 13, 2010 | Permalink | Comments (0) | TrackBack (0)

Uniltaeral, Anticompetitive Acquisitions of Dominance or Monopoly Power

Posted by D. Daniel Sokol

Avishalom Tor (Haifa - Law) has posted Uniltaeral, Anticompetitive Acquisitions of Dominance or Monopoly Power.

ABSTRACT: The prohibition of certain types of anticompetitive unilateral conduct by firms possessing a substantial degree of market power is a cornerstone of competition law regimes worldwide. Yet notwithstanding the social costs of monopoly modern legal regimes refrain from prohibiting it outright. Instead, competition laws prohibit monopolies or dominant firms from engaging in those types of anti-competitive conduct that amount to "monopolizing" or an "abuse of dominant position." Importantly, anti-competitive conduct can take place both on the road to monopoly and, later on, once substantial market power has been achieved. Legal regimes nevertheless tend either to ignore or pay only limited attention to the unilateral conduct of firms lacking substantial market power.

This Article argues, however, that such conduct merits legal attention where it led or would lead if unstopped to the acquisition of substantial market power. Specifically, competition law regimes that fail to incorporate an appropriately-designed unilateral conduct liability in this area are unable to address some increasingly important classes of potentially harmful unilateral practices such as those that concern cheap exclusion, multi-product (but not necessarily dominant) firms, or network tipping effects. This failure, moreover, may lead to distortions in other areas of unilateral conduct policy in these regimes. The analysis concludes by drawing together the lessons from the critical evaluation of the EU and the U.S. approaches for the appropriate design of unilateral conduct regimes worldwide.

January 13, 2010 | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 12, 2010

Public vs. Private Enforcement of Antitrust Law in Unilateral Conduct Cases - The Interaction between the Economic Review of the Prohibition of Abuses of Dominant Positions and Private Enforcement

Posted by D. Daniel Sokol

Mark-Oliver Mackenrodt, Max Planck Institute for Intellectual Property, Competition & Tax Law explains Public vs. Private Enforcement of Antitrust Law in Unilateral Conduct Cases - The Interaction between the Economic Review of the Prohibition of Abuses of Dominant Positions and Private Enforcement.

ABSTRACT: The present paper analyzes the interaction between the economic review of the probition of abuses of a dominant position (Article 82 EC) on the one hand and the efforts to enhance private enforcement of competition law through private damage claims on the other hand.

The paper argues that effective enforcement requires that exactly those cases should be selected for decision which cause the type of negative welfare effects that Article 82 EC seeks to prevent. The author finds that public enforcers seek to repress unilateral business strategies causing harm to competition as protected by Article 82 EC. Private plaintiffs, by contrast, are motivated by the prospect of gaining damage awards which depends on their individual harm. The paper distinguishes several groups of private plaintiffs. For each, it is asked whether there is a correlation between individual harm and harm to competition. As it turns out, there is a divergence in the incentives of public enforcers as compared to certain potential private enforcers. In cases where there is harm to competition but no or only little individual harm there is concern for an under-deterrence through private enforcement. On the other hand, there are cases where private parties have an incentive to go to court even though there is no or little harm to competition. This might result in an over-deterrence. The paper concludes by discussing the consequences for reaching an optimum level of enforcement and the influence of a more economic understanding of Article 82 EC.

January 12, 2010 | Permalink | Comments (1) | TrackBack (0)

CPI Rolls out New Website

Posted by D. Daniel Sokol

Competition Policy International has rolled out the new website for Commentary.  Check it out here.

January 12, 2010 | Permalink | Comments (0) | TrackBack (0)

New Competition Law Blog

Posted by D. Daniel Sokol

Cosmo Graham (University of Leicester - Law and self described "Grumpy old sceptical academic") has joined the blogosphere with the Competition Law Blog.

January 12, 2010 | Permalink | Comments (0) | TrackBack (0)

Justice Sonia Sotomayor and the Relationship Between Leagues and Players: Insights and Implications

Posted by D. Daniel Sokol

Michael McCann, Vermont Law School has written on Justice Sonia Sotomayor and the Relationship Between Leagues and Players: Insights and Implications.

ABSTRACT: This Essay examines U.S. Supreme Court Justice Sonia Sotomayor’s important role in shaping U.S. sports law. As a judge on the U.S. District Court for the Southern District of New York and later on the U.S. Court of Appeals for the Second Circuit, Sotomayor authored opinions that resolved two major sports law disputes: whether Major League Baseball (“MLB”) owners could unilaterally impose new labor conditions on MLB players during the 1994 baseball strike and whether Ohio State University sophomore Maurice Clarett was obligated to wait three years from the completion of high school to become eligible for the National Football League draft.

Although some critics of Justice Sotomayor charge that she sacrifices traditional legal analysis in order to advance progressive ideals, her views on the relationship between leagues and players appear far more conventional, if not rigid. This conclusion furnishes insight on how she might assess two emerging sports law disputes: whether the National Basketball Association’s eligibility restriction violates section 1 of the Sherman Antitrust Act and whether the National Football League ("NFL") comprises a single entity. The latter dispute is the subject of American Needle v. NFL, oral arguments for which will be heard by Justice Sotomayor and other Supreme Court justices in January 2010.

January 12, 2010 | Permalink | Comments (0) | TrackBack (0)

Product Market Power and Stock Market Liquidity

Posted by D. Daniel Sokol

Jayant R. Kale, Georgia State University and Yee Cheng Loon, SUNY - Binghamton analyze Product Market Power and Stock Market Liquidity.

ABSTRACT: Theory predicts that since a firm with market power has more stable cash flows because of its ability to set prices in the product market, its stock price is less sensitive to order flow (Peress, 2009), which results in greater stock liquidity. We test this prediction on a large sample of firms and find that stock liquidity increases with market power because market power reduces return volatility. Further, consistent with theoretical predictions, the impact of market power on liquidity is more pronounced when information asymmetry is more severe, that is, for smaller firms and for firms with less analyst coverage. Our findings are robust to different measures of liquidity, market power, volatility, and alternative econometric model specifications.

January 12, 2010 | Permalink | Comments (0) | TrackBack (0)