Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Tuesday, June 29, 2010

Antitrust and Innovation: Where We Are and Where We Should Be Going

Posted by D. Daniel Sokol

Herb Hovenkamp (Iowa Law) has an important contribution on Antitrust and Innovation: Where We Are and Where We Should Be Going.

ABSTRACT: For large parts of their history intellectual property law and antitrust law have worked so as to undermine innovation competition by protecting too much. Antitrust policy often reflected exaggerated fears of competitive harm, and responded by developing overly protective rules that shielded inefficient businesses from competition at the expense of consumers. By the same token, the IP laws have often undermined rather than promoted innovation by granting IP holders rights far beyond what is necessary to create appropriate incentives to innovate.

Perhaps the biggest intellectual change in recent decades is that we have come to see patents less as a species of monopoly and more as a kind of property. While a good development overall, this makeover in conception has contributed to some less desirable expansions in the patent system. The “propertization” of patent law has not been attended by requirements that apply to other types of property. One principle of property law is that claimants have the obligation to articulate clear boundaries of ownership. Another is that property owners must communicate timely and effective notice of their claims, because the cost of giving notice is typically much lower than the cost of searching.

Although one should not push the point too far, antitrust law, which is judge made, claims relatively more freedom from interest group capture than does statutory IP law. And if antitrust tribunals go too far, Congress can be trusted to respond to the voices of IP holders, who have consistently shown themselves to be a more effective interest group than IP users or consumers. For its part, IP law can take some important lessons from the road that antitrust has taken toward reform and redemption. Roughly 40 years ago antitrust pursued a course of protecting small competitors at consumers’ expense and even condemning such practices precisely because they reduced costs. Then in the late 1970s the Supreme Court dramatically shifted the ground, requiring not only that injury be clearly proven, but also that it be the right kind of injury – that is, injury to competition and not merely injury to the plaintiff. This transformation was accomplished entirely by the Supreme Court, largely in the face of Congressional indifference and in apparent conflict with a private injury statute that guarantees liberal recovery for every kind of injury. Intellectual property law would profit by continuously examining its root motivations as antitrust law does.

June 29, 2010 | Permalink | Comments (1) | TrackBack (0)

Predation Analysis and the FTC's Case Against Intel

Posted by D. Daniel Sokol

Dan Crane (Michigan Law) has an interesting article on Predation Analysis and the FTC's Case Against Intel.

ABSTRACT: The Federal Trade Commission's pending antitrust case against Intel challenges a number of Intel's discounting and rebating practices. The Commission appears poised to apply a cost-price test to the challenged practices, but proposes to include "fixed sunk costs" in the appropriate measure of cost. This paper explains the importance of using cost-price screens to assess unilaterally imposed prices and analyzes the futility of including sunk costs in the relevant cost measure.

June 29, 2010 | Permalink | Comments (0) | TrackBack (0)

Age Eligibility Rules in Women's Professional Golf: A Legal Eagle or an Antitrust Bogey?

Posted by D. Daniel Sokol

Elizabeth A. Gregg, Indiana University, Lawrence W. Fielding, Jacksonville University and Ryan M. Rodenberg, Florida State University ask Age Eligibility Rules in Women's Professional Golf: A Legal Eagle or an Antitrust Bogey?

ABSTRACT: The LPGA's minimum age rule is analyzed under American antitrust law.


 

June 29, 2010 | Permalink | Comments (0) | TrackBack (0)

Monday, June 28, 2010

Dawn of a New Constitutional Era or Opportunity Wasted? An Intellectual Reappraisal of China’s Anti-Monopoly Law

Posted by D. Daniel Sokol

Oliver Zhong, US-Asia Law Institute, New York University School of Law writes on Dawn of a New Constitutional Era or Opportunity Wasted? An Intellectual Reappraisal of China’s Anti-Monopoly Law.

ABSTRACT: China’s nascent “competition law” legislation, the Anti-Monopoly Law, has piqued the interest of many an antitrust practitioner. This Article argues that the attention is well-deserved, but for the wrong reason. The AML, it argues, is far broader than a competition law, and one is already on a misleading track attempting to read it within an antitrust paradigm. Legislations work only within a certain constitutional context, and the Chinese one is particularly complex. An intellectual reappraisal is due. The Article aims to do three things: to reconceptualize the AML as promulgated and identify major policy ambiguities; to review official updates and developments since promulgation with an eye to clarify such ambiguities; and to place the AML in China’s intellectual tradition to ascertain what it signifies for the present and augurs for the future.


 

June 28, 2010 | Permalink | Comments (0) | TrackBack (0)

Promoting Innovation Through Patent and Antitrust Law and Policy

Posted by D. Daniel Sokol

Christine Varney (DOJ) has an important new speech up on the web titled Promoting Innovation Through Patent and Antitrust Law and Policy. There are her remarks for the Joint Workshop of the U.S. Patent and Trademark Office, the Federal Trade Commission, and the Department of Justice on the Intersection of Patent Policy and Competition Policy: Implications for Promoting Innovation

June 28, 2010 | Permalink | Comments (0) | TrackBack (0)

New Chambers USA Rankings Are Out - Texas Antitrust Elite Edition

Petroleum Mergers and Competition in the Northeast United States

Posted by D. Daniel Sokol

Christopher T. Taylor, U.S. Federal Trade Commission - Bureau of Economics Louis Silvia, Government of the United States of America - Federal Trade Commission have a new paper on

Petroleum Mergers and Competition in the Northeast United States.

ABSTRACT: Sunoco’s 2004 acquisition of El Paso’s, New Jersey refinery and Valero’s 2005 acquisition of Premcor’s Delaware refinery significantly consolidated refinery control in the U.S. Northeast. The Federal Trade Commission investigated both transactions but challenged neither. We examine the FTC’s enforcement rationale and test whether these mergers were associated with post-merger price increases in either gasoline or diesel at retail and wholesale levels. Our findings indicate that the transactions were largely competitively neutral. There was some indication that some unbranded rack prices may have increased after the mergers, but this result was not robust across controls or assumptions. In some other instances, prices in merger affected areas may have fallen relative to prices elsewhere after the transactions.

June 28, 2010 | Permalink | Comments (0) | TrackBack (0)

Entry, Competitiveness and Exports: Evidence from Firm Level Data of Indian Manufacturing

Posted by D. Daniel Sokol

Alokesh Barua (International Trade and Development Division, School of International Studies, Jawaharlal Nehru University), Debashis Chakraborty (Indian Institute of Foreign Trade, New Delhi) and Hariprasad C. G. (International Trade and Development Division, School of International Studies, Jawaharlal Nehru University)analyze Entry, Competitiveness and Exports: Evidence from Firm Level Data of Indian Manufacturing.

ABSTRACT: The industry and trade policy regimes in India have witnessed drastic changes since 1991. The dismantling of the industrial licensing system and thereby allowing free entry to and exit from the industry of firms in 1991 followed by the WTO induced trade liberalization leading to substantial reduction in tariffs and gradual softening of foreign investment regulations, particularly in the context of foreign direct investment since 1995, may have had significant impact on the state of competitiveness in India industries. In this paper an attempt has been made to evaluate the effects of trade and industrial policy changes on domestic competitiveness for select Indian industries during post-liberalization period. Though there exists a pool of empirical literature focusing on the state of competitiveness in India, the link between theoretical models underlying the empirical analysis is not often strong. Moreover, a section of the literature focuses on a combination of firm and industry data for drawing conclusions on firm behavior, which may not reflect the actual scenario. Given this background, the present paper attempts to provide a unified approach to examine the inter-relationships between entry and competitiveness within a consistent oligopolistic market framework. The empirical analysis of the present study, carried out on the basis of firm data for 14 sectors over 1990-2008, indicates that Indian industry have shown considerable changes over the last decade in terms of entry and competitiveness. An overall decline in concentration is witnessed between the two end points, which signify the importance of newer entry in the markets. The Price-Cost Margin however behaves differently for different sectors, which could be explained by the differing level of spillover of technical changes as a result of increased pressure of competition due to liberalization. Demand curve is generally found to be inelastic and declines over the period. The relationship between th e size of the firms and their export volume turns out to be significantly positive.

June 28, 2010 | Permalink | Comments (0) | TrackBack (0)

Sunday, June 27, 2010

New Chambers USA Rankings Are Out - Pennsylvania Antitrust Elite Edition