Antitrust & Competition Policy Blog

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

Saturday, July 10, 2010

Regulation of Entry and the Distortion of Industrial Organization

Posted by D. Daniel Sokol

Raymond J. Fisman, Columbia University Business School and Virginia Sarria-Allende, Universidad Austral - IAE Business School have posted Regulation of Entry and the Distortion of Industrial Organization.

ABSTRACT: We study the distortions of industrial organization caused by entry regulation. We take advantage of heterogeneity across industries in their natural barriers and growth opportunities to examine whether industries are differentially affected in countries according to entry regulation. First, we consider the effect of entry regulation on the (static) industry structure. We find that regulation has a greater impact in industries with lower natural barriers to entry, both on the number of firms and on the average size of firms. We find that the effect of entry regulation on industry share is not related to differences in natural barriers. Regarding industry dynamics, we find that in countries with high entry regulation, industries respond to growth opportunities through the expansion of existing firms, while in countries with low entry regulation, growth opportunities lead to the creation of new firms; finally, the total sectoral response is invariant to the level of regulation.

July 10, 2010 | Permalink | Comments (0) | TrackBack (0)

UCL course: The Role of Economics in Competition Law and Practice

Posted by D. Daniel Sokol

UCL Jevons Institute: The Role of Economics in... Logo

The UCL Jevons Institute is pleased to announce that it will again run it successful Role of Economics in Competition Law and Practice course, starting in the Autumn 2010. 


This course introduces the economic theories that underlie competition law and the methods that are used to assess whether business practices are nefarious, benign, or healthy.  This year it is taught by Dr. Andrea Coscelli, Director of Competition Economics at Ofcom, and Professor David S. Evans who teaches at University of Chicago as well as University College London.  During the year, there will be guest lecturers primarily drawn from current or ex-officials of competition authorities as well as judges and visiting academics.

The course consists of two parts:
The first part involves an introduction to microeconomics and industrial organization theory. It provides a basic introduction to the economics of markets including how firms maximise profits, the theory of demand, the role of costs, perfect competition, monopoly, oligopoly, product differentiation, vertical relationships, and multi-sided markets.

The second part involves the application of economics to competition policy. It includes the analysis of market power, market definition, cartels and other coordinated  behaviour, unilateral conduct including predatory and exclusionary practices, horizontal and vertical mergers, two-sided markets and the web economy, and antitrust and intellectual property. The course is designed to provide students with a deep understanding of how economics is applied to competition policy as well as practical tools for applying this to cases.

Although both parts provide a rigorous introduction to the topic, the course does not require students to have any previous coursework or knowledge of economics and does not require students to a know anything beyond very basic math. Lectures rely on graphs and verbal descriptions to convey key concepts. Typical students generally have undergraduate degrees in law or other liberal arts subjects.  Most students who take the course go on to practice as competition lawyers or in another field of law in which knowledge of economics is helpful.


To view the full schedule of lectures and book your place, please click on the link below or go to: 

Alternatively you can download a brochure about the course from the UCL Jevons Institute website:

With best wishes,

Lisa Penfold
Events Manager, UCL Faculty of Laws
Tel: 020 7679 1514


You are invited to the following event:
UCL Jevons Institute: The Role of Economics in Competition Law & Practice

Tuesday, October 05, 2010 at 6:00 PM
- to -
Tuesday, March 08, 2011 at 8:00 PM (GMT)

UCL Faculty of Laws
Bentham House
Endsleigh Gardens
WC1H 0EG London
United Kingdom

July 10, 2010 | Permalink | Comments (0) | TrackBack (0)

Friday, July 9, 2010

Assessing Microsoft from a Distance

Posted by D. Daniel Sokol

John Lopatka (Penn State Law) takes an introspective look at Assessing Microsoft from a Distance.

ABSTRACT: A careful review of the evidence that was available at the time Microsoft was litigated and has accumulated since indicates that the conduct by which Microsoft was found to have unlawfully preserved monopoly power in personal computer operating systems was largely ineffectual. The entry barrier that Microsoft supposedly maintained through exclusionary conduct has eroded substantially, but not because of the conduct restrictions imposed by the remedial orders. Rather, the market has evolved as technology has progressed. Nevertheless, various Microsoft officials intended at least some of the conduct challenged simply to injure competitors, and the government relied upon evidence of that intent and a theory of possible competitive harm in bringing its case. Intent evidence can sometimes be helpful in determining the economic nature of objectively ambiguous practices. But rational actors may engage in conduct unlikely to return monopoly profits and unlikely to reduce economic welfare because it might do so and is cheap. Given the high cost of antitrust enforcement, attacking potentially anti-competitive conduct merely because the actor can engage in it at low private cost is unlikely to serve the public interest.

July 9, 2010 | Permalink | Comments (0) | TrackBack (0)

The New Insurance Block Exemption Regulation

Posted by D. Daniel Sokol

Alan Davis and Christina Day (both Pinsent Masons LLP) describe The New Insurance Block Exemption Regulation.

ABSTRACT: Under the new regulation, a block exemption remains available for insurance agreements but its scope is more limited and comments by the European Commission raise the prospect of greater scrutiny.

The new insurance block exemption automatically exempts certain types of cooperation agreements between insurers but in a more limited way than was previously the case, and there will be an increased need for insurers to self-assess the compliance of their agreements with the competition rules. Comments by the European Commission about monitoring and enforcement of the new application of the new block exemption also raises the prospect of greater scrutiny of the insurance sector under the competition rules, especially in the area of co-insurance and co-reinsurance groups.

July 9, 2010 | Permalink | Comments (0) | TrackBack (0)

Innovation and Competition in Generation and Retail Power Markets

Posted by D. Daniel Sokol

Catherine Waddams Price, University of East Anglia - School of Management and Elizabeth Hooper, University of East Anglia - Norwich Business School identifiy issues in Innovation and Competition in Generation and Retail Power Markets.

ABSTRACT: There has been considerable merger activity in EU energy markets in recent years. It could be argued that competition authorities should be required to take into account potential innovation effects of mergers. In the UK, regulators are now trying to achieve multiple objectives within the current framework. There is a danger that if markets are expected to deliver mutually incompatible objectives they will be unable to achieve any of them.

July 9, 2010 | Permalink | Comments (0) | TrackBack (0)

Foreign Bank Presence and its Effect on Firm Entry and Exit in Transition Economies

Posted by D. Daniel Sokol

Olena Havrylchyk (CEPII) analyzes Foreign Bank Presence and its Effect on Firm Entry and Exit in Transition Economies.

ABSTRACT: This study investigates the impact of foreign bank penetration in Central and Eastern Europe on firm entry. We demonstrate that the acquisition of domestic banks by foreign investors has led to reduced firm creation, smaller average size of entrants and increased firm exit in opaque industries compared to transparent ones. At the same time, the entry of greenfield foreign banks spurred firm creation and exit. Unlike previous studies, which use interchangeably the notions of opacity and size, we define opacity in terms of technological process and show that economic significance of foreign bank entry is larger for opaque industries than for industries with large shares of small firms. Our findings can be interpreted as evidence of increased credit constraints and are consistent with theories that argue that foreign bank presence exacerbates informational asymmetries.

July 9, 2010 | Permalink | Comments (0) | TrackBack (0)

Thursday, July 8, 2010

A micro-econometric approach to geographic market definition in local retail markets: Demand side considerations

Posted by D. Daniel Sokol

Walter Beckert (Birkbeck College, University of London, IFS, and UK Competition Commission) discusses A micro-econometric approach to geographic market definition in local retail markets: Demand side considerations.

ABSTRACT: This paper formalizes an empirically implementable framework for the definition of local antitrust markets in retail markets. This framework rests on a demand model that captures the trade-off between distance and pecuniary cost across alternative shopping destinations within local markets. The paper develops, and presents estimation results for, an empirical demand model at the store level for groceries in the UK.

July 8, 2010 | Permalink | Comments (0) | TrackBack (0)

Mixed oligopoly, vertical product differentiation and fixed quality-dependent costs

Posted by D. Daniel Sokol

Stefan Lutz and Mario Pezzino (both University of Manchester, School of Social Sciences) have a new paper on Mixed oligopoly, vertical product differentiation and fixed quality-dependent costs.

ABSTRACT: A private and a public firm face fixed quality-dependent costs of production and compete first in quality and then either in prices or in quantities. In the long run the public firm targets welfare maximization whereas the private firm maximizes profits. In the short run both firms compete in prices or quantities to maximize profits. Mixed competition is always socially desirable compared to a private duopoly regardless of the type of competition in the short run and the equilibrium quality ranking. In addition, mixed competition seems to be a more efficient regulatory instrument than the adoption of a minimum quality standard.

July 8, 2010 | Permalink | Comments (0) | TrackBack (0)

European Commission Decisions on Competition: Economic Perspectives on Landmark Antitrust and Merger Cases

Posted by D. Daniel Sokol

July 8, 2010 | Permalink | Comments (1) | TrackBack (0)

The Handbook of Competition Economics 2010

Second Mover Advantage and Bertrand Dynamic Competition: An Experiment

Posted by D. Daniel Sokol

S.N. O'Higgins (University of Salerno), Arturo Palomba (University of Naples II) and Patrizia Sbriglia (University of Naples II) explain Second Mover Advantage and Bertrand Dynamic Competition: An Experiment.

ABSTRACT: In this paper we provide an experimental test of a dynamic Bertrand duopolistic model, where firms move sequentially and their informational setting varies across different designs. Our experiment is composed of three treatments. In the first treatment, subjects receive information only on the costs and demand parameters and on the price’ choices of their opponent in the market in which they are positioned (matching is fixed); in the second and third treatments, subjects are also informed on the behaviour of players who are not directly operating in their market. Our aim is to study whether the individual behaviour and the process of equilibrium convergence are affected by the specific informational setting adopted. In all treatments we selected students who had previously studied market games and industrial organization, conjecturing that the specific participants’ expertise decreased the chances of imitation in tre! atment II and III. However, our results prove the opposite: the extra information provided in treatment II and III strongly affects the long run convergence to the market equilibrium. In fact, whilst in the first session, a high proportion of markets converge to the Nash-Bertrand symmetric solution, we observe that a high proportion of markets converge to more collusive outcomes in treatment II and more competitive outcomes in treatment III. By the same token, players’ profits significantly differ in three settings. An interesting point of our analysis relates to the assessment of the individual behavioural rules in the second and third treatments. When information on the behaviour of participants on uncorrelated markets is provided, players begin to adopt mixed behavioural rules, in the sense that they follow myopic best reply rules as long as their profits are in line with the average profits on all markets, and , when their gains fall below that threshold, they start i! mitating successful strategies adopted on other markets.

July 8, 2010 | Permalink | Comments (0) | TrackBack (0)

Welcome Kluwer Competition Law Blog

Posted by D. Daniel Sokol

Joining the world of blogs is the Kluwer Competition Law Blog.

The aim of the blog is to provide fresh and insightful information that will be of use to practitioners, in-house counsel and academics. The main focus will be on EU competition law, but the blog will also follow important developments in EU Member States and the United States.

Edited by Thomas Graf of Cleary Gottlieb, Brussels, the blog will provide you with high quality posts from experts within the competition law community. Contributors include: Jose Rivas, Bird & Bird; Marcus Glader, Vinge; Eric J. Stock, Hogan Lovells; Silke Heinz, Cleary Gottlieb; Frederic Depoortere, Skadden; Eric Barbier de la Serre, Latham & Watkins; Till Mueller-Ibold, Cleary Gottlieb; Damien Gerard, Louvain University; Simon Pritchard, Allen & Overy; Andrea Lofaro, RBB Economics.

July 8, 2010 | Permalink | Comments (0) | TrackBack (0)

An Antitrust Analysis of the Federal Trade Commission’s Complaint Against Intel

Posted by D. Daniel Sokol

Josh Wright (GMU Law) has an interesting article on An Antitrust Analysis of the Federal Trade Commission’s Complaint Against Intel.

ABSTRACT: The Federal Trade Commission’s recent complaint targets the Intel Corporation for antitrust scrutiny under Section 5 of the Federal Trade Commission Act and Section 2 of the Sherman Act. The Commission alleges that, through the use of loyalty discounts offered to microprocessor purchasers, Intel unlawfully excluded rivals and harmed consumers in the microprocessor and graphics processor markets. This article analyzes the Commission’s claims. The Commission’s reliance on Section 5 should be viewed with suspicion because it allows the Commission to evade the more stringent standards of proof that have been emerged in the Supreme Court’s Section 2 jurisprudence. Furthermore, the Commission’s actions surrounding its prosecution of Intel reflect an adversarial attitude that undermines the Commission’s stated comparative advantages over private litigants. Moreover, the Commission’s allegations form a weak case when evaluated under the conventional Section 2 standard. Unlike many Section 2 cases alleging speculative future consumer harm, the disputed conduct in this case has been in the marketplace for nearly a decade, and its competitive footprint is readily observable. The available data do not support the Commission’s theory that Intel’s behavior harmed consumers. To the contrary, it is almost certain that Intel’s distribution contracts led to tangible, demonstrable consumer welfare gains in the form of lower prices. Accordingly, the Commission’s complaint against Intel threatens to harm consumers directly in the computer industry as well as indirectly by undermining the stability and certainly which longstanding Section 2 jurisprudence has afforded the business community by requiring the plaintiffs offer rigorous proof of competitive harm.

July 8, 2010 | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 7, 2010

Energy Market Restructuring and Competition Regulation

Posted by D. Daniel Sokol

Michael D. Diathesopoulos University of Athens - Faculty of Law; University of Cambridge - Faculty of Law; University of Glasgow - School of Law; University of Leicester - Faculty of Law has a forthcoming article on Energy Market Restructuring and Competition Regulation.

ABSTRACT: This article examines the energy market restructuring in EU after the gradual liberalisation process of previous years and defines the application of European competition law to this framework of restructuring. We firstly present the different aspects of this restructuring and second we highlight the existing restrictions on this process. In the second part of this article, we focus on the steps taken mainly by EC Commission, in order to control the concentrations in energy market, which derived from the gradual involvement of the private sector in the market and the lift of barriers in energy market, while we highlight the major points concerning competition regulation, which are related to the effort for the establishment of a European single energy market. We analyse - by underlining as well issues of methodology and using relevant ECJ case law - the general framework of the application of competition rules to energy market, under a scope of combination of sectoral and general rules and under a perspective of an establishment of a hybrid status for European energy markets, a status that combines the need for markets' opening to competition with other objectives such as the protection of consumers, prevention of cartels and security of supply.

July 7, 2010 | Permalink | Comments (0) | TrackBack (0)

Tacit Collusion in an Infinitely Repeated Prisoners’ Dilemma

Posted by D. Daniel Sokol

Joseph E. Harrington, Jr. (Johns Hopkins - Econ) and Wei Zhao (Johns Hopkins - Econ)  have an interesting new paper on Tacit Collusion in an Infinitely Repeated Prisoners’ Dilemma.

ABSTRACT: In the context of an infinitely repeated Prisoners’ Dilemma, we explore how cooperation is initiated when players communicate and coordinate through their actions. There are two types of players - patient and impatient - which are private information. An impatient type is incapable of cooperative play, while if both players are patient types - and this is common knowledge - then they can cooperate with a grim trigger strategy. We find that the longer that players have gone without cooperating, the lower is the probability that they’ll cooperate in the next period. While the probability of cooperation emerging is always positive, there is a positive probability that cooperation never occurs.

July 7, 2010 | Permalink | Comments (0) | TrackBack (0)

Europe Targets Google on Competition Abuses

Posted by D. Daniel Sokol

It looks like Google may be the latest US based tech company to get the intimate treatment from Brussels competition enforcers.  The Wall Street Journal covers this development here.

July 7, 2010 | Permalink | Comments (0) | TrackBack (0)

We Are Number 30

Posted by D. Daniel Sokol

According to this ranking, we are the 30th most trafficked law professor blog.

July 7, 2010 | Permalink | Comments (0) | TrackBack (0)

Pricing Policy and Partial Collusion

Posted by D. Daniel Sokol

Stefano Colombo (DISCE, Università Cattolica) addresses Pricing Policy and Partial Collusion.

ABSTRACT: We study the pricing policy equilibria emerging in a partial collusion duopolistic framework where firms in the first stage of the game choose non-cooperatively whether to price discriminate or not, and from the second stage onward collude on prices.When the discount factor is particularly high or particularly low both firms price discriminate in equilibrium. For intermediate discount factors and high firms'asymmetry, the unique equilibrium is characterized by only the smaller firm choosing price discrimination.In the case of intermediate discount factors and low firms' asymmetry, there are two possible equilibria: both firms price discriminate or no firm price discriminates.

July 7, 2010 | Permalink | Comments (0) | TrackBack (0)


Posted by D. Daniel Sokol

A review of developments in private litigation in the UK, Europe and the US
12 October 2010, The King's Fund, London W1

GCR's 2010 Antitrust Litigation conference brings together leading competition and litigation experts from the UK, other EU member states and the US who will provide practical guidance for potential claimants and defendants.

CHAIRMAN AND SPEAKERS from the European Commission, the judiciary, law firms and industry include:

* John Pheasant, Partner, Hogan Lovells LLP
* Mr Justice Barling, President, Competition Appeals Tribunal
* Nicholas Green QC, Brick Court Chambers, Chairman, The Bar Council
* Mark Hoskins QC, Brick Court Chambers
* Elizabeth Morony, Partner, Clifford Chance LLP
* Nicholas Heaton, Partner, Hogan Lovells LLP
* Ingo Brinker, Partner, Gleiss Lutz
* Georg Berrisch, Partner, Covington & Burling LLP
* Jon Lawrence, Partner, Freshfields Bruckhaus Deringer LLP
* Alan Wiseman, Partner, Howrey LLP
* Christopher Vajda QC, Monckton Chambers
* Eddy de Smijter, Private Enforcement Unit, DG Competition, European Commission
* Gunnar Niels, Director, Oxera
* Bruno Augustin, Assistant Director, Ernst Young
* Richard Pike, Partner, Baker & McKenzie LLP
* Michael O'Kane, Partner, Peters and Peters
* Mark Simpson QC, Fountain Court

"The quality of the speakers is excellent and a good audience"
Past delegate, DLA Piper UK LLP


* Jurisdiction and Forum Shopping: Germany vs the UK
* Settlements: Relevant issues when settling international claims
* Access to Commission File
* Quantifying damages: Towards guidance to the Courts - The Oxera Report
* Damages: A case study
* Dealing with the individual - criminal sanctions, implications for civil litigation
* The Competition Appeal Tribunal - is it a suitable forum for international damages claims?

"High powered: Excellent"
Past delegate, Barclays

A conference programme will be available shortly. If you would like to receive a copy please e-mail


Save £100 by registering before 15 August 2010 with our early bird rates -

* Standard early bird rate: £550 (+ 17.5% VAT = £646.25)
* In-house lawyers and government agencies early bird rate: £450 (+17.5% VAT = £528.75)

Gain 6.5 CPD hours by attending this conference


July 7, 2010 | Permalink | Comments (0) | TrackBack (0)

A Dangerous Call to Create Crisis Cartels: Notes to Supreme Court Judgment of January 20, 2010

Posted by D. Daniel Sokol

Francisco Marcos, Instituto de Empresa Business School discusses A Dangerous Call to Create Crisis Cartels: Notes to Supreme Court Judgment of January 20, 2010.

ABSTRACT: Situations of economic crisis do not justify an exemption to the prohibition of anticompetitive agreements. There is neither a special rule for the agricultural sector that would provide a broad antitrust exemption aside from the common agricultural policy (CAP). The primacy of CAP goals does not mean that the agricultural sector is exempted from the application of competition rules. Only the European Commission and common market organizations’ regulations may, in justified cases, establish limitations to free competition rules. The Supreme Court Judgment of 20 January 2010 makes a mistaken reading of EU case law and introduces a dangerous precedent regarding anticompetitive actions by agricultural producers. The judicial creation of a specific antitrust exemption for the storage of olive oil by producers (to raise its sale prices) violates competition law.

July 7, 2010 | Permalink | Comments (0) | TrackBack (0)