Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Friday, September 10, 2010

Canada's Draft Service Standards for Merger Review: Plus Ça Change, Plus C'est La Même Chose?

Posted by D. Daniel Sokol

Sandra Walker (Fraser Milner Casgrain) asks Canada's Draft Service Standards for Merger Review: Plus Ça Change, Plus C'est La Même Chose?

ABSTRACT: Canada's merger review process has always suffered from schizophrenia. Unlike in the EU and United States, the timeline for the substantive merger review process has never been aligned with the statutory waiting periods. Absent an injunction, once the statutory waiting periods have expired, the parties are free to close a transaction. However, the expiry of the waiting period has never offered the merging parties any comfort that their proposed transaction would not be challenged under the Competition Act post-closing. The parties could only obtain such comfort by obtaining positive clearance from the Competition Bureau ("Bureau"), either in the form of an advance ruling certificate ("ARC") or a no-action letter advising that it does not have substantive competition concerns and therefore does not intend to challenge the deal. This state of affairs has left merging parties wondering whether to close in Canada when legally entitled to or whether to await the Bureau's positive clearance.

All this was expected to change when Canada's Parliament amended the Competition Act in March 2009 to establish a two-stage merger review. These amendments appeared to align Canada's regime with that of the U.S. Hart-Scott Rodino Act ("HSR Act") process. The new regime came into effect in March 2009, introducing a 30 day initial waiting period with the possibility of a supplementary information request ("SIR") that would trigger a second waiting period expiring 30 days after compliance with the SIR. It was anticipated that this process would streamline the review process and that the expiry of the initial 30 day waiting period for the vast majority of transactions would signal that the Bureau did not intend to challenge the deal except in highly unusual circumstances.

Has the new Canadian merger review regime lived up to its potential? Not according to the Bureau's draft Fee and Services Standards Handbook for Merger-Related Matters ("draft Handbook") which was released for comment in May 2010. As described in detail below, while the draft Handbook reduces the existing service standard periods (a welcome change) and provides additional clarity on how it categorizes mergers, it continues the misalignment or de-linking of the substantive merger review periods and the statutory waiting periods-plus ça change, plus c'est la meme chose. This results in what the Canadian Bar Association has called a "complex mosaic of timing and information requirements...which increases uncertainty for the business community in merger review."

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

Services of General Economic Interest and Competition under European Law—A Delicate Balance

Posted by D. Daniel Sokol

Luc Gyselen (Arnold & Porter) writes on Services of General Economic Interest and Competition under European Law—A Delicate Balance.

ABSTRACT: Competition is often described as a mechanism allowing consumers to access better products or services at lower prices. That result would be obtained through the rivalry process compelling firms to improve their offers in a hope of being selected, rather than rejected, by consumers. In this contribution, the author examines to what extent that presentation applies to firms providing services considered of to be of a general interest.

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

University of Tennessee Behavior and Business Law Conference

Posted by D. Daniel Sokol

Conference Schedule

Behavior and Business Law Conference Schedule

Workshop 1: Behavior in the Context of Corporate and Securities Law

Paper Presenter: Donald Langevoort, Georgetown University Law Center; Discussants: Joan Heminway, The University of Tennessee College of Law; Eric Sundstrom, The University of Tennessee College of Arts and Sciences (Psychology)

Workshop 2: Alternative Dispute Resolution and Economics

Paper Presenter: Barbara Black, University of Cincinnati College of Law; Discussants: Gregory Jones, Georgia State University College of Law; Rudy Santore, The University of Tennessee College of Business Administration (Economics)

Lunch

Instapundit blogger Glenn Reynolds, The University of Tennessee College of Law

Workshop 3: Consumer Credit Protection and Behavioral Economics

Paper Presenter: Edward Janger, Brooklyn Law School; Discussants: Thomas Plank, The University of Tennessee College of Law; William Fox, The University of Tennessee Center for Business and Economic Research

Workshop 4: Happiness in Business or Law

Paper Presenter: Peter Huang, Temple University School of Law; Discussants: Sheena Iyengar, Columbia University Graduate School of Business; William Neilson, The University of Tennessee College of Business Administration (Economics)

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

Improving EU Competition Law Procedures by Applying Principles of Good Administration: The Role of the Ombudsman

Posted by D. Daniel Sokol

P. Nikiforos Diamandouros (European Ombudsman) discusses Improving EU Competition Law Procedures by Applying Principles of Good Administration: The Role of the Ombudsman.

ABSTRACT: The European Commission plays a key role in the application of EU competition law. Various mechanisms exist for reviewing the exercise of these powers. They include the European Ombudsman. While the mandate of the Ombudsman goes far beyond competition law—he deals with allegations of ‘maladministration’ in all areas where EU institutions and bodies operate—his role has interesting applications in the competition law field, as demonstrated by his recent Intel decision.

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

Thursday, September 9, 2010

Spectrum Auction Tragedies: the case of the Mexico spectrum auction for AWS services

Posted by D. Daniel Sokol

Ramiro Tovar Landa (Instituto Tecnológico Autónomo de México) has written on Spectrum Auction Tragedies: the case of the Mexico spectrum auction for AWS services.

ABSTRACT: Last July 19th the Mexican Federal Government concluded the auction of the 1.9/2.1 GHz band blocks for Advance Wireless Services (AWS). The auction design and the spectrum cap impose by the Federal Competition Commission led to the participation of only one bidder with a price at the minimum posted by the government for one of the two national coverage blocks put to auction. The remained nation block was not assigned because no bidders qualified and a third block identical to the national blocks was divided in 27 regional blocks but the auction final value was 28 times the minimum posted price for the national block. The social cost and the implicit subsidy generated by the auction result obey to an industrial policy in telecommunication oriented to pick winners and modify the market structure from the regulators goals instead of the market evolution.

Download Spectrum Auction Tragedies

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

Leniency Programs in the Presence of Judicial Errors

Posted by D. Daniel Sokol

Nahom Ghebrihiwet and Evgenia Motchenkova, VU University Amsterdam - Department of Economics, TILEC
discuss Leniency Programs in the Presence of Judicial Errors.

ABSTRACT: We analyze the effects of antitrust and leniency programs in a repeated oligopoly model outlined in Motta and Polo (2003). We extend their framework by including the possibility of Type I judicial errors and pre-trial settlements. Through comparison of our results to the earlier results we come to a number of novel conclusions. Firstly, antitrust enforcement in the presence of judicial errors is less effective and ex-ante deterrence is weaker than was predicted by Motta and Polo (2003). Secondly, adverse effects of leniency programs are underestimated by the traditional approach, which does not take Type I judicial errors into account.

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

Shana Tova to the Antitrust Community

Posted by D. Daniel Sokol

Today is the first day of the Jewish New Year, Rosh Hashana.  I want to wish members of the antitrust community around the world a sweet new year full of great joy, success and spiritual fulfillment.

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

Bundling Among Rivals: A Case of Pharmaceutical Cocktails

Posted by D. Daniel Sokol

Claudio Lucarelli (Cornell University), Sean Nicholson (Cornell University) and Minjae Song (University of Rochester) have a paper on Bundling Among Rivals: A Case of Pharmaceutical Cocktails.

ABSTRACT: We empirically analyze the welfare effects of cross-firm bundling in the pharmaceutical industry. Physicians often treat patients with "cocktail" regimens that combine two or more drugs. Firms cannot price discriminate because each drug is produced by a different firm and a physician creates the bundle in her office from the component drugs. We show that a less competitive equilibrium arises with cocktail products because firms can internalize partially the externality their pricing decisions impose on competitors. The incremental profits from creating a bundle are sometimes as large as the incremental profits from a merger of the same two firms.

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

Revising the Horizontal Merger Guidelines: Lessons from the E.U. and the U.S.

Posted by D. Daniel Sokol

Richard J. Gilbert, University of California, Berkeley - Department of Economics and Daniel L. Rubinfeld, University of California at Berkeley - School of Law, NYU Law School discuss Revising the Horizontal Merger Guidelines: Lessons from the E.U. and the U.S.

ABSTRACT: Recently, the U.S. Department of Justice and Federal Trade Commission have embarked on an effort to revise and update the U.S. Horizontal Merger Guidelines. here is substantial overlap between the U.S. and E.U. Guidelines, which makes a proposal for U.S. revisions immediately applicable to the E.U. and elsewhere. The U.S. Merger Guidelines can be revised in light of the learning of economists and lawyers in the past two decades to emphasize the importance of competitive effects analysis in merger evaluation and the forces that drive innovation. The Guidelines should also note that once a competitive effects analysis has been completed, it is possible to “back out” a relevant market (or markets) that is consistent with that competitive effects analysis.

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

Wednesday, September 8, 2010

A Dynamic Analysis of Resale Price Maintenance: Inefficient Brand Promotion, Higher Margins, Distorted Choices, and Retarded Retailer Innovation

Posted by D. Daniel Sokol

Warren S. Grimes, Southwestern Law School addresses A Dynamic Analysis of Resale Price Maintenance: Inefficient Brand Promotion, Higher Margins, Distorted Choices, and Retarded Retailer Innovation.

ABSTRACT: This article responds to Professor Benjamin Klein’s recently published article that describes a comprehensive procompetitive rationale for RPM — resolving the incentive incompatibility between the brand manufacturer and the retailers that sell that brand. Retailers commonly have insufficient incentive to carry and promote products that, if effective distribution were available, would be highly profitable to the manufacturer. The Klein article uses a manufacturer profit/output standard to argue that RPM resolves this incompatibility in a procompetitive manner. I accept Klein’s premise that RPM is a way of encouraging retailers to carry and promote the manufacturer’s brand, but challenge his measure of procompetitive effect as inconsistent with the Sherman Act’s focus on competition, not profitability for individual market participants. I further develop salient features of RPM that undercut the Klein thesis, including the inefficiency of RPM as a brand promotion tool, the inflated manufacturer margins commonly associated with RPM, and the stifling effect of RPM on innovative and efficient retailing. An analysis of six contemporary RPM cases illustrates these anticompetitive effects and provides robust support for a strong presumption that RPM is a violation of the Sherman Act.


 

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

U.S. Supreme Court Rejects Price Squeeze Claim: A High Point for Divergence between US and European Law?

Posted by D. Daniel Sokol

Warren S. Grimes, Southwestern Law School asks U.S. Supreme Court Rejects Price Squeeze Claim: A High Point for Divergence between US and European Law?

ABSTRACT: The US Supreme Court’s decision in Pacific Bell Telephone Co. v. LinkLine Communications rejected price squeeze claims brought under Section 2 of the Sherman Act. In support of this holding, the majority cited concerns with maintaining a monopolist’s freedom of action necessary to promote competition and innovation. The Court majority also stressed the difficulties of administering a price squeeze test. The author challenges the Court’s reasoning on each of these points. The monopolist’s duty to deal in this case was unchallenged, as was the exclusionary effects of it’s behavior. The Court’s rejection of the price squeeze claim came at the expense of the underlying consumer welfare goals of the Sherman Act. The Court also turned aside an opportunity to adopt a workable price transfer test for assessing price squeezes by a dominant, vertically integrated firm, the same test that the European Commission applied in the Deutsche Telecom case. The LinkLine Court’s decision is consistent with a line of ideological decisions that are often poorly anchored to the facts of the case being decided.


 

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

Excessive Pricing, Entry, Assessment, and Investment: Lessons from the Mittal Litigation

Posted by D. Daniel Sokol

David Gilo, Tel Aviv University - Buchmann Faculty of Law and Ariel Ezrachi, University of Oxford - Faculty of Law discuss Excessive Pricing, Entry, Assessment, and Investment: Lessons from the Mittal Litigation.

ABSTRACT: The role of antitrust in curtailing excessive prices has long been a contentious area. Consequently, the charging of excessive prices has been subjected to diverse levels of enforcement across the world. U.S. antitrust law, for example, does not encompass the charging of high prices as such, and was held not to “condemn the resultant of those very forces which it is its prime object to foster: finis opus coronat.” By contrast, competition laws in other jurisdictions provide for the condemnation of excessive or unfair pricing. Such is the case under EU competition law, the competition provisions in the European Member States, and in other jurisdictions across the world. But even among those competition regimes which do intervene against the charging of excessive prices as such, one may identify different levels of enthusiasm for doing so. In Europe, for example, recent years have witnessed a restrained approach by the European Commission but a more proactive approach by some of the competition authorities of the Member States. Varying levels of intervention reflect a controversy as to the merit of prohibiting excessive pricing. Three main grounds are often used to justify non- or limited intervention: (1) intervention is not necessary, as high prices would be competed away by new entry, attracted by the excessive price; (2) there are practical difficulties in speculating what a price would have been had there been competition and in determining the excessiveness of the prices actually charged; and (3) enforcement which targets excessive prices may chill innovation and investment. To illustrate the difficulties of assessment and to question some of the justifications that are used to rationalize non-intervention, this article reviews the recent litigation in South Africa related to alleged excessive pricing by Mittal Steel. We use the decisions of the South African Competition Tribunal and the South African Competition Appeal Court as a case study to highlight both the complexity of, and possible merit in, antitrust intervention against excessive pricing.

Our analysis focuses on the three grounds for non-intervention. First, with respect to the self-correcting nature of excessive prices, we illustrate how excessive prices, in and of themselves, do not attract new entry when potential entrants are either informed or uninformed about their post-entry profits. Referring to our previous work on this subject, we question the South African Competition Tribunal’s holding in the Mittal case with respect to the prerequisite conditions for intervention against excessive pricing. Second, we consider how the difficulties of assessing what is an excessive price affected the outcome in the Mittal litigation. Without underestimating these difficulties, we consider how they may be alleviated in certain cases through reasonable methods for inferring what may constitute an excessive price. Third, while acknowledging the possible validity of concerns about chilling ex ante investment, we outline instances in which these concerns should not serve to support nonintervention. It should be stressed that this article does not advocate across-the-board intervention. It does, however, question the validity of a categorical “hands-off” approach, which deems excessive prices to be outside the realm of competition law. We consider separately the weight that should be assigned to each ground for non-intervention. Subsequently, we argue in favor of a case-by-case approach which explores the factual matrix of each case and considers the benefits, costs, and net effects of intervention.


 

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

Enforcing European Competition Law - Harmonizing Private and Public Approaches in a More Differentiated Enforcement Model

Posted by D. Daniel Sokol

Jörg Philipp Terhechte, University of Hamburg explains Enforcing European Competition Law - Harmonizing Private and Public Approaches in a More Differentiated Enforcement Model.

ABSTRACT: This paper focuses on the relevance of the new hybrid enforcement structure in European competition law. The main question is how public and private enforcement can be combined and a solid model of the whole enforcement process can be constructed. In a first step, the traditional enforcement structure will be discussed (II.) with the changes which the new regulation No 1/2003 brought upon that system (III.). Afterwards, the potential role of private enforcement has to be illuminated (IV.) to identify possible conflicts between private and public enforcement (V.). In the light of this, the paper discusses first ideas for a "harmonized system" of enforcement which puts the aims of competition law in European context into its centre as well as the fundamental principles of the European Union like the rule of law and human rights.


 

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

Tuesday, September 7, 2010

Deposit Market Competition, Wholesale Funding, and Bank Risk

Posted by D. Daniel Sokol

Ben R. Craig (Federal Reserve Bank of Cleveland and Deutsche Bundesbank) and Valeriya Dinger (University of Bonn) address Deposit Market Competition, Wholesale Funding, and Bank Risk.

Abstract: In this paper we revisit the long debate on the risk effects of bank competition and propose a new approach to the empirical estimation of the relation between deposit market competition and bank risk. Our approach accounts for the opportunity of banks to shift to wholesale funding when deposit market competition is intense. The analysis is based on a unique comprehensive dataset which combines retail deposit rates data with data on bank characteristics and with data on local deposit market features for a sample of 589 U.S. banks. Our results support the notion of a risk-enhancing effect of deposit market competition.

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

Pricing Payment Cards

Posted by D. Daniel Sokol

Özlem Bedre-Defolie (ESMT European School of Management and Technology) and Emilio Calvano (Bocconi University) address Pricing Payment Cards.

ABSTRACT: Payment card networks, such as Visa, require merchants' banks to pay substantial "interchange" fees to cardholders' banks, on a per transaction basis. This paper shows that a network's profit-maximizing fee induces an inefficient price structure, over-subsidizing card usage and over-taxing merchants. In contrast to the literature we show that this distortion is systematic and arises from the fact that consumers make two distinct decisions (membership and usage) whereas merchants make only one (membership). These findings are robust to competition for cardholders and/or for merchants, network competition, and strategic card acceptance to attract consumers.

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

Competition, Efficiency, and Soundness in Banking: An Industrial Organization Perspective

Posted by D. Daniel Sokol

Klaus Schaeck (Bangor Business School) and Martin Cihák (IMF) explore Competition, Efficiency, and Soundness in Banking: An Industrial Organization Perspective.

ABSTRACT: How can competition enhance bank soundness? Does competition improve soundness via the efficiency channel? Do banks heterogeneously respond to competition? To answer these questions, we exploit an innovative measure of competition [Boone, J., A new way to measure competition, EconJnl, Vol. 118, pp. 1245-1261] that captures the reallocation of profits from inefficient banks to their efficient counterparts. Based on two complementary datasets for Europe and the U.S., we first establish that the new competition indicator captures a broad variety of other characteristics of competition in a consistent manner. Second, we verify that competition increases efficiency. Third, we present novel evidence that efficiency is the conduit through which competition contributes to bank soundness. In a final examination of banks’ heterogeneous responses to competition, we find that smaller banks’ soundness measures respond m! ore strongly to competition than larger banks’ soundness measures, and two-stage quantile regressions indicate that the soundness-enhancing effect of competition is larger in magnitude for sound banks than for fragile banks.

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

6th Seoul International Competition Forum

Posted by D. Daniel Sokol

The 6th Seoul International Competition Forum

 

Seoul, 15th September 2010

 

 

I.   Overview

 

The Seoul International Competition Forum (SICF), held biennially since 2002, aims to help advance Korea’s competition law and policy, establish the culture of competition and spread competition law worldwide. The forum was first conceived in 2001 when the Korea Fair Trade Commission invited officials of competition agencies and international organizations and experts in competition law and policy to celebrate the 20th anniversary of the Commission’s foundation and to seek a forward-looking direction of its competition policy.

 

To date, Seoul International Competition Forum has made a meaningful contribution to the development of competition law and policy through discussions on various competition issues joined by high ranking officials of many competition authorities and international organization such as the OECD, UNCTAD, competition law practicing lawyers, and prestigious academics.

 

This year, the 6th Seoul International Competition Forum will take place in the Lotte Hotel Seoul on 15th September, 2010. The Forum will be devoted to the discussions of competition issues in the area of (1) Digital Convergence and Competition Issues, (2) Horizontal Expansion of competition Law in Asia, (3) Sector Regulation and Competition Law Enforcement, and (4) For better Competition Authority. 

 

 

II.    Agenda(Draft)

 

·   14 September (Tue) 19:00-20:30   Welcome Reception

 

 

·   15 September (Wed)

 

Time

Programs

9:30-10:00

Opening Ceremony

10:00-12:00

(120min)

Session 1: Digital Convergence and Competition Issues

Digital Convergence driven by the rapid development of information and digital technology connects different products, companies, systems or industries. The intensifying trend toward digital convergence is now affecting the competition enforcement system. What we witness are complicated market definition, expanded network effect, various anticompetitive behaviors, especially regarding intellectual property rights, weighted importance on vertical and conglomerate mergers, etc.

Participants will review experts’ analysis on the impact of digital convergence on competition and share experience and discuss the ways for more effective competition law enforcement.

 

Keynote Speaker(each 20min)

Alexander Italianer (Director General, EC DG Comp)

  Albert A. Foer (President of American Antitrust Institute)

Discussant (each 15min)

Stanley Wong (Member, Competition Authority (Ireland))

Hiroyuki Odagiri (Director, CPRC of Japan Fair Trade Commission)

Alberto Heimler (Chair, OECD Competition Committee 2nd W/G)

Seonghoon Jeon (Professor, Sogang Univ, Non-standing Commissioner of FTC, Korea)

Moderator

Richard Brunell (Adjunct Professor of Boston College Law School, Senior Fellow of American Antitrust Institute)

12:00-14:00

Lunch

14:00-15:00

(60min)

Session 2: Horizontal Expansion of Competition Law in Asia

Given the rising influence of Asian countries in the world economy and politics, it would be worth to have in-depth discussion on current state and future plans of competition enforcement of large emerging economies such as China, India and Indonesia.

 

Speaker (each 15min)

 Qing Li (Deputy Director General, NDRC, China)

H. C. Gupta (Member of Competition Commission of India)

 Anna Maria Tri Anggraini (Vice Chairman, KPPU, Indonesia)

Moderator

Hassan Qaqaya (Head, Competition Law and Consumer Policies Branch, UNCTAD)

15:00-15:10

Coffee Break

15:10-16:50

(100min)

Session 3: Sector Regulation and Competition Law Enforcement

Sector regulation and competition policy have always maintained both tense and cooperative relations. Conflicts are inevitably induced when sector regulations cause anti-competitive effects or when regulatory authority tries to exempt the enforcement of competition law in its jurisdictions. Participants’ experiences on such cases will be shared and effective response to the situation will be discussed.

 

Keynote Speaker (15min)

William Kovacic (Commissioner, US Federal Trade Commission)

Allan Fels (Professor, School of Government, Australia)

Discussant (each 10min)

Li-Ming Chiang (Commissioner, FTC, Chinese Taipei)

Markus Lange (Director, German Federal Cartel Office)

Andrey Tsyganov (Deputy Head, Federal Antimonopoly Service, Russia)

King Wang Poon (Director, Competition Commission of Singapore)

Hackhyun Kim (Commissioner, KFTC, Korea)

Moderator

Alberto Heimler (Chair, OECD Competition Committee 2nd W/G)

16:50-17:00

Coffee Break

17:00-18:20

(80min)

Session 4: For better Competition Authority

Leading experts from major competition authorities will share experiences and propose ways on how to enhance effectiveness of competition enforcement. The Session also provides an opportunity to look back on the 30-year-history of the Korean Fair Trade Commission and suggest its future direction for a new leap forward.

 

Speaker(each 15min)

Bruno Lasserre (President, Authorité de la Concurrence, France)

Kazuhiko Takeshima (Chairman, Japan Fair Trade Commission)

William Kovacic (Commissioner, US Federal Trade Commission)

Dongwon Suh (Senior Advisor of Kim & Chang (Former Vice Chairman of KFTC), Korea)

Moderator

Hoil Yoon (Yoon & Yang LLP, Korea)

18:20-18:30

Closing Ceremony

18:30-

Gala Dinner

 

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

Distance Selling, Internet and Price Dynamics

Posted by D. Daniel Sokol

Philippe Askenazy, Paris School of Economics; Institute for the Study of Labor (IZA), Claire Celerier, Banque de France; University of Toulouse 1 - Toulouse School of Economics, and Delphine Irac, Banque de France discuss Distance Selling, Internet and Price Dynamics.

ABSTRACT: The share of retail sales made via distance selling has increased steadily, driven by Internet sales. Meanwhile, a large body of research has been devoted to measuring the impact of online shopping on consumer prices. These studies are based primarily on microeconomic data and they reveal contrasting effects due to diverging microeconomic behaviours. This paper aims to use a macro-sector estimation to show how the price-decreasing effects of Internet shopping outweigh the price-increasing effects. In that purpose, we use French price index series and distance selling sales covering about 30 sectors, from 1990 to 2007. We find that downward effects dominate: the recent development of distance selling, due to the development of online selling, results in lower prices. 

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

Monday, September 6, 2010

Antitrust Formalism is Dead! Long Live Antitrust Formalism!: Some Implications of American Needle v. NFL

Posted by D. Daniel Sokol

Judd E. Stone II (International Center for Law and Economics) and Joshua D. Wright (George Mason Law) have written on Antitrust Formalism is Dead! Long Live Antitrust Formalism!: Some Implications of American Needle v. NFL.

ABSTRACT: Antitrust observers and football fans alike awaited the Supreme Court’s decision in American Needle v. National Football League for months – inspiring over a dozen articles, and even one from the quarterback of the defending champion New Orleans Saints. Yet the implications of the Court’s decision, effectively narrowing the scope of the “intra-enterprise immunity” doctrine to firms with a complete “unity of interests,” are unclear. While some depict the decision as a schism from the last several decades of antitrust law, we explain why this interpretation is meritless and discuss the practical impact of the Court’s holding. The Court’s antitrust jurisprudence over the past several decades, including that of the Roberts Court and American Needle, has broadly embraced rules that are both relatively easy to administer as well as conscious of the error costs of deterring pro-competitive conduct. Intra-enterprise immunity potentially provided such a “filter” that enabled judges to dismiss a non-trivial subset of meritless claims prior to costly discovery. The doctrine, however, proved notoriously difficult to consistently apply in situations involving common organizational structures. Consistent with error-cost principles that have been the lodestar of the Court’s recent antitrust output, American Needle gave the Court an opportunity to effectively abandon intra-enterprise immunity in favor of the Twombly “plausibility” standard. Rather than marking a drastic change in antitrust jurisprudence, therefore, American Needle should be viewed as the Supreme Court substituting an unreliable screening mechanism in favor of a more cost-effective alternative.

September 6, 2010 | Permalink | Comments (0) | TrackBack (0)

The CREA Abuse of Dominance Case: Competition Bureau Challenges Organized Real Estate in Canada

Posted by D. Daniel Sokol

Steve Szentesi (Norton Stewart) explains The CREA Abuse of Dominance Case: Competition Bureau Challenges Organized Real Estate in Canada.

ABSTRACT:  On February 8, 2010, the Canadian Competition Bureau (the "Bureau") filed an abuse of dominance application against one of Canada's largest single industry trade associations-The Canadian Real Estate Association ("CREA").

According to the Bureau, CREA has used rules, under which it licenses its MLS® trade-mark and related marks to member real estate boards, to maintain control of the market for residential real estate brokerage services in Canada. In particular, the Bureau has taken the position that CREA's MLS® Rules inhibit or prevent non-traditional business models, including fee-for-service and flat-fee models, from effectively competing in the residential real estate services market.

September 6, 2010 | Permalink | Comments (0) | TrackBack (0)