Antitrust & Competition Policy Blog

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

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Friday, September 17, 2010

Competition Law in a Global Context Lecture: Competition Law and Policy in Latin America

Posted by D. Daniel Sokol

You are invited to a Centre for Law and Economics (Competition, Regulation and Public Policy Section), Competition Law in a Global Context Lecture:  

Competition Law and Policy in Latin America
On Thursday 23 September from 5 ­ 7pm
Moot Court, UCL Faculty of Laws

Speakers:
* Chair: Ioannis Lianos (UCL)
* Paulo Montt (University of Santiago, Partner: Ferrada Nehme)
* Javier Tapia (University College London, OFGEM)
* Julian Pena (University of Buenos Aires, Partner: Allende & Brea)
* Juan David Gutierrez (Universidad Javeriana (Bogotá, Colombia))
* Pablo Marquez (Universidad Javeriana (Bogotá, Colombia))

About this event:
This event will be divided in two parts.

The first part will provide a critical assessment of the enforcement of competition law in some key jurisdictions in Spanish-speaking Latin America focusing on cartel enforcement (in particular leniency policy), abuse of dominance, the intersection of competition law and regulation, merger control, private enforcement (including private actions for antitrust damages).

The second part will discuss horizontal approaches, including convergence and harmonisation of competition laws across Latin America, the influence of European and US models of Competition law (substance and enforcement) and the development of specific Latin American models.

The event will also discuss the following issues:
* The scope of competition law in Latin America: has it expanded? What are the areas that are still exempted from the application of competition law (the ones that tend to be different than in the EU or the US)?
* How are competition law principles integrated in all areas of public action?
* What would competition advocacy achieve in these jurisdictions?
* Is the judicial and regulatory system (institutions) adequate for a sophisticated and economically oriented competition law?
* What is the degree of discretion that is recognized to competition authorities? How due process is preserved? In particular for foreign firms. Suggestions for reforms.
* How does the level of economic development and broader culture affect the application of competition law?


Schedule
Registration from 4.30pm
Seminar: 5pm
Drinks reception: 7pm

Please sign up online at: http://latin-america.eventbrite.com/

About the Competition Law in a Global Context Speaker Series
Convened by Dr. Ioannis Lianos (UCL), the Competition Law in a Global Context Speaker Series aim to critically examine the evolution of competition law enforcement in several parts of the world. More than 100 jurisdictions have now developed competition law statutes and many actively enforce it. The series will delve into important issues of practical and theoretical importance for practitioners, academics and graduate students interested in the enforcement of competition law in foreign jurisdictions.

Previous talks in the series included US Antitrust Law under an Obama Administration: One year on. A forthcoming talk is Cartels and Corporate Compliance.

The series forms part of UCL's increasing engagement with the study of comparative competition law and global competition law enforcement. The Centre for Law and Economics (Public Policy Section) at UCL has signed a research partnership agreement with the United Nations Conference on Trade and Development (UNCTAD) and members of UCL faculty participate actively to the work of the International Competition Network (ICN).

September 17, 2010 | Permalink | Comments (0) | TrackBack (0)

Resale Price Maintenance: Consignment Agreements, Copyrighted or Patented Products and the First Sale Doctrine

Posted by D. Daniel Sokol

Herb Hovenkamp (Iowa Law) has posted Resale Price Maintenance: Consignment Agreements, Copyrighted or Patented Products and the First Sale Doctrine.

ABSTRACT: The rule of reason adopted for resale price maintenance in the Supreme Court’s Leegin decision, which upset the century old Dr. Miles rule of per se illegality, requires some reconsideration of a number of issues about antitrust treatment of RPM. Under the old per se rule, bona fide “consignment” agreements were not covered by Section 1 of the Sherman Act at all because there was said to be no qualifying “agreement” between the supplier and the dealer. Rather the dealer was simply said to be acting as an agent of the seller. However, insofar as RPM produces competitive dangers, such as those occasioned by powerful dealers, these harms do not seem to depend on whether the transfer from the supplier to the dealer was a sale or a consignment.

Secondly, while Leegin took RPM in one direction, applying a rule of reason to conduct that had previously been unlawful per se, the Supreme Court’s Quanta Computer decision went in the other direction, restoring an invariant rule prohibiting resale price maintenance requirements from being enforced by means of patent infringement suits.

September 17, 2010 | Permalink | Comments (1) | TrackBack (0)

Consumer Loss Aversion and the Intensity of Competition

Posted by D. Daniel Sokol

Heiko Karle (Université Libre de Bruxelles) and Martin Peitz (University of Mannheim) address Consumer Loss Aversion and the Intensity of Competition.

ABSTRACT: Consider a differentiated product market in which all consumers are fully informed about match value and price at the time they make their purchasing decision. Initially, consumers become informed about the prices of all products in the market but do not know the match values. Some consumers have reference-dependent utilities—i.e., they form a reference-point distribution with respect to match value and price that will make them realize gains or losses if their eventually chosen product performs better or, respectively, worse than their reference point in both dimensions. Loss aversion in the match-value dimension leads to a less competitive outcome, while loss aversion in the price dimension leads to a more competitive equilibrium than a market in which consumers are not subject to reference dependence. Depending on the weights consumers attach to the price and the match-value dimension, a market with loss-averse cons! umers may be more or less competitive than a market with consumers that do not have reference-dependent utilities. We also show that consumer loss aversion tends to lead to higher prices if the market accommodates a larger number of firms.

September 17, 2010 | Permalink | Comments (0) | TrackBack (0)

Google is Bad - Just Ask Rick Rule (and Microsoft)

Posted by D. Daniel Sokol

Rick Rule of Cadwalader has an op-ed against Google in today's Wall Street Journal. He states:

Again like Microsoft, Google claims its antitrust problems are the result of a cabal of disgruntled competitors. And it is true that Microsoft's rivals such as Mr. Schmidt's Sun and Novell provided much of the evidence, and at least some of the impetus, against Microsoft. But in monopolization cases, which are about exclusion of rivals from the marketplace, it is almost always the excluded victims who blow the whistle on monopolists.

Unlike Microsoft, however, Google so far has offered little more than cursory justifications for its actions. Microsoft at least believed what it was doing reflected its innovation, which, though perhaps rough on rivals, benefited consumers.

September 17, 2010 | Permalink | Comments (0) | TrackBack (0)

Private Competition Litigation in Canada

Posted by D. Daniel Sokol

Davit Akman, Adam Fanaki, & Mark Katz (Davies Ward) discuss Private Competition Litigation in Canada.

ABSTRACT: Private competition litigation, particularly class action litigation, is an area of growing importance in Canada. In recent years, private actions have played an increasingly prominent role in the enforcement of competition law in Canada. The Canadian regime incorporates many elements of U.S. private antitrust litigation, while preserving a number of Canadian aspects intended to guard against abuses of the system, such as awarding compensatory damages only and not treble damages. The Canadian system may provide some useful lessons for those jurisdictions contemplating a move towards increased private litigation.

This note is intended to provide a brief overview of private competition litigation in Canada, as well as to highlight recent and potentially significant statutory and jurisprudential developments which could further increase the importance of private competition litigation in this country.

September 17, 2010 | Permalink | Comments (0) | TrackBack (0)

Thursday, September 16, 2010

Price regulation in oligopoly

Posted by D. Daniel Sokol

Luis C. Corchón - Economics, Universidad Carlos III, Madrid and Félix Marcos - Economics, Universidad Complutense de Madrid describe Price regulation in oligopoly.

ABSTRACT: In this paper we consider price regulation in oligopolistic markets when firms are quantity setters. We consider a market for a homogeneous good with a special form of the demand function (Ï-linearity), constant returns to scale and identical firms. Marginal costs can take two values only: low or high. The regulator knows all parameters except marginal costs. Assuming that the regulator is risk neutral, we characterize the optimal policy and show how this policy depends on the basic parameter of demand and costs

September 16, 2010 | Permalink | Comments (0) | TrackBack (0)

The Impact of Mergers on the Degree of Competition In the Banking Industry

Posted by D. Daniel Sokol

Vittoria Cerasi, Milano-Bicocca University - Department of Statistics, Barbara Chizzolini, Bocconi University, and
Marc Ivaldi, University of Toulouse 1 - Industrial Economic Institute (IDEI), Centre for Economic Policy Research (CEPR) examine The Impact of Mergers on the Degree of Competition In the Banking Industry.

ABSTRACT: This paper analyses the relation between competition and concentration in the banking sector. The empirical answer is given by testing a monopolistic competition model of bank branching behaviour on individual bank data at county level (départements and provinces) in France and Italy. We propose a measure of the degree of competiveness in each local market that is function also of market structure indicators. We then use the econometric model to evaluate the impact of horizontal mergers among incumbent banks on competition and discuss when, depending on the pre-merger structure of the market and geographic distribution of branches, the merger is anti-competitive. The paper has implications for competition policy as it suggests an applied tool to evaluate the potential anti-competitive impact of mergers.

September 16, 2010 | Permalink | Comments (0) | TrackBack (0)

Efficiency and Market Power in Spanish Banking

Posted by D. Daniel Sokol

Rolf Färe, Oregon State University - Department of Economics, Shawna Grosskopf, Oregon State University - Department of Economics, Joaquín Maudos, University of Valencia - Faculty of Economics, and Emili Tortosa-Ausina, Jaume I University - Department of Economics discuss Efficiency and Market Power in Spanish Banking.

ABSTRACT: Some recent studies have been investigating the existence of market power in the European banking system, in general, and the Spanish banking industry, in particular. Although results are mixed, the evidence suggests some commercial banks and savings banks benefit from monopoly rents. Some other studies [Berger and Hannan, Review of Economics and Statistics LXXX (1998) 454-465] have also found strong evidence that banks in more concentrated markets exhibit lower cost efficiency levels. Our study merges these two groups of findings by exploring how cost efficiency measures for Spanish banks are related to market power using more flexible techniques, which are more consistent with those employed to measure efficiency in the first stage of the analysis. Results show that the relationship varies according to the level of market power, the component of efficiency evaluated (cost, technical or allocative) and the type of banking firm (commercial bank or savings bank), suggesting that the "quiet life" might be a reality only for some banks.

September 16, 2010 | Permalink | Comments (0) | TrackBack (0)

OFT and CC publish joint merger guidelines

Posted by D. Daniel Sokol

The UK's OFT and CC have published joint merger guidelines.

September 16, 2010 | Permalink | Comments (0) | TrackBack (0)

Top Ten Points to Know When Resolving Global Antitrust Cases in Canada

Posted by D. Daniel Sokol

Graham Reynolds, Q.C. (Osler, Hoskin & Harcourt) provides the Top Ten Points to Know When Resolving Global Antitrust Cases in Canada.

ABSTRACT: As one of the leading international antitrust regulators, Canada's Competition Bureau ("Bureau") undertakes many multinational investigations, most commonly in coordination with other regulators. Where parties under investigation are seeking to resolve their global antitrust liability, Canada's Competition Bureau is often one of the jurisdictions they will approach.  Processes in Canada are similar to, but have important distinctions from, case resolution practices in other jurisdictions. This brief article seeks to highlight some of the more important features of which lawyers should be aware when seeking a Canadian resolution.

September 16, 2010 | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 15, 2010

When Do Generics Challenge Drug Patents?

Posted by D. Daniel Sokol

C. Scott Hemphill, Columbia University - Law School and Bhaven N. Sampat, Columbia University - Mailman School of Public Health ask When Do Generics Challenge Drug Patents?

ABSTRACT:

The Hatch-Waxman Act regulates competition between brand-name and generic drugs in the United States. We examine a feature of the Act that has generated significant controversy, yet received little systematic attention. “Paragraph IV” challenges are a mechanism for generic drug makers to challenge the patents of brand-name drug makers as a means to secure early market entry.

We begin with a set of descriptive results about brand-name patent portfolios and Paragraph IV challenges. Over time, patenting has increased, measured by the number of patents per drug and the length of the nominal patent term. During the same period, the fraction of drugs receiving challenges has increased. Drugs are also challenged sooner, relative to brand-name approval.

Our econometric analyses of challenges over the past decade show that brand-name sales have a positive effect upon the likelihood of generic challenge, consistent with the view that patents that later prove to be valuable receive greater ex post scrutiny. The likelihood of challenge also varies by patent type and timing of expiration. Conditional on sales and other drug characteristics, drugs with weaker patents, particularly those that expire later than a drug’s basic compound patent, face a significantly higher likelihood of challenge. Though the welfare implications of Hatch-Waxman patent challenge provisions are complex, our results suggest these challenges serve a useful purpose by promoting scrutiny of low quality and late-expiring patents.

 

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

Consumers’ participation rights in competition law procedures

Posted by D. Daniel Sokol

 
Published 17 December 2009
Friday, 8 October 2010

Please note that the workshop, originally planned on Friday, 16 April, 2010, has been postponed to 8 October 2010.


This workshop will analyze the administrative procedures in EC competition law as they were designed back in 1962 and how they were changed as a result of landmark cases from the European courts during the 1990s. The core aspect of the workshop is to scrutinize the procedural model of tripartite distinction between undertakings, the holders of a "legitimate interest" and holders of a "sufficient interest".

In particular, in the light of recent legislative reforms (Regulation 1/2003 and the modernization package) and case law developments (Österreichische Postparkasse and VKI), the workshop will inquire whether adversarial inter partes procedures are an appropriate model to serve the substantive interests that competition law rules are intended to pursue.

The workshop will further scrutinize whether and how this procedural model aligns with the present patchwork of various enforcement methods of EC competition law. For example, how consumers' participation rights relate with leniency applications, commitments and in particular, with private enforcement as an alternative avenue of redress.

The workshop is organized with support of the Amsterdam Centre for Law and Economics and the Foundation Europa Instituut.

Speakers & Chair

  • Chair (to be confirmed): Prof. Deirdre Curtin, ACELG, University of Amsterdam 
  • Prof. Gareth Davies, Vrije Universiteit, Amsterdam
  • Prof. Lorenzo Pace, University of Molise, Italy
  • Mr. Michael Albers, Hearing Officer, European Commission
  • Mr. David M. Ortega Peciña, BEUC - The European Consumer's Organisation & OCU - Organizacion de Consumidores y Usarios
  • Mr. Onno Brouwer, Freshfields Bruckhaus Deringer, Amsterdam
  • Dr. Joana Mendes, Amsterdam Centre for European Law and Governance
  • Dr. Kati Cseres, Amsterdam Centre for European Law and Governance & Amsterdam Centre for Law and Economics

Programme


Download here the programme.

Date and Venue


Friday, 8 October 2010
University of Amsterdam, Belle van Zuylen-Zaal

Contact and Registration


Participation in the conference is free of charge. For organizational reasons, we ask you to register, using the Conference Registration Form below.

For more information, or any questions you might have, please send an email to [email protected]

Location

Singel 425
1012 WP  Amsterdam
Room: Belle van Zuylen-Zaal

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

Canada Enacts Significant Changes to its Foreign Investment Laws

Posted by D. Daniel Sokol

Catherine A. Pawluch, Kevin Wright, & Jonathan Gilhen (Davis LLP) describes how Canada Enacts Significant Changes to its Foreign Investment Laws.

ABSTRACT: A foreigner considering an investment in Canada might understandably be overwhelmed (and potentially deterred) by the complex regulatory framework governing the potential investment. In addition to the myriad of sector-specific restrictions on foreign ownership, such investments may also be subject to review under the Competition Act to ensure competition is not "lessened or prevented substantially" and a general review under the Investment Canada Act ("ICA") to ensure the investment is of "net benefit" to Canada.

In July 2007, the Government of Canada established the Competition Policy Review Panel ("Panel") to study and make recommendations on improving Canada's competitiveness in an increasingly global marketplace. In its final report titled Compete to Win, released on June 26, 2008, the Panel made a significant number of recommendations including amending the ICA and other legislation and changing how such legislation is administered. Among the Panel's recommendations were proposed amendments to the ICA to narrow its scope generally and the introduction of an explicit screening mechanism for investments raising national security concerns.

This article provides a brief overview of amendments to the ICA designed to implement the Panel's recommendations, and highlights some other recent developments in Canadian foreign investment law.

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

US News World Report Law Firm Rankings Are Out - Who Wins in Antitrust?

Posted by D. Daniel Sokol

The new US News and World Report Law Firm Rankings are out.  Personally, I am not impressed.  There is not a good sense of why a firm gets ranked the way it does.  Moreover, there is a lack of details about particular partners and recent deals or cases.  I am also surprised a bit (and in some cases surprised a lot) by what firms made the cut as "best" and what firms did not.  In other words, when in doubt, stick with the far superior Chambers rankings.

Nevertheless, below are all of the firms ranked in Tier 1 for National antitrust practice:

Gibson Dunn, K&L Gates, Mayer Brown, McDermott Will & Emery, Sidley Austin, Skadden, Arps, Slate, Meagher & Flom, Arnold & Porter, Boies, Schiller & Flexner, Cleary Gottlieb Steen & Hamilton, Covington & Burling, Davis Polk & Wardwell, Dewey & LeBoeuf, Howrey, Jones Day, Kenny Nachwalter, Kirkland & Ellis, O'Melveny & Myers, Simpson Thacher & Bartlett, Sullivan & Cromwell , Weil, Gotshal & Manges, WilmerHale

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

A Director who presides over financial ruin of a company is not exactly who I would want on my corporate board, and yet many boards seem invite former AIG, Lehman other failed company board members - I am selling stock

Posted by D. Daniel Sokol

Check out this story in the NY Times how directors with a record of failure seem to keep getting appointed to new firms.  For competitors to these firms, this is the best news possible that a former AIG or Lehman director is now on the board to provide poor decision-making and oversight.

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

Regulating Google: Searching for a Solution Without a Problem

Posted by D. Daniel Sokol

David Balto has a piece on the Huffington Post about Regulating Google: Searching for a Solution Without a Problem.

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

Does Competition Matter? An Attempt of Analytical 'Unbundling' of Competition from Consumer Welfare

Posted by D. Daniel Sokol

Oles Andriychuk, University of East Anglia - Centre for Competition Policy asks Does Competition Matter? An Attempt of Analytical 'Unbundling' of Competition from Consumer Welfare.

ABSTRACT: This paper is an attempt to evaluate the conceptual relationship between two central elements of the theory of antitrust: competition and consumer welfare. These two notions are analysed in their mutual dependency. The main purpose of this paper is to show that both competition and consumer welfare are economic values of fundamental importance with no ex ante hierarchical dominance of consumer welfare over competition. In case of conflict, priority might be given to either of these values depending on the context of the assessment. As can be understood from the very etymology of the term, competition is a notion which encompasses a process, more than a result. The notion of consumer welfare, on the other hand, is result-oriented. If we are interested in the outcomes that can be generated by competition only, then the very process of rivalry between undertakings would be seen as unnecessary or, at least, not indispensable. If, however, we consider that competition (seen as a process) is important for the societal paradigm of economic development, then the outcomes generated by this process are not the only reason for the rivalry between undertakings to exist. Methodologically, the latter approach appears to be more consistent with the idea of liberal democracy.

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

Tuesday, September 14, 2010

DOJ Antirust Economics Analysis Group Seminar Series - Fall 2010 Speaker Schedule

Posted by D. Daniel Sokol

The Economic Analysis Group presents a seminar series to advance recent economic analyses in the fields of industrial organization, antitrust, and applied microeconomics. Schedules are organized in the spring and fall.

Location:   Seminars take place in the Liberty Square Building at 450 Fifth Street NW. The closest Metro stop is Gallery Place/Chinatown.
Time:   Seminars take place 2:00 to 3:30 p.m. on Tuesdays unless otherwise noted.
Attendance:   Seminars are free and open to the public, but prior arrangements must be made in order to pass through building security.
Contact:   For more information or to arrange attendance, contact Patrick Greenlee at 202-307-3745 or send e-mail to [email protected].


Date
Speaker
Topic
September 21 Peter Davis
UK Comp. Comm
"Guidance from Simulation: The Merger Evaulation Process"

September 28

Chis Adams
FTC
"Estimating Demand with Competing Auctions"
October 6
Wednesday
Nanyun Zhang
Towson
“Welfare Implications of the Effects of Patent Pooling on Product Development and Commercialization” (with Thomas Jeitschko)
October 12 Josh Wright
GMU
“State Regulation of Alcohol Distribution: The Effects of Post & Hold Laws on Consumption and Social Harms” (with Jim Cooper)
October 20
Wednesday
Federico Ciliberto
Virginia
Does Multimarket Contact Facilitate Tacit Collusion? Inference on Conjectural Parameters in the Airline Industry” (with Jon Williams)
October 26
Emek Basker
Missouri (& Census)
"Supersize It: The Growth of Chains and the Rise of the 'Big Box' Retail Format" (with Shawn Klimek and Pham Hoang Van)
November 2 Andrew Cohen
Fed
"Rating Shopping in the CMBS Market"
November 9 Alex Raskovich
EAG
"Cumulative Innovation and Competition Policy" (with Nate Miller)
November 16 Peter Cramton
Maryland
"Spectrum Auction Design"
November 30 Lisa George
Hunter
"The New Hour: Measuring the Value of Local Television News"
December 7 Eric Emch
EAG
"What is the Full Impact of Entry? Measuring Incumbent Price Responses to Actual and Potential LCC Entry in Airline Markets"

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

The Economics of Parallel Trade – Iconoclast Views on a Dogma of EU Competition Law

Posted by D. Daniel Sokol

Nicolas Petit, University of Liege explores The Economics of Parallel Trade – Iconoclast Views on a Dogma of EU Competition Law.

ABSTRACT: This paper attempts to demonstrate that whilst parallel trade (also referred to as “grey market trade” in the United States, or as “arbitrage” in economic theory) in the European Union is subject to a remarkably favourable legal regime, the economic case supporting this position remains to be made. To this end, it shows that the position of the EU Courts, and more generally the EU institutions is far from unquestionable in light of the relevant economic literature.

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

Soft Law and the Private Enforcement of the EU Competition Rules

Posted by D. Daniel Sokol

Albert Sánchez Graells, Pontifical University Comillas of Madrid explains Soft Law and the Private Enforcement of the EU Competition Rules.

ABSTRACT: The use of soft law instruments is pervasive in the field of EU competition policy. This poses significant legal challenges derived from the progressive ‘hardening’ of these regulatory tools by the European Courts as a result of the application of the general principles of EU law. The preponderance of soft law instruments might even have expanded after the modernisation and decentralisation of the enforcement of EU competition rules, giving rise to yet more complicated legal puzzles. One of them is the impact that soft law can have on undertakings as a result of its enforcement (or lack of) by national courts of the Member States in the framework of private actions. This paper stresses that soft law instruments have asymmetrical legal effects when they are enforced by the Commission and by national courts. Hence, they create a significant risk for the consistency in the interpretation and enforcement of EU competition law that seems to claim for a revision of current rules before further promoting private actions.


 

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