Antitrust & Competition Policy Blog

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

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Tuesday, September 28, 2010

Is Jon Leibowitz Making the Grade? A Year at the FTC

Posted by D. Daniel Sokol

Jon Leibowitz (FTC) has posted his speech from ther Georgetwon Fourth Annual Global Antitrust Enforcement Symposium on Making the Grade? A Year at the FTC.

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

Regulation of Pharmaceutical Prices: Evidence from a Reference Price Reform in Denmark

Posted by D. Daniel Sokol

Ulrich Kaiser (University of Zurich), Susan J. Mendez (University of Zurich), and Thomas Rønde (Copenhagen Business School) address Regulation of Pharmaceutical Prices: Evidence from a Reference Price Reform in Denmark.

ABSTRACT: On April 1, 2005, Denmark changed the way references prices, a main determinant of reimbursements for pharmaceutical purchases, are calculated. The previous reference prices, which were based on average EU prices, were substituted to minimum domestic prices. Novel to the literature, we estimate the joint effects of this reform on prices and quantities. Prices decreased more than 26 percent due to the reform, which reduced patient and government expenditures by 3.0 percent and 5.6 percent, respectively, and producer revenues by 5.0 percent. The prices of expensive products decreased more than their cheaper counterparts, resulting in large differences in patient benefits from the reform.

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

Monday, September 27, 2010

Resale Price Maintenance by Japanese Newspapers

Posted by D. Daniel Sokol

David Flath (Osaka University) addresses Resale Price Maintenance by Japanese Newspapers.

ABSTRACT: In Japan, newspapers enjoy a special exemption from antimonopoly prohibitionsagainst resale price maintenance (suppliers’ stipulations that bar downstreamfirms from price discounting), but are each required to set uniform pricesthroughout Japan. In fact, the newspapers have rarely changed their subscriptionprices in recent years, and the three leading national dailies, together accountingfor about half the total industry circulation, and thirteen other papers accountingfor another one eighth of industry circulation, all have set exactly the same price(3,925 yen per month). The remaining local papers all set lower prices. The authorized resale price maintenance, and prohibition against prices thatvarygeographically, have allowed collusive price increases that I here estimate to bearound 500 yen per month, entailing economic waste of about 300 billion yen($3 billion) per year but adding only around 16 billion yen per year to newspaperprofit. The increased profit margin on subscriptions is much offset by reducedsale of ads.

September 27, 2010 | Permalink | Comments (0) | TrackBack (0)

The Economics of Number Portability: Switching Costs and Two-Part Tariffs

Posted by D. Daniel Sokol

Reiko Aoki and John Small  explain The Economics of Number Portability: Switching Costs and Two-Part Tariffs.

ABSTRACT: This paper interprets number portability as a reduction of switching costs in a model of competition between telephone companies. We identify several cases by their cost and demand characteristics and show that social benefit of number portability are not guaranteed. Analysis using two-part tariff highlights the effect of how the technological cost of switching cost reduction effects the final market allocation.

September 27, 2010 | Permalink | Comments (0) | TrackBack (0)

Every Viewer has a Price - On the Differentiation of TV Channels

Posted by D. Daniel Sokol

Jonas Häckner (Dept. of Economics, Stockholm University) and Sten Nyberg (Dept. of Economics, Stockholm University) explain Every Viewer has a Price - On the Differentiation of TV Channels.

ABSTRACT: This study has three main objectives. First, we develop a realistic framework for studying the incentives to differentiate broadcasting in free-to-air TV markets. Consumers are allowed to vary the amount of time spent in front of the television set depending on preferences over program types (e.g., entertainment versus news), differences in the alternative cost of time and an Hotelling type dimension reflecting i.e., political positioning. Second, since empirical evidence suggest that different consumer segments are priced differently in the market for advertising, we analyze the implications of targeted advertising on the equilibrium level of differentiation. Third, we compare the equilibrium outcome with the socially optimal configuration. When consumers have no preferences over program types, standard Hotelling type results apply. Market forces minimize differentiation while the optimal degree is at an intermediate le! vel. As preferences over program types get stronger the difference between optimal and market outcomes is initially reduced. However, when a large enough number of consumers start flipping between channels in order to avoid the least preferred program type, minimal differentiation suddenly becomes optimal while market forces leads to excessive differentiation. Hence, policies aimed at increasing diversity is beneficial only when viewers care little about program content.

September 27, 2010 | Permalink | Comments (0) | TrackBack (0)

Settlement Agreements and Patent Abuse in the Pharmaceutical Sector: An EU/US Comparison - 2010 Conference

Posted by D. Daniel Sokol

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The pharmaceutical sector continues to be one of the main focus areas for competition authorities throughout the world. This conference provides an update on the major developments affecting the sector including the General Court's recent judgment in the AstraZeneca case - the first judgment on dominance and abusive practices in the pharmaceutical sector.

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Speakers from the European Commission, law firms, economic consultancies and industry include:

Chairman: Stephen Kon, Partner, SJ Berwin LLP

  • Dominik Schnichels
    Head of Pharma Task Force, DG Competition, European Commission
  • Mike Walker
    Vice President, Charles River Associates
  • Marleen van Kerckhove
    Partner, Arnold & Porter LLP
  • Asim Varma
    Partner, Arnold & Porter LLP
  • James S. Venit
    Partner, Skadden Arps Slate Meagher & Flom LLP
  • David Rosenberg
    Vice President, Corporate IP Policy, GlaxoSmithKline
  • Cameron Firth
    Partner, SJ Berwin LLP
  • Gavin Robert
    Partner, Linklaters LLP
  • Jeffrey Schmidt
    Partner, Linklaters LLP
  • Mélanie Thill-Tayara
    Partner, Norton Rose
  • Jordi Faus
    Partner, Faus & Moliner Abogados
  • Thomas Wessely
    Partner, Freshfields Bruckhaus Deringer LLP

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Delegates will receive practical analysis and advice on:

  • AstraZeneca and the Commission's pharma policy
  • Market definition and dominance in the pharma sector following AstraZeneca - what does it mean for your company?
  • Unilateral conduct - when does it risk infringing antitrust rules? A view from the EU and the US
  • EU and US approach to settlement agreements
  • Roundtable: a follow up on the EU inquiry at national level

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Forthcoming GCR Conferences:

  • International Merger Control
    Major international conference to mark the 20th anniversary of the EU Merger Regulation
    28 & 29 September 2010, The Radisson Blu Royal Hotel, Brussels
  • 2010 Antitrust Litigation
    12 October 2010, The King's Fund, London
  • GCR's 2010 Competition Law Review
    In-depth analysis and debate on recent developments in competition law and policy 16 & 17 November 2010, The Conrad Hotel, Brussels
  • 2011 Antitrust Law Leaders Forum
    3 - 5 February 2011, Fontainebleau Hotel, Miami

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September 27, 2010 | Permalink | Comments (0) | TrackBack (0)

Do the Gators Rule Florida?

Posted by D. Daniel Sokol

So asks one of my daughters this morning.  My wife and I both looked at each other rather puzzled since neither of us particularly care for college football.  It seems as if the football indoctrination starts early here.

September 27, 2010 | Permalink | Comments (0) | TrackBack (0)

The Impact of the Draft EC Horizontal Guidelines on Intellectual Property Rights and Innovation

Posted by D. Daniel Sokol

Richard Taffet (Bingham) discusses The Impact of the Draft EC Horizontal Guidelines on Intellectual Property Rights and Innovation.

The European Commission's Draft Guidelines on the Application of Article 101 of the Treaty on the Functioning of the European Union to Horizontal Co-Operation Agreements (the "Draft Guidelines") have attracted a multitude of comments from many interested parties. This has been particularly the case in relation to Chapter 7 of the Draft Guidelines that addresses "standardization agreements"-i.e., agreements that arise in connection with the development of technical standards that incorporate technology subject to intellectual property rights ("IPRs"). The reason for such a reaction to Chapter 7 may be because the Draft Guidelines seek to address the complex and often controversial issues that exist under competition and intellectual property laws, especially when patented technology is included in technical standards.

This paper will ask whether, in doing so, the Draft Guidelines seek to define problems and propose solutions in a manner that may be interpreted as reflecting a bias against the legitimate and pro-competitive exercise of intellectual property rights. It concludes that, as currently drafted, the Draft Guidelines may, in fact do so, and by so doing may cause the contrary result than intended. Rather than providing certainty for IPR-related conduct in the standards context so that effective standardization may proceed most efficiently, they may undermine the pro-competitive use of IPR in standards and thereby diminish technical innovation through the standards process. 

September 27, 2010 | Permalink | Comments (0) | TrackBack (0)