Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, November 27, 2010

Transaction et concurrence Quels enseignements des premières décisions communautaires ? Points de vue européen et français

Posted by D. Daniel Sokol

La revue Concurrences,

en partenariat avec les

 Petits-déjeuners Sorbonne Affaires,

vous invitent à assister à un petit-déjeuner débat:


Transaction et concurrence
Quels enseignements des
premières décisions communautaires ?
Points de vue européen et français

Avec

Kris Dekeyser

Chef d'Unité, Direction Cartels

DG COMP, Commission européenne

 

Et

 

Virginie Beaumeunier

Rapporteure générale de l'Autorité de la concurrence

Animé par

Christophe Lemaire

Maître de conférences à l'Ecole de droit de la Sorbonne,

Avocat à la Cour et membre du Comité de rédaction de la revue Concurrences

Mardi 30 novembre 2010

8h30 - 10h30

Université Paris I Panthéon Sorbonne

12 place du Panthéon, Salle 1

 Paris, 75 005

RER Luxembourg

Métro Maubert/Mutualité

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

Leniency Programmes and Protection of Confidentiality: The Experience of the European Commission

Posted by D. Daniel Sokol

Antonio Caruso (DG Comp) describes Leniency Programmes and Protection of Confidentiality: The Experience of the European Commission.

ABSTRACT: The principle of confidentiality of leniency submissions is a key point of the EU Leniency Programme. Largely drawn from the functioning of the US programme, the EU Leniency Programme gradually strengthened the protection of the confidentiality of leniency submissions, in order not to put at a disadvantage leniency applicants compared to non-applicants. Protection is nevertheless not absolute and varies depending on the entities that interact with the Commission, such as parties to the proceedings, third parties, foreign, EU Member States' judges or other authorities. The legal framework is complex: leniency submissions are covered by the notion of ‘professional secrecy’ (Art. 339 of TFEU) and considered in principle confidential, for the purposes of Regulation 1049/2001 and the publication of decisions. Their disclosure is subject to very specific conditions before judges/national authorities. Whereas EU Courts will be prompted in forthcoming key cases to scrutinize the status of confidentiality of leniency submissions under Regulation 1049/2001 and other regimes, Commission policy remains aimed at protecting the confidential status of corporate statements in all circumstances, whereas enabling disclosure of pre-existing documents only subject to certain conditions.

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

Current Issues in Competition and Consumer Protection Enforcement in the Retail Sector

Posted by D. Daniel Sokol

This is the shopping season.  It therefore makes sense to highlight Tom Rosch's (FTC) recent speech on Current Issues in Competition and Consumer Protection Enforcement in the Retail Sector

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

Friday, November 26, 2010

Transaction et concurrence Quels enseignements des premières décisions communautaires ? Points de vue européen et français

Posted by D. Daniel Sokol

La revue Concurrences,

en partenariat avec les

 Petits-déjeuners Sorbonne Affaires,

vous invitent à assister à un petit-déjeuner débat:


Transaction et concurrence
Quels enseignements des
premières décisions communautaires ?
Points de vue européen et français

 

Avec

 

 

 

 

 

 

 

Kris Dekeyser

 

Chef d'Unité, Direction Cartels

DG COMP, Commission européenne

 

Et

 

 

 

 

 

 

Virginie Beaumeunier

 

Rapporteure générale de l'Autorité de la concurrence


 

Animé par

 

Christophe Lemaire

 

 

 

 

 

Maître de conférences à l'Ecole de droit de la Sorbonne,

 

Avocat à la Cour et membre du Comité de rédaction de la revue Concurrences

 

 

Mardi 30 novembre 2010

8h30 - 10h30

Université Paris I Panthéon Sorbonne

12 place du Panthéon, Salle 1

 Paris, 75 005

RER Luxembourg

Métro Maubert/Mutualité

November 26, 2010 | Permalink | Comments (0) | TrackBack (0)

Using Rival Effects to Identify Synergies and Improve Merger Typologies

Posted by D. Daniel Sokol

Tomaso Duso, Humboldt University of Berlin - School of Business and Economics, Wissenschaftszentrum Berlin für Sozialforschung (WZB) - Competitiveness and Industrial Change and Joseph A. Clougherty, University of Illinois at Urbana-Champaign, Centre for Economic Policy Research (CEPR) describe Using Rival Effects to Identify Synergies and Improve Merger Typologies.

ABSTRACT: The strategic management literature has found it difficult to differentiate between collusive and efficiency-based synergies in horizontal merger activity. We propose a schematic to classify mergers that yields more information on merger types and merger effects, and that can, moreover, distinguish between mergers characterized largely by collusion-based synergies and mergers characterized largely by effi-ciency-based synergies. Crucial to the proposed measurement procedure is that it encompasses the impact of merger events not only on merging firms – as is custom – but also on non-merging competitor firms (the rivals). Employing the event-study methodology with stock-market data on samples of large horizontal mergers drawn from the US and UK (an Anglo-Saxon sub-sample) and from the European continent, we demonstrate how the proposed schematic can better clarify the nature of merger activity.

November 26, 2010 | Permalink | Comments (0) | TrackBack (0)

Optimal Contract Reformation as a New Approach to Private Antitrust Damages in Cartel Cases

Posted by D. Daniel Sokol

Alessio Aresu, College of Europe, Bruges, Latham & Watkins - Law describes Optimal Contract Reformation as a New Approach to Private Antitrust Damages in Cartel Cases.

ABSTRACT: This article proposes an incentive-based method to facilitate private antitrust enforcement in the European Union. Focusing exclusively on cartels, the article first explains why antitrust enforcement benefits from being both public and private. It goes on to suggest that through an improved co-ordination of leniency and fining policies, sufficient deterrence can be achieved through public enforcement alone, without the need to add further deterrence with private actions. As a consequence, private enforcement could be re-focused solely on compensation and thus avoid the complications implied in the pursuit of deterrence. Furthermore, an incentive-based bargaining scheme, namely an optimal contract reformation model based on contract law, is proposed, which would facilitate the judge’s task in establishing damages and seeks to encourage parties to settle. The scheme attempts to address the inherent lack of access to evidence experienced by claimants in private antitrust litigation. If the scheme can have a positive impact for follow-on actions, stand-alone actions may still need to rely on instruments such as court disclosure orders. Finally, the article attempts to establish a theoretical background for the proposed optimal reformation model on the basis of contract law.

November 26, 2010 | Permalink | Comments (0) | TrackBack (0)

Thursday, November 25, 2010

Games Judges Don't Play: Predatory Pricing and Strategic Reasoning in US Antitrust

Posted by D. Daniel Sokol

Nicola Giocoli, University of Pisa - Department of Economics explores Games Judges Don't Play: Predatory Pricing and Strategic Reasoning in US Antitrust.

ABSTRACT: The paper analyzes the last three decades of debates on predatory pricing in US antitrust law, starting from the literature which followed Areeda & Turner 1975 and ending with the early years of the new century, after the Brooke decision. Special emphasis is given to the game-theoretic approach to predation and to the reasons why this approach has never gained attention in courtrooms. It is argued that, despite their mathematical rigor, the sophisticated stories told by strategic models in order to demonstrate the actual viability of predatory behavior fail to satisfy the criteria which guide the decisions of antitrust courts, in particular their preference for easy-to-apply rules. Therefore predation cases are still governed by a peculiar alliance between Chicago-style price theory - which, contrary to game theory, considers predatory behavior almost always irrational - and a Harvard-style attention for the operational side of antitrust enforcement.

November 25, 2010 | Permalink | Comments (0) | TrackBack (0)

The Future of U.S. Antitrust: Do Landmark Changes Portend A Turbulent Future?

Posted by D. Daniel Sokol

The Future of U.S. Antitrust:
Do Landmark Changes Portend A Turbulent Future?


A non-CLE teleconference
proudly presented by the

ABA SIL International Antitrust Law Committee

November 30, 2010
12:00 p.m. – 1:30 p.m. EST

Register Today

U.S. antitrust law is experiencing a moment of historical change. Through the newly released Merger Guidelines, proposed changes to the HSR rules, and the rebirth of Section 5, the U.S. Agencies have brought a decidedly more activist enforcement agenda to Washington. Across town, the Supreme Court's recent opinions in Twombly, Iqbal, Leegin, Linkline, and American Needle demonstrate a similar intent to reshape antitrust litigation for the next generation. Developments in Congress and the lower federal and state courts have also greatly impacted U.S. practice.

This teleconference will seek to synthesize these recent changes to predict what lies ahead for practictioners and parties in the years to come. Join us for what promises to be a lively discussion of trends on issues such as the future of merger control, the use of economics at the Agencies and the federal courts, discovery, class certification, and indirect purchaser standing.

Speakers:

Samuel Miller
Sidley Austin LLP

Ethan Litwin
Hughes Hubbard & Reed LLP

John Johnson
Edgeworth Economics

Register Today

November 25, 2010 | Permalink | Comments (0) | TrackBack (0)

EU Cartel Law and the Shaking Foundations of Judicial Review

Posted by D. Daniel Sokol

Damien Gerard, Louvain University - Law explains EU Cartel Law and the Shaking Foundations of Judicial Review.

ABSTRACT: Over the years, the Court of Justice has played an important role in framing the development of antitrust enforcement in the European Union. The vast majority of those cases which have set the boundaries of the exercise of the European Commission’s powers in the field of competition policy have involved direct actions brought by participants in horizontal agreements and hard core cartels. With the increasing number of competition-related cases brought before the General Court (“GC”) at first instance and then appealed to the European Court of Justice (“ECJ”), the foundations of judicial review seemed to have reached a point of equilibrium around the turn of the century. A few recent cases, however, appear to have shaken that fragile equilibrium. This short note aims to account for and criticize that recent case law, which jeopardizes the essence of legal certainty and due process. To that end, Section I summarizes the foundations of the EU judicial review system, as they have emerged in the Court of Justice’s case law in the field of cartels, while Section II deals specifically with the recent cases and the questions they raise.

November 25, 2010 | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 24, 2010

Is a Margin Squeeze an Antitrust or Regulatory Violation?

Posted by D. Daniel Sokol

Alberto Heimler (Scuola Superiore della Pubblica Amministrazione) asks Is a Margin Squeeze an Antitrust or Regulatory Violation?

ABSTRACT:Margin squeezes can be evaluated under a predation or a refusal-to-deal standard. Both Carlton and Sidak argue in favor of using the predation standard. However, should the conditions for an abusive refusal to deal be satisfied, then margin squeezes should be prohibited even when prices are not predatory. It is sufficient that they are exclusionary. According to the U.S. Supreme Court decision in linkLine, when a vertically integrated company is not subject to an obligation to supply, there cannot be a margin-squeeze case. However, the Court does not establish how to define a margin squeeze when there is an antitrust duty to supply. In those circumstances, the EC approach in the Deutsche Telekom case helps to identify a standard. In any event, remedies in margin-squeeze cases should make sure that incentives to eliminate double-marginalization are maintained.

November 24, 2010 | Permalink | Comments (0) | TrackBack (0)

The Use of Surveys in Merger and Competition Analysis

Posted by D. Daniel Sokol

Steven Hurley (CAT) describes The Use of Surveys in Merger and Competition Analysis.

ABSTRACT:Data generated from surveys have long been used to gather information from a large population efficiently. Used properly by competition authorities and professional advisors, surveys can assist in measuring how consumers value product attributes and make purchasing decisions, which can be invaluable information in assessing whether a particular transaction or conduct is ultimately likely to result in harm to consumer welfare. However, a robust survey takes time, effort, and substantial resources to construct and carry out. There are a significant number of potential pitfalls that, if not carefully considered and managed, can render results wholly unreliable. Nevertheless, by taking appropriate care and applying best practices, surveys and the data they generate are valuable additional empirical tools that can assist competition authorities and advisors in assessing how markets work.

November 24, 2010 | Permalink | Comments (0) | TrackBack (0)

On Price Taking Behavior in a Nonrenewable Resource Cartel-Fringe Game

Posted by D. Daniel Sokol

Hassan Benchekroun Department of Economics, CIREQ. McGill University and Cees Withagen Department of Spatial Economics, VU University Amsterdam provide thoughts On Price Taking Behavior in a Nonrenewable Resource Cartel-Fringe Game.

ABSTRACT: We consider a nonrenewable resource game with one cartel and a set of fringe members. We show that (i) the outcomes of the closed-loop and the open-loop nonrenewable resource game with the fringe members as price takers (the cartel-fringe game à la Salant 1976) coincide and (ii) when the number of fringe firms becomes arbitrarily large, the equilibrium outcome of the closed-loop Nash game does not coincide with the equilibrium outcome of the closed-loop cartel-fringe game. Thus, the outcome of the cartel-fringe open-loop equilibrium can be supported as an outcome of a subgame perfect equilibrium. However the interpretation of the cartel-fringe model, where from the outset the fringe is assumed to be price-taker, as a limit case of an asymmetric oligopoly with the agents playing Nash-Cournot, does not extend to the case where firms can use closed-loop strategies.

November 24, 2010 | Permalink | Comments (0) | TrackBack (0)

Supreme Court Verdict in CCI v SAIL: Setting the Ground Rules for the Commission and the Appellate Tribunal

Posted by D. Daniel Sokol

Parthsarathi Jha (Trilegal) describes Supreme Court Verdict in CCI v SAIL: Setting the Ground Rules for the Commission and the Appellate Tribunal.

ABSTRACT: In a recent telling judgment, the Supreme Court of India effectively and judiciously delineated the scope and manner of exercise of powers by the Competition Appellate Tribunal (hereinafter "the Tribunal") and the Competition Commission of India under the new Competition Act of 2002. The Supreme Court was hearing an appeal filed by the Competition Commission against the Tribunal order dated February 15, 2000. The dispute, being the first before the Supreme Court in relation to the Competition Act, has generated lot of curiosity and euphemism among lawyers, academia, and students. Even though the dispute did not involve interpreting any substantive concepts of competition law, the judgment will have significant bearing on the functioning of the Competition Commission of India and the Tribunal in times to come.

In this paper, I describe the judgment's importance for those readers having a special interest in competition law developments in India. Part II of the paper briefly sets out the background against which the Competition Act was enacted and enforced. Part III summarizes the main provisions of the Competition Act. Part IV briefly captures the facts of the dispute and order of the Tribunal. Part V paper deals with the issues framed by the Supreme Court and its findings. Finally, in Part VI, I draw conclusions.

November 24, 2010 | Permalink | Comments (0) | TrackBack (0)

Banking sector competition in Russia

Posted by D. Daniel Sokol

Diego Anzoategui, María Soledad Martínez Pería and Martin Melecky (all World Bank)discuss Banking sector competition in Russia.

ABSTRACT: The Russian banking sector includes approximately 1,000 banks, but is it competitive? This paper analyzes bank competition in Russia during 2002-2008. The authors examine indicators of concentration and contestability, and compute non-structural measures of competition. They compare competition in Russia to that in Brazil, China, and India, and contrast competition across different groups of banks within Russia. Contestability in Russia is obstructed by uneven supervisory practices and an unclear exit process. Non-structural measures reveal that banks in Russia are less competitive than those in Brazil. Within Russia, large banks and state-owned banks exert more market power than the smaller and privately-owned institutions. Finally, business-oriented banks are more competitive than those concentrating on lending to individuals.

November 24, 2010 | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 23, 2010

Economics of Open Source: A Dynamic Approach

Posted by D. Daniel Sokol

Jeongmeen Suh (KIEP) and Murat Yilmaz (Bogaziçi University) describe the Economics of Open Source: A Dynamic Approach.

ABSTRACT: This paper analyzes open innovation projects and their e¤ects on incentives for innova- tion. We model basic features of the General Public License (GPL), one of the most popular open source licenses and study how firms behave under this license. Under the GPL, there is a trade-off between stimulating innovation and promoting disclosure. By using the open source, a firm can increase its technology level and therefore its probability of innovation success and of achieving a greater profit in that period. However, any innovative findings using open source would be also open source in subsequent periods. This obligation decreases the expected future revenue of the firm. We analyze this trade-off and show that if a firm has the same technology level as the open source, it does not use the source. On the other hand, if a firm has a lower level of production technology than the open source, it is optimal to use the source.

November 23, 2010 | Permalink | Comments (0) | TrackBack (0)

Land Use Regulation as a Barrier to Entry: Evidence from the Texas Lodging Industry

Posted by D. Daniel Sokol

Junichi Suzuki has posted Land Use Regulation as a Barrier to Entry: Evidence from the Texas Lodging Industry.

ABSTRACT: This paper examines the anticompetitive effects of land use regulation using microdata on mid-scale chain hotels in Texas. I construct a dynamic entry-exit model that endogenizes hotel chains\' reactions to land use regulation. Estimation results indicate that imposing stringent regulation increases costs considerably. Hotel chains nonetheless enter highly regulated markets even if entry probabilities are lower, anticipating fewer rivals and hence greater market power. Consumers incur the costs of regulation indirectly in the form of high prices.

November 23, 2010 | Permalink | Comments (0) | TrackBack (0)

Targeting in Advertising Markets: Implications for Offline vs. Online Media

Posted by D. Daniel Sokol

Dirk Bergemann (Yale - Econ) and Alessandro Bonatti (MIT Sloan School) address Targeting in Advertising Markets: Implications for Offline vs. Online Media.

ABSTRACT:We develop a model with many advertisers (products) and many advertising markets (media). Each advertiser sells to a different segment of consumers, and each medium has a different ability to target advertising messages. We characterize the competitive equilibrium in the media markets and evaluate the implications of targeting in advertising markets. An increase in the targeting ability leads to an increase in the total number of purchases (matches), and hence in the social value of advertising. Yet, an improved targeting ability also increases the concentration of firms advertising in each market. Surprisingly, we then find that the equilibrium price of advertisements is first increasing, then decreasing in the targeting ability. We trace out the implications of targeting for competing media. We distinguish o­ ine and online media by their targeting ability: low versus high. As consumers’ relative exposure to online media increases, the revenues of o­fline media decrease, even though the price of advertising might increase.

November 23, 2010 | Permalink | Comments (0) | TrackBack (0)

Optimal Leniency Programs in Antitrust

Posted by D. Daniel Sokol

Andrea Pinna (Queen Mary, University of London and CRENoS) discusses Optimal Leniency Programs in Antitrust.

ABSTRACT: This paper analyses the incentive structure underlying the adoption of leniency programs in antitrust enforcement. The enforcement of competition law is treated as the delegation of the economic activity from the government to private firms. The model contributes to the debate over desirability of granting leniency to more than one cartelists. For this purpose, I introduce a probability of conviction that depends on authority-specific characteristics. This results in the optimal number of leniencies being specific to national authorities and market structures. The model confirms a result widely acknowledged in the antitrust literature - a program that merely reduces sanctions to the first reporter is ineffective.

November 23, 2010 | Permalink | Comments (0) | TrackBack (0)

Monday, November 22, 2010

CRA Annual Conference: Economic developments in European competition policy Wednesday 8 December 2010

Posted by D. Daniel Sokol

CRA Annual Conference Economic developments in European competition policy
Wednesday 8 December 2010
Conrad Hotel, Brussels

Download Full_Programme_-_CRA_Annual_Brussels_Conference_-_8_December_2010[1]


Confirmed speakers

Alexander Italianer, Director General, DG Competition
Prof Carl Shapiro, Deputy Assistant Attorney General, DOJ
Prof Joseph Farrell, Director of Bureau of Economics, FTC
Prof Damien Neven, Chief Economist, DG Competition
Amelia Fletcher, Chief Economist / Head of Mergers, OFT
Prof Steven Salop, Georgetown University
Prof Kai-Uwe Kühn, University of Michigan
John Fingleton, CEO, UK OFT
Alison Oldale, Chief Economist, UK Competition Commission
Prof John Van Reenen, Centre for Economic Performance, LSE
Andreas Mundt, President, Bundeskartellamt
Thibaud Vergé, Chief Economist, Autorité de la concurrence
Prof Maarten-Pieter Schinkel, University of Amsterdam
Christian Ewald, Chief Economist, Bundeskartellamt
Matthew Bennett, Director of Economics, OFT
Miguel de la Mano, Deputy Chief Economist, DG Competition
Prof Patrick Rey, IDEI, Toulouse
Prof Luís Cabral, IESE and NYU

November 22, 2010 | Permalink | Comments (0) | TrackBack (0)

Price Increasing Competition? Experimental Evidence

Posted by D. Daniel Sokol

Cary Deck (Department of Economics, University of Arkansas) and Jingping Gu (Department of Economics, University of Arkansas) provide interesting findings on Price Increasing Competition? Experimental Evidence.

ABSTRACT: Economic intuition suggests that increased competition generates lower prices. However, recent theoretical work by Chen and Riordan (2008) shows that a monopolist may set a lower price in the absence of a competitor selling a differentiated product. The direction of the predicted price change is dependent upon the joint distribution of buyer values for the two products. We explore this relationship using controlled laboratory experiments. Our results indicate that the distribution of buyer values does affect prices in a manner consistent with the theoretical predictions, although price increasing competition is rare due in part to overly intense competition regardless of the distribution of buyer values.

November 22, 2010 | Permalink | Comments (0) | TrackBack (0)