Antitrust & Competition Policy Blog

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

Friday, December 3, 2010

China-The Baidu Decision

Posted by D. Daniel Sokol

Dr R. Ian McEwin (National Univ. of Singapore) & Dr. Corinne Chew (Rajah & Tann LLP) explain China-The Baidu Decision.

ABSTRACT: The Baidu case, one of the first abuse of dominance cases in China, is important in several respects. First, it was one of the first private competition law actions in China. Second, the judgment was read out in a real-time broadcast. Third, the legal reasoning was more detailed than in other competition law cases. Fourth, the Court stressed the importance of economic reasoning and evidence in deciding such cases. This paper analyzes both the facts of the case and its significance.

December 3, 2010 | Permalink | Comments (0) | TrackBack (0)

Antitrust Criminal Sanctions: Evolution of Executive Punishment

Posted by D. Daniel Sokol

Donald Klawiter (Sheppard Mullin) explores Antitrust Criminal Sanctions: Evolution of Executive Punishment.

ABSTRACT: Judge Douglas H. Ginsburg and Professor Joshua D. Wright's excellent study of antitrust sanctions for corporations and individuals concludes with a strong recommendation that individual penalties, specifically incarceration, will be the most appropriate and effective penalties for antitrust violations. This article will analyze the punishment of defendant executives as it has evolved during the era of international cartel enforcement (1995 to 2010) and will conclude that, although it was slow to get there, the current enforcement policy and practice focuses much more directly on the defendant executive that if ever has and is approaching the Ginsburg-Wright model as the major deterrence factor.  The article also argues that both the Antitrust Division and corporate compliance training must inform the corporate executives much more effectively of the harsh penalties executives will face if they violate the law.  Finally, the article reviews several activities that may cause defendant executives greater risk during an antitrust investigation and provides important advice to the executives, counsel, and board members to navigate around those serious risks.

December 3, 2010 | Permalink | Comments (0) | TrackBack (0)

Top 10 SSRN Downloads October 3, 2010 to December 2, 2010 for Antitrust

Posted by D. Daniel Sokol

TOP 10 Papers for SSRN Journal of Antitrust: Antitrust Law & Policy eJournal (for all papers announced in the last 60 days)
October 3, 2010 to December 2, 2010

Rank Downloads Paper Title
1 337 How the Lock-In Movement Went off the Tracks
Stan J. Liebowitz, Stephen E. Margolis,
University of Texas at Dallas - Department of Finance & Managerial Economics, North Carolina State University - Department of Economics,
Date posted to database: October 30, 2010
Last Revised: October 30, 2010
2 190 Apportioning Liability Behind a Veil of Ignorance
Shahar Dillbary,
University of Alabama School of Law,
Date posted to database: November 6, 2010
Last Revised: November 6, 2010
3 183 A Primer on Antitrust Damages
Herbert J. Hovenkamp,
University of Iowa - College of Law,
Date posted to database: October 2, 2010
Last Revised: October 2, 2010
4 164 Misbehavioral Economics: The Case Against Behavioral Antitrust
Joshua D. Wright, Judd E. Stone,
George Mason University - School of Law, Faculty, International Center for Law and Economics,
Date posted to database: October 3, 2010
Last Revised: October 3, 2010
5 155 Merger Policy and the 2010 Merger Guidelines
Herbert J. Hovenkamp,
University of Iowa - College of Law,
Date posted to database: October 17, 2010
Last Revised: December 2, 2010
6 139 Oddball Iqbal and Twombly and Employment Discrimination
Suja A. Thomas,
University of Illinois at Urbana-Champaign - College of Law,
Date posted to database: September 22, 2010
Last Revised: October 31, 2010
7 125 Judicial Review in European Union Competition Law: A Quantitative and Qualitative Assessment
Damien Geradin, Nicolas Petit,
Tilburg University - Tilburg Law and Economics Center (TILEC), University of Liege,
Date posted to database: October 28, 2010
Last Revised: October 28, 2010
8 124 EU Cartel Law and the Shaking Foundations of Judicial Review
Damien M.B. Gerard,
Louvain University - Chair of European Law,
Date posted to database: September 12, 2010
Last Revised: September 12, 2010
9 115 Antitrust, Governance, and Postseason College Football
Michael McCann,
Vermont Law School,
Date posted to database: November 19, 2010
Last Revised: November 19, 2010
10 111 Market Oversight Games
Maarten Pieter Schinkel,
University of Amsterdam - Amsterdam Center for Law & Economics (ACLE),
Date posted to database: October 15, 2010
Last Revised: October 15, 2010

December 3, 2010 | Permalink | Comments (1) | TrackBack (0)

Our Chanukah Candle Lighting Made the Local Newspaper - One Student Emailed "Your Kids Are Really Cute" - That Will Not Get Them a Higher Grade on the Exam

Posted by D. Daniel Sokol

At dinner for the first night of Chanukah were family friends and a certain photographer at the Gainesville Sun.  You can view the story and a picture of our candle lighting here.

December 3, 2010 | Permalink | Comments (1) | TrackBack (0)

Leniency Programs in Latin America: "New" Tools for Cartel Enforcement

Posted by D. Daniel Sokol

Elisa V. Mariscal & Carlos Mena-Labarthe (Federal Competition Commission of Mexico) discuss Leniency Programs in Latin America: "New" Tools for Cartel Enforcement.

ABSTRACT: The fight against cartels has become a central feature for many competition agencies. In Latin America, this fight is long overdue as the prevalence of cartels has historically harmed competition in both large and small markets. The introduction of immunity and leniency programs to fight hard-core cartels is an important challenge for many authorities in the region.  They have to garner the necessary expertise to administer these programs, increasingly join and even cooperate with their international counterparts, and learn the nuances in their legal systems when implementing them and enforcing their competition legislation. Nonetheless, these programs have proven to be extremely effective, low-cost tools that have uncovered a number of cartels in a relatively short period of time.

We present some information on the differences among these programs in eight Latin American countries and discuss some of the advantages and challenges that each have faced in using this tool to investigate cartels. While we note that increases to monetary fines and sanctions would improve the effectiveness of these programs, we also believe that, on their own, there is room for leniency programs to grow and become more effective for antitrust agencies in Latin America.

December 3, 2010 | Permalink | Comments (0) | TrackBack (0)

Thursday, December 2, 2010

China's Approach to Compulsory Licensing of Intellectual Property Under Its Anti-Monopoly Law

Posted by D. Daniel Sokol

Michael Jacobs (De Paul Univ.) & Xinzhu Zhang (Chinese Academy of Social Sciences) address China's Approach to Compulsory Licensing of Intellectual Property Under Its Anti-Monopoly Law.

ABSTRACT: While a discussion of the misuse of Intellectual Property Rights (IPRs) can be quite broad, this paper focuses on one aspect of a significant question regarding the relationship between antitrust and IP laws:Whether and on what terms courts and competition regulators should compel a dominant firm to license its powerful intellectual property to a smaller rival. As many know, this question has already generated substantial controversy, largely because the relevant law in the United States and Europe provide markedly different answers. In China's context, since compulsory licensing of IP is so complicated and subtle an issue, it may be too soon to recommend any specific approach. Certainly, more discussion and research are needed. However, as outlined in this paper, certain preliminary steps should be taken.

December 2, 2010 | Permalink | Comments (0) | TrackBack (0)

Product Differentiation Through Exclusivity: Is There a One-Market-Power-Rent Theorem?

Posted by D. Daniel Sokol

Benjamin E. Hermalin, University of California, Berkeley and Michael L. Katz, University of California, Berkeley - Economic Analysis & Policy Group ask Product Differentiation Through Exclusivity: Is There a One-Market-Power-Rent Theorem?

ABSTRACT: In systems industries, combinations of components are consumed together to generate user benefits. Arrangements among component providers sometimes limit consumers’ ability to mix and match components, and such exclusive arrangements have been highly controversial. We examine the competitive and welfare effects of exclusive arrangements among system components in a model of relatively differentiated applications that run on relatively undifferentiated platforms. For a given set of components and prices, exclusive arrangements reduce consumer welfare by limiting consumer choice and raising equilibrium prices. In some cases, however, exclusivity raises consumer welfare by increasing the equilibrium number of platforms, which leads to lower prices relative to the monopoly outcome that would prevail absent exclusivity. We also show that there is no “One-Market-Power-Rent Theorem.” That is to say, exclusive deals with providers of differentiated applications can raise platforms’ margins without reducing application margins, so that overall industry profits rise.

December 2, 2010 | Permalink | Comments (0) | TrackBack (0)

Constant Vigilance: Maintaining Cartel Deterrence During the Great Depression

Posted by D. Daniel Sokol

Margaret C. Levenstein & Valerie Suslow (both University of Michigan Ross School of Business) explain Constant Vigilance: Maintaining Cartel Deterrence During the Great Depression.

ABSTRACT: Antitrust authorities around the world have continued to pursue illegal price-fixing throughout the economic crisis, but have also increasingly granted "inability to pay" reductions in fines. While taking ability to pay into account is appropriate, as the overriding policy goal is the promotion of competition, these reductions in fines must be accompanied by other policy changes in order to maintain the expected level of sanction. Granting inability to pay requests for reductions in fines is an ex-post decision on the part of antitrust authorities, and yet it clearly has ex-ante incentive implications for cartel formation. These fine reductions also have the potential to undermine the legitimacy and credibility of the antitrust authorities, and therefore must be implemented with specific, objective, and transparent criteria. To assure the effectiveness of anti-cartel policy, we should design policies that are informed by empirical research. Antitrust authorities should be vigilant in restricting communication that facilitates cooperation among competing firms in highly concentrated industries, especially those with a history of collusion. They should also monitor the behavior of former cartel members, raising standards for mergers and other cooperative agreements for firms with a history of collusion. This paper reviews the implementation of recent cartel "inability-to-pay" reductions in fines and proposes tools for maintaining deterrence without increasing the likelihood of bankruptcy. Our recommendations build on our earlier empirical research on the determinants of cartel stability.

December 2, 2010 | Permalink | Comments (0) | TrackBack (0)

Antitrust Sanctions

Posted by D. Daniel Sokol

Douglas Ginsburg (DC Circuit) and Joshua Wright (George Mason Law) have an interesting article on Antitrust Sanctions.

ABSTRACT: In this article, we first discuss traditional deterrence theory as applied to optimal criminal antitrust penalties. Then we evaluate both the U.S. and EU experience with ever-increasing corporate fines and the available empirical evidence on the deterrent value of cartel sanctions. In the next part we turn to our claim that the conventional wisdom of ever-increasing corporate fines to solve the problem of under-deterrence is misguided. The determination of the optimal sanction for price-fixing should be guided by two principles: (1) the total sanction must be great enough, but no greater than necessary, to take the profit out of price-fixing; and (2) the individuals responsible for the price-fixing should be given a sufficient disincentive to discourage them from engaging in the activity. We propose altering the distribution of criminal sanctions for corporations and the individuals who fix prices on their behalf, and introducing sanctions for negligent officers and directors consistent with our two fundamental principles. Finally, we discuss the experience with debarment as a sanction in other contexts, and how it might operate in the context of U.S. antitrust enforcement.

December 2, 2010 | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 1, 2010


Posted by D. Daniel Sokol






Live Webcast @

Friday, December 3rd

, 2010

10:00 a.m. – 11:00 a.m. EST


Free Online Registration Required

 John Thorne Senior Vice President & Deputy General Counsel Verizon Communications Inc.
Janet L. McDavid Partner, Hogan Lovells LLP



Email them to

for answers during the webcast!

December 1, 2010 | Permalink | Comments (0) | TrackBack (0)

UK Competition Law 2011

Posted by D. Daniel Sokol

10th Anniversary IBC Legal Conference

UK Competition Law 2011
An advanced review of major competition law developments in the UK

Thursday, 17th February 2011 - De Vere Holborn Bars, London, UK

Book by the end of this Friday 3rd December to save £200!

                               Download full agenda      Register now      Your VIP Code: CSZNBGQ

Gain a full update on UK competition law developments, including the scope and practical impact of a more proactive and tougher merged competition authority by attending the one-day UK Competition Law conference.

Using recent case law and court decisions our highly experienced speaker panel will guide you through:

  • The merger of the Office of Fair Trading and the Competition Commission
  • Civil & criminal investigations
  • The enforcement of UK competition law
  • Competition litigation
  • The OFT's priorities and policies
  • IP & competition law issues
  • Joint CC/OFT guidelines on mergers
  • Public procurement issues

Chaired by: Nicholas Green QC, Brick Court Chambers

11 expert speakers including:

  • Ali Nikpay, Senior Director Cartels & Criminal Enforcement, Office of Fair Trading (OFT)
  • Sheldon Mills, Director of Mergers, Office of Fair Trading (OFT)
  • Emily Smith, Senior Lawyer & Retail Account Manager - Competition & Regulatory Law IPG, BT
  • Michael Bowsher QC, Monckton Chambers
  • Euan Burrows, Partner, Ashurst LLP
  • Peter Willis, Partner, Head of EU & Competition, Dundas & Wilson LLP

Download the full programme and list of expert speakers.

Accreditation: 5.5 SRA hours. Bar Council hours will also be available.

Act now to benefit from the £200 early bird saving!
             - Register online       
             - Email IBC Legal
             - Call +44 (0) 20 7017 5503

You will need to quote VIP Code: CSZNBGQ when registering.

December 1, 2010 | Permalink | Comments (0) | TrackBack (0)

Happy Hanukkah (Chanukah)

Posted by D. Daniel Sokol

Tonight begins the festival of lights, Hanukkah (Chanukah).  Although, this is a minor religious holiday, because of its proximity to that other highly commercialized non-Jewish holiday (and no I don't mean either Bodhi Day or Ashura -- I mean the one with the guy in red tights who is not Spider Man), Hanukkah has taken on great visibility and importance. 

What does the antitrust professor want as a present for Hanukkah?  For those of you wondering what I asked my wife to get me, it is The Oxford Handbook of Judaism and Economics (Oxford University Press 2010).

We sing the traditional Hebrew, English and Spanish Hanukkah songs as we spin our dreidels at home.  However, for those looking for sonmething a bit more interesting (like my wife who will serve us Greek-Herbed Spinach Latkes with Feta-Yogurt Sauce tonight), let me provide some new takes on the festival of lights. 

Some modern day Hanukkah favorite songs:

Hanukkah Blessings by Barenaked Ladies

Adam Sandler - Chanukah (Hanukkah) Song


Hanukkah Hey Ya!



December 1, 2010 | Permalink | Comments (0) | TrackBack (0)

Antitrust Oversight: More an Art than a Craft

Posted by D. Daniel Sokol

Pieter Kalbfleisch (Netherlands Competition Authority, NMA) covers Antitrust Oversight: More an Art than a Craft in his latest article.

ABSTRACT: Would it lead to more effective sanctioning of cartel violations if attention were shifted from sanctioning undertakings to primarily sanctioning those individuals who, de facto, either exercised leadership over or gave instructions to a cartel violation, along with those who refrained from taking any measures to stop the violation, even though they had the power to stop the violation or to prevent it from happening? This article will examine why the answer to this question is both yes and no.

December 1, 2010 | Permalink | Comments (0) | TrackBack (0)

Competition and Innovation: ICT- and non-ICT-enabled Product and Process Innovations

Posted by D. Daniel Sokol

Daniel Nepelski (European Commission) explains Competition and Innovation: ICT- and non-ICT-enabled Product and Process Innovations.

ABSTRACT: The reason for contradictory predictions of the models studying the impact of competi¬tion on innovation is the varying assumptions with respect to competition or innovation type. Thus, we study how the impact of competition changes with different types of innova¬tive Output. In particular, we distinguish between non-ICT - and ICT-enabled product and process innovations. To allow for such flexibility, we apply Bayesian inference techniques and use direct measures of innovative that control for the heterogeneity of innovation Output. Our analysis provides evidence that supports the hypothesis that the effect of market com¬petition on innovation is not alike for all types of innovation. We observe an inverse U-shape relationship between competition and non-ICT-enabled and a clear U-shape dependency for ICT-enabled innovations. However, the results become considerably weaker, once industry effects are taken into account.! Thus, although the impact of competition on innovation varies with the type of innovation, other factors seem to have a stronger impact on the incentives to innovate.

December 1, 2010 | Permalink | Comments (0) | TrackBack (0)

Demand as a source of entry and the survival of new semiconductor firms

Posted by D. Daniel Sokol

Roberto Fontana (KITeS - Bocconi University, Milan, Italy and Department of Economics, University of Pavia, Pavia, Italy) and Franco Malerba (KITeS - Bocconi University, Milan, Italy) adress Demand as a source of entry and the survival of new semiconductor firms.

ABSTRACT: The performance of new companies coming from the demand side of the semiconductor industry is examined and it is compared with the performance of entrants coming from the semiconductor industry itself and with other types of entrants. By using a dataset of more than one thousand start-ups founded between 1997 and 2007 around the world, the paper shows that start-ups with a background in application sectors perform survive longer than spin-offs from the semiconductor industry itself or than inexperienced firms founded by people previously active in university or services. These results point strongly to the major role of demand not just as a source of innovations, but also as a major driver of entry into an industry and of successful performance of new firms.

December 1, 2010 | Permalink | Comments (0) | TrackBack (0)

Non-Price Competition in Credit Card Markets Through Bundling and Bank Level Benefits

Posted by D. Daniel Sokol

G. Gulsun Akin (Bogazici University), Ahmet Faruk Aysan, Gazi Ishak Kara and Levent Yildiran discuss Non-Price Competition in Credit Card Markets Through Bundling and Bank Level Benefits.

ABSTRACT: Attempts to explain high and sticky credit card rates have given rise to a vast literature on credit card markets. This paper endeavors to explain the rates in the Turkish market using measures of non-price competition. In this market, issuers compete monopolistically by differentiating their credit card products. The fact that credit cards and all other banking services are perceived as a bundle by consumers allows banks to deploy also bank level characteristics to differentiate their credit cards. Thus, credit card rates are expected to be affected by the features and service quality of banks. Panel data estimations also control various costs associated with credit card lending. The results show significant and robust effects of the non-price competition variables on credit card rates.

December 1, 2010 | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 30, 2010

Essays on the Economics of Two-Sided Markets: Economics, Antitrust and Strategy

Posted by D. Daniel Sokol

David S. Evans, University of Chicago Law School, University College London provides a collected set of works in Essays on the Economics of Two-Sided Markets: Economics, Antitrust and Strategy.

ABSTRACT: This volume collects a series of essays that I have written over the last decade on businesses that create value by providing products that enable two or more different types of customers to get together, find each other, and exchange value. Part I presents background pieces on the economics of multi-sided platforms and industries in which these platforms are common. Part II examines the antitrust economics of two-sided markets including defining the difficult problem of defining the boundaries of competition. Part III comprises several papers that apply two-sided market analysis to web-based businesses. Part IV does the same for payment cards which is the industry that attracted much of the early two-sided analysis - in part because this framework was helpful for understanding the hotly debated issue of interchange fees. Part V collects several article and book chapters on software platforms. These platforms have become especially important in the last several years because they are now the basis for revolutionary developments with mobile devices (e.g. the iPhone and Android), social networking (Facebook in particular), and payments (PayPalX). The essays are published as originally written (usually, in fact, whatever version could be made freely available). The book itself consists of a series of urls (website addresses) that enable the reader to download these papers.

November 30, 2010 | Permalink | Comments (0) | TrackBack (0)

Antitrust in two-sided markets: Is competition always desirable?

Posted by D. Daniel Sokol

Ingo Fielder (University of Hamburg - Law) asks Antitrust in two-sided markets: Is competition always desirable?

ABSTRACT: The main objective of antitrust interventions is to assure competition in markets to benefit consumers. This paper challenges this common approach by examining the case of a satellite broadcasting network with monopoly power. First, satellite TV is identified as a two-sided market. It is then analyzed in the framework of the canonical model for two-sided markets developed by Rochet & Tirole (2004). The main finding is that the satellite network maximizes his profits by choosing a price formation which maximizes the overall welfare of all market participants. Even if the satellite network uses his monopoly power to introduce a fee to receive satellite TV, it would do so only until the semi-elasticity of the amount of consumers in regard to the per-interaction-price equals the one of the TV stations – exactly the point where welfare is maximized. It is therefore concluded that antitrust cases have to take a more! in-depth look at two-sided markets before deciding that competition is best for consumers.

November 30, 2010 | Permalink | Comments (0) | TrackBack (0)

An Antitrust Analysis of the Case for Wireless Network Neutrality

Posted by D. Daniel Sokol

Mike Topper (Conerstone Research) and Gregory L. Rosston, Stanford Institute for Economic Policy Research provide An Antitrust Analysis of the Case for Wireless Network Neutrality.

ABSTRACT: The ongoing debate about possible implementation of regulatory rules requiring ‘‘network neutrality’’ for wireless telecommunications services is inherently about whether to impose prohibitions on the ability of network operators to control their vertical relationships. Antitrust analysis is well suited to analyze whether a wireless network neutrality rule is socially beneficial. Implementing network neutrality rules would be akin to using a per se antitrust rule regarding vertical relationships instead of the rule of reason analysis typically applied to vertical relationships in antitrust. Per se rules are used to prevent actions that rarely, if ever, have any procompetitive benefits, such as price-fixing agreements. Rule of reason analysis is used when there are potential efficiency gains from the actions under investigation.

Some vertical practices of the wireless carriers, such as bandwidth restrictions, may appear to be anticompetitive, but may also have plausible efficiency justifications so should be judged under rule of reason analysis. Economic examination of the wireless industry shows significant competition between networks, which reduces the concern about vertical relationships, but also shows some areas that should be monitored by antitrust and regulatory authorities. We propose several regulatory changes that would likely increase wireless competition and lessen the perceived need for prophylactic network neutrality rules while at the same time allowing efficiency-enhancing vertical relationships.

November 30, 2010 | Permalink | Comments (0) | TrackBack (0)

Competition and Development: What Competition Law Regime?

Posted by D. Daniel Sokol

Abel Mateus (University of New Lisbon - Economics) has an interesting paper on Competition and Development: What Competition Law Regime?

ABSTRACT: Using a law and economics model of competition law enforcement we try to answer the following questions: What characterizes the effectiveness of a competition law regime? How has competition law enforcement spread around the world? What factors limit the enforcement of competition law? And finally, what regimes for competition law and what are the pre-requisites for each one? Our econometric analysis confirms that democracy, the level of education and control of vested interests are the most important pre-requisites for a competition law regime, and its improvement is crucial for having a more effective regime. Quality of public administration and the regulatory system as well as of the judicial system and reduction of corruption are sub-factors that are central to enforcement.

November 30, 2010 | Permalink | Comments (0) | TrackBack (0)