Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, February 6, 2010

Do Law Schools (via NALP) Have a Competition Problem?

Posted by D. Daniel Sokol

Read the story in the ABA Journal here.  Also, read the Jones Day analysis of the NALP plan here.

HT: Chris Sagers

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

Friday, February 5, 2010

Demand Side Merger Efficiencies

Posted by D. Daniel Sokol

David Reitman, Charles River Associates, and Dipan Ghosh, Charles River Associates have posted Demand Side Merger Efficiencies.

ABSTRACT: Mergers can generate demand side efficiencies that benefit customers in a number of ways, including procurement savings, transaction efficiencies, and quality improvements. We show that per-unit demand side efficiencies and marginal cost efficiencies of the same magnitude have an equivalent impact on the post-merger market in terms of output and welfare. Consequently, there is no reason to distinguish between marginal cost savings and demand side per-unit efficiencies when evaluating the impact of a merger. We demonstrate how various techniques for evaluating the impact of mergers – compensating marginal cost reductions, upward pricing pressure, and merger simulation – can be readily adapted to incorporate demand side as well as supply side efficiencies.


 

February 5, 2010 | Permalink | Comments (0) | TrackBack (0)

Just What the Doctor Ordered, A Second Opinion for Vertical Price Fixing

Posted by D. Daniel Sokol

Jay Himes & Morissa Falk (both Labaton Sucharow) offer Just What the Doctor Ordered, A Second Opinion for Vertical Price Fixing.

ABSTRACT: The arguments that gained favor in Leegin were repackaged old chestnuts—and are no tastier today than when they were first packaged for courts and legislators decades ago.

Download CPI-published-RPM-paper[1]

February 5, 2010 | Permalink | Comments (0) | TrackBack (0)

Competition in Agriculture Online Symposium Next Week

Posted by D. Daniel Sokol

With some invitations still outstanding, I am happy to report that we have what is shaping up to be a very interesting online symposium.

The Department of Justice and US Department of Agriculture announced in August 2009 that they would be organizing a series of public workshops in 2010 focusing on competition in the agriculture sector. They also launched a public comment period that ran until the end of 2010 soliciting comments from interested stakeholders on the state of competition in the agriculture sector. The first workshop will be held in Ankeny, Iowa on March 12th and subsequent workshops will take place throughout the country in 2010. For more details please see here.

Ahead of the workshops, I have asked a number of experts on agriculture and competition issues to provide comments of no more than 300 words on the following topics:

What is the appropriate role of government and antitrust enforcement in the agriculture sector?

What are the potential long-term impacts of the DOJ and USDA workshop series on the agriculture sector?

Given the GAO report on consumer impacts of industry consolidation, what consumer benefits could be delivered/harmed via antitrust action in the agriculture sector?

What considerations should be taken into account when regulators become involved in commercial disputes?

There have been a number of discussions about the intersection between intellectual property and competition policy. What should regulators keep in mind when they enter into such discussions?

So far, people who have committed to participate in our online symposium include:
Christina Bohannan (U. Iowa Law)
Ron Cass (former Dean of BU Law)
Jeff Harrison (U. Florida Law)
Scott Kieff (GW Law)
Andrew Novakovic (Cornell Applied Economics; Director Cornell Program on Dairy Markets and Policy)
George Priest (Yale Law)
Kyle Stiegert (U. Wisconsin Agricultural and Applied Economics; Director, Food System Research Group)
Mike Sykuta (U. Missouri Agricultural and Applied Economics)
Josh Wright (George Mason Law)

February 5, 2010 | Permalink | Comments (0) | TrackBack (0)

Posner still believes in Chicago School Antitrust (Even if he has a new love for Keynes)

Posted by D. Daniel Sokol

See Posner's letter to the editor in today's WSJ. He notes, "My views on antitrust have not changed. I believe that Keynes has much to teach us about the role of government in digging an economy out of a depression or a recession. But that has absolutely nothing to do with antitrust."

February 5, 2010 | Permalink | Comments (0) | TrackBack (0)

DOJ Submits Views on Amended Google Book Search Settlement

Posted by D. Daniel Sokol

DOJ sees progress but still is not happy.  See here for details.

February 5, 2010 | Permalink | Comments (0) | TrackBack (0)

State Aid to Banks in the Financial Crisis: The Past and the Future

Posted by D. Daniel Sokol

Emily Adler, James Kavanagh, and Alexander Ugryumov (all Oxera) offer their thoughts on State Aid to Banks in the Financial Crisis: The Past and the Future.

ABSTRACT: This Economist's Note considers the use of state aid policy in Europe to control the flow of public funds to the banking sector during the financial crisis, and the potential implications of so doing. During the financial crisis, state aid decisions have had to prioritise saving financial institutions over distortions to competition. But post-crisis, saving institutions is not the same as saving the financial system. The more stable the financial system becomes, the easier it is for state aid control to take a tough approach to aided banks. Looking forward, as aid is unwound there is a policy choice to be made whether to prioritise competition in the single market (by coordinating withdrawal of aid) or to prioritise competition within national markets (by removing state support as and when local conditions permit)

February 5, 2010 | Permalink | Comments (0) | TrackBack (0)

Thursday, February 4, 2010

We Have Herb Hovenkamp Visiting Us For the Next Two Days at the University of Florida

Posted by D. Daniel Sokol

This week we have the great pleasure of welcoming Herb Hovenkamp (Iowa Law) to the University of Florida Levin College of Law.  Herb is the inaugural Bayard Wickliffe Heath Memorial Lecture Series speaker on U.S. Antitrust Policy.  Today he is presenting the paper "IP and Antitrust: Reformation and Harm" (co-authored with Christina Bohannan of Iowa Law) at a faculty workshop.  Tomorrow he is delivering his public talk on the institutional and legal issues relating to the the DOJ and FTC. See our press release here.

February 4, 2010 | Permalink | Comments (1) | TrackBack (0)

For the Love of Culture Google, copyright, and our future

Posted by D. Daniel Sokol

Larry Lessig has weighed in on the Google settlement in the New Republic with an article titled For the Love of Culture Google, copyright, and our future.

February 4, 2010 | Permalink | Comments (0) | TrackBack (0)

A Civil Conflict: Can the States Overturn Leegin?

Posted by D. Daniel Sokol

Leiv Blad & Bryan Killian (both Bingham McKutchen) ask A Civil Conflict: Can the States Overturn Leegin?

ABSTRACT: Overturning a 96-year-old rule, the United States Supreme Court held in Leegin that minimum resale price maintenance (“RPM”) agreements would no longer be considered illegal per se under Section 1 of the Sherman Act, but instead would be evaluated under the more lenient “rule of reason.” A number of states immediately objected to the change, vowing to legislatively reverse Leegin. Maryland has already done so and other states may follow.

This flurry of legislative activity raises the question: Can a state overturn Leegin consistent with the United States Constitution? The answer to that question is no, at least to the extent the state regulates conduct that is wholly outside its borders.

February 4, 2010 | Permalink | Comments (0) | TrackBack (0)

India's New Competition Regime: The Elephant Who Became a Tiger

Posted by D. Daniel Sokol

Mark Sansom (Freshfields) and Priya Christian describe India's New Competition Regime: The Elephant Who Became a Tiger.

ABSTRACT: After a wait of more than six years, India has begun to bring into force the provisions of its Competition Act, 2002. The new regime, which is loosely reflective of EC and UK law, establishes the Competition Commission of India (the CCI) as the nation's competition regulator and a Competition Appellate Tribunal to hear appeals in competition matters.

This article considers the key provisions of the new Indian regime with respect to anticompetitive agreements (including the CCI's cartel leniency regime), abuses of dominance and the yet-to-be-implemented merger control rules. It highlights significant points of similarity and divergence with EC and UK competition laws and highlights areas where further clarification by the CCI will be needed.

February 4, 2010 | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 3, 2010

A Question for Our Readers Regarding Public Opinion

Posted by D. Daniel Sokol

Other than the survey of British public opinion on cartels that Andreas Stephan undertook in 2007, is any practitioner or academic aware of any other sucvh survey of public opnions on cartel issues in any other jurisdiction?

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

Technology Transfer, Competition Law and Developing Countries : A Means of Loosening the Dependency Ties

Posted by D. Daniel Sokol

Obinne Obiefuna, University of Essex - School of Law, analyzes Technology Transfer, Competition Law and Developing Countries : A Means of Loosening the Dependency Ties.

ABSTRACT: This paper discusses the interaction between transfer of technology and competition law in a developing economy and how these two concepts will impact the developing economies positively to set them along a positive journey to enable them develop self sufficiency. The aim also is to elucidate how technology transfer and competition law can aid in the fight against the inequalities between the people in developed countries and people in the underdeveloped country. The paper equally argues that the above methods will encourage self reliance, equal partnership and trading in the international global market which is a better form of interaction for developing countries with their developed counterparts than aids and grants.

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

Leegin, The Political Backlash

Posted by D. Daniel Sokol

Roger Blair (University of Florida - Econ) & Jessica Haynes (University of Florida - Econ) explainLeegin, The Political Backlash.

ABSTRACT: In 1911, the Supreme Court addressed resale price maintenance (“RPM”) for the first time. Although RPM is a vertical price restraint, the Court treated it as a horizontal restraint and found RPM to be illegal per se. This, we believe, was an error that went uncorrected for nearly 100 years. Finally, in 2007, the Court got it right and made RPM subject to rule of reason analysis. Now, several states legislatures are trying to roll back the clock and restore the per se illegality of RPM. This, we argue, is a mistake based on faulty economic reasoning. We support our contention by explaining briefly pro-competitive as well as anticompetitive uses of RPM. We then examine the antitrust treatment of RPM and the states’ reactions to the current antitrust status of RPM.

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

The Amended Google Books Settlement is Still Exclusive

Posted by D. Daniel Sokol

James Grimmelmann (New York Law School) argues The Amended Google Books Settlement is Still Exclusive\.

ABSTRACT: The deal that Google would get under the proposed amended settlement in the Authors Guild case is exclusive in one very important sense. Many out-of-print books are so-called “orphan works”: they’re in copyright, but their copyright owners can’t be found. If you or I start printing new copies of these books, we’d be copyright infringers, subject to statutory damages of up to $150,000 a book—or even jail time. Google, on the other hand, will be authorized to sell online copies of these books. That’s exclusivity: permission to do what is forbidden to others.

Some pro-settlement commentators have challenged this view. They believe that the market for electronic editions of orphan books is open to Google’s competitors.They make three principal claims: first, that the settlement creates no new entry barriers; second, that it explicitly enables the new Book Rights Registry to issue licenses to competitors; and third, that competitors could reasonably expect to obtain class-action settlements substantially identical to Google’s. All three of these propositions are wrong. In this essay, I will explain why.

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

Book Review of The Competition Law of the European Union in Comparative Perspective

We are glad to welcome Kevin Coates of DG Competition (and a visiting scholar at NYU School of Law) to review Eleanor Fox's Book Review of The Competition Law of the European Union in Comparative Perspective.

Posted by Kevin Coates

Professor Eleanor Fox is the Walter J. Derenberg Professor of Trade Regulation at NYU School of Law, and is one of the world's leading authorities on comparative antitrust law.  Her cases and materials book on "The Competition Law of the European Union in Comparative Perspective" was published by West in 2009.


In 2008 Professor Fox asked me to comment on a late draft of the book, and in return for my very limited attempts to suggest improvements I receive thanks in the introduction.  I can take no credit for what was already an excellent text.


The book does not purport to be a general introduction to EU competition law, and Professor Fox provides recommendations for EU texts that would provide such an introduction.  Nevertheless anyone who reads and understands this text would be well on the way to understanding the EU system.  (Readers should note that since the publication of the book, the entry into force of the Lisbon Treaty has changed - once again - the numbering of the competition rules of the Treaty: Articles 81, 82, 86 and 87 have now become Articles 101, 102, 106 and 107, and references in those articles to the "common market" have been replaced with references to the "internal market".)


The book provides a broad overview of the policy underlying the EU competition rules, drawing on the Treaty provisions, and policy statements found in DG Competition's Annual Report to the European Parliament.  It has a short, but useful, discussion of the relationship between the competition objectives and the market integration objectives contained within the Treaty - a wholly necessary explanation if the difference between the EU and US approaches to vertical restraints is to be understood.


It then covers all aspects of EU competition law - anti-competitive agreements and concerted practices, cartels, abuses of dominance, mergers, and state action.  For each it draws on the Treaty, court cases, Commission decisions, and policy statements, provides comparative material from the US legal system, and then provides "Notes and Questions".  


The selection of cases and the relevant parts of the cases is always pertinent and Professor Fox will save readers much time by having done the hard work of wading through the increasingly long Commission decisions and Court cases and extracting the core issues.


However it is in the "Notes and Questions" that the real value of the book lies.  As Giuliano Amato notes in the foreword, "Carefully reading the "Notes and Questions" she has written after each of the cases (or paragraphs) published in this volume should be mandatory not only for students, but also for scholars, judges, officials and practitioners in Europe".   I would only add that it should not only be European competition lawyers that undertake this exercise.  As a comparative law text, it shines as much light on the US system as it does on that of the EU, with the discussion around the Trinko and Microsoft cases being particularly worth mentioning.


To take just a couple of examples from the Notes and Questions:

- Using the US Steel conduct from the 1950s and 1960s to highlight the likely difference between what constitutes a violation of Section 1 of the Sherman Act and Article 101 of the Treaty

- Why does Europe care about a dominant firm's elimination of a competitor by below cost pricing and the US does not (necessarily)?

- Highlighting the different routes by which EU and US law reach the same end in analysing labour agreements;

- Asking whether there are good reasons why Europe has state aid control and the United States does not?


The value is not only in the comparisons, however.  At numerous places throughout the book, Professor Fox asks difficult questions about the reasoning and evidence underlying Commission decisions and court cases.  When she asks whether distortion of competition means the same in the State aid rules (Article 107) as it does in the antitrust rules (Article 101), she pins down one of the most important questions of EU competition law.


If I have one quibble it is that the text does not address the substantial enforcement differences in the EU and the US, and the consequence this has for the interpretation of the substantive law.  The difference between the EU and US in both the provisions for private enforcement (with the US having opt-out class action lawsuits, contingency fees, extensive discovery, jury trials and treble damages for all infringements) and the consequent amount of private enforcement (almost non-existent in the EU and arguably all-too-existent in the US) are not covered; understandable, of course, in a text focussing on the substantive laws. However as the US antitrust debate shows, the system of enforcement affects the substantive law: the transcript of the US Supreme Court argument in American Needle (available at http://www.supremecourtus.gov/oral_arguments/argument_transcripts/08-661.pdf) makes fascinating reading for a European antitrust lawyer.  The Court, faced with a relatively simple question of whether the NFL constitutes a single entity for the purposes of US antitrust spent little time discussing the single entity doctrine as such.  Instead, the debate centred on the relative burden that would be placed on the NFL if everything that it did were subject to a rule of reason analysis.  Whereas in the EU, the question would likely be confined to an assessment of the "single entity" doctrine under Parker Pen, the US Supreme Court was clearly concerned with enforcement costs.


This, however, is a minor point and should not detract from the fact that every reader would take something of value away from a careful reading of this book.  For students, it provides the best comparative overview there is of the similarities in, and differences between, EU and US antitrust law; for practitioners and academics, it asks many of the difficult questions that deserve answers.



February 3, 2010 | Permalink | Comments (2) | TrackBack (0)

The Application of EC Competition Law in the Energy Sector

Posted by D. Daniel Sokol

Ulrich Scholz and Stephan Purps (both Freshfields) analyze The Application of EC Competition Law in the Energy Sector.

ABSTRACT: This article describes the main developments in the application of EC Competition law in the energy sector in the past year. It provides an overview of the major European cases, as well as national enforcement practices and regulatory developments. Finally, some observations are made regarding certain recurring themes in the Commission's enforcement practice.

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

Tuesday, February 2, 2010

NYU Annual Survey of American Law Symposium "Critical Directions in Antitrust"

Posted by D. Daniel Sokol

NYU Annual Survey of American Law Symposium "Critical Directions in Antitrust"

Greenberg Lounge
Vanderbilt Hall
40 Washington Square South
Friday, February 19, 2010
9:30 AM – 4:00 PM

Please join us for this symposium, which will bring together academics and practitioners in the field of antitrust law. The symposium’s three panels will explore recent developments in antitrust and potential new directions for enforcement. CLE credit is available to attendees. Please register here.

Schedule

9:30 am REGISTRATION AND BREAKFAST
10:00 am

OPENING REMARKS
HARRY FIRST
Charles L. Denison Professor of Law, New York University School of Law

RICHARD REVESZ
Dean, New York University School of Law

10:15 am PANEL 1: GOVERNMENT ENFORCEMENT

Government enforcement agencies play a key role in enforcing the antitrust laws. The FTC, DOJ, and FCC all review mergers and challenge anticompetitive behavior. This panel reviews recent changes and developments in government enforcement and discusses what the role of government enforcement should be.

Moderator: HARRY FIRST
Charles L. Denison Professor of Law, New York University School of Law
Panelists:

KEVIN ARQUIT
Partner, Simpson Thacher & Bartlett, LLP

JONATHAN BAKER
Chief Economist, Federal Communications Commission

HOWARD SHELANSKI
Deputy Director for Antitrust, Federal Trade Commission, Bureau of Economics

PHILIP WEISER
Deputy Assistant Attorney General for International, Policy, and Appellate Matters, United States Department of Justice, Antitrust Division

ROBERT WILLIG
Professor of Economics and Public Affairs, The Woodrow Wilson School for Public and International Affairs at Princeton Universtiy

11:45 am COFFEE BREAK
12:00 pm PANEL 2: ANTITRUST AND INNOVATION

One of the most important questions facing antitrust practice in the coming decades is that of how antitrust should encourage and interact with innovation. There is a tension between policies that encourage innovation, such as granting temporary monopolies to innovators, and the antitrust laws that foster competition. How should these interests be balanced?

Moderator: ELEANOR FOX
Walter J. Derenberg Professor of Trade Regulation, New York University School of Law
Panelists:

HERBERT HOVENKAMP
Ben and Dorothy Willie Chair, University of Iowa School of Law

JANUSZ ORDOVER
Professor of Economics, New York University

ROBERT PITOFSKY
Dean Emeritus, Joseph and Madeline Sheehy Professor of Antitrust and Trade Regulation Law, Georgetown Law

MARIUS SCHWARTZ
Professor of Economics, Georgetown University

1:15 pm LUNCH BREAK
2:30 pm PANEL 3: PRIVATE ENFORCEMENT

This panel will discuss developments in private antitrust suits, including class actions following government investigations and suits brought by competitors over harm to competition.    

Moderator: ILENE GOTTS
Partner, Wachtell Lipton Rosen & Katz
Panelists:

JONATHAN JACOBSON
Partner, Wilson Sonsini Goodrich & Rosati, LLP

STACEY ANNE MAHONEY
Partner, Gibson Dunn & Crutcher, LLP

J. DOUGLAS RICHARDS
Managing Partner of the New York Office, Cohen Milstein

DANIEL RUBINFELD
Robert L. Bridges Professor of Law, Professor of Economics, University of California Berkeley

3:45 pm CLOSING REMARKS

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

Coordinated Effects

Posted by D. Daniel Sokol

Janusz A. Ordover (NYU - Econ) has written a nice overview of Coordinated Effects.

ABSTRACT: The analysis of potential coordinated effects of mergers has moved from an unvarnished reliance on the “structural” presumption that simply a reduction in the number of competitors may likely facilitate collusion to a more sophisticated assessment of the likelihood that a transaction will facilitate or enhance coordination and harm consumers. While the reduction in the number of firms and the resulting increase in concentration is at best a starting point for such assessment, other considerations play an equal or possibly even more important role in merger assessment now. The 1992 Merger Guidelines now ask whether the relevant market is plausibly conducive to coordination, and then whether the transaction will change market conditions in a way that relaxes the constraints on market participants in a way that would make coordination more likely, stable, or complete. Reviews of coordinated effects of several recent mergers by U.S. and European regulatory agencies illustrate this approach and its focus on potential mechanisms of coordination, the impact of the merger on such mechanisms, and the importance of pricing complexity when assessing coordinated effects.

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

Innovation, Entrepreneurship, and the Information Age

Posted by D. Daniel Sokol

Phil Weiser (DOJ) has posted his remarks Innovation, Entrepreneurship, and the Information Age.

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