Antitrust & Competition Policy Blog

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

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Tuesday, February 2, 2010

State Enforcement of Resale Price Maintenance Prohibitions After Leegin: Policy Without Principle

Posted by D. Daniel Sokol

David Olsky (Wilmer Hale) explains State Enforcement of Resale Price Maintenance Prohibitions After Leegin: Policy Without Principle.

ABSTRACT: Over the past three years, certain state attorneys general have spoken out strongly against Resale Price Maintenance (“RPM”) practices, upset with the Supreme Court decision in Leegin. Citing their own state laws, these state enforcers have insisted that the per se prohibitions on RPM that existed prior to Leegin still exist within their respective states. Officials from the Antitrust Bureau for the New York Attorney General have also asserted that under federal law, courts should apply a “quick look” or otherwise truncated rule of reason.

The recent settlement of an RPM claim against Herman Miller furniture underlines that the state attorneys general are not just saber rattling. Federal officials from the new administration have indicated varying levels of approval of these efforts, with Assistant Attorney General Christine Varney setting forth suggested guidance to state enforcement efforts regarding how to challenge RPM under the rule of reason regime.

This leads one to the question of the purpose for these efforts. That is, what is the policy rationale for focusing on bringing cases that would push the boundaries of antitrust law on RPM? Are there genuine policy concerns about RPM that would justify, say, a diversion of even a fraction of the efforts needed to monitor and prevent potential bid rigging among local service providers?

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

Federal Antitrust Enforcement Priorities Under the Obama Administration

Posted by D. Daniel Sokol

Ronan Harty (Davis Polk) explains Federal Antitrust Enforcement Priorities Under the Obama Administration.

ABSTRACT: In this paper, Ronan P. Harty reviews the recent enforcement efforts of the principal United States antitrust regulators: the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission. The new leaders of these agencies under the Obama administration have been widely expected to enforce the U.S. antitrust laws more vigorously than under the Bush administration. In particular, it has been predicted that these agencies would more aggressively pursue single-firm conduct that potentially violates Section 2 of the Sherman Act, and that they would step up their review of mergers and acquisitions. Mr. Harty indicates that, while it is still relatively early in the Obama presidency, and while the evidence is not entirely uniform, there is growing support for these predictions. Over the past year, the federal antitrust regulators have initiated several high profile Section 2 investigations, proposed modifications to their Horizontal Merger Guidelines, and have challenged pending and completed mergers of various sizes, all while continuing to enforce Section 1 of the Sherman Act against cartels. Nevertheless, Mr. Harty explains that the challenges inherent in investigating and prosecuting Section 2 cases may limit the ultimate effectiveness of some of the increased federal enforcement efforts in that field.

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

Article 82 EC: What Future for the Effects-Based Approach?

Posted by D. Daniel Sokol

Giorgio Monti (LSE - Law), asks,Article 82 EC: What Future for the Effects-Based Approach?

ABSTRACT:

  • This article provides a critical review of the Guidance on he Commission's Enforcement Priorities in Applying Article 82 to abusive exclusionary conduct. The author explores the significance of this document for the future application of Article 82. The article also examines the relationship between the Commission's new approach and the case law of the European Court of Justice, suggesting how the Court might respond to the approach canvassed in the Guidance Paper.
  • February 2, 2010 | Permalink | Comments (0) | TrackBack (0)

    Monday, February 1, 2010

    Communication, Renegotiation, and the Scope for Collusion

    Posted by D. Daniel Sokol

    David J. Cooper, University of Alberta - School of Business and Kai-Uwe Kuhn, University of Michigan at Ann Arbor - Department of Economics, explain Communication, Renegotiation, and the Scope for Collusion.

    ABSTRACT: We use experiments to analyze what type of communication is most effective in achieving cooperation in a simple collusion game. Consistent with the existing literature on communication and collusion, even minimal communication leads to a short run increase in collusion. However, in a limited message-space treatment where subjects cannot communicate contingent strategies, this initial burst of collusion rapidly collapses. When unlimited pre-game communication is allowed via a chat window, an initial decline in collusion is reversed over time. Content analysis is used to identify multiple channels by which communication improves collusion in this setting. Explicit threats to punish cheating prove to be by far the most important factor to successfully establish collusion, consistent with the existing theory of collusion. However, collusion is even more likely when we allow for renegotiation, contrary to standard theories of renegotiation. What appears critical for the success of collusion with renegotiation is that cheaters are often admonished in strong terms. Allowing renegotiation therefore appears to increase collusion by allowing for an inexpensive and highly effective form of punishment.

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

    The Competitive Impact of Hypermarket Retailers on Gasoline Prices

    Posted by D. Daniel Sokol

    Paul Zimmerman (FTC) has a very interesting paper with policy implications, The Competitive Impact of Hypermarket Retailers on Gasoline Prices.

    ABSTRACT: Hypermarkets are large retail suppliers of general merchandise or grocery items that also sell gasoline, often at very low margins. Using panel data for 1998-2002, this paper estimates the impact of hypermarkets on average state-level retail gasoline prices. The empirical results suggest a robust, economically (and statistically) significant effect of increased competition from hypermarkets. Furthermore, the results also suggest that refiners’ lower the delivered wholesale prices charged to their affiliated lessee-dealer and open-dealer stations in response to increased hypermarket competition, which in turn translates to lower retail (street) prices. The presence of a state motor fuel sales-below-cost (SBC) law may lessen the price-reducing effects from hypermarket competition by 40-67 percent while independently imparting no other offsetting price reductions. Finally, using recently published estimates of the short-run own price elasticity of demand for gasoline, consumer welfare is estimated to have increased in the neighborhood of $488 million over the sample period.

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

    You Cannot Have an Antitrust Revolution When the Case Law is Against You

    Posted by D. Daniel Sokol

    For those itching for a more robust antitrust enforcement with more victories by the government, the problem is that the case law goes against such a policy.  I have been noting this for some time but the WSJ has published an article today that notes that case law constrains the Obama administration its its enforcement abilities and priorities.

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

    Consumer Preferences in Monopolistic Competition Models

    Posted by D. Daniel Sokol

    Alexander Tarasov (Penn State - Econ) analyzes Consumer Preferences in Monopolistic Competition Models.

    ABSTRACT: This paper develops a novel approach to modeling preferences in monopolistic competition models with a continuum of goods. In contrast to the commonly used CES preferences, which do not capture the effects of consumer income and the intensity of competition on equilibrium prices, the present preferences can capture both effects. I show that under an unrestrictive regularity assumption, the equilibrium prices decrease with the total mass of available goods (which represents the intensity of competition in the model) and increase with consumer income. The former implies that the entry of firms in the market or opening a country to international trade has a pro-competitive effect that decreases equilibrium prices.

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

    Recent Developments in EC Merger Control

    Posted by D. Daniel Sokol

    Götz Drauz, Thomas Chellingsworth and Hertta Hyrkas (all Howrey) explain Recent Developments in EC Merger Control.

    ABSTRACT: This article describes the main developments in EC merger control over the last two years. It provides an overview of the major cases in certain key sectors, and of the most important changes in the legislation, European Commission practice and case law of the Community courts. It further attempts to draw some conclusions relating to the current and likely future direction of administrative practice and policy.

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

    Sunday, January 31, 2010

    Robert D. Joffe, 1943-2010

    Posted by D. Daniel Sokol

    Robert D. Joffe, a Cravath antitrust partner and former managing partner died on Thursday of pancreatic cancer.  The NY Times obituary is avaiable here.   

    January 31, 2010 | Permalink | Comments (0) | TrackBack (0)

    Two Watersheds: The New Case Law of Bundles, Rebates and Class Certification

    Posted by D. Daniel Sokol

    Two Watersheds: The New Case Law of Bundles, Rebates and Class Certification

     

    Sponsored by Empiris LLC & O’Melveny & Myers LLP

     

    Thursday, February 4, 2010

    8:30 a.m. – 12:15 p.m.

    Willard InterContinental Washington

    The Willard Room

    1401 Pennsylvania Avenue, N.W.

    Washington, D.C. 20004

     


     

    7:30 a.m.

    Registration & Continental Breakfast

    8:30 a.m.

    Welcoming Remarks

     

    Daniel D. Polsby, Dean & Foundation Professor of Law, George Mason University School of Law 

     

    Opening Remarks

     

    Jeffrey A. Eisenach, Chairman & Managing Partner, Empiris LLC and Adjunct Professor, George Mason University School of Law 

     

    Introduction of Judge Hogan

     

    Ian Simmons, Partner, O’Melveny & Myers LLP

     8:45 a.m.

    Keynote Address

     

    The Honorable Thomas F. Hogan, United States District Judge, United States District Court for the District of Columbia

    9:30 a.m.

    Panel One | Evaluating Bundling and Share-Based Rebates in High-Tech Industries

     

    Moderator

     

    Alden F. Abbott, Deputy Director, Office of International Affairs, U.S. Federal Trade Commission and Adjunct Professor, George Mason University School of Law

     

    Speakers

     

    Thomas Brown, Partner, O'Melveny & Myers LLP

    Nicholas S. Economides, Professor of Economics, New York University Leonard N. Stern School of Business

    Joseph Kattan, Partner, Gibson, Dunn & Crutcher LLP

    Kevin M. Murphy, George J. Stigler Distinguished Service Professor of Economics, The University of Chicago Booth School of Business

     

     

    Our first panel will address one of the hottest topics in contemporary antitrust – the assessment of bundling and share-based rebates in high tech industries.  The antitrust status of discounts applied to sales of bundled products is subject to substantial uncertainty, at least in the United States.  Federal court opinions in this area are in obvious tension, as is scholarly commentary.  

    11:00 a.m.

    Panel Two | Class Action in the Wake of Monsanto, IPO and Hydrogen Peroxide

     

    Moderator

     

    Peter C. Thomas, Partner, Simpson Thacher & Bartlett LLP

     

    Speakers

     

    Eric L. Cramer, Shareholder, Berger & Montague, P.C.

    Ian Simmons, Partner, O’Melveny & Myers LLP

    Hal J. Singer, President & Managing Partner, Empiris LLC and Adjunct Professor, McDonough School of Business, Georgetown University

     Edward A. Snyder, Dean & George Pratt Shultz Professor of Economics, The University of Chicago Booth School of Business

     


     

    If the rule of thumb in merger cases once was, to paraphrase Justice Stewart, “the government always wins,” then one might state a similar rule to the effect that “antitrust cases are always certified as class actions” prevailed.  Starting with the Monsanto case in 2005, defendants began to have a fighting chance to defeat class certification.  Although antitrust cases remain amongst the most common cases to be certified, over the last several years key decisions have altered the battlefield.  This panel will discuss the case law, economic analysis of, and strategies behind prosecuting and defending antitrust class certification motions.  

     

    General Information

     

    Registration

    To register for this Event, please download our Registration Brochure and follow the instructions on page 3.

     

    Registration Fees

    General Admission

    $345

    Government/Academic

    $150

    Student

    $50

     

    Federal Tax ID Number 54-1603842.

    W-9 Form

     

    CLE

    The Symposium has applied for 3.5 VA MCLE credit hours (0.0 ethics).

     

    Contact Information

    Laura O'Brien, Symposium Editor

    George Mason Law Review

    3301 Fairfax Drive

    Arlington, Virginia 22201-4498

    gmusymposium@gmail.com

     

    Prior George Mason Law Review Symposia

    January 31, 2010 | Permalink | Comments (0) | TrackBack (0)

    The New DOJ: Lessons Learned From the Ticketmaster Live Nation Decision

    Posted by D. Daniel Sokol

    Alan Meese (William & Mary Law) and Barak Richman (Duke Law) have an interesting op-ed on The New DOJ: Lessons Learned From the Ticketmaster Live Nation Decision worth reading.  It also mentions their academic work on this topic.

    January 31, 2010 | Permalink | Comments (0) | TrackBack (0)