Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Monday, April 11, 2011

Competition Commission has published its 2011/12 Business Plan

Posted by D. Daniel Sokol

The Competition Commission has published its 2011/12 Business Plan.

April 11, 2011 | Permalink | Comments (0) | TrackBack (0)

Competition Law and Regulation of Technology Markets

Posted by D. Daniel Sokol

Kevin Coates (DG Comp) has authored Competition Law and Regulation of Technology Markets.

BOOK ABSTRACT: This book takes a practical, integrated approach to competition law, which is becoming increasingly prominent in Europe - as demonstrated by a number of high profile cases such as Microsoft, Sony/BMG and Intel.

April 11, 2011 | Permalink | Comments (0) | TrackBack (0)

Rediscovering the Spirit of Competition: On the Normative Value of the Competitive Process

Posted by D. Daniel Sokol

Oles Andriychuk, European University Institute; University of East Anglia (UEA) - Centre for Competition Policy analyzes Rediscovering the Spirit of Competition: On the Normative Value of the Competitive Process .

ABSTRACT: The paper develops its core argument in 12 sections structured in three parts: I Positive analysis; II Normative proposal; and III Operationalisation. Section B illustrates the traditional justification for the utilitarian perception of competition and analyses its main weaknesses. Section C explores conceptual differences and underlines the fundamental similarities of the two major deontological antitrust schools (Austrian and Ordoliberal). Section D provides some conceptual argumentation for the treatment of competition as a constitutional value. Section E introduces the theoretical framework of value pluralism which reconciles the conflicts between constitutional values. The methodology of value pluralism is applied in order to balance the value of competition with the interests of welfare. Section F opens the second part of the paper. It explores competition as the essence of liberal democracy, claiming that the economic aspects of competition together with its political (elections) and cultural (free speech) elements constitute the core of democratic governance. Accordingly, these values should be protected as a matter of evolutionary choice of society without any utility-based verification. Section G conceptualises the ‘Oroboros dilemma’ of self-destructive freedom and democracy, which is described in the domain of competition by Robert Bork as the ‘antitrust paradox: a policy at war with itself ’. Section H continues the comparative analysis of competition. It explores regulatory practices developed for the protection of free elections (political competition) and free speech (cultural competition) on one hand and economic competition on the other. It reveals the main methodological error of antitrust, which prevents immunisation of some anticompetitive practices from sanctions on non-utilitarian grounds. This section concludes that, unlike its political and cultural counterparts, economic competition is gradually transforming into a purely instrumental consequentialist policy which corresponds neither to the semantics nor even to the syntax of the term ‘competition’. The logic of such transformation is a direct consequence of the above-mentioned methodological inconsistency between economic competition on one hand and the political and cultural aspects of competition on the other. Section I develops the argument that in certain situations anticompetitive agreements are immunised from antitrust sanctions provided that they simultaneously promote competition more than they distort it. This possibility exists in the regulation of the political and cultural aspects of competition, but it is missing in the economic context. The current structure of Article 101(3) of the Treaty on the Functioning of the European Union (TFEU) does not envisage this option. Therefore in practice courts tend to develop indirect ways of granting immunity to undertakings which cannot conform to the rigid utilitarian requirements of Article 101(3) TFEU. While acceptable, this solution is far from optimal. For this reason the section proposes a conceptual amendment of Article 101 TFEU. This proposal is designed as a contribution to the academic debate on the role of the competitive process in antitrust rather than as a direct call for changes in primary European law. Section J clarifies that the proposed deontological benchmark for competition does not diminish the importance of utilitarian values since the proposal merely extends the current regulatory framework without substituting any of its existing parts. The application of the amended Article 101 (3) TFEU would still be based upon the discretion of the decision-maker. The will of the decision-maker (be it the Commission, national authorities or courts) constitutes the central part of this section. It analyses the balancing techniques, developed by the legal and constitutional theories and implements them into the area of antitrust. Section K continues the analysis of the balancing act, dealing specifically with the technique of separation of different values. It proposes a two-step methodology of balancing. The first one is purely value-centric. It artificially isolates each value from all others in order to undertake their independent analysis which helps to understand the internal essence of each value separately. The second consecutive step recontextualises previously isolated values into the main regulatory agenda. This section demonstrates that the present-day regulatory status of competition does not enable it to be in the par-in-parem relationships with other values, because all balancing acts are performed as a one-step analysis: each value is only balanced against the others at the external level, where the one with the higher importance always prevails. This section is designed to provide the operational justification for the normative proposal developed in Section I. The last section summarises the main findings of the paper.

April 11, 2011 | Permalink | Comments (0) | TrackBack (0)

Extraneous Liability in Antitrust

Posted by D. Daniel Sokol

Alan Devlin (clerk, US Northern District of Illinois) addresses Extraneous Liability in Antitrust.

ABSTRACT: Whether an act gives rise to liability should turn on its tendency to yield particular outcomes, rather than on its ultimate effect, which may have resulted from extraneous factors beyond the actor’s control and foresight. This principle is firmly engrained in jurisprudence, yet antitrust violates this principle in a number of unappreciated ways. The law judges commercial conduct based not on the nature of the challenged behavior to bring about particular results, but on the stochastic confluence of extraneous factors. This Article explores the phenomenon of extraneous liability, finding fault with several important features of the modern antitrust system. Nevertheless, the paper accepts a legitimate role for extraneous factors in antitrust analysis. To the extent that such forces are both reasonably identifiable and at least somewhat determinate ex ante, they may appropriately affect the legality of conduct the future commercial impact of which depends on those forces.

April 11, 2011 | Permalink | Comments (0) | TrackBack (0)

Appropriate Liability Rules for Tying and Bundled Discounting: A Response to Professor Elhauge

Posted by D. Daniel Sokol

Thom Lambert (Missouri Law) has posted Appropriate Liability Rules for Tying and Bundled Discounting: A Response to Professor Elhauge.

ABSTRACT: Professor Einer Elhauge’s highly acclaimed article, Tying, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, 123 Harv. L. Rev. 397 (Dec. 2009), contests two propositions on which efficiency-minded antitrust scholars have largely agreed: (1) that there should be no tying liability absent substantial tied market foreclosure (a position contrary to the legal status quo), and (2) that courts should recognize a safe harbor for any bundled discount that results in above-cost pricing that could be matched by an equally efficient, single-product rival. Elhauge maintains that tie-ins that do not cause substantial tied market foreclosure may nonetheless occasion adverse “power” effects that the U.S. Supreme Court has properly deemed to be anticompetitive. Those power effects may also result, Elhauge argues, from bundled discounts (even “above-cost” bundled discounts) that involve artificial inflation of the unbundled “linking” product price. These conclusions lead Elhauge to defend prevailing tying doctrine and to advocate a bundled discount rule that eschews price-cost comparisons and instead focuses on whether the discounter has raised the unbundled price of its linking product above but-for levels.

This Article asserts a comprehensive response to Elhauge’s provocative arguments. With respect to tying, the Article shows that governing Supreme Court precedent does not deem the non-foreclosure “power” effects of the practice to be anticompetitive and that those effects are unlikely to reduce social welfare in the long run, especially after accounting for dynamic efficiencies. With respect to bundled discounting, the Article shows that Elhauge’s proposed liability rule is both inapposite to consumer harm and inadministrable and that both “linked” market foreclosure and a form of below-cost pricing are necessary for anticompetitive harm and should therefore be prerequisites to antitrust liability.

April 11, 2011 | Permalink | Comments (0) | TrackBack (0)

Sunday, April 10, 2011

Fifth Evening Policy Talk of the Global Competition Law Centre (GCLC) with Joaquín Almunia, Vice-President of the European Commission, Commissioner for Competition on "Staying Ahead Of The Curve In Eu Competition Policy"

Posted by D. Daniel Sokol

Fifth Evening Policy Talk of the Global Competition Law Centre (GCLC) with Joaquín Almunia, Vice-President of the European Commission, Commissioner for Competition on "Staying Ahead Of The Curve In Eu Competition Policy"

When: 19 April 2011, 18:45- 21:00

Place: The Hotel (formerly the Hilton), 38 Boulevard de Waterloo, 1000 Brussels

On 19 April the Global Competition Law Centre (GCLC) organises its fifth Evening Policy Talk with Joaquín Almunia, Vice-President of the European Commission, Commissioner for Competition on "Staying Ahead Of The Curve In Eu Competition Policy".

April 10, 2011 | Permalink | Comments (0) | TrackBack (0)