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 25, 2011

Seventh Symposium on Trends in Retail Competition: Private Labels, Brands and Competition Policy

Posted by D. Daniel Sokol

Seventh Symposium on Trends in Retail Competition: Private Labels, Brands and Competition Policy

Friday 3 June 2011

bullet Venue: Centre for Competition Law & Policy

Organised by Centre for Competition Law & Policy in conjunction with Oxford Institute of European and Comparative Law

The grocery sector in Europe, arguably the most important for consumers, is facing unprecedented challenges in terms of climate change, higher global demand for food and increasing pressure on finite resources. At the same time consumers expect access to a wide range of products at competitive prices from a choice of outlets.

The policy implications underlying these challenges are growing in importance. The sector is coming under greater scrutiny at both European and national levels, in terms of the health of the supply chain and both retail and product competition in the marketplace. Such scrutiny provides a backdrop to this symposium which looks in particular at relationships between retailers and suppliers, competition between branded and private label products and the implications for shoppers. Competition between private labels and branded goods differs in important respects from the usual head-to-head competition between suppliers arising from the retailer?s dual role, with the retailer being at the same time important retail customer and direct (product) competitor.Meanwhile, competition authorities have expressed concerns over some adverse effects of buyer power, notably the transfer of excessive risks and unexpected costs to suppliers, undermining investments in product quality, range and innovation.

This symposium, the seventh to be hosted by the Oxford Institute of European and Comparative Law in conjunction with the Centre for Competition Law & Policy and sponsored by the law firm Bristows, will explore these issues and their implications for shoppers. The programme features two roundtable discussions, presenting an opportunity to hear from national competition authorities and officials. The event will be held under the Chatham House Rule1.

There is no charge to attend.

bullet For the full programme and registration information, click here (Acrobat PDF file)

April 25, 2011 | Permalink | Comments (0) | TrackBack (0)

The Next Big Question in Competition Law: How do we Treat Buyer Power?

Posted by D. Daniel Sokol

Paul Nihol (UC Louven) and Thomas Lübbig (Freshfields) ask The Next Big Question in Competition Law: How do we Treat Buyer Power?

ABSTRACT: significant number of antitrust issues have now been settled, with many practitioners and observers agreeing on how anticompetitive practices should be addressed around the globe. For instance, there is no discussion about the necessity to act severely against cartels. The rules on horizontal mergers have become similar, or demonstrate little difference, on both sides of the Atlantic. Some questions remain on resale price maintenance or the extent to which economics should be introduced in the analysis of dominance. But these issues, while not being minor, call for a refinement, not an overhaul, of current rules. This is probably the right moment for the next big question to emerge.

April 25, 2011 | Permalink | Comments (0) | TrackBack (0)

Exclusive Dealing: Single-Product Discounting, Slotting Allowances, and Related Practices

Posted by D. Daniel Sokol

Herb Hovenkamp (Iowa Law) has posted Exclusive Dealing: Single-Product Discounting, Slotting Allowances, and Related Practices.

ABSTRACT: A firm's discounting policies over a single product raise exclusive dealing concerns in two situations. First, the firm may offer quantity discounts whose effect is to induce customers to take most of their requirements for a given product from the defendant. In addition, a firm may employ “slotting” fees or similar allowances paid by manufacturers to retailers, with the possible result that rivals have difficulty obtaining access to shelf space.

Most quantity discount programs are undoubtedly designed to reflect the reduced costs of larger transactions. But suppose that a discounting program is clearly in excess of anything justified by significant savings. For example, suppose that the program gives incremental discounts stretching up to very large volumes and permits the aggregation of all purchases over a lengthy period, say one year. If exclusive dealing under equivalent structural conditions and subject to equivalent defenses were lawful, the discount arrangement should be lawful as well. But the competitive impact must in fact be less because any equally efficient rival can take the customer by bidding a better price and even compensating the customer for the loss of the discount from the defendant.

Some discounts take the form of upfront payments from producers to grocers or other retailers for access to the retailer's shelf space. For example, a grocer may wish to allocate scarce display space to only two of the three major brands of prepared baby food. These allowances are generally paid to retailers in order to induce them to carry and display a product whose prospects are uncertain to the retailer. The special characteristic of the slotting allowance that gives it this risk-transferring property is that it is a discount that diminishes as the volume of goods sold increases, effectively making the supplier share in the risk that a product will not succeed at retail.

Challenges to above cost discounting, where the engine of exclusion is price, must meet more severe structural requirements than exclusive dealing. Indeed, predatory pricing is a “monopolization” offense requiring significant market shares in at least the 60-70% range, and it would be perverse to assess stricter structural requirements in cases involving below cost pricing than in those challenging prices that are above cost.

April 25, 2011 | Permalink | Comments (0) | TrackBack (0)

The Determination of Optimal Fines in Cartel Cases: The Myth of Underdeterrence

Posted by D. Daniel Sokol

Marie-Laure Allain, Ecole Polytechnique, Paris - Laboratoire d'Econometrie, Marcel Boyer, University of Montreal - Department of Economics, Center for Interuniversity Research and Analysis on Organization (CIRANO), Rachidi Kotchoni, Laval University - CRÉA, and Jean Pierre Ponssard, Ecole Polytechnique, Paris - Laboratoire d'Econometrie have an interesting new paper on The Determination of Optimal Fines in Cartel Cases: The Myth of Underdeterrence.

ABSTRACT: The determination of optimal fines to deter the formation or continuation of cartels is a major objective of competition policy. We provide a game theoretic discussion of the restitution and deterrence properties of fines static and dynamic frameworks: cartel stability depends on their ability to prevent deviation by firms and the benefit of a deviation depends on the fines to be imposed in case of detection by the antitrust authority. We show that the proper consideration of the dynamics of competition has a major impact on the determination of optimal dissuasive fines: our results suggest that a clear majority of fines imposed by the European Commission in recent years meet the deterrence objective.

April 25, 2011 | Permalink | Comments (0) | TrackBack (0)

Estimating the Lock-in Effects of Switching Costs from Firm-Level Data

Posted by D. Daniel Sokol

Gabor Kezdi (Institute of Economics Hungarian Academy of Sciences) and Gergely Csorba (Institute of Economics Hungarian Academy of Sciences) have a paper Estimating the Lock-in Effects of Switching Costs from Firm-Level Data.

ABSTRACT: This paper proposes a simple method for estimating the lock-in effects of switching costs from firm-level data. We compare the behavior of already contracted consumers to the behavior of new consumers as the latter can serve as contrafactual to the former. In panel regressions on firms' incoming and quitting consumers, we look at the differential response to price changes and identify the lock-in effect of switching costs from the difference between the two. We illustrate our method by analyzing the Hungarian personal loan market and find strong lock-in effects.

April 25, 2011 | Permalink | Comments (0) | TrackBack (0)

Sunday, April 24, 2011

East Asian Market and Competition Policy Conference: April 30, 2011

Posted by D. Daniel Sokol

East Asian Market and Competition Policy Conference


Date: April 30, Saturday, 2011

Venue: Shinhan Hall, 6th Floor, Centennial Building,
Sookmyung Women's University, Seoul, Korea


Organizers:

- Specialization Center of the Institute of Law, Sookmyung Women's University,
Korea

- Panel on the Advancement of Competition Law and Policy supported by the
National Research Foundation of Korea


- Panel on the Competition Cooperation in Northeast Asia supported by
Korea Fair Trade Commission

INVITATION



On behalf of the organizers I am pleased to invite you to the Conference on East Asian Market and Competition Policy to be held in Seoul, Korea, on April 30, 2011. We invited high ranking officials and prominent scholars from Asia, Europe and America as panelists, and will illuminate the role of competition policy and the trends in competition policy enforcement in the context of economic cooperation and regional economic integration in East Asia. We anticipate your participation, and look forward to welcoming you in Seoul.


Sincerely,

Ki Jong Lee
Professor and Director
Specialization Center of the Institute of Law
Sookmyung Women's University

AGENDA


09:45-10:00 Opening Session

Welcoming remark

Eun-Gyun Mok, Dean, Graduate School, Sookmyung Women's University, Korea

Congratulatory remark

Dong-Heub Lee, Justice, Constitutional Court, Korea

10:00-11:10 Session 1

The Role of Competition Policy in Facilitating Regional Economic Integration in East Asia

Moderator

Ji Sang Chang, Professor, Kyungbook National University, Korea


Speaker

Cecilio Madero Villarejo, Deputy Director General, Mergers and Antitrust, European Commission, EU

Discussants

Song Bum Shin, Director, Regional Cooperation Division, Ministry of Foreign Affairs and Trade, Korea

Ki Jong Lee, Professor, Sookmyung Women's University, Korea


11:00-11:20 Break

11:20-12:30 Session 2


Trends in Competition Policy Enforcement

Moderator

Kiljun Park, Professor, Yonsei University, Korea


Speakers

William E. Kovacic, Commissioner, Federal Trade Commission, US

Hackhyun Kim, Commissioner, Fair Trade Commission, Korea

Jiang Lui, Director, Case-Acceptance Division, Anti-Monopoly Bureau, Ministry of Commerce, China


12:30-13:50 Lunch Break


13:50-14:50 Session 3


FTAs and the Cooperation on Competition Policy in East Asia


Moderator

Jinook Jeong, Professor, Yonsei University, Korea


Speaker

Xiaoye Wang, Professor, Chinese Academy of Social Science, China


Discussants

Hiroshi Nakazato, Senior Planning Officer, International Affairs Division, Fair Trade Commission, Japan

Jinyul Ju, Professor, Pusan National University, Korea

14:50-15:00 Closing Session

CONTACT

Ki Jong Lee
Professor and Director
Specialization Center of the Institute of Law
Sookmyung Women's University
52 Hyochangwon-gil, Yongsan
Seoul 140-742, KOREA
T +82-2-2077-7091
F +82-2-2077-7969
Email: [email protected]



April 24, 2011 | Permalink | Comments (0) | TrackBack (0)