Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, May 7, 2011

Collective Redress, More Consultations at the European Level But are We Getting Closer to Consensus?

Posted by D. Daniel Sokol

Ann Marie Galvin (3M Europe) asks Collective Redress, More Consultations at the European Level But are We Getting Closer to Consensus?

ABSTRACT: Towards a Coherent European Approach to Collective Redress is the latest consultation by the European Commission ("Commission") on collective redress and follows a 2005 Green Paper and a 2008 White Paper on antitrust damages actions; in 2008 there was also a Green Paper on consumer collective redress. The earlier consultations provoked much debate and disagreement among stakeholders with many complaints about the lack of coordination within the Commission itself. There was no decisive action taken in 2008 and so, after more than 6 years, we are still in a consultation.

So what is new this time? There are three new aspects to note in the current consultation: (i) This is a horizontal public consultation involving three Commission Directorates-Justice, Competition, and Consumer-which addresses, to some extent, past criticisms; (ii) There is a focus on the use of private enforcement to achieve public enforcement of EU law. This has been widely criticized as an inappropriate policy direction. The enforcement of EU law should remain the responsibility of EU and national bodies and should never be the role of private legal actions; and (iii) Looking at injunctive relief in the context of collective procedures. This already exists in certain areas but has never been mentioned in previous consultations and studies-a point that is relevant to note as the current paper frequently refers to earlier studies as justification for action at EU level.

May 7, 2011 | Permalink | Comments (0) | TrackBack (0)

Friday, May 6, 2011

Non-Exclusive Competition under Adverse Selection

Posted by D. Daniel Sokol

Andrea Attar (University of Rome "Tor Vergata"), Thomas Mariotti (Toulouse School of Economics), and François Salanié (Toulouse School of Economics) describe Non-Exclusive Competition under Adverse Selection.

ABSTRACT: Consider a seller of a divisible good, facing several identical buyers. The quality of the good may be low or high, and is the seller's private information. The seller has strictly convex preferences that satisfy a single-crossing property. Buyers compete by posting arbitrary menus of contracts. Competition is non-exclusive in that the seller can simultaneously and secretly trade with several buyers. We fully characterize conditions for the existence of an equilibrium. Equilibrium aggregate allocations are unique. Any traded contract must yield zero profit. If a quality is indeed traded, then it is traded efficiently. Depending on parameters, both qualities may be traded, or only one of them, or the market may break down completely to a no-trade equilibrium

May 6, 2011 | Permalink | Comments (0) | TrackBack (0)

Ownership and Control in a Competitive Industry

Posted by D. Daniel Sokol

Heiko Karle (ECARES, Universite Libre de Bruxelles), Tobias J. Klein (CentER, Netspar, TILEC, Tilburg University), and Konrad O. Stahl address Ownership and Control in a Competitive Industry.

ABSTRACT: We study a differentiated product market in which an investor initially owns a controlling stake in one of two competing firms and may acquire a non-controlling or a controlling stake in a competitor, either directly using her own assets, or indirectly via the controlled firm. While industry profits are maximized within a symmetric two product monopoly, the investor attains this only in exceptional cases. Instead, she sometimes acquires a noncontrolling stake. Or she invests asymmetrically rather than pursuing a full takeover if she acquires a controlling one. Generally, she invests indirectly if she only wants to affect the product market outcome, and directly if acquiring shares is profitable per se.

May 6, 2011 | Permalink | Comments (0) | TrackBack (0)

Cross-Border Antitrust Issues, Tuesday, June 7, 2011, Clifford Chance 4th floor Conference Center, New York

Posted by D. Daniel Sokol

Clifford Chance and MLex Invitation

 

 

 



Cross-Border Antitrust Issues



 

Date

Tuesday, June 7, 2011

Venue

Clifford Chance 4th floor Conference Center


31 West 52 Street, New York 10019

Time

Registration: 9:00 a.m.  


Program: 9:30 a.m. - 5:00 p.m.


Breakfast and lunch will be served.

RSVP

Register

 

 


 

Clifford Chance and MLex cordially invite you to a seminar on handling multi-jurisdictional antitrust issues. The seminar will be led by antitrust lawyers from Clifford Chance offices around the globe as well as members of the international antitrust law and regulatory media agency MLex. Panel discussions will include participation from international antitrust authorities, foreign law firm experts, and antitrust executives at multinational corporations. The Program includes:

 

A conversation on institutional design and possible reforms

  • Do some regulators have more power than others (the judge and jury question)?
  • How does multi‐jurisdictional coordination work?
  • What are the greatest obstacles toward convergence?
  • Why are there different tests and standards?
  • Is there a policy shift toward deference to the jurisdiction with the more significant antitrust issue?
  • Is there room for two competition agencies?
  • What are the advantages and disadvantages of a two agency system?
  • Is change likely to occur?
  • What is the role of the ICN? Whose standards apply and why?

 

Moderator:  Alex Nourry, Clifford Chance London

 

Panelists:

William E. Kovacic, Commissioner, US Federal Trade Commission
John Fingleton, Chief Executive, Office of Fair Trade
Michel Petite, Clifford Chance Paris and Former Director General of the EC Legal Service

 

Transactions in emerging antitrust regulatory regimes

 

  • What is the status of implementing antitrust merger control in India, China, Russia and Brazil?
  • What are the impediments for companies?
  • How does competition with state‐owned entities affect the merger control review?
  • Will there be backlash in established jurisdictions if the process in BRIC countries is perceived as political?

 

Moderator: William Blumenthal,Clifford Chance US

 

Panelists:

Torsten Syrbe, Clifford Chance Moscow (Russia)
Samir Ghandi, Economic Laws Practice (India)
Ninette Dodoo, Clifford Chance Beijing (China)
Caio Mário Mário da Silva Pereira Neto, Brasil Pereira Neto Galdino Macedo (Brazil)

 

Coordinating multi jurisdictional transactions

 

  • What are the pitfalls and difficulties in multi‐jurisdictional filings?
  • What are the decision points for jurisdictions with voluntary filing requirements? What are the risks in filing or not filing?
  • How should companies address complainants/interveners across jurisdictions?
  • How should companies deal with multiple antitrust authorities simultaneously?
  • What to do when separate jurisdictions are seeking conflicting remedies?
  • When should companies address remedies and should they address them simultaneously with multiple regulators?

 

Moderator:  Robert McLeod, MLex


Panelists:

Mark Siemens, Senior Counsel, Siemens Corporation
Miguel del Pino, Marval, O'Farrell & Mairal (Argentina)
Dr. Andreas Bardong, Head of Section Merger Control Policy, Germany Bundeskartellamt
Thomas Vinje, Clifford Chance Brussels

 

Handling multi jurisdictional antitrust investigations and litigations

 

  • How do the varied rules of privilege affect multi‐jurisdictional investigations and litigations?
  • How do different legal standards – dominance vs. monopolization – affect forum choice?
    When should you retain outside counsel?
  • How does the potential for criminal prosecution in one or more jurisdictions affect how an investigation is handled?
  • How does the computation of damages differ across jurisdictions?
  • What effect do compliance programs have on civil fines?

 

Moderator: Lewis Crofts, MLex

 

Panelists:

Thomas Kramler, Deputy Head of Unit, DG Competition, European Commission
Joshua Soven, Chief Litigation 1 Section, U.S. Department of Justice Antitrust Division
Dr. Andreas Bardong, Head of Section Merger Control Policy, Germany Bundeskartellamt
Luke Tolaini, Clifford Chance London

 

 

This course will offer New York State CLE credit.

 

 

Attorney Advertising
Prior results do not guarantee a similar outcome.

 

 

 




May 6, 2011 | Permalink | Comments (0) | TrackBack (0)

Roger Witcomb named new Head of UK Competition Commission

Posted by D. Daniel Sokol

See the press release here. As the press release states:

Mr Witcomb will be the Chair during the Government’s consultation on its proposals to merge the CC with the competition functions of the Office for Fair Trading (OFT). This consultation forms part of the Government’s plan to stimulate growth by allowing the market to be dynamic and competitive, while strengthening and streamlining the competition regime. He has been a member of the Competition Commission Board since 2009 and a Deputy Chair since January 2011

May 6, 2011 | Permalink | Comments (0) | TrackBack (0)

The Competition and Consumer Amendment Bill (No. 1) 2011 (Exposure Draft): A Problematic Attempt to Prohibit Information Disclosure

Posted by D. Daniel Sokol

Brent Fisse, University of Sydney - Faculty of Law and Caron Y. Beaton Wells, Melbourne Law School have posted The Competition and Consumer Amendment Bill (No. 1) 2011 (Exposure Draft): A Problematic Attempt to Prohibit Information Disclosure.

ABSTRACT: The Competition and Consumer Amendment Bill (No. 1) 2011 (Exposure Draft) seeks to prohibit anti-competitive disclosure of information by one competitor to another. The proposed prohibition under s 44ZZW seeks to ban the private disclosure of price-related information. The proposed prohibition under s 44ZZX seeks to ban the public or private disclosure of price-related and certain other information for the purpose of substantially lessening competition in a market. Neither prohibition has a cogent rationale. As a result, both suffer from dire overreach and are likely to produce unintended consequences. The most fundamental flaw is that the proposed prohibitions focus on information disclosure whereas the relevant economic concern is not information disclosure of itself but the facilitation of coordinated conduct by competitors. Another serious flaw is that the proposed exceptions to the prohibitions are too limited in scope. There is also a potential loophole, namely the conceivable use of continuous disclosure by public-listed companies as an avenue for getting around the prohibition against public disclosure of information under s 44ZZX.

May 6, 2011 | Permalink | Comments (0) | TrackBack (0)

Thursday, May 5, 2011

De-merger Regimes in Europe. Are national deconcentration powers an appropriate tool for enhancing competition in the EU?

Posted by D. Daniel Sokol

Stefan Thomas - University of Tubingen asks De-merger Regimes in Europe. Are national deconcentration powers an appropriate tool for enhancing competition in the EU?

ABSTRACT: Bigness as such is not an offence in the EU - or, at least not yet. In the UK under the Enterprise Act 2002 the Parliament has created powers to remedy adverse effects on competition even if they were not created by an unlawful merger or by abusive behaviour of a dominant firm. Recently these provisions were used for ordering the deconcentration of BAA in an effort to improve competition between airports in the UK. In Germany, a vigorous debate is beginning regarding whether similar powers should be conferred upon the German Federal Cartel Office.

May 5, 2011 | Permalink | Comments (0) | TrackBack (0)

5th International IMEDIPA Conference on Competition Law and Policy

Posted by D. Daniel Sokol

IMEDIPA presents its 5th international conference in Athens 

under the auspices of the Hellenic Competition Commission and the Competition Authority of Cyprus

 

Hotel Grande Bretagne

Friday May 27 and Saturday May 28, 2011

 CONFERENCE PROGRAMME

 DAY 1 : MAY 27, 2011

8:00-9:00 Registration

 

 Welcome session

 09:00 Introduction: Ioannis Lianos, UCL, IMEDIPA

 Salutations: Dimitrios Kyritsakis, President, Hellenic Competition Commission

                     Eleni Karaoli, Member of the Board, Cypriot Competition Authority

 

 9:30 – 11:00 Session 1: Horizontal Cooperation Agreements: information exchange, trade associations, standard setting in a horizontal context

Chair: Yannis Katsoulacos, Athens University of Economics and Business

Panelists

Panayotis Bernitsas, M & P Bernitsas Law Offices

Simon Bishop, RBB Economics

Emmanuel Dryllerakis, Dryllerakis & Associates

Eliza Petritsi, Holman Fenwick Willan LLP

Ewoud Sakkers, Head of Unit, DG Competition, European Commission

 

11:00 -11:15 Coffee break

 

11:15- 12:45 Session 2: Vertical strategies and competition law

Chair:  Ioannis Lianos, UCL

Panelists

Jean-François Bellis, Van Bael & Bellis

Ian Forrester, White & Case LLP

Christos Genakos, Athens University of Economics and Business

Okeoghene Odudu, University of Cambridge

Gregory Pelecanos, Ballas, Pelecanos & Associates

 

12:45-13:45 Debate: Static versus dynamic approaches in competition law: an institutional perspective from the United States and Europe

 Key note Speaker: Judge Douglas Ginsburg, United States Court of Appeals for the District of Columbia Circuit

Discussant: Judge Nicholas Forwood, General Court of the EU

Debate chaired by Judge Frederic Jenny, Cour de Cassation, OECD

 

13:45-14:30 Lunch Break

 

14:30-16:30 Session 3: Merger Enforcement

Chair: Richard Whish, Kings College London

Panelists

Sheldon Mills, UK Office of Fair Trading

Konstantinos Adamantopoulos, Holman Fenwick Willan LLP

Kyriakos Fountoukakos, Herbert Smith LLP

Ioannis Kokkoris, University of Reading, IMEDIPA

Panagiotis Fotis, Directorate-General, Hellenic Competition Commission

 

16:30-16:45 Coffee break

 

16:45- 18:30 Session 4:  Roundtable of authorities

Chair: Frederic Jenny, Cour de Cassation, OECD

Panelists

Šarūnas Keserauskas, Chairman, Competition Council of the Republic of Lithuania

 

Assimakis Komninos, Commissioner, Hellenic Competition Commission 

 William Kovacic, Commissioner, US Federal Trade Commission

 

Bruno Lasserre, Chairman, French Competition Authority

Ewoud Sakkers, Head of Unit, DG Competition, European Commission

Jacques Steenbergern, Director General, Belgian Competition Authority

 

DAY 2: MAY 28, 2011

9:45-11:15 Session 5: Government restrictions to competition: a law and policy perspective

Chair: Tasos Telloglou, Kathimerini Daily

Panelists

Allan Fels, Dean of the Australia and New Zealand School of Government (ANZSOG) tbc

Assimakis Komninos, Commissioner, Hellenic Competition Commission

William Kovacic, Commissioner, US Federal Trade Commission

Bruno Lasserre, Chairman, French Competition Authority

Ioannis Lianos, UCL, IMEDIPA

 

11:15 – 11:30 Coffee break

 

11.30 – 13.00 Session 6: Crisis and Competition Enforcement

Chair: Ioannis Kokkoris, University of Reading, IMEDIPA

Panelists

Dimitris Loukas, Hellenic Competition Commission

Phedon Nicolaides, European Institute of Public Administration, Maastricht

Šarūnas Keserauskas, Chairman, Competition Council of the Republic of Lithuania

 

 

13:00-13:45: Buffet lunch break

 

13:45- 15:15 Session 7: Cartels and Collusive practices in Greece & Cyprus: recent developments

Chair: George Triantafillakis, Democritus Thrace University

Panelists

Anastasios Antoniou, Anastasios Antoniou LLC

Dimitris Avgitidis, Hellenic Competition Commission, Democritus University of Thrace

Anastasia Dritsa, KGDI Law Firm

Efi Kinini, Athens Law School

Nikos Vettas, Athens University of Economics and Business and EAGCP, DG-Competition, European Commission

 

15:15-15:30 Coffee Break

 

15:30 – 17:30 : Session 8: Abuse of dominance in Greece & Cyprus: recent developments

Chair: Dimitris Tzouganatos, Athens Law School

Panelists

Yannis Katsoulacos, Athens University of Economics and Business

Constantinos Lambadarios, Lambadarios Law Firm

Xenophon Paparrigopoulos, Potamitis Vekris Law Firm

Emmanuela Truli, Hellenic Competition Commission

 

17:30: Conclusion: Ioannis Kokkoris, University of Reading, IMEDIPA

 

CONFERENCE FEES 

STANDARD CONFERENCE FEE: 90 Euros

EARLY BIRD & SPECIAL BOOKINGS (for more than 5 persons and for any booking before May 13th): 80 Euros

STUDENTS, ACADEMICS, TRAINEES: 70 Euros

The conference fees cover the following:

- access to the conference and conference materials

- access to the conference lunch buffet (for May 27 and May 28)

- access to all coffee breaks (for May 27 and May 28)

 

 For more information : info.imedipa@gmail.com

May 5, 2011 | Permalink | Comments (0) | TrackBack (0)

Competition and Regulation in the Insurance Sector: Reassessing the McCarran-Ferguson Act

Posted by D. Daniel Sokol

Beth Farmer (Penn State Law) has published Competition and Regulation in the Insurance Sector: Reassessing the McCarran-Ferguson Act.

ABSTRACT: This article was presented at a symposium entitled “Public and Private: Are the Boundaries in Transition?” sponsored by the American Antitrust Institute on June 24, 201'3 It proposes a different paradigm, which more precisely describes regulation and competition in the insurance sector. This relationship is the shifting boundary between state and federal regulation instead of a boundary between the public and private sectors. The McCarran-Ferguson Act was adopted to protect firms acting in the business of insurance from federal antitrust scrutiny, but its language and impact goes far beyond federal competition law. So broad is the exemption that the modern effect of the Act only incidentally concerns antitrust. Fundamentally, the Act reifies the boundaries between federal and state power; it is, at base, an allocation of power and an affirmation of the federalism paradigm. In this sector, the distinction is between different manifestations of public power rather than the distinction between public and private power. Moreover, the defense of the antitrust boundaries is a skirmish, not the subject of the main purpose of the McCarran-Ferguson Act, which is, as ever, federalism. My provisional conclusions are as follows: the antitrust exemption is unnecessary, but even if it were eliminated, it would have protected little. Reverse preemption, which could be viewed as mere mischief, an unintended consequence, is, in fact, at the heart of this model and exposes the points of the Act: preservation of the boundaries, allocation of power, and deference among the states and federal government.

This Article discusses, first, the antitrust immunity aspect of the McCarran-Ferguson Act, including the asserted justification for the exemption and whether it is required in the era of modern antitrust interpretation. Next, it discusses proposed legislative repealers and reasons for their failure, and offers comparative examples of competition and exemption in the insurance sector from the European Union. Finally, it concludes by returning to first principles, which reach more broadly than antitrust and implicate the structure of federal and state authority.

May 5, 2011 | Permalink | Comments (1) | TrackBack (0)

Evaluating Leniency and Modeling Cartel Durations: Time-Varying Policy Impacts and Sample Selection

Posted by D. Daniel Sokol

Jun Zhou, Bonn University, Wirtschaftspolitische Abteilung is Evaluating Leniency and Modeling Cartel Durations: Time-Varying Policy Impacts and Sample Selection.

ABSTRACT: The objective of this paper is to investigate the efficacy of the European Commission's leniency in destabilizing and deterring cartels. I discuss a dynamic model of cartel formation and dissolution to illustrate how changes in antitrust policies and market and macroeconomic conditions might affect cartel duration. Comparative statics results are then corroborated with empirical estimates of a hazard function adjusted to account for both the heterogeneity of cartels and the non-proportional time dependence suggested by theory. Statistical tests are consistent with the theoretic predictions that following a more efficacious leniency program, the average duration of discovered cartels rises in the short run and falls in the long-run.

May 5, 2011 | Permalink | Comments (0) | TrackBack (0)

Competition Law, Antitrust Immunity and Profits: A Dynamic Panel Analysis

Posted by D. Daniel Sokol

Erik Brouwer, Tilburg Law and Economics Center (TILEC) and Fatih Cemil Ozbugday, Tilburg Law and Economics Center (TILEC), Tilburg University - Department of Economics address Competition Law, Antitrust Immunity and Profits: A Dynamic Panel Analysis.

ABSTRACT: This paper tests whether the transition from the old Economic Competition Act, which was based on the so-called “abuse system”, to the new Competition Act, which was based on “prohibition system”, in the Netherlands had an impact on the price-cost margins in manufacturing industries during the period 1993-2007. The paper further investigates if the price-cost margins were higher in industries where temporary antitrust immunity was granted for subset of firms that engaged in concerted practices. The results indicate that the change in the competition law in the Netherlands had a very small and negative, yet statistically insignificant deterrent effect on the price-cost margins. Elsewhere, markups were higher in industries in which temporary antitrust immunity was granted for some class of coordinated actions.

May 5, 2011 | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 4, 2011

GCR's The Asia-Pacific Antitrust Review 2011

Posted by D. Daniel Sokol

May 4, 2011 | Permalink | Comments (0) | TrackBack (0)

The Second Annual Chicago Forum on International Antitrust Issues

Posted by D. Daniel Sokol

International Antitrust Forum

The Second Annual Chicago Forum on International Antitrust Issues
Thursday, June 9th - Friday, June 10th, 2011

Registration | Agenda | Sponsors

This conference is co-sponsored by Baker & McKenzie, Mayer Brown, Microsoft, NERA Economic Consulting and the Searle Center on Law, Regulation, and Economic Growth.

Overview

This two-day conference will examine the latest developments in competition regulation around the globe including:

  • Antitrust Enforcement Priorities: US, Canada and Mexico
  • Corporate Perspectives on Dealing with the US and Non-US Agencies
  • Leniency in Cartel Investigations
  • Global Compliance: Best Practices
  • Developments in Brazil, Russia, India and China
  • Hot topics in Europe
  • Merger Update: New Guidelines in the US and Abroad
  • Abuse of Dominance
  • Distribution Practices: Pricing, Advertising and the Internet
  • New Risks and Strategies in Private Antitrust Litigation
  • Counseling and Litigating Without the Attorney-Client Privilege

Government Speakers:
William E. Kovacic, Commissioner, Federal Trade Commission; Melanie L. Aitken, Commissioner of Competition, Canada Competition Bureau; Eduardo Perez Motta, Chairman, Federal Competition Commission, Mexico; Rachel C. Brandenburger, Special Advisor, International, Antitrust Division, Department of Justice; Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement, Antitrust Division, Department of Justice; Russell W. Damtoft, Associate Director, Office of International Affairs, Federal Trade Commission

Other Speakers:
Patrick Ahern, Baker & McKenzie LLP; Theodore L. Banks, Compliance & Competition Consultants; Michael R. Baye, Kelley School of Business, Indiana University; Roxane C. Busey, Baker & McKenzie LLP; Mildred L. Calhoun, BP America; Thomas Campbell, Baker & McKenzie LLP; Steven J. Cernak, General Motors; Alice W. Detwiler, Microsoft; Nathalie Jalabert Doury, Mayer Brown LLP (Paris); Ricks P. Frazier, United Airlines; Anne Gron, NERA; H. Stephen Harris, Jr., Baker & McKenzie LLP; Paul Hofer, NERA (London); Clara Ingen-Housz, Baker & McKenzie LLP (Hong Kong); Kevin Kehoe, Microsoft; Christopher J. Kelly, Mayer Brown LLP; Deborah Platt Majoras, Proctor & Gamble; Carel Maske, Microsoft (Brussels); Mark McLaughlin, Mayer Brown LLP; Samantha Mobley, Baker & McKenzie LLP (London); Christopher J. Myers, Microsoft; Anne Riley, Shell International (London); Douglas M. Tween, Baker & McKenzie LLP; Spencer Weber Waller, Loyola Law School; Bruno D. Werneck, Tauil & Chequer Advogados (Sao Paulo); Lawrence Wu, NERA

 

Registration

Register
Tuition: $400
Standard Registration $200 (Government/Academic/Judicial Registration)

Credits: Earn up to 10.5 CLE credits, incl. 2 professionalism (ethics).

For more information regarding this conference or other initiatives of the Searle Center, please call (312) 503-1811 or send an email to searlecenter@law.northwestern.edu .

May 4, 2011 | Permalink | Comments (0) | TrackBack (0)

Acquisitions, Entry and Innovation in Network Industries

Posted by D. Daniel Sokol

Pehr-Johan Norbäck, Research Institute of Industrial Economics (IFN), Lars Persson, Research Institute of Industrial Economics (IFN), Centre for Economic Policy Research (CEPR), and Joacim Tåg, Research Institute of Industrial Economics (IFN) describe Acquisitions, Entry and Innovation in Network Industries.

ABSTRACT: Why do so many high-priced acquisitions of entrepreneurial firms take place in network industries? We develop a theory of commercialization (entry or sale) in network industries showing that high equilibrium acquisition prices are driven by the incumbents' desire to prevent rivals from acquiring innovative entrepreneurial firms. This preemptive motive becomes more important when there is an increase in network effects. A consequence is higher innovation incentives under an acquisition relative to entry. A policy enforcing strict compatibility leads to more entry, but can be counterproductive by reducing bidding competition, thereby also reducing acquisition prices and innovation incentives.

May 4, 2011 | Permalink | Comments (0) | TrackBack (0)

Choosing Among Tools for Assessing Unilateral Merger Effects

Posted by D. Daniel Sokol

Gregory J. Werden U.S. Department of Justice - Antitrust Division Luke Froeb Vanderbilt University - Owen Graduate School of Management discuss Choosing Among Tools for Assessing Unilateral Merger Effects.

ABSTRACT: A raft of articles offered contrasting views on analytic tools for assessing unilateral effects from differentiated products mergers. We revisit this debate to clarify the issues and place them in context. We consider the choice among analytic tools at three stages of a merger assessment - initial screening, ultimate decision, and courtroom presentation. In doing so, we explain how the proper analytic tool for a particular merger depends on the competitive process in which the merging firms are engaged and how the merger is apt to affect it. We also explain how the proper analytical tool for a particular merger depends on the information currently available. We address the Upward Pricing Pressure Index (UPPI), finding merit in the idea of a simple screen for differentiated products mergers, and suggesting a slightly simpler calculation. We conclude that either as a screen or as part of a full assessment of a merger, other tools are preferable to the UPPI.

May 4, 2011 | Permalink | Comments (0) | TrackBack (0)

Organisational Structures in Network Industries – An Application to the Railway Industry

Posted by D. Daniel Sokol

Benjamin Pakula (University of Giessen) and Georg Götz (University of Giessen) discuss Organisational Structures in Network Industries – An Application to the Railway Industry.

ABSTRACT: This paper analyses the incentives to upgrade input quality in vertically related (network) industries. Upstream investments have a biased effect on the downstream companies and lead to vertical product differentiation. Different vertical structures such as vertical integration, ownership and legal unbundling lead to different investments. We find that, without regulation, vertical integration and legal unbundling regimes provide highest investment incentives and lead to highest welfare. However, we also find foreclosure in the downstream market if the potential degree of horizontal product differentiation of the entrant is low. Under ownership unbundling, investment incentives are lower but there is never foreclosure of the entrant since this would worsen double marginalisation. When the network operator is subject to a break-even regulation, the investment incentives are crowded out under legal and ownership unbundling! whereas they remain nearly unchanged under vertical integration. Welfare and co umer surplus decrease under legal unbundling, but increase under the two other regimes.

May 4, 2011 | Permalink | Comments (0) | TrackBack (0)

Bates White's 8th Annual Antitrust Conference, June 6, 2011, Washington, DC

Posted by D. Daniel Sokol

Bates White's 8th Annual Antitrust Conference

  • June 6, 2011
  • Washington, DC

Panel sessions

Trends and takeaways from recent merger enforcement actions

Joseph Farrell, Director, Bureau of Economics, Federal Trade Commission
Renata B. Hesse, Partner, Wilson Sonsini Goodrich & Rosati
J. Robert Kramer II, General Counsel, Office of the Assistant Attorney General, Department of Justice
John H. Lyons, Partner, Skadden, Arps
David P. Wales, Partner, Jones Day
George A. Rozanski, Partner, Bates White Economic Consulting (moderator)

This panel will discuss recent developments in merger enforcement in the United States including the impact, or lack of impact, that the new Horizontal Merger Guidelines (HMG) has had on enforcement priorities and the types of analysis being considered by the agencies. We will explore the following questions:

  • What do recent cases say about the agencies’ enforcement stance?
  • Have measures of diversions and margins replaced measures of concentration and market definition? What will courts say?
  • How have revisions to the sections on coordinated effects and geographic market definition influenced the agencies’ enforcement stance and analyses presented by merging parties?
  • Agency review of consummated mergers: is it an exercise in repairing the damage or deterring non-reportable but anticompetitive mergers in the future?

Is it time to improve the Foreign Trade Antitrust Improvement Act?

Amy B. Manning, Partner, McGuire Woods
Jerome A. Murphy, Partner, Crowell & Moring
Mark Rosman, Partner, Wilson Sonsini Goodrich & Rosati
Jodi Trulove, Partner, Dickstein Shapiro
Charles L. Miller, Partner, Bates White Economic Consulting (moderator)

In a number of antitrust cases–including notable recent decisions in LCDs, DRAM, and AMD v. Intel–courts have limited private remedies available under U.S. law in rulings citing the Foreign Trade Antitrust Improvement Act (“FTAIA”) of 1982.

Critics claim that such decisions deny full compensation to victims, allow violators to retain illegal gains, and dilute the threat of treble-damage remedies. Proponents argue that international comity requires limits to U.S. civil actions and that higher U.S. civil penalties discourage self-reporting of antitrust violations and cooperation with authorities. We will explore the following questions:

  • Are U.S. courts striking the right balance?
  • If the status quo continues, what are the implications for antitrust law enforcement in the United States and abroad?
  • Should Congress act to amend the FTAIA and, if so, how?

Keynote

“Market Power, Market Definition, and the Merger Guidelines

Louis Kaplow, JD, PhD, Finn M.W. Caspersen and Household International Professor of Law and Economics, Harvard Law School; Associate Director, John M. Olin Center for Law, Economics, and Business

Date, location, and timeline

Monday, June 6, 2011
Ronald Reagan Building
1300 Pennsylvania Avenue NW
Washington, DC 20004

Registration
2:30–3:00 p.m.
Horizon Room

Horizontal Merger Guidelines panel
3:00–4:15 p.m.
Horizon Room

FTAIA panel
4:30–5:45 p.m.
Horizon Room

Reception
6:00–7:00 p.m.
Rotunda Room

Dinner and keynote address
7:00–9:30 p.m.
Rotunda Room

RSVP

To register, please email Claudine Roshanian or call her at 202.216.1801



May 4, 2011 | Permalink | Comments (0) | TrackBack (0)

SSRN Most Downloaded New Papers of the Last Two Months: TOP 10 Papers for Journal of Antitrust: Antitrust Law & Policy eJournal March 4, 2011 to May 3, 2011

Posted by D. Daniel Sokol

Rank Downloads Paper Title
1 205 Antitrust Merger Efficiencies in the Shadow of the Law
D. Daniel Sokol, James A. Fishkin,
University of Florida - Levin College of Law, Dechert LLP,
Date posted to database: April 4, 2011
Last Revised: April 7, 2011
2 139 Appropriate Liability Rules for Tying and Bundled Discounting: A Response to Professor Elhauge
Thomas A. Lambert,
University of Missouri - School of Law ,
Date posted to database: March 10, 2011
Last Revised: March 14, 2011
3 138 Avoidance Techniques: State Related Defences in International Antitrust Cases
Marek Martyniszyn,
University College Dublin- School of Law,
Date posted to database: March 14, 2011
Last Revised: March 14, 2011
4 136 A Neo-Chicago Approach to Concerted Action
William H. Page,
University of Florida - Fredric G. Levin College of Law,
Date posted to database: March 10, 2011
Last Revised: March 10, 2011
5 136 Fines and Damages Under EU Competition Law – Implications of the Accumulation of Liability
Michael J. Frese,
Amsterdan Center for Law & Economics (ACLE),
Date posted to database: March 25, 2011
Last Revised: April 27, 2011
6 116 Rediscovering the Spirit of Competition: On the Normative Value of the Competitive Process
Oles Andriychuk, Oles Andriychuk,
University of East Anglia (UEA) - Centre for Competition Policy, European University Institute,
Date posted to database: March 9, 2011
Last Revised: March 10, 2011
7 107 The Development of General Principles for EU Competition Law Enforcement – The Protection of Legal Professional Privilege
Michael J. Frese,
Amsterdan Center for Law & Economics (ACLE),
Date posted to database: February 28, 2011
Last Revised: April 7, 2011
8 104 Tying Noncompetitive Goods
Herbert J. Hovenkamp,
University of Iowa - College of Law,
Date posted to database: March 17, 2011
Last Revised: April 25, 2011
9 101 Removing Property from Intellectual Property and (Intended?) Pernicious Impacts on Innovation and Competition
F. Scott Kieff,
George Washington University - Law School,
Date posted to database: March 29, 2011
Last Revised: April 5, 2011
10 98 Merger Simulation in an Administrative Context
Jonathan B. Baker,
American University - Washington College of Law,
Date posted to database: March 21, 2011
Last Revised: March 21, 2011

May 4, 2011 | Permalink | Comments (0) | TrackBack (0)

FTC Staff Report Finds 60 Percent Increase in Pharmaceutical Industry Deals That Delay Consumers' Access to Lower-Cost Generic Drugs

Posted by D. Daniel Sokol

According to the FTC press release:

Pharmaceutical companies struck an unprecedented number of deals in Fiscal Year (FY) 2010 in which the manufacturers of branded products paid potential generic rivals and generic companies agreed to defer the introduction of lower-cost medicines for American consumers, according to an overview of industry data released by the staff of the Federal Trade Commission.

The FTC staff report found that the number of these deals skyrocketed more than 60 percent, from 19 in FY 2009 to 31 in FY 2010. Overall, the agreements reached in the latest fiscal year involved 22 different brand-name pharmaceutical products with combined annual U.S. sales of about $9.3 billion.

“Collusive deals to keep generics off the market are already costing consumers and taxpayers $3.5 billion a year in higher drug prices,” said FTC Chairman Jon Leibowitz. “The increasing number of these deals is a win-win proposition for the pharmaceutical industry, but a lose-lose for everyone else.”

Millions of Americans rely on generic drugs to make medicine affordable, and generics also help hold down costs for taxpayer-funded health programs such as Medicare and Medicaid. Generic prices are typically at least 20 to 30 percent less than the name-brand drugs, and in some cases are up to 90 percent cheaper.

In recent years, certain brand-name companies have paid generic challengers to settle their patent challenges and delay the introduction of lower-cost medicines. An FTC staff study has found that such settlements that include a payment delay generic entry by 17 months longer on average than those that do not include a payment.

The FTC has challenged a number of these patent settlement agreements in court, contending that they are anticompetitive and violate U.S. antitrust laws. The agency also has supported legislation in Congress that would prohibit settlements that increase the cost of prescription drugs.

The staff report summarizes data on patent settlements filed with the FTC and the Department of Justice during FY 2010. There were a total of 113 final patent settlements. Of those, 31 settlements contained a payment to a generic manufacturer and also restricted the generic’s ability to market its product. Of those 31 settlements, 26 involved generics that were so-called “first filers,” meaning that they were the first to seek FDA approval to market a generic version of the branded drug. Because of the regulatory framework, when first filers delay entering the market, other generic manufacturers can also be blocked from entering the market, which makes such patent settlement deals particularly harmful to consumers.

The staff report issued today also cited three other settlements in FY 2010 that did not record any explicit compensation for the generic, but provided other assurances that may have had the effect of compensating the generic for delaying entry.

May 4, 2011 | Permalink | Comments (0) | TrackBack (0)

Access Regulation, Entry and the Investment Ladder in Telecommunications

Posted by D. Daniel Sokol

Fabio Manenti (Università di Padova) and Antonio Sciala' (Universita' Roma Tre) explain Access Regulation, Entry and the Investment Ladder in Telecommunications.

ABSTRACT: This paper presents a model of competition between an incumbent and an entrant firm in telecommunications. The entrant has the option to enter the market with or without having preliminary invested in its own infrastructure; in case of facility based entry, the entrant has also the option to invest in the provision of enhanced services. In case of resale based entry the entrant needs access to the incumbent network. Unlike the rival, the incumbent has always the option to upgrade the existing network to provide advanced services. We study the impact of access regulation on the type of entry and on firms' investments. Without regulation, we find that the incumbent sets the access charge to prevent resale based entry and this overstimulates rival's investment that may turn out to be socially inefficient. Access regulation may discourage welfare enhancing investments, thus also inducing a socially inefficient outcome. We ex! tend the model to account for negotiated interconnection in case of facilities based entry.

May 4, 2011 | Permalink | Comments (1) | TrackBack (0)