Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Monday, May 16, 2011

Collective Redress Proposals for Europe: Seeking a Solution to a Non-Existent Problem?

Posted by D. Daniel Sokol

Luke Tolaini & Samantha Ward (Clifford Chance) ask Collective Redress Proposals for Europe: Seeking a Solution to a Non-Existent Problem?

ABSTRACT: The European Commission's public consultation on collective redress is the latest in a series of attempts at legislating for class action-style relief in Europe for breaches of EU law. It follows proposals in 2005 and 2008 by the Competition Directorate General ("DG COMP") and the Health and Consumer Policy Directorate General ("DG SANCO"), but it is not clear how the new consultation fits with those earlier proposals. In one sense, it appears to be taking a step backwards, asking for views on whether such a regime is necessary at all, before seeking opinions on how it should work. Neither DG COMP nor DG SANCO addressed the basis on which the EU could legislate in this area at all. The new consultation is similarly silent on this issue, and provides no evidence that legislation at EU level is necessary, or that it would achieve the objectives of the Treaties.

This article examines the history of the Commission's attempts to put in place a collective redress framework for breaches of EU law and looks at what regimes currently exist in Member States for collective redress. It also considers the concerns of defendants that the perceived disadvantages of U.S. class actions will make their way into Europe through any new legislation.

May 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Entry decisions after deregulation: the role of incumbents' market power

Posted by D. Daniel Sokol

Lorenzo Ciari (European University Institute - Firenze (I)) and Riccardo De Bonis (Banca d'Italia, Economics and International Relations Area) analyze Entry decisions after deregulation: the role of incumbents' market power.

ABSTRACT: This paper investigates the role of incumbents' market power in shaping the entry decisions of Italian banks after branching liberalization in 1990. Using a unique dataset on 260 banks, we find that entry over the 1990-1995 period was targeted towards markets that were more competitive to begin with, i.e. where banking spreads were smaller. The results confirm the entry deterrent role of market power in the short-run and show a long run effect of regulation that survives after the removal of administrative barriers. The capacity of market power to discourage entry is confirmed in instrumental variables specifications, where we use the characteristics of the local banking markets in 1936, a proxy for tightness of banking regulation, to identify an exogenous source of variation in the spreads.

May 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Can Vertical Separation Reduce Non-Price Discrimination and Increase Welfare?

Posted by D. Daniel Sokol

Duarte Brito (Universidade Nova de Lisboa and CEFAGE-UE), Pedro Pereira (Autoridade da Concorrência and IST), and João Vareda (Autoridade da Concorrência and CEFAGE-UE) ask Can Vertical Separation Reduce Non-Price Discrimination and Increase Welfare?

ABSTRACT: We investigate if vertical separation reduces non-price discrimination and increases welfare. Consider an industry consisting of a vertically integrated firm and an independent retailer, which requires access to the vertically integrated firm's wholesaler services. The wholesaler can degrade the quality of input it supplies to either of the retailers. Discrimination occurs if one of the retailers is supplied an input of lower quality than its rival. We show that separation of the vertically integrated firm reduces discrimination against the independent retailer, although it does not guarantee no-discrimination. Furthermore, with separation, the wholesaler may discriminate against the vertically integrated firm's retailer. Vertical separation impacts social welfare through two effects. First, through the double-marginalization effect, which is negative. Second, through the quality degradation effect, which can be positive or negative. Hence, the net welfare impact of vertical separation is negative or potentially ambiguous.

 

May 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Welfare, Competition, Specialization and Growth

Posted by D. Daniel Sokol

Daria ONORI (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and University of Rome “La Sapienza”, Faculty of Economics) has a paper on Welfare, Competition, Specialization and Growth.

ABSTRACT: In this paper we consider a simple model of horizontal differentiation and derive the closed form solutions for the level of the variables in the decentralized economy and in the social planner case. This enables us to analyze consumers’ welfare as a function of the parameter representing market power. We surprisingly find that, when the total labor force is greater than a certain level, the welfare function is an inverted-N shape in the decentralized economy and monotonically decreasing in the centralized economy. This suggests that there is another effect which interacts with market power: the degree of returns to specialization.

May 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Regulation Versus Antitrust: How Net Neutrality is Defining the Boundaries

Posted by D. Daniel Sokol

Babette Boliek, Pepperdine University School of Law has written on Regulation Versus Antitrust: How Net Neutrality is Defining the Boundaries.

ABSTRACT: This Article challenges the various jurisdictional theories that underpin the FCC’s net neutrality regulation. The assertion of jurisdiction by the FCC over any aspect of the Internet ecosystem has raised populist, congressional, and even judicial rhetoric to a crescendo and resulted in a recent vote to defund the FCC’s efforts. This Article places the current crisis squarely in context of the long-standing jurisdictional struggle between regulation and antitrust law. These two regimes are often at jurisdictional cross-purposes because, even though they both purport to maximize the social good, they do so by inapposite means. Indeed, there is a policy choice inherent in the very jurisdictional authority permitted each regime – a choice that the FCC’s jurisdictional bases for net neutrality may actually circumvent and obfuscate. Focusing on the Supreme Court’s recent decision in Trinko and the D.C. Circuit’s even more recent decision in Comcast, this Article examines the jurisdictional boundaries between these regulatory and antitrust camps. In analyzing the jurisdictional limits of each through the lens of the net neutrality debate, this Article reveals opportunities for congressional reforms beyond mere rhetoric. To identify problematic uses of regulatory authority, this Article: (i) creates an innovative grouping of possible bases for regulatory authority labeled “satellite jurisdiction,” and (ii) proposes a new framework to classify possible jurisdictional overreach in what the author brands as either procedural or substantive opportunism. Finally, this Article recommends a new standard by which both procedural and substantive jurisdictional opportunism may be tempered and antitrust authority maximized where most salutary and appropriate.

May 16, 2011 | Permalink | Comments (0) | TrackBack (0)

Sunday, May 15, 2011

Blog Book Symposium on Criminalising Cartels: Critical Studies of an International Regulatory Movement

Posted by D. Daniel Sokol

One of the most important books in recent years on cartels has been Criminalising Cartels: Critical Studies of an International Regulatory Movement, edited by Caron Beaton Wells (Melbourne - Law) and Ariel Ezrachi (Oxford - Law). I have assembled an international group of reviewers to provide their thoughts on the book. They include:

Thomas Cheng, Hong Kong University - Law
Julie Clarke, Deakin University - Law
Angus MacCulloch, University Lancaster Law
Anestis Papadopoulos, KPP Law, National University of Athens Law School
Daniel Sokol, University of Florida Law

We will hold the symposium in two parts. Part I will be on Tuesday May 17. The second part will be Tuesday May 24. Thereafter, Caron and Ariel may respond to the postings (as well as particular chapter authors).

May 15, 2011 | Permalink | Comments (0) | TrackBack (0)

Patent Settlements, Patent Reform, and Mergers: Recent Developments in Pharmaceutical Antitrust

Posted by D. Daniel Sokol

Tom Rosch (FTC) has posted his speech Patent Settlements, Patent Reform, and Mergers: Recent Developments in Pharmaceutical Antitrust.

May 15, 2011 | Permalink | Comments (0) | TrackBack (0)