Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Tuesday, July 12, 2011

Ex-Post Assessment of Merger Effects: The Case of Pfizer and Pharmacia, 2003

Posted by D. Daniel Sokol

Nina Leheyda, Centre for European Economic Research (ZEW), Patrick Beschorner, Centre for European Economic Research (ZEW), and Kai Huschelrath, Centre for European Research (ZEW) have posted Ex-Post Assessment of Merger Effects: The Case of Pfizer and Pharmacia, 2003.

ABSTRACT: The paper studies the effects of the Pfizer and Pharmacia (2003) merger on competition in the Swiss pharmaceutical market and compares the assessment of the Swiss Competition Commission (COMCO) with the post-merger market developments. We find that the merger has had a miniscule impact on the Swiss pharmaceutical market. This has primarily to do with the fact that the product portfolios of both companies have shown no or only slight overlaps. In both cases of potential anticompetitive effects, the companies successfully proposed to divest some of their assets in order to prevent a further strengthening of their dominant position. The remedies included products in the development phase which were not available on the market at the time of the decision. In other markets in which either an overlapping of businesses of both companies existed or in which one of the merging entities held a dominant market position, no significant effects of the merger were noticed. This might have to do with both, existing price regulation in the Swiss drug industry and changes in Pfizer’s product portfolio following the merger. Furthermore, with respect to other potentially interesting market characteristics such as investment behaviour, R&D, sales or employment, available data on global company level does not allow an isolation of the possible effects of the merger.

July 12, 2011 | Permalink | Comments (0) | TrackBack (0)

Too Big to Exist

Posted by D. Daniel Sokol

Barak Y. Orbach, University of Arizona and Grace E. Campbell, University of Arizona - James E. Rogers College of Law have written the very interesting Too Big to Exist.

ABSTRACT: In the United States competition law is known as “antitrust law,” a name that has stuck since the emergence of the field and serves as a reminder of its origins in fears of big businesses - the trusts. Anti-Trust laws emerged mostly in response to public aversion towards big businesses. In 1882, Standard Oil’s General Solicitor devised a new use for an old legal instrument, “trust,” creating a business organization in which stockholders of various corporations transferred their stocks to trustees. Quickly the word “trust” acquired a new meaning: a concentration of capital in the hands of few - a big business. Antitrust arose, shortly thereafter, as a legal war against bigness. Despite the origins of the discipline and narratives to the contrary, business size in itself has never been an antitrust violation. The Great Recession revived old discussions of business size, albeit in a lesser degree in the antitrust community. This Essay studies the role of bigness in American competition law, seeking to eliminate past fears from any present analysis and narrative.

July 12, 2011 | Permalink | Comments (0) | TrackBack (0)

Monday, July 11, 2011

CLEN: Second Annual Baxt Lecture on Competition Law Wed 24/08/2011 12:30 PM - 2:00 PM

Posted by D. Daniel Sokol

CLEN: Second Annual Baxt Lecture on Competition Law

Wed 24/08/2011
12:30 PM - 2:00 PM
Speaker Professor Richard Whish
Description

 

Convenor:           Associate Professor Caron Beaton-Wells

Topic:                    Private Enforcement of Competition? European Developments

Description:    Private claims for damages to compensate for losses caused by anti-competitive conduct have been a longstanding and, at times, controversial feature of United States’ competition law. In recent years, however, growing momentum in favour of private enforcement of competition law has been seen outside of the US, particularly in Europe. This development raises challenging questions of policy and practice, particularly in the context of collective redress. In Australia, there has been a recent spate of private actions in respect of major cartels.  However, some have argued that the hurdles are too high and that the system weighs too heavily in favour of public enforcement at the expense of compensation for victims of anti-competitive conduct.  Providing insights of great interest to the Australian debate, the Second Annual Baxt Lecture will see one of Europe’s leading competition law scholars address the questions raised by private enforcement based on recent European experience.

Details:                 Date: Wednesday 24 August

Time: 1-2pm (light lunch from 12.30pm)

Venue: Theatre G08, Melbourne Law School, 185 Pelham Street, Carlton, Victoria

To register click here

The Lecture is named in honour of Professor Bob Baxt AO in recognition of his substantial contribution to the development of competition law in Australia. In particular, the Lecture acknowledges his significant support for the establishment of competition law as a recognised and sought after discipline at the graduate level at the Melbourne Law School. Professor Baxt is the Chair of the Advisory Board of the competition law specialty in the Melbourne Law Masters program.

 

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

Adversarial Economics in Antitrust Litigation: Losing Academic Consensus in the Battle of the Experts

Posted by D. Daniel Sokol

Rebecca Haw, Harvard Law School, Vanderbilt University School of Law has posted Adversarial Economics in Antitrust Litigation: Losing Academic Consensus in the Battle of the Experts.

ABSTRACT: The adversarial presentation of expert scientific evidence tends to obscure academic consensus. Small, marginal disagreements can be made, in the context of litigation, to seem important and settled issues can be made to appear hopelessly deadlocked. This Article explores this dynamic in the context of antitrust litigation. Expert testimony is often the “whole game” in an antitrust dispute since experts testify about dispositive issues like the competitive effect of a business practice or the relevant boundaries of a market. And the Supreme Court has encouraged – even engineered – this delegation to economic authority. But when judges are faced with the appearance of deadlock among experts, they are forced to either decide the substance of the economics themselves or ask the jury to resolve it as a matter of fact. Both practices void much of the benefit of courtroom expertise. The Article examines several reforms that would make expert testimony less adversarial, and evaluates their ability to better reveal the true distribution of expert opinion on an economic question. It then presents two reforms that, while preserving the adversarial structure of expert evidence, would increase the chances that consensus economic views prevail at trial.

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

Why Can’t We All Just Get Along: Structural Modeling and Natural Experiments in Merger Analysis

Posted by D. Daniel Sokol

Malcolm B. Coate, U.S. Federal Trade Commission (FTC) and Jeffrey H. Fischer, U.S. Federal Trade Commission (FTC) suggest Why Can’t We All Just Get Along: Structural Modeling and Natural Experiments in Merger Analysis.

ABSTRACT: Economists have two basic methodologies: structuralism, in which formal economic models control the analysis, and experimentalism, in which economic theory guides the analysis, but data from experiments determines the policy recommendation. The choice between the two approaches is often quite controversial, although each approach has its own strengths and limitations. Under either approach, the scientific method requires testing and, when choosing between models with comparable empirical support, verification. We describe how these approaches play out in merger analysis, where Cournot and Bertrand models of competition are the standard Structuralist tools. In contrast, Experimentalists generally search for some type of evidence of a relationship between structure and market performance. Which methodology is superior depends first on empirical testing of the relevant theories and then on how closely the facts of the market match the assumptions of the relevant economic theory, and how much precision the analysis requires in comparing predicted price effects with merger efficiencies. We illustrate these tradeoffs with examples from three recently-litigated cases. Finally, we note that neither approach to merger analysis is applicable to every case, leaving the analyst to apply what we define as the Post-Structural Consensus, a methodology implicit in the Merger Guidelines and revealed in the enforcement histories of the federal antitrust agencies.

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

Excessive Prices within EU Competition Law

Posted by D. Daniel Sokol

Liyang Hou, ICRI-KULeuven-IBBT, Catholic University of Leuven (KUL) - Interdisciplinary Centre for Law and ICT (ICRI) explores Excessive Prices within EU Competition Law.

ABSTRACT: Due to the different views in economics the prohibition of excessive prices is among the most controversial subjects within EU competition law. This article aims to shed some light on this concept. In the following, it first identifies the exceptional circumstances that may justify antitrust actions against excessive pricing. Subsequently, an empirical research is undertaken on the two-step analytical framework established by United Brands: first, analysing whether the profit margin is excessive; if affirmative, then assessing whether the price is unfair in itself or compared with others. In particular, it focuses on the three uncertainties within that framework: (i) determining an excessive profit margin, (ii) examining whether a price is abusive in itself, and (iii) demonstrating an abusive price based on benchmarks.

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

Careers in Antitrust and Consumer Protection: Navigating the Opportunities Tuesday, July 12, 2011 12:30 - 1:30 p.m. EDT

Posted by D. Daniel Sokol

ABA Young Lawyers Division Antitrust
Committee,
ABA Section of Antitrust Law Membership & Equal Opportunity Committee,
and the Antitrust Committee and the Young Lawyers Section of the
Bar Association of the District of Columbia Present:

Careers in Antitrust and Consumer Protection:
Navigating the Opportunities
Tuesday, July 12, 2011
12:30 - 1:30 p.m. EDT

Grab your lunch and join us on Tuesday, July 12th at 12:30 via teleconference or in-person at Arnold & Porter, 555 12th Street, NW, Washington, DC.
This program will provide a rare opportunity to hear from young lawyers, who graduated in the last ten years, from both antitrust enforcement agencies and private practice, concerning their pathways into antitrust and consumer protection careers. The speakers will discuss what led them to practice antirust and consumer protection law, the types of cases that they work on, and how someone interested in antitrust and consumer protection can break into the fields.
Panelists: Dan Blynn, Kelley, Drye & Warren
Ian Conner, Kirkland & Ellis
Shane Cralle, U.S. Department of Justice, Antitrust Division, National Criminal Enforcement Section
Carla Hine, McDermott, Will & Emery
Brendan McNamara, Federal Trade Commission, Mergers II Division
Moderator: Svetlana Gans, Federal Trade Commission, Marketing Practices Division
There will be an opportunity to ask questions during the program. You may submit your questions in advance to Svetlana Gans at sgans@ftc.gov. Alternatively, you may ask a question during the program when the operator opens up the call to questions.
The ABA is not seeking CLE credit for this program. You will not receive CLE credit for attending/viewing/listening.

Recordings of this program will be posted on the Section website, and downloadable in an MP3 format. Please visit http://www.americanbar.org/groups/antitrust_law.html after the program to listen/download the audio.

You can register by accessing the attached document.

Download July 12

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

GCR's 2011 Handbook of Competition Enforcement Agencies

Posted by D. Daniel Sokol

Global Competition Review is pleased to announce the publication of The 2011 Handbook of Competition Enforcement Agencies. The book’s comprehensive format provides full contact details for competition agencies in 78 jurisdictions, together with charts showing their structure, and a Q & A explaining their funding and powers.

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

What Antitrust Law Can (and Cannot) Teach About the First Sale Doctrine

Posted by D. Daniel Sokol

Ariel Katz, University of Toronto - Faculty of Law discusses What Antitrust Law Can (and Cannot) Teach About the First Sale Doctrine.

ABSTRACT: The first sale doctrine (or exhaustion) limits the exclusive rights that survive the initial authorized sale of an item protected by such rights. The first sale doctrine has always been under pressure by owners of intellectual property rights, and courts have never been able to precisely outline its contours, or fully articulate its rationale. Recently, and somewhat counter-intuitively, insights borrowed from modern antitrust law and economics are invoked to provide a seemingly robust theoretical foundation for undermining exhaustion rules or narrowing their scope, and thereby strengthen IP owners’ control over downstream distribution and use of the goods they produce.

This article shows why this trend is misguided and agues that it should be resisted, not because the insights from modern antitrust are irrelevant, quite the contrary. Indeed, the insights from modern antitrust law and economics can help underpin some of the first sale doctrine’s missing theoretical foundations and help drawing its proper contours. However, as this article demonstrates, the insights from modern antitrust do not support the case against the first sale doctrine. When taken seriously, these insights ultimately support its continued vitality.

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