Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Friday, January 21, 2011

Introducing the Harvard Business Law Review

Posted by D. Daniel Sokol

Harvard Law School has launched a new law review, Harvard Business Law Review.  Already in publication is a piece by Herb Hovenkamp and Christina Bohannan on Concerted Refusals to License Intellectual Property Rights.

January 21, 2011 | Permalink | Comments (0) | TrackBack (0)

Vertical Separation as an Appropriate Remedy

Posted by D. Daniel Sokol

Boaz Moselle (LECG) and David Black discuss Vertical Separation as an Appropriate Remedy.

ABSTRACT: In this article, we discuss the use by competition and regulatory authorities of vertical separation as a tool to promote competition in industries where a vertically integrated firm owns a monopoly or quasi-monopoly input (e.g. the ‘local loop’ in telecoms, or the transmission grid in electricity). There are a range of vertical separation options, from the least intrusive (‘accounting separation’), through to the most intrusive (full ownership separation). The case for or against a vertical separation remedy in any particular instance depends on an assessment of a trade-off between the benefits of increased competition, and the economic costs. These costs can include loss of coordination of activities between the separated entities, ‘hold-up problems’, and ‘double marginalisation’. To illustrate the costs and benefits, we describe the application of accounting and legal separation in the water sector in Great Britain, functional separation for the telecommunications sector in the UK, and ownership separation of an electricity network in Germany.

January 21, 2011 | Permalink | Comments (0) | TrackBack (0)

Buyer Power and Price Discrimination: The Case of the UK Care Homes Market

Posted by D. Daniel Sokol

Ruth Hancock (UEA-Medicine) and Morten Hviid (UEA-Law) explain Buyer Power and Price Discrimination: The Case of the UK Care Homes Market.

ABSTRACT: UK Local Authorities purchase care home places on behalf of a large group of people following a means test of their income and wealth. All other buyers of care home services are atomistic. The care home market is characterised by a large number of small providers. Local authorities may thus have buyer power. We show that any abuse of this buyer power may lead to some people, “the squeezed middle” not being served. We quantify the size of the squeezed middle and assess the implications of the form of the means test for local authorities' ability to exercise buyer power.

January 21, 2011 | Permalink | Comments (0) | TrackBack (0)

Thursday, January 20, 2011

Market Strucutre, Screening Activity and Bank Lending Behavior

Posted by D. Daniel Sokol

Nikolaos Papanikolaou (Luxembourg School of Finance, University of Luxembourg) describes Market Strucutre, Screening Activity and Bank Lending Behavior.

ABSTRACT: In this paper we construct a theoretical model of spatial banking competition that considers the differential information among banks and potential borrowers in order to investigate how market structure affects the lending behavior of banks and their incentives to invest in screening technology. Consistent with the prevailing view in the relevant literature, our results reveal that competition reduces lending cost, which, in turn, encourages the entry of new customers in the loan market. Also, that the transportation cost that potential borrowers have to pay in order to reach the bank of their interest is decreased with the degree of competitiveness. Importantly, we demonstrate that market structure exerts a considerable positive effect on banks’ incentives to screen their loan applicants since banks are found to invest more in screening as competition in the market becomes higher. This is to say, banks resort to screening that serves as a buffer mechanism against bad credit which entails higher risk and which is more likely under competitive conditions. Overall, our findings provide support to a rather close link between the degree of competition, bank lending activity, and the investment of banks in screening technology.

January 20, 2011 | Permalink | Comments (0) | TrackBack (0)

Market Structure, Countervailing Power and Price Discrimination: The Case of Airports

Posted by D. Daniel Sokol

Jonathan Haskel (Imperial College London and CEPR), Alberto Iozzi (Faculty of Economics, University of Rome "Tor Vergata"), and Tommaso Valletti (Faculty of Economics, University of Rome "Tor Vergata") explain Market Structure, Countervailing Power and Price Discrimination: The Case of Airports.

ABSTRACT: We study bargained input prices where up and downstream firms can choose alternative vertical partners. We apply our model to bargained airport landing fees where a number of interesting policy questions have arisen. For example, what is the impact of joint ownership of airports? Does airline countervailing power stop airports raising fees? Should airports be prohibited, as an EU directive intends, from charging differential prices to airlines? Our major findings are (a) an increase in upstream concentration or in the substitutability between airports always increases the landing fee; (b) the effect of countervailing power, via an increase in downstream concentration, depends on the competition regime between airlines and whether airports can price discriminate: airline concentration reduces the landing fee when downstream competition is in quantities, but if downstream competition is in prices only where airports cannot! discriminate. Furthermore, only in a specific case (Bertrand competition, uniform landing fees and undifferentiated goods) will lower fees pass through to consumers. (c) With Cournot competition, uniform landing fees are always higher than discriminatory fees, while the reverse is true with Bertrand competition. We also look at the incentives for airport expansion which raise quantities of passengers paying a given landing fee, but alters the nature of airline competition, which changes the landing fee.

January 20, 2011 | Permalink | Comments (0) | TrackBack (0)

Why are some coalitions more successful than others in setting standards? Empirical evidence from the Blu-ray vs. HD-DVD standard war

Posted by D. Daniel Sokol

Zouhaïer M'chirgui (CREM, LAREQUAD - Euromed Management - Euromed Management), Olivier Chanel (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579), and Didier Calcei (Groupe ESC Troyes - ESC Troyes - ESC Troyes) ask Why are some coalitions more successful than others in setting standards? Empirical evidence from the Blu-ray vs. HD-DVD standard war.

ABSTRACT: Standard-setting coalitions are increasingly composed of rival firms from different sectors and are characterized by simultaneous and/or sequential cooperation and competition among their members. This paper examines why firms choose to belong to two standard-setting coalitions instead of one and what determines the success of a standard coalition. We test empirically for network effect, experience effect, and coopetitive effect in the Blu-ray vs. HD-DVD standard war. We find that the higher the similarity of the members in the coalition, the greater the probability of standard coalition success. Furthermore, relatedness leads to a greater probability of joining both competing coalitions, but at a given degree of knowledge difference, an opposite effect exists.

January 20, 2011 | Permalink | Comments (0) | TrackBack (0)

Central banks and competition authorities: institutional comparisons and new concerns

Posted by D. Daniel Sokol

John Vickers (Oxford - Economics) has an interesting paper on Central banks and competition authorities: institutional comparisons and new concerns.

ABSTRACT: The establishment of independent authorities for monetary policy and for competition policy was part of the institutional consensus of the Great Moderation. The paper contrasts how policy has operated in the two spheres, especially as regards the role of law. It then discusses the application of competition policy to banks before and during the crisis, and relationships between competition and financial stability. Finally, the paper considers whether the financial crisis - which has led, at least temporarily, to unorthodox and less independent monetary and competition policies - has undermined the long-term case for independence. The conclusion is that it has not. While regulation of the financial system clearly requires fundamental reform, sound money and markets free from threats to competition remain fundamental to long-run prosperity; those ends are best pursued by focused and independent monetary and competition policies.

January 20, 2011 | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 19, 2011

Economic Doctrines and Approaches to Antitrust

Posted by D. Daniel Sokol

Economic Doctrines and Approaches to Antitrust
Event
 
There is considerable disagreement on optimal antitrust policy both within the United States and between the United States and other nations. These fundamental disagreements over the right approach to competition don't stem principally from politics, rather they stem from doctrine---- the overarching view of antitrust held by regulators and other policymakers. In a new report, ITIF examines the four principle antitrust doctrines, how they influence approaches to and positions on particular antitrust issues (e.g., monopoly, collusion, pricing, and mergers), and how the field of antitrust can move forward to better cope with the challenges of the 21st century, innovation-based global economy.
 
Please join ITIF for the release of a new report on the role of economic thinking in antitrust.

Date & Time:
Friday, January 28, 2011
9:00 - 10:30 AM (add to calendar)

Location:
Jenner & Block
1099 New York Avenue NW, Suite 900
Washington,DC 20001-4412 (map)

Presenters:
Robert Atkinson
President and Founder, Information Technology and Information Foundation

David Audretsch
Distinguished Professor, Indiana University

Respondents:
Seth Bloom
General Counsel, Senate Antitrust Subcommittee, Staff of Senator Kohl, Chairman

Joseph Farrell
Director of the Bureau of Economics, Federal Trade Commission

Janet L. McDavid
Partner, Hogan Lovells
 
Register for the event.

January 19, 2011 | Permalink | Comments (0) | TrackBack (0)

Cournot oligopoly interval games

Posted by D. Daniel Sokol

Aymeric Lardon (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines) discusses Cournot oligopoly interval games.

ABSTRACT: In this paper we consider cooperative Cournot oligopoly games. Following Chander and Tulkens (1997) we assume that firms react to a deviating coalition by choosing individual best reply strategies. Lardon (2009) shows that if the inverse demand function is not differentiable, it is not always possible to define a Cournot oligopoly TU(Transferable Utility)-game. In this paper, we prove that we can always specify a Cournot oligopoly interval game. Furthermore, we deal with the problem of the non-emptiness of two induced cores: the interval gamma-core and the standard gamma-core. To this end, we use a decision theory criterion, the Hurwicz criterion (Hurwicz 1951), that consists in combining, for any coalition, the worst and the better worths that it can obtain in its worth interval. The first result states that the interval gamma-core is non-empty if and only if the oligopoly TU-game associated with the better worth of every coalition in its worth interval admits a non-empty gamma-core. However, we show that even for a very simple oligopoly situation, this condition fails to be satisfied. The second result states that the standard gamma-core is non-empty if and only if the oligopoly TU- game associated with the worst worth of every coalition in its worth interval admits a nonempty gamma-core. Moreover, we give some properties on every individual profit function and every cost function under which this condition always holds, what substantially extends the gamma-core existence results in Lardon (2009).

January 19, 2011 | Permalink | Comments (1) | TrackBack (0)

Economics for Competition Lawyers

Posted by D. Daniel Sokol

Gunnar Niels, Helen Jenkins, and James Kavanagh
Oxford University Press
744 pages | 246x171mm
978-0-19-958851-0 | Paperback | March 2011 (estimated)
BOOK ABSTRACT:
  • Written specifically for lawyers in a practical and accessible style which facilitates understanding by non-specialists
  • Offers coverage of the major topics in competition law: market definition, mergers, state aid, remedies, cartels and cartel damages
  • Authored by respected economic experts who are well-versed in simplifying complex economic arguments for the courts
  • Starts with first principles, allowing practitioners to develop their understanding of economics from the ground up
  • Gives insight into how to get the best from an expert economist in the course of a case
  • Structured in a modular format for ease of reference
Why, in the context of a damages claim, are competitive industries more likely to pass on cost increases to consumers than less competitive industries? When can a merger or joint venture result in lower prices, even if there are no cost efficiencies? How can it be rational for a network provider to offer its services below cost in the early stages of network development, regardless of whether there are competing networks?

Economics for Competition Lawyers answers all these questions and explains the underlying economic principles most relevant for competition law. An accessible practitioner textbook, written in the tone of an economic expert's report to a high court judge, the book is aimed specifically at competition lawyers, be they solicitors, barristers, in-house counsel, lawyers at government agencies, judges, or students.

Practitioners of competition law worldwide need at least a basic grasp of economics, and some of the most successful competition lawyers are those with a solid foundation in economics. This is not only because the most basic premise of competition law - "competition is good, monopoly is bad' - comes from economic theory, but also because economics provides many of the standard tools now commonly applied in competition investigations, such as the SSNIP test for market definition. Also, the substantive standards applied to mergers and business practices increasingly take account of economic effects on the market, and this requires reference to economic "theories of harm".

This book therefore explains from first principles the economics that underpin market definition, market power/dominance, mergers, and anti-competitive practices, and shows how this knowledge can be applied in competition cases. For example, it goes beyond the standard explanation of the SSNIP test to cover issues such as when and how to define separate markets because of price discrimination. Likewise, on the matter of market shares, the book goes back to first principles to explain in which circumstances it is more appropriate to measure market shares by capacity than by turnover. It uses plain English and real-world examples, not abstruse theory, to explain the key points. It also offers valuable insight into how to best use economics, or economic experts, in the course of a case.

January 19, 2011 | Permalink | Comments (0) | TrackBack (0)

Accountable Care Organizations and Competition Policy

Posted by D. Daniel Sokol

Accountable Care Organizations and Competition Policy

January 24, 2011, 12:00pm – 1:30pm

Streaming Video

Click here to watch the event live.

About This Event

The Affordable Care Act provides an opportunity to create integrated, cost effective, high quality health care systems for Medicare recipients—and eventually all Americans—through the creation of Accountable Care Organizations, or ACOs. One of the most challenging questions facing ACOs is how to provide integration without sacrificing competition and the decreased cost and increased quality it produces. The Center for Medicare & Medicaid Services, the Federal Trade Commission, and the Department of Justice have already been carefully scrutinizing these issues. Will some ACOs threaten competition and eventually raise costs for consumers? To what extent can ACOs overcome the barriers set up by current antitrust regulation? How should the lessons from health care reform educate the role of antitrust enforcement and regulation? How should we approach health care antitrust issues in an era of ACOs?

Please join us for a discussion of these and other questions related to implementing the Accountable Care Act in a way that enhances competition, provides better care, and lowers costs.

Introductory remarks:
Christine Varney, Assistant Attorney General, Department of Justice

Featured panelists:
Christi Braun, Shareholder, Ober/Kaler
Tim Greaney, Co-Director, Center for Health Law Studies, Saint Louis University Law School
Melinda Hatton, Senior Vice President and General Counsel, American Hospital Association
Joe Miller, General Counsel, America’s Health Insurance Plans
Sharis Pozen, Chief of Staff of the Antitrust Division, Department of Justice

Moderated by:
David Balto, Senior Fellow, Center for American Progress

 

RSVP

Click here to RSVP for this event
For more information, call 202-682-1611

Location

Center for American Progress
1333 H St. NW, 10th Floor
Washington, DC 20005

A light lunch will be served at 11:30 a.m.

January 19, 2011 | Permalink | Comments (0) | TrackBack (0)

Endogenous Product Differentiation, Market Size and Prices

Posted by D. Daniel Sokol

Shon Ferguson (Dept. of Economics, Stockholm University) discusses Endogenous Product Differentiation, Market Size and Prices.

ABSTRACT: Recent empirical evidence suggests that prices for many goods and services are higher in larger markets. This paper provides an explanation for this phenomenon when firms can choose how much to differentiate their products in a monopolistically competitive environment. The model proposes that consumers’ love of variety makes them more sensitive to product differentiation efforts by firms, which leads to higher prices in larger markets. Larger markets lead to greater variety and products that are more differentiated, which provides consumers with greater welfare despite the adverse effect of product differentiation on prices. The social planner does not charge a markup, which allows it to differentiate products more than is possible in the competitive equilibrium. The model also provides an explanation for why prices do not always fall when trade is liberalized.

January 19, 2011 | Permalink | Comments (0) | TrackBack (0)

Vertical Integration, Innovation and Foreclosure

Posted by D. Daniel Sokol

Marie-Laure Allain (CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X), Claire Chambolle (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, ALISS - Alimentation et sciences sociales - INRA : UR1303), and Patrick Rey (Toulouse School of Economics - Toulouse School of Economics) explore Vertical Integration, Innovation and Foreclosure.

ABSTRACT: This paper studies the potential effects of vertical integration on downstream firms' incentives to innovate. Interacting efficiently with a supplier may require information exchanges, which raises the concern that sensitive information may be disclosed to rivals. This may be particularly harmful in case of innovative activities, as it increases the risk of imitation. We show that vertical integration exacerbates this threat of imitation, which de facto degrades the integrated supplier's ability to interact with unintegrated competitors. Vertical integration may thus lead to input foreclosure, thereby raising rivals' cost and limiting both upstream competition and downstream innovation. A similar concern of customer foreclosure arises in the case of downstream bottlenecks.

January 19, 2011 | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 18, 2011

Competition Commission of India's Trysts with Law and Policy: Enforcement One Year On

Posted by D. Daniel Sokol

Pallavi S. Shroff & Harman Singh Sandhu (Amarchand & Mangaldas & Suresh A Shroff & Co) explain Competition Commission of India's Trysts with Law and Policy: Enforcement One Year On.

ABSTRACT: The (Indian) Competition Act, 2002 ("Act") aims to promote competition and to prevent practices that adversely affect competition. The Competition Commission of India ("CCI") is the statutory body created to enforce the Act. Although enacted in 2002, the Act is being brought into force in a phased manner. Sections 3 and 4 of the Act (relating to anticompetitive agreements and abuse of dominance) were effectively brought into force in May 2009, along with the enforcement powers of the CCI. Sections 5 and 6, which create India's merger control regime, requiring CCI pre-clearance of mergers, acquisitions, and amalgamations meeting specified worldwide and/or Indian turnover/asset-based thresholds (referred to in the Act as "combinations") have not yet come into effect.

The Act superseded the Monopolies and Restrictive Trade Practices Act, 1969 ("MRTP Act"), which sought to regulate monopolistic, restrictive, and unfair trade practices with effect from September 1, 2009 when the MRTP Act was repealed. Later, on October 14, 2009, the Monopolies & Restrictive Trade Practices Commission ("MRTPC"), which had jurisdiction over MRTP Act cases, was dissolved, and pending MRTPC investigations and cases were transferred to the CCI and the Competition Appellate Tribunal ("COMPAT"), respectively.

2010 was a landmark year for the development of competition law in India, as it was the first full year with the substantive enforcement provisions of the Act in force. In that regard, 2010 saw a significant increase in the enforcement activities by the CCI. Certain key issues, pertaining to the CCI's jurisdiction, powers, and obligations towards parties to the investigation etc., which will shape the way the CCI functions and handles investigations in the future, were also decided by the Supreme Court of India and the Bombay High Court.

January 18, 2011 | Permalink | Comments (0) | TrackBack (0)

Antitrust 2025

Posted by D. Daniel Sokol

Maurice Stucke (Tennessee Law) predicts Antitrust 2025.

ABSTRACT: Antitrust policy in the United States has roughly twenty to thirty year cycles: (i) after initial dormancy, 1900-1920, the promise of antitrust; (ii) 1920s-mid-1930s, antitrust dormancy in the boom and bust years; (iii) mid-1940s-1970s, antitrust representing "the Magna Carta of free enterprise" in preserving economic and political freedom; and (iv) late-1970s-2010, antitrust's contraction under the Chicago and post-Chicago Schools' neoclassical economic theories. So if past cycles are reliable indicators of future ones, we are at (or approaching) a new antitrust policy cycle, with 2025 being the approximate midpoint.

Any new policy cycle will be defined by three fundamental questions:

a.     What is competition?

b.     What are the goals of competition law?

c.     What should be the legal standards to promote these goals?

One reason the Chicago School was effective in displacing the existing paradigm was its answering these three questions. For example, in The Antitrust Paradox, Robert Bork first looked at several different definitions of competition. Rejecting competition as rivalry, perfect competition ("utterly useless as a goal of law"), and protection of fragmented markets, Bork settled on his definition of competition, namely as a shorthand expression of consumer welfare, which comported with his goal of competition law. Bork then outlined the legal standards to promote his conception of consumer welfare. Consequently, the first and second questions are fundamental, as "[e]verything else follows from the answer we give."

Rather than predict the state of antitrust policy in 2025 (such as more or less cartel enforcement), this Essay will map two scenarios based on these three fundamental questions. At a 2010 American Antitrust Institute conference, a distinction was made between prediction and futures planning. Prediction is something fairly precise and usually anticipated within a short time period. Futures planning is less precise. It is an open creative exercise in developing multiple scenarios and trying to understand the assumptions embedded in these scenarios. Accordingly, this Essay will examine some of the prevailing assumptions underlying the current answers to these three questions. By altering these assumptions, one can map alternative scenarios and their policy implications.

January 18, 2011 | Permalink | Comments (0) | TrackBack (0)

Commission launches second monitoring exercise of patent settlements in pharma sector

Posted by D. Daniel Sokol

Commission launches second monitoring exercise of patent settlements in pharma sector

From the Commission press release:

The European Commission has addressed information requests to selected pharmaceutical companies, asking them to submit copies of their patent settlement agreements concluded in the European Economic Area (EEA) in 2010 between originator and generic companies. This is the second monitoring exercise following the Commission's competition sector inquiry of 2009 (see IP/09/1098 and MEMO/09/321) that pointed to significant risks for European consumers stemming from certain types of patent settlements.

"Patent settlements are an area of particular concern because they may delay the market entry of generic medicines. The outcome of our first monitoring exercise showed that potentially problematic agreements had decreased significantly since the Commission's sector inquiry" said Joaquín Almunia, Commission Vice-President in charge of competition policy. "The 2011 monitoring exercise is important to assess whether this positive trend is confirmed and to identify potentially problematic patent settlements."

The Commission has asked a selected number of originator and generic companies to submit a copy of all patent settlement agreements relevant for the EU/EEA markets concluded in the period from 1 January 2010 to 31 December 2010, together with annexes, related agreements and amendments. In order to limit the administrative burden on companies, they were asked for limited additional background information.

The Commission's competition inquiry in the pharmaceutical sector showed that certain patent settlements may cause consumer harm because they delay the market entry of cheaper generic medicines.

The Commission will analyse the agreements submitted in the light of these findings and publish a report providing a statistical overview in the first half of 2011. If a specific settlement raises additional questions, a more targeted request for information could follow.

The Commission carried out a first monitoring exercise in 2010 that showed a significant decrease in the number of potentially problematic patent settlements in the EEA. The number fell to 10% of total patent settlements in the sector in the period July 2008 to December 2009 compared with 22% in the period covered in the inquiry into the pharmaceutical sector (January 2000-June 2008). The amount of money involved in the settlements, between the so-called "originator" pharmaceutical companies and producers of generic drugs also decreased from more than € 200 million recorded in the sector inquiry period to less than € 1 million, according to the 2010 report. This suggested an increased awareness of the industry of which settlement agreements may attract competition law scrutiny. It was also good news for consumers that cheaper generic drugs are not being unduly kept out or delayed into the market. (see IP/10/887).

http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html

HT (Christi Braun)

January 18, 2011 | Permalink | Comments (0) | TrackBack (0)

The End of Per Se Illegal Tying

Posted by D. Daniel Sokol

Christopher Leslie (UC Irvine Law) predicts The End of Per Se Illegal Tying.

ABSTRACT: When making predictions about the future of antitrust law, one can err in one of two directions: making a bold prediction that is provocative but ultimately wrong or making a conservative prediction that proves accurate but safe. In my essay for this symposium in which we are asked to speculate about changes in antitrust law in the next 15 years, I pursue the safe path. I predict that by the year 2025, courts will have ceased calling tying arrangements per se illegal and will evaluate them under a traditional the rule of reason analysis.

January 18, 2011 | Permalink | Comments (0) | TrackBack (0)

European Merger Control

Posted by D. Daniel Sokol

Michael Rosenthal (Hunton & Williams) and Stefan Thomas (University of Tübingen - Law) have a new book on European Merger Control.

BOOK ABSTRACT: European merger control is among the most important and complex aspects of competition law. The rapid pace of development in this area presents a further challenge: legislation and guidance documents are frequently issued and updated, and the formidable body of Court and Commission case-law continues to grow at a daunting rate. This book provides a comprehensive treatment of EC merger control law and procedure. It adopts an integrated approach that embraces both the law and economics of merger control, supplemented throughout with practical insights drawn from the authors' own experience. The book blends practical and academic perspectives and addresses new and unsolved questions of EC merger control law.

January 18, 2011 | Permalink | Comments (0) | TrackBack (0)

Monday, January 17, 2011

Jurisdiction and Judgments in Relation to EU Competition Law Claims

Posted by D. Daniel Sokol

Mihail Danov (Brunel University - Law) has a new book on Jurisdiction and Judgments in Relation to EU Competition Law Claims.

ABSTRACT: This book sets out the way that, through enhanced private antitrust enforcement reform, private international law has a pivotal role in EU competition law disputes with an international element. The author offers a thorough analysis of the post-2003 policy of the EU favouring private law enforcement of EU competition law and its implementation under the existing provisions for jurisdiction and recognition and enforcement of foreign judgments under the Brussels I regime. The book also considers how the jurisdiction, recognition and enforcement of judgments issues are dealt with in England under the common law rules applicable when Brussels I does not apply. The complex private international law problems in respect of cross-border class actions that have arisen in several countries, as well as judgments in relation to antitrust infringements, are also discussed. The author further examines the choice of law issues that may arise before the English courts under Rome I and Rome II. The potential problems regarding jurisdiction of arbitral tribunals and choice of law in arbitral proceedings in relation to EU competition law claims, and the jurisdiction of English courts in proceedings ancillary to arbitration claims, are dealt with accordingly.

January 17, 2011 | Permalink | Comments (0) | TrackBack (0)

Gas Release and Transport Capacity Investment as Instruments to Foster Competition in Gas Markets

Posted by D. Daniel Sokol

Corinne Chaton (Laboratoire de Finance des Marchés d'Energies), Farid Gasmi (Toulouse School of Economics (ARQADE & IDEI)), Marie-Laure Guillerminet (Hamburg University (FNU)), and Juan Daniel Oviedo (Universidad del Rosario) advocate Gas Release and Transport Capacity Investment as Instruments to Foster Competition in Gas Markets.

ABSTRACT: Motivated by recent policy events experienced by the European natural gas industry, this paper develops a simple model for analyzing the interaction between gas release and capacity investment programs as tools to improve the performance of imperfectly competitive markets. We consider a regional market in which a measure that has an incumbent release part of its gas to a marketer complements a program of investment in transport capacity dedicated to imports by the marketer, at a regulated transport charge, of competitively-priced gas. First, we examine the case where transport capacity is regulated while gas release is not, i.e., the volume of gas released is determined by the incumbent. We then analyze the effect of the "artifcial" duopoly created by the regulator when the latter regulates both gas release and transport capacity. Finally, using information on the French industry, we calibrate the basic demand and cost e! lements of the model and perform some simulations of these two scenarios. Besides allowing us to analyze the economic properties of these scenarios, a policy implication that comes out of the empirical analysis is that, when combined with network expansion investments, gas-release measures applied under regulatory control are indeed effective short-term policies for promoting gas-to-gas competition.

January 17, 2011 | Permalink | Comments (0) | TrackBack (0)