Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, August 20, 2011

Access regulation with asymmetric termination costs

Posted by D. Daniel Sokol

Torben Stuhmeier (Dusseldorf Institute for Competition Economics) addresses Access regulation with asymmetric termination costs.

ABSTRACT: In many telecommunications markets incumbent providers enjoy a demand-side advantage over any entrant. However, market entrants may enjoy a supply-side advantage over the incumbent, since they are more efficient or operate on innovative technologies. Considering both a supply-side and a demand-side asymmetry, the present model analyzes the effect of two regulatory regimes: An access markup for a low cost network and reciprocal charges below the costs of a high cost network. Both regimes may have adverse effects on subscribers, market shares, and profits. It can be shown that an access markup is not generally beneficial and an access deficit not generally detrimental for the respective networks. However, if providers discriminate between on-net and off-net prices a markup on the entrant's termination cost is generally to its benefit and to the incumbent's detriment.

 

 

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

Friday, August 19, 2011

A Critical Assessment of the Legal and Economic Framework of IP-Competition Interface in Singapore

Posted by D. Daniel Sokol Ashish Lall, National University of Singapore and Daryl Lim, The John Marshall Law School describe A Critical Assessment of the Legal and Economic Framework of IP-Competition Interface in Singapore. ABSTRACT: This chapter argues that the key to navigating the Interface in Singapore includes understanding the nature of IP markets in Singapore and fostering synergies between the key institutions responsible for the IP and competition regimes. As Singapore adopts a regulatory self-assessment system, firms with substantial IPRs in Singapore need to fully understand the Interface to avoid what may be costly mistakes. The discussion of the economic framework first provides background on the economic structure of Singapore, illustrating the role of location and legacy in sectors that continue to be important today. The second part discusses Singapore’s innovation performance based on international innovation rankings, as well as on standard measures such as patents, R&D expenditures and personnel. It suggests that Singapore is not yet an innovation-based economy despite the recent increase in innovation inputs. The discussion of the legal framework first surveys IP issues arising from anti-competitive agreements, abuse of dominance, as well as mergers and acquisitions. The second part highlights the challenges and opportunities relevant to Singapore as a small open economy trying to move up the technology value chain and concludes by suggesting a number of ways Singapore can better navigate the Interface.

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

ICN Best Practice: Soft Law, Concrete Results

Posted by D. Daniel Sokol

Maria Copolla (FTC) addresses ICN Best Practice: Soft Law, Concrete Results.

ABSTRACT: Cross-border mergers and acquisitions need approval from an increasing number of competition agencies. Today more than 90 jurisdictions actively engage in merger review, an increase from approximately 60 jurisdictions in 2000, and fewer than a dozen jurisdictions in 1990. As the volume of cross-border transactions increases and with merger filings again on the rise, reducing the unnecessary costs and burdens of merger review is as important today, if not more so, than it was when the International Competition Network was formed in 2001.

The costs of merger control fall both on agencies and businesses. For business, for example, the International Chamber of Commerce recently noted, "Compliance with merger control has become a major factor in mergers and acquisitions, in terms of both cost and time. Even relatively small transactions may be subject to merger control in ten or more jurisdictions." For many agencies, a significant portion of their budget is dedicated to merger review, and only a tiny percentage of the reviewed transactions are potentially problematic. In a 2008 ICN survey on agency effectiveness, ICN member agencies cited resource constraints due to review of mandatory notifications as the principal reason they could not proactively determine their enforcement and advocacy priorities.

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

Merger Control in India: Partial Implementation of the ICN Recommended Practices

Posted by D. Daniel Sokol

Neil Campbell & Sorcha O'Carroll (McMillan & Co.) discuss Merger Control in India: Partial Implementation of the ICN Recommended Practices.

ABSTRACT: India's new merger regime illustrates how the International Competition Network's Recommended Practices for Merger Notification and Review Procedures can help to improve merger control processes. In this review, we focus on three areas of practical importance to merging parties that also have significant implications for the effectiveness and efficiency of the agency's merger control activities: local nexus, timelines, and information requirements. The Indian Competition Act, 2002 included provisions to establish a mandatory pre‑merger review. The regulations implementing these provisions were not finalized until May 2011, and the merger notification regime came into force on June 1, 2011. In the intervening 9 years, the Indian government revised the Competition Act in 2007, and published 3 sets of draft implementing regulations (in 2008 and 2011). The Competition Commission of India ("CCI") and the Indian Government publicly expressed their commitment to developing an effective modern regime that considered international best practices, and were willing to engage repeatedly with national and international stakeholders throughout the process. In the private sector, a wide range of stakeholders were actively involved and advocated changes, in large part based on international norms and experience. The high level of engagement from stakeholders such as bar associations and business/industry groups was likely motivated by a recognition that investment in this process was easily balanced against the costs and risks that could result from a non-conforming regime.

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

Thursday, August 18, 2011

Howard Shelanski to Join Davis Polk in Part Time Role

Posted by D. Daniel Sokol

Howard Shelanski (Georgetown Law), until recently the Deputy Director of the FTC's Bureau of Economics, has joined NY Law firm Davis Polk in an Of Counsel role. For those of you who do not know Howard, he is incredibly smart, well respected and a brilliant communicator of complex ideas to all sorts of audiences. I have seen him present to academic and practitioner audiences around the world. I think he will not only do well in front of agencies but also incredibly well in front of clients. Howard adds tremendous value to Davis Polk and finally gives the firm a Washington antitrust insider and a really good one at that.

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

An Economic Approach to Price Fixing

Posted by D. Daniel Sokol

Louis Kaplow, Harvard Law School, National Bureau of Economic Research (NBER) offers An Economic Approach to Price Fixing.

ABSTRACT: This article examines optimal policy toward coordinated oligopolistic price elevation. First, it analyzes the social welfare implications of enforcement, elaborating the value of deterrence and the nature of possible chilling effects. Then, it explores a variety of means of detection, with particular attention to the sorts of errors that may arise under each. Finally, it examines the level and type of sanctions that should be employed. It emerges that there is remarkably little overlap in content between the present investigation and prior legal policy work on the subject. Some central issues have been ignored while particular resolutions of others have been taken for granted, thereby indicating the need for wholesale reassessment.

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

OFT Dairy Price-Fixing Case Leaves Sour Taste for Cooperating Parties in Settlements

Posted by D. Daniel Sokol

Andreas Stephan, University of East Anglia (UEA) - Centre for Competition Policy explains how the OFT Dairy Price-Fixing Case Leaves Sour Taste for Cooperating Parties in Settlements.

ABSTRACT: The UK's Office of Fair Trading (OFT) was forced to scale down its investigation into dairy price fixing due to a lack of evidence, after most of the parties under investigation had agreed to settle their liability and pay fines. This paper discusses implications for cartel enforcement and the use of settlements.

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

5° Coloquio ForoCompetencia - Programa

Posted by D. Daniel Sokol

5° Coloquio ForoCompetencia

viernes 14 de octubre de 2011 en el Sheraton Hotel de Pilar, Buenos Aires, Argentina

 

El programa de este año es el siguiente:

 

8:30 – 9:00 - Acreditación

 

9:00 –9:20 - Apertura

 

9:20 –11:00 - Tema I – Propiedad intelectual y defensa de la competencia

Panelista. Alfredo BULLARD, Bullard & Asociados (Perú).

Comentarista. Andrés FONT GALARZA, Gibson Dunn (Bélgica).

Comentarista. Guillermo CABANELLAS, Universidad de San Andrés (Argentina).

Moderador: Walter CONT

 

11:00 – 11:30 - Receso para café

 

11:30 – 13:00 - Tema II. Políticas de descuentos

Panelista. Elizabeth FARINA, Compass Lexecon (Brasil).

Comentarista. Germán COLOMA, Universidad del CEMA (Argentina).

Comentarista. Fabián PETTIGREW, Vocal de la CNDC (Argentina).

Moderador: Marcelo CELANI

 

13:00 – 15:00 - Almuerzo (Salón Las Vasijas)

 

15:00 – 16:30 - Tema III. Intercambio de información entre competidores

Panelista. Ana Paula MARTINEZ, Levy & Salomão (Brasil)

Comentarista. Diego PÓVOLO, Vocal de la CNDC (Argentina)

Comentarista. Claudio LIZANA Carey Abogados (Chile)

Moderador: Marcelo DEN TOOM

 

16:30 – 17:00 - Receso para café

 

17:00 – 18:30 - Tema IV. Fusiones verticales

Panelista. Enrique GONZALEZ DIAZ, Cleary Gottlieb (Bélgica)

Comentarista. Miguel FLORES, Comisión Federal de Competencia (México)

Comentarista: Tito ANDRADE, Machado Meyer (Brasil)

Moderador: Luis BARRY

18:30 – 19:00 - Cierre

 

Lugar de Realización

Sheraton Pilar Hotel and Convention Center, Panamericana Km. 49,5, Pilar, Buenos Aires.

 

Precio de Inscripción

U$D 220 

 

Inscripciones

Para inscribirse hay que registrarse en:

https://spreadsheets.google.com/spreadsheet/viewform?formkey=dGJMMTBfVVdLUDVJT2xJTFdIczhVUmc6MQ

 

Pago de Inscripción

Para coordinar el pago por favor contactarse con: Marina Bidart (marinabidart@yahoo.com.ar), Walter Cont (Walter@fiel.org.ar) o Viviana Guadagni (vguadagni@qdva.com.ar).

Los cupos son limitados.

IMPORTANTE: Se considerará inscripto quien efectivice el correspondiente pago.

 

Comité Organizador

Luis BARRY, Marina BIDART, Bernardo CASSAGNE, Marcelo CELANI, Germán COLOMA, Walter CONT, Miguel DEL PINO, Marcelo DEN TOOM, Victoria DIAZ VERA, Viviana GUADAGNI, Ricardo INGLEZ DE SOUZA, Diego ORIBE y Julián PEÑA

August 18, 2011 | Permalink | Comments (1) | TrackBack (0)

On the Choice of Welfare Standards in Competition Law

Posted by D. Daniel Sokol

Louis Kaplow, Harvard Law School, National Bureau of Economic Research (NBER) has posted On the Choice of Welfare Standards in Competition Law.

ABSTRACT: This article addresses two issues relating to the choice between a consumer welfare and total welfare standard for competition law. First, it considers whether distributive considerations may favor a consumer welfare standard, or at least some underweighting of producer surplus in a total welfare assessment. The argument that focusing on consumer welfare is poorly targeted to general redistributive objectives is correct but not decisive since the distributive incidences of consumer and producer surplus differ significantly. By contrast, the argument that it is more efficient to rely exclusively on the tax and transfer system to achieve general distributive objectives is normatively powerful. Second, the relevance of the preexisting level of price elevation (relative to a competitive, marginal cost benchmark) is found to be quite different under the two standards. For a given additional price increase caused by anticompetitive activity, the marginal sacrifice of consumer welfare is greatest when there is no preexisting elevation and gradually falls as the initial elevation grows. By contrast, the marginal sacrifice of total welfare (deadweight loss) is negligible when there is no preexisting elevation and rises as the initial elevation grows. This difference has implications for competition policy, most directly for that toward horizontal mergers and price-fixing, along with practices that facilitate coordinated price elevation.

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

Deterrence, Recidivism and European Cartel Fines

Posted by D. Daniel Sokol

Cento Veljanovski, Case Associates provides new data on Deterrence, Recidivism and European Cartel Fines.

ABSTRACT: Based on a statistical analysis of cartel prosecutions from 1999 to end-2010, the way the European Commission has built up its fines under the 2006 penalty guidelines is assessed. The fines are compared to those imposed by the European Commission under its previous 1998 guidelines. Among the main findings are:

The "gravity" - the starting point for setting a fine - was determined by the cartel members' collective market share; and set between 15% to 25%, with an average of 18% well below the maximum 30% of annual sales. The penalty uplift for recidivism was well below the 100% per prior offence, and never exceeded 100%.

Pre-leniency fines were an average 23% of estimated total sales.

Post-leniency fines were probably restitutionary, and possibly deterred cartels, but this depends on third-party estimates of detection rates and overcharges.

Average post-leniency fines were 84% greater than under the 1998 guidelines, while pre-leniency fines were about the same. Thus the higher headline fines were due to less generous leniency rather than more severe fines under the penalty notice - an average reduction of 18% compared to 36% prior to 2007.

The Commission was more reliant on whistleblowers - full immunity was given in 74% of all cartels prosecuted under the 2006 guidelines compared to 48% under the 1998 guidelines.

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

Wednesday, August 17, 2011

Volume of Commerce and Criminal Sentences for Antitrust Violations – Alternative Interpretations in the Air Cargo Fuel Surcharge Cases

Posted by D. Daniel Sokol

Melissa H. Maxman and Elizabeth L. Holdefer (Cozen O'Conner) discuss Volume of Commerce and Criminal Sentences for Antitrust Violations  –  Alternative Interpretations in the Air Cargo Fuel Surcharge Cases.

 

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

Standard Oil and U.S. Steel: Predation and Collusion in the Law of Monopolization and Mergers

Posted by D. Daniel Sokol

Bill Page (UF Law) has posted Standard Oil and U.S. Steel: Predation and Collusion in the Law of Monopolization and Mergers.

ABSTRACT: The Supreme Court’s 1911 decision in Standard Oil gave us embryonic versions of two foundational standards of liability under the Sherman Act: the rule of reason under Section 1 and the monopoly power/exclusionary conduct test under Section 2. But a case filed later in 1911, United States v. United States Steel Corporation, shaped the understanding of Standard Oil’s standards of liability for decades. U.S. Steel, eventually decided by the Supreme Court in 1920, upheld the 1901 merger that created U.S. Steel. The majority found that the efforts of the Corporation and its rivals to control prices in the famous Gary dinners had violated Section 1 of the Sherman Act when they occurred, but paradoxically insulated U.S. Steel from liability under Section 2. U.S. Steel was formed to monopolize the industry, but failed; it demonstrated its impotence by fixing prices with rivals instead of crushing them, as Standard Oil had done.

U.S. Steel’s interpretation and application of Standard Oil essentially ended governmental enforcement of section 2 until Alcoa. Economic scholars suggest that the case ratified “the most socially damaging of all mergers in U.S. history” and caused lasting harm to the American economy by making the crucial steel industry less competitive. Equally important, I argue in this essay, it harmed antitrust doctrine. In cases like Alcoa, it played a role in confusing in the law of monopolization under Section 2 of the Sherman Act. Moreover, by rendering Section 1 of the Sherman ineffective against monopolistic mergers, it contributed to the passage of Cellar-Kefauver Act’s amendment of Section 7 of the Clayton Act in 1950 and, indirectly, to the early misguided interpretations of that provision in cases like Brown Shoe and Von’s. In this essay, I will describe errors of U.S. Steel, the mistaken responses to those errors in post-New Deal antitrust, and role of competing ideologies in both. In a final Part, I argue that modern reforms should assure that both U.S. Steel’s errors and the excesses of the post-New Deal antitrust will not recur.

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

Distributive Justice and Consumer Welfare in Antitrust

Posted by D. Daniel Sokol

Herb Hovenkamp (Iowa - Law) has posted the thoughtful Distributive Justice and Consumer Welfare in Antitrust.

ABSTRACT: The dominant view of antitrust policy in the United States is that it is intended to promote some version of economic welfare. More specifically, antitrust promotes allocative efficiency by ensuring that markets are as competitive as they can practicably be, and that firms do not face unreasonable roadblocks to attaining productive efficiency, which refers to both cost minimization and innovation.

The distribution concern that has dominated debates over United States antitrust policy over the last several decades is whether antitrust should adopt a “consumer welfare” principle rather than a more general neoclassical “total welfare” principle. In The Antitrust Paradox Robert Bork famously argued that antitrust law should adopt what he termed a “consumer welfare” standard for illegality, but then equated this standard with general welfare. “Total welfare” refers to the aggregate value that an economy produces, without regard for way that gains or losses are distributed.

The consumer welfare test is not a balancing test, in the sense that one must attempt to measure efficiency gains and losses and net them out. Under the test, if consumers are harmed (either by reduced output or product quality, or by higher prices resulting from the exercise of market power), then this fact trumps any offsetting gains to producers and, presumably, to others. Theoretically, even a minor injury to consumers outweighs significant efficiency gains. In this sense the consumer welfare test can be easier to administer on a case by case basis than general welfare tests.

The volume and complexity of the academic debate on the antitrust welfare definition creates an impression of policy significance that is completely belied by the case law, and largely by government enforcement policy. Few if any decisions have turned on the difference. In fact, antitrust policy generally applies both tests in the following sense. First, the economic analysis from the dominant Harvard and Chicago schools of antitrust is consistently concerned with general welfare, although the schools entertain different assumptions about the robustness of markets and the merits of intervention. Harvard School antitrust economists began to look at total welfare consequences at least as early as the 1930s. The Chicago School has likewise consistently followed a total welfare approach, ignoring distributional concerns and focusing on the extent to which practices are likely to impose welfare losses in the neoclassical sense.

However, if the evidence in a particular case indicates that a challenged practice facilitates the exercise of market power, resulting in output that is actually lower and prices that are actually higher, then tribunals uniformly condemn the restraint without regard to offsetting efficiencies. Indeed, I have not been able to find a single appellate decision that made a fact finding that a challenged practice resulted in lower market wide output and higher prices, but that also went on to approve the restraint because proven efficiencies exceeded consumer losses.

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

Does Regulation Drive Market Competition? Evidence from the Spanish Local TV Industry

Posted by D. Daniel Sokol

Ricard Gil, University of California, Santa Cruz asks Does Regulation Drive Market Competition? Evidence from the Spanish Local TV Industry.

ABSTRACT: This paper empirically examines whether regulation decreases market competition. For this purpose, I use data from Spanish local TV stations for 1996, 1999 and 2002. During this period of time, this industry transitioned from a state of allegality (no regulation in place whatsoever), to being highly regulated and finally to being liberalized. I estimate station population entry thresholds by number of entrants across years to proxy for the nature of competition by determining the necessary market size to sustain an extra station. I find that stations soften competition the most under no regulation and seem to compete the hardest when highly regulated. I explain in the paper that, even though this is at odds with previous literature, this result is explained by the industry's institutions, its low profitability and the nature of the first regulation and its consequent liberalization.

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

Relationship between Public and Private Enforcement: Quod Dei Deo, Quod Caesaris Caesari

Posted by D. Daniel Sokol

Assimakis Komninos, Hellenic Competition Commission, University College London, Department of Law has written on the Relationship between Public and Private Enforcement: Quod Dei Deo, Quod Caesaris Caesari.

ABSTRACT: The paper addresses the position of private enforcement in the overall context of competition enforcement in Europe and its relationship with public enforcement. It revisits the various objectives-functions served by competition enforcement (injunctive, compensatory, deterrent-punitive) and considers how and to what extent there is a role of each limb of antitrust enforcement with regard to such objectives-functions. It then sets out the principle that private enforcement is independent of public enforcement and places emphasis on the questions of the effect of public decisions on private litigation and on the interaction between the latter and leniency. Finally, the paper reviews the role of public agencies in quantifying anti-competitive harm and takes a position as to the degree such a duty should be imposed on them.

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

Tuesday, August 16, 2011

Misconduct in Standard Setting: The Case for Patent Misuse

Posted by D. Daniel Sokol

Daryl Lim, The John Marshall Law School addresses Misconduct in Standard Setting: The Case for Patent Misuse.

ABSTRACT: This Article examines the problem of patent hold-ups in standard setting organizations. The paper critically assesses the solutions currently used to address the problem and explains why the overlooked policy lever of patent misuse provides a best answer yet to patent hold-ups. This article is followed by an Addendum that analyzes the en banc decision of the Federal Circuit in Princo Corp. v. International Trade Com’n. 616 F.3d 1318 (Fed. Cir. 2010), which was decided after this article was written.

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

Consolidation and Rationalization in the Transatlantic Air Transport Market – Prospects and Challenges for Competition and Consumer Welfare

Posted by D. Daniel Sokol

Antigoni Lykotrafiti, Tilburg Law and Economics Center (TILEC), Tilburg Law School discusses Consolidation and Rationalization in the Transatlantic Air Transport Market – Prospects and Challenges for Competition and Consumer Welfare.

ABSTRACT: The Discussion Paper examines the regulation of the air transport sector from the perspective of competition law, focusing specifically on EU-US air transport relations. Emphasis is placed on the ongoing negotiations between Europe and the United States for the creation of a transatlantic open aviation area, where American and European airlines will operate freely without restrictions on traffic rights, subject solely to common rules agreed between the parties. In 2007, the first-ever EU-US Air Transport Agreement was reached, followed, in 2010, by a second-stage agreement. All efforts are now concentrated on the conclusion of the final agreement. Given that the transatlantic air transport market accounts for almost 60% of world traffic, the conclusion of the final agreement will signal the creation of the biggest liberalized airspace in the world. The prospects and challenges thereof are expected to be major and are examined from the perspective of the consumers, the airline industry and the law itself. The first part of the paper is a flight into the past, tracing the regulation of air transport from the birth of civil aviation up until today. The second part is a flight into the future, aspiring to foresee how smooth or turbulent the transition to the new regime is going to be. Given that the successful application of the final agreement is dependent upon effective regulatory cooperation aimed ultimately at regulatory convergence, the analysis looks into the prospects and challenges associated with regulatory convergence at both sector-specific and general competition law level.

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

The Role of Private Labels in Antitrust

Posted by D. Daniel Sokol

Chris Doyle and Richard Murgatroyd (both RBB Economics) discuss The Role of Private Labels in Antitrust.

ABSTRACT: Private labels now play a key role in a wide range of industries. Consequently, it is crucial that antitrust practitioners fully understand how private labels can affect the level and nature of competition in the markets in which they are present. However, we argue that insufficient consideration has generally been given to the potentially complex and multifaceted effect that private labels can have on shaping the competitive dynamics of markets, and that a detailed and nuanced understanding is required to make a complete assessment of competition in the markets concerned. After first providing an overview of relevant background information, we discuss how private label products may affect competition in a variety of contexts, with reference to both economic theory and experiences from recent mergers and market investigations, and highlight some key considerations.

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

The International Competition Community at Work

Posted by D. Daniel Sokol

Paul Lugard (TILEC) has posted The International Competition Community at Work.

ABSTRACT: Over the past decade, the International Competition Network ("ICN") has brought important changes to the substance, procedure, and administration of completion law. Founded in 2001 by 15 competition agencies as a virtual, practical, and results-oriented network of competition agencies to: (i) encourage the dissemination of antitrust experience and best practices; (ii) promote the advocacy role of antitrust agencies; and (iii) facilitate international cooperation among competition agencies, the ICN has since grown to 117 agencies from 103 jurisdictions. 

Since its inception, the ICN has contributed significantly to the harmonization and convergence of procedural and substantive antitrust law and policy. ICN work products now cover most of the daily work of competition agencies in the fields of merger control, anti-cartel enforcement, and unilateral conduct, as well as matters that relate to the way competition agencies operate in practical terms; in particular, advocacy and agency effectiveness. With the participation of non-governmental advisers ("NGAs"), including private practitioners, academics, representatives of international organizations, and industry and consumer groups, the ICN has developed an impressive body of recommended practices, enforcement manuals, templates, reports on rules and legislation in force, databases, explanatory notes, and other materials.

The private sector has a significant and immediate interest in the work of the ICN, in particular its efforts to minimize incompatible outcomes across jurisdictions and reduce unnecessary costs and burdens from duplicative or inconsistent antitrust and merger control procedures. Indeed, as one commentator has eloquently put it: "for business, manoeuvring a balkanized antitrust terrain is costly." That interest is likely to increase over the years to come as ICN work products are migrating to superior standards and are progressively implemented in national competition law and policy across the world. This trend is already clearly visible. Recently, 39 ICN competition agencies have reported using the ICN Anti-Cartel Enforcement Manual in their cartel investigations, while the ICN Recommended Practices for Merger Notification and Review Procedures have been influential in reforming national merger control regimes in more than two-thirds of the jurisdictions where such changes have been made.

Obviously, knowledge of the work of the ICN and agencies' involvement in ICN projects may also provide valuable insights into those agencies' policy agendas and may help to resolve individual cases. Finally, for private practitioners and other NGAs, the ICN offers a forum to make private sector experience and knowledge accessible to ICN-competition agencies and to interact with agency officials on those matters. This process of cross-fertilization also significantly contributes to the legitimacy of the ICN and the work product it produces.

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

Monday, August 15, 2011

The Failing Firm Defense: Alive and Well

Posted by D. Daniel Sokol

Thomas D. Fina and Vishal Mehta (Baker Botts) describes The Failing Firm Defense: Alive and Well.

ABSTRACT: The failing firm defense exempts an otherwise anticompetitive acquisition from liability under Section 7 of the Clayton Act where failure of one of the merging parties is imminent. Despite the defense’s longevity, the stringent standards underlying the doctrine have limited its use over time. The defense has seldom been raised by merging parties in courts or before the Agencies and, when invoked, has rarely succeeded.1 This article provides an overview of the failing firm defense and highlights two recent investigations by the Federal Trade Commission and the Department of Justice, in which the defense has succeeded. Together, these cases suggest that the failing firm defense, in its current, longstanding incarnation, is alive and well. Moreover, the cases illustrate the importance of a “shop” of the allegedly failing firm’s assets and the extent to which the Agencies, in the right case, may act quickly and creatively in validating the defense.

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