Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, November 5, 2011

Connect with Linkedin to the Readers of the Antitrust and Competition Policy Blog

Posted by D. Daniel Sokol

Connect with Linkedin to the Readers of the Antitrust and Competition Policy Blog. Our linkedin site is here. See how international the workd of antitrust and competition policy is.

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

Brands, Competition Law and IP Law Conference

Posted by D. Daniel Sokol

Brands, Competition Law and IP Law Conference


Friday 2 December 2011 from 2 - 7pm
at UCL Faculty of Laws' Bloomsbury Campus

Organised by UCL's Centre for Law, Economics & Society, the UCL Institute of Brand and Innovation Law (IBIL), and the Institute for Consumer and Antitrust Studies (Loyola University Chicago)


About the conference

Brands matter. In modern times, brands and brand management have become a central feature of the modern economy and a staple of business theory and business practice. Coca-Cola, Nike, Google, Disney, Apple, Microsoft, BMW, Marlboro, IBM, Kellogg’s, Louis-Vuitton, and Virgin are all large companies, but they are also brands that present powerful, valuable tools for business. Business is fully aware of that power and value. Contrary to the law’s conception of trademarks, brands are used to indicate far more than source and/or quality. Indeed those functions are far down on the list of what most businesses want for their brands. Brands allow businesses to reach consumers directly with messages regarding emotion, identity, and self-worth such that consumers are no longer buying a product but buying a brand. Businesses pursue that strategy to move beyond price, product, place, and position and create the idea that a consumer should buy a branded good or service at a higher price than the consumer might otherwise pay. Branding explicitly contemplates reducing or eliminating price competition as the brand personality cannot be duplicated. In addition, this practice can be understood as a product differentiation tactic which allows a branded good to turn a commodity into a special category that sees higher margins compared to the others in that market space. In other words, brands have important effects on competition and the marketplace. Given that both IP law and competition law address business competition, one might expect them to address brands as they fit into each doctrine’s areas of concern and that together trademark and competition law would offer a coherent legal regime to manage the way in which brands affect competition. That, however, is not the case.


The aim of this conference is to reflect on the legal and economic understanding of brands by explaining what brands are and how they function, how trademark and competition law integrate brands in their framework and if this is satisfactory, and the role brands play in business competition. The conference will also delve into specific issues raised by branding in the 21st century business competition, such as the challenges raised by online business and the increasing role of private labels in distribution.


This event is accredited with 4.5 CPD hours by the Solicitors Regulation Authority, Bar Standard Board and IPReg.


Programme:

13:30

Registration 
Cissy Chu Common Room

14:00

Welcome
Dr Ioannis Lianos, UCL Laws

14:05

Brands and Neoclassical Price Theory: Friends or Foes?
Dr Amelia Fletcher (Chief Economist, OFT)
Dr Peter Davis (Senior Vice-President, Compass Lexecon)
Chaired by Dr Ioannis Lianos (UCL Law)

15:10

Brands in Competition Law I: Private Labels, National Brands and Retail Competition
Simon Pritchard (Allen & Overy LLP)
Christian Ahlborn (Linklaters LLP) 
Simon Baxter (Skadden Arps, Slate, Meagher & Flom LLP)
Chaired by Professor Spencer Weber Waller (Loyola University Chicago)

16:20

Coffee Break

16:40

Brands and the Interaction between Competition Law and Trade Mark Law
Professor Spencer Weber Waller (Loyola University Chicago)
John Noble (British Brands Group)
Dr Ioannis Lianos (UCL Laws)
Chaired by The Rt Hon Prof. Sir Robin Jacob

17:40

Brands and IP Law
Deven Desai (Google, Inc)
Dr Dev Gangjee (LSE)
Tony Appleton (Procter & Gamble)
Chaired by The Rt Hon Prof. Sir Robin Jacob 

18:50

Closing Remarks

19:00 - 19:45

Reception

 

Fees: £50 standard Ticket

Sign up online at: 

http://brands-competition-ip.eventbrite.co.uk/

 



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

The German and Romanian Abuse of Market Dominance in the Light of Article 102 TFEU

Posted by D. Daniel Sokol

Anca D. Chirita (University of Durham Law) has a book out on The German and Romanian Abuse of Market Dominance in the Light of Article 102 TFEU.

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

Friday, November 4, 2011

More Common Ground For International Competition Law?

Posted by D. Daniel Sokol

Josef Drexl, Director, Max Planck Institute for Intellectual Property and Competition Law, Warren S. Grimes, Southwestern Law School, Clifford A. Jones, University of Florida, Rudolph J.R. Peritz, New York Law School, and Edward T. Swaine, George Washington University Law School, ask More Common Ground For International Competition Law? in their edited volume.

BOOK ABSTRACT: In recent years, an impressive proliferation of competition laws has been seen around the world. Whilst this development may lead to greater diversity of approaches, economic arguments may promote convergence. The contributions to this book look at a number of the most topical issues by asking whether the competition world is turning more towards convergence or diversity. These issues include, among others, the changing role of economics in times of economic crises and political change, the introduction of criminal sanctions, resale-price maintenance, unilateral conduct and the application of competition law to intellectual property and state-owned enterprises.

TABLE OF CONTENTS

Preface

PART I: ECONOMIC FOUNDATIONS OF COMPETITION LAW

1. Are People Self-interested? The Implications of Behavioral Economics on Competition Policy Maurice E. Stucke

2. Consumer Choice as the Best Way to Recenter the Mission of Competition Law Robert H. Lande

3. Protecting Consumer Choice: Competition and Consumer Protection Law Together Neil W. Averitt

4. Is Competition Law Part of Consumer Law? Paul L. Nihoul PART II: INDIVIDUAL JURISDICTIONS AND INTERNATIONAL PERSPECTIVES

5. Resale Price Maintenance: A Reassessment of its Competitive Harms and Benefits Marina Lao

6. The Leegin Case – A US Antitrust Chief Event v A Storm in a European Teacup? Josef Bejcek

7. Competition Law Issues Concerning Related Markets and their Treatment under EU Competition Law Thomas Eilmansberger 8.

A Comparative Look at the Competition Law Control of State-owned Enterprises and Government in China Deborah Healey

9. Australia’s Criminalization of Cartels: Will it be Contagious? Caron Beaton-Wells

PART III: INTELLECTUAL PROPERTY AND COMPETITION LAW

10. Patent Ambush Strategies and Article 102 TFEU Andreas Fuchs

11. Three Statutory Regimes at Impasse: ‘Reverse Payments’ in ‘Pay-for-Delay’ Settlement Agreements between Brand-name and Generic Drug Companies Rudolph J.R. Peritz

12. Patent Ambush and Reverse Payments Gustavo Ghidini

13. Intellectual Property in Competition: How to Promote Dynamic Competition as a Goal Josef Drexl 14. Industrial Standards and Technology Pools: A Regulatory Challenge for EU Competition Law Steven Anderman

PART IV: PROMOTING COMPETITION POLICY NATIONALLY AND ACROSS BORDERS

15. International Antitrust Solutions: Discrete Steps or Causally Linked? Michal S. Gal

16. Penumbras of European Union Competition Law: External Governance, Extraterritoriality, and the Shifting Borderlands of the Internal Market Clifford A. Jones

17. The Role of Non-governmental Organizations in the Development of Competition Law Albert A. Foer

Index

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

Do Mergers Really Reduce Costs? Evidence from Hospitals

Posted by D. Daniel Sokol

Teresa D. Harrison, Drexel University - Department of Economics & International Business asks Do Mergers Really Reduce Costs? Evidence from Hospitals.

ABSTRACT: In this paper, we compare potential and realized cost savings from hospital mergers. Our approach isolates changes in realized cost savings due to different output mixes from systematic changes due to time and also provides a measure of the potential cost savings due to scale economies. Our findings suggest that economies of scale are present for merging hospitals and they realize these cost savings immediately following a merger. However, we also show that over time, cost savings from the merger decrease and the proportion of hospitals experiencing positive cost savings declines.

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

Modeling Internal Decision Making Process: An Explanation of Conflicting Empirical Results on Behavior of Non‐Profit and For‐Profit Hospitals

Posted by D. Daniel Sokol

Kathleen A. Carroll, University of Maryland, Baltimore County - Department of Economics and Jane E. Ruseski, University of Alberta - Department of Economics explain Modeling Internal Decision Making Process: An Explanation of Conflicting Empirical Results on Behavior of Non‐Profit and For‐Profit Hospitals.

ABSTRACT: This article develops multiobjective models of hospital decision making that incorporate the internal decision process in both a for‐profit and a non‐profit hospital (NPH). Predicted output and quality for an NPH differ from those for a for‐profit hospital under some conditions but converge under others. Convergence may be the result of a complex internal decision structure with decision control primarily by physicians, similar objectives across different organizational forms, or differing constraints. The mechanisms underlying these outcomes provide explanations for conflicting results in empirical studies of non‐profit and for‐profit hospitals and provide a different rationale for convergence than non‐profit response to competition from for‐profit hospitals. Understanding the source of convergence is important for policies directed toward the tax treatment of NPHs.

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

Thursday, November 3, 2011

Mom-and-Pop Meet Big Box: Complements or Substitutes?

Posted by D. Daniel Sokol

John Haltiwanger, University of Maryland - Department of Economics, Ron S. Jarmin, U.S. Census Bureau, and C. J. Krizan, U.S. Census Bureau - Center for Economic Studies ask Mom-and-Pop Meet Big Box: Complements or Substitutes?

ABSTRACT: In part due to the popular perception that Big-Boxes displace smaller, often family owned (a.k.a. Mom-and-Pop) retail establishments, several empirical studies have examined the evidence on how Big-Boxes’ impact local retail employment but no clear consensus has emerged. To help shed light on this debate, we exploit establishment-level data with detailed location information from a single metropolitan area to quantify the impact of Big-Box store entry and growth on nearby single unit and local chain stores. We incorporate a rich set of controls for local retail market conditions as well as whether or not the Big-Boxes are in the same sector as the smaller stores. We find a substantial negative impact of Big-Box entry and growth on the employment growth at both single unit and especially smaller chain stores – but only when the Big-Box activity is both in the immediate area and in the same detailed industry.

November 3, 2011 | Permalink | Comments (0) | TrackBack (0)

The Informative Role of Subsidies

Posted by D. Daniel Sokol

Ana Espinola-Arredondo and Felix Munoz-Garcia (School of Economic Sciences, Washington State University) describe The Informative Role of Subsidies.

ABSTRACT: This paper investigates the effect of monopoly subsidies on entry deterrence. We consider a potential entrant who observes two signals: the subsidy set by the regulator and the output level produced by the incumbent firm. We show that not only an informative equilibrium can be supported, where information about the incumbent's costs is conveyed to the entrant, but also an uninformative equilibrium, where the actions of regulator and incumbent conceal the monopolist's type, thus deterring entry. While the regulator?s role can support entry-deterrence practices, we demonstrate that his presence is nonetheless welfare improving. Furthermore, we compare equilibrium welfare relative to two benchmarks: complete information environments, and standard entry-deterrence games where the regulator is absent.

November 3, 2011 | Permalink | Comments (0) | TrackBack (0)

A Simplified Mixed Logit Demand Model with an Application to the Simulation of Entry

Posted by D. Daniel Sokol

Sergio Aquino de Souza (CADE) has written on A Simplified Mixed Logit Demand Model with an Application to the Simulation of Entry.

ABSTRACT: The key contribution of this paper is to show how to incorporate more information into the empirical strategy in order to avoid the need of valid instruments, which are difficult to find in many instances. I use information on price elasticity to propose a methodology that is able to determine the parameters of a simplified Mixed Logit Model. I also apply this methodology to the ready-to-eat cereal industry and simulate the competitive and welfare effects of the introduction of new products.

November 3, 2011 | Permalink | Comments (0) | TrackBack (0)

Step up to the plate: FTC needs to stop the Express Scripts-Medco merger

Posted by D. Daniel Sokol

David Balto has an op-ed asking Step up to the plate: FTC needs to stop the Express Scripts-Medco merger.

November 3, 2011 | Permalink | Comments (0) | TrackBack (0)

Estimating Travellers’ Preferences for Competition in Commercial Passenger Rail Transport

Posted by D. Daniel Sokol

Johannes Paha (University of Giessen), Dirk Rompf (University of Giessen), and Christiane Warnecke (University of Giessen) analyze Estimating Travellers’ Preferences for Competition in Commercial Passenger Rail Transport.

ABSTRACT: The current level of competition in European commercial passenger rail markets is low and empirical data on customer preferences in intramodal competition has hardly been available, yet. Our study raises the knowledge of competition in commercial passenger rail by exploring the determinants of customers’ choice behaviour on two cross-border routes, Cologne-Brussels and Cologne-Amsterdam. We analyse stated preference information from about 700 on-train interviews by means of multinomial Logit regressions. Our analysis indicates that customers experiencing competition (Cologne-Brussels) show a higher preference for competitive services than customers for whom competition is a purely hypothetical situation (Cologne-Amsterdam). Moreover, travellers show a status quo bias, i.e. a preference for the service provider on whose trains they were interviewed which partly stems from switching costs. These findings regarding status! quo bias and switching costs complement previous studies on the outcome of intramodal competition, implying that entry is even more difficult than they predicted.

November 3, 2011 | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 2, 2011

(Weak) Correlation and Sunspots in Duopoly

Posted by D. Daniel Sokol

Indrajit Ray, Department of Economics, University of Birmingham and Sonali Sen Gupta, Department of Economics, University of Birmingham describe (Weak) Correlation and Sunspots in Duopoly.

ABSTRACT: For duopoly models, we consider the notion of weak correlation using simple symmetric devices that the players choose to commit to in equilibrium. In a linear duopoly game, we prove that Nashcentric devices involving a sunspot structure are simple symmetric weak correlated equilibria. Any small perturbation from such a structure fails to be an equilibrium.

November 2, 2011 | Permalink | Comments (0) | TrackBack (0)

The dynamics of a differentiated duopoly with quantity competition

Posted by D. Daniel Sokol

Luciano Fanti (Department of Economics, University of Pisa) and Luca Gori (Department of Law and Economics "G.L.M. Casaregi", University of Genoa) describe The dynamics of a differentiated duopoly with quantity competition.

ABSTRACT: We analyse the dynamics of a Cournot duopoly game with heterogeneous players to investigate the effects of micro-founded differentiated products demand. The present analysis, which modifies and extends Zhang et al. (2007) (Zhang, J., Da, Q., Wang, Y., 2007. Analysis of nonlinear duopoly game with heterogeneous players. Economic Modelling 24, 138–148) and Tramontana, F., (2010) (Tramontana, F., 2010. Heterogeneous duopoly with isoelastic demand function. Economic Modelling 27, 350–357), reveals that a higher degree of product differentiation may destabilise the market equilibrium. Moreover, we show that a cascade of flip bifurcations may lead to periodic cycles and ultimately chaotic motions. Since a higher degree of product differentiation implies weaker competition, then a theoretical implication of our findings, that also constitute a policy warning for firms, is that a fiercer (weaker) competition tends to stabili! se (destabilise) the unique positive Cournot-Nash equilibrium of the economy.

November 2, 2011 | Permalink | Comments (0) | TrackBack (0)

The experience curve and the market size of competitive consumer durable markets

Posted by D. Daniel Sokol

Joachim Kaldasch, EBC Hochschule Berlin discusses The experience curve and the market size of competitive consumer durable markets.

ABSTRACT: An evolutionary model of the product life cycle is applied to derive the experience curve and the market size of (expensive) durable goods. The experience (learning) curve suggests that the real costs per unit decrease with an increasing cumulative output (Henderson's law). Based on the idea that in a competitive market firms are forced to pass cost advantages on to the price, the evolutionary model suggests that the mean price and also the mean costs are governed by an exponential decline with time. Simultaneously the mean price evolution satisfies Henderson's law. The market size is defined here by the number of active firms. The market size is shown to follow the total market revenue if the latter exhibits fast variations, else the size is nearly constant. A comparison with an empirical investigation confirms the model predictions.

November 2, 2011 | Permalink | Comments (0) | TrackBack (0)

Strategic loyalty reward in dynamic price Discrimination

Posted by D. Daniel Sokol

Bernard Caillaud (Paris School of Economics) and Romain De Nijs (Paris School of Economics) explain Strategic loyalty reward in dynamic price Discrimination.

ABSTRACT: This paper proposes a dynamic model of duopolistic competition under behaviorbased price discrimination with the following property: in equilibrium, a firm may reward its previous customers although long term contracts are not enforceable. A firm can offer a lower price to its previous customers than to its new customers as a strategic means to hamper its rival to gather precise information on the young generation of customers for subsequent profitable behavior-based pricing. The result holds both with myopic and forward-looking, impatient enough consumers.

November 2, 2011 | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 1, 2011

A Good Carrot? U.S. Travel Restrictions in Cartel Enforcement

Posted by D. Daniel Sokol

J. Mark Gidley & Patrick Eyers (White & Case) ask A Good Carrot? U.S. Travel Restrictions in Cartel Enforcement.

ABSTRACT: Based on an obscure memorandum, foreign executives accused of price-fixing in the United States face a Hobson's Choice: plead guilty and serve time in a U.S. prison, or refuse to plead guilty and incur criminal jeopardy, plus restricted travel to the United States. For executives in the early or middle stages of successful careers in which regular business travel to the United States is essential, the prospect of serving a reduced sentence in a low-security U.S. prison might appear initially as a better option than refusing to plead and risking conviction and a career-ruining ban on travel to the United States.

The Antitrust Division of the U.S. Department of Justice ("DOJ"), recognizing the substantial leverage it possesses as gatekeeper to the world's largest economy, has seized upon this dynamic in negotiating an ever-increasing number of guilty pleas from foreign executives in antitrust investigations. Scott Hammond, Deputy Assistant Attorney General for criminal enforcement at DOJ, recently characterized DOJ's immigration leverage as "a good carrot."

Disturbingly, the immigration consequences which DOJ brings to bear on plea negotiations in antitrust cases derive from an obscure (and questionable) 1996 Memorandum of Understanding ("MoU") between two U.S. government departments: the Antitrust Division and the Immigration and Naturalization Service ("INS"). Today, the INS is now the Immigration and Customs Enforcement Division of the Department of Justice ("ICE"). The 1996 MoU states that the INS "considers" criminal antitrust offenses to be "crimes involving moral turpitude," thereby rendering convicted price-fixing offenders inadmissible into the United States for a 15-year period under 18 U.S.C. §1182. The untested memorandum of the U.S. government notwithstanding, no court in the United States has ever held an antitrust offense to be a crime of moral turpitude.

That antiquated expression, crime involving moral turpitude ("CIMT"), is typically reserved for "inherently base, vile or depraved" crimes, such as bank robbery and attempted murder. As such, there appears to be no legal basis whatsoever to ban antitrust offenders from the United States for such lengthy periods, or to threaten them with such in the course of plea negotiations under the CIMT rubric. Until the legality of characterizing antitrust offenses as CIMTs is challenged, however, DOJ is likely to continue to convince foreign executives to submit to U.S. prisons regardless of the strength of the government's case against them.

November 1, 2011 | Permalink | Comments (0) | TrackBack (0)

Stability analysis in a Bertrand duopoly with different product quality and heterogeneous expectations

Posted by D. Daniel Sokol

Luciano Fanti (University of Pisa) and Luca Gori (University of Genoa) address Stability analysis in a Bertrand duopoly with different product quality and heterogeneous expectations.

ABSTRACT: We study the local stability properties of a duopoly game with price competition, different product quality and heterogeneous expectations. We show that the Nash equilibrium can loose stability through a flip bifurcation when the consumer’s type range increases. This result occurs irrespective of whether the high(low)-quality firm has either bounded rational (naive) or naive (bounded rational) expectations about the price that should be set in the future by the rival to maximise profits. Therefore, although, on the one hand, an increase in the consumer’s types range increases profits, on the other hand, it contributes to reduce the parametric stability region of the unique interior equilibrium. Moreover, we show that the stability region is larger when the high-quality firm has naïve expectations and the low-quality firm has bounded rational expectations. This implies that when the expectations formation mechanism! of the high-quality firm becomes more complicated than the naive one, and, in particular, it follows the mechanism proposed by Dixit (1986), the stability of the Nash equilibrium in a duopoly market with price competition becomes under increasing strain.

November 1, 2011 | Permalink | Comments (0) | TrackBack (0)

Global Conference on Third-Party Financing of Litigation Wednesday, November 9 and Thursday, November 10, 2011

Posted by D. Daniel Sokol

The Searle Civil Justice Institute (SCJI) at George Mason University’s Law & Economics Center is hosting a global conference on Third-Party Financing of Litigation to be held at the Royal Windsor Hotel Grand Place on Wednesday, November 9 and Thursday, November 10, 2011.  The conference will begin early afternoon on Wednesday and conclude by early afternoon on Thursday.  A cocktail reception will be held on Wednesday evening.

Click here for agenda.

OVERVIEW:

This second of two policy conferences will feature the work product of SCJI’s public policy initiative entitled Third-Party Financing of Litigation: Civil Justice Friend or Foe?  SCJI has commissioned ten papers by leading international scholars to evaluate the legal and economic issues likely to arise with the expansion of third-party financing of litigation.  Particular attention is paid to the potential impact of third-party financing on economic growth and free enterprise systems throughout the world.

In addition to the participating scholars, the conference will feature legal practitioners, financiers, and others with an interest in third-party financing of litigation.  By bringing together a group of leading scholars and front-line practitioners, SCJI hopes to stimulate an informative and balanced discussion of third-party financing and potential policy concerns.

Please click here to read a summary of our prior conference on this topic, held in New York, NY on October 5, 2011.

REGISTRATION:

There is no registration fee. Please click here to register online.

Contact: Scott Hazelgrove
Email: dhazelgr@gmu.edu

PARTICIPATING SCHOLARS:

Participating scholars for this conference are:

  • George Barker, Director, Centre for Law and Economics, The Australian National University
  • Michelle Boardman, Assistant Professor of Law, George Mason University School of Law
  • Geoffrey J. Lysaught, Deputy Executive Director, Law & Economics Center
  • Ianika Tzankova, Professor of Comparative Mass Litigation, Tilburg Law School
  • Cento Veljanovski, Managing Partner, Case Associates, London; IEA Fellow in Law and Economics; Adjunct Senior Research Fellow, Centre for Regulatory & Market Analysis, University of South Australia

CONFERENCE HOTEL:

Royal Windsor Hotel Grand Plac
5 Rue Duquesnoy
1000 Brussels, Belgium

To make a reservation, please call the Royal Windsor Hotel at +32 2 505 5555, or email resa.royalwindsor@warwickhotels.com, and mention the conference in order to receive the conference rate.

Please click here to register.

Brussels, Belgium – Royal Windsor Hotel Grand Place (http://www.royalwindsorbrussels.com/)

 
Brussels, Belgium – Royal Windsor Hotel Grand Place

November 1, 2011 | Permalink | Comments (0) | TrackBack (0)

Quantity Precommitment and Price Matching

Posted by D. Daniel Sokol

Norovsambuu Tumennasan (School of Economics and Management, Aarhus University, Denmark) explores Quantity Precommitment and Price Matching.

ABSTRACT: We revisit the question of whether price matching is anti-competitive in a capacity constrained duopoly setting. We show that the effect of price matching depends on capacity. Specifically, price matching has no effect when capacity is relatively low, but it benefits the firms when capacity is relatively high. Interestingly, when capacity is in an intermediate range, price matching benefits only the small firm but does not affect the large firm in any way. Therefore, one has to consider capacity seriously when evaluating if price matching is anti-competitive. If the firms choose their capacities simultaneously before pricing decisions, then the effect of price matching is either pro-competitive or ambiguous. We show that if the cost of capacity is high, then price matching can only (weakly) decrease the market price. On the other hand, if the cost of capacity is low, then the effect of price matching on the market price is ambiguous due to the multiplicity of equilibria. Therefore, this paper challenges the widely accepted belief that price matching is an anti-competititive practice if the firms choose their capacities simultaneously before pricing decisions.

November 1, 2011 | Permalink | Comments (0) | TrackBack (0)

Antitrust and Social Networking

Posted by D. Daniel Sokol

Spencer Weber Waller, Loyola University Chicago School of Law discusses Antitrust and Social Networking.

ABSTRACT: IBM. ATT. Microsoft. Intel. IBM (redux). Google. Twitter. Facebook. All are present or former leaders in key high-tech sectors. These firms also all have been the subject of serious antitrust scrutiny over the past three decades. All have been referred to at different times as “monopolies” in the colloquial sense, and in the more technical antitrust sense, and have been the target of public and private investigations and/or litigation relating to monopolization, attempted monopolization, or the abuse of a dominant position in the United States, the European Union, the EU member states, and other jurisdictions.

The goal of this essay is to focus on social networking sites as the most recent locus of these competition concerns and to create a framework to analyze the competition law concerns of social network sites. It may well be too early to definitively resolve the many antitrust issues in this rapidly evolving market, but it is not too soon to define the issues and analyze the way they will be resolved as antitrust law undertakes its traditional role of defining and limiting the abuse of market power in key high-tech industries. I also seek to create a framework to understand and evaluate from an antitrust perspective continuing issues of network effects, essential facilities, infrastructure, and their application to social network sites and related software platforms, taking into account the added complication that most of the markets in question do not currently charge consumers and exhibit features of what economists call two-sided markets. I conclude not with a call to action, but with more of a checklist of which competition law issues matter most and which represent the greatest antitrust risks faced by the current market leader Facebook as social networking continuing to evolve and grow in importance.

November 1, 2011 | Permalink | Comments (0) | TrackBack (0)