Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Tuesday, November 29, 2011

Merger Referrals in Practice—Analysis of the Cases under Article 22 of the Merger Regulation

Posted by D. Daniel Sokol

Gianni De Stefano (Latham), Rita Motta (Latham), and Susanne Zuehlke (Latham) describe Merger Referrals in Practice—Analysis of the Cases under Article 22 of the Merger Regulation.

ABSTRACT: To date, there have been 26 referral cases under Article 22 of the Merger Regulation and the Commission has declined to accept jurisdiction in three instances only. Although they were apparently restrictive in the use of Article 22 in the past, Member States tend to consider that possibility more often nowadays. An analysis of practice demonstrates that referrals can have dramatic consequences on the outcome of cases.

November 29, 2011 | Permalink | Comments (0) | TrackBack (0)

Monday, November 28, 2011

Anticompetitive Product Design in the New Economy

Posted by D. Daniel Sokol

John M. Newman (DOJ) has written on Anticompetitive Product Design in the New Economy.

ABSTRACT: Claims alleging anticompetitive product design and redesign lie at the very core of one of antitrust law’s most challenging dilemmas: the intersection between innovation and regulation, invention and intervention. For over three decades, courts and scholars have struggled to determine the proper analytical framework within which to address such cases. Meanwhile, the very industries in which challenged conduct occurs have been undergoing fundamental changes.

As demonstrated by the ongoing and recent antitrust litigation involving high-technology firms Apple, Intel, and Microsoft, distinctive features characterize most product markets in what has been called the “New Economy” - and increasingly has become simply “the economy.” Many of these features not only uniquely incentivize anticompetitive design-related conduct, but also render such conduct uniquely susceptible to antitrust scrutiny. Accordingly, this Article both supplies a proper understanding of code-based product markets and, perhaps more importantly, provides a structured, efficient, and rational method of analyzing design-related conduct in those markets.

November 28, 2011 | Permalink | Comments (0) | TrackBack (0)

A Note on the Value of Residual Claimancy with Competing Vertical Hierarchies

Posted by D. Daniel Sokol

Riccardo Martina (Universita di Napoli Federico II and CSEF) and Salvatore Piccolo (Universita di Napoli Federico II and CSEF) provide A Note on the Value of Residual Claimancy with Competing Vertical Hierarchies.

ABSTRACT: In this short paper we study a competing vertical hierarchies model where the allocation of residual claimancy is endogenous and is determined jointly with production and contractual decisions. We .nd a set of circumstances in which the (equilibrium) allocation of residual claimancy is affected by competition in a non trivial manner. More precisely, although revenue-sharing contracts foster agents. (non-contractible) surplus enhancing effort, we show that competing principals dealing with exclusive and privately informed agents might still prefer to retain a share of the surplus from production when dealing with inefficient types. This is because reducing the surplus share of inefficient types reduces the information rent given up to efficient types. Hence, the equilibrium allocation of residual claimancy follows a pro-cyclical rule.

November 28, 2011 | Permalink | Comments (0) | TrackBack (0)

Quality Choice, Competition and Vertical Relationship in a Market of Protected Designation of Origin

Posted by D. Daniel Sokol

Zohra Bouamra-Mechemache and Jianyu Yu, Toulouse School of Economics (Gremaq, INRA) address Quality Choice, Competition and Vertical Relationship in a Market of Protected Designation of Origin.

We show that the farmers' choice of quality may di ffer from the processors' choice, de- pending on the demand and technology characteristics of the Protected Designations of Origin (PDO) product. In particular, farmers will prefer a higher quality standard than processors under two conditions. First, the demand for the PDO product should be inelastic enough such that the oligopoly power will lead to a higher price for a small decrease in quantity. Second, when the agricultural input technology exhibits decreasing return to scale, an increase in quality should generate a further reduction in farmers' return to scale, such that a higher quality can be sustained by a higher procurement price while the oligopsonistic processors cannot easily adjust their quantity. We also show that when farmers and processors have conflicting incentive in the choice of PDO quality standard, the equilibrium quality standard is the result from the negotiation between farmers and processors and depends on the relative bargaining power of farmers when negotiating with firms.

November 28, 2011 | Permalink | Comments (0) | TrackBack (0)

Today's free program - Antitrust and Judaism November 28, 2011 12pm-1:30pm EST

Posted by D. Daniel Sokol

The American Bar Association
ABA Section of Antitrust Exemptions & Immunities Committee
Antitrust and Judaism
November 28, 2011
12pm-1:30pm EST

In light of the Supreme Court's pending decision of the scope of religious organizations’ immunity from civil liability, as well as prominent recent scholarship on the antitrust treatment of rabbinical orders and concerns expressed by some over their conduct in employment, kosher certification, and other matters, the top-flight panelists will ask whether antitrust could and should be used to police markets also regulated by rabbinical authorities. This seminar will put the oy back in oy vey!

Link to the program details here.

Speakers:

  • Makan Delrahim, Brownstein Hyatt Farber Schreck, LLP
  • David Dunn, Hogan Lovells
  • Robert Litan, Kauffman Foundation and Brookings Institution
  • Barak Richman, Duke University Law School

Moderator:

  • D. Daniel Sokol, University of Florida Levin College of Law

The ABA is not seeking CLE credit for this program. You will not receive CLE credit for attending/viewing/listening.

To register for the conference. You will receive the dial in numbers in your confirmation.

Recordings of this program will be posted on the Section website and downloadable in an MPEG-3 format, provided all releases have been obtained. Please visit our Committee Program Audio page after the program to listen to/download the audio.

November 28, 2011 | Permalink | Comments (0) | TrackBack (0)

Left Behind by Modernisation? Restrictions by Object Under Article 101(1)

Posted by D. Daniel Sokol

Alison Jones, King's College London - School of Law asks Left Behind by Modernisation? Restrictions by Object Under Article 101(1).

ABSTRACT: This article charts the journey that the European Commission has taken to "modernize" the interpretation and application of Article 101. It commences by analyzing the Commission's initial formalistic approach to Article 101 and examining why change was necessary. It then considers how, and the extent to which, reform has occurred, focusing on the treatment of "object" or "hardcore" restraints, which are still treated on a strict and inflexible basis. Indeed, it concludes that the process of modernization may have made it less likely that firms will be willing to incorporate such hardcore restraints in their agreements, even when they consider them to be indispensable to the working of a pro-competitive arrangement.

November 28, 2011 | Permalink | Comments (0) | TrackBack (0)

Sunday, November 27, 2011

Mexico Talks Monopoly Reform - A Good Step to Increasing Efficiency in Mexico

Posted by D. Daniel Sokol

Mary Anastasia O'Grady's weekly op-ed on the Americas focuses this week on PEMEX- the Mexican oil monopoly and potential efforts to privatize it. Given the relative success of privatization (at least when the introduction of competition goes hand in hand with such privatization measures), this would be a good development for Mexico, even if politically difficult. I have written in detail about privatization and competition here.

November 27, 2011 | Permalink | Comments (0) | TrackBack (0)

Neutral on Internet Neutrality: Should There Be a Role for the Federal Trade Commission?

A Trip Around the Cartel Victims Remedy Buffet

Posted by D. Daniel Sokol

Kent Bernard (Fordham Law) offers A Trip Around the Cartel Victims Remedy Buffet.

ABSTRACT: The debate about whether the European Union should adopt a community-wide system to compensate victims of illegal cartel activityx has generated a lot of heat, but perhaps less enlightenment, over the past years. Some people are arguing for grafting a U.S. style class action litigation system onto the EU structure, somehow modifying that U.S. graft to avoid the costs of the U.S. system while all the while preserving and reflecting European cultures and traditions.

Almost no one suggests that we should be encouraging the formation or longevity of cartels. And it is certainly a legitimate question to see how better to provide a way for the victims of illegal cartel behavior to be made whole. But while cartels are bad, they are not the only bad things out there. Do we need to be looking at a remedy that has a wider application? Or is there no need for any new remedy at all? There is a respectable argument that, in the time since this flirtation with the U.S. litigation structure for cartel damages began in 2005, market forces and the availability of actions in the national courts have begun to fill the perceived gap and that the best approach here would be to let that process continue. Others point out that areas such as alternate dispute resolution remain underexplored. And there may be something else out there that deserves consideration.

November 27, 2011 | Permalink | Comments (0) | TrackBack (0)