Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Saturday, March 5, 2011

Competition Law and the State: 18 & 19 March 2011, Hong Kong

Posted by D. Daniel Sokol

A Global Competition Law and Economics Series Conference: Competition Law and the State
18 & 19 March 2011, Hong Kong


Welcome and
Introduction

Professor Dame Hazel Genn DBE QC (Dean, UCL Faculty of
Laws) &
Professor Johannes Chan (Dean, The University of Hong Kong
Faculty of Law)
Dr Ioannis Lianos (UCL, Co-Director, Global Competition Law
and Economics Series)
Professor Daniel Sokol (University of Florida,
Co-Director, Global Competition Law and Economics Series)

09:15
Official Address:

Mr Gregory So (Under Secretary for Commerce and
Economic Development, Hong Kong Special Administrative Region)


09:30
KEYNOTE ADDRESS: Government in
Markets


Keynote Speaker:
John Fingleton (Chairman, UK Office
of Fair Trading)

Chair:
Judge Frederic Jenny (Cour de Cassation and Chairman, OECD
Competition Committee)

Respondents:



  • Allan Fels (Dean, Australian and New Zealand School of Government
    (ANZSOG))

  • William Kovacic (Commissioner, Federal Trade Commission)

  • Eduardo Pérez Motta (President, Federal Competition Committee,
    Mexico)

Followed by discussion



10:45
COFFEE BREAK

11:00
SESSION 1:
Controlling anticompetitive
action by the State: ex ante approaches (competition advocacy, competitive
neutrality, competition law assessment of projected legislation)


Chair: William Kovacic (Commissioner, Federal Trade
Commission)
Panelists:

  • Joseph P Bauer (Professor of Law, The University of Notre Dame Law
    School)

  • Michiyo Hamada (Commissioner, Japan Fair Trade Commission (JFTC))

  • Gert-Jan.Koopman (Deputy Director General (State Aids) European Commission -
    OECD)

  • Simon Milnes (Infrastructure, Competition and Consumer Division, the
    Australian Treasury)

  • Eduardo Pérez Motta (President, Federal Competition Committee, Mexico)



13:00
The Baker & McKenzie Speakers' Lunch
Light
Lunch for other attendees

14:00
SESSION 2:
Competition law and state
regulation: Setting the stage and focus on state-owned
companies


Chair: Gert-Jan.Koopman (Deputy Director General
(State Aids) European Commission - OECD)
Panelists:

  • Gregory Leonard (Senior Vice-President, NERA)

  • Yena Lim Hua Yen (Chief executive, Competition Commission of Singapore)

  • Tony Prosser (Professor of Law, University of Bristol, Law School)

  • Huang Yong (Professor of Law, University of International Business and
    Economics (UIBE) School of Law, Beijing)

  • Georgina Foster (Partner, Baker & McKenzie LLP
    (Sydney))


15:45
COFFEE BREAK

16:00

SESSION 3:
Controlling anticompetitive action by
the State: ex post approaches (state aids, state action doctrine, state
sponsored cartels and anticompetitive practices)


Chair:
Dhanendra Kumar (Chairman, Competition Commission of India)
Panelists:



  • Thomas Cheng (Assistant Professor of Law, The University of Hong Kong
    Faculty of Law)

  • Michal Gal (Professor of Law, University of Haifa)

  • Damien Geradin (University of Tilburg & Covington & Burling
    LLP)

  • Gavin Robert (Partner, Linklaters LLP)

  • Willard Tom (General Counsel, US Federal Trade
    Commission)


17:30
COFFEE BREAK

17:45

SESSION 4: Authorities Roundtable
Exemptions from the application
of competition law / the challenge of applying competition law to foreign state
activities: comparative and international perspectives


Chair:
Allan Fels (Dean, Australian and New Zealand School of Government
(ANZSOG))
Panelists:



  • Gert-Jan.Koopman (Deputy Director General (State Aids) European Commission -
    OECD)

  • Dhanedra Kumar (Chairman, Competition Commission of India)

  • Jianhui Yang (Anti-Monopoly Bureau, MOFCOM)

  • Yena Lim Hua Yen, (Chief Executive, Competition Commission of
    Singapore)


19:30
Close of Day one


Saturday 19 March - Competition law and the challenge of the evolving
definition and structure of State activities



09:30
Registration and refreshments

10:00
SESSION 5:
Competition law and
private regulation: Self-regulation by professional associations, regulation by
trade associations or voluntary agreements promoting public
interest


Chair: Eduardo Pérez Motta (President, Federal
Competition Committee, Mexico)
Panelists:

  • Assimakis Komninos (Commissioner, Hellenic Competition Commission)

  • Ioannis Lianos (UCL Faculty of Laws)

  • Paul Lugard (TBC) (former Head of Antitrust, Philips; Vice-Chair,
    Competition Commission BIAC; Lecturer Tilburg University)

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

  • Mark Williams (Professor of Law, The Hong Kong Polytechnic)

  • Shiying Xu (Institute of Competition Law, East China University of Political
    Science and Law)


11:30
Coffee Break

11:45
SESSION 6
The interaction between
competition law and regulatory alternatives (networks: broadcasting, digital
media)


Chair: Gert-Jan Koopman (Deputy Director General (State
Aids), European Commission)
Panelists:

  • Nick Economides (Professor of Law, Stern Business School, NYU)

  • Geoff Edwards (Charles River Associates)

  • Leigh Hancher (University of Tilburg & Allen & Overy LLP)

  • Mark Whitener (Senior Counsel, General Electric)


13:15
LUNCH

14:15
SESSION 7:
The interaction between
competition law and regulatory alternatives II
networks / infrastructure:
energy
credence goods: healthcare and financial services


Chair: Jianhui Yang (Anti-Monopoly Bureau,
MOFCOM)
Panelists:

  • Alberto Heimler (Professor of Economics, Advanced School of Public
    Administration, Government of the Italian Republic)

  • Clara Ingen-Housz (Partner, Baker & McKenzie LLP (Hong Kong))

  • Ioannis Kokkoris (University of Reading Law School)

  • William Kovacic (Commissioner, Federal Trade Commission)

  • Franz Jürgen Säcker (Professor of Law, Freien Universität
    Berlin)


16:15
Break

16:30

DISCUSSION:
Extensions - The evolving role of the State and the
impact of competition law in a globalized world: institutional solutions for
dealing with tragic choices


Chair:
Emeritus Professor
Valentine Korah (UCL Faculty of Laws)


Moderator:
Judge Frederic Jenny (Cour de Cassation and Chairman, OECD
Competition Committee)

Open discussion to the floor



17:30
Concluding remarks:
Thomas
Cheng (HKU), Ioannis Lianos (UCL) & Daniel Sokol (Florida)

17:45
End of conference

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

Big Changes in India's Merger Control Regime

Posted by D. Daniel Sokol

I received an email from Indian competition law specialist Pallavi Shroff (Amarchand Mangaldas) late last night. She mentioned the following important development:

The Government of India late last night issued a notification bringing into force the merger control provisions under the Competition Act, 2002, with effect from 1 June 2011.

The Government also issued additional notifications which significantly alter the
merger control provisions:

(1) The merger notification thresholds have been revised upwards by 50%;

(2) Mergers where the target company being acquired has assets worth less than INR 250 crores (approximately USD 55.7 million) or a turnover of less than INR 750 crores (approximately USD 167 million) have been exempted from the merger notification requirement for an initial period of 5 years; and

(3) Recognizing the wide definition of a “group” under the Competition Act, the notification exempts a “group” exercising less than 50% in a target company from the merger notification requirement for an initial period of 5 years. Please note, the definition of “group” has not been amended.

I am sure there will be more developments and analysis soon.

March 5, 2011 | Permalink | Comments (1) | TrackBack (0)

Friday, March 4, 2011

Keeping Pace with SAIC: Monopoly Agreements and Abuses of a Dominant Position

Posted by D. Daniel Sokol

Ninette Dodoo (Clifford Chance) explores Keeping Pace with SAIC: Monopoly Agreements and Abuses of a Dominant Position.

ABSTRACT: Since the introduction of China's Anti-Monopoly Law ("AML") in August 2008, much of the precedent and practice has focused on China's merger control regime. On January 7, 2011, the State Administration for Industry and Commerce ("SAIC") published regulations concerning non-price-related anticompetitive practices. A few days earlier, on January 4, 2011, the National Development and Reform Commission ("NDRC") published a corresponding set of regulations on price-related anticompetitive conduct. The regulations adopted by SAIC, which took effect on February 1, 2011, deal with the application of the AML to anticompetitive agreements (or monopoly agreements under the AML), abuses of dominant market position, and abuses of administrative power. They are the first substantive rules issued and, as such, offer insight on how SAIC will enforce the conduct-related provisions of the AML. Far from providing legal certainty and predictability, SAIC's regulations raise questions and leave SAIC with considerable discretion in the enforcement of the AML. This may be inevitable given the relative infancy of China's competition rules but creates risks, compliance burdens, and uncertainty for companies conducting business in China. This article examines the SAIC Regulation on the Prohibition of Conduct Involving Monopoly Agreements ("SAIC Monopoly Agreements Regulation") and the SAIC Regulation on the Prohibition of Conduct Abusing a Dominant Market Position ("SAIC Abuse of Dominance Regulation") (together "SAIC regulations"), and considers the scope of these regulations while highlighting certain areas of uncertainty. It also considers some of the enforcement issues likely to be encountered as SAIC develops and implements the AML.

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

Just Another Brick in the Wall: Communications with In-house Lawyers Remain Unprotected by Legal Privilege at the European Union Level

Posted by D. Daniel Sokol

Luis Pais Antunes (PMLJ) explores Just Another Brick in the Wall: Communications with In-house Lawyers Remain Unprotected by Legal Privilege at the European Union Level.

ABSTRACT: As decided by the ECJ, legal privilege does not extend to in-house lawyers in antitrust investigations carried out by the Commission. The decision creates a discrepancy with national investigations as that extension is accepted in some countries. It further creates unease for companies taking advice from in-house lawyers, which may compromise their role in ensuring compliance. It raises questions as to why ‘enrolled in-house lawyers’ should remain subject to ethical and discipline rules applicable to external lawyers as their communications do not benefit from the same protection.

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

Pricing, Advertising, and Market Structure with Frictions

Posted by D. Daniel Sokol

Pedro Gomis-Porqueras (School of Economics, Australian National University), Benoit Julien (School of Economics, University of New South Wales), and Chengsi Wang (School of Economics, University of New South Wales) have posted Pricing, Advertising, and Market Structure with Frictions.

ABSTRACT: This paper develops a model of pricing and advertising in a matching environment with capacity constrained sellers and uncoordinated buyers. Sellers’ search intensity attracts buyers only probabilistically through costly informative advertisement. Equilibrium prices and profit maximizing advertising levels are derived and their properties analyzed. The model generates an inverted U-shape relationship between individual advertisement and market tightness which is robust to alternative advertising technologies. The well known empirical fact in the IO literature reflects the trade-off between price and market tightness matching effects. Finally, in this environment we can alleviate the discontinuity problem, allowing for unique symmetric equilibrium price to be derived.

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

Fines: New Case Extending Company Liability in the Name of the ‘Economic Unit’ Concept and Reversing Prior Case Law on Admissible Arguments

Posted by D. Daniel Sokol

Antoine Winckler (Cleary) describes Fines: New Case Extending Company Liability in the Name of the ‘Economic Unit’ Concept and Reversing Prior Case Law on Admissible Arguments.

ABSTRACT: A company has the right to challenge in court its liability or status of addressee even where it has not done so during an administrative procedure following the reception of a statement of objections sent by the European Commission.

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

Thursday, March 3, 2011

Interview with Shang Ming, Director General of the Anti-Monopoly Bureau Under the Ministry of Commerce of the People’s Republic of China

Transatlantic Antitrust: Past and Present: Remarks as Prepared for St Gallen International Competition Law Forum

Posted by D. Daniel Sokol

Rachel Brandenburger (DOJ) discusses Transatlantic Antitrust: Past and Present: Remarks as Prepared for St Gallen International Competition Law Forum.

ABSTRACT: Today the USA and the EU have largely consistent policies directed at promoting consumer welfare. Cooperation and convergence must develop beyond these territories as antitrust agencies are spreading around the globe. The process may appear time consuming but provides concrete results such as multinational coordinated raids in cartel enforcement procedures.

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

Injunctions at the Request of Third Parties in EU Competition Law

Posted by D. Daniel Sokol

Caroline Cauffman, Universities of Maastricht and Antwerp explains Injunctions at the Request of Third Parties in EU Competition Law.

ABSTRACT: The European Commission recently made significant efforts to encourage the private enforcement of EU competition law, by inducing natural and legal persons who suffered damages as a result of competition law infringements, to bring actions for monetary damages before national courts. An important obstacle to the succes of this type of actions is the dificulty to prove and assess the amount of damages. This problem could be evaded by bringing actions for injunctions instead of actions for damages. Surprisingly, however, actions for injunctions have received less attention in the debate as to the private enforcement of competition law. This article investigates the current possibilities to bring actions for such injunctions either in the course of administrative procedures, or in the course of civil procedures and suggests proceeding to the introduction of a harmonized action for the cessation of competition law infringements.

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

Antitrust Law and the Promotion of Democracy and Economic Growth

Posted by D. Daniel Sokol

Niels Petersen of the Max Planck Institute for Research on Collective Goods has written on Antitrust Law and the Promotion of Democracy and Economic Growth.

ABSTRACT: There is a considerable debate in the legal literature about the purpose of antitrust institutions. Some argue that antitrust law merely serves the purpose of economic growth, while others have a broader perspective on the function of antitrust, maintaining that the prevention of economic concentration is an important means to promote democratization and democratic stability. This contribution seeks to test the empirical assumptions of this normative debate. Using panel data of 154 states from 1960 to 2007, it analyzes whether antitrust law actually has a positive effect on democracy and economic growth. The paper finds that antitrust law has a strongly positive effect on the level of GDP per capita and economic growth. However, there is no significant positive effect on the level of democracy. It is suggested that these results might be due to the current structure of existing antitrust laws, which are designed to promote economic efficiency rather than to prevent economic concentration.

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

Self-Disclosure at International Cartels

Posted by D. Daniel Sokol

Steffen Brenner, Copenhagen Business School explores Self-Disclosure at International Cartels.

ABSTRACT: We study revelation behavior at illegal international cartels. Our hypotheses suggest that a resource advantage induces executives of large multinational enterprises (MNEs) to be more likely to reveal the cartel and to cooperate with the antitrust agency during the prosecution stage. Moreover, we expect the cultural background to influence the firm's inclination to reveal incriminating evidence. Empirical tests based on data about cartel breakdowns under the EU Leniency Program show that large MNEs are indeed more likely to reveal the cartel. However, they largely fail to explain variation in legal actions along cultural dimensions.

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

Wednesday, March 2, 2011

Second Annual Chicago Forum on International Antitrust Issues, June 9-10, 2011

Posted by D. Daniel Sokol

The Searle Center on Law, Regulation, and Economic Growth will host the Second Annual Chicago Forum on International Antitrust Issues on Thursday, June 9-Friday, June 10, 2011. The Forum will be held at Northwestern University School of Law in Chicago, IL. Topics will include:

· Antitrust Enforcement Priorities: US, Canada and Mexico
· Corporate Perspectives in Dealing with the Agencies
· Leniency in Cartel Investigations
· Global Compliance: Best Practices
· Developments in Brazil, Russia, India and China
· Hot topics in Europe
· Merger Update: New Guidelines in the US and Abroad
· Abuse of Dominance
· Distribution Practices—Pricing, Advertising and the Internet
· New Risks and Strategies in Private Antitrust Litigation
· Counseling and Litigating Without the Attorney-Client Privilege

Confirmed Government Speakers:
· William E. Kovacic, Commissioner, Federal Trade Commission
· Melanie L. Aitken, Commissioner of Competition, Canada Competition Bureau
· Eduardo Perez Motta, Chairman, Federal Competition Commission, Mexico
· Rachel C. Brandenburger, Special Advisor, International, Antitrust Division, Department of Justice
· Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement, Antitrust Division, Department of Justice
· Russell W. Damtoft, Associate Director, Office of International Affairs, Federal Trade Commission

Confirmed Other Speakers:
· Patrick Ahern, Baker & McKenzie LLP
· Theodore L. Banks, Compliance & Competition Consultants
· Michael R. Baye, Kelley School of Business, Indiana University
· Roxane C. Busey, Baker & McKenzie LLP
· Mildred L. Calhoun, BP America
· Thomas Campbell, Baker & McKenzie LLP
· Steven J. Cernak, General Motors
· Martin Commons, Baker & McKenzie LLP (Beijing)
· Alice W. Detwiler, Microsoft
· Nathalie Jalabert Doury, Mayer Brown LLP (Paris)
· Ricks P. Frazier, United Airlines
· Anne Gron, NERA
· H. Stephen Harris, Jr., Jones Day, Atlanta
· Kevin Kehoe, Microsoft
· Christopher J. Kelly, Mayer Brown LLP (Palo Alto)
· Gregory K. Leonard, NERA
· Deborah P. Majoras, Proctor & Gamble
· Mark McLaughlin, Mayer Brown LLP
· Samantha Mobley, Baker & McKenzie LLP (London)
· Christopher J. Myers, Microsoft
· Douglas Tween, Baker & McKenzie LLP
· Spencer Weber Waller, Loyola Law School
· Bruno D. Werneck, Tauil & Chequer Advogados (Sao Paulo)
· Lawrence Wu, NERA

Additional information will be made available on the Forum website: http://www.law.northwestern.edu/searlecenter/conference/international/index.html.

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

Further Reflections on the Impact of the EC Horizontal Cooperation Guidelines on Intellectual Property Rights and Innovation

Posted by D. Daniel Sokol

Richard Taffet (Bingham McCutchen) offers Further Reflections on the Impact of the EC Horizontal Cooperation Guidelines on Intellectual Property Rights and Innovation.

ABSTRACT: The European Commission has now issued its Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements (the "Guidelines"). The final version of Chapter 7 of the Guidelines reflects significant modifications from the draft released last year, and appear to reflect an attempt to address many comments submitted regarding the draft's lack of balance in Chapter 7 between intellectual property and competition law rights and principles. Indeed, as I previously observed, the draft Guidelines might, in fact, have reflected an anti-IP bias that could be construed in ways that would diminish the rights of IP owners, create less certainty with respect to the lawful exercise and assertion of IP rights, and undermine the pro-competitive use of IPR specifically in the standards context, thus threatening to diminish the positive, innovation-enhancing potential of standardization.

More specifically, as previously commented, while the draft Guidelines identified the potential for anticompetitive effect in connection with standardization, they failed to observe that as a general matter (i) the use of proprietary technology in standards is pro-competitive, and (ii) the effective enforcement of IP results generally in positive competitive effects. Furthermore, the draft Guidelines provided no context-or even definition-of the anticompetitive conduct identified-i.e., "hold up" or "excessive pricing"-in the standards context, or acknowledged that competitive risks resulting from what may be claimed as "hold up" or "excessive pricing" are, in large measure, theoretical.

As a result, the draft Guidelines could have easily been interpreted as requiring a fundamental shift of existing legal standards and standardization processes, even though no systemic competitive problems in the standards arena actually exist. Moreover, and perhaps most troubling, the draft Guidelines risked interpretation as imposing prescriptive rules, rather than applying the type of competitive analysis necessary to properly evaluate the effect of conduct in the context of standardization and in relation to IPR for purposes of determining whether any unlawful competitive restriction has or would likely occur.  As such, the draft Guidelines created the risk that they themselves would limit the pro-competitive nature of standardization, limit the rights of IP holders (contrary to settled IP law), and overall diminish the ability of firms effectively to compete, especially in the fast moving world of information and communications technology.

As revised and reflected in the final Chapter 7, however, the Guidelines now, while still lacking coherence in some critical areas (e.g., explaining meaningful standards underpinning the analysis of unilateral conduct in the IPR and standards contexts), have come a long way to expressly recognize the generally pro-competitive nature of standardization and IP, as well as the limited and discrete circumstances that may result in restrictive competitive effects in such contexts.

Equally important, it appears indisputable that the Guidelines make it clear that conduct, including in relation to standardization, must be analyzed for purposes of assessing its lawfulness under Article 101 of the Treaty based upon objective criteria that assess the actual competitive effects of the subject conduct. This is the case even for conduct that will not qualify for Chapter 7's safe harbor-there will be no presumption that non-safe harbor protected conduct is unlawful, and rather all conduct shall be considered based on its actual or likely competitive effects.

Thus, while the Guidelines will no doubt be the subject of ongoing discussion, and perhaps alternate interpretation, it should now be clear that they do not represent a "sea change" from existing law, if any change at all, and they should not be considered as an invitation to require any modification of current standardization processes as successfully pursued not only in Europe, but globally. This note touches on certain aspects of the Guidelines that support these conclusions.

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

The Problem of Search Engines as Essential Facilities: An Economic & Legal Assessment

Posted by D. Daniel Sokol

Geoffrey A. Manne, Executive Director, International Center for Law & Economics (ICLE), Lecturer in Law, Lewis & Clark Law School discusses The Problem of Search Engines as Essential Facilities: An Economic & Legal Assessment.

ABSTRACT: What is wrong with calls for search neutrality, especially those rooted in the notion of Internet search (or, more accurately, Google, the policy scolds’ bête noir of the day) as an “essential facility,” and necessitating government-mandated access? As others have noted, the basic concept of neutrality in search is, at root, farcical. The idea that a search engine, which offers its users edited access to the most relevant websites based on the search engine’s assessment of the user’s intent, should do so “neutrally” implies that the search engine’s efforts to ensure relevance should be cabined by an almost-limitless range of ancillary concerns. Nevertheless, proponents of this view have begun to adduce increasingly detail-laden and complex arguments in favor of their positions, and the European Commission has even opened a formal investigation into Google’s practices, based largely on various claims that it has systematically denied access to its top search results (in some cases paid results, in others organic results) by competing services, especially vertical search engines. To my knowledge, no one has yet claimed that Google should offer up links to competing general search engines as a remedy for its perceived market foreclosure, but Microsoft’s experience with the “Browser Choice Screen” it has now agreed to offer as a consequence of the European Commission’s successful competition case against the company is not encouraging. These more superficially sophisticated claims are rooted in the notion of Internet search as an “essential facility” – a bottleneck limiting effective competition. These claims, as well as the more fundamental harm-to-competitor claims, are difficult to sustain on any economically-reasonable grounds. To understand this requires some basic understanding of the economics of essential facilities, of Internet search, and of the relevant product markets in which Internet search operates.

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

Making friends with your neighbors? Agglomeration and tacit collusion in the lodging industry

Posted by D. Daniel Sokol

Li Gan (Texas A&M - Econ) and Manuel A. Hernandez (IFPRI) ask and discuss Making friends with your neighbors? Agglomeration and tacit collusion in the lodging industry.

ABSTRACT: Agglomeration is a location pattern frequently observed in service industries such as hotels. This paper empirically examines if agglomeration facilitates tacit collusion in the lodging industry using a quarterly dataset of hotels that operated in rural areas across Texas between 2003 and 2005. We jointly model a price and occupancy rate equation under a switching regression model to endogenously identify a collusive and non-collusive regime. The estimation results indicate that clustered hotels have a higher probability of being in the potential collusive regime than isolated properties in the same town. The identification of a collusive regime is also consistent with other factors considered to affect the sustainability of collusion like cluster size, seasonality and firm size, and the results are robust to alternative cluster definitions.

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

Of Pleading and Discovery: Reflections on Twombly and Iqbal with Special Reference to Antitrust

Posted by D. Daniel Sokol

Richard Epstein (University of Chicago, NYU) has recentled penned Of Pleading and Discovery: Reflections on Twombly and Iqbal with Special Reference to Antitrust.

ABSTRACT: This Essay explores the evolving influence of Twombly and Iqbal on modern antitrust litigation. The author argues that any proposed statutory repudiation of Twombly and Iqbal is premature. He also develops a model that calls for a periodic reevaluation of the overall strength of a plaintiff’s case to see if a final motion dismissing the case or some part thereof is appropriate before discovery runs its course. That approach should be followed in a limited number of big cases. The key to the successful judicial administration of discovery is to require that plaintiffs gather publicly available information in order to make credible their claims of a valid cause of action. It also encourages a more active judicial supervision of discovery in large cases to evaluate whether the evidence produced at any point warrants further discovery. Finally, the author criticizes the current rules governing “civil investigative demands” from the Antitrust Division as being far too intrusive relative to the parallel rules that govern discovery under the Federal Rules of Civil Procedure.

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

Interview with Xu Kunlin, Director General of the Department of Price Supervision of the National Development and Reform Commission (NDRC)

COLLUSION ON PRIVATE HEALTH INSURANCE COVERAGE IN CHILE

Posted by D. Daniel Sokol

Claudio A. Agostini, Eduardo Saavedra, & Manuel Willington, Alberto Hurtado University - Econ describe COLLUSION ON PRIVATE HEALTH INSURANCE COVERAGE IN CHILE.

ABSTRACT: In September 2005, the Chilean Competition Authority filed a lawsuit against five private health insurance providers for violation of antitrust laws. They were accused of colluding to reduce the coverage levels of their plans. Between March 2002 and March 2003, they reduced the coverage offered from 100 percent for hospitalization and 80 percent for ambulatory care to 90 percent and 70 percent, respectively. These facts were undisputed, but, logically, the mere observation of parallel conduct is not enough to infer collusion. In this article, we analyze the merits of the accusation and find strong support for it. We first present evidence on the definition of the relevant market (that excludes the public insurer) and the presence of entry barriers. We then present a simple model of imperfect competition that gives some testable predictions to separate the hypotheses that insurers colluded to reduce coverage and the one—argued during the trial by the insurers—that the coverage reduction was a competitive reaction to a cost shock. We then present econometric evidence consistent only with the hypothesis of collusion: The accused insurers reduced sales efforts and marketing expenses relative to the non-accused insurers, the monthly transfer rates of insurees among accused insurers decreased during the period of the alleged agreement relative to the rate of the non-accused insurers, and profits of both accused and non-accused insurers increased after the coverage reduction.

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

Tuesday, March 1, 2011

THE EFFECT OF COMPETITION LAW ENFORCEMENT ON ECONOMIC GROWTH

Posted by D. Daniel Sokol

Tay-Cheng Ma, Department of Economics, Chinese Culture University analyzes THE EFFECT OF COMPETITION LAW ENFORCEMENT ON ECONOMIC GROWTH.

ABSTRACT: To identify the effect of competition law on productivity growth, this article conducts a cross-country study using a sample of 101 countries that enforce competition law. The evidence shows that the effect exhibits an asymmetrical pattern depending on the stage of development of each country. For the poor less developed countries (LDCs) whose institutional frameworks cannot exceed a threshold level, competition law has a very limited effect on changing economic activity, and its legislation is neither harmful nor helpful in terms of market competition or economic growth. As to the developed countries (DCs) and middle-income LDCs, although their institutional frameworks have passed the threshold level, the effect of competition law on growth still depends on the law enforcement efficiency of the government. Without an efficient enforcement scheme, a stronger competition law not only cannot support productivity growth, but might also slow down the potential path of growth.

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

Competition Policy in Russia: Historical Sources, the Current State, and Evolutionary Perspectives

Posted by D. Daniel Sokol

Yuri Rubin & Denis Matvienko (Moscow University of Industry and Finance) has written Competition Policy in Russia: Historical Sources, the Current State, and Evolutionary Perspectives.

ABSTRACT: In structured market systems, state competition policy is an inherent part of the government's activity in the context of competition protection and development and, as such, acts as an essential pillar of an existing, viable market system. The rational observer understands the defense of competition to be the cornerstone of fair competition, not only supporting sustainable conditions for the development of competition but also allowing responsible and fair competitors to strengthen their competitiveness, either directly or indirectly. In transitioning economies such as Russia competition policies gain special importance in economic development and have special interests to global competition practitioners. Until recently, state competition policy in Russia was construed to mean antimonopoly policy. The antimonopoly trend was justified during the dangerous period of transforming the Soviet-type monopolies into classic market-based monopolies. During this time it was necessary to formulate the components to create a system to counteract monopolistic behavior and protect the principles of market competition that were born from the difficult times of perestroika. This antimonopoly trend is prevalent in the competition policy today. However, being concentrated on protecting competition, this policy lacks the full measures necessary to stimulate developing competition. In this article, the evolution of views on competition and competition policy will be examined, beginning with historic Soviet views, then taking into account the views on competition from the perestroika period, and culminating with current views. Moreover, the directions and tools of modern competition policy in Russia and the prospects of its further evolution will also be considered.

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