Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Tuesday, June 5, 2012

The strategic interplay between bundling and merging in complementary markets

Posted by D. Daniel Sokol

Andrea Mantovani (University of Bologna & IEB) and Jan Vandekerckhove (Maastricht University) address The strategic interplay between bundling and merging in complementary markets.

ABSTRACT: In this paper, two pairs of complementors have to decide whether to merge and eventually bundle their products. Depending on the degree of competitive pressure in the market, either both pairs decide to merge (with or without bundling), or only one pair merges and bundles, while rivals remain independent. The latter case can very harmful for consumers as it brings surge in prices. We also consider the case in which one pair moves first. Interestingly, we find a parametric region where first movers merge but refrain from bundling, to not induce rivals to merge as well.

June 5, 2012 | Permalink | Comments (0) | TrackBack (0)

Monday, June 4, 2012

Competition Law Develops in Southern Africa

Posted by D. Daniel Sokol

Heather Irvine & Candice Upfold (Norton Rose) note that Competition Law Develops in Southern Africa.

ABSTRACT: African countries are increasingly adopting competition law. To date, sixteen countries in Africa have adopted legislation to regulate mergers, and 11 are in the process of promulgating competition statutes. In particular, Southern Africa has seen some interesting developments in the last few years.

June 4, 2012 | Permalink | Comments (0) | TrackBack (0)

A Roadmap to the Smartphone Patent Wars and FRAND Licensing

Posted by D. Daniel Sokol

Michael Carrier (Rutgers) provides A Roadmap to the Smartphone Patent Wars and FRAND Licensing.

ABSTRACT: The smartphone industry today is characterized by a thicket of patents and wars based on those patents. Every day brings a new lawsuit or development between Apple, HTC, Microsoft, Motorola Mobility ("MMI"), Nokia, and Samsung. The lawsuits span numerous courts and several continents. And they often pit Apple or Microsoft on one side and manufacturers of Google's Android operating system-HTC, MMI, and Samsung-on the other.

June 4, 2012 | Permalink | Comments (0) | TrackBack (0)

Revising the Technology Transfer Guidelines

Posted by D. Daniel Sokol

Pierre Regibeau (CRAI & Imperial Coll.) & Katharine E. Rockett (Univ. of Essex) analyze Revising the Technology Transfer Guidelines.

ABSTRACT: We were asked by DG Competition to provide an economic evaluation of the 2004 Technology Transfer Guidelines that would serve as an input into the formal review process initiated a few months ago. When assessing a long-standing piece of competition policy, the best approach is certainly to turn to the related cases that have arisen since the policy document came into force. However, for better or for worse, very few "technology transfer" cases have appeared on the European Competition radar since 2004. A priori then, it seems that the 2004 Guidelines have done a decent job of giving a reasonably clear picture of the types of conducts that might land an undertaking in hot water.

We therefore decided to organize our report around two different questions. First, have there been developments in industry practice that might call for a revision, clarification, or extension of the current Guidelines? Second, do we, as economists, feel that the current Guidelines are logically consistent, both internally and with respect to other policy documents emanating from DG Competition?

June 4, 2012 | Permalink | Comments (0) | TrackBack (0)

The Global Limits of Competition Law - Stanford University Press

Posted by D. Daniel Sokol

My newest book is now out. The Global Limits of Competition Law, edited by Ioannis Lianos (UCL) and D. Daniel Sokol (University of Florida).

BOOK ABSTRACT: Over the last three decades, the field of antitrust law has grown increasingly prominent, and more than one hundred countries have enacted competition law statutes. As competition law expands to jurisdictions with very different economic, social, cultural, and institutional backgrounds, the debates over its usefulness have similarly evolved.

This book, the first in a new series on global competition law, critically assesses the importance of competition law, its development and modern practice, and the global limits that have emerged. This volume will be a key resource to both scholars and practitioners interested in antitrust, competition law, economics, business strategy, and administrative sciences.

Contents

Preface
Contributors

Introduction
Ioannis Lianos and D. Daniel Sokol

Part I. The Competition Law Process

1. The Limits of Antitrust and the Chicago School Tradition
George L. Priest

2. Competition Law and Human Rights: Striking a Balance Between Business Freedom and Regulatory Intervention
Arianna Andreangeli

Part II. The Real Limits of Competition Law

3. Limits of Imports from Economics into Competition Law
Anne-Lise Sibony

4. Complications in the Antitrust Response to Monopsony
Jeffrey L. Harrison

5. Antitrust and the Close Look: Transaction Cost Economics in Competition Policy
Herbert Hovenkamp

Part III. Competition Law and Its Synergies with Other Areas of Law

6. Anticompetitive Government Regulation
D. Daniel Sokol

7. A Global Perspective on State Action
Damien M. B. Gerard

8. IP’s Advantages over Antitrust
Daniel A. Crane

9. Competition Law and Consumer Protection Against Unfair Commercial Practices: A More-than-Complementary Relationship?
Paolisa Nebbia

Part IV. Competition Law and Institutional Design

10. Judicial Scrutiny and Competition Authorities: The Institutional Limits of Antitrust
Javier Tapia and Santiago Montt

11. Competition Authorities: Independence and Advocacy
Frederic Jenny

12. Competition Law Remedies: In Search of a Theory
Ioannis Lianos

Part V. Competition Law and Culture

13. How Culture May Change Assumptions in Antitrust Policy
Thomas K. Cheng

14. Promoting Convergence of Competition Policies in Northeast Asia: Culture-Competition Correlation and Its Implications
Ki Jong Lee

15. The Limits of Competition Law in Latin America
Julian Pena

Notes

Index

 

June 4, 2012 | Permalink | Comments (0) | TrackBack (0)

Technology Licensing: Evolving Antitrust Standards in the Smartphone and Other Sectors

Posted by D. Daniel Sokol

Paul Lugard (TILEC) discusses Technology Licensing: Evolving Antitrust Standards in the Smartphone and Other Sectors.

ABSTRACT: Antitrust review of business transactions involving intellectual property has never been entirely undisputed. On the one hand, there is a general belief that antitrust intervention in R&D-, intellectual property-, and innovation-intense industries should be centered on the preservation of innovation incentives. On the other hand, day-to-day practice demonstrates that even in sectors where the intellectual property landscape is relatively easily accessible, but where innovation is nonetheless important, the proper application of antitrust law is highly fact-specific and complex.

For instance, intuition tells us that grant-back clauses in technology licensing agreements may decrease licensees' incentives to innovate unless they are properly compensated for their innovative efforts. But it also obvious that appropriate compensation schemes for future innovations may be impossible to set up, and that some licensors may not be willing to license their technology, without grant-back clauses, as a result of which the positive welfare effects associated with technology licensing may not materialize to start with. How does one distinguish the good and the bad cases?

And, to add a particularly topical example, how should one ensure that-given evidence of the ability and incentive to foreclose rivals-the acquisition of a portfolio of hundreds of Standard Essential Patents ("SEPs") relevant to wireless devices by Apple, Microsoft, or Google will not result in post-merger exclusionary conduct as a result of those companies repudiating prior fair, reasonable, and non-discriminatory ("FRAND") commitments, or a failure to adhere to those commitments in a meaningful manner as the prior owners would have done?

Faced with fast-moving, innovative industries, antitrust enforcement agencies are up against difficult tasks. Indeed, they need to have a well-informed opinion on the nature and drivers of innovation and the durability of market power, as well as the potential of the industry at hand to correct itself, especially in light of dominance. In these settings, over-enforcement resulting in the loss of valuable dynamic efficiencies is often a real risk, while devising and implementing adequate remedies is difficult and takes time. This certainly applies to the one sector that takes a prominent place in this issue of the CPI Antitrust Chronicle, the sector of mobile devices.

This issue comes at a critical time. Only a few weeks ago, on February 13, 2012, the Department of Justice ("DOJ") issued its closing statement following its investigations into three cases: Google's acquisition of Motorola Mobility, a manufacturer of smartphones and computer tables and the holder of a portfolio of approximately 17,000 issued patents and 6,800 applications; the acquisition by Rockstar Bidco (a partnership including, among others, Apple, Microsoft, and Research in Motion ("RIM")) of approximately 6,000 Nortel patents; and the acquisition by Apple of a portfolio of Novell patents. Each of these three acquisitions involved a large number of SEPs relevant to wireless devices, many of which the pre-existing owners had committed to license through their participation in Standard Setting Organizations ("SSOs") on FRAND terms.

June 4, 2012 | Permalink | Comments (0) | TrackBack (0)

Most Cited Antitrust Articles of All Time

Posted by D. Daniel Sokol

A new article in the Michigan Law Review by Shapiro undertakes a citation analysis of law reviews. The most cited Antitrust articles are:

1. 636 Philip Areeda & Donald F. Turner, Predatory Pricing and Related Practices under Section 2 of the Sherman Act, 88 Harv. L. Rev. 697 (1975).

2. 463 William M. Landes & Richard A. Posner, Market Power in Antitrust Cases, 94 Harv. L. Rev. 937 (1981).

3. 451 Frank H. Easterbrook, Limits of Antitrust, 63 Tex. L. Rev. 1 (1984).

4. 448 Donald F. Turner, The Definition of Agreement under the Sherman Act: Conscious Parallelism and Refusals to Deal, 75 Harv. L. Rev. 655 (1962).

5. 402 Richard A. Posner, The Chicago School of Antitrust Analysis, 127 U. Pa. L. Rev. 925 (1979).

6. 365 Derek C. Bok, Section 7 of the Clayton Act and the Merging of Law and Economics, 74 Harv. L. Rev. 226 (1960).

7. 362 Ward S. Bowman, Jr., Tying Arrangements and the Leverage Problem, 67 Yale L.J. 19 (1957).

8. 359 Robert H. Bork, The Rule of Reason and the Per Se Concept: Price Fixing and Market Division II, 75 Yale L.J. 373 (1966).

9. 349 Thomas G. Krattenmaker & Steven C. Salop, Anticompetitive Exclusion: Raising Rivals’ Costs to Achieve Power over Price, 96 Yale L.J. 209 (1986).

10. 340 Robert H. Bork, The Rule of Reason and the Per Se Concept: Price Fixing and Market Division, 74 Yale L.J. 775 (1965).

Shapiro does not examine citations for books. Had he done so, one would have found that Bork's Antitrust Paradox dwarfs every article cited by a significant amount (2,127 citations). I am also curious about the most cited article in the Antitrust Law Journal. Does anyone happen to know what article it might be?

June 4, 2012 | Permalink | Comments (0) | TrackBack (0)

Competitive Effects of Exchanges or Sales of Airport Landing Slots

Posted by D. Daniel Sokol

James D. Reitzes, The Brattle Group Brendan McVeigh, The Brattle Group Nicholas Powers, The Brattle Group and Samuel Moy, The Brattle Group analyze Competitive Effects of Exchanges or Sales of Airport Landing Slots.

ABSTRACT: We investigate the competitive effects of exchanges or sales of airport landing slots. In our model, airlines with potentially asymmetric slot allocations must decide upon which routes to use their landing slots. When all airlines serve the same routes in a slot-constrained Cournot Nash equilibrium, small changes in slot allocations among airlines do not affect the overall allocation of slots across routes or air fares. In a symmetric equilibrium where slot holding airlines have the same number of slots, we find that an increase in the number of slot-holding airlines leads to higher social welfare and consumer surplus, although the number of served routes may decline. Under asymmetric slot allocations, larger slot holders serve "thin" demand routes that are not served by smaller slot holders. In this situation, transfers of slots from larger to smaller slot holders increase social welfare and consumer surplus, even though fewer routes may be served. More generally, our results suggest that increases in slot concentration are harmful to consumers and social welfare, although consumers on relatively thin routes may gain air transportation service as a result.

June 4, 2012 | Permalink | Comments (0) | TrackBack (0)

Sunday, June 3, 2012

Most Downloaded New Papers for SSRN Journal of Antitrust: Antitrust Law & Policy eJournal April 4, 2012 to June 3, 2012

Posted by D. Daniel Sokol

RECENT HITS (for all papers announced in the last 60 days)

TOP Papers for Journal of Antitrust: Antitrust Law & Policy eJournal April 4, 2012 to June 3, 2012

Rank Downloads Paper Title

1 165 Markets in IP and Antitrust Herbert J. Hovenkamp, University of Iowa - College of Law,

2 160 The Rule of Reason and the Goals of Antitrust: An Economic Approach Roger D. Blair, D. Daniel Sokol, University of Florida - Department of Economics, University of Florida - Levin College of Law,

3 157 Is Pepsi Really a Substitute for Coke? Market Definition in Antitrust and IP Mark A. Lemley, Mark P. McKenna, Stanford Law School, Notre Dame Law School,

4 138 Competition-Based Reform of the National Health Service in England: A One-Way Street? Lucy Reynolds, Amir Attaran, Tamara K. Hervey, Martin McKee, London School of Hygiene and Tropical Medicine, University of Ottawa - Faculties of Law and Medicine, University of Sheffield - Faculty of Law, London School of Hygiene and Tropical Medicine,

5 136 The Single Entity Theory: An Antitrust Time-Bomb for Chinese State-Owned Enterprises? Angela Huyue Zhang, University of Chicago - Law School,

6 123 The Strategic Use of Public and Private Litigation in Antitrust as Business Strategy D. Daniel Sokol, University of Florida - Levin College of Law,

7 103 The Regulation/Competition Interaction Javier Tapia, Despoina Mantzari, Centre for Regulation and Competition, Universidad de Chile, University College London-Faculty of Laws,

8 88 Do Developing Countries Enforce Their Antitrust Laws? A Statistical Study of Public Antitrust Enforcement in Developing Countries Dina I. Waked, Harvard University - Law School - Faculty,

June 3, 2012 | Permalink | Comments (0) | TrackBack (0)

Islam, Islamic Countries, and Competition Law: From Past Glory to Modern Day Challenges

Posted by D. Daniel Sokol

Maher Dabbah (Queen Mary, Univ. of London) provides historical context on Islam, Islamic Countries, and Competition Law: From Past Glory to Modern Day Challenges.

ABSTRACT: Despite this rich history and past glory, Islamic countries did not carry the mechanism of economic regulation, in the form of Hisba, into modern times. Indeed, there has been inadequate recognition given by these countries to the importance of Hisba as an institution for market regulation. More generally, these countries have been among the latecomers to arrive properly at the competition law scene. And in doing so, they have not made use of their Islamic identity, but rather have-quite comfortably-become part of the generic category known as "developing countries" or "emerging economies" in the field of competition law.

While for some people it may be quite difficult to understand why-in light of the past Islam had in economic regulation-Islamic countries have been such latecomers, this development is understandable because, since their inception, competition law and policy have been dominated by particular political, economic, and legal forces. These forces have mandated that certain changes and evolutions ought to occur for "modern" competition law and policy to become relevant in a given economy. Nonetheless, this does not mean that Islamic countries should take a backseat in the development of competition law and policy globally. Indeed, with these countries increasingly turning their attention to competition law, they are in a good position to contribute to the debate on global competition law and policy and to offer a fresh perspective that can help put competition law into its proper cultural and socio-political context.

June 3, 2012 | Permalink | Comments (0) | TrackBack (0)