Antitrust & Competition Policy Blog

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

Tuesday, August 21, 2012

International Antitrust Institutions

Posted by D. Daniel Sokol

Oliver Budzinski, Ilmenau University of Technology, University of Southern Denmark - Department of Environmental and Business Economics describes International Antitrust Institutions.

ABSTRACT: The paper discusses the economic theory of international antitrust institutions. Economic theory shows that non-coordinated competition poli-cies of regimes that are territorially smaller than the international markets on which business companies compete violate cross-border allocative efficiency and are deficient with respect to global welfare. At the same time, some diversity of antitrust institutions and policies promotes dynamic and evolutionary efficiency so that globally binding, worldwide homogenous competition rules do not represent a first-best solution either. After reviewing the existing international antitrust institutions and their prospects and limits from an economic perspective (with a focus on the International Competition Network, ICN), the paper discusses reform proposals from economic literature.

August 21, 2012 | Permalink | Comments (0) | TrackBack (0)

Abuse of Administrative Power to Restrict Competition in China: Four Reflections, Two Ideas and a Thought

Posted by D. Daniel Sokol

Mel Marquis, European University Institute, University of Verona has written on Abuse of Administrative Power to Restrict Competition in China: Four Reflections, Two Ideas and a Thought.

ABSTRACT: This chapter of the book embarks on an extensive discussion of the treatment by China's Anti-Monopoly Law (AML) of anticompetitive government restrictions (i.e., abuses of "administrative monopoly"). Without suggesting an 'emulation imperative', the chapter takes as a comparative frame the long and fascinating European experience with the treatment of anticompetitive public measures under the Treaty of Rome, as most recently amended by the Treaty on the Functioning of the European Union. The chapter builds on the extant literature relating to the AML and advocates steps to enhance the effectiveness of Chapter V of the AML ("abusve of administrative power to restrict competition") via ex ante and ex post instruments.

August 21, 2012 | Permalink | Comments (0) | TrackBack (0)

Monday, August 20, 2012

Enforcement "Plus:" The FTC's Business Education Efforts

Posted by D. Daniel Sokol

Kelly Signs (FTC) explains Enforcement "Plus:" The FTC's Business Education Efforts.

ABSTRACT: Law enforcement can have obvious consequences for the targets of investigations, but it can also affect the conduct of other businesses. Research shows that the vast majority of businesses want to comply with legal requirements, not just to avoid sanctions but also to maintain a reputation as an ethical business. Informed businesses can anticipate the consequences of a particular course of action, thereby reducing uncertainty about potential legal pitfalls and increasing compliance with prevailing legal standards. Yet to comply, businesses must be aware of a wide variety of laws, rules, and guidelines governing their conduct.

As the only U.S. agency with both consumer protection and competition jurisdiction in broad sectors of the economy, the Federal Trade Commission enforces laws and regulations aimed at protecting consumers from unfair, deceptive, or anticompetitive conduct. Long ago, the FTC recognized that preventing law violations is even more important than detecting and punishing violators, and that educating businesses about legal requirements encourages them to avoid policies and practices that might later be found to be unfair, deceptive, or anticompetitive. Preventing conduct that is likely to harm consumers leads to obvious, if difficult to calculate, benefits-for both consumers and the businesses themselves. Moreover, effective and efficient FTC enforcement promotes policies that encourage competition on the merits and truthful, non-deceptive information, which leads to lower prices, better service, and more choices.

Some statutes and regulations enforced by the FTC are very specific in their proscriptions, but the FTC's primary statute, the Federal Trade Commission Act, is very broadly worded, in keeping with the common law approach to U.S. antitrust and consumer protection law. Although this allows the FTC to adapt its enforcement approach to the changing nature of competition and consumer behavior, it can present a challenge for a business that wants to remain up-to-date on legal requirements. As a result, the need for business education is particularly acute in areas of the law governed by general standards of conduct, areas such as monopolization, advertising substantiation, and consumer privacy. Here, business education can be a cost effective supplement to law enforcement by "filling in the gaps" and explaining sometimes esoteric legal concepts in language easy for a businessperson to understand and act upon. It can also build support for a culture of competitiveness in which every business has the same opportunity to succeed because legal standards are understood and applied uniformly to all competitors.

Businesses-and consumers-deserve assurance that law enforcement is predictable and tied to basic principles of fairness and truthfulness. To that end, the FTC makes public all of its enforcement decisions, and publishes many other types of documents that help to explain its work, as well as providing opportunities for formal and informal feedback on its efforts. By coupling the announcement of enforcement actions with other types of business education, the FTC leverages its limited resources to expand the reach of its law enforcement efforts and encourage compliance. And businesses that are knowledgeable about the work of the FTC and the laws it enforces are more likely to spot potential law violations or support the FTC's investigative work by providing relevant information when asked.

August 20, 2012 | Permalink | Comments (0) | TrackBack (0)

Behavioral Exploitation Antitrust in Consumer Subprime Mortgage Lending

Posted by D. Daniel Sokol

Max Huffman, Indiana University Robert H. McKinney School of Law and Daniel B. Heidtke, Loyola University Chicago School of Law have an interesting paper on Behavioral Exploitation Antitrust in Consumer Subprime Mortgage Lending.

ABSTRACT: We analyze whether antitrust might provide an alternative and perhaps superior approach to regulating consumer subprime mortgage lending. Behavioral exploitation antitrust targets commercial conduct of the sort that was observed in consumer subprime mortgage lending in the years leading up to 2007. The welfare effects of that conduct are easily established. Antitrust-based regulation can mitigate those welfare effects. Regulation that does exist, which operates at the level of the individual transaction, may be easily avoided, may be short-sighted, may suffer from enforcement problems that public choice theory explains, and/or may overreach by removing consumer choice. We show that antitrust enforcement under a rule of reason approach avoids those pitfalls. However, none of the three primary approaches to antitrust enforcement – prohibitions of anticompetitive conduct by a dominant firm, prohibitions of anticompetitive agreements, and prohibitions of mergers with incipient anticompetitive effects – in their current form permit resort to antitrust remedies in the consumer subprime mortgage market. We argue that liberalized standards for antitrust enforcement under both Clayton Act section 7 (regulating mergers) and Sherman Act section 1 (regulating concerted conduct), perhaps restricted narrowly to this and closely analogous markets, would be appropriate to gain the benefits of regulation through behavioral exploitation antitrust.

August 20, 2012 | Permalink | Comments (0) | TrackBack (0)

Screening for Collusion: A Spatial Statistics Approach

Posted by D. Daniel Sokol

Pim Heijnen, University of Groningen , Marco A. Haan, University of Groningen, and Adriaan R. Soetevent, University of Amsterdam - Amsterdam School of Economics, Tinbergen Institute offer up thoughts on Screening for Collusion: A Spatial Statistics Approach.

ABSTRACT: We develop a method to screen for local cartels. We first test whether there is statistical evidence of clustering of outlets that score high on some characteristic that is consistent with collusive behavior. If so, we determine in a second step the most suspicious regions where further antitrust investigation would be warranted. We apply our method to build a variance screen for the Dutch gasoline market.

August 20, 2012 | Permalink | Comments (0) | TrackBack (0)

Anti-Competitive Stumbling Stones on the Way to a Cleaner World: Protecting Competition in Innovation without a Market

Posted by D. Daniel Sokol

Josef Drexl, Max Planck Institute for Intellectual Property and Competition Law has written on Anti-Competitive Stumbling Stones on the Way to a Cleaner World: Protecting Competition in Innovation without a Market.

ABSTRACT: Firms do not only compete by price. Another parameter of competition is innovation. This raises the question of how competition law should assess potential restraints of competition in innovation. Modern competition policy advocates an effects-based approach which analyzes cases in the light of the economic effects on relevant markets. Also firms compete in existing markets when they try to improve their products sold in these markets or optimize processes for manufacturing those products. However, as it was first discussed in merger control law, an analysis limited to the effects on existing markets may fail to assess cases appropriately when firms are not yet competitors, but dispose of innovation capacity for future markets. Whereas a merger among such firms will not harm existing price competition, it may well have a negative effect on the incentives to innovate of the new firm. For addressing this phenomenon, the U.S. agencies in particular started to analyse cases also in the light of so-called “innovation markets” in the 1990s. Yet, this new approach was also criticized. Indeed, the idea of an innovation market remained at best a metaphor since there are no transactions between suppliers and customers of innovation before tradable technologies and products emerge from R&D efforts. Therefore, both the most recent US Horizontal Merger Guidelines and the EU Guidelines on Horizontal Cooperation Agreements have now given up the “innovation market” concept in favor of a US “innovation competition” and EU “competition in innovation” concept. This change confirms that competition in innovation takes place outside and before the emergence of markets. If this is so, modern competition law, which strongly focuses on an approach based on market analysis, may pose a major problem regarding its capability to address restraints of competition in innovation appropriately. The following article analysis this problem against the background of EU competition law for the different fields of enforcement – mergers, agreements and unilateral conduct – by also taking into account most recent cases. The article highlights that an analysis based on the effects on existing markets can only work as a rough proxy in such cases. Most importantly, in the field of unilateral conduct, the requirement of market dominance at the time of the abuse under Article 102 TFEU considerably limits the capability of enforcers to act against restraints of competition in innovation.

August 20, 2012 | Permalink | Comments (0) | TrackBack (0)

Brands, Competition, and the Law October 19, 2012

Posted by D. Daniel Sokol

Brands, Competition, and the Law

An Interdisciplinary Conference Sponsored by the Institute for Consumer Antitrust Studies, Loyola University Chicago School of Law, and the Centre for Law, Economics and Society (CLES) at University College London

October 19, 2012

Loyola University Chicago School of Law, 10th Floor
Powers Rogers & Smith Ceremonial Courtroom, 25 E. Pearson, Chicago, IL 60611


This program has been approved for 5.0 Hours of Illinois Continuing Legal Education Credit


To Register visit


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.

The aim of this conference is to reflect on the legal, business, and economic understanding of brands by explaining what brands are,  how they function, 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.

List of Participants

Deven Desai, Associate Professor, Thomas Jefferson Law School

Kirsten Edwards-Warren, Director of Economics, Office of Fair Trading, UK

Phil Evans, FIPRA International

Warren Grimes, Professor, Southwestern Law School

Greg Gundlach, Distinguished Professor of Marketing, University of North Florida Business School

James Langenfeld, Navigent Consulting

Ioannis Lianos, Reader in Competition Law and Economics, University College London

Deborah Majorus, General Counsel, Proctor & Gamble

Mark McKenna, Professor Law, Notre Dame Law School

John D. Mittelstaedt, Chair, Department of Management and Marketing, University of Wyoming College of Business

John Noble, Director, British Brands Group

Barak Orbach, Professor Law, University of Arizona James E. Rodgeres College of Law

Joan Phillips, Professor, Quinlan School of Business and Director of Integrated Marketing Program, Loyola University Chicago

Matthew Sag, Associate Professor and Associate Director, Institute for Consumer Antitrust Studies, Loyola University Chicago School of Law

Eliot Schreiber, COO Cloverleaf Innovation

Spencer Weber Waller, Professor and Director, Institute for Consumer Antitrust Studies, Loyola University Chicago School of Law


Tentative Program


9:00          Registration and Continental Breakfast


9:30         Welcome- Spencer Weber Waller, Loyola University Chicago


9:40          Brands and Price Theory Chair, Ioannis Lianos, UCL

                 Brands and EU Competition Law: More Sword
Than Shield

                 James Langenfeld, Navigent Consulting

                 Kirsten Edwards-Warren, Office of Fair Trading, UK

                 Phil Evans, FIPRA International


11:00        Coffee Break


11:15        Brands and Business Theory

Chair, Joan Phillips, Quinlan School of Business, Loyola University Chicago

                 John Noble, BBG

                 Individuals, Markets and Business Competitiveness

                 Greg Gundlach, UNF

                 A Marketing Perspective on Brands in Antitrust

                 Eliot Schreiber, Cloverleaf Innovation, Commentator


12:30        Buffet Lunch


1:00          Brands and Competition Law

Chair, Spencer Weber Waller, Loyola University Chicago School of Law

Antitrust’s Brand Blindness

                 Deborah Majorus, Proctor & Gamble


                 Barak Orbach, Arizona

                 Branding Preferences and Antitrust Premises

Warren Grimes, Southwestern


2:30          Brands and IP Law

Chair, Matthew Sag, Loyola University Chicago School of Law

                 Deven Desai, Thomas Jefferson Law School

                 Networks, Information, and Brands

                 Mark McKenna, Notre Dame Law School

                 Brand Mercantilism

                 John D. Mittelstaedt, University of Wyoming

Trademark Dilution and the Management of Brands


3:45          Closing Remarks and Reception


Registration Fees and Information


For Those Seeking Illinois Continuing Legal Education Credit

Free          Current LUC Faculty, Staff, Students, and Members of the Institute Advisory Board

$  75         Government and Public Interest Attorneys

$130         Loyola University Chicago School of Law Alumni

$155         All Others


without ICLE Credit

Free          LUC Students, Staff, Professors, and Members of the Institute Advisory Board

$50          All Others


To Register: Please

For additional information please contact Professor
Spencer Waller at
or Ms. Chris Nemes at

August 20, 2012 | Permalink | Comments (0) | TrackBack (0)

Bargaining, Vertical Mergers and Entry

Posted by D. Daniel Sokol

Geza Sapi (Dusseldorf Institute for Competition Economics – DICE) explores Bargaining, Vertical Mergers and Entry.

ABSTRACT: This paper analyzes vertical integration incentives in a bilaterally duopolistic industry where upstream producers bargain with downstream retailers on terms of supply. In the applied framework integration does not a¤ect the total output produced, but it affects the distribution of rents among players. Vertical integration incentives depend on the strength of substitutability or complementarity between products and the shape of the unit cost function. I demonstrate furthermore that in contrast to the widely prevailing view in competition policy, vertical integration can under particular circumstances convey more bargaining power to the merged entity than a horizontal merger to monopoly. The model is applied to analyze strategic merger incentives to influence entry decisions. Mergers can facilitate and deter entry. While horizontal mergers to deter entry are never profitable, firms on different market levels may strategically choose to integrate vertically to keep a potential entrant out of the market. I provide conditions for such entry-deterring vertical mergers to occur.

August 20, 2012 | Permalink | Comments (0) | TrackBack (0)

Sunday, August 19, 2012

The case of South Staffordshire/Cambridge: is clearer water emerging?

Posted by D. Daniel Sokol

OXERA asks The case of South Staffordshire/Cambridge: is clearer water emerging?

ABSTRACT: In May 2012, the UK Competition Commission cleared a water merger without requiring any undertakings: the first time this has happened in the history of the privatised water sector. Building on previous analysis, the CC changed its approach to valuing the detriments to regulation of the water sector caused by mergers. Along with proposed changes to the merger regime being put forward in the Draft Water Bill, this case should provide clearer guidance to those considering acquisitions in the sector.

August 19, 2012 | Permalink | Comments (0) | TrackBack (0)