Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Tuesday, October 16, 2012

Balancing Industrial Concentration and Competition for Economic Development in Asia

Posted by D. Daniel Sokol

Ronald U. Mendoza, Asian Institute of Management, Padmini Mahurkar, Lai-Lynn and Angelica B. Barcenas are Balancing Industrial Concentration and Competition for Economic Development in Asia.

ABSTRACT: In pursuit of economic growth and development, countries have tried to strike a balance between competition and industrial policies across time. This paper will review the empirical evidence on industrial concentration and its economic correlates (notably firms’ performance as measured by profitability, factor productivity and innovation). It will also analyze how the introduction of competition policies and laws in South Korea, China, India, Indonesia and the Philippines affected industrial concentration. It will examine at what point in their industrialization and economic development these economies implemented these laws and policies. The empirical literature suggests that industrial concentration could exhibit an inverted-U-shaped relationship as far as its link to certain economic indicators of success, such as productivity and innovation. This suggests a role for recalibrating policies to adjust the balance between industrial concentration and competition, so that the over-all outcomes are net welfare enhancing. Indeed, country policy experiences reviewed here appear to demonstrate this recalibration, notably following privatization and liberalization policies.

October 16, 2012 | Permalink | Comments (0) | TrackBack (0)

Competition Standards and Patents

Posted by D. Daniel Sokol

Per Hellstrom & Thomas Kramler (DG Comp) discuss Competition Standards and Patents.

ABSTRACT: The interface of competition, standards, and patents has received increased attention over the past few years, in particular in the information, communication, and technologies sector. With regard to the mobile devices sector, some even refer to an on-going "patent war" in reference to the extensive global patent litigation between technology and software companies such as Apple, Google, Samsung, Microsoft, Nokia, Motorola, HTC, and others.

Antitrust authorities have recently signaled increased vigilance about the strategic use of patents. When clearing the Google/Motorola merger in February 2012, Vice-President Almunia stated, "the Commission will continue to keep a close eye on the behaviour of all market players in the sector, particularly the increasingly strategic use of patents."

In January 2012 the European Commission opened a formal antitrust investigation against Samsung Electronics to assess whether it may have abusively used certain of its essential patent rights to distort competition in the field of mobile devices in Europe. In April 2012, the Commission opened two further formal proceedings against Motorola Mobility to assess whether Motorola may have abusively used certain of its standard essential patents related to mobile, wireless, and video compression standards to distort competition.These proceedings are on-going.

The purpose of this paper is to briefly outline some of the issues raised by the use of standards and patents from an EU competition law perspective, and discuss what lessons market participants and regulators might draw from ongoing disputes.

October 16, 2012 | Permalink | Comments (0) | TrackBack (0)

Fair and Effective Competition Policy in the EU: Which Role for Authorities and Which Role for the Courts after Menarini

Posted by D. Daniel Sokol

Marco Bronckers, Leiden University - Leiden Law School Anne Vallery, ask Fair and Effective Competition Policy in the EU: Which Role for Authorities and Which Role for the Courts after Menarini.

ABSTRACT: Competition law enforcement in the EU and in most EU Member States follows an administrative model: decisions on the infringement and on the fine are taken by an administrative agency; when courts are called upon to review these decisions they traditionally leave a large measure of discretion to these agencies. With the considerable increase in fines, and attendant measures such as recidivism factors, this model has now clearly taken on features of criminal enforcement. From a fundamental rights perspective serious questions have arisen as to whether this model still conforms to the precepts of a fair trial. These questions were addressed in part in the recent Menarini-judgment of the European Court of Human Rights and subsequent judgments by the European Courts (KME, Chalkor, Posten Norge). These recent judgments show that judicial review of administrative competition law fines will have to intensify. Fairness also requires at some point a shift from administrative to judicial enforcement.

October 16, 2012 | Permalink | Comments (0) | TrackBack (0)

THE HYPOTHETICAL MONOPOLIST IN A WORLD OF MULTI-PRODUCT FIRMS: SHOULD OUTSIDE COMPANIONS BE INCLUDED IN HIS BASKET?

Posted by D. Daniel Sokol

Adriaan ten Kate, Sr. and Gunnar Niels (Oxera) ask THE HYPOTHETICAL MONOPOLIST IN A WORLD OF MULTI-PRODUCT FIRMS: SHOULD OUTSIDE COMPANIONS BE INCLUDED IN HIS BASKET?

ABSTRACT: The hypothetical monopolist of the U.S. Horizontal Merger Guidelines not only is supposed to be the sole producer of the products inside the candidate market, but also is not supposed to produce any products outside that market. As most real-world firms produce multiple products, the transition from the prevailing situation to hypothetical monopoly implies both a hypothetical merger of all firms that produce inside products and a hypothetical spin-off of all outside products produced by those firms. Such a spin-off has a number of effects, which we discuss in detail for both substitute and complementary outside companions. We argue that these effects do not bring market definition any closer to its ultimate goal—that is, the assessment of market power. In our view, it is preferable to consider the hypothetical monopolist as an inclusive monopolist, resulting from the merger of all firms producing inside products but without any spin-off of companions. Such a monopolist captures the idea of the hypothetical cartel referred to in the 2010 version of the Guidelines, but is better suited to describe the issues at stake.

October 16, 2012 | Permalink | Comments (0) | TrackBack (0)

Fox's Cases and Materials on United States Antitrust in Global Context, 3d edition

Posted by D. Daniel Sokol

Eleanor Fox has come out with Cases and Materials on United States Antitrust in Global Context, 3d edition.

CASEBOOK ABSTRACT: This up-to-the-minute antitrust casebook is rich with political economy, economics, global perspective, and in general the analytics of solving contemporary antitrust problems in the United States and the world. Useful in a 3 or 4-credit course and as a desk book, the volume features all of the landmark U.S. antitrust cases, the evolving new economy and information technology developments, and references to contrasting and converging European, South African and other jurisprudence. It offers a clear presentation of the tools for analysis, examining assumptions that may influence outcomes. The work is unique in its probing questions that explore the line between hard competition and abuse of power, and its problem sets for analysis and debate.

October 16, 2012 | Permalink | Comments (0) | TrackBack (0)

Hospital market concentration and discrimination of patients

Posted by D. Daniel Sokol Ralf

Dewenter (Dusseldorf Institute for Competition Economics), Thomas Jaschinski (Dusseldorf Institute for Competition Economics) and Bjorn A. Kuchinke (Technische Universitat Ilmenau) analyze Hospital market concentration and discrimination of patients.

ABSTRACT: In this paper we investigate the existence of a two-tier medical system in the German acute care hospital sector using data from a survey of 483 German hospitals. The focus of our analysis lies on the impact of hospital concentration on the probability of discrimination of patients with different health insurances in regard to the access to medical services. Accounting for a possible endogeneity of market structure, we find that hospitals in highly concentrated markets are less likely to pursue any differentiation among prospective patients with different health insurances. We ascribe this finding to competitive pressure in less concentrated markets. Hospitals in competitive markets are more obliged to steal business from rival hospitals by privileging profitable patients than hospitals in highly concentrated markets.

October 16, 2012 | Permalink | Comments (0) | TrackBack (0)

Monday, October 15, 2012

The Saitama Saturday Club Case: Political Meddling, Public Opinion, and Antitrust Enforcement in Japan at a Turning Point

Posted by D. Daniel Sokol

Simon Vande Walle, University of Tokyo - Graduate School of Law and Politics, explains The Saitama Saturday Club Case: Political Meddling, Public Opinion, and Antitrust Enforcement in Japan at a Turning Point.

ABSTRACT: This paper tells the story of the Saitama Saturday Club case and how it changed antitrust enforcement in Japan. Although the case is often cited as an example of failed antitrust enforcement, in fact, the case had a lasting and positive impact in many unexpected ways.

The case opposed Japan’s antitrust enforcement agency against the country’s mighty construction industry. For years, the construction companies had rigged bids for thousands of public works in Saitama Prefecture, in clear violation of Japan’s Antimonopoly Act. Yet they escaped relatively scot-free, as the Japan Fair Trade Commission decided not to bring criminal charges and instead handled the case with an administrative penalty.

But this docile treatment triggered a public backlash. Angry citizens sued the bid-riggers for damages, an unprecedented move that would subsequently be replicated in over eighty other cases throughout Japan. More broadly, the case heightened public awareness of the pernicious nature of bid-rigging and galvanized popular support for more robust antitrust enforcement. This support in turn enabled the Japan Fair Trade Commission to move against entrenched interests and gradually step up enforcement in the years that followed, an evolution that continues to this day. In this sense, the Saitama Saturday Club case constituted a turning point for antitrust enforcement in Japan.

October 15, 2012 | Permalink | Comments (0) | TrackBack (0)

Competitive Entertainment: Implications of the NFL Lockout Litigation for Sports, Theatre, Music, and Video Entertainment

Posted by D. Daniel Sokol

Henry H. Perritt Jr., Illinois Institute of Technology - Chicago-Kent College of Law describes Competitive Entertainment: Implications of the NFL Lockout Litigation for Sports, Theatre, Music, and Video Entertainment.

ABSTRACT: The 2011 NFL lockout reveals profound changes in the labor and product markets for the entire entertainment industry, driven by a revolution in technology. This article explores the revolution in the professional sports, theatre, and movie-making industries and concludes that it is fragmenting production, blurring the boundaries between labor markets and product markets, and introducing new forms of competition. As a result, the labor exemptions to the antitrust laws, which featured prominently in the NFL controversy are becoming less relevant, shifting the law's policing of competition to antitrust rule-of-reason analysis, where counterpoises such as labor unions are inactive, and making overaggressive interpretation and enforcement of copyright law a major danger to realization of the new markets' potential.

October 15, 2012 | Permalink | Comments (0) | TrackBack (0)

Deal or No Deal? - Consensual Arrangements as an Instrument of European Competition Policy

Posted by D. Daniel Sokol

Oliver Budzinski, Ilmenau University of Technology, University of Southern Denmark - Department of Environmental and Business Economics and Bjoern A. Kuchinke, Ilmenau University of Technology ask Deal or No Deal? - Consensual Arrangements as an Instrument of European Competition Policy.

ABSTRACT: Roughly during the last decade, European Competition Policy has undergone a series of fundamental changes. All four areas – cartel policy, merger policy, abuse control, and state aid control – have been subject to a modernization process, which led to a focus on analyzing the effects of individual cases and established a tendency towards deciding each case on its individual merits. These changes can be understood as a move away from rule-based competition policy towards a case-by-case approach. The case-by-case approach especially includes consensual arrangements, so-called ‘deals’ between the competition authority and business companies. Therefore, this paper will discuss the pros and cons of ‘deals’ as an instrument of (European) competition policy. The paper’s central focus lies on the economic analysis of the advantages and disadvantages of using consensual arrangements as a relevant instrument of European competition policy. With respect to European competition policy, we conclude that we need to issue a note of caution. From an economic perspective, an expansion of consensual elements necessarily walks hand in hand with a continual weakening of the protection of competition. Consumer welfare will not benefit from expanding the role and importance of consensual arrangements as a means of European competition policy.

October 15, 2012 | Permalink | Comments (0) | TrackBack (0)

A New Role for the EU in Economic Governance. Lessons from Emerging and Existing Models - Amsterdam, 9 November 2012

Posted by D. Daniel Sokol

The  Amsterdam Centre for European Law and Governance(University of Amsterdam) invites you to its 2nd ACELG Annual Conference on

 

A New Role for the EU in Economic Governance. Lessons from Emerging and Existing Models

 

Amsterdam, 9 November 2012

 

This conference will explore and discuss the possible models for EU law and governance in the areas of economic and financial policies, while reviewing experiences with existing EU governance models in the economic domain.

 

The one-day conference will focus on discussing the EU’s role in the coordination of national economic policies and in the oversight of financial markets and aims to identify challenges to the future governance model. It will draw from two existing EU governance models in two distinct fields: competition, where the EU has had a central role from the outset (of the EEC), and food safety, where – similar to the area of financial and economic policies – the Member States originally retained their exclusive competence.

 

Speakers

Prof. Fabian Ambtenbrink, Erasmus University Rotterdam

Prof. Imelda Maher, University College Dublin

Prof. Niamh Moloney, London School of Economics

Prof. Ellen Vos, Maastricht University

 

Attendance is free of charge. Participants are required to register.

 

Please address general inquiries to Angela Moisl, acelg@uva.l

 

For a more detailed programme and online registration, see http://acelg.uva.nl/news-events/events/content/conferences/2012/11/2nd-annual-acelg-conference.html

October 15, 2012 | Permalink | Comments (0) | TrackBack (0)

Impact on retail prices of non-neutral wholesale prices for content providers

Posted by D. Daniel Sokol

Giuseppe D'ACQUISTO (Garante per la protezione dei dati personali), Patrick MAILLE (Universite europeenne de Bretagne), Maurizio Naldi (Universita degli Studi di Roma "Tor Vergata") and Bruno Tuffin (Universite de Rennes 1) have written on Impact on retail prices of non-neutral wholesale prices for content providers.

ABSTRACT: The impact of wholesale prices is examined in a context where the end customer access both free content and payper-use content, delivered by two different providers through a common network provider. We formulate and solve the game between the network provider and the pay-per-use content provider, where both use the price they separately charge the end customer with as a leverage to maximize their profits. In the neutral case (the network provider charges equal wholesale prices to the two content providers), the benefits coming from wholesale price reductions are largely retained by the pay-peruse content provider. When the free content provider is charged more than its pay-per-use competitor, both the network provider and the pay-per-use content provider see their profit increase, while the end customer experiences a negligible reduction in the retail price.

October 15, 2012 | Permalink | Comments (0) | TrackBack (0)

Sunday, October 14, 2012

The Obama Administration's Strong Antitrust Record

Posted by D. Daniel Sokol

David Balto has a piece in USNWR on The Obama Administration's Strong Antitrust Record.

October 14, 2012 | Permalink | Comments (0) | TrackBack (0)