Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Tuesday, February 21, 2012

Using Competition Policy to Promote "Shared Growth" in Korea

Posted by D. Daniel Sokol

Seonghoon Jeon (Sogang University - Economics) has an interesting article on Using Competition Policy to Promote "Shared Growth" in Korea.

ABSTRACT: "Shared Growth," a principle that both large and small companies should grow together, is among the top priorities on the political agenda of all Korean parties. There are many policy instruments to promote shared or mutual growth of large companies and small-medium enterprises ("SMEs"), but the Korea Fair Trade Commission ("KFTC") has played a pivotal role.

In this column, I would like to address the issue of using competition policies to promote shared growth in Korea, with an emphasis on innovation. Even though the recent drive of shared growth by KFTC covers issues larger than innovation, a main focus is to encourage cooperation in research and development ("R&D") between large companies and small-medium enterprises.

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

Profitability in Cournot and Bertrand Mixed Markets under Endogenous Objectives

Posted by D. Daniel Sokol

Marcella Scrimitore, University of Salento discusses Profitability in Cournot and Bertrand Mixed Markets under Endogenous Objectives.

ABSTRACT: We examine both quantity and price competition between a number of profit-maximizing firms and a state-controlled enterprise (SCE). The objective function of the latter is strategically defined by a welfare-maximizing government which weighs the SCE’s profits relative to consumer surplus and private profits. Different motives drive the government‘s optimal behavior in the two competitive settings and lead all firms in oligopoly to gain higher profits in Cournot than in Bertrand. The profit ordering is reverted, and social welfare is enhanced, with respect to the purely-mixed market examined by Ghosh and Mitra (2010). In duopoly, aggregate profits are equivalent in Cournot and Bertrand.

February 21, 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 explore 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.

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

Monday, February 20, 2012

Convergence and Its Discontents: A Reconsideration of the Merits of Convergence of Global Competition Law

Posted by D. Daniel Sokol

Thomas Cheng (Hong Kong University - Law) has posted Convergence and Its Discontents: A Reconsideration of the Merits of Convergence of Global Competition Law.

ABSTRACT: This Article examines the recent phenomenon of the convergence of competition law regimes across the globe. The increasing harmonization of competition law, at both the procedural and substantive levels, has been widely discussed and applauded in recent years. This Article casts doubt on the conventional wisdom that convergence necessarily constitutes a positive development in global competition law. After analyzing the causes of the phenomenon, this Article argues that there should be limits to the pursuit of convergence. First, the costs of convergence should not be overlooked. The most important of such costs is the loss of national regulatory prerogative. Second, the multitude of goals that are pursued by different jurisdictions in their competition laws poses serious obstacles to convergence. Finally, the need to incorporate economic development considerations and cultural variations in market behavior further cautions against wholesale harmonization of competition laws.

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

CALL FOR PAPERS: THIRD WORKSHOP FOR JUNIOR RESEARCHERS ON THE LAW AND ECONOMICS OF INTELLECTUAL PROPERTY AND COMPETITION LAW June 18 to June 20, 2012

Posted by D. Daniel Sokol

International Max Planck Research School for Competition and Innovation & the Professorship for Intellectual Property, ETH Zurich CALL FOR PAPERS From June 18 to June 20, 2012, the International Max Planck Research School for Competition and Innovation (www.imprs-ci.ip.mpg.de) and the Professorship for Intellectual Property at ETH Zurich (www.ip.ethz.ch) will jointly organize their

THIRD WORKSHOP FOR JUNIOR RESEARCHERS ON THE LAW AND ECONOMICS OF INTELLECTUAL PROPERTY AND COMPETITION LAW

The workshop will enable a small number of junior researchers from law and from economics to engage in an intensive, rigorous discussion of their own scholarly work. Several senior professors from law and from economics departments in Europe and the United States will provide feedback on the research projects. Keynote speakers & commentators include faculty of both hosting institutions as well as Professors Harry First (New York University), Mark Schankerman (London School of Economics) and Geertrui Van Overwalle (Universities of Leuven & Tilburg). The workshop will be held at Castle Ringberg (http://www.schloss-ringberg.mpg.de/home), which is located in a lovely region one hour south of Munich, Germany. The organizers will fund travel and hotel expenses for all invited workshop participants. Excellent junior researchers (doctoral students, postdocs, research fellows and assistant professors) from law and from economics are invited to submit their application online at www.easychair.org/conferences/?conf=ipcompetition2012.

After registering a user account, please fill out the "New submission" form. You must attach an extended abstract or a draft paper ("Upload Paper", draft paper is preferred, PDF or Word) as well as a curriculum vitae with a list of two references ("Attachment", reference letters are not required at submission time). Papers may not be published by the conference date; papers already accepted for publication must be in a stage where substantial feedback is still helpful. The submission deadline is March 31, 2012. Notifications of acceptance will be sent out by April 16, 2012. Papers are due for circulation among workshop participants and commentators on June 1, 2012. For junior researchers from economics, research projects should relate to industrial organization, competition, innovation and/or intellectual property and may include formal models as well as empirical or experimental approaches. For junior scholars from law, research projects should relate to intellectual property and/or competition law and must use law and economics as a research methodology. In order to achieve a good international mix of workshop participants, submissions from researchers from outside Europe are particularly encouraged. The International Max Planck Research School for Competition and Innovation is a joint initiative by the Max Planck Institute for Intellectual Property and Competition Law as well as the Department of Economics, the Munich School of Management, and the Faculty of Law of the Ludwig Maximilians University of Munich. Any questions concerning the workshop should be directed to Prof. Stefan Bechtold, sbechtold@ethz.ch.

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

One Network’s Effect: The Rise and Future of the ICN

Posted by D. Daniel Sokol

Maria Coppola Tineo, FTC describes One Network’s Effect: The Rise and Future of the ICN.

ABSTRACT: In the first decade of its existence the International Competition Network (ICN) has advanced to frontrunner position among international organizations that address competition policy. As the ICN looks to its next decade, and governmental belt-tightening forces most competition agencies to rethink resource allocation, a key question is whether the ICN’s success is attributable to the Network’s relevance and competence, or timing and luck? The ICN has reached the top by furthering international cooperation and coordination, influencing domestic policies, and building capacity of its members. Many of its very achievements, however, also pose the greatest risks for a free fall.

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

A Comparative Look on Foreign State Compulsion as a Defence in Antitrust Litigation

Posted by D. Daniel Sokol

Marek Martyniszyn, University College Dublin- School of Law has posted A Comparative Look on Foreign State Compulsion as a Defence in Antitrust Litigation.

ABSTRACT: This paper presents and investigates the foreign state compulsion as a defence in transnational antitrust cases. It takes a comparative approach by looking at the doctrine and its developments in the United States and in the European Union. To illustrate the relevance of the defence and the difficulties of its applicability, this paper analyses the new antitrust case law emerging in the US involving Chinese export cartels. It is argued that at present the standard required to prove compulsion is too high to serve its function.

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

Economic Analysis of Pay-for-Delay Settlements and Their Legal Ruling

Posted by D. Daniel Sokol

Linda Gratz, Max Planck Institute for Intellectual Property and Competition Law, Ludwig Maximilians University of Munich - Munich Graduate School of Economics (MGSE) provides an Economic Analysis of Pay-for-Delay Settlements and Their Legal Ruling.

ABSTRACT: In this paper, we ask whether courts should continue to rule settlements in the context of pharmaceutical claims per se legal, when these settlements comprise payments from originator to generic companies, potentially delaying generic entry compared to the underlying litigations. We find that the rule of per se legality induces maximal collusion among settling companies and therefore yields the lowest consumer welfare compared to alternative rules. While under the rule of per se illegality settling companies are entirely prevented from colluding, under the rule of reason they collude to a limited degree when antitrust enforcement is subject to error. Contrary to intuition, limited collusion can be welfare enhancing as it increases settling parties' profits, and thus fosters generic entry. Alternative incentive devices to foster generic entry, for instance, the provision of an exclusivity right to first generic entrants, as implemented within the Hatch-Waxman Act of 1984, are shown to be ineffective.

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

Sunday, February 19, 2012

The Anticorruption and Antitrust Interface

Posted by D. Daniel Sokol

Stephen L. Braga, Christopher P. Conniff, & Mark S. Popofsky (Ropes and Gray) describe The Anticorruption and Antitrust Interface.

ABSTRACT: The Foreign Corrupt Practices Act ("FCPA") and the Sherman Act proscribe distinct forms of misconduct. The FCPA prohibits "the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to . . . any foreign official for purposes of," among other things, "securing any improper advantage." The Sherman Act, inter alia, prohibits price-fixing, bid-rigging, and similar "hard core" cartel offenses that harm U.S. consumers.

The two statutory schemes nevertheless share a number of common attributes. Both statutes proscribe overseas misconduct. Legal environments that spawn corruption also can nurture cartels. The incentives that lead employees to bribe foreign officials can also induce them to engage in price-fixing. Both are subject to significant criminal penalties. The U.S. Department of Justice ("DOJ") has made prosecution of both a priority. And DOJ and Securities Exchange Commission ("SEC") enforcement of both statutes increasingly benefit from international cooperation among enforcers and self-reporting by firms under investigation. These common attributes have given rise in recent years to notable examples of overlapping antitrust and anticorruption prosecutions by DOJ. Sometimes investigations initiated to pursue violations of one statute uncover related misconduct under the other. And in some notable instances, DOJ has charged violations of both the Sherman Act and the FCPA based on the same course of conduct. On the civil side, although the FCPA lacks a private right of action, competitors harmed by rivals who achieved their position through corrupt payments have sought to recover for conduct that violates the FCPA under the Sherman Act. This article surveys this intersection between anticorruption and antitrust. Part II describes common attributes of the statutory schemes. Part III describes notable instances where criminal antitrust investigations spawned FCPA investigations (and vice versa), as well as instances in which firms injured by rivals' FCPA violations seek to recover for the same conduct under the antitrust laws. Part IV explains how companies can craft effective antitrust and anticorruptioncompliance programs that reduce the risk that employees commit either type of offense.

February 19, 2012 | Permalink | Comments (3) | TrackBack (0)