Antitrust & Competition Policy Blog

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

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Saturday, January 5, 2013

CAS Certificate of Advanced Studies International Competition Law and Compliance

Posted by D. Daniel Sokol

The Center for Competition and Commercial Law of the ZHAW School of Management in Switzerland has planned an intensive international antitrust program for this spring. The details are set out in the attached brochure.

The program, which offers a Certificate of Advanced Studies, will be taught by a diverse group of international practitioners, present and former government enforcers, and in-house counsel. As the brochure describes, the program consists of multi-day sessions in March, May and June.

For additional information, contact either of the following individuals:

Head of Program Dr. Fabio Babey fabio.babey@zhaw.ch

Director of Program Patrick Krauskopf krpa@zhaw.ch

Download 2013 CAS Program with Dates

January 5, 2013 | Permalink | Comments (0) | TrackBack (0)

Bundling and Tying: Should Regulators Use the Per Se Approach or the Rule-of-Reason Approach? Lessons from the Economics Literature

Posted by D. Daniel Sokol

Sonia Di Giannatale (Centro de Investigacion y Docencia Economicas) & Alexander Elbittar (Centro de Investigacion y Docencia Economicas) ask Bundling and Tying: Should Regulators Use the Per Se Approach or the Rule-of-Reason Approach? Lessons from the Economics Literature.

ABSTRACT: A firm that practices tying in the United States can be committing a per se violation of the an- titrust law, and it can be also considered a per se violation of the Article 102 of the EC Treaty. However, there is evidence for the use of the rule-of-reason approach in some courts' decisions in tying cases, such as United States vs. Microsoft in 2001 and the case against Microsoft in the EC in 2004. Therefore, the question of when a tying case should be ruled under the per se approach or under the rule-of-reason approach is valid and has policy implications. This article is written to shed light into what could be the appropriate answer by presenting several lessons that we can learn from the economics literature.

January 5, 2013 | Permalink | Comments (0) | TrackBack (0)

Friday, January 4, 2013

Competition Agency Design: What's on the Menu?

Posted by D. Daniel Sokol

William E. Kovacic George Washington University - Law School and David A. Hyman University of Illinois College of Law ask Competition Agency Design: What's on the Menu?

ABSTRACT: In recent years the United Kingdom and various other countries have decided to restructure the institutions responsible for enforcing competition laws. How should a nation choose among myriad alternative arrangements? This paper lays out nine major institutional choices that governments must address in designing the implementation mechanism for a competition law. The paper discusses tradeoffs associated with each choice and examines interdependencies among different design elements. In doing so, the paper offers a structured framework that countries can use in forming new competition systems or altering existing institutional arrangements.

January 4, 2013 | Permalink | Comments (0) | TrackBack (0)

Best holiday cards - Antitrust Edition

Posted by D. Daniel Sokol

Every winter, I receive holiday cards from many in the antitrust community. Some cards are serious, some evoke a sense of warmth. My favorite card that I received this year was from Janusz Ordover (NYU and Compass Lexecon). Janusz is a world class antitrust economist and a contributor to the forthcoming Oxford Handbook of International Antitrust Economics (Oxford University Press, Roger D. Blaier and D. Daniel Sokol, editors, forthcoming).

Ordover

For holiday videos, the Sokol family holiday 3 minute music video can be found here.

January 4, 2013 | Permalink | Comments (0) | TrackBack (0)

Still a series of tubes? The dynamic Internet and competition policy

Posted by D. Daniel Sokol

AEI is hosting a conference on Still a series of tubes? The dynamic Internet and competition policy.

Wednesday, January 16, 2013 | 4:00 p.m. – 5:30 p.m. 
AEI, Twelfth Floor  1150 Seventeenth Street, NW  Washington, DC 20036

Agenda

3:45 PM Registration

4:00 PM Opening Remarks

4:10 PM Presentations: Jeffrey Eisenach, AEI Christopher S. Yoo, University of Pennsylvania Law School and AEI Discussant: Jonathan E. Nuechterlein, WilmerHale

5:00 PM Question and Answer Session Moderator: Kevin A. Hassett, AEI

5:30 PM Adjournment and Reception

January 4, 2013 | Permalink | Comments (0) | TrackBack (0)

Antitrust Enforcement in High-Technology Industries: Protecting Innovation and Competition

Posted by D. Daniel Sokol

Fionna Scott-Morten gave a talk at the NY Bar on Antitrust Enforcement in High-Technology Industries: Protecting Innovation and Competition.

January 4, 2013 | Permalink | Comments (0) | TrackBack (0)

Job Opportunity: OFFICE OF THE NEW YORK STATE ATTORNEY GENERAL Division of Economic Justice Antitrust Bureau - Bureau Chief - New York City

Posted by D. Daniel Sokol

OFFICE OF THE NEW YORK STATE ATTORNEY GENERAL

Division of Economic Justice

Antitrust Bureau

 

- Bureau Chief - New York City

Reference No. ANTB_BC_NYC_2013

The Office of the New York State Attorney General (OAG) is seeking an experienced antitrust

litigator to lead the Antitrust Bureau in New York City. The bureau chief will supervise attorneys

and support staff in their target development, investigations and affirmative lawsuits on behalf of the

Office.

The Antitrust Bureau enforces civil federal and state antitrust laws on behalf of New York and its

citizens, and is engaged in the full range of antitrust issues including price-fixing, bid-rigging,

horizontal and vertical restraints, monopolization and mergers. We are seeking candidates with at

least 10 years of experience in these areas as well as complex litigation experience, supervisory

experience, and excellent writing and communication skills; commitment to public service is

essential.

The Antitrust Bureau also works closely with other state antitrust enforcers on matters of national

impact and with the United States Department of Justice and the Federal Trade Commission. The

bureau chief can expect to interface with representatives of these agencies and other state attorney

general offices.

Attorneys in the OAG must reside in (or intend to soon become a resident of) New York State and

be admitted to practice law in New York State.

Candidates from diverse backgrounds are encouraged to apply. The Office is an equal opportunity

employer and does not discriminate on the basis of race, color, national origin, ethnicity, gender,

sexual orientation, religion, age or disability and is committed to workplace diversity.

Please submit cover letter, resume, writing sample and three references to: Sandra Jefferson

Grannum, Esq., Bureau Chief, Legal Recruitment Bureau, Office of the New York State Attorney

General, 120 Broadway, New York, NY 10271 or

recruitment@ag.ny.gov. Please indicate the

Reference No. of the position(s) of interest. Submission via email is preferred.

For more information about the OAG, please go to our website: www.ag.ny.gov.

January 4, 2013 | Permalink | Comments (0) | TrackBack (0)

Intel: Why the European Commission Was Right

Posted by D. Daniel Sokol

Pietro Crocioni Ofcom; University of Warwick - Warwick Business School discusses Intel: Why the European Commission Was Right.

ABSTRACT: This article examines the European Commission's decision on Intel's conditional rebates. The author took part in a mock jury exercise taking the side of the European Commission and this articles explains why the latter was right in concluding that Intel's conditional rebates were an abuse of dominant position.

January 4, 2013 | Permalink | Comments (0) | TrackBack (0)

Commonly Accepted Errors and Misunderstandings in European Competition Law – Abuse of Dominance, and Patent Licensing

Posted by D. Daniel Sokol

John Temple Lang University of Dublin - Trinity College; Cleary Gottlieb explains Commonly Accepted Errors and Misunderstandings in European Competition Law – Abuse of Dominance, and Patent Licensing.

ABSTRACT: A tour d’horizon of the current state of European competition law suggests that there are a number of widespread misunderstandings and commonly accepted errors. Some are expressed publicly, some are not. Some are due to questions not having been carefully considered. Others seem to be due to a steady stream of propaganda designed to influence the law in ways that would be helpful to particular companies.

January 4, 2013 | Permalink | Comments (0) | TrackBack (0)

Thursday, January 3, 2013

Advisory Objection Procedures in the Netherlands: A Case Study on Their Usefulness in Dutch Competition Law

Posted by D. Daniel Sokol

Jan H. Jans, University of Groningen - Department of Administrative Law and Public Administration, Faculty of Law and A. Outhuijse discuss Advisory Objection Procedures in the Netherlands: A Case Study on Their Usefulness in Dutch Competition Law.

ABSTRACT: On 1 January 2013, the Netherlands Competition Authority is merging with the Independent Post and Telecommunications Authority of the Netherlands (OPTA) and the Netherlands Consumer Authority (CA). The new organisation is to be known as the Consumer and Market Authority (ACM). To enable the ACM to operate effectively and efficiently, a bill is being prepared which will streamline the procedures and enforcement instruments available to the ACM. One of the proposed changes concerns abolishing the objection phase for decisions imposing fines.The aim of the present article is to discuss the reasons for this proposed change. We will be concentrating on sanctions under the Netherlands Competition Act (Mw) and the role played by the Advisory Commission on Competition Act Objections (Adviescommissie bezwaarschriften Mededingingswet (AbM)).

January 3, 2013 | Permalink | Comments (1) | TrackBack (0)

Google Settles Search Investigation with the FTC

Posted by D. Daniel Sokol

The FTC has announced it's settlement with Google regarding internet search. Google seems to have gotten off relatively lightly. According to the press release:

Under a settlement reached with the FTC, Google will meet its prior commitments to allow competitors access – on fair, reasonable, and non-discriminatory terms – to patents on critical standardized technologies needed to make popular devices such as smart phones, laptop and tablet computers, and gaming consoles. In a separate letter of commitment to the Commission, Google has agreed to give online advertisers more flexibility to simultaneously manage ad campaigns on Google’s AdWords platform and on rival ad platforms; and to refrain from misappropriating online content from so-called “vertical” websites that focus on specific categories such as shopping or travel for use in its own vertical offerings.

My prediction is that the next major move at the FTC is that Jon Leibowitz will step down and move on to other things now that he can claim a win for the agency on online search. Time will tell whether or not the investigation had merit and whether or not the settlement improves consuerm welfare.

I address the issue of the strategic use of antitrust in this article.

January 3, 2013 | Permalink | Comments (0) | TrackBack (0)

Joe Farrell Joins Bates White

Posted by D. Daniel Sokol

Joe Farrell (Berkeley) and the most recent former head of the Bureau of Economics at the FTCF has joined the Bates White antitrust economics consulting practice. See the press release here. Joe is a great economist - indeed, one of the elite practitioners in this field. Also, like a number of other Bates White economists and affiliates, he has contributed a chapter to the Oxford Handbook of International Antitrust Economics (Oxford University Press, Roger D. Blaier and D. Daniel Sokol, editors, forthcoming).

January 3, 2013 | Permalink | Comments (0) | TrackBack (0)

Econometric Evidence in EU Competition Law: An Empirical and Theoretical Analysis

Posted by D. Daniel Sokol

Ioannis Lianos, University College London - Faculty of Laws and Christos Genakos, Athens University of Economics and Business describe Econometric Evidence in EU Competition Law: An Empirical and Theoretical Analysis.

ABSTRACT: Competition authorities and litigants worldwide have increased the use of economic quantitative methods and economic expert witnesses as a means to produce and support evidence in merger and antitrust cases. The application of quantitative techniques to antitrust has arisen naturally from the need to answer the central questions of antitrust analysis, such as, market definition and market structure issues, analysis of pricing and non-pricing behaviour by firms, quantification of damages and efficiencies and dynamic issues of entry and product reallocation. The paper aims, on the one hand, to briefly describe the main aspects of the most commonly used quantitative techniques in antitrust analysis, and on the other hand, to quantify their use in EU merger and antitrust decisions from 2004 until 2011. Moreover, we also codify the Commission‘s opinion on the techniques utilized. The paper then explores the substantive law framework for the assessment and evaluation of this quantitative evidence in EU competition law by the European Commission and the Courts, in particular topics relating to the standard of proof and evidential cogency and the interaction between the different concepts of causation in law and econometrics, whereas Section 5 provides a unique empirical analysis of the probative value of different kinds of econometric evidence, by performing for the first time a quantitative analysis of the opinion of the European Commission for the particular techniques used and their average evidential weight.

January 3, 2013 | Permalink | Comments (0) | TrackBack (0)

Strategic Information Sharing between Competing Retailers in a Supply Chain with Endogenous Wholesale Price

Posted by D. Daniel Sokol

Noam Shamir Northwestern University - Kellogg School of Management idebntifies Strategic Information Sharing between Competing Retailers in a Supply Chain with Endogenous Wholesale Price.

ABSTRACT: This paper introduces a new motivation for information sharing in decentralized supply chains - as a mechanism to achieve truthful information sharing and to reduce signaling costs. We study a two-echelon supply chain with one manufacturer selling a homogeneous product to n price-setting competing retailers. Each retailer has access to private information about the potential market demand, and the retailers have an ex-ante incentive to share this information with each other and to conceal the information from the manufacturer. However, without a mechanism that induces the retailers to truthful information exchange as their strategic choice, no information can be exchanged via pure communication (cheap talk). To overcome this obstacle, two signaling games are analyzed: in the …first game, information is shared truthfully among the retailers; in the second game, information is also shared truthfully with the manufacturer. We show that under some conditions sharing information with the manufacturer results in a higher pro…t for the retailers.

January 3, 2013 | Permalink | Comments (0) | TrackBack (0)

Resolving the FTC's Investigation of Google: A Good Deal for Consumers

Posted by D. Daniel Sokol

Stephen Houck (Menaker & Hermann) argues that Resolving the FTC's Investigation of Google: A Good Deal for Consumers.

January 3, 2013 | Permalink | Comments (0) | TrackBack (0)

Still Seeking Resolution to Search and Competition Issues

Posted by D. Daniel Sokol

Dave Heiner (Microsoft) has a blog post in which he is Still Seeking Resolution to Search and Competition Issues.

January 3, 2013 | Permalink | Comments (0) | TrackBack (0)

For a Rigorous 'Effects-Based' Analysis of Vertical Restraints Adopted by Dominant Firms: An Analysis of the EU and Brazilian Competition Law

Posted by D. Daniel Sokol

Damien Geradin, Tilburg University - Tilburg Law and Economics Center (TILEC), University of Michigan Law School advocates For a Rigorous 'Effects-Based' Analysis of Vertical Restraints Adopted by Dominant Firms: An Analysis of the EU and Brazilian Competition Law.

ABSTRACT: This study concerns the way agreements between a dominant supplier and its customers that restrict the ability of those customers to buy from the dominant firm’s rivals, including exclusive dealing, conditional rebates and tying and bundling (hereafter, “vertical restraints”) have been assessed by the EU and Brazilian competition authorities and courts.

For several decades, vertical restraints have been a subject of debate among lawyers and economists, and views as to how such restraints should be assessed have fluctuated. In recent years, however, a consensus has emerged that per se rules of illegality (or of legality) should not be applied to vertical restraints. Instead, such restraints should be assessed pursuant to an effects-based analysis balancing their pro- and anti-competitive effects. The difficulty, however, is to devise legal tests that allow this balancing to take place in a coherent and rigorous manner.

Following an analysis of the economics of vertical restraints, this paper shows that the European Commission, which has the power to enforce EU competition rules, has recently opted for an effects-based approach to vertical restraints, and has developed a Guidance Paper that offers a legal and economic methodology describing how it intends to analyse such restraints. This paper shows, however, that the EU courts are still reluctant to follow such a methodology preferring instead to continue to apply formalistic rules.

The situation is different in Brazil where, at least since the enactment of Law 8.884 in 1994, there has been a consensus that vertical restraints had to be analysed under an effects-based approach. However, such an approach has been pursued through balancing tests relying on qualitative criteria and intuitive reasoning, rather than and a rigorous and structured assessment, including quantitative elements, hence leading to inconsistency and uncertainty. The Brazilian competition law system would thus benefit from the adoption of guidelines, which as in the case of the EU Guidance Paper, provides a clear legal and economic methodology as to how an effects-based approach should be implemented.

This paper also analyses the extent to which the legal and institutional framework in place in the EU and in Brazil is well suited to the implementation of a rigorous effects-based approach relying on economic analysis. There is no doubt that the mature EU system possesses the legal and institutional framework to apply such a rigorous approach, the problem being however that the EU courts, which are composed of generalist judges, are still reluctant to pursue it. The European Commission, which is a sophisticated institution, can however pursue an economic based approach.

Although the Brazilian competition law system is not yet fully mature, it has gone a long way, and the entry into force of the new Brazilian Competition Act 12.529/2011 and the setting up of the New CADE will further contribute to its development. The paper argues that the Brazilian system would greatly benefit from the adoption of guidelines, which, like the European Commission Guidance Paper, would offer a clear legal and economic methodology to implement an effects-based approach to vertical restraints.

January 3, 2013 | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 2, 2013

Competition Agency Design: What's on the Menu?

Posted by D. Daniel Sokol

William E. Kovacic, George Washington University - Law School and David A. Hyman, University of Illinois College of Law ask Competition Agency Design: What's on the Menu?

ABSTRACT: In recent years the United Kingdom and various other countries have decided to restructure the institutions responsible for enforcing competition laws. How should a nation choose among myriad alternative arrangements? This paper lays out nine major institutional choices that governments must address in designing the implementation mechanism for a competition law. The paper discusses tradeoffs associated with each choice and examines interdependencies among different design elements. In doing so, the paper offers a structured framework that countries can use in forming new competition systems or altering existing institutional arrangements.

January 2, 2013 | Permalink | Comments (0) | TrackBack (0)

THE ECONOMICS OF FTC V. LUNDBECK: WHY DRUG MERGERS MAY NOT RAISE PRICES

Posted by D. Daniel Sokol

Gerg Werden (DOJ) explains THE ECONOMICS OF FTC V. LUNDBECK: WHY DRUG MERGERS MAY NOT RAISE PRICES.

ABSTRACT: In Federal Trade Commission v. Lundbeck, the courts rejected a challenge to a consummated acquisition that had placed under common control the only two drugs for treating a serious heart condition in newborns. Clinical studies showed that the two drugs were equally effective, and the only alternative, surgery, was not a good substitute. Moreover, prices shot up immediately after the acquisition. Yet the courts ruled that the FTC failed to demonstrate substitutability in response to a price difference between the drugs. This article explains why the much-criticized result and rationale of the case plausibly were correct. Analysis of a bespoke model of competition between therapeutic substitute drugs reveals that: (1) competition plausibly results in monopoly pricing, and if not, (2) competition plausibly results in near-monopoly pricing.

January 2, 2013 | Permalink | Comments (0) | TrackBack (0)

Antitrust Compliance Programmes & Optimal Antitrust Enforcement

Posted by D. Daniel Sokol

Wouter Wils, King's College London - School of Law; European Commission has written on Antitrust Compliance Programmes & Optimal Antitrust Enforcement. This paper is worth reading.

ABSTRACT: Should companies that have antitrust compliance programmes be granted a reduction in the amount of fines or even immunity from fines when they are found to have committed antitrust infringements? Should the absence of a compliance programme constitute an aggravating factor leading to higher fines for antitrust infringements? Should the adoption of a compliance programme be imposed as part of infringement decisions or settlements? These are the questions which this paper examines, on the basis of an analysis of the nature of antitrust infringements, the rationale of company liability for antitrust infringements, and the possible positive and possible negative effects of compliance programmes.

 

January 2, 2013 | Permalink | Comments (0) | TrackBack (0)