Antitrust & Competition Policy Blog

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

Saturday, June 8, 2013

FTC & DOJ IP/Antitrust Enforcement Priorities June 26, 2013 12:00 pm – 1:00 pm ET

Posted by D. Daniel Sokol


ABA Section of Intellectual Property Law

Antitrust Interface with Intellectual Property Law Committee


FTC & DOJ IP/Antitrust Enforcement Priorities

June 26, 2013

12:00 pm – 1:00 pm ET

As the FTC & DOJ continue to focus heavily on antitrust issues involving intellectual property, two top officials discuss the agencies’ enforcement priorities in this area, including issues related to standard setting, FRAND licensing, and patent assertion entities.

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Jonathan Lutinski, Wilson Sonsini Goodrich & Rosati, Washington, DC


Suzanne Munck, Chief Counsel for Intellectual Property, Federal Trade Commission, Washington, DC

Frances Marshall, Special Counsel for Intellectual Property, Antitrust Division, United States Department of Justice, Washington, DC

In-Person Attendance Location

Wilson Sonsini Goodrich & Rosati

1700 K Street, NW, Fifth Floor

Washington, DC 20006

To attend in person, please rsvp to:

Linda North at


The ABA is not seeking CLE credit for this program.

Audio Archive

MP3 recordings of this program will be posted on the Section website, provided all releases have been obtained. Section members can visit our Section website after the program for access.


June 8, 2013 | Permalink | Comments (0) | TrackBack (0)

FTC Hiring Announcement: Attorney Advisor (Intellectual Property)

Posted by D. Daniel Sokol

FTC Hiring Announcement: Attorney Advisor (Intellectual Property)


Job Title:Attorney Advisor (Intellectual Property)

Agency:Federal Trade Commission

Job Announcement Number:OPP-2013-0002


$105,211.00                                                                                                                to                                                         $155,500.00                          / Per Year


Thursday, June 06, 2013 to                            Thursday, June 20, 2013




Full-time, Excepted Service, -                            Permanent




1 vacancy -                                      District Of Columbia, DC, USView Map


All Qualified Candidates


OUR MISSION: The Federal Trade Commission (FTC) enforces a variety of Federal antitrust and consumer protection laws. The FTC seeks to ensure that the nation's markets function competitively and are vigorous, efficient, and free of undue restrictions. The FTC also works to enhance the smooth operation of the marketplace by eliminating marketing acts or practices that are unfair or deceptive. The FTC conducts economic analyses to support its law enforcement efforts and to contribute to the policy deliberations of the Agency, the Congress, the Executive Branch, and other organizations.


The Federal Trade Commission’s Office of Policy Planning assists the Commission to develop and implement long-range competition and consumer protection policy initiatives and advises staff on cases raising new or complex policy and legal issues. The Office of Policy Planning is seeking an attorney with intellectual property experience to support the office’s work.

Candidates should have excellent legal research and writing abilities, strong organizational and analytical skills in presenting written arguments, excellent oral communication skills, and the ability to explain complex legal and technical issues in a clear and succinct manner. Candidates also should be able to work effectively with other people, exercise sound judgment, meet deadlines, and exhibit a strong interest in the work of the agency. In addition, demonstrated experience in intellectual property, patent litigation, and antitrust is highly desired. This position is not included in the bargaining unit.



  • Possess a JD or LL.B degree from an accredited law school
  • Member in good standing of the Bar of a state or territory - US, PR, DC
  • U.S. citizenship
  • Relocation expenses will not be paid


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As an attorney in the Office of Policy Planning, you will perform a variety of legal duties, including frequently challenging legal and policy analysis. Often the work of the staff includes advisory functions related to antitrust policy and enforcement efforts under the various statutes enforced by the Commission. A successful staff member has interest in and the ability to deal with both legal analysis and economic and practical business issues arising from the policy issues under consideration. More specifically, you will;

  • Provide intellectual property guidance to support the Commission’s policy and enforcement initiatives.
  • Draft and review policy recommendations, amicus briefs, advocacy comments and Commission decisions.
  • Organize public workshops and draft Commission and staff reports on cutting-edge competition and intellectual property issues.
  • Confer with government agencies, public authorities, attorneys, businesspersons, and other members of the public in order to obtain information relevant to Commission policy and enforcement initiatives.
  • Prepare internal documents for review by the Commission and perform special assignments as directed.

June 8, 2013 | Permalink | Comments (0) | TrackBack (0)

Friday, June 7, 2013

Old Technology Upgrades, Innovation, and Competition in Vertically Differentiated Markets

Posted by D. Daniel Sokol

 Marc Bourreau (Telecom Paris), Paolo Lupi (AGCOM), and Fabio Manenti (University of Padova) explore Old Technology Upgrades, Innovation, and Competition in Vertically Differentiated Markets.

ABSTRACT: We study how the migration from an old to a new technology is affected by the access price to the old technology. We show that both the incumbent and the regulator are willing to set a very high access price to accelerate consumers' migration to the new technology. When the quality of the old technology is exogenous and the entrant dominates investment in the new technology, the old technology is completely switched off in equilibrium, whereas the old technology persists when the incumbent dominates investment. When the incumbent can decide on an endogenous upgrade of the old technology, the migration to the new technology is slowed down, and the entrant might be foreclosed.

June 7, 2013 | Permalink | Comments (0) | TrackBack (0)

Judo Economics in Markets with Asymmetric Firms

Posted by D. Daniel Sokol

Daniel Cracau (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) describes Judo Economics in Markets with Asymmetric Firms.

ABSTRACT: I study a game with one market incumbent and a small entrant in a duopoly with perfectly substitutable products. Firms face a sequential Bertrand competition. Limiting the initial capacity (Judo economics) is a plausible entry strategy for the small firm. If we, however, introduce asymmetry in production cost or product quality, capacity limitation can become obsolete. I derive thresholds as regards the cost and quality differences for the entrant's choice to voluntarily limit the production capacity in equilibrium. I study a market entry game with price competition and perfectly substitutable products. Limiting the initial capacity (Judo economics) is a plausible entry strategy. I show that under asymmetry in production cost or product quality, capacity limitation can become obsolete.

June 7, 2013 | Permalink | Comments (0) | TrackBack (0)

Comparing the U.S. Class Action Mechanism and Proposed U.K. System: Which Strikes the Right Balance Between Safeguards and Justice?

Posted by D. Daniel Sokol

Sharon Robertson (Cohen Milstein) asks about Comparing the U.S. Class Action Mechanism and Proposed U.K. System: Which Strikes the Right Balance Between Safeguards and Justice?

ABSTRACT: Free enterprise and competition are critical to the success of a market economy. In the United States, the class action mechanism is one of the most effective and efficient means for consumers to play a part in protecting this basic principle. By treating public citizens as "private attorneys general," class actions incentivize aggrieved consumers to ferret out wrongdoing and seek recompense.

In January 2013, the U.K. government's department for Business Innovation and Skills ("BIS") published a response to its 2012 Consultation on options for reform. The response introduced a limited opt-out class action mechanism. While the proposed U.K. class action device bears some similarities to the U.S. system, it also includes some critical differences. The following article provides an overview of both mechanisms and the merits of the same.

June 7, 2013 | Permalink | Comments (0) | TrackBack (0)

Thursday, June 6, 2013

Private Antitrust Enforcement in Brazil: New Perspectives and Interplay with Leniency

Posted by D. Daniel Sokol

Mariana Tavares de Araujo & Ana Paula Martinez (Levy & Salomao Advogados) address Private Antitrust Enforcement in Brazil: New Perspectives and Interplay with Leniency.

ABSTRACT: Private antitrust enforcement in Brazil has been on the rise over the past five years. This may be due to such reasons as the global trend of antitrust authorities encouraging damage litigation by potential injured parties; the growing number of infringement decisions issued by Brazil's antitrust agency, CADE; and the increasing general awareness of competition law in Brazil.

Pursuant to Article 47 of Brazil's Antitrust Law, victims of anticompetitive conduct may recover the losses they sustained as a result of a violation, apart from an order to cease the illegal conduct. A general provision in the Brazil Civil Code also establishes that any party who causes losses to third parties shall indemnify those that suffer injuries (Article 927). Plaintiffs may seek compensation of pecuniary damages (actual damages and lost earnings) and moral damages. Under recent case law, companies are also entitled to compensation for moral damages, usually derived from losses related to its reputation in the market.

Apart from complaints based on contracts, a significant percentage of private actions are based on horizontal conduct in Brazil. Similarly to other jurisdictions, both corporations and individuals may be sued individually (e.g. by competitors, suppliers, and direct or indirect purchasers) or collectively for antitrust violations, but the greatest majority of pending cases are against corporations. Please note that pass-on defense is not applicable to misconduct against consumers; for other cases, there have been no statutory provisions or case law issued to date.

Individual lawsuits are governed by the general rules set forth in the Brazilian Civil Procedure Code. Collective actions are regulated by different statutes that comprise the country's collective redress system. Standing to file suits aiming at the protection of collective rights is relatively restricted, and only governmental and publicly held entities are allowed to file. State and Federal Prosecutors' Offices have been responsible for the majority of civil suits seeking collective redress, most of which have been related to consumers' rights complaints.

June 6, 2013 | Permalink | Comments (0) | TrackBack (0)

Private Antitrust Litigation in China—The Burden of Proof and Its Challenges

Posted by D. Daniel Sokol

Adrian Emch and Jonathan Liang (Hogan Lovells) describe Private Antitrust Litigation in China—The Burden of Proof and Its Challenges.

ABSTRACT: On March 20, 2013, the Guangdong High People's Court issued its verdict in the dispute between two leading Chinese information technology companies, Qihoo 360 and Tencent. The court dismissed 360's claim that Tencent had committed an abuse of dominance in violation of the Anti-Monopoly Law on the grounds that 360 had put forward a wrong definition of the relevant market and that Tencent was not in a dominant position.

The reaction in the local press was instant-observers claimed that the burden of proof was too high for plaintiffs seeking redress for antitrust violations through the Chinese courts, in particular for abuse of dominance cases.

Although not all judgments are made public in China and the picture is therefore incomplete, the judgments that have been published since the AML took effect close to five years ago would seem to confirm the difficulties for plaintiffs to succeed in private antitrust actions in China. The publicly available information indicates that only very few plaintiffs have won a clear victory in AML-based actions thus far.

This article examines how the burden of proof is allocated in private antitrust suits in China, and tries to assess whether the criticism about the high burden of proof is merited.  The remainder of the article is organized as follows: section 2 provides an introduction to the legislative background, and section 3 lays out the general principle for the burden of proof in antitrust cases. Sections 4 and 5 describe two broad ways for parties to "lower" the burden of proof-by resorting to presumptions and by seeking discovery through the courts. Section 6 concludes.

June 6, 2013 | Permalink | Comments (0) | TrackBack (0)

Trade Associations and Private Antitrust Litigation in China

Posted by D. Daniel Sokol

Hao Qian (China University of Political Science and Law) discusses Trade Associations and Private Antitrust Litigation in China.

ABSTRACT: Trade associations present a peculiar issue in China's competition law, due to their unusual origin and development. No voluntarily established business associations were possible or necessary in the era of central planning, when the Chinese economy was based on state-ownership and bureaucratically managed by the government. Only when China embarked on a new course to embrace a market economy in the early 1980s did trade associations begin to emerge, but they were far from representing the small and gradually expanding private sector. To facilitate the still on-going government restructuring during the past three decades, most of China's trade associations were created primarily to take over redundant/retired officials and take on the regulatory functions that reorganized administrative agencies had to divest. As of today, even though they are in theory "social organizations," trade associations still must obtain the endorsement and supervision of certain government authorities in order to register and operate legally. The government explicitly acknowledges that trade associations have yet to unhook their connections with administrative agencies.

The inherent semi-government role of trade associations in China often enables them to exert a greater influence on the market competition than their counterparts in mature market economies. Except in a few state monopolized industries, Chinese enterprises are generally of small size and with low competitive capacity. However, trade associations are capable of initiating and orchestrating concerted action among their members. In many cases, they do so to implement government policies that are not necessarily consistent with fair competition. But even when they pursue their own self-interest, for example through various measures motivated by local protectionism, trade associations possess enhanced abilities to detect and punish any deviation by members; abilities which are essentially buttressed by their government affiliations. Additionally, the fragmented structure of the Chinese market often makes it easy for even small trade associations to organize anticompetitive activities among members, thus effectively monopolizing relatively closed and isolated local markets.

For the above reasons, trade associations have figured largely in China's competitive landscape. In the drafting process of the Anti-Monopoly Law ("AML"), cartels orchestrated by trade associations already posed a major concern regarding private monopolies. Open price-fixing maneuvers in 2007 by the China branch of the "International Ramen Manufacturers Association" not only rallied additional support for the AML draft during the last stage of the bill, but also in great part enabled the insertion of three provisions specifically on trade associations into the final legislation.

Since the AML entered into force in August 2008, trade associations have remained in the spotlight in enforcement activities. Of the seventeen investigations that the State Administration for Industry and Commerce ("SAIC") had initiated by November 2012, sixteen cases involved activities organized by trade associations. Similarly, most of the major price monopolies handled by both the National Development and Reform Commission ("NDRC") and its local counterparts have been those arranged by trade associations.

However, at the same time, not many private antitrust suits have been brought against trade associations. In fact, Article 50 of the AML generally states that a business operator "shall bear civil liabilities" if its monopolistic conduct causes losses to aggrieved parties. In the Provisions on Several Issues concerning the Application of Law in the Trial of Civil Dispute Cases Arising from Monopolistic Conduct ("Judicial Interpretation") published in May 2012, the Supreme People's Court further lists "articles of association in violation of the AML" as a cause of civil action against trade associations.

These provisions would seem to have paved the way for private parties to bring a civil lawsuit against trade associations violating the AML. Yet they also leave much room for interpretation and point to general issues in civil law and procedure, the application of which in relation to the AML remains largely unexplored. In contrast to administrative sanctions on trade associations pursuant to Article 46(3) of the AML (the legal basis for NDRC and SAIC enforcement activities) it is unclear in the law whether, or to what extent, in a civil lawsuit a trade association should be held liable for losses caused by monopolistic conduct of its members but organized by the association.

As a result, to date, private antitrust suits against trade associations have not appeared to be a desirable option. On the other hand, the limited number of antitrust cases in which a trade association was sued for civil damages sheds important lights on how the courts have tackled ambiguities in the law. This paper examines some of the major issues that the courts have addressed in several reported court judgments of such cases, in the context of both the AML and relevant laws, in order to analyze the emerging legal rules applicable in civil suits against trade associations for AML violations.

June 6, 2013 | Permalink | Comments (0) | TrackBack (0)

Private Antitrust Actions in Japan

Posted by D. Daniel Sokol

Mitsuo Matsushita (Nagashima Ohno & Tsunematsu) & Kazunori Furuya (Furuya Law Office) discuss Private Antitrust Actions in Japan.

ABSTRACT: The Japanese Antimonopoly Law (hereafter referred to as "JAML") was enacted in 1947 as part of the Economic Democratization Policy introduced into Japan by the Occupation Forces. Originally it was based on U.S. antitrust laws but, after more than 60 years of enforcement, JAML has acquired features unique to Japan such as the control of dominant position designed to protect small enterprises such as subcontractors and small dealers vis-a-vis large producers and dealers which tend to abuse their superior bargaining positions to the disadvantage of the smaller entities. The major pillars of JAML are the prohibition of: (a) of monopolization, (b) cartels and (c) unfair business practices and, in addition, (d) the control of mergers and acquisitions.

Private monopolization is roughly similar to monopolization under Section 2 of the Sherman Act in the United States and abuse of dominant positions in the European Union. Cartels are generally prohibited in Japan just like in the United States, European Union, and elsewhere. The control of mergers and acquisitions is similar to the counterparts in other major jurisdictions.

Unfair business practices (or unfair trade practices) are a category unique to JAML. It is provided for in Article 2:9 of JAML. According to this article, unfair business practices are those conducts which tend to impede fair competition and include: (1) boycott (collective refusals to supply which include primary and secondary refusals); (2) price discrimination (unreasonable discrimination in supplying commodities and services); (3) below-cost selling (predatory pricing); (4) resale price maintenance; (5) abuse of dominant positions; and (6) other conducts which are designated by JFTC: unreasonable discrimination, transaction with unreasonable prices, unreasonable inducement or coercion of competitors' customers, transactions with unreasonable restrictions, unreasonable use of one's advantageous positions in transactions and unreasonable interference into transactions between competitors and their customers, and inducement of corporate executives and employees of competitors to cause disadvantages to their companies.

Categories (1)-(5) are subject to administrative surcharges of differing amounts according to the category in question as well as cease-and-desist orders imposed the Japan Fair Trade Commission ("JFTC"), the enforcement agency. Category (6) is subject to cease-and-desist orders of JFTC but not subject to administrative surcharge.

One of the constituent elements of unfair business practices is that a conduct tends to impede fair competition and is "without good cause" or "unreasonable" as the case may be. "Without good cause" is used with Categories (1), (3), and (4) and is interpreted to mean unlawful in principle, e.g., a conduct amounting to this category is presumed to be unlawful when the existence of the conduct is established and this presumption can be overturned if the defendant successfully rebuts this presumption.

"Unreasonable" is used with all other categories. This concept is similar to "rule of reason" in U.S. antitrust laws and it is up to JFTC or a private plaintiff to adduce evidence and argument proving the illegality of the conduct.

As mentioned earlier, one of the constituent elements of unfair business practice is that a conduct "tends to impede fair competition" as contrasted with the constituent elements of private monopolization or unreasonable restraint of trade. In cases of private monopolization and unreasonable restraint of trade, it is necessary that a conduct in question "substantially restrains competition" which means making a heavier impact on the market than a mere "tending to impede fair competition." The prohibition of unfair business practices is a precautionary measure in relation to the prohibition of private monopolization and unfair business practices.

June 6, 2013 | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 5, 2013

Patent Assertion Entities and Antitrust: Operating Company Patent Transfers

Posted by D. Daniel Sokol

Mark S. Popofsky and Michael D. Laufert (Ropes and Gray) discuss Patent Assertion Entities and Antitrust: Operating Company Patent Transfers.

ABSTRACT: The power of a patent can depend on its holder. In one set of hands, a patent might play a defensive role, warding off suits by similarly armed competitors. But when placed in another’s, the same patent can serve as a weapon for extracting royalties from inadvertent infringers or for raising rivals’ costs. In short, much like the theory of relativity, the ability and incentive to assert a patent can turn on the positions rights holders and enforcement targets occupy.

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

Collusion at the Extensive Margin

Posted by D. Daniel Sokol

Martin C. Byford, RMIT University - School of Economics, Finance and Marketing and Joshua S. Gans, University of Toronto - Rotman School of Management discuss Collusion at the Extensive Margin.

ABSTRACT: This paper is the first to examine collusion at the extensive margin (whereby firms collude by avoiding entry into each other's markets or territories). We demonstrate that such collusion offers distinct predictions for the role of multiple markets in sustaining collusion such as the use of proportionate response enforcement mechanisms, the possibilities of oligopolistic competition with a collusive fringe, and predatory entry. We argue that collusion at the extensive margin poses dicult issues for antitrust authorities relative to its intensive margin counterpart.

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

EU Competition Law and Contract

Posted by D. Daniel Sokol

Okeoghene Odudu, University of Cambridge - Faculty of Law explores EU Competition Law and Contract.

ABSTRACT: This chapter explores the courts reaction to a co-contractor who fails to comply with the terms of that contract, but seeks to resist an action for breach of contract by claiming that to enforce the contract would be contrary to EU competition law - the Euro-defence. Reliance on Euro-defences has acquired and retains a distinct pejorative sense amongst judges in the English court. Using Shavell’s basic theory of litigation it is argued that the Euro-defence dilutes the incentive to comply with contracts and also creates a strong incentive for a party with valid contractual rights to settle unmeritorious claims. Using Calkins theory of courts react to litigation strategies it is argued that the judicial reaction has been first to increase the burdens faced by a party wishing to raise the Euro-defence and secondly to reduce the benefit to be had by successfully raising the Euro-defence. The chapter concludes by considering whether the defensive invocation of EU competition law remains as a mechanism for ensuring compliance with competition law.

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

Worlds in Collision: Merger Policy in Bankruptcy

Posted by D. Daniel Sokol

Max Huffman, Indiana University Robert H. McKinney School of Law offers his thoughts on Worlds in Collision: Merger Policy in Bankruptcy.

ABSTRACT: Despite a deep literature on the failing firm defense and the frequency with which antitrust issues arise in corporate bankruptcy proceedings, the literature lacks an effort comprehensively to theorize an approach -- and courts have not settled on a rule -- that resolves the deep and enduring conflict between the estate-value-maximization goal of bankruptcy law and the consumer protection goal of merger review. This proposed article addresses that gap.

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

Tuesday, June 4, 2013

Cartel Fine Severity and the European Commission: 2007-2011

Posted by D. Daniel Sokol

John M. Connor, Purdue University; American Antitrust Institute (AAI) discusses Cartel Fine Severity and the European Commission: 2007-2011.

ABSTRACT: This article analyzes the first 22 cartel decisions of the European Commission under its 2006 revised fining Guidelines. I find that the severity of the cartel fines relative to affected sales is about double that of the fines decided under the previous 1998 Guidelines. Severity varies only modestly across companies in the same cartel. A large minority of EC fines now disgorge the monopoly profits accumulated by cartelists. Yet, the new fine guidelines are no more severe than contemporaneous U.S. DOJ criminal fines.

Nearly all recent cartel decisions reward one or more participants with full or partial leniency. There is no evidence that leniency discounts have led to larger percentage reductions in cartel-wide fines. Moreover, despite more severe fines, the share of defendants requiring reductions under the Commission’s 10% cap or ability-to-pay considerations has not risen.

Contrary to expectations, the size of the percentage discounts for recidivism has gone down under the new guidelines; moreover, severity during the Almunia Commissionership is much lower than his predecessor’s administration. There is evidence that the Commission has been inconsistent in applying recidivism penalties in the manner promised it its 2006 Guidelines. In particular, it has been overly lenient by failing to account for numerous previous hard-core cartel violations in the EU.

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


Posted by D. Daniel Sokol

Greg Sidak (Criteron Economics) contemplates COURT-APPOINTED NEUTRAL ECONOMIC EXPERTS.

ABSTRACT: Complex civil litigation routinely includes expert economic testimony. However, it may be hard for a jury to determine at trial which expert economist is more credible, and it may be hard for the judge to determine at the Daubert hearing whether the methodology upon which a given expert economist relies is intellectually rigorous enough to produce results that constitute admissible testimony. One solution rarely employed is for the court to appoint its own neutral economic expert under Rule 706 of the Federal Rules of Evidence when a lawsuit contains a claim for damages that will require rigorous analysis of data. Based on my recent experience as Judge Richard Posner’s court-appointed economic expert on damages in patent infringement litigation, I explain how the wider use of Rule 706 would assist the judge and jury and would facilitate the prompt settlement of intellectual property, antitrust, securities, contract, business tort, and other complex disputes. The benefits to courts and litigants would surely exceed the costs.

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


Posted by D. Daniel Sokol

Ariel Ezrachi (Oxford) and John Thanassoulis (Oxford) have an interesting new paper on UPSTREAM HORIZONTAL MERGERS AND (THE ABSENCE OF) RETAIL PRICE EFFECTS.

ABSTRACT: The article explores the retail price effects of upstream and midstream horizontal mergers. It questions the prevailing assumption in merger review according to which such transactions will have similar effects on retail price as that of downstream horizontal mergers. The analysis illustrates how a sophisticated profit-maximizing merged entity may find it more profitable to enter into efficient contracts that seek to maximize the profit of the distribution channel, and so ensure that retail prices are not raised. The merged entity uses its market power and improved bargaining position to extract as much of that profit as possible from the retailer. We therefore argue that one cannot simply assume a direct link between the creation of market power upstream following a merger transaction, and the subsequent increase in retail prices. An analysis of the effects of upstream mergers on retail prices should call for a more nuanced appraisal that distinguishes the transfer of wealth within the operators in the distribution chain from the possible price impacts on final consumers.

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

Price Effects and the Commerce Clause: The Case of State Wine Shipping Laws

Posted by D. Daniel Sokol

Jerry Ellig, George Mason University - Mercatus Center and Alan E. Wiseman, Vanderbilt University - Department of Political Science describe Price Effects and the Commerce Clause: The Case of State Wine Shipping Laws.

ABSTRACT: In the wake of Granholm v. Heald, numerous states passed new laws to regulate interstate direct shipment of alcohol that would seem to contradict the spirit, if not the explicit content, of the Commerce Clause. We build on existing scholarship analyzing the empirical impacts of direct shipment barriers to identify how these new laws are likely to influence local market conditions. Drawing on new data that measure posted winery prices and aggregate production levels in 2002 and 2004, we demonstrate how many of these new laws would be expected to effectively diminish, if not altogether remove, the benefits that would normally accrue to consumers from legalized interstate direct shipment of wine. Although empirical analysis of price effects currently plays a very limited role in dormant Commerce Clause cases, our analysis suggests how price data can be used to ascertain whether a state restriction constitutes discrimination against out‐of‐state economic interests.

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

Monday, June 3, 2013

Estimating the Effect of Entry on Generic Drug Prices Using Hatch-Waxman Exclusivity

Posted by D. Daniel Sokol

Luke Olson, Government of the United States of America - Federal Trade Commission and Brett W. Wendling, Government of the United States of America - Federal Trade Commission are Estimating the Effect of Entry on Generic Drug Prices Using Hatch-Waxman Exclusivity.

ABSTRACT: Generic drugs play an important role in disciplining drug prices and controlling rising drug costs. However, the effect that an additional generic drug competitor has on drug prices is difficult to measure because the number of firms competing in a market is endogenously determined. We identify the causal effects of a second and a third generic competitor on generic drug prices by exploiting the 180-day period of marketing exclusivity created by provisions of the Hatch-Waxman Act. The effects of the second and third competitors on price have important implications for drug competition policy and the interpretation of theory relating price to competition in generic drug markets. We find significant biases associated with estimates that do not properly account for endogenous entry. Specifically, we find that the failure to account for endogenous entry leads to significant underestimation of the effects of two and three competitors on generic drug prices, especially among large drugs.

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

An Economic Interpretation of FRAND

Posted by D. Daniel Sokol

Dennis W. Carlton, University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER) and Allan Shampine, Compass Lexecon offer An Economic Interpretation of FRAND.

ABSTRACT: Standard setting organizations have for many years required members to commit to license patents essential to use of standards on Fair, Reasonable and Non-discriminatory terms. Unfortunately, SSOs have not defined what FRAND means, leaving its interpretation to courts and regulators. This paper explains the economic concerns underlying FRAND – hold-up and strategic behavior leading to inefficient behavior in a standard setting context – and how a proper economic interpretation of FRAND can eliminate or mitigate those concerns. Ex ante analyses based on the “reasonable” principle can potentially eliminate hold-up, but, as a practical matter, may be costly, difficult to perform and error-prone. In such circumstances, the “non-discriminatory” principle of FRAND can provide some protection against hold-up even when the “reasonable” principle of FRAND does not.

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

ACE and Competition Laws: Opportunities and Challenges 12 June 2013, Chulalongkorn University Thailand

Posted by D. Daniel Sokol

ACE and Competition Laws: Opportunities and Challenges 12 June 2013, Chulalongkorn University Thailand

See details here.


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