Antitrust & Competition Policy Blog

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

Thursday, April 14, 2016

Resale Price Maintenance After Leegin: The Curious Case of Contact Lenses Paperback

Gregory T. Gundlach (University of North Florida) and Riley T. Krotz (University of North Florida) have a new book on Resale Price Maintenance After Leegin: The Curious Case of Contact Lenses.

BOOK ABSTRACT: Resale price maintenance (RPM) is a controversial pricing practice for managing retail distribution channels. In Leegin Creative Leather Products, Inc. v. PSKS, Inc. (2007), the Supreme Court abolished a nearly century-old per se rule against RPM established in Dr. Miles Medicine Co. v. John D. Park & Sons (1911). Henceforth, RPM will be judged under federal antitrust law by the rule of reason – a less restrictive standard that requires courts to weigh all the relevant circumstances of a case to assess whether a practice unreasonably restrains trade. Despite that the decision in Leegin leaves many unanswered questions, the decision has prompted an increasing number of consumer goods manufacturers to adopt RPM in the management of their retailer relationships. Recently, the widespread use of restrictive pricing practices in the retail distribution of contact lenses has drawn attention and elevated debate over the practice. Pending lawsuits in the industry have been identified as an important “test case” for antitrust’s new vertical pricing regime following Leegin. Drawing upon relevant literatures from law, economics, and business, together with publically available information, important questions in the debate and related cases that share significance for scholarship and practice are elaborated upon and examined. We hope this examination reveals insights helpful to understanding the antitrust implications of contact lens manufacturers’ pricing practices and for advancing academic knowledge, marketing practice, and competition policy involving RPM.

April 14, 2016 | Permalink | Comments (0)

Intermediaries in Two-Sided Markets: An Empirical Analysis of the U.S. Cable Television Industry

Andre Boik, University of California, Davis -- Department of Economics identifies Intermediaries in Two-Sided Markets: An Empirical Analysis of the U.S. Cable Television Industry.

ABSTRACT: Local television stations are platforms in a two-sided market connecting advertisers and viewers. This paper explicitly examines the effect that important intermediaries (such as cable, telephone, and satellite distributors) may have on a platform’s pricing behavior in a two-sided market. I find that stations raise their fees to cable distributors because stations prefer that viewers access their content through satellite distributors with whom they do not compete in the local advertising market, and that station mergers lower stations’ fees to distributors by partially internalizing a pricing externality that results from the mandatory bundling of local content.



April 14, 2016 | Permalink | Comments (0)

Leniency – The Polish Programme and the 'Semi-Formal' Harmonisation in the EU by the European Competition Network

Marcin Kulesza, Warsaw School of Social Sciences and Humanities describes Leniency – The Polish Programme and the 'Semi-Formal' Harmonisation in the EU by the European Competition Network.

ABSTRACT: When studying the legal character of the Polish leniency programme, one cannot overlook its origin and the harmonisation process of such programmes in the EU. From the beginning, the Polish programme has been, as it should be, bound to the EU programme and to the European Competition Network’s Model Leniency Programme. The paper briefly presents the European roots of the Polish leniency programme, its original convergence with the Commission’s programme and its current convergence with the Model Leniency Programme. In addition, the status of the Model Leniency Programme is analysed and questioned and its provisions are presented in the context of the evolution of Polish leniency. Some additions to the current Polish programme are suggested in conclusion.



April 14, 2016 | Permalink | Comments (0)

Wednesday, April 13, 2016

Assessment of antitrust agencies’ impact and performance: an analytical framework

Juan Delgado, Hector Otero and Eduardo Perez-Asenjo (all Global Economics Group) provide an Assessment of antitrust agencies’ impact and performance: an analytical framework.

ABSTRACT: The assessment of antitrust agencies’ impact and performance serves three goals: first, to assess how well competition agencies have done their job; secondly, to help to correct their future strategy and to improve the allocation of limited resources, and finally, to respond to the need for accountability of public agencies. We propose an analytical framework to evaluate the impact of the interventions of antitrust agencies (eg infringement decisions, merger control decisions, advocacy work, etc.). The framework proposed combines comprehensiveness (including all activities by agencies) and simplicity (through a number of synthetic indicators). The framework classifies interventions according to their nature and impact measurability and proposes activity, relevance, and impact indicators to assess agencies’ performance.


April 13, 2016 | Permalink | Comments (0)

Remembering Joe Brodley

Please help us to celebrate the life and contributions of Professor Joseph F. Brodley.  Though the antitrust community cannot claim an outright monopoly on Joe – it’s fair to say that we did have substantial market power vis-à-vis his extraordinary contributions to the law.   

The following are links to Professor Brodley’s memorial page at Boston University School of Law and to the Boston Globe’s April 3rd obituary.

A memorial service will be held for Professor Brodley in just one month – on May 14th.  We are compiling a book (hard copy) of remembrances to share with Joe’s family (narrowly defined – sibling, kids, grandkids).  And so we are asking folks in Joe’s larger academic & antitrust family to share their memories for inclusion in compilation. 

Towards that end, if you could email your reflections, we would be greatly appreciative.  We would welcome your contributions – even very brief remembrance or well-wishes for his family.  If you could send them by Tuesday, May 10th, that would be ideal.

Please email Hillary Greene at  A few more requests, please (1) include “Joe Brodley” in the email subject line, (2) write your message exactly as you would like it to appear, (3) feel free to forward this notice however you see fit – we would like to reach out to folks who knew and loved Joe in his many roles (scholar, teacher, advocate, colleague, friend).

On behalf of all of us – friends of Joe (Harry, Eleanor, Keith and Bill), the AALS Antitrust and Economic Regulation Section Executive Committee, and myself – we look forward to hearing from you all! 


Hillary Greene  ((339) 203-0931 cell) 

Chair, Section of Antirust and Economic Regulation

American Association of Law Schools

cc: Harry First, Eleanor Fox, Keith Hylton, Bill Kovacic 

April 13, 2016 | Permalink | Comments (0)



ABSTRACT: In this article, I discuss the economics behind a series of recent controversial pricing patterns and strategies that have spawned antitrust and related activity in the downstream petroleum industry. Brought under both federal and state laws, I discuss how legislators and courts have tried to deal with specific practices and argue that, in some cases, the laws (or the interpretation of those laws) can sometimes be counterproductive and actually harm competition. The practical consequence to downstream fuel sellers is that behavior which is perfectly pro-competitive and unilateral in nature still carries an unavoidable systematic risk of litigation. The first risk I discuss arises from parallel pricing. Well known in general and not illegal in itself, parallel behaviors still spawn substantial antitrust activity in the petroleum industry. I focus on two particular and unusual parallel pricing patterns specific to downstream petroleum that have caused recent international controversy. A second litigation risk sellers face arises from pricing too high in states with so-called “price-gouging” laws and a third risk arises from pricing too low in states with “Sales-Below-Cost” laws. Finally, a fourth litigation risk arises from the use of bundled discounts between fuel and non-fuel sales. Usually challenged under Sales-Below-Cost laws not well suited to address them, bundled discounting at the retail level has become an increasingly common pricing technique in the ongoing modernization of the downstream petroleum industry.


April 13, 2016 | Permalink | Comments (0)

Cuozzo Speed Technologies, LLC v. Lee

The NYS Science & Technology Law Center is pleased to announce that Professor Shubha Ghosh, the new Crandall Melvin Professor of Law at Syracuse University College of Law will be presenting on the upcoming Supreme Court case, Cuozzo Speed Technologies, LLC v. Lee.

Cuozzo Speed Technologies, LLC v. Lee

Thursday, April 21st from 1pm to 2:15pm

The Supreme Court will consider whether the inter partes review (IPR) procedures which allow a third party to challenge the validity of a patent in front of the Patent Trial and Appeal Board (PTAB) have made it too difficult for inventors to defend their patent claims (and too easy to successfully invalidate patents). IPR allows companies to challenge and potentially invalidate a competing patent, settling intellectual property disputes far more cheaply and quickly than through a Federal Court proceeding. Critics of the process say that the PTAB is utilizing an improper standard in construing claims in a manner that is disadvantageous and unfair to patent holders. The high court justices will review the Federal Circuit panel's 2-1 decision in Cuozzo upholding the PTAB decision and the standard employed.

Please join us April 21 for a webinar to discuss issues raised by the Cuozzo case. Participating in the webcast is free but does require registration. Topics to be discussed include:

• Role of the PTAB and its relationship to the courts

• Use of post-grant proceedings such as inter partes review

• Vulnerability of patents in post-grant proceedings

• Implications of Cuozzo for patent practice and technology commercialization

About the presenter:

Dr. Ghosh serves as the new director of the Technology Commercialization Law Program. He holds a Ph.D. in Economics from University of Michigan and a J.D. from Stanford Law School. He is a member of the California bar and the US Supreme Court bar. He has taught many courses focused on the development and commercialization of technology.

April 13, 2016 | Permalink | Comments (0)

The Role of Non-Coordinated Effects in the Assessment of Minority Shareholdings

Frank P. Maier-Rigaud, IESEG School of Management (LEM-CNRS), Department of Economics and Quantitative Methods; NERA Economic Consulting, Ulrich Schwalbe, University of Hohenheim, and Felix Forster, NERA Economic Consulting examine The Role of Non-Coordinated Effects in the Assessment of Minority Shareholdings.

ABSTRACT: Following the standard (acquisition of control) merger logic, merger control regimes have typically treated horizontal minority shareholdings as a matter of coordinated effects. As in a standard horizontal merger case, the transaction implies full control of the target firm and joint profit maximization post-merger, it is easy to see the acquisition of minority shares being analysed as a matter of information flows and influencing conduct. In that sense, competitive effects of shareholdings are not systematically different from a standard merger, although the effects of the shareholding are attenuated by the more limited degree of influence exerted by the minority shareholder. This has led to a focus on the acquired rights of minority shareholders in an effort to gauge the actual influence that such a shareholder may exert on the company. In other words, the focus has been on coordinated effects resulting from the influence of the minority shareholder to the detriment of a non-coordinated effects analysis. This article focusses on the non-coordinated effects of minority shareholdings in oligopolistic markets. It is demonstrated that minority shareholdings even when they fall below the usual thresholds can lead to a significant impediment of effective competition (SIEC) on a purely non-coordinated basis. This is particularly likely in a market with differentiated products, when a firm partially acquires shareholdings in its closest competitor and when the next best alternative products are only weak substitutes. While share thresholds may be a decent rough proxy for coordinated effects to the extent that they convey different degrees of direct influence, it is shown that such thresholds are much less meaningful in the context of non-coordinated effects as general market conditions and in particular closeness of competition, which is independent of the magnitude of the shares, becomes much more important.



April 13, 2016 | Permalink | Comments (0)

The First Bid Rigging Case in Slovakia after Years of Judicial Disputes

Ondrej Blazo, Univerzita Komenského v Bratislave and Silvia Sramelova, Antimonopoly Office of the Slovak Republic explore The First Bid Rigging Case in Slovakia after Years of Judicial Disputes.

ABSTRACT: In 2006, the Antimonopoly Office of the Slovak Republic (hereafter, AMO) decided its first bid-rigging case concerning a cartel between six construction companies. According to the cartel decision, the six construction companies infringed the Act on the Protection of Competition as well as Article 101 TFEU.

April 13, 2016 | Permalink | Comments (0)

Tuesday, April 12, 2016

FTC Workshop Announcement: Something New Under the Sun: Competition and Consumer Protection Issues in Solar Power June 21, 2016

The FTC Office of Policy Planning (easily the most effective 1% of the FTC's total budget every year in terms of pro-competitive impact across administrations) is hosting

Something New Under the Sun: Competition and Consumer Protection Issues in Solar Power on June 21, 2016.

From the press release:

The Federal Trade Commission will hold a one-day public workshop on June 21, 2016 to explore competition and consumer protection issues that may arise when consumers generate their own electric power by installing home solar photovoltaic (PV) panels – a practice known as solar distributed generation (DG). The workshop, which will consist of presentations and roundtable discussions, will focus on the following topics:

  1. The current state of the solar power industry, and anticipated technological advancements;
  2. Current regulatory approaches to compensating consumers for the power they generate, with a particular focus on net metering laws and regulations;
  3. Competition among solar DG firms, between solar DG firms and regulated utilities, and between solar generation and other power generation technologies; and
  4. Consumer protection issues, including how consumers get the information necessary to decide whether to install solar PV panels.


The FTC will be accepting public comments through August 22, 2016. See below for more information. See the announcement notice [PDF] for a list of questions that the FTC would like comments on.

April 12, 2016 | Permalink | Comments (0)

A Departure from a Formalistic Approach in the Assessment of Restrictive Vertical Agreements in Favour of a More Economics-Based Approach? Case Comment to the Supreme Court Judgment of 15 May 2014 (Ref. No. III SK 44/13)

Małgorzata Sieradzka, Lazarski University offers A Departure from a Formalistic Approach in the Assessment of Restrictive Vertical Agreements in Favour of a More Economics-Based Approach? Case Comment to the Supreme Court Judgment of 15 May 2014 (Ref. No. III SK 44/13).

ABSTRACT: The discussed judgment of the Supreme Court is in line with its other jurisprudence with respect to the classification of price agreements as practices restricting competition under Article 6(1)(1) of the Competition and Consumer Protection Act 1 of 16 February 2007 (hereafter: Competition Act 2007). Despite the firm stance taken on the assessment of price agreements by the UOKiK President, the Supreme Court once again emphasizes the necessity for an economics-based approach 2. In the opinion of the Supreme Court, not every vertical price-fixing agreement results in a threat to the public interest. A departure from a rigorous application of the ban on competition restricting practices (Article 6(1)(1) of Competition Act 2007) to all types of vertical agreements has an impact on the application of legal provisions governing the imposition of financial penalties. Considering the optional nature of fines, the question arises about their purpose in cases where the public interest has not been jeopardized.



April 12, 2016 | Permalink | Comments (0)

European Competition Law Annual 2013

Philip Lowe (CMA), Mel Marquis (EUI), and Giorgio Monti (EUI) have produced European Competition Law Annual 2013.

ABSTRACT: This volume contains papers presented at the 18th Annual EU Competition Law and Policy Workshop. The papers examine means of balancing effective (public) competition law enforcement and the requirements of legitimate and accountable exercise of public authority. The authors address the design and performance of various enforcement tools at European and national levels, including sanctions and remedies but also distinctive instruments under Regulation 1/2003 (eg commitment procedures) and under the Treaty on the Functioning of the European Union (Article 106(3) when used as a basis for infringement procedures). From the perspective of legitimacy, reflections focus on the implications of fundamental rights standards and general principles of law for the EU’s complex and quasi-federal enforcement architecture. Issues that may sometimes escape judicial scrutiny are also discussed, such as how agencies prioritise their activities, and how investigation responsibilities are distributed within the European Competition Network. Effectiveness and legitimacy are then considered in the context of public enforcement cooperation beyond the EU, where international organisations, regional cooperation and a range of formal and informal modes of governance prevail.


April 12, 2016 | Permalink | Comments (0)

Competition Laws of the Russian Federation: Introduction to the Legislative Framework Governing Market Protection

Trygve Ben Holland, University for Public Administration offers Competition Laws of the Russian Federation: Introduction to the Legislative Framework Governing Market Protection.

ABSTRACT: The competition laws of the Russian Federation have been re-drafted and amended several times. Law No 135-FZ of 2006 forms the basis of the modern laws governing competition issues in the Russian Federation. Present essay introduced to the rules on market protection at all levels (anti-trust, dominant market position, state aid, public procurement, and inter.institutional provisions).



April 12, 2016 | Permalink | Comments (0)

Market Power and Joint Ownership: Evidence from Nuclear Plants in Sweden

Erik Lundin, Research Institute of Industrial Economics (IFN); Stockholm School of Economics provides Market Power and Joint Ownership: Evidence from Nuclear Plants in Sweden.

ABSTRACT: This paper presents an empirical test of the anticompetitive effects of joint ownership, by examining the operation of three nuclear plants in Sweden. Since maintenance is the main conduit explaining the variation in output, I formulate a model of intertemporal choice in which firms choose how to allocate a given amount of maintenance within each year. Using data on production and bidding curves on the day-ahead market, I test the model against data given three behavioral assumptions: Unilateral profit maximization; joint profit maximization; and a social planner. Modeling for joint profit maximization best matches data, indicating that joint ownership has facilitated coordination of maintenance decisions. Terminating the joint ownership and modeling for unilateral profit maximization would lead to a 5 percent decrease in prices and a 6 percent decrease in system production costs. I identify positive supply shocks in the form of inflow to the hydro power reservoirs as important determinants of the incentives to exercise market power. Therefore, the mechanisms discussed in this paper should be of relevance also in other electricity markets where the share of intermittent production is increasing. As a motivation for the structural exercise, I use a difference-in-differences estimator to identify a shift in the allocation of maintenance towards the winter season (when demand and prices are peaking) at the time of the introduction of the joint ownership. This is in line with the results from the structural model, as the ability to influence the price is also higher during the winter season.



April 12, 2016 | Permalink | Comments (0)

Monday, April 11, 2016

The Price Effects of Cross-Market Hospital Mergers

Leemore Dafny (Northwestern), Kate Ho (Columbia), Robin S. Lee (Harvard) examine The Price Effects of Cross-Market Hospital Mergers.

ABSTRACT: So-called "horizontal mergers" of hospitals in the same geographic market have garnered significant attention from researchers and regulators alike. However, much of the recent hospital industry consolidation spans multiple markets serving distinct patient populations. We show that such combinations can reduce competition among the merging providers for inclusion in insurers' networks of providers, leading to higher prices. The result derives from the presence of "common customers” (i.e. purchasers of insurance plans) who value both providers, as well as (one or more) "common insurers" with which price and network status is negotiated. We test our theoretical predictions using two samples of cross-market hospital mergers, focusing exclusively on hospitals that are bystanders rather than the likely drivers of the transactions in order to address concerns about the endogeneity of merger activity. We find that hospitals gaining system members in-state (but not in the same geographic market) experience price increases of 6-10 percent relative to control hospitals, while hospitals gaining system members out-of-state exhibit no statistically significant changes in price. The former group are likelier to share common customers and insurers. This effect remains sizeable even when the merging parties are located further than 90 minutes apart. The results suggest that cross-market, within-state hospital mergers appear to increase hospital systems' leverage when bargaining with insurers.


April 11, 2016 | Permalink | Comments (0)

Monolithic Copyright, Market Power and Market Definition - The Impact of Competition Law on the Licensing of Copyrighted Content

Martin Senftleben, VU University Amsterdam - Faculty of Law examines Monolithic Copyright, Market Power and Market Definition - The Impact of Competition Law on the Licensing of Copyrighted Content.

ABSTRACT: A monolith can be described as a geological feature “consisting of a single massive stone or rock, such as some mountains.” In architecture, it may refer to “a single large piece of rock placed as, or within, a monument or building.” A literary or artistic work may constitute a monolith in its own right. As a single large piece of information, it may stand out from works of the same category. Similarly, collections of works may become so dense that they resemble a single massive information monolith. In both cases, the market power resulting from copyright ownership may be considerable. Hence, the question arises whether competition law can serve as a vehicle to ensure reasonable access conditions and prevent an artificial supply shortfall.



April 11, 2016 | Permalink | Comments (0)

University of Florida Competition Policy Initiative Launched

See here.

April 11, 2016 | Permalink | Comments (0)

Hovenkamp Lecture at the University of Florida: Google case bad, Apple case good

The legendary Herb Hovenkamp gave a talk on Friday at the University of Florida on antitrust and innovation for our University of Florida Law Review's Dunwoody lecture.  This link has his entire presentation.

Hovenkamp said that the European Commission's potential remedy against Google was misguided and would turn Google into a public utility.  He said that high market share should not be confused with market power because switching costs are low.  On DOJ's e-books case against Apple, Hovenkamp argued that the case was correctly decided as a matter of law and policy.

April 11, 2016 | Permalink | Comments (0)

The Dynamics of Leniency Application and Cartel Enforcement Spillovers

Jun Zhou Zhejiang, Wanli University; Tilburg Law and Economics Center (TILEC); Bruegel explores The Dynamics of Leniency Application and Cartel Enforcement Spillovers.

ABSTRACT: We study the timing of leniency applications using a novel application of multi-spell discrete-time survival analysis for a sample of cartels that were prosecuted by the European Commission (EC) between 1996 and 2014. The start of an EC investigation does not affect the rate at which conspirators apply for leniency in the market investigated but increases the rate of application in separate markets in which a conspirator in the investigated market also engaged in collusion. Our results shed light on enforcement efforts against cartels and other forms of conspiracy.



April 11, 2016 | Permalink | Comments (0)

Rethinking European Competition Law: From a Consumer Welfare to a Capability Approach

Rutger J.G. Claassen, Utrecht University Department of Philosophy and Anna Gerbrandy, Europa Institute Utrecht University School of Law are Rethinking European Competition Law: From a Consumer Welfare to a Capability Approach.

ABSTRACT: European competition law is predominantly focused on maximizing consumer welfare. This overarching purpose (which is supported by economic theory) leaves little place for safeguarding non-economic values, such as sustainability. This makes it difficult to allow cooperation between companies to contribute to such non-economic goals. In this article we explore whether it is possible to establish a different normative framework, in which such goals can be taken into account and can be balanced against the economic goal of consumer welfare. To answer this question, we take four steps. First, we discuss current EU competition law and the difficulty of fitting non-economic goals into the dominant interpretation of that law. Second, we propose a different normative framework, based on the capability approach advanced by philosopher Martha Nussbaum and economist Amartya Sen. Third, we argue that there are good principled reasons to incorporate non-economic goals into competition law. Fourth, we apply both the capability approach and the consumer welfare approach to three (illustrative) cases in which non-economic goals are at stake. Overall, we argue that the capability framework, although not without difficulties of its own, may provide a more legitimate theory for the interpretation of European competition law.



April 11, 2016 | Permalink | Comments (0)