Antitrust & Competition Policy Blog

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

Wednesday, June 1, 2016

Frucona Kosice: The Application of the ‘Private Creditor Test’ Under the General Court's Scrutiny

Ulrich Soltesz, Gleiss Lutz describes Frucona Kosice: The Application of the ‘Private Creditor Test’ Under the General Court's Scrutiny.

ABSTRACT: On 16 March 2016, the General Court annulled a decision by the Commission finding that the Commission misapplied the ‘private creditor’ test in its assessment of a 2004 tax debt settlement (‘arrangement’) between Frucona Kosice and the Slovak tax authorities.

 

June 1, 2016 | Permalink | Comments (0)

Chinese Competition Law—The Year 2015 in Review

Adrian Emch, Hogan Lovells and Jiaming Zhang, Hogan Lovells offer Chinese Competition Law—The Year 2015 in Review.

ABSTRACT: For Chinese competition law, the year 2015 was a "mixed bag" of developments characterized by both change and continuity.

In terms of change, the pace in law enforcement seems to have slowed. After the landmark Qualcomm decision at the beginning of the year, China's three competition authorities took somewhat of a "lower profile" in 2015. Instead, they stepped up investigations against state-owned enterprises and government-mandated anti-competitive conduct, and expanded their normative efforts by drafting competition law implementation guidelines.

In terms of continuity, certain developments in 2015 reflect consistency with prior enforcement trends and policies. For example, a clear link with pre-2015 developments was that high technology and intellectual property rights continued to be enforcement targets. Continuity was also visible in enforcement actions in the automobile industry and against international cartel cases.

Going into 2016 and beyond, we would expect that the Chinese competition authorities finalize their guidelines drafting projects and go back full-steam to case handling. Hence, in retrospect, 2015 may be viewed as a year of transition for Chinese competition law.

June 1, 2016 | Permalink | Comments (0)

Tuesday, May 31, 2016

Patent Settlements in the Pharmaceutical Industry: What Can We Learn from Economic Analysis?

Jonas Severin Frank, Philipps University Marburg - Faculty of Business Administration and Economics and Wolfgang Kerber, Philipps University Marburg - School of Business Administration and Economics discuss Patent Settlements in the Pharmaceutical Industry: What Can We Learn from Economic Analysis?

ABSTRACT: Patent settlements between originator and generic firms in the pharmaceutical industry have been challenged by antitrust and competition authorities in the U.S. and the EU. Particularly Settlements with large "reverse payments" to generic firms raise the concern of collusive behaviour for protecting weak patents and delaying price competition through generic entry and therefore harming consumers. However, it is still heavily disputed under what conditions such patent settlements are anti-competitive and violate antitrust rules. This article scrutinizes critically what economic analysis has so far contributed to our knowledge about the effects of these patent settlements and the possible rules for their antitrust treatment. An important claim of this paper is that the problem of patent settlements can only be understood, if we analyze it not only from a narrow antitrust perspective but also take into account its deep interrelationship with the problems (and the economics) of the patent system. Therefore we identify three different channels of effects, how patent settlements can influence consumer welfare: (1) price effects, (2) innovation incentive effects, and (3) effects via the incentives to challenge weak patents. The paper critically analyzes the existing economic studies and identifies a number of Research gaps, especially also in regard to trade offs between different effects. It also suggests that policy Solutions for these patent settlements should also be sought in combination with patent law solutions.

 

 

May 31, 2016 | Permalink | Comments (0)

New York State Bar Association’s Antitrust Section -- Why Antitrust Program Thursday, June 16, 2016 @ Wilkie Farr and open bar at Tonic

Please Join the NYSBA Antitrust Section for:

An Opportunity for Law Students and Junior Lawyers to Discuss with Practitioners Why They Chose To Practice Antitrust Law (and Why You Should Too!)

The New York State Bar Association’s Antitrust Section presents its annual program for law students and young lawyers interested in antitrust law on Thursday, June 16, 2016. This program offers a great opportunity to hear perspectives on this dynamic and challenging area of the law from practitioners who graduated in the last ten years, including attorneys from law firms and antitrust enforcement agencies. Panelists will discuss what led them to antitrust law; provide details on the types of cases, transactions or other antitrust work they have handled; and offer insight into optimal positioning to capture a job in the field. A portion of the program will be allotted for questions and comments.

The program will take place from 4:30 to 6:00 p.m. at the law offices of Willkie Farr & Gallagher LLP at 787 Seventh Avenue. Following the panel, all attendees are cordially invited to a networking event with open bar from 6-9:00 p.m. at Tonic NYC, located at 727 Seventh Avenue. All law students and junior attorneys interested in the possibility of pursuing antitrust law as a career are encouraged to attend this informative and worthwhile event. RSVPs are requested by email to Lori Pearson, at lpearson@willkie.com. Please include in your RSVP your law school.

May 31, 2016 | Permalink | Comments (0)

Compliance and Individual Sanctions for Competition Law Infringements

Florian Wagner-von Papp, University College London Faculty of Laws provides insight into Compliance and Individual Sanctions for Competition Law Infringements.

ABSTRACT: This chapter describes the status quo of criminal enforcement in selected Member States of the European Union and discusses the desirability of criminal enforcement of competition law from a policy perspective. It concludes that at least in Germany the introduction of a criminal offence for horizontal hardcore cartels beyond the existing bid-rigging offence would be desirable, provided an automatic criminal immunity provision for immunity recipients under a leniency programme within the European Competition Network is introduced and the Bundeskartellamt is involved in the criminal prosecution. The introduction of effective criminal enforcement would make compliance training both more important and more effective. Criminalisation makes compliance more important because compliance training helps to spread knowledge about the criminal offence — and only a known threat can deter. Criminalisation makes compliance training more effective because the participants of compliance sessions are motivated to pay attention to avoid criminal liability.

 

 

May 31, 2016 | Permalink | Comments (0)

Competition at the Grid Edge: Innovation and Antitrust Law in the Electricity Sector

Michael W. Wara, Stanford Law School explores Competition at the Grid Edge: Innovation and Antitrust Law in the Electricity Sector.

ABSTRACT: The advent of distributed energy technologies, most notably, distributed solar energy, poses a competitive threat to the electric utility industry. Here I provide a comprehensive assessment of the U.S. electric utility industry's regulatory response to this threat over the past three years. Electric utilities across the United States are asking their Public Utility Commissions for changes in rate structures that, depending on their details, may either reduce cross-subsidies to distributed energy resources or may be erecting much higher barriers to entry for innovative energy technologies and business models. Usually, a utility's actions are exempt from antitrust scrutiny under the State Action Immunity and Filed Rate doctrines. I argue that in the case of the utility response to distributed energy, this may not be the case. Because the risk exists, both electric utilities and their overseeing commissions need to make much greater efforts to evaluate the competitive impacts of changes in rates - a consideration that is largely absent from the proceedings to date. By doing so, they will both ensure that society’s interest in a cleaner, more innovative, more productive energy sector is protected and at the same time minimize their own risks of liability under the antitrust statutes.

 

 

May 31, 2016 | Permalink | Comments (0)

Leniency, Collusion, Corruption, and Whistleblowing

Reinaldo Luz, CAPES, Coordenacao de Aperfeiçoamento de Pessoal de Nível Superior; Federal University of Minas Gerais (UFMG) - Faculdade de Direito and Giancarlo Spagnolo, Stockholm School of Economics (SITE); Centre for Economic Policy Research (CEPR); University of Rome 'Tor Vergata'; EIEF have an interesting paper on Leniency, Collusion, Corruption, and Whistleblowing.

Abstract: Leniency policies offering immunity to the first cartel member that blows the whistle and self-reports to the antitrust authority have become the main instrument in the fight against price-fixing conspiracies around the world. In public procurement markets, however, bid-rigging schemes are often accompanied by corruption of public officials. In the absence of coordinated forms of leniency (or rewards) for unveiling corruption, a policy offering immunity from antitrust sanctions may not be sufficient to encourage wrongdoers to blow the whistle, as the leniency recipient will then be exposed to the risk of conviction for corruption. This paper assesses the extent of this problem by describing and discussing the antitrust and anti-corruption provisions present in a few selected countries, from both common law and civil law regimes. For each of these countries, we try to evaluate whether the legal system presents any solution to limiting the risk that legal provisions against corruption undermine the effectiveness of leniency programs against bid rigging in public procurement. Legal harmonization, coordination and co-operation on procedural and substantive issues, and inter and intra jurisdictions, seem essential to solve this problem. Given the size of public procurement markets and their propensity for cartelization, specific improvements in legislation appear necessary in all the countries considered. Explicitly introducing leniency policies for corruption, as has been recently done in Brazil and Mexico, is only a first step. The antitrust experience has taught us these policies must be carefully designed and sufficiently generous, they should not be discretional, and they must be consistently implemented to achieve their goals of inducing whistleblowing. Hence, the road ahead appears a long one. To increase the effectiveness of leniency in multiple offense cases, we suggest, besides extending automatic leniency to individual criminal sanctions, the creation of a ‘one-stop-point’ enabling firms and individuals to report different crimes simultaneously and receive leniency for all of them at once if they are entitled to it. As long as individual criminal charges are not covered by a coordinated and non-discretional leniency program, there is little hope that these provision will induce any improvement in the fight against corrupting cartels. A more effective way to fight such cartels may then be offering Qui Tam rewards to non-accomplice whistleblowers, as is already done with apparent success by several law enforcement agencies in the US.

May 31, 2016 | Permalink | Comments (0)

Monday, May 30, 2016

FRAND in India: Emerging Developments

Kirti Gupta, Qualcomm provides FRAND in India: Emerging Developments.

ABSTRACT: There is an ongoing debate about the Intellectual Property Rights (“IPR”) policies of major Standard Setting Organizations (“SSOs”) and how the licensing disputes related to the valuation of IPR related to standards, or the Standard Essential Patents (“SEPs”) should be resolved. The licensing commitments, often based on Fair Reasonable and Non-Discriminatory (“FRAND”) terms, have been the focal point of various discussions and questions abound about their purpose, interpretation and whether or not they need further clarification. At this time of intense global debate, IPR policies related to the newly formed Indian telecommunications standards SSO are in formation, as is the jurisprudence on the FRAND licensing practices — both in the Indian courts and the Indian antitrust authority — the Competition Commission of India (CCI). This article connects the underlying issues of the global dialogue on SSO IPR policies and disputers related to licensing of SEPs to the Indian jurisprudence in formation. What policies India implements and how the jurisprudence evolves is of key importance towards the long term prospects of the wireless and telecommunications technologies that heavily rely on the creation and use of common technology standards.

 

 

May 30, 2016 | Permalink | Comments (0)

The Role of EU Competition Law in Tackling Abuse of Regulatory Power by Sports Associations

Ben Van Rompuy, T.M.C. Asser Instituut; Free University of Brussels (VUB) - iMinds-SMIT examines The Role of EU Competition Law in Tackling Abuse of Regulatory Power by Sports Associations.

ABSTRACT: In his opinion in Bosman, Advocate General Lenz called attention to the function of EU competition law to control the private regulatory power of international sports associations. The true potential of EU competition law to protect athletes and other parties against regulatory overreach by sports associations, however, remains underexplored. This article examines the prospect of an increased use of EU competition law to challenge restrictive rules or abusive conduct and, consequently, to exert influence on the governance structure and institutional features of sports associations. First, it generally assesses the extent to which the rule-making activity of sports associations relating to the organization of sport satisfies the requirements for the application of Articles 101 and 102 TFEU. It will highlight that the analytical framework gives sufficient flexibility to take into account the specific characteristics of sport. Second, to practically illustrate the nature and function of EU competition law enforcement, it analyses European and national decisional practice regarding conflicts of interest between the role of sports associations as the regulator of their sport and their commercial interests in the events that they promote and organize.

 

 

May 30, 2016 | Permalink | Comments (0)

Airport Slots: Can Regulation Be Coordinated with Competiton?

Cathal Guiomard, DCU Business School, Dublin, Ireland asks Airport Slots: Can Regulation Be Coordinated with Competiton?

ABSTRACT: Competition is a dynamic process in which firms vie for advantage; regulation is typically a set of static rules. On the face of it, there is a potentially serious conflict between the two. This paper reviews the EU's regulations dealing with administrative slot allocation, drawing in particular on the application of those rules at Dublin airport. It suggests the best way to promote competition in aviation is to avoid choosing an administrative basis of slot allocation, especially when a new airport is being developed, opting instead for market-based mechanisms whether slot trading or runway charges differentiation according to scarcity.

 

 

May 30, 2016 | Permalink | Comments (0)

Class Warfare: Why Antitrust Class Actions are Essential for Compensation and Deterrence

Robert Lande, U Baltimore explores Class Warfare: Why Antitrust Class Actions are Essential for Compensation and Deterrence.

ABSTRACT: Recent empirical studies demonstrate five reasons why antitrust class action cases are essential: (1) class actions are virtually the only way for most victims of antitrust violations to receive compensation; (2) most successful class actions involve collusion that was anticompetitive; (3) class victims’ compensation has been modest, generally less than their damages; (4) class actions deter significant amounts of collusion and other anticompetitive behavior; and (5) anticompetitive collusion is underdeterred, a problem that would be exacerbated without class actions. Unfortunately, a number of court decisions have undermined class action cases, thus preventing much effective and important antitrust enforcement.

May 30, 2016 | Permalink | Comments (0)

Friday, May 27, 2016

Modifying Merger Consent Decrees: An Economist Plot to Improve Merger Enforcement Policy

Steve Salop, Georgetown discusses Modifying Merger Consent Decrees: An Economist Plot to Improve Merger Enforcement Policy.

ABSTRACT: This short article analyzes a proposal that merger consent decrees should include a review and modification provision that would give the agency the ability to petition the court to order further relief if the consent decree fails to preserve or restore competition and protect consumer welfare in a reasonable period of time after the merger is consummated. This review and modification process would help to protect competition and consumers from insufficient, poorly designed or otherwise ineffective consent decrees. It would place more of the risk of failure on the merging parties who claim to the agency that the merger will not harm competition and that the remedy is sufficient to cure the agency’s concerns. The merging firms then would be incentivized to provide more efficient and effective remedies at the HSR stage rather than bear the risk of potentially more costly remedies, disgorgement and other relief later on. This allocation of risk to the merged firm also would help to deter the post-merger exercise of market power achieved or enhanced by the merger. For the same reasons, it also would increase the deterrence of anticompetitive mergers. The article analyzes the structure of the proposal, its goals and benefits, potential relief provisions if modification is required, and potential criticisms.

 

 

May 27, 2016 | Permalink | Comments (0)

The Role of EU Competition Law in Tackling Abuse of Regulatory Power by Sports Associations

Ben Van Rompuy, T.M.C. Asser Instituut; Free University of Brussels (VUB) - iMinds-SMIT analyzes The Role of EU Competition Law in Tackling Abuse of Regulatory Power by Sports Associations.

ABSTRACT: In his opinion in Bosman, Advocate General Lenz called attention to the function of EU competition law to control the private regulatory power of international sports associations. The true potential of EU competition law to protect athletes and other parties against regulatory overreach by sports associations, however, remains underexplored. This article examines the prospect of an increased use of EU competition law to challenge restrictive rules or abusive conduct and, consequently, to exert influence on the governance structure and institutional features of sports associations. First, it generally assesses the extent to which the rule-making activity of sports associations relating to the organization of sport satisfies the requirements for the application of Articles 101 and 102 TFEU. It will highlight that the analytical framework gives sufficient flexibility to take into account the specific characteristics of sport. Second, to practically illustrate the nature and function of EU competition law enforcement, it analyses European and national decisional practice regarding conflicts of interest between the role of sports associations as the regulator of their sport and their commercial interests in the events that they promote and organize.

 

 

May 27, 2016 | Permalink | Comments (0)

Crowding the Market: Is There Room for Antitrust in Market Manipulation Cases?

Jacob Hamburger, George Mason asks Crowding the Market: Is There Room for Antitrust in Market Manipulation Cases?

ABSTRACT: This article analyses the current debate surrounding the role of antitrust in recent market manipulation matters domestically. Despite the anti-competitive nature of this activity, there are several difficulties and inconsistencies that must be addressed. In particular, a stronger definition for market manipulation that captures a wide array of activity must be adopted. Next, it is also important to have a general understanding of the different laws and regulations used to combat market manipulation and how they have been applied in recent cases. This article also recommends an antitrust-based framework for analyzing current market manipulation cases like LIBOR and FX. Finally, this article addresses some of the difficulties with applying antitrust law, including regulatory overlap and the pushback against private enforcement efforts.

 

 

May 27, 2016 | Permalink | Comments (0)

Thursday, May 26, 2016

The Centralization of EU Competition Policy: Historical Institutionalist Dynamics from Cartel Monitoring to Merger Control (1956–91)

Laurent Warlouzet, Artois University describes The Centralization of EU Competition Policy: Historical Institutionalist Dynamics from Cartel Monitoring to Merger Control (1956–91).

ABSTRACT: The contemporary strength of EU competition policy does not stem naturally and mechanically from the Treaty of Rome, nor is it only a consequence of the spread of ‘neoliberal’ ideas or the single market programme. It is also the product of decades of dynamics underlined by historical institutionalism, which allowed the Commission to secure decisive powers, despite the unwillingness of some of the most powerful Member States. In this regard, the two most important cornerstones were Regulations 17/62 on cartels and 4064/89 on mergers. The Commission benefited from the unintended consequences of decisions taken in the Council and from the path dependencies created by Regulation 17/62. It progressively developed a centralized institutional framework with itself at the centre.

May 26, 2016 | Permalink | Comments (0)

Buying Monopoly: Antitrust Limits on Damages for Externally Acquired Patents

Erik Hovenkamp, Northwestern University, Department of Economics and Herbert J. Hovenkamp, University of Iowa - College of Law explain Buying Monopoly: Antitrust Limits on Damages for Externally Acquired Patents.

ABSTRACT: The “monopoly” authorized by the Patent Act refers to the exclusionary power of individual patents. That is not the same thing as the acquisition of individual patent rights into portfolios that dominate a market, something that the Patent Act never justifies and that the antitrust laws rightfully prohibit.

Most patent assignments are procompetitive and serve to promote the efficient commercialization of patented inventions. However, patent acquisitions may also be used to combine substitute patents from external patentees, giving the acquirer an unearned monopoly position in the relevant technology market. A producer requires only one of the substitutes, but by acquiring the combination it can impede product market rivals by limiting their access to important technological inputs. Similarly, a patent assertion entity may acquire substitute patents to eliminate inter-licensor competition, enabling it to charge supra-competitive license fees, much like a merger or cartel. For example, by acquiring two or more substitute patents that collectively dominate a market a PAE can effectively monopolize the technology for that market. Such anticompetitive practices are regularly condemned in conventional product contexts, but the courts have not yet applied the same antitrust logic to patent markets. And they passively encourage anticompetitive patent acquisitions by awarding large damages when such patents are infringed.

We propose that infringement damages for an externally acquired patent be denied if the acquisition served materially to expand or perpetuate the plaintiff’s dominant position in the relevant technology market. By weakening enforcement, this limits the patent holder’s ability to use such acquisitions to anticompetitive ends. We do not suggest that a dominant patent holder should be prohibited from securing external patent rights in the relevant technology market, but simply that it should obtain them through nonexclusive licensing, not transactions that restrict third party access. This is as valuable to patent policy as it is to antitrust, for it will tend to increase innovation by discouraging systematic monopoly in technology markets.

May 26, 2016 | Permalink | Comments (0)

CCP 12th Annual Conference 2016 COMPETITION POLICY IN FINANCIAL MARKETS

CCP 12th Annual Conference 2016
COMPETITION POLICY IN FINANCIAL MARKETS

About the conference...

 
When: 9-10 June 2016
Where: OPEN, 20 Bank Plain, Norwich

With the promotion of competition being an increasingly key element of financial services regulation, this two day conference will focus on the challenges and complexities of formulating competition policy across a diverse set of financial services markets, from banking, pensions and insurance to derivatives and currency exchange.
 
The challenges facing regulators and competition authorities in these markets are complicated by the existence of strong behavioural biases amongst market participants, an increasing reliance on digital systems of trade and information exchange, and systemic risks within this most important of sectors.
 
The conference will explore these themes from a variety of perspectives (ex ante regulation, corporate compliance, core antitrust law, criminal law, behavioural insights and institutional design), drawing on a number of disciplines including Economics, Law, Business Science and Political Science. Whilst the focus is on financial services, many of the topics addressed will have wider application across other sectors.

With over 90 delegates already registered this event is nearing capacity - book now to avoid disappointment!


CLICK HERE TO REGISTER
 
Speakers include...
Alasdair Brown
, University of East Anglia
Lee Callaghan, Aviva
Alison Cottrell, Banking Standards Board
Paul Fisher, Prudential Regulatory Authority & Bank of England
Bert Foer, American Antitrust Institute
Brad Hooker, University of Reading
Stefan Hunt, Financial Conduct Authority
Scott James, King's College London
David Little, Cleary Gottlieb Steen & Hamilton LLP
Bruce Lyons, University of East Anglia
Hannah Nixon, Payment Systems Regulator
Maarten Pieter Schinkel, University of Amsterdam
Alasdair Smith, Competition and Markets Authority
Steve Smith, Lloyds Banking Group
Mary Starks, Financial Conduct Authority
Andreas Stephan, UEA Law School
John Thanassoulis, Warwick Business School
Xavier Vives, IESE Business School
Richard Whish QC (Hon), King’s College London
Programme...
CCP 12th ANNUAL CONFERENCE
FULL PROGRAMME
 
For more information please contact us on...
E: ccp@uea.ac.uk     
T: +44 (0) 1603 593715    
W: competitionpolicy.ac.uk

May 26, 2016 | Permalink | Comments (0)

Some Inconvenient Truths About Antitrust Law and Economics

Jeffrey Lynch Harrison, University of Florida - Levin College of Law offers Some Inconvenient Truths About Antitrust Law and Economics.

ABSTRACT: For years those teaching and writing about antitrust law have stressed three basic goals -- consumer surplus, allocative efficiency, and productive efficiency. Rarely, if ever, are the limitations of those goals revealed to readers. For example, in determining costs of production, external costs are not accounted for. This means that the firm most able to externalize its cost by one means or another will appear to be the more efficient and will be given broad leeway as far as avoiding liability. The Essay discusses this and other problems inherent in the goals set out for antitrust law.

 

 

May 26, 2016 | Permalink | Comments (0)

Market Power and Inequality: The Antitrust Counterrevolution and its Discontents

Lina Khan and Sandeep Vaheesan are upset about Market Power and Inequality: The Antitrust Counterrevolution and its Discontents.

ABSTRACT: One unexplored theme in the debate around economic inequality is the role of monopoly and oligopoly power. Despite the relative lack of attention to this topic, there is sound reason to believe that pervasive market power in the economy has contributed to extreme economic disparity in the United States today. Given the affluence of shareholders and executives compared to consumers in most markets as well as the power dynamics inside large corporations, market power, in general, can be expected to have significant regressive distributional effects. Case studies of anticompetitive practices and uncompetitive market structures in several key industries illustrate how large corporations have come to dominate the U.S. economy. On top of their market power, monopolistic and oligopolistic companies translate their economic power into political influence, often successfully pushing for laws and regulation that further enhance their clout and transfer wealth upwards. Pervasive market power in the economy, which appears to be contributing to economic inequality, is the result of an intellectual and political revolution in the 1980s that dramatically reoriented and narrowed the goals of antitrust law. Importantly, this counterrevolution can be reversed. We present a vision of antitrust that accords with what Congress intended in enacting “this comprehensive charter of economic liberty” and offer specific policy prescriptions.

 

 

May 26, 2016 | Permalink | Comments (0)

Wednesday, May 25, 2016

European Commission appoints Tommaso Valletti as new Chief Economist of DG Competition

Congratulations to Imperial College Business School Professor Tommaso Valletti who was just appointed as new DG Competition Chief Economist.  According to the press release:

The European Commission has appointed Professor Tommaso Valletti as the new Chief Economist of the Directorate General for Competition. Professor Valletti , who is an Italian national, currently holds teaching positions at both Imperial College Business School and at the University of Rome "Tor Vergata". He is also an Academic Director at the Centre for Regulation in Europe (CERRE) in Brussels, sits in the panel of academic advisors of OFCOM, the UK’s communications regulator and is a member of DG Competition’s Economic Advisory Group on Competition Policy. He will take up his duties as the fifth competition Chief Economist on 1 September 2016. The role entails assisting in the evaluation of the economic impact of the Commission’s actions in the competition field and providing independent guidance on methodological issues of economics and econometrics in the application of EU competition rules.

Valletti is a serious economist.  His recent papers include:

Valletti T, Ahlfeldt G, Koutroumpis P, Speed 2.0: Evaluating access to universal digital highways, Journal of the European Economic Association, ISSN: 1542-4774

This paper shows that having access to a fast Internet connection is an important determinant ofcapitalization effects in property markets. Our empirical strategy combines a boundarydiscontinuity design with controls for time-invariant effects and arbitrary macro-economicshocks at a very local level to identify the causal effect of broadband speed on property pricesfrom variation that is plausibly exogenous. Applying this strategy to a micro data set fromEngland between 1995 and 2010 we find a significantly positive effect, but diminishing returnsto speed. Our results imply that disconnecting an average property from a high-speed firstgenerationbroadband connection (offering Internet speed up to 8 Mbit/s) would depreciate itsvalue by 2.8%. In contrast, upgrading such a property to a faster connection (offering speeds upto 24 Mbit/s) would increase its value by no more than 1%. We decompose this effect by incomeand urbanization, finding considerable heterogeneity. These estimates are used to evaluateproposed plans to deliver fast broadband universally. We find that increasing speed andconnecting unserved households passes a cost-benefit test in urban and some suburban areas,while the case for universal delivery in rural areas is not as strong.

JOURNAL ARTICLE

Reggiani C, Valletti T, 2016, Net neutrality and innovation at the core and at the edge, International Journal of Industrial Organization, Vol: 45, Pages: 16-27, ISSN: 0167-7187

How would abandoning Internet net neutrality affect content providers that have different sizes? We model an Internet broadband provider that can offer a different quality of service (priority) to heterogeneous content providers. Internet users can potentially access all content, although they browse and click ads with different probabilities. Net neutrality regulation effectively protects innovation done at the edge by small content providers. Prioritization, instead, increases both infrastructure core investment and welfare only if it sufficiently stimulates innovation from the large content provider.

JOURNAL ARTICLE

Valletti T, Peitz M, Greenstein S, 2016, Net Neutrality: A Fast Lane to Understanding the Trade-offs, Journal of Economic Perspectives, Vol: 30, Pages: 127-150, ISSN: 1944-7965

The “net neutrality” principle has triggered a heated debate and advocates have proposed policy interventions.In this paper, we provide perspective by framing issues in terms of the positive economic factors at work. We stress the incentives of market participants, and highlight the economic conflicts behind the arguments put forward by the different parties. We also identify several key open questions.

JOURNAL ARTICLE

Bourreau M, Kourandi F, Valletti T, 2015, NET NEUTRALITY WITH COMPETING INTERNET PLATFORMS,JOURNAL OF INDUSTRIAL ECONOMICS, Vol: 63, Pages: 30-73, ISSN: 0022-1821

JOURNAL ARTICLE

Genakos C, Valletti T, 2015, Evaluating a Decade of Mobile Termination Rate Regulation, ECONOMIC JOURNAL, Vol: 125, Pages: F31-F48, ISSN: 0013-0133

JOURNAL ARTICLE

Kourandi F, Kraemer J, Valletti T, 2015, Net Neutrality, Exclusivity Contracts, and Internet Fragmentation,INFORMATION SYSTEMS RESEARCH, Vol: 26, Pages: 320-338, ISSN: 1047-7047

JOURNAL ARTICLE

Nardotto M, Valletti T, Verboven F, 2015, UNBUNDLING THE INCUMBENT: EVIDENCE FROM UK BROADBAND, JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION, Vol: 13, Pages: 330-362, ISSN: 1542-4766

JOURNAL ARTICLE

Peitz M, Valletti T, 2015, Reassessing competition concerns in electronic communications markets,TELECOMMUNICATIONS POLICY, Vol: 39, Pages: 896-912, ISSN: 0308-5961

JOURNAL ARTICLE

Stavropoulou C, Valletti T, 2015, Compulsory licensing and access to drugs, EUROPEAN JOURNAL OF HEALTH ECONOMICS, Vol: 16, Pages: 83-94, ISSN: 1618-7598

JOURNAL ARTICLE

Bennato AR, Valletti T, 2014, Pharmaceutical innovation and parallel trade, INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION, Vol: 33, Pages: 83-92, ISSN: 0167-7187

JOURNAL ARTICLE

Hoernig S, Inderst R, Valletti T, 2014, Calling circles: network competition with nonuniform calling patterns,RAND JOURNAL OF ECONOMICS, Vol: 45, Pages: 155-175, ISSN: 0741-6261

JOURNAL ARTICLE

Iozzi A, Valletti T, 2014, Vertical Bargaining and Countervailing Power, AMERICAN ECONOMIC JOURNAL-MICROECONOMICS, Vol: 6, Pages: 106-135, ISSN: 1945-7669

JOURNAL ARTICLE

Valletti T, 2014, Special Issue: Selected Papers, European Association for Research in Industrial Economics 40th Annual Conference, Evora, Portugal/30 August-1 September 2013 Foreword, INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION, Vol: 34, Pages: 36-36, ISSN: 0167-7187

JOURNAL ARTICLE

Haskel J, Iozzi A, Valletti T, 2013, Market structure, countervailing power and price discrimination: The case of airports, JOURNAL OF URBAN ECONOMICS, Vol: 74, Pages: 12-26, ISSN: 0094-1190

JOURNAL ARTICLE

Calzada J, Valletti TM, 2012, Intertemporal Movie Distribution: Versioning When Customers Can Buy Both Versions, MARKETING SCIENCE, Vol: 31, Pages: 649-667, ISSN: 0732-2399

JOURNAL ARTICLE

Genakos C, Valletti T, 2012, Regulating prices in two-sided markets: The waterbed experience in mobile telephony, TELECOMMUNICATIONS POLICY, Vol: 36, Pages: 360-368, ISSN: 0308-5961

JOURNAL ARTICLE

Genakos C, Valletti T, 2011, TESTING THE "WATERBED" EFFECT IN MOBILE TELEPHONY, JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION, Vol: 9, Pages: 1114-1142, ISSN: 1542-4766

JOURNAL ARTICLE

Genakos C, Valletti T, 2011, Seesaw in the air: Interconnection regulation and the structure of mobile tariffs,INFORMATION ECONOMICS AND POLICY, Vol: 23, Pages: 159-170, ISSN: 0167-6245

JOURNAL ARTICLE

Hoernig S, Valletti TM, 2011, When Two-Part Tariffs are Not Enough: Mixing with Nonlinear Pricing, B E JOURNAL OF THEORETICAL ECONOMICS, Vol: 11, ISSN: 1935-1704

JOURNAL ARTICLE

Inderst R, Valletti T, 2011, Incentives for input foreclosure, EUROPEAN ECONOMIC REVIEW, Vol: 55, Pages: 820-831, ISSN: 0014-2921

JOURNAL ARTICLE

Inderst R, Valletti TM, 2011, BUYER POWER AND THE 'WATERBED EFFECT', JOURNAL OF INDUSTRIAL ECONOMICS, Vol: 59, Pages: 1-20, ISSN: 0022-1821

JOURNAL ARTICLE

Genakos C, Valletti T, 2010, Mobile regulation and the 'waterbed' effect, Promoting New Telecom Infrastructures: Markets, Policies and Pricing, Pages: 284-300, ISBN: 9781849804455

BOOK CHAPTER

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