Antitrust & Competition Policy Blog

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

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Tuesday, July 7, 2015

The Sharing Economy: Issues Facing Platforms, Participants, and Regulators

Christopher Koopman, George Mason University - Mercatus Center, Matthew D. Mitchell, George Mason University - Mercatus Center, and Adam D. Thierer, George Mason University - Mercatus Center discuss The Sharing Economy: Issues Facing Platforms, Participants, and Regulators.

ABSTRACT: Filing of the Mercatus Center at George Mason University to the Federal Trade Commission for the FTC's June 9, 2015 workshop on "The “Sharing” Economy: Issues Facing Platforms, Participants, and Regulators." The Mercatus Center at George Mason University is dedicated to advancing knowledge about the impact of regulation on society. As part of its mission, the Mercatus Center conducts careful and independent analyses employing contemporary economic scholarship to assess rulemaking proposals from the perspective of the public interest. Thus, this comment before the Federal Trade Commission (FTC) does not represent the views of any particular affected party or special interest group. Rather, it is designed to assist the commission as it weighs the costs and benefits of regulation that affects the sharing economy. Our comments to the commission are derived from recent Mercatus Center working papers on these issues.

July 7, 2015 | Permalink | Comments (0)

Chinese antitrust—a snapshot

Xiaoye Wang, Hunan University and the Chinese Academy of Social Sciences, and Member of the Consultative Expert Panel of the Anti-Monopoly Commission under the State Council of the People's Republic of Chinaand Adrian Emch, Hogan Lovells and Peking University provide Chinese antitrust—a snapshot.

ABSTRACT: China’s Anti-Monopoly Law (AML) has been in force for over six and half years. This article argues that there has been a gradual yet perceptible change in the quality and intensity of AML enforcement over the years, with the fifth anniversary of the AML’s effectiveness as the somewhat arbitrary ‘turning point’. Indeed, over the past few years, the normative work—in terms of drafting AML implementing rules and guidance—of the three antitrust authorities has decreased, while the handling of actual enforcement cases has increased. Moreover, the cases investigated have become more high profile: the investigation by the National Development and Reform Commission against Qualcomm, the action by the State Administration for Industry and Commerce against Microsoft, and the prohibition by the Ministry of Commerce of the P3 transaction symbolize this trend.

July 7, 2015 | Permalink | Comments (0)

Consumer protection as the ‘Open Sesame’ that allows Alibaba to crush the Forty Thieves

Ying Yu, Wolfson College, University of Oxford, and Programme Coordinator, Consumer Rights in China Programme, the Foundation of Law, Justice and Society and Mingnan Shen, Researcher of Consumer Rights in China Programme, the Foundation of Law, Justice and Society Consumer protection as the ‘Open Sesame’ that allows Alibaba to crush the Forty Thieves.

ABSTRACT:Following in the footsteps of the man whose name is associated with the Forty Thieves, and whose immortal words gave him access to the treasure, the 21st century’s Alibaba found his pot of gold in Chinese consumer with his ‘Open Sesame’: the protection that Alipay delivers to consumers. By offering an escrow service, Alipay accounts for approximately half of the online payment transactions in China, becoming the biggest threat to China’s banks in the state-backed financial industry. This article aims to discover how Alipay drives Alibaba’s growth by analysing current consumer protection issues in China, Alipay’s legal character and its consumer redress. It also examines why Chinese banks’ triple advantages, that is, state support, public trust, and monopoly status failed to help them secure their share in Chinese online market. China’s announcement of the final drafting of The Deposit Guarantee (Insurance) Scheme indicates that opening up the Chinese financial market completely is only a matter of time. How to win back the trust of consumers and compete with both domestic and foreign finance institutions are currently the biggest challenges facing the banks in China. Alibaba’s success demonstrates that harnessing consumer trust is the main source of its increasing market power.

July 7, 2015 | Permalink | Comments (0)

The Role of Presumptions of Market Dominance in Civil Litigation in China

Félix E. Mezzanotte, School of Accounting and Finance, Hong Kong Polytechnic and Liyang Hou, Koguan Law School, Shanghai Jiao Tong University explore The Role of Presumptions of Market Dominance in Civil Litigation in China.

ABSTRACT: We examine the use and effects of the presumptions of market dominance in antitrust litigation in China (Article 19 Antimonopoly Law). To this end, 13 court decisions in cases of abuse of market dominance were analysed. We found that the presumptions are mentioned in eight cases. The presence of the presumptions, however, did not influence the court’s rationale and findings in a meaningful way. In those cases in which the presumptions are cited and market dominance found (three cases), the court’s views were guided less by the logic underlying the presumptions than by the fact that the defendants held a monopoly position due to patent holdings or exclusive rights. In the other five cases that cite the presumptions, the defendants operated in a competitive market and dominance was not found. Here, the plaintiffs systematically failed to satisfy the requirements of the presumption due to problems of market definition and measurement of market shares. In terms of effects, the possibility that the presumptions connote a shift in the burden of proof from the plaintiff to the defendant remains unclear, and further guidance from the Chinese courts on this issue is critical.

July 7, 2015 | Permalink | Comments (0)

Monday, July 6, 2015

Comments to the U.S. Sentencing Commission Concerning Antitrust Fines

Robert H. Lande, University of Baltimore - School of Law and Albert Foer, American Antitrust Institute (AAI) offers Comments to the U.S. Sentencing Commission Concerning Antitrust Fines.

ABSTRACT: This Comment was submitted to the US Sentencing Commission on behalf of the American Antitrust Institute. It makes three important points, all of which concern the US Sentencing Commission's Antitrust Guidelines' cartel overcharge presumption. First, the evidence demonstrates there currently is significant underdeterrence of price fixing and other anticompetitive forms of collusion. Second, the general approach to calculating cartel fines embodied in the US Sentencing Commission Guidelines, under which the enforcers and ultimately the courts calculate antitrust fines based upon a very specific presumed overcharge, is sound and in the public interest. Third, the 10% cartel overcharge presumption in the Guidelines is much too low. The best evidence demonstrates that the Commission should double it, to 20%. This would conform it more closely to the median or average overcharge likely to result from collusion, yet still be a conservative resolution of the issues. Raising the 10% presumption should increase the overall level of cartel deterrence which will benefit consumers greatly.

July 6, 2015 | Permalink | Comments (0)


Maria Ostrovnaya, International Laboratory for Institutional Analysis of Economic Reforms, Center for Institutional Studies, National Research University Higher School of Economics and Elena Podkolzina, International Laboratory for Institutional Analysis of Economic Reforms, Center for Institutional Studies, National Research University Higher School of Economics describe ANTITRUST ENFORCEMENT IN PUBLIC PROCUREMENT: THE CASE OF RUSSIA.

ABSTRACT: Why do people violate the law? The Hobbesian outlook would be that people violate the law in the absence of appropriate punishment. John Stuart Mill would have attributed the violation to the lack of incentives to behave legally. In this paper, we combine these two factors to examine the effect of antitrust regulation on price competition. We examine the case of public drug procurement in St. Petersburg, Russia between 2008 and 2010. Our results highlight that the Russian Federal Antitrust Service was unable to enforce competitive bidding when the main regulators interpreted the competition law differently. The Committee for Public Health in St. Petersburg notably leveraged the loopholes in antitrust enforcement and successfully maintained illegal relationships with different economic agents. We use data on Russian drug procurement to illustrate these effects. Based on our estimates, we suggest policy implications regarding antitrust policy.

July 6, 2015 | Permalink | Comments (0)


Lilian T.D. Petit, Economist at Authority for Consumers and Markets (ACM) and Erasmus School of Economics, Ron G.M. Kemp, Authority for Consumers and Markets (ACM) and Jarig van Sinderen, ACM and Professor at Erasmus School of Economics examine CARTELS AND PRODUCTIVITY GROWTH: AN EMPIRICAL INVESTIGATION OF THE IMPACT OF CARTELS ON PRODUCTIVITY IN THE NETHERLANDS.

ABSTRACT: Currently, there are only a few empirical studies that have studied the possible consequences of cartels on productivity growth. Empirical insights about cartels would be critical for competition authorities to examine and legitimize their own policies. Until 1998, the Netherlands had a permissive attitude towards cartels—cartels were required to register. The Netherlands' cartel register provides an opportunity to study the effects of cartelization on productivity growth. By using cartel and industry data on productivity growth, we estimate the impact of cartel formation, cartel presence, and cartel termination on the total productivity growth in the Netherlands between 1982 and 1998. Our research results suggest that cartel presence, indicated by registration status in the cartel register, indeed curbs productivity growth.

July 6, 2015 | Permalink | Comments (0)


Patrick Andreoli-Versbach, Max Planck Institute for Innovation and Competition & University of Munich and Jens-Uwe Franck, University of Mannheim provide ECONOMETRIC EVIDENCE TO TARGET TACIT COLLUSION IN OLIGOPOLISTIC MARKETS.

ABSTRACT: Tacit collusion may reduce welfare comparably to explicit collusion, but remains mostly unaddressed by antitrust enforcement that greatly depends on evidence of explicit communication. We propose to target specific elements of firms' behavior that facilitate tacit collusion by providing quantitative evidence that links these actions to an anticompetitive market outcome. We apply our approach to incidents on the Italian gasoline market, where the market leader unilaterally announced its commitment to a policy of sticky pricing and large price changes that facilitated price alignment and coordination of price changes. Antitrust policy must distinguish such active promotion of a collusive strategy from passive, best-response, alignment. Our results imply the necessity of stronger legal instruments that target unilateral conduct that aims at bringing about collusion.

July 6, 2015 | Permalink | Comments (0)

Sunday, July 5, 2015

Brulotte's Web

Herbert J. Hovenkamp, University of Iowa - College of Law has posted Brulotte's Web.

ABSTRACT: Kimble v. Marvel Entertainment held that stare decisis required the Supreme Court to adhere to the half century old, much criticized rule in Brulotte v. Thys.   Justice Douglas' Brulotte opinion concluded that license agreements requiring royalties measured by use of a patent after its expiration are unenforceable per se.  The court need not inquire into market power nor anticompetitive effects, effects on innovation, and it may not accept any defense.  Congress can change the rule if it wants to, but has resisted many invitations to do so.

Under Brulotte a hybrid license on a patent and a trade secret requires a royalty reduction when the patent expires. But there is little reason for thinking that a process is worth more to a licensee when it is covered by both a patent and a trade secret than when it is covered by only a single right.  What the licensee wants is access to a technology that reduces its costs or improves the quality of its output.  Those numbers are determined by market value and product competition, and are not obviously affected by the number and kind of IP rights that they embody.  For example, the price I am willing to pay for a patented weed killer for my back yard is not higher because I know that production of the weed killer is protected by a trade secret as well as a patent.

One area where Brulotte/Kimble threatens efficient risk sharing is reach through royalties. Researchers in some areas often require costly patented research tools, or inputs, that may produce considerable value once a successful product has been developed. The research might succeed in producing a valuable drug but there is also a high chance that it will fail.  A rational way to price out such an asset is conditionally, perhaps with little or no royalty during the research period, but a substantial royalty down the road if the project succeeds.   Depending on the age of the patent and the timeline for the project, this can contemplate royalties on the pharmaceutical drug long after the patent on the research tool expires.

A lively debate has emerged about the economics of reach through royalties, with some believing that they contribute to a patent "thicket" that is difficult for researchers to negotiate,  and others arguing that they constitute a reasonable form of risk sharing.   That issue is a serious one and should never be addressed by any rule as ham handed as the Brulotte per se rule against post-expiration royalties.

One problematic effect of Kimble is that antitrust tying law is undergoing a process of revision that is coming close to removing per se illegality.   That has largely happened for just the reasons that the Court suggested: the underlying economic theory has changed, de-emphasizing harmful leverage and emphasizing efficiencies.   By contrast, the patent law of tying arrangements -- heavily borrowed from antitrust -- remains stuck in a time warp until Congress gets around to changing it.

In defending its rule of stare decisis, the Kimble Court also observed that the challenged practice involved two areas of law, property and contract, where stare decisis has traditionally been regarded as strong because of reliance interests.  A legal regime that previously permitted unlimited licensing but then adopted the Brulotte rule could certainly upset many reliance interests. When the legal change is in the other direction, however the weight of reliance interests is less clear.  The real impact of overruling would be on those people, who like the parties in Kimble, wrote their agreements in ignorance of Brulotte.  In such cases the effect of overruling would be that these parties would get precisely what they bargained for.

The Kimble Court rejected Kimble's proposed alternative -- namely, that post-expiration royalty extensions be addressed under a rule of reason.  The Court found this unacceptable, substituting a bright line (although ill conceived) rule for something as complex and indeterminate as antitrust's rule of treason.  But nearly every commercial transaction in the country is subject to antitrust evaluation under Section 1 of the Sherman Act.  Agreements requiring post-expiration payments would join the general run of agreements that are nearly always legal.

July 5, 2015 | Permalink | Comments (0)

Friday, July 3, 2015

Horizontal Merger of Big Firms with Product Choice in the Presence of Small Firms

Lijun Pan, Nagoya University describes Horizontal Merger of Big Firms with Product Choice in the Presence of Small Firms.

ABSTRACT: We extend Shimomura and Thisse (2012) to investigate how the bilateral merger between big firms with the choice on product range affects the competitive fringe and social welfare. The comparison of the marginal cost synergy to fixed cost determines whether the merged big firm (insider) withdraws a brand or maintains two brands. In addition, the insider's different product choices generate opposing impacts on the competitive fringe and social welfare.

July 3, 2015 | Permalink | Comments (0) | TrackBack (0)

How Reasonable Royalties Suppress Patent Licensing

Erik N. Hovenkamp, Northwestern University, explains How Reasonable Royalties Suppress Patent Licensing.

ABSTRACT:  Patent remedies are essential to maintain a well-functioning patent system, but if not properly fashioned they may interfere with the dissemination of patented inventions and thereby foreclose many opportunities for mutually-beneficial licensing. This paper addresses two attributes of patent damages awards that engender such effects. The first is the monopoly fallacy: the tendency to overstate a patent holder’s market power in its licensing market by discounting or disregarding alternative options or potential workarounds, effectively allowing a plaintiff to recover a monopoly price for a license that would command only a competitive price if exchanged at arm’s length. As a result, settlements or judgments secured from unintentional infringers become a patent holder’s most lucrative means of licensing, and this substantially lessens its interest in actively disseminating its invention by seeking out potential licensees ex ante. In fact, if expected damages are sufficiently high in relation to the market value of a license, the patent holder’s most profitable strategy is to deliberately refrain from approaching known licensing candidates in the hope that some fraction of them will unintentionally infringe. Consequently many opportunities for efficient licensing are ultimately missed, and many of those deals that do occur could have been executed earlier and more efficiently. A second problem is the courts’ reliance on precedential royalties, or reasonable royalty damages based on an established royalty for the infringed patent. While administratively convenient, the results of this approach will often be woefully imprecise, as there are many variables relating to the parties, the licensee’s intended licensing application, and the competitive landscape that collectively create a significant disparity in the licensing terms a patent holder would reach with different licensees or at different times in the patent term. Because a precedential royalty rule ignores these differences, the terms of a licensing contract may work against the licensor in its future dealings or disputes with other parties. Patent holders thus have a strong interest in not setting a bad precedent, and will reject many mutually-beneficial deals simply because the royalty rate would not appear particularly high. The result is that patent holders are induced to cut off a large segment of the market, even though they could have benefitted from these forgone transactions – an outcome that injures inventors, firms, and consumers.

July 3, 2015 | Permalink | Comments (0) | TrackBack (0)

Unjustified Public Monopolies: The Necessity to Remain Vigilant (Luxembourg)

Mathilde Stenersen and Vincent Wellens (NautaDutilh Avocats) have written on Unjustified Public Monopolies: The Necessity to Remain Vigilant (Luxembourg).

ABSTRACT:  Under the rules of competition, public bodies cannot reserve to themselves the exercise of activities that are economic in nature. Enshrined in European competition law, that principle has been applied recently, in Luxembourg, by the Competition Council, against the City of Luxembourg, in a health-related market (transportation of human bodies).

July 3, 2015 | Permalink | Comments (0) | TrackBack (0)

Thursday, July 2, 2015

Product Redesign and the Abuse of Dominance: The apple IPod Itune Litigation

Larry Popofsky (Orrick) presented a lecture at Oxford on Product Redesign and the Abuse of Dominance: The apple IPod Itune Litigation.

Download Oxford Final

July 2, 2015 | Permalink | Comments (0) | TrackBack (0)

Discretionary Authority and Prioritizing in Government Agencies

Maarten Pieter Schinkel, University of Amsterdam - Amsterdam Center for Law & Economics (ACLE); Tinbergen Institute - Tinbergen Institute Amsterdam (TIA), Lukas Toth, University of Amsterdam - Amsterdam Center for Law & Economics (ACLE), and Jan Tuinstra, University of Amsterdam - Department of Quantitative Economics (KE); Tinbergen analyze Institute Discretionary Authority and Prioritizing in Government Agencies.

ABSTRACT:  Government agencies typically have a certain freedom to choose among different possible courses of action. This paper studies agency decision-making on priorities in a principal-agent framework with multi-tasking. The agency head (the principal) has discretion over part of the agency's budget to incentivize his staff (agents) in the pick-up of cases. The head is concerned with society's benefits from the agency's overall performance, but also with the organization's public image as formed from its case record and various non-case specific activities. Based on their talent and the contracts offered by the head, staff officials choose which type of task to pursue: complex major, yet difficult to complete cases with an uncertain outcome, or basic minor and simple cases with a much higher probability of success. The size of the agency's discretionary budget influences not only the scale, but also the type of tasks it will engage in. Social welfare is non-monotonic and discontinuous in the agency's budget. Small changes in the budget may cause extensive restructuring from major to minor tasks, or vice versa. A budget cut can improve welfare more than extra budget would, even if resources are below the welfare-maximizing level. For lower binding budgets, the head continues to suboptimally incentivize work on complex tasks, when the agency should have shifted down to simpler tasks. Yet a reluctant head may need to be nudged with more resources to pursue productive cases. In determining the discretionary space of the agency head, government can limit the extraction of resources, but thereby also benefits less from the head's expertise. Antitrust authorities serve as one illustration of policy implications for institutional design.

July 2, 2015 | Permalink | Comments (0) | TrackBack (0)

Promoting or restricting competition?: Regulation of the UK retail residential energy market since 2008

Stephen Littlechild, Cambridge asks Promoting or restricting competition?: Regulation of the UK retail residential energy market since 2008.

ABSTRACT: Since 2008 UK energy regulator Ofgem has imposed increasingly severe restrictions on suppliers to the domestic (residential) retail market. Initially, non-discrimination conditions aimed to “remove unfair price differentials”, particularly between suppliers’ prices between regions, totalling £0.5 bn. This actually envisaged increasing prices to other customers by £0.5 billion, to maintain revenue neutrality. In the event, competition reduced, customer switching fell by half, and profits of major suppliers increased by nearly £1 billion, at the expense of customers. Later, restrictions on the number and types of tariffs aimed to encourage customers to engage in the market. However, there is no empirical evidence to justify this, and the policy prohibits many discounts and tariff types that customers value, especially vulnerable customers. Perhaps Ofgem felt pressed to Do Something in the face of an unprecedented increase in energy prices. Successive Governments have supported its interventions, but cannot be blamed for designing them. The decline of economists in senior positions at Ofgem removed an important ‘sanity check’. But Ofgem itself bears responsibility for its change in policy since 2008. It may have been well-meaning, attempting to protect the interests of vulnerable customers, but inappropriate restrictions have made customers worse off. Should other regulators follow suit? No. Hopefully the CMA market investigation will reveal this and bring to an end one of the most misguided episodes in the modern history of UK regulation.

July 2, 2015 | Permalink | Comments (0) | TrackBack (0)

The Impact of Service Bundling on Consumer Switching Behaviour: Evidence from UK Communication Markets

Tim Burnnett, Centre for Market and Public Organisation University of Bristol discusses The Impact of Service Bundling on Consumer Switching Behaviour: Evidence from UK Communication Markets.

ABSTRACT: This paper empirically analyses the impact of the bundling of four common home communication services with a single supplier on the probability that an individual changes supplier using a survey-elicited dataset of 2,871 individuals. Implementing a random effects probit approach to control for individual heterogeneity, the results strongly show that when individuals bundle their service then they are significantly less likely to change supplier. A second result indicates that service- and supplier- related variables are better predictors of an individual's likelihood of switching than are the characteristics of the individual, suggesting that future research in this area should prioritise their inclusion.

July 2, 2015 | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 1, 2015

Monopolistic markups in the Polish food sector

Justyna Kufel (Institute of Agricultural and Food Economics – National Research Institute) explores Monopolistic markups in the Polish food sector.

ABSTRACT: Agri-food sectors are commonly considered as highly regulated, traditional and of strategic importance, mainly due to the food security issues. Changes in the related market structures are subject of constant interest because of their importance for competition and economic welfare of food producers and consumers. In Poland, a rising concentration among various branches of the food industry can be observed. The main objective of the article was to depict the changes of the market power execution in the Polish food sector and its branches in the period 2002-2013. As a measure of this phenomenon the markups of price above the marginal cost were applied and for their estimation two methods were used, namely the Roeger method involving primal and dual Solow residuals and the method based on the marginal cost of labor. Yearly data for 32 food sector branches and various accounting categories were used in the calculations. It was found that in the analyzed period the markup over marginal cost on average amounted to 10.4% and it was increasing over time. The labor input category seemed to be not sufficient for the markup calculation. The evolution of the monopolistic power in the Polish food sector appears to be associated not only with the business cycle, but also with the sector developments accelerated by the accession to the EU. Moreover, the differences in results for the branches indicate a considerable heterogeneity in the Polish food industry companies pricing practices.

July 1, 2015 | Permalink | Comments (0) | TrackBack (0)

Time Series Econometrics in a Post-acquisition Antitrust Analysis: the Brazilian Iron ore Market

Eduardo P. S. Fiuza and Fabiana F. M. Tito (both Ipea) explain Time Series Econometrics in a Post-acquisition Antitrust Analysis: the Brazilian Iron ore Market.

ABSTRACT: In Brazil, mergers and acquisitions are usually analyzed by the Antitrust Authorities ex post, following a SCP framework close to the Merger Guidelines applied in the USA. However, this framework was unable to address a set of acquisitions of four mining companies by the newly privatized national champion CVRD. The present article reports an econometric exercise undertaken by the Brazilian Ministry of Justice, which came to reinforce the definition of the relevant geographic market and to test for structural breaks in the price series. Though international prices Grangercaused domestic prices in Brazil, they explain less than a third of the variance. A price surge on the acquired miners’ series was observed above the export price increase not long after the acquisitions, such that a structural break could not be rejected.

July 1, 2015 | Permalink | Comments (0) | TrackBack (0)

Antitrust Chronicle Summer 2015, Volume 6 Number 2

Compliance Complexities

  1. Joseph Murphy, Jun 30, 2015

    Agency Assessments of Compliance Programs

      No matter what an agency may say in speeches about the importance of compliance and ethics efforts, if it ignores good programs in practice, then businesses will correctly read the real message: programs do not count. Joe Murphy (Compliance Strategists)

      • Theodore Banks, Jun 30, 2015

        Why You Should Love Your Antitrust Compliance Monitor

          The monitor then can become a kind of insurance policy. Theodore L. Banks (Scharf Banks Marmor)

          • Keith Hylton, Jun 30, 2015

            Antitrust Snoops on the Loose

              It is time for courts to start questioning requests for monitors under the Sherman Act. Keith N. Hylton (Boston University)

              • Rosa Abrantes-Metz, Elizabeth Prewitt, Jun 30, 2015

                Antitrust Compliance 2.0: The Use of Structural Analysis and Empirical Screens to Detect Collusion and Corruption in Bidding Procurement Processes

                  A compliance program, with the use of screening, helps position a company to win a race for leniency. Rosa M. Abrantes-Metz (Global Economics Group & New York Univ.) & Elizabeth Prewitt (Hughes Hubbard & Reed)

                  • Florence Thepot, Jun 30, 2015

                    Antitrust v. Anti-Corruption Policy Approaches to Compliance: Why Such A Gap?

                      Different liability regimes may explain why, in some jurisdictions, competition law and anti-corruption agencies have very contrasted approaches to compliance programs. Florence Thépot (University College London)

                      • Nathalie Jalabert-Doury, David Harrison, Jens Peter Schmidt, Jun 30, 2015

                        Enforcers’ Consideration of Compliance Programs in Europe: A Long and Winding—but Increasingly Interesting—Road

                          Although the European Commission's position remains that compliance programs are beneficial in assisting companies to avoid breaches of competition law, the increasing willingness of other competition authorities in Europe to take compliance measures into account in decisions relating to liability provides a further compelling reason to implement rigorous, bespoke compliance arrangements, in case the worst should happen. Nathalie Jalabert-Doury, David Harrison, & Jens-Peter Schmidt (Mayer Brown)

                          • Javier Tapia, Jun 30, 2015

                            The Need for Compliance & Ethics in Latin America

                              I think there are compelling reasons for paying more attention to compliance programs, even over fundamental reforms to the statutes. It is time to make a profound paradigm-shift. Javier Tapia (Chilean Competition Tribunal)

                              July 1, 2015 | Permalink | Comments (0)

                              From Imitation to Collusion - A Comment

                              Jörg Oechssler, University of Heidelberg, Alex Roomets, Franklin and Marshall College, and Stefan Roth, Universitat Pompeu Fabra, Barcelona offer From Imitation to Collusion - A Comment.

                              ABSTRACT: In oligopoly, imitating the most successful competitor yields very competitive outcomes. This theoretical prediction has been confirmed experimentally by a number of studies. A recent paper by Friedman et al. (2015) qualifies those results in an interesting way: while they replicate the very competitive results for the first 25 to 50 periods, they show that when using a much longer time horizon of 1200 periods, results slowly turn to more and more collusive outcomes. We replicate their result for duopolies. However, with 4 firms none of our oligopolies becomes permanently collusive. Instead, the average quantity always stays above the Cournot-Nash equilibrium quantity. Thus, it seems that “four remain many” even with 1200 periods.

                              July 1, 2015 | Permalink | Comments (0) | TrackBack (0)