Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Wednesday, July 2, 2014

Collusion at the Extensive Margin

Martin C. Byford (RMIT) and Joshua S. Gans (Toronto) discuss Collusion at the Extensive Margin.

ABSTRACT: We augment the multi-market collusion model of Bernheim and Whinston (1990) by allowing for firm entry into, and exit from, individual markets. We show that this gives rise to a new mechanism by which a cartel can sustain a collusive agreement: Collusion at the extensive margin whereby firms collude by avoiding entry into each other’s markets or territories. We characterise parameter values that sustain this type of collusion and identify the assumptions where this collusion is more likely to hold than its intensive margin counterpart. Specifically, it is demonstrated that Where duopoly competition is fierce collusion at the extensive margin is always sustainable. The model predicts new forms of market sharing such as oligopolistic competition with a collusive fringe, and predatory entry. We also provide a theoretic foundation for the use of a proportional response enforcement mechanism.

July 2, 2014 | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 1, 2014

Sanctions in EU Competition Law: Principles and Practice

Michael J Frese (ACLE) has written on Sanctions in EU Competition Law: Principles and Practice.

BOOK ABSTRACT: In the early decades of European integration the enforcement of EU competition law was highly centralised. Virtually all enforcement actions under Articles 101 and 102 TFEU were initiated by the European Commission. More recently the enforcement of EU competition law has become less centralised - many would say even decentralised. In 2004, essentially in an effort to increase enforcement capacity in the wake of EU enlargement, the involvement of Member State competition authorities was significantly reinforced by national authorities being given power to pursue infringements of EU competition law largely on the basis of their domestic enforcement regimes.

This combination of decentralisation and enforcement autonomy raises questions about the relationship between EU law and national law, as well as about the costs of enforcement. This new book links these questions by analysing how competences in the area of sanctions are distributed between EU and national law, and how this influences the costs of enforcement. The author's conclusions, which highlight the economic implications of the choices made by competition authorities, courts and legislators, will be of use to all the above in further developing EU competition policy.

July 1, 2014 | Permalink | Comments (0) | TrackBack (0)

IPPP – Risks and opportunities An economic perspective

Julie de Brux (Sorbonne Business School) and Frederic Marty (French National Centre of Scientific Research (CNRS) senior fellow, Research Group on Law, Economics and Management, University of Nice Sophia-Antipolis and OFCE, Innovation and Competition Department Sciences Po) analyze IPPP – Risks and opportunities An economic perspective.

ABSTRACT: This article analyzes some of the issues raised by institutionalized public-private partnerships in an economic perspective. We demonstrate that although they may address some of the main limits of purely contractual public-private partnerships, such as the issues of control, know-how transfer, or additional financial cost, they may induce some intrinsic risks, related to alterations of the contractual incentive structure and judicial challenges. Based on economic theory, we stem some recommendations and comments about the adequacy of legal requirements with economic normative views.

July 1, 2014 | Permalink | Comments (0) | TrackBack (0)

Mergers, Agency Costs, and Social Welfare

Jean-Etienne de Bettignies, Queen’s University and Thomas W. Ross, UBC have an interesting paper on Mergers, Agency Costs, and Social Welfare.

ABSTRACT: We examine the impact of a merger to monopoly in a Cournot duopoly framework where managers make cost-reducing investment or effort decisions prior to choosing output. A well-established result is that, absent agency costs, the merger leads to greater investment and lower production costs. We show that, when agency costs are present, this result may be reversed, with mergers leading instead to lower investment/effort, higher production costs, and lower social welfare. (JEL L40, L13, D21, D82)

July 1, 2014 | Permalink | Comments (0) | TrackBack (0)

Regulatory Monopoly and Differential Pricing in the Market for Patents

Neel U. Sukhatme, Princeton University, Department of Economics discusses Regulatory Monopoly and Differential Pricing in the Market for Patents.

ABSTRACT: Patent law is inextricably tied to the economics of monopolies, as patents are legal monopolies awarded to inventors to incentivize innovation. Yet legal scholars have largely ignored another crucial monopoly at the heart of patent law: the monopoly of the U.S. Patent and Trademark Office (PTO) over the granting of patents. The present Article remedies this oversight and introduces the broader concept of a regulatory monopoly ― a single governmental actor with the power to set prices in a regulatory area. Using insights from both neoclassical and behavioral economics, the Article explains how regulatory monopolies like the PTO can enhance social welfare via differential pricing ― that is, by charging regulated entities differing fees based on their willingness or ability to pay. In particular, the Article shows how the PTO could increase its revenues and promote innovation by charging different patent “prices” for inventions in different industries. Such pricing could also be used to tailor effective patent term across industries, an emergent goal for many patent scholars.

The Article discusses how recent empirical and legal developments have made differential patent pricing possible. It then generates differential prices by leveraging new empirical research that measures the relative importance of patent protection across industries. The Article concludes by discussing how recent patent reform (the America Invents Act of 2011) provides the legal basis for the PTO to conduct differential pricing, and estimates the welfare gains from shifting to a differential pricing regime.

July 1, 2014 | Permalink | Comments (0) | TrackBack (0)

Monday, June 30, 2014

State Aid, National Courts and the Separation of Powers: Should Judges be Bound to the European Commission's Unfinished State Aid Business?

Thomas Lubbig (Freshfields) and Tom Morgan ask State Aid, National Courts and the Separation of Powers: Should Judges be Bound to the European Commission's Unfinished State Aid Business?

ABSTRACT: This article considers a Court of Justice of the European Union (CJEU) State aid judgment that seemingly binds national courts to find State aid in cases where the Commission has already initiated its own formal investigation. In future the situation may be much easier for complainants who allege their competitors are recipients of State aid in national courts, even though the Commission still has significant doubts in its own investigation. Arguably the judgment infringes national courts' discretion and independence to make their own assessment in State aid matters.

June 30, 2014 | Permalink | Comments (0) | TrackBack (0)

Enforcement vs Deterrence in Merger Control: Can Remedies Lead to Lower Welfare?

Andreea Cosnita, Universite Paris I Pantheon-Sorbonne - Maison des Sciences Economiques and Lars Sorgard, Norwegian School of Economics and Business Administration (NHH); Norwegian School of Economics (NHH) - Department of Economics ask Enforcement vs Deterrence in Merger Control: Can Remedies Lead to Lower Welfare?

ABSTRACT: This paper deals with the enforcement of merger policy, and aims to study how merger remedies affect the deterrence accomplished by controlling mergers. We determine the optimal frequency of investigations launched by the agency, and identify situations where the introduction of remedies can lead to a lower welfare. We find that the potential for remedies can make it less likely that the worst mergers are deterred. Even if the worst mergers are deterred, the potential for remedies can lead to more mergers with a negative impact to be proposed, and eventually to more decision errors by the antitrust authorities.

June 30, 2014 | Permalink | Comments (0) | TrackBack (0)

Football broadcasting business in the EU: towards fairer competition?

Sara Moya Izquierdo and Miguel Troncoso Ferrer, Gomez-Acebo & Pombo Abogados, S.L.P. ask Football broadcasting business in the EU: towards fairer competition?

ABSTRACT: Broadcasting of major football events is now one of the most profitable businesses related to sports, and the number of Competition law cases related thereto has increased in recent years. European competition authorities have shaped the regulatory framework under which football broadcasting rights are negotiated, modifying the landscape of the market of media rights for top competitions. Nevertheless, recent European Court judgments seem to open the door to new market definitions, which are expected to continue changing during the coming decade, mainly due to developments in technology and consumer preferences. This new landscape will have a direct impact on the terms and conditions to be negotiated between holders of the rights (football clubs and/or federations) and broadcasters.

June 30, 2014 | Permalink | Comments (0) | TrackBack (0)

More than a cookie cutter: the global influence of European competition law

Marcus Pollard explains More than a cookie cutter: the global influence of European competition law.

ABSTRACT: As I now leave the JECLAP editorial team, and depart from private practice and Europe for new challenges in Asia, it seems an opportune moment to reflect on the growing influence of European competition laws on the rest of the world. Readers will be aware that in recent years there has been a significant proliferation of new and credible antitrust agencies. Across Africa, Latin America, and Asia, many countries are actively taking steps to introduce competition laws or revise existing provisions to ensure they keep apace with the more sophisticated regimes active in, for example, South Africa, Brazil, China, India, and Singapore. In designing their new systems, many non-European agencies have turned to European principles (as opposed to United States) for their guiding influence. New agencies have been able to seek inspiration and be willingly influenced by the tome of Commission guidelines and block exemptions—as well as detailed publicly available decisions and the ever-burgeoning case law from the European courts.

June 30, 2014 | Permalink | Comments (0) | TrackBack (0)

Saturday, June 28, 2014

Optimal and Just Financial Penalties for Competition Law Infringements 1 July 2014 from 17:15 to 19:15

Optimal and Just Financial Penalties for Competition Law Infringements

UCL Faculty of Laws
Tuesday, 1 July 2014 from 17:15 to 19:15 (BST)

London, United Kingdom

The CLES has completed a report on financial penalties for competition law infringements for the Chilean Economic Prosecutor (Fiscalia) taking a law and economics and a comparative law perspective (EU, UK, Germany, France, US) and making suggestions for the reform of the financial penalties regimes for competition law infringements in Chile but also other jurisdictions. The report was drafted by a CLES team composed by lawyers and economists.

Speakers at the launch include

  • Felipe Irarrázabal, Economic Prosecutor, Republic of Chile

  • Frederic Jenny, Chairman, Competition Committee, OECD

  • Ioannis Lianos, Director, Centre for Law, Economics and Society

  • Marc Braithwaite, Assistant Director, Competition and Markets Policy, Competition & Markets Authority

  • Florian Wagner-von Papp, UCL Laws


 The panel will particularly examine the following three topics.
(i) The need to adopt a more effects based approach in setting financial penalties for competition law infringements, instead of relying on proxies, such as a percentage of affected sales or commerce. (ii) The role of guidelines and the optimal degree of detail for these guidelines in assessing aggravating and mitigating circumstances. (iii) The role of the judiciary in the process and the optimal intensity of review.

 The discussion will provide insights from the relevant experience in the various jurisdictions covered by the report (United States, the EU, the UK, Germany, France).

Book your place at the conference website:

June 28, 2014 | Permalink | Comments (0) | TrackBack (0)

Friday, June 27, 2014


Cento Veljanovski (Case Associates) offers A STATISTICAL ANALYSIS OF U.K. ANTITRUST ENFORCEMENT.

ABSTRACT: The Office of Fair Trading (OFT) has been a highly rated competition law enforcer. Yet its antitrust performance activities fall far short of this image. Here a critical assessment is made of the OFT's antitrust enforcement activities, and of the claim that there is quantitative survey evidence that the OFT has had a “significant deterrent effect.” It concludes that the evidence for this claim is flawed and not credible.

June 27, 2014 | Permalink | Comments (0) | TrackBack (0)

Mobile Computing: The Next Platform Rivalry

Timothy Bresnahan, Stanford and Shane Greenstein, Northwestern analyze Mobile Computing: The Next Platform Rivalry.

ABSTRACT: All modern information and communications technology (ICT) industries use the platform organization. A platform in computing is a reconfigurable base of compatible components on which firms and users build applications. Applications share the general purpose components, which leads to the exploitation of increasing returns at an industry-wide level (Bresnahan and Trajtenberg, 1995). Platforms compete for developers, who create applications which make the platform valuable for users. Distinct platforms serve different or/or overlapping customers. Platforms also compete in their governance structures, which determine what obligations a developer assumes, and what rights the platform leader reserves for itself. Governance serves a useful function, mediating the terms of transactions and assigning responsibilities to build complements. We consider governance in mobile computing, specifically. The market involves many high profile companies, such as Microsoft, Google, Apple, Nokia, and Research in Motion, who employ different approaches to platform governance. That variance frames a seemingly simple question: why doesn’t one form of platform governance emerge as superior, dominating most markets in which platforms play an essential role? Our essay will stress the reasons for differentiation, and we propose an argument that is missing from the platform literature, about changes over time. Platform leaders commit to their approach to governance, but the governance that can help at one moment can get in the way at a later time. That opens up opportunities for differentiated platforms.

June 27, 2014 | Permalink | Comments (0) | TrackBack (0)

Drafting Competition Law for Developing Jurisdictions: Learning from Experience

Eleanor M. Fox, New York University School of Law and Michal S. Gal, University of Haifa - Faculty of Law discuss Drafting Competition Law for Developing Jurisdictions: Learning from Experience.

ABSTRACT: Developing jurisdictions often share some socio-economic characteristics, including highly concentrated markets, state ownership of major businesses, scarce human and financial resources, poor infrastructure, systemic poverty, cronyism, and corruption. This article attempts to sketch some of the implications of such characteristics on the competition law rules to be adopted by developing jurisdictions, based, inter alia, on the experience some developing jurisdictions already have with such laws. The analysis raises intriguing and complex issues, such as what the country seeks to and can probably derive from a competition law; What should be the presumptions that stand at the basis of the law; How should the lack of resources and the political economy characteristics affect the design of competition law institutions and the formulation of substantive prohibitions; and should public interest considerations be incorporated into the law, and if so how and by whom.

June 27, 2014 | Permalink | Comments (0) | TrackBack (0)

Rebates and Competition Law: An Overview of EU and National Law

Hans Zenger, Charles River Associates (CRA) describes Rebates and Competition Law: An Overview of EU and National Law.

ABSTRACT: This short paper provides an overview of the different evidentiary standards that have been applied in recent case law and case practice, covering both leading EU and selected national cases. Section 2 first describes the established case law of the Court of Justice of the European Union. Section 3 then goes on to portray the Commission’s more recent effects-based approach and case practice. Section 4 summarizes some notable recent NCA cases and contrasts them with the Commission’s approach. Section 5, finally, concludes and provides an outlook on policy.

June 27, 2014 | Permalink | Comments (0) | TrackBack (0)

Thursday, June 26, 2014

The Psychology of Competition: A Social Comparison Perspective

Stephen M. Garcia, University of Michigan, Avishalom Tor, Notre Dame Law School, and Tyrone M. Schiff, University of Michigan at Ann Arbor provide thoughts on The Psychology of Competition: A Social Comparison Perspective.

ABSTRACT: Social comparison — the tendency to self-evaluate by comparing ourselves to others — is an important source of competitive behavior. We propose a new model that distinguishes between individual and situational factors that increase social comparison and thus lead to a range of competitive attitudes and behavior. Individual factors are those that vary from person to person: the relevance of the performance dimension, the similarity of rivals, and their relationship closeness to the individual, as well as the various individual differences variables relating to social comparison more generally. Situational factors, conversely, are those factors on the social comparison landscape that affect similarly situated individuals: proximity to a standard (i.e., near the number 1 ranking vs. far away), the number of competitors (i.e., few vs. many), social category fault lines (i.e., disputes across vs. within social categories), and more. The distinction between individual and situational factors also helps chart future directions for social comparison research and generates new vistas across psychology and related disciplines..

June 26, 2014 | Permalink | Comments (0) | TrackBack (0)

Understanding Behavioral Antitrust

Avishalom Tor, Notre Dame Law School is Understanding Behavioral Antitrust.

ABSTRACT: Behavioral antitrust – the application to antitrust analysis of empirical evidence of robust behavioral deviations from strict rationality – is increasingly popular and hotly debated by legal scholars and the enforcement agencies alike. This Article shows, however, that both proponents and opponents of behavioral antitrust frequently and fundamentally misconstrue its methodology, treating concrete empirical phenomena as if they were broad hypothetical assumptions. Because of this fundamental methodological error, scholars often make three classes of mistakes in behavioral antitrust analyses: First, they fail to appreciate the variability and heterogeneity of behavioral phenomena; second, they disregard the concrete ways in which markets, firms, and other institutions both facilitate and inhibit rational behavior by antitrust actors; and, third, they erroneously equate all deviations from standard rationality with harm to competition. After establishing the central role of rationality assumptions in present-day antitrust and reviewing illustrative behavioral analyses across the field – from horizontal and vertical restraints, through monopolization, to merger enforcement practices – the Article examines the three classes of mistakes, their manifestation, and their consequences in antitrust scholarship. It concludes by offering two sets of essential lessons that the behavioral approach already can offer to make antitrust law and policy more realistic and effective in protecting competition: One concerning the value of case-specific evidence in antitrust adjudication and enforcement, the other showing how antitrust law can and should account for systematic and predictable boundedly rational behavior that is neither constant nor uniform.

June 26, 2014 | Permalink | Comments (0) | TrackBack (0)

The Oxford Handbook of International Antitrust Economics

Roger D. Blair, University of Florida - Warrington College of Business Administration - Department of Economics and D. Daniel Sokol, University of Florida - Levin College of Law describe The Oxford Handbook of International Antitrust Economics.

ABSTRACT: Antitrust economics is a subset of industrial organization economics. What makes antitrust economics rather unique is the centrality of economic analysis to the development of antitrust law and policy. In the United States antitrust economics guides all antitrust analysis by government enforcers (at the federal level the Department of Justice Antitrust Division and the Federal Trade Commission) and courts. In other systems, the centrality of antitrust economics to antitrust law (typically called competition law) and policy has not been established. Instead, cutting edge antitrust economic analysis competes with non-antitrust economics goals. Nevertheless, across the major non-US jurisdictions, antitrust economics is far more utilized now than previously. With global mergers and various types of conduct, increased coordination across agencies, practitioner lawyers and economists around the world trained in the latest theories of antitrust economics, and a rise of economic analysis in decision-making by adjudicators, the increasing role of international antitrust economics seems somewhat inevitable. The desire to provide scholars and policy-makers across jurisdictions a reference tool to understand the most important developments in antitrust economics motivates this handbook. We have assembled many of the most important scholars in the field to provide overviews and analysis of the core issuers in antitrust economics. Although no handbook can be exhaustive, we have attempted to cover all of what we believe to be the major topics in the field. The developments in economic analysis across these areas that the handbook covers will shape policy and legal issues in the field for some time. We hope that the handbook will provide inspiration for new avenues of theoretical and empirical research in the field.

You can order an advanced copy here (Voume 1) and here (Volume 2).

June 26, 2014 | Permalink | Comments (0) | TrackBack (0)

The Economics of Retailing Formats: Competition versus Bargaining

Olav Johansen, University of Bergen - Department of Economics and Tore Nilssen, University of Oslo - Department of Economics discuss The Economics of Retailing Formats: Competition versus Bargaining.

ABSTRACT: We set up a merger game between retailing stores to study the incentives of independent stores to form a big store when some consumers have preferences for one-stop shopping. Such one-stop shopping creates complementarity between products, leading in turn to lower prices after a big store is formed but may also lead to an improvement in the bargaining position vis-à-vis producers through the creation of an inside option that small stores don't have. We find that big stores will not be formed when the stores' ex-ante bargaining power vis-a-vis producers is high. Otherwise, an asymmetric situation occurs with only one big store created when one-stop shoppers are abundant.

June 26, 2014 | Permalink | Comments (0) | TrackBack (0)

Economics of Competition Policy for Economists 9-10 OCTOBER 2014

Economics of Competition Policy for Economists

Course Details: 

Aimed at those with a good background in microeconomics, but who are relatively new to practical competition policy, this two day course will provide an introduction to the economics of competition policy. 

The course will consist of eight 90 minute sessions which will be delivered by different speakers with strong practical experience of competition policy work. Each will involve a mix of presentation and interactive work to help provide practical analytical tools. 

The focus will be on the UK/EU legal framework and core antitrust issues including the assessment of anti-competitive agreements and abuse of dominance and mergers. 

The course is limited to 40 attendees maximum. 

Full programme can be viewed here.

DATE & TIME: 9-10 OCTOBER 2014. 9.30am - 5.00pm

VENUE: etc. venues THE HATTON, LONDON (Map)

FEES: Private Sector £1350 + VAT  •   Public Sector / Academia £750 + VAT

20% 'early bird' discount if booked before July 31 2014

BOOKING: Details of how to book can be found here

If you have any enquiries please contact us on 01603 593715&nbsp;or email <a href="" data-mce-href=""></a>&nbsp;

June 26, 2014 | Permalink | Comments (1) | TrackBack (0)

Senate Judiciary Testimony - The AT&T/DIRECTV Merger: The Impact on Competition and Consumers in the Video Market and Beyond

The AT&T/DIRECTV Merger: The Impact on Competition and Consumers in the Video Market and Beyond

Antitrust, Competition Policy and Consumer RightsDate: Tuesday, June 24, 2014 Time: 02:30 PM Location: Dirksen 226Presiding: Senator Klobuchar


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Member Statements

  1. Senator Patrick Leahy D (VT)


  1. Randall L. Stephenson
    President and Chief Executive Officer
    Dallas , TX
  2. Michael D. White
    Chairman and Chief Executive Officer
    El Segundo , CA
  3. Christopher Keyser
    Writers Guild of America West
    Los Angeles , CA
  4. Matthew F. Wood
    Policy Director
    Free Press
    Washington , DC
  5. Larry Downes
    Project Director
    Georgetown University, Center for Business and Public Policy
    Washington , DC
  6. Ross J. Lieberman
    Senior Vice President of Government Affairs
    American Cable Association
    Washington , DC

June 26, 2014 | Permalink | Comments (0) | TrackBack (0)