Thursday, November 11, 2004

French Competition Council Dismisses Case Against Apple

Nicholas Francis, a consultant with London-based Reckon, passed on this news story about the dismissal of a suit against Apple brought VirginMega, a French download site.  The suit was an attempt to pierce the armor of Apple's digital rights management (DRM), specifically Apple's proprietary FairPlay technology,  with competition law.  The French Competition Council dismissed the suit on the grounds that the technology was not "indispensible" and the failure by VirginMega to establish a causal link between Apple's dominant position and the use of DRM.

Thanks, Mr, Francis, for passing on the story and I encourage other readers of this blog to pass on relevant posts.

November 11, 2004 | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 10, 2004

Supreme Court denies cert in Trigon case

The Supreme Court left standing the 4th Circuit's decision in Trigon, dismissing antitrust claims brought by chiropractors against a health care insurance provider.  The American Chiropractic Association had filed suit against Trigon in 2000, alleging that the Virginia company had conspired with its health care advisory board, consisting of physicians, to steer patients away from chiropractic care.  The district court granted summary judgment to Trigon, and the 4th Circuit affirmed this past Spring.   One of the reasons for the dismissal was that the physicians could not have conspired with Trigon because they were employees of the provider, and that the monopolization claim made no economic sense since chiropractic care was generally cheaper. 

November 10, 2004 | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 9, 2004

Pharmaceutical Antitrust Case in the News

Generic Line reports that Organon and its parent company, Akzo Nobel, entered into $ 36 million settlement with the AG's of all 50 states to resolve state antitrust claims stemming from anticompetitive acts related to its anti-depression drug Remeron.  The claims alleged that the two companies took steps to block the entry of generic competition, including fraudulent claims about its patents made to the FDA. 

November 9, 2004 | Permalink | Comments (0) | TrackBack (0)

Microsoft-Novell Settlement

The Wall Street Journal and The Globe and Mail both reported on the  US$ 536 million settlement today.  While this closes the challenge from Novell in the EU, the company  stated that it intends to file an antitrust suit against Microsoft later this week in Utah. 

November 9, 2004 | Permalink | Comments (0) | TrackBack (0)

Monday, November 8, 2004

Two Recent Working Papers on SSRN

Two working papers of note, recently posted on SSRN:

(1) Professor John M. O'Connor of Purdue University writes on the need for more effective domestic legislation and international enforcement of judgments to combat international cartels.  The paper is particularly relevant in light of the Supreme Court's decision in Hoffman-La Roche this summer, a decision that potentially limits the application of US antitrust law to international cartels. 

(2)  Professor Michael Waldman of Cornell University provides a nice survey of the economic theory of durable goods and some proposals on antitrust policy in durable goods markets.  Particular focus is on the problem of mergers, elimination of second hand markets, tying arrangements, and after-market monopolization.

November 8, 2004 | Permalink | Comments (0) | TrackBack (0)

Antitrust Law in the PRC

According to a recent report,  draft antitrust legislation in China has been submitted to to the State Council for review.  The draft apparently does not include provisions for an independent agency to oversee implementation of the legislation, the first antitrust law for the country if implemented.   Also in the news, the Fair Competition and Market Economy 2004 Shanghai International Forum will be held this Wednesday in Shanghia.  This multicountry forum, including legal experts and ministers from 12 countries, will discuss issues of global competition and competition policy. 

November 8, 2004 | Permalink | Comments (0) | TrackBack (0)

Friday, November 5, 2004

Law professor and economist brief in Hoffman-LaRoche case

The amicus brief submitted by law professors and economists in the Hoffman-LaRoche case can be found at the site for the joint AEI-Brookings Center.   The brief advocated allowing suit under US antitrust law for both doctrinal and policy reasons.   

November 5, 2004 | Permalink | Comments (0) | TrackBack (0)

Energy Law and Antitrust

For those interested in the intersection of energy law and antitrust, the Antitrust Committee of the Energy Bar Association recently released this report on antitrust developments affecting the energy sector over the past year.  The document reports on the Phillips-Conoco merger and the FTC's comments on FERC's market behavior rules, the latter particularly interesting in light of Enron and the California electricity crisis of a few years ago. 

November 5, 2004 | Permalink | Comments (0) | TrackBack (0)

Thursday, November 4, 2004

Opposition to SONY-BMG merger in Europe

Impala, a trade group representing independent record labels in Europe. announced that it will be opposing the SONY-BMG merger approved by the EC this past July. According to an article from today's National Post, the independents that the increased consolidation in the recording industry has marginalized lesser known performers. The article reports that Michel Lambot, president of Impala, sees the consolidation as a blow against cultural diversity and self-determination. The EC's decision approving the merger was released in September. The FTC approved the merger also in July of this year.

November 4, 2004 | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 3, 2004

Insurance Probe Expands

Today's Wall Street Journal reports that the insurance company Chubb Corp. received an investigative damand from the Ohio Attorney General as part of an antitrust probe into alleged regulatory and antitrust violations. The article reports that in addition to New York and Ohio, California, Massachusetts, Utah and North Carolina are also investigating insurance industry practices.

November 3, 2004 | Permalink | Comments (1) | TrackBack (0)

Antitrust issues among generic drug makers

The Second Circuit's decision two weeks ago in Geneva Pharmaceuticals v. Barr Labs, 2004 WL 2334907 (2nd Cir 2004), illustrates the anticompetitive concerns among generic drug makers. At issue was the market for a blood thinner medication and exlusive contractual arrangements between Barr Labs, an established manufacturer of a generic version of the drug, and ACIC/Brantford, a Canadian chemical company that provided a key ingredient to the drug. While the lower court dismissed Geneva Labs' antitrust claims, the Second Circuit held that the court had defined the market too broadly and should have considered only the generic drug market and not the generic and branded market together.

November 3, 2004 | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 2, 2004

Two Excellent Web Sites on Intellectual Property, Antitrust, and Competition Issues

For those interested in how issues of competition policy permeate the fields of antitrust and intellectual property, take a look at the following two web sites:

Economic and Game Theory Intellectual Property Page: Hosted by Michele Boldrin (of The University of Minnesota Economics Department) and David Levine (of The UCLA Economics Department), the site offers a great mix of legal analysis and economic theory.

IPWatchdog: Professor Eugene Quinn's web site out of Syracuse University College of Law provides a nice portal into the world of intellectual property and related issues, particularly antitrust. Already familiar to IP mavens, the site is a "must visit" for antitrust fans as well.

November 2, 2004 | Permalink | Comments (0) | TrackBack (0)

Anticompetitive Uses of Copyright

The Sixth Circuit's decision in Lexmark v. Static Control Components last week did not deal with antitrust law, but is relevant to competition policy. In overruling the grant of preliminary injunction to Lexmark, who was attempting to prevent the marketing of remanufactured toner cartridges that mimicked the microchip in Lexmark cartridges, the Sixth Circuit effectively prevented an attempt to limit competition in the toner cartridge market. What is worth noting is that the court reached this result without an appeal to antitrust law or to the doctrine of copyright misuse. Instead, the decision rested on a judicious application of the Copyright Act and the Digital Millennium Copyright Act. According to the court, the remanufactured cartridges were not the product of copyright infringement, and the remanufacturer's construction of the cartridges did not violate the anit-circumvention provisions of the DMCA. The court also found that the remanufacturer was protected by the DMCA's interoperabilty defense.

The Lexmark case provides a nice example of how competition policy informs intellectual property law. Although the court did not rely on copyright misuse, it is useful to keep thinking of how this defense could apply in other cases. For a discussion, see Dan Burk's article Anticircumvention Misuse at 50 UCLA Law Review 1095 (2003) and Judge Posner's opinion, Assessment Technologies v. WIREdata , 350 F.3d 640 (7th Cir. 2003).

November 2, 2004 | Permalink | Comments (0) | TrackBack (0)

Monday, November 1, 2004

Oligopoly theory and Section One Claims

Gregory J. Werden, Senior Economic Counsel, Antitrust Division, U.S. Department of Justice, has published a nice article entitled "Economic Evidence on the Existence of Collusion: Reconciling Antitrust Law with Oligopoly Theory" at 71 Antitrust Law Journal 719 (2004). The article provides a useful survey of economic theories of oligopoly, focusing principally on the ideas of Edward Chamberlin, George Stigler, and various contemporary game theorists. Mr. Werden highlights the difficulties each theory poses for developing a coherent Section One analysis and demonstrates how these difficulties are reflected in the jurisprudence of Turner and Posner. Here's a sample:

"There is indeed something of a lack of consensus on modern oligopoly theory. Placing great stock in models of repeated games, some economists may believe that pricing coordination commonly arises from unspoken agreements. These economists may find most circumstantial evidence utterly ambiguous as to whether there was a spoken agreement. Focusing instead on the Prisoners' Dilemma game and Stigler's model, other economists may believe that unspoken agreements are at best rare, and they may readily infer the existence of a spoken agreement from circumstances."

Professor Werden also shows how this lack of scholarly consensus on oligopoly theory affects the admissibility of expert witnesses under the Daubert/Joiner/Kumho standard.

November 1, 2004 | Permalink | Comments (0) | TrackBack (0)

More on VNS and the the Election Pool

Today's Wall Street Journal reports on the revamped Voter News Service that was the subject of yesterday's post. In "Stung by Miscalls in 2000, Networks Gird for Accuracy in '04", Joe Flint & Shilagh Murray report that the former VNS blames the 2000 reporting fiasco, in part, on poor technology and inflexibility in spotting glitches in the county-level election data. One change this year is the separation of functions of the new Election Pool into the collection of actual election results and the conducting of exit polls. Under the current arrangement, Edison Media Research and Mitofsky International are responsible for the eexit polling while Associted Press will now collect county level election data. The article does not directly address the competition concerns raised by Professor Lande in his press release, discussed yesterday.

November 1, 2004 | Permalink | Comments (0) | TrackBack (1)

Essay on Thurman Arnold

Spencer Waller's essay, The Antitrust Legacy of Thurman Arnold, published at 78 St. John's Law Review 569 (2004) provides some nice insights into the background of Arnold as head of the Antitrust Division during the New Deal and into the politics of the New Deal itself. Here's a sample:

"Just as the Supreme Court destroyed the legal underpinning for the corporate collectivism underlying the NRA Codes, Arnold destroyed the moral and economic basis for the culture of cartels in America and abroad. He upped the criminal and civil consequences for such business behavior, forced it underground, de-legitimized it by making it both anti-consumer and un-American, created a stable mandate for antitrust as part of an expanded role of the federal government in policing a healthy national economy, and made it impossible for antitrust to be repealed in the future or completely undermined by changes in the prevailing political winds."

Particularly interesting to me were Professor Waller's discussions of the patent cases and Arnold's views of law and economics:

"What Arnold meant by efficiency, however, is very different from the sole focus of the current emaciated form of antitrust on allocative efficiency and wealth maximization. At a minimum, Arnold believed that powerful organizations had to show that they were both efficient and serving the consumer in order to escape antitrust scrutiny. For Arnold, most economists and the law and economics movement of his day were the priests of the old order, preaching that the government was powerless to take action to solve the ills of the day, lest it contravene the natural laws of markets. To him, the newer economics of his day were a source of action, not inaction. More importantly, '[a]ntitrust enforcement must come down from the blue sky of economic and legal theory and concern itself with these family budget items, one at a time.' Inefficiency in the Great Depression meant an economy that produced much but could not distribute those goods and services to consumers. Even where distribution worked reasonably well, consumers frequently lacked the purchasing power to buy the goods and services being produced. The failure of the Great Depression was 'a dangerous kind of waste' that created the situation where those in need saw 'the spectacle of goods withheld from them for no understandable reason.'" [citations omitted]

Let's hope that Professor Waller is planning a book length treatment on the worthy subject. Also worth looking at is Professor Waller's article on Thurman Arnold in the Wyoming Law Review.

November 1, 2004 | Permalink | Comments (0) | TrackBack (0)