Antitrust & Competition Policy Blog

2 New Blogs Join Law Professor Blogs Network

We are pleased to announce the launch of two new blogs as part of our Law Professor Blogs Network:

• Business Law Prof Blog (Dale Oesterle (Ohio State))
• Elder Law Prof (Anne Kimberly Dayton (William Mitchell))

These blogs join our existing blogs:

• AntitrustProf Blog (Shubha Ghosh (SUNY Buffalo))
• ContractsProf Blog (Carol Chomsky (Minnesota) & Frank Snyder (Texas-Wesleyan))
• CrimProf Blog (Jack Chin (Arizona) & Mark Godsey (Cincinnati))
• Health Law Prof Blog (Betsy Malloy (Cincinnati) & Tom Mayo (SMU))
• LaborProf Blog (Rafael Gely (Cincinnati))
• Law Librarian Blog (Joe Hodnicki (Cincinnati))
• Law School Academic Support Blog (Dennis Tonsing (Roger WIlliams) & Ellen Swain (Vermont))
• Media Law Prof Blog (Cristina Corcos (LSU))
• Sentencing Law & Policy Blog (Douglas Berman (Ohio State))
• TaxProf Blog (Paul Caron (Cincinnati))
• Tech Law Prof Blog (Jonathan Ezor (Touro) & Michelle Zakarin (Touro))
• White Collar Crime Prof Blog (Peter Henning (Wayne State) & Ellen Podgor (Georgia State))
• Wills, Trusts & Estates Prof Blog (Gerry Beyer (Texas Tech))

LexisNexis is supporting our effort to expand the network into other areas of law.  Please email us if you would be interested in finding out more about starting a blog as part of our network.

Empagran Redux

Hanno Kaiser has some interesting posts on his Law and Society blog a valuable visual aid to the Supreme Court's decision in Empagran from last year.   His blog also contains some insightful commentary on post-Empagran caselaw.

Regulatory Bargaining and Public Law--look for it soon from Cambridge

Professor Jim Rossi of the Florida State University College of Law continues to contribute to the important area of regulation and public law with his new book, Regulatory Bargaining and Public Law, forthcoming from Cambridge University Press.  The book announcement states:

In this book, Professor Rossi explores the implications of a bargaining perspective for institutional governance and public law in deregulated industries, such as electric power and telecommunications. ... Professor Rossi argues that governmental institutions, often influenced by private stakeholders, share blame for the defects in deregulated markets. 

         Among the issues address in this book are consumer service obligations, constitutional takings jurisprudence, the filed rate doctrine, the dormant commerce clause, state action immunity from antitrust enforcement, and federalism disputes.  Professor Rossi’s book warns against a ‘deference trap’ leading courts to passive roles in conflicts involving political institutions, such as regulatory agencies and states. 

Congratulations to Daniel Crane

Daniel Crane, professor of law at Cardozo Law School, has been invited to present his paper The Paradox of Predatory Pricing at the prestigious Stanford-Yale Young Scholars Conference Program.  Professor Crane's paper offers an innovative take on predatory pricing by focusing on the strategic uses of predatory pricing litigation for anticompetitive purposes.

Rambus, Out of the Frying Pan...

More than a year after the FTC lost a case against Rambus at the administrative level,  the agency alleges that the chip company destroyed key evidence in the case.   The allegation accompanied a motion to reopen the case to submit new evidence.

California grocery chains' profit sharing plan under fire

California AG Bill Lockyear won a ruling yesterday in his challenge to a profit sharing plan among major grocery chains in Southern California.  A district court judge rejected the chains' argument that the plan was immune from antitrust scrutiny because it was enacted to deal with a labor walkout. 

Ultimatum in EU for Microsoft

The June 1 deadline looms for Microsoft to comply with the EU competition commission's ruling to distribute versions of the operating system without Media Player and to pay the hefty fine of 497 million euros.  Meanwhile, Microsoft competitors have expressed concern about pricing of the unbundled operating system, seeking differential pricing for the two versions of the operating system.

Open Access for Scholarly Journals

Bernard Wysocki reported in yesterday's Wall Street Journal on the push in the US (particular at Berkeley) to move towards open access journals.  Daniel Greenstein, associate vice provost of the UC system, is quoted: "We have to take back control from the publishers," viz. Reed-Elsevier and other academic publishers.  According to the article,  the US system spends $ 30 million a year on scholarly periodicals.

Miracle Cure for America's Woes--Competition

Tim Ferguson has a book review in today's Wall Street Journal of Paul London's The Competition Solution: The Bipartisan Secret Behind American Prosperity, a recent publication from the American Enterprise Institute Press.  Mr. London was an economist in the Clinton administration from 1993 to 1997, and consequently his insights are portrayed, in Ferguson's review, as Democrats finally seeing the Republican light.  I am a bit dismayed by attempts to to portray this Paul as on the road to free market Damascus (see the essay on the AEI website that provides an excerpt from the book).  It is more than condescending to portray Democrats or other groups in the center or the left as somehow not getting the importance of markets.  Just read Charles Lindbloom's work on markets and democracy for a taste not only of how liberals view the marketplace but also of how to think about markets in a constructive manner.  Nonetheless, despite the lovefest of bipartisanship and the dancing around the laissez-faire maypole it attempts to stimulate,  Mr. London's book  seems to provide a worthwhile synthesis of the benefits of competition and the role of antitrust law and other regulations to promote it. 

State restrictions on out of state wine sales violate dormant commerce clause

In a 5-4 decision, the US Supreme Court struck down Michigan and New York state laws that prevented direct sales to consumers from out of state wineries.  The case focused on the relationship between the dormant commerce clause and the 21st amendment.   

The majority opinion was authored by Justice Kennedy and held that the state laws discriminated against out of state businesses without a legitimate local purpose.  The states had justified the restrictions under the state's powers to regulate the market for alcohol and the ability of out of state sales to evade state taxes. 

The four dissenting justices (Stevens, Thomas, O'Connor, and  Rehnquist) argued that the state regulations were justified by the history of prohibition.  Justice Thomas read the history, particularly the Webb-Kenyon Act from the prohibition era, to leave the regulation of alcohol to state law and take the issue away from federal judges and Congress.   Justice Stevens and O'Connor signed onto Justice Thomas's dissenting opinion but also had a separate shorter dissent in which they argued that while the majority's opinion might vindicate the philosophy of Adam Smith at the time of the drafting  of the constitution, state regulation of alcohol needs to be understood in terms of the country's history with prohibition.  This last comment is a nice jab at originalism as an interpretative mode.

Whatever one thinks of originalism, however,  my opinion is that the decision is an important victory for commerce clause jurisprudence. 

Comment on In re MSG litigation

Dr. Hanno Kaiser has an interesting comment on the federal district court's recent decision in the MSG case.  The decision is the first to apply the Supreme Court's decision in Empagran last Summer to find that US federal courts have jurisdiction over an international cartel when there are effects on the domestic market.  As Dr. Kaiser points out, the Supreme Court's decision in the Empagran inelegantly balanced the need for comity with the need to combat cartels that have affects on domestic markets.  The MSG decision provides a nice model of how to apply the Supreme Court test.   

Guilty Plea in Bayer AG Price Fixing Probe

Cross post to White Collar Crime blog.  Thanks to Peter Henning from Wayne State University and Elen Plodgor from Georgia State Law College.

DoJ Drops Antitrust Probe of The Seattle Times

Newspaper did not attempt to monopolize Seattle market for daily newspapers, the DoJ concludes.

Welcome, fellow bloggers

(1) Hanno Kaiser, an antitrust attorney and adjunct professor at Cardozo Law School, offers insights on antitrust law at his website and an interesting law and society perspective on antitrust at this link.

(2) Robert W. Doyle of Sheppard Mullin offers information for the antitrust practitioner at his new blog. Welcome to the blogosphere.

National Association of Realtors Reconsiders

According to todays Wall Street Journal, in light of scrutiny from the Department of Justice, the NAR met to reconsider a rule restricting Internet advertising:

"Yesterday morning, a Realtors committee agreed to recommend to the organization's board an effort to revise the rule to allay the antitrust concerns. The board is to vote on that recommendation tomorrow. The rule, adopted two years ago, hasn't taken effect because of the department's inquiry into the effects on competition.

"The rule involves the Internet display of information from multiple-listing services, or MLS, which are local databases of homes available for sale. Under the rule, a brokerage firm that belongs to an MLS would have the right to bar other members of the service from putting on their Web sites listing information about the homes of that firm's clients. Under a particularly controversial provision, the listing firm could exclude some rivals from displaying the information while allowing others to do so.

"Ms. Janik said it is likely that the Realtors will offer to remove the provision for selective exclusion. In that case, an MLS member would have the choice of allowing all other members to display the information or blocking all of them from doing so. That would reduce firms' ability to retaliate against certain rivals while working with others."

(from "Realtors May Revise Web Policy to Head Off Antitrust Law Suit," by James R. Hagerty and John R. Wilke, Wall Street Journal, 5/13/05)

Free Love

Now that I have caught your attention let me tell you about a pet peeve and a growing movement to address it.  In 1979, former Ft Worth Congressman Jim Wright wrangled through Congress one of the most anti-competitive pieces of legislation imaginable. The infamous Wright Amendment, attached to a pending aviation bill, restricted  the destination of flights out of Love Field, a Dallas airport (home to Southwest Airlines) that was supposed to shut down after the opening of Dallas-Ft Worth Airport in the mid 1970's. The legislation was defended then and is defended now as a means to foster the development of regional cooperative efforts like DFW.  The practical effect is to reduce competition.  While, truthfully,  antitrust law would not correct this impediment to competition, it is time to rethink the legislation.  For some more information, see Southwest's page as well as the following excerpt from yesterday's Wall Street Journal ("Southwest's Dallas Duel" by Susan Warren & Melanie Trottman):

"After more than a quarter century of living under the restrictions of an arcane federal law, Southwest Airlines has declared war on a statute that has stifled its growth at its hometown airport.

"Under the 1979 law, the only flights Southwest may schedule at its headquarters at Dallas Love Field are those to and from seven states. Since the law's enactment, Southwest has grown up to fly more passengers than any other U.S. carrier and is one of the few that is profitable. Still, anyone who wants to fly Southwest from Dallas to a location beyond a nearby state must first fly to a nearby city, wait at least an hour in the airport, then change planes. Southwest is forbidden to sell tickets to and from these faraway cities and can't even advertise such long-haul flights under the statute.

"The law, called the Wright Amendment after its sponsor, former Fort Worth congressman and House speaker Jim Wright, was designed to protect rival Dallas-Fort Worth International Airport, located about 11 miles away, from competition by carriers at Love Field. The law has protected AMR Corp.'s American Airlines, which is based in Fort Worth and has become DFW's dominant carrier and chief moneymaker. It also has pushed up fares to and from Dallas and kept Southwest from expanding in its hometown even as it has spread to 59 other cities, where it typically offers long-haul flights to many destinations and has prompted rivals to cut their fares."

Special Issue on UCL Post-Prop 64

Members of the California State Bar Section on Antitrust and Unfair Competition, take note: The Spring/Summer 2005 issue of Competition, the section's journal, focuses on the implications of Prop 64, the initiative passed last November which limited the rights of citizens to sue under California's unfair competition law.  The issue, titled "Will You Still Need Me; Will You Still Plead Me, After Prop 64?,"  contains seven articles that raise such questions as: has Prop 64 federalized unfair competition claims and whether Prop 64 applies to pending cases (the answer seems to be no).   The forward to the issue discusses the activities of the Trevor Law Group, a firm of several recent law grads, who brought countless private actions against Los Angeles area businesses under California's law.

For those who are not members, I could not find a link to the issue.  But here's a link to the journal's website that might provide further information.

R. Hewitt Pate to Step Down Next Month

The Wall Street Journal reports this morning that R. Hewitt Pate intends to step down next month from his position as chief of the Antitrust Division of the Department of Justice.  He has been  chief since 2003 and a senior official in the division since 2001.  Mr. Pate stated that he will not be participating in the pending SBC-ATT and Verizon-MCI mergers.  Under Pate's watch, the DoJ's merger activity increased, most notably the challenge to the Oracle-Peoplesoft merger.  Named as possible successors: Phillip Proger of Jones Day in Washington and Makan Delrahim, the antitrust division's appellate and international-policy chief.

DoJ Investigates National Association of Realtors

The Wall Street Journal reported yesterday that for the past eighteen months, the Department of Justice has been investigating the practices of the National Association of Realtors prohibiting the listing of properties on competitor's websites and various state laws that limit rebates and competition in commission rates.  As today's Washington Post describes:

"The issue boils down to whether a listing agent can effectively claim ownership rights to a home listing, deciding where and when it can be displayed on the Internet, for the duration of the listing contract, which usually runs between 60 and 90 days.

"The Realtors' group argues that agents work hard to get listings and so should be entitled to choose whether a home can also be displayed on a competitor's Web site."

The Post also reports that the DoJ filed a lawsuit against the State of Kentucky challenging a state law prohibiting rebates to customers by realtors.

Jessica Swesey reports on the story for Inman News (a subscription site), quoting this blogger as well as other antitrust specialists.

Ernest Gellhorn Passes Away May 7

Perhaps the leading luminary in antitrust and economic regulation, Ernest Gellhorn passed away Saturday in Washington, D.C.   Professor Gellhorn had a incredibly distinguished career as dean at three major law schools and as a professor at Duke, Virginia, and most recently George Mason.  I doubt that there is anyone active in the fields of antitrust and administrative law who has not read or been affected by Professor Gellhorn's scholarship and advocacy.  More information can be found at this George Mason site.