Monday, August 22, 2005
Professors Preston McAfee, Hugo Mialon, and Sue Mialon have published two articles on SSRN concerning the private enforcement of antitrust law. In Private v. Public Enforcement of Antitrust: A Strategic Analysis, the authors conclude that private enforcement alone is never efficient and that efficient private enforcement requires damages that are multiplied and decoupled. In Private Antitrust Enforcement: Procompetitive or Anticompetitive?, the authors conclude that private antitrust suits are more likely to be used by smaller firms in fragmented industries than by larger firms in concentrated ones.
Professor Michael Carrier of the Rutgers-Camden Law School has posted an interesting comment on SSRN concluding that antitrust scrutiny of standard setting organizations should be minimal since the pro-competitie benefits of SSO's will undoubtedly outweigh any anti-competitive effects.
Professor Elizabeth Trujillo of Florida State University College of Law offers a fresh perspective on the state action doctrine providing immunity from antitrust for conduct that falls under a state regulatory scheme. In State Action Antitrust Exemption Collides with Deregulation: Rehabilitating the Foreseeability Doctrine, Professor Trujillo points out that the immunity under the state action doctrine creates an impediment to the ability of states to deregulate electricity markets and open up the markets to competing new entrants. As she writes:
"The challenge for policymakers in establishing "pro-competition" policies is in implementing them within old regulatory structures originally intended to delegate authority to regulatory entities such as utilities which have traditionally dominated the electrical market. In effect, broad application of state action would interfere with any competitive efforts because it would continue to preserve old regulatory structures and protect traditionally dominant suppliers in the market."
Professor Trujillo recommends strengthening the requirement that the state regulation should reflect a clearly articulated state policy before allowing the immunity. In this way, courts can correct the misapplication of the Supreme Court's Midcal standard.
The proposed merger between Whirlpool and Maytag is getting intense scrutiny from the Department of Justice and is the suject of controversy. According to the Des Moines Register:
"Robert Doyle, a lawyer with Sheppard, Mullin, Richter & Hampton in Washington, D.C., said a key issue in the the Maytag-Whirlpool deal is whether smaller competitors are in a position to keep the U.S. market competitive.
"If competitors such as the South Korean companies Samsung and LG "are in a position to grow and expand and keep the market competitive, then the Whirlpool deal is less of a concern," Doyle said. "But there is an issue of whether the smaller ones have the ability expand in the marketplace if the transaction is completed."
"Doyle sees "a significant antitrust question" in the deal.
"Whirlpool is the nation's largest appliance maker, with about 35 percent of the market. Maytag is No. 3, with 15 percent, but in certain sectors - washers, for example - a merged company would have a 72 percent market share in terms of unit sales, according to analysts' reports.
"Some analysts have said that number is skewed because Whirlpool builds washing machines for Sears, which sells them under its in-house Kenmore brand.
"Sears controls the pricing, and Whirlpool must periodically bid with other manufacturers to get the work.
"Without Kenmore, the market share of a combined Maytag-Whirlpool company would be slightly less than 30 percent in U.S. major appliances, Duthie said.
"Doyle, however, said regulators might require Whirlpool to sell off some portions of its business to satisfy antitrust concerns."
Thursday, August 18, 2005
Professor Scherer of Harvard University and Haverford College has released a working paper entitled "Technological Innovation and Monopolization", available at the AAI Website. I was fortunate enough to see a presentation of this interesting paper at a conference in Milan about a year ago. Professor Scherer concludes that while courts in general are able to deal with he monopolization-innovation trade-off, the legal process is often too slow to keep up with market and technological changes.
I have been away in England and the Continent for the past six weeks, seeing, among things, software patents taking a hit in the EU. In any case, I hope to return to regular posting now that I am back on this side of the Atlantic. Please continue to send me material as appropriate. Also, consider guest blogging. Let me know if there is interest.