Thursday, December 15, 2005
A bit of shameless self-promotion: I have finished a short article on biotechnology patent pools and their treatment under antitrust and patent law, particularly after the Federal Circuit's recent decision in Phillips. All comments are welcome. Please do not publish or cite without my permission.
Wednesday, December 14, 2005
Nice article in the Dec 10th issue of The Economist entitled "Matchmakers and Trustbusters." The article deals with the problem of pricing in twos sided matching markets, that is markets in which the market maker has to coordinate the two sides of a market by the creation of a platform. An example is a dating service or, in the more high tech realm, an operating system. The immediate relevance of this economics issue is to the interchange fee chargedy by Visa and Mastercard to retail bankers. The legal question is whether this fee is set too high, as claimed by the banks. The difficulty is that the choice of the fee may have very little to do with the marginal cost of the service provided and more to do with the value of the final transaction. For an economic analysis, see the paper by Rochet and Tirole cited in The Economist article. David Evans, currently of the Law and Economics Consulting Group, writes that the two sided markets do not require extra scrutiny or a bye under the antitrust laws. He urges antitrust regulators to understand the nature of the market before proceeding.
Monday, December 5, 2005
Antitrust & Competition Article
Below is a link to an article that appears in the Richmond Journal of Law & Technology entitled "A New Method for Regulatory Antitrust Analysis? Verizon Communications Inc. v. Trinko," by James E. Scheuermann and William D. Semins.
In Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004), the U.S. Supreme Court adopted a novel method for applying the antitrust laws in regulated and deregulating markets. This new method could have profound implications for participants and litigants in such markets. Because the Court did not acknowledge its departure from precedent on this matter of method, the decision adds a new layer of uncertainty to business conduct and planning by participants in these markets. This article analyzes the Court's adoption and application of this novel method in light of the other two methods of regulatory antitrust analysis previously adopted by the Court and a Federal Circuit Court of Appeals, and discusses some implications of the Court's decision for future regulatory antitrust cases.