Wednesday, April 18, 2007

Reforming Entry Analysis in Merger Cases

Posted by D. Daniel Sokol

Last Friday I attended the very good annual Loyola Chicago Institute for Consumer Antitrust Studies conference that Spencer Waller puts together.  Among the papers presented was one by John Kirkwood of Seattle University - School of Law and Richard Zerbe of the University of Washington - Daniel J. Evans School of Public Affairs entitled Reforming Entry Analysis in Merger Cases.

ABSTRACT: Entry analysis is a critical, yet often poorly executed component of the antitrust evaluation of a merger. While a merger cannot create market power if entry is easy, courts generally evaluate the ease of entry without asking the right economic questions. The 1992 Merger Guidelines identified the three components of entry analysis - timeliness, likelihood, and sufficiency - but courts typically resolve the most difficult  issue - likelihood - in a few paragraphs, asking whether the relevant market has entry barriers but not whether those barriers are high enough to render entry unprofitable. This paper examines every litigated federal merger case since April 1992 and finds, for example, that courts never determined the minimum volume of sales an entrant would need to be profitable and rarely examined whether the reactions of incumbent firms would prevent the entrant from attaining that volume. In order to focus the courts on the right issues and provide them with better evidence to resolve those issues, this paper proposes a new approach to entry analysis. Under it, the government would have the burden of showing not only that the relevant market has barriers but also that the barriers are high enough to make entry unprofitable. If defendants contend that entry is likely, they would have the burden of demonstrating a "path to profitability" - a business strategy and financial plan that is likely to enable an entrant to both make money and promptly eliminate the merger's anticompetitive effects. This approach would improve the quality of entry analysis while maintaining its workability.

April 18, 2007 | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 17, 2007

DOJ/FTC Intellectual Property Report is Out

Posted by D. Daniel Sokol

Just in time for the ABA Spring Meeting, the DOJ and FTC released Antitrust Enforcement and Intellectual Property Rights:  Promoting Innovation and Competition:  A Report Issued By the U.S. Department of Justice and the Federal Trade Commission.  I am still trying to read through the AMC Report.  This means even more reading over the weekend.

The press release summarizes the conclusions:

  • Antitrust liability for mere unilateral, unconditional refusals to license patents will not play a meaningful part in the interface between patent rights and antitrust protections. Antitrust liability for refusals to license competitors would compel firms to reach out and affirmatively assist their rivals, a result that is in tension with the antitrust laws.
  • Conditional refusals to license that cause competitive harm are subject to antitrust scrutiny.
  • Joint negotiation of licensing terms by standard-setting organization participants before the standard is set can be procompetitive. Such negotiations are unlikely to constitute a per se antitrust violation. The agencies will usually apply a rule of reason analysis when evaluating these joint activities.
  • The agencies evaluate the competitive effects of cross-licenses and patent pools under the rule of reason framework articulated in the 1995 Antitrust-IP Guidelines.
  • Combining complementary patents within a pool is generally procompetitive. A combination of complementary intellectual property rights, especially those that block the use of a particular technology or standard, can be an efficient and procompetitive way to disseminate those rights to would-be users of the technology or standard. Including substitute patents in a pool does not make the pool presumptively anticompetitive–competitive effects will be ascertained on a case-by-case basis.
  • The agencies apply a rule of reason analysis to assess intellectual property licensing agreements, including non-assertion clauses, grantbacks, and reach-through royalty agreements.
  • The Antitrust-IP Guidelines will continue to guide the agencies’ analysis of intellectual property tying and bundling. The agencies consider both the anticompetitive effects and the efficiencies attributable to a tie, and would be likely to challenge a tying arrangement if: (1) the seller has market power in the tying product, (2) the arrangement has an adverse effect on competition in the relevant market for the tied product, and (3) efficiency justifications for the arrangement do not outweigh the anticompetitive effects. If a package license constitutes tying, the agencies will evaluate it under the same principles they use to analyze other tying arrangements.
  • The agencies consider both the anticompetitive effects and the efficiencies attributable to a tie or bundle involving intellectual property.
  • The starting point for evaluating practices that extend beyond a patent’s expiration is an analysis of whether the patent in question confers market power. If so, these practices will be evaluated under the agencies’ traditional rule of reason framework, unless the agencies find a particular practice to be a sham cover for naked price fixing or market allocation.
  • Collecting royalties beyond a patent’s statutory term can be efficient. Although there are limitations on a patent owner’s ability to collect royalties beyond a patent’s statutory term, see Brulotte v. Thys Co., 379 U.S. 29 (1964), that practice may permit licensees to pay lower royalty rates over a longer period of time which can reduce the deadweight loss associated with a patent monopoly and allow the patent holder to recover the full value of the patent, thereby preserving innovation incentives.

April 17, 2007 | Permalink | Comments (0) | TrackBack (0)

Elhauge and Geradin's Global Antitrust Law and Economics (Foundation Press 2007)

Posted by Shubha Ghosh

Professors Einer Elhauge  (Petrie Professor of Law, Harvard University) and Damien Geradin (Partner, Howrey, LLP; Professor of competition law and economics, TILEC, Tilburg University) have made a fine contribution to the fields of antitrust, comparative law, and law & economics with their new casebook Global Antitrust Law and Economics.   The casebook juxtaposes developments in US antitrust law and EC competition law through eight chapters. Beginning with an overview of the contrasting remedial systems in the US and the EC, the book considers, in order, horizontal agreements, unilateral conduct, vertical agreements, agreements affecting downstream competition, concerted action, mergers, and extraterritoral competition law and trade.    The book is a tour de force, suitable for advanced courses and seminars in competition policy and international trade.

Two aspects of the book, related to my areas of interest, illustrate its range and depth.  First, the chapter on horizontal agreements contains a a twenty five page section on intellectual property law, which compares the US and EC approaches to licensing restrictions.   The selected readings include the General Electric and New Wrinkle cases, the Erauw-Jacquery decision on plant seed licensing, the DOJ/FTC Joint Guidelines on Intellectual Property licensing, and EC Commission Regulation on Technology Transfer Agreements.   This brief section does a nice job of contrasting the normative positions underlying the US and the EC approaches, with the former emphasizing innovation and the latter emphasizing market competition.

Secondly, a law and economics perspective is integrated throughout the presentation of the materials.  If there is any criticism, it would be that there could have been more discussion of market competition and market structure issues as well as the welfarist assumptions underlying antitrust and competition law.  But at nearly twelve hundred pages, Elhauge Geradin's treatise size casebook overflows with insights into the present and future of global antitrust on both sides of the Atlantic.

Posted by D. Daniel Sokol

I too think very highly of this textbook and have been using portions of it (from a pre-publication copy) in my seminar this semester.  It fills a gap among casebooks as the only comparative casebook on US and EU antitrust/competition policy.  Next week Einer and Damien will be guest blogging with us about the casebook. 

April 17, 2007 | Permalink | Comments (0) | TrackBack (0)

National Champions and the Two-Thirds Rule in EC Merger Control

Posted by D. Daniel Sokol

Nationalism remains strong in cross border EU mergers.  That is, Member States of the EU sometimes make life very difficult from cross European mergers (the recent E.On attempt to acquire Endesa comes to mind as do some failed cross-border banking mergers) that might be beneficial to the EU but which would involve the acquisition of a country's firm by a firm of another Member State.  Another issue is one in which countries seek to promote national champions even if may create a domestic consumer welfare loss.  A new working paper by Andrew Scott entitled National Champions and the Two-Thirds Rule in EC Merger Control addresses this second issue and the potential for community-wide reform.

ABSTRACT: The 'two-thirds rule' stands as a caveat to the quantitative jurisdictional thresholds stipulated in the Merger Regulations. It prevents the attribution of a 'Community dimension' to large business mergers where two-thirds of the parties' respective turnovers are made in one and the same member state. It sees the relevant national authority and not the European Commission enjoy competence to assess the competitive effects of such a transaction. In the immediate aftermath of Gas Natural/Endesa - a case which the European Commission accepted only reluctantly did not possess a Community dimension - the Competition Commissioner mooted the legislative repeal of the two-thirds rule. The reception by member states of a proposal on these lines is unlikely to be uniformly generous. This note first reviews the origins and content of the two-thirds rule, before proceeding to consider the current momentum behind and prospects for successful reform. It suggested that a wider rapprochement between divergent perspectives on the best approach to achieving economic development both within and across the member states of the EC - and in particular on the problematic issue of support for 'national champions' - will likely be necessary before any revision can occur.

April 17, 2007 | Permalink | Comments (0) | TrackBack (0)

Monday, April 16, 2007

Visiting Professor Opportunities in Antitrust/Competition Law

Posted by D. Daniel Sokol

This is the time of year in which US law faculty begin to think about opportunities abroad to expand their teaching and research horizons.   The list of Fulbright opportunities available for law professors is available here.  Two countries have specific needs in antitrust law- Portugal and India.  Other countries have general needs in which one could still undertake competition related research and lecturing.   The deadline for Fulbright award applications is  August 1, 2007.

April 16, 2007 | Permalink | Comments (0) | TrackBack (0)

China and Antitrust/Competition Policy

Posted by D. Daniel Sokol

Antitrust is a regulatory tool to improve societal well being through a market based organization of the economy.  In a development context, antitrust works to create a more competitive environment to encourage growth and productivity. An antitrust agency is the primary domestic institution within a country’s antitrust system. It protects competition in a number of different ways. Ex ante, an antitrust agency can prevent anti-competitive conduct through merger review. By reviewing a proposed merger of two firms, an antitrust agency can address the potential anti-competitive effects of a merger prior to its consummation. Another ex ante role is that of competition advocacy. In this role, agencies attempt to mitigate the anti-competitive effect of policy by other parts of government—other agencies or the legislative process. Ex post, an antitrust agency brings cases against anti-competitive conduct whether unilateral or coordinated. Some competition advocacy is ex post and attempts to reduce the impact of anti-competitive laws and regulation already in place.

Within the antitrust international community, China and its potential adoption of an antitrust law is a hot topic and has been for a number of years, as China has been slow to adopt an antitrust law. We are beginning to see some academic literature on the future Chinese law and the types of issues and behavior that the law should address. In terms of enforcement priorities, given the nature of China’s economy—heavy government regulation, many state owned enterprises, and collusive practices among competitors, it seems to me that the priorities of the new agency should be focused almost exclusively on anti-cartel enforcement and competition advocacy. Mergers would be next, especially as Chinese companies begin to consolidate. It should be a long time before any new Chinese agency brings an abuse of dominance/monopolization case. To the extent that it does, the focus should be in regulated industries (e.g., transportation, energy, telecom), where distortions have the largest country-wide economic impacts. In an excellent speech at the Chicago Kent Law Review Conference on Latin AmericanLaw and Development this past Friday, Eduardo Perez Mota, President of the Federal Competition Commission of Mexico (CFC), outlined an enforcement agenda on advocacy and dominance cases focused on regulated industries. The CFC is one of the gems of Latin American antitrust enforcement agencies and has been in business since just before NAFTA was signed. It terms of an enforcement agenda, the CFC understands that the primary distortions in Mexico come from state action that either support state owned enterprises or recently privatized companies.

The above discussion is my way of introducing to a new working paper by Bruce Owen, Su Sun, and Wentong Zheng entitled China's Competition Policy Reforms: The Antimonopoly Law and Beyond.

ABSTRACT: More than twelve years have elapsed since China began its efforts to enact a comprehensive antitrust law. Today, drafts of the law are still being debated, with no real signs of enactment. Such a protracted legislative process is highly unusual in China, and can only be explained by the controversy the draft law generates. After a brief review of China's current competition policy and the new draft antitrust law, this paper discusses the fundamental issues in China's economy that give rise to the challenges facing China's antitrust policymakers in enacting the new antitrust law. These issues include the role of state-owned enterprises, perceived excessive competition in China's economy, mergers and acquisitions by foreign companies, the treatment of administrative monopolies, and the enforcement of the antitrust law. While those controversies create significant policy issues for China, they do not constitute valid objections to the enactment of the new antitrust law. Meanwhile, it will be important for China to recognize that the new antitrust law alone will not be sufficient to fully realize its goal of promoting competition in its economy; other reforms will be necessary as well. China will be better off by moving swiftly to enact the new antitrust law, while keeping the momentum to engage in those other reforms.

April 16, 2007 | Permalink | Comments (0) | TrackBack (0)

Sunday, April 15, 2007

Rules Versus Standards in Antitrust Adjudication

Posted by D. Daniel Sokol

Dan Crane of Cardozo Law School (whom I finally met on Thursday night) has an article forthcoming in the Washington & Lee Law Review that is worth reading-- Rules Versus Standards in Antitrust Adjudication.

ABSTRACT: Antitrust law is moving away from rules (ex ante, limited factor liability determinants) and toward standards (ex post, multi-factor liability determinants). This movement has important consequences for the structure of antitrust adjudication, including shifting ultimate decision-making down the legal hierarchy (in the direction of juries, trial courts sitting as fact-finders, and administrative agencies) and increasing the importance of economic experts. The efficiency consequences of this trend are often negative. Specifying liability determinants as open-ended, unpredictable standards increases litigation costs, chills socially beneficial industrial practices, allocates decision-making on microeconomic policy to unqualified juries, and facilitates strategic misuse of antitrust litigation by rent-seeking competitors. Instead of following a generalized preference for standards, courts should consider five factors in choosing the ex ante precision of liability determinants: (1) whether the lawsuit was brought by the government or a private party;  (2) whether the legal determinant would create liability or immunize against it; (3) whether  the remedy sought is prospective (i.e., injunctive) or retrospective (i.e., damages); (4) whether the conduct is idiosyncratic or paradigmatic; and (5) whether the misconduct alleged is collusion or exclusion.

April 15, 2007 | Permalink | Comments (0) | TrackBack (0)

The Prohibition of the Proposed Springer-Prosiebensat.1-Merger: How Much Economics in German Merger Control?

Posted by D. Daniel Sokol

It may be that German competition law is lacking in modern economic based reasoning in its merger analysis.  This is the view taken by a new working paper by Oliver Budzinski of the University of Marburg and Katharina Wacker of Heinrich-Heine Universitaet Duesseldorf entitled The Prohibition of the Proposed Springer-Prosiebensat.1-Merger: How Much Economics in German Merger Control?

ABSTRACT: We review the Bundeskartellamt (Federal Cartel Office Germany) decision on the proposed merger between Springer and ProSiebenSat.1 from an economic point of view. In doing so, it is not our goal to analyse whether the controversial decision by the Bundeskartellamt has been correct or flawed from a legal point of view. Instead, we analyse whether the economic reasoning in the decision document reflects state-of-the-art economic theory on conglomerate mergers. Regarding such types of mergers, anticompetitive effects either do not occur regularly or are more often than not overcompensated by efficiency gains, so that a standard welfare perspective demands reluctance concerning antitrust interventions. This is particularly true if two-sided markets, like media markets, are involved. However, anticompetitive conglomerate mergers are not impossible, in particular in neighbouring markets where there is some relationship between the products of the merging companies. In line with the more-economic approach in European merger control, a particular thorough line of argumentation, backed with particularly convincing economic evidence, is necessary to justify a prohibition of a conglomerate merger from an economic point of view. Against this background, we do not find the reasoning of the Bundeskartellamt entirely convincing and sufficiently strong to justify a prohibition of the proposed combination from an economic perspective. The reasons are that (i) the Bundeskartellamt fails to continuously consider consumer and customer welfare as the relevant standards, (ii) positive efficiency and welfare effects of cross-media strategies are neglected, (iii) in contrast, the competition agency sometimes appears to view profitability of post-merger strategy options to be per se anticompetitive (efficiency offence), (iv) the incontestability of the relevant markets is not sufficiently substantiated, (v) inconsistencies occur regarding the symmetry of the TV advertising market duopoly versus the unique role of the BILD-Zeitung and (vi) the employment of modern economic instruments appears to be underdeveloped. Thus, we conclude that the Bundeskartellamt has not embraced the European more-economic approach in the analysed decision. However, one can discuss whether economic effects are overcompensated in this case by concerns about a reduction in diversity of opinion and threats to free speech. Similar to the Bundeskartellamt, we do not consider these concerns in our analysis.

April 15, 2007 | Permalink | Comments (0) | TrackBack (0)

Thursday, April 12, 2007

The Vertical Restraints' Paradox: Justifying the Different Legal Treatment of Price and Non-Price Vertical Restraints

Posted by D. Daniel Sokol

Shubha will be happy to know that I found a recent working paper that agrees with him on the need for per se illegality treatment of RPM.  Ittai Paldor, an SJD student at U Toronto has the following working paper out on SSRN entitled The Vertical Restraints' Paradox: Justifying the Different Legal Treatment of Price and Non-Price Vertical Restraints.

Abstract: In a case currently pending before the U.S. Supreme Court the court has been urged to overrule the longstanding per se illegality rule presently applicable to minimum resale price maintenance, or RPM. Over the past fifty years antitrust theorists and economists have advanced several pro-competitive explanations for RPM. Additionally, scholars have argued that non-price vertical restraints (such as territorial exclusivity) and RPM have similar effects on price and quantity and should therefore be treated similarly by law. Nearly thirty years ago, the Supreme Court ruled that non-price vertical restraints should be subject to a rule of reason, acknowledging their pro-competitive potential. Since no explanation has been forwarded to justify treating RPM differently, there seems to be good reason to rectify the inconsistency and subject RPM to a rule of reason too. And indeed, the Court has recently granted Certiorari, signaling at least a willingness to reconsider its position. In the following I argue that legal policymakers' current approach is economically justified. I show that all pro-competitive explanations for RPM suffer from a common flaw, the possibility of non-price competition, which challenges RPM's ability to achieve any of the pro-competitive goals attributed to it. I then proceed to show that non-price vertical restraints are capable of achieving the pro-competitive goals which RPM is incapable of achieving. This justifies both applying a per se illegality rule to RPM and applying a different rule, namely a rule of reason, to other vertical restraints.

April 12, 2007 | Permalink | Comments (1) | TrackBack (0)

Wednesday, April 11, 2007

Antitrust and Media Diversity

Posted by D. Daniel Sokol

David Balto reports on a recent decision in California.  Reilly v. Media News challenges a series of newspaper mergers in the Bay Area.  Mr. Reilly, a consumer, argues the mergers are anticompetitive and he argues the anticompetitive effects are not just a matter of prices but the importance on diversity of ownership and diversity of media views.  Judge Illston decided Mr Reilly had standing.  She relied on Judge Walker's decision in an earlier merger challenge brought by Mr. Reilly "Chief Judge Walker [in Reilly 1]  simply noted that the Newspaper  reservation Act reflects a congressional concern with "encouragement of  ultiple sources of newspaper news, features and opinion," and "the Sherman Act and Clayton Act should be read bearing in mind [these] legislative purposes.Id. at 1195. There is no reason to think that Congress was only concerned with newspaper diversity in situations where the NPA is involved.

"This Court agrees with the analysis of standing made in Reilly I. The NPA evidences that Congress values the existence of separate sources of newspaper content in a community, and that loss of separate sources injures consumers. The existence of the NPA thus strongly suggests that loss of diversity of content is a "threatened loss or damage `of the type the antitrust laws were designed to prevent and that flows from that which makes defendants' acts unlawful. "' Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S.104,113 (1986). This conclusion is consistent with the Supreme Court's broad interpretation of the Clayton Act, which "does not confine its protection to consumers, or to purchasers, or to competitors, or to sellers.... The Act is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practices by whomever they may be perpetrated." Blue Shield v Mcready" and "A refusal to compete with respect to the package of services offered to customers, no less than a refusal to compete with respect to the price term of an agreement, impairs the  ability of the market to advance social welfare by ensuring the provision of desired goods and services to consumers at a price approximating the marginal cost of providing them."  FTC v. Indiana Federation of Dentists, 476 U. S. 447, 459 (1986); see also Glen Holly, 352 F.3d at 377 ("Antitrust law addresses distribution restraints in order to protect consumers from the higher prices or diminished choices that can sometimes result from limiting intrabrand competition.") (citation omitted).

Download reilly.stngdecision.pdf

April 11, 2007 | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 10, 2007

Law Professor's Brief in Cascade v. PeaceHealth

Posted by D. Daniel Sokol

Professor Daniel Crane of Cardozo Law School (of recent fame on this blog for his excellent Antitrust Antifederalism article) is filing a law professors' amicus brief in Cascade v. PeaceHealth, a 9th Circuit case on bundled discounts.  This is in response to the following (rather unusual) request by the 9th Cir. panel:

The court invites supplemental briefs by any amicus curiae addressing the following issue raised in this appeal: Whether a plaintiff who seeks to establish the predatory or anticompetitive conduct element of an attempted monopolization claim under § 2 of the Sherman Act by showing that the defendant offered bundled discounts to the defendant's customers must prove that the defendant's prices were below an appropriate measure of the defendant's costs. If so, what is the appropriate measure of costs and how should the trial court instruct the jury on the matter of costs? If not, what standard should the trial court instruct the jury to use to determine whether the bundled discounts are predatory or anticompetitive?

The Crane brief answers the first question yes.  It argues in favor of a discount reallocation screen (the plaintiff must show that the competitive product was priced below cost after reallocation of discounts from the monopoly product) and advocates average variable cost as the appropriate measure of cost.

The brief will be on behalf of a group of law professors.  It is due to be filed next Thursday (April 19).  Anyone wishing to review a draft of the brief should email Dan

April 10, 2007 | Permalink | Comments (0) | TrackBack (0)

Spulber and Yoo on Trinko

Posted by D. Daniel Sokol

Trinko is one of the most important antitrust decisions of recent years.  Daniel Spulber of Northwestern University's Kellog School of Management and Christopher Yoo of Vanderbilt Law School examine Trinko and apply its meaning to the current debate on net neutrality issues in their working paper entitled Mandating Access to Telecom and the Internet: The Hidden Side of Trinko.

Abstract: Antitrust has long played a major role in telecommunications policy, demonstrated most dramatically by the equal access mandate imposed during the breakup of AT&T. In this Article we explore the extent to which antitrust can continue to serve as a source of access mandates following the Supreme Court's 2004 Trinko decision. Although Trinko sharply criticized access remedies and antitrust courts' ability to enforce them, it is not yet clear whether future courts will interpret the opinion as barring all antitrust access claims. Even more importantly, the opinion contains language hinting at possible bases for differentiating among different types of access, in contrast to previous analyses, which have generally grouped all of the forms of access into a single category. We build upon this language to offer an analytical framework, based on a branch of mathematics known as graph theory, that captures the manner in which different components of network can interact with one another as part of a complex system. Our analysis  also offers a basis for classifying the different types of access into five categories: retail, wholesale, interconnection, platform, and unbundled. We then employ this framework to analyze a range of policy and doctrinal issues, including the current debate over network neutrality.

April 10, 2007 | Permalink | Comments (0) | TrackBack (0)

Monday, April 9, 2007

50 Years Later: Is Less EU Competition Policy Better?

Posted by D. Daniel Sokol

Valentine Korah of University College London provides her thoughts on 50 years of competition policy in the EU here (free registration required).  Korah notes a pattern of decreasing competition policy intervention.

Korah makes a number of interesting points.  One insight in particular on the current state of Article 82 stands out.  Korah writes, "The old views on Article 82 are still accepted by the courts, although the views are now controversial. The Commission is trying focus on avoiding consumer harm, and analyzing the direct or indirect effects on consumers of conduct alleged to be abusive. There is a huge dispute between those influenced by the German school of Ordo Liberals, interested in competition as an institution and the protection of competitors, on the one hand, and those influenced by developments in the USA and concern for efficiency." 

Are we in fact seeing the Americanization of Article 82?

April 9, 2007 | Permalink | Comments (0) | TrackBack (0)

International Competition Network in Action

Posted by D. Daniel Sokol

The International Competition Network (ICN) has, in my estimation, been the most important and effective international antitrust institution for norm creation and implementation since its creation in 2001.  Two ICN events are coming up in the near term that are worth noting. 

As posted on the ICN website, "The Irish Competition Authority and the UK Office of Fair Trading will be hosting an ICN Mergers Workshop on Substantive Issues in Merger Review to be held on April 12th-13th, 2007, in Dublin, Ireland. The Workshop is aimed at case handlers of competition authorities and it is intended to promote the outputs delivered by the ICN Merger Investigation and Analysis Subgroup over the last two years."

The ICN annual meeting conference website is now up, here.  The meeting will be in Moscow.  As documents become final, they will be posted on the conference website.  The conference agenda is exciting and is available here.  I have been involved with the inputs of a number of subgroups and think that this conference and materials will be excellent.  As noted earlier, due to the upcoming birth of our second child, my wife has forbidden my travel in May and June so I will not attend the conference.  We will try to get someone to report from the conference for the blog.

April 9, 2007 | Permalink | Comments (0) | TrackBack (0)

Sunday, April 8, 2007

Comparative Perspectives on Multi-Jurisdictional Antitrust Enforcement

Posted by D. Daniel Sokol

The Centre for Competition Policy at the University of East Anglia will hold its annual summer conference from June 14-15.  This year's theme is Comparative Perspectives on Multi-Jurisdictional Antitrust Enforcement.  You can find more conference information here.

Speakers include:
Professor Stephen Calkins (Wayne State University); Firat Cengiz (CCP, University of East Anglia); Professor Andrew Gavil (Howard University); Dr. Michael Harker (CCP, University of East Anglia); Professor Scott Hemphill (Columbia University); Professor William Kovacic (FTC); Dr. Philip Marsden (BICL); Professor Stephen Wilks (Exeter University).

April 8, 2007 | Permalink | Comments (0) | TrackBack (0)

Saturday, April 7, 2007

Bargaining Over Remedies in Merger Regulation

Posted by D. Daniel Sokol

Merger remedies are a critical issue in any given jurisdiction, yet one that is underplayed in the academic literature.  Adding to the literature on EU merger remedies is a working paper by Bruce Lyons and Andrei Medvedev of the Competition Centre of the University of East Anglia entitled Bargaining Over Remedies in Merger Regulation.

ABSTRACT: This paper provides a first attempt to understand how outcomes are determined by the standard institutions of merger control. In particular, we focus on the internationally standard 2-phase investigation structure and remedy negotiations of the form practiced by the EC. We find that there are inherent biases in remedy outcomes, and identifiable circumstances where offers will be excessive and where they will be deficient. In particular, we find clear circumstances in which firms offer excessive remedies, which goes against a possible intuition that firms should expect to extract an information rent for possessing superior information about competition in the market.

April 7, 2007 | Permalink | Comments (0) | TrackBack (0)

Friday, April 6, 2007

The intersection of competition law and IP in Europe

Posted by D. Daniel Sokol

Ioannis Lianos, Associate Executive Director of the Jevons Institute of Competition Law and Economics at the Faculty of Laws of the University College London recently wrote on the interaction between competition law and IP in Europe (defending a regulatory theory of IP). The article is based on a lecture he gave last year at the Centre for European Legal Studies, University of Cambridge and has been published at the 8 Cambridge Yearbook of European Legal Studies (2006) 153.

Download Competition_law_and_intellectual_property_rights_article.pdf

The Jevons Institute of Competition Law and Economics's forthcoming conference on May 10, 2007 is on the topic of competition law and its interface with IP.

April 6, 2007 | Permalink | Comments (0) | TrackBack (0)

Thursday, April 5, 2007

TOP 10 Most Downloaded Papers for Antitrust Law & Policy

Posted by D. Daniel Sokol

TOP 10 Papers for Antitrust Law & Policy
February 3, 2007
to April 4, 2007

1. The European Commission's 2006 Guidelines on Antitrust Fines: A Legal and Economic Analysis
Wouter P.J. Wils,
European Commission - Directorate General for Legal Service,

2. Antitrust
Louis Kaplow, Carl Shapiro,
Harvard Law School, University of California, Berkeley - Economic Analysis & Policy Group,

3. Drug Patent Settlements Between Rivals: A Survey
C. Scott Hemphill,
Columbia University - Columbia Law School,

4. Monopolists Without Borders: The Institutional Challenge of International Antitrust in a Global Gilded Age
D. Daniel Sokol,
University of Wisconsin Law School
,

5. Beyond Schumpeter Vs. Arrow: How Antitrust Fosters Innovation
Jonathan B. Baker,
American University - Washington College of Law,

6. Priceless? The Competitive Costs of Credit Card Merchant Restraints
Adam Levitin,
Georgetown University - Law Center,

7. Arbitration of Antitrust Claims in the United States and Europe
Niccolò Landi, Catherine A. Rogers,
Santa Maria Law Firm, University of Bocconi
- Institute of Comparative Law,

8. Antitrust Process and Vertical Deference: Judicial Review of State Regulatory Inaction
Jim Rossi,
Florida State University College of Law,

9. Discovering Cartels: Uncovering Dynamic Interrelationships Between Criminal and Civil Antitrust Investigations
Vivek Ghosal,
Georgia Institute of Technology - School of Economics
,

10. Priceless? The Social Costs of Credit Card Merchant Restraints
Adam Levitin,

Georgetown University
- Law Center.

April 5, 2007 | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 4, 2007

The Law and Economics of Innovation

Posted by D. Daniel Sokol

THE REGULATION OF INNOVATION AND ECONOMIC GROWTH

Friday, May 4, 2007
9 a.m.-4:00 p.m.

George Mason University School of Law
Arlington, Virginia

http://innovationforum.gmu.edu

The George Mason University School of Law and Microsoft Corporation announce the first in an annual series of conferences on The Law and Economics of Innovation. The series will bring together leading academics to present and discuss new scholarship touching on diverse aspects of a key question affecting the technology industry and the process of innovation. Each conference will conclude with a roundtable discussion among top technology industry representatives and regulators to begin to assess the concrete implications of the scholarship for the development of innovative industries.

The inaugural conference in the series, to be held on Friday, May 4th at George Mason University School of Law, will address the complex problem of regulation and how regulation fosters or impedes economic growth through innovation: How should a jurisdiction, particularly an emerging or developing economy, approach its IP or its antitrust regime if it seeks to maximize economic growth to optimize the role of innovation in growth?

REGISTRATION:

Registration is free of charge but space is limited. To register, click here.

CONFERENCE PROGRAM:

8:30am   Registration & Welcome Coffee
9:00am   Welcome Remarks
9:15am   Keynote Address:  Robert D. Cooter, University of California at Berkeley School of Law

9:45am   Panel 1:  Some Economics of Innovation
              - Marco Iansiti, Harvard Business School
              - Stan J. Liebowitz, University of Texas/Dallas School of Management
              - Stephen E. Margolis, North Carolina State College of  Management
              - Moderated by Bruce H. Kobayashi, George Mason School of Law

11:00am  Panel 2:  Regulatory Reform
              - Howard A. Shelanski, University of California at Berkeley School of Law
              - Douglas G. Lichtman, University of Chicago Law School
              - Moderated by Randal Picker, University of Chicago Law School

12:00pm  Lunch in the Atrium

1:00pm   Panel 3:  Antitrust, Innovation and Economic Growth
              - Daniel F. Spulber, Kellogg School of Management
              - Keith N. Hylton, Boston University School of Law
              - Joshua D. Wright, George Mason School of Law
              - Moderated by Jonathan B. Baker, American University Washington College of Law

2:45pm   Industry/Regulator Roundtable Discussion
              - Gerald F. Masoudi, Deputy Assistant Attorney General, Department of Justice, Antitrust
                Division
              - David A. Heiner, Vice President and Deputy General Counsel, Antitrust Group, Microsoft
                Corporation
              - Others TBD
              - Moderated by Ronald A. Cass, Dean Emeritus, Boston University School of Law

4:00pm   Closing Reception

April 4, 2007 | Permalink | Comments (0) | TrackBack (1)

Is Antitrust Moral?

Posted by D. Daniel Sokol

What role, if any, should morality play in antitrust?  This is an underexplored question that is the theme of a new working paper by the Maurice Stucke of the DOJ Antitrust Division entitled Morality and Antitrust.

Abstract: Although the Sherman Act was enacted over a century ago, antitrust enforcers, policy makers, and scholars have largely circumvented the morality of antitrust crimes. Its absence is remarkable given the vigorous debate over the appropriate civil and criminal penalties for antitrust violations. Under the continued influence of the Chicago-school's neoclassical economic theories, antitrust analysis is primarily concerned with economic efficiency. Since terms like morality and evil are judgmental, not descriptive, they are deemed outside the discourse of economic theory's self-described positivism. But antitrust analysis is not beyond the judgmental. Over the past thirty years, while antitrust's civil remedies have remained relatively unchanged, the criminal penalties for price fixing, bid rigging, and other Sherman Act antitrust violations have soared - from a misdemeanor to a felony punishable by up to ten years imprisonment. If the criminal laws reflect society's moral judgments, then antitrust and morality ultimately are intertwined. This article provides a background of antitrust violations and the flawed economic theory of optimal deterrence that has played a critical role in shaping the criminal sanctions for Sherman Act violations. Despite the escalation in antitrust's criminal penalties, there is no clear evidence that optimal deterrence has been achieved. The article next introduces morality and asks what role morality could play in the field of antitrust, if optimal deterrence alone is insufficient to effectively deter violations. After examining under a three-part standard whether antitrust crimes can indeed be deemed immoral, the article weighs some of the benefits and risks of supplementing antitrust crimes with a moral component and the risks of the current course - namely, ignoring morality. 

April 4, 2007 | Permalink | Comments (0) | TrackBack (0)