Antitrust & Competition Policy Blog

Fordham 36th Annual Conference on International Antitrust Law and Policy

Posted by D. Daniel Sokol

The Fordham 36th Annual Conference on International Antitrust Law and Policy is now open for registration.

Dates for the 36th Annual Conference on International Antitrust Law and Policy:

Thursday & Friday, September 24 & 25, 2009.

THURSDAY MORNING

Welcome --- Dean William Treanor, Fordham School of Law

International Antitrust: Recent Developments and Trends 

Jon Leibowitz, Chairman, Federal Trade Commission, Washington
Philip Lowe, Director-General, DG Competition, European Commission, Brussels
Christine Varney, Assistant Attorney General, Antitrust Division, Department of Justice, Washington

Discussion

A. Paul Victor, Presider, Dewey & LeBoeuf, New York
Bernhard Heitzer, President, Federal Cartel Office, Bonn
Ronit Kan, Director General, Israel Antitrust Authority, Jerusalem
Graeme Samuel, Chairman, Australian Competition and Consumer Commission, Canberra

THURSDAY AFTERNOON

State Aids and EU Competition Law and Policy
         Neelie Kroes, Commissioner for Competition, European Commission, Brussels

Government Aid and Competition Conditions

Frederic Jenny, Presider, Judge, Cour de cassation, Paris
Seth Bloom, General Counsel, Senate Antitrust Subcommittee, Judiciary Committee,    Washington
Alberto Heimler, Professor, School of Public Administration, Rome
Philip Lowe, Director-General, DG Competition, European Commission, Brussels  
Simon Polito, Lovells, London
James F.Rill, Howrey, Washington
Ulrich Soltesz, Gleiss Lutz, Brussels
Bernard Spitz, Chairman of the French Federation of Insurance Companies, Paris

Reception

FRIDAY MORNING

Pharmaceutical Industry and Competition Law

Luc Gyselen, Presider, Arnold & Porter, Brussels
William E. Kovacic, Commissioner, Federal Trade Commission, Washington
Margaret K.Kyle, Assistant Professor, London Business School, London
Tracy R. Lewis, Professor, Duke Fuqua School of Business, Durham
Caroline B. Manogue, Executive Vice President, Chief Legal Officer and Secretary, Endo Pharmaceuticals Inc., Chadds Ford
Anne N. Nielsen, Vice-President & Assoc. General Counsel, Bristol-Myers Squibb, New York
Dominik Schnichels, Head of Task Force, DG Competition, European Commission, Brussels
  

FRIDAY AFTERNOON

Vertical restraints/RPM and Article 81 (1) analysis

Andreas Reindl, Presider, Fordham Law School, New York
Amelia Fletcher, Chief Economist, Office of Fair Trading, London
Eric Gippini Fourier, Legal Service, European Commission, Brussels
Edurne Navarro Varona, Uria Menendez, Brussels
Damian Neven, Chief Economist, DG Competition, European Commission, Brussels
Tommy Prud'homme, Assistant Attorney General,  Antitrust Division Office. of     Attorney General of Texas, Austin
Nils Wahl, Judge, European Court of First Instance, Luxembourg
Christine Wilson, O'Melveny & Myers, Washington

Closing

Energy Efficiency: Efficiency or Monopsony?

Posted by D. Daniel Sokol

Tim Brennan of the University of Maryland-Baltimore Department of Economics has written Energy Efficiency: Efficiency or Monopsony?

ABSTRACT: The cliche in the electricity sector, the "cheapest power plant is the one we don't build," seems to neglect the benefits of the energy that plant would generate. Those overall benefits could be countered by benefits to consumers if "not building that plant" was the result of monopsony. A regulator acting as a monopsonist may need to avoid rationing demand at monopsony prices. Subsidizing energy efficiency to reduce electricity demand at the margin can solve that problem, if energy efficiency and electricity use are substitutes. We may not observe these effects if the regulator can set price as well as quantity, lacks buyer-side market power, or is legally precluded from denying generators a reasonable return on capital. Nevertheless, the possibility of monopsony remains significant in light of the debate as to whether antitrust enforcement should maximize consumer welfare or total welfare.

Is a Cartel Just an Ordinary Prisoner's Dilemma?

Posted by D. Daniel Sokol

Christoph Engel, Max Planck Institute for Research on Collective Goods has a new paper on Is a Cartel Just an Ordinary Prisoner's Dilemma?

ABSTRACT: Ever since the heyday of the Chicago School, antitrust intervention has been under attack. One of the stronger counter-arguments is behavioural. Models predicting the absence of a social problem rely on the assumption that all agents are prevoyant maximisers of profit. Many experiments have shown that subjects are more likely to collude. However, other experimental findings point to behavioural forces mitigating the social detriment. Subjects collude less if they know they inflict harm on others. And they cooperate more if the structurally identical game is framed neutrally. Arguably this setting does not give them a chance to activate their world knowledge on the undesirability of collusion. The experiment to be presented puts these two forces to the direct test: externalities, and normativity. The main finding is this: only normativity helps. Society cannot dispense of antitrust intervention.

American Needle Cert Granted - Some Initial Thoughts

Posted by Chris Sagers

A very big, possibly game-changing event has occurred in antitrust.  Yesterday, on the last regularly scheduled sitting of its October Term 2008, the Supreme Court granted certiorari to review the Seventh Circuit's decision in American Needle, Inc. v. NFL, 538 F.3d 736 (7th Cir. 2008), /cert. granted,/ 77 U.S.L.W. 3326 (U.S. June 29, 2009) (No. 08-661). The court below offered one of the most dramatic rulings yet in the long-running debate whether sports leagues can be Copperweld "single entities," finding the National Football League a single entity--and therefore immune from section 1 liability as a matter of law--even with respect to the member teams' licensing of their own, individually owned trademarks.  Were it ever in doubt, American Needle should prove that the sports league question is not a curiosity of interest mostly to specialists in sports law.  The decision below, and the current make-up of the Supreme Court that will decide its fate, pose a larger threat to the scope of Section 1 of the Sherman Act than it has faced in many decades.

The decision below was so dramatic because it found single entity status even as to a kind of conduct in which the teams most obviously do or could compete in horizontal price competition: the licensing of their trademarks for the making of sports memorabilia.  In late 2000 the teams of the NFL voted collectively to enter into a 10-year exclusive license with Reebok to produce headwear bearing the teams' trademarked logos. 

Thus ended what had been a long period of some competition among headwear manufacturers.  Prior to 1963 the teams had individually licensed their own IP directly to manufacturers or through agents, and
in many cases a team would license more than one manufacturer to make products bearing its mark.  In 1963, some of the teams established a California corporation to act as their licensing agent, but even
thereafter the agent and sometimes the individual teams continued to license more than one maker to use its marks.  Plaintiff American Needle had been a licensee of the various teams' marks and for many years had made headwear bearing their marks in competition with other licensee manufacturers.  But shortly after the exclusive Reebok contract took effect American Needle's contract was allowed to expire, as were those of other outstanding Reebok competitors.  There is some reason to believe the Reebok contract has had bad effects already:  even with no discovery at all as to the question of the exclusive deal's purpose or effect, plaintiff American Needle was able to adduce evidence of substantial and persistent price increases for the products now exclusively made by Reebok.

Still, the Seventh Circuit affirmed an order of summary judgment that found single-entity status after only limited discovery.  Judge Kanne wrote for a unanimous panel that in reaching the exclusive license deal,
the teams acted together as one entity.  Though he marched dutifully through several quotations from Copperweld and a summary of the existing section 1 caselaw on sports leagues, the only actual defenses he offered for the ruling were two. First, he noted that the teams had been collectively licensing their trademarks for a long time (since 1963). 

Though he characterized this point as the "most important[]," since Copperweld characterized section 1's concern as the removal of independent economic forces, it actually seems irrelevant.   As a few of
the parties pointed out in briefing to the Court, that a conspiracy has succeeded for a long time cannot determine its legality. What really seems much more important was Judge Kanne's rejection of the idea that the question should depend to any extent on whether the teams did or *could have* competed with one another.  He wrote first that the panel "[was] not convinced that the NFL's single-entity status . . . turns entirely on whether the league's member teams can compete with one another . . . ."  Then, with virtually no analysis of whether their ability to compete *could* be relevant to their entity status, he wrote
that "with that said, American Needle's assertion that the NFL teams have deprived the market of independent sources of economic power"--seemingly the critical question under Copperweld--"unravels." 
The brief analysis following that claim boils down more or less exclusively to the panel's view that "the NFL teams share a vital economic interest in collectively promoting NFL football."

Importantly, plaintiffs were afforded no discovery as to whether the NFL teams did or could compete with respect to trademark licenses to headwear manufacturers, and in fact the panel ruled against American
Needle on a Rule 56(f) discovery dispute on that point, which was also on appeal.

In other words, a unanimous panel of a federal court of appeals has held the following conduct to be categorically exempt from section 1 liability:  a collection of business firms that happened to share an
"economic interest in collectively promoting" one product could establish a horizontal conspiracy fixing the price of a different product, with quite different economic characteristics and as to which they have competed even in the recent past.  They may also boycotting all but one downstream distributor of that product with the purpose of maximizing its revenue.

Today, the Court granted cert on the following QP:

"Should the National Football League and its member teams be treated as a single entity that is exempt from rule of reason claims under Section 1 of the Sherman Act, which outlaws any "contract, combination ... or conspiracy, in restraint of trade," because they cooperate in joint production of NFL football games, while at the same time they may have competing economic interests, have the ability to control their own economic decisions, and have the ability to compete with each other and the league?"

This all bodes very poorly for the future of section 1.  On the current Court there are probably four solid votes for affirmance (judging from opinion authors and voting in the past several years, one could well
expect Justices Roberts, Scalia, Thomas and Alito to vote to affirm).

Affirmance therefore calls only for one more vote.  Presumably Justice Stevens will vote for reversal, given his frequent dissents in the Court's pro-defendant decisions of the past few decades (including, importantly, in Copperweld, though not in Dagher, from which no one dissented).  Justice Ginsburg too seems a likely vote for reversal, as she has joined some Stevens dissents.  I suppose one might expect
Justice Breyer, the Court's strongest antitrust expert, to oppose a decision so logically flawed and so damaging to antitrust enforcement (though one might also have expected him not to join in Twombly, for the same reasons). But Justice Kennedy seems no friend of private antitrust enforcement, having written for the Court in Leegin and Brooke Group, as well as Iqbal's recent and controversial application of the Twombly rule and the pro-defendant ruling in securities litigation, Stoneridge Investment Partners.

And finally, assuming Judge Sotomayor is confirmed to the Court in time, it is a bit hard to predict how her presence might alter the Court's balance with respect to a case like American Needle.  On the one hand, she would replace a Justice whose record in antitrust is often a bit confusing and surely not very friendly to antitrust policy.  Justice Souter, after all, wrote Twombly, and accordingly believed that the benefits of private enforcement are very frequently outweighed by its costs, and the strange metaphysical tightrope he walked in California Dental raises more questions than it answers of his view of antitrust.

So would a Justice Sotomayor much change the Court by replacing the antitrust views of Justice Souter? Like much else about her, it is hard to say.  The few antitrust opinions she authored while on the Second  Circuit, for example, were mostly pro-defendant (e.g., finding a professional football labor dispute to be within the non-statutory labor exemption and ruling against a Robinson-Patman plaintiff, but leaving glimmers of hope for plaintiffs (e.g., reversing 12(b)(6) dismissal for a class of employees against Exxon and a major procedural ruling in credit card litigation, but which didn't reach antitrust merits). 

Another critical fact in trying to read these particular tea leaves is that no Justice dissented in Dagher, a much overlooked decision that happens to be absolutely freighted with dark potential and that bears important affinities with the issues presented in American Needle.  That all of the Justices failed to see the potential that Dagher would ultimately lead to judicial repeal of section 1 does not bode well for how they will view American Needle.

In short, there are probably four pretty solid votes for affirmance, one more (Kennedy) that seems only marginally less solid for defendants, and either of two (Breyer and Sotomayor) that might also sign on for affirmance.

One of the most interesting aspects of this case is that the Solicitor General, weighing in at the Court's request, opposed cert. The Court made the request just one month after the new President's inauguration, just after the confirmation of his new SG, and just before the new AAG's confirmation vote.  That in itself is interesting, as one must wonder exactly why the Court made its request--it only takes four votes, and neither the number of votes nor their identities are made public, but why exactly was the Court interested in the administration's views of this case? 

While one presumes the Court merely offered the administration a courtesy as to this area of enforcement policy that might well change fairly drastically, it is tantalizing to speculate whether there were some more cynical motives surrounding this very bad lower court decision with potentially very broad consequences.  But in any event, what is really interesting is that the SG's brief was substantively quite weak.  The brief begins by stressing that the opinion below is incorrect and could have major, negative consequences, but then works through a handful of quite strained and unpersuasive arguments that the case is not well suited for review under the Court's cert standards.  This was so even though the signatories include a handful of the nation's best appellate lawyers and several absolute powerhouses in antitrust.  A conclusion one might draw is that though the signatories would like very much to see Judge Kanne's decision reversed, they fear as much as I do that this particular Court will get its hands on it.

In any event, for those of us who would like to see federal antitrust survive the Roberts era without sub silentio judicial repeal, there is one bright spot in these affairs.  American Needle's able trial counsel, who developed a strong fact case at the pre-trial stage with only the most limited discovery, has been joined on the Supreme Court appeal by two of Jones Day's best lawyers:  Meir Feder, one of the country's most able Supreme Court advocates, and the head of JD's antitrust group, Joe Sims.  Mr. Sims, in particular, brings not only world-class antitrust expertise to the table, but an important measure of gravitas--he is not exactly a man the Court will perceive as a leftie firebrand or some reckless pro-plaintiff populist, and rather was a top antitrust enforcement official in the Nixon administration and currently one of the country's leading antitrust practitioners.  Their supplemental brief for American Needle in reply to the SG's brief opposing cert is a work of art.  One expects that their merits briefs will be devastating.

A Gap in the Enforcement of Article 82

Posted by D. Daniel Sokol

Ioannis Kokkoris (OFT, Visiting Lecturer at City University Law School and a Visiting Fellow at Durham University) has come out with a new book, A Gap in the Enforcement of Article 82.

BOOK ABSTRACT: The European Commission has acknowledged and respected, in Regulation 1/2003, the ability of the Member States to apply stricter rules than Article 82. There are some types of conduct that cannot be addressed by Article 82 because the undertakings involved are not dominant. One relates to conduct by non-dominant firms against other firms in weaker bargaining positions. A second type of conduct, and the focus of this book, relates to the anti-competitive conducts that non-dominant firms may adopt towards consumers (eg price discrimination, excessive pricing). This book focuses on instances where non-dominant firms have the ability to behave independently of customers and competitors and adopt conducts which will induce consumer harm.

The Commission cannot address anti-competitive conduct of non-dominant firms which induce significant consumer harm. This has resulted from the application of the dominance concept and from the dependence of a finding of a dominant firm on the market share of the firm. The aim of this book is to illustrate that applying the concept of dominance in that way means that a non-dominant firm in a differentiated market can adopt anti-competitive conducts and not be deterred by the possible application of Article 82.

American Competitiveness & the State Owned Enterprise Challenge

Posted by D. Daniel Sokol

I will be presenting in DC for a conference hosted by the US Chamber of Commerce on July 7.  It is on a topic of growing importance - state owned enterprises.  My talks will build off of my forthcoming article "Competition Policy and Corporate Governance of State Owned Enterprises" that will appear in the BYU Law Review.

American Competitiveness & the State Owned Enterprise Challenge Tuesday, July 07, 2009 8:30 am - 12:00 pm (Eastern Time) U.S. Chamber of Commerce 1615 H Street NW Washington, DC 20062 Map and Directions Keynote Remarks:           Ambassador Demetrios Marantis   Deputy U.S. Trade Representative                                            Panelists:    Jennifer Harris, National Intelligence Council  Dr. Paula Stern, The Stern Group, former ITC Chairwoman William Blumenthal, Partner, Clifford Chance     Shanker Singham, Partner, Squire Sanders                   D. Daniel Sokol, Professor, University of Florida, Levin College of Law Hans Christiansen, OECD Senior Economist, Secretary of the OECD Working Group on Privitisation and Corporate Governance of State-Owned Enterprises Program 8:30AM       Registration and Continental Breakfast 9:00 AM      Keynote Address, Ambassador Demetrios Marantis, Deputy USTR 9:30 AM      Panel One:  The SOE Challenge & America’s Competitiveness In its 2008 report Global Trends 2025: A Transformed World, the National Intelligence Council identified the growing role of the state in economies around the world as a chief national and economic security concern.  This panel will explore the challenges to America’s national economic competitiveness from the rise of state-led development models around the world, including in the United States, that focus on the use of industrial policy and state interference to discriminate against foreign competitors and advantage domestic enterprises, whether state owned or “state influenced".  Panelists will provide an overview of the policies that governments are employing to tilt the playing field in favor of domestic competitors, and will weigh American’s offensive and defensive interests in addressing state-initiated distortions to free market competition around the world. Panel Discussants:                                     Jennifer Harris, National Intelligence Council                                    Shanker Singham, Partner, Squire Sanders                                            Hans Christiansen, OECD Senior Economist    10:45 AM    BREAK 11:00 AM    Panel Two:  Policy Solutions to the SOE Challenge This panel will explore potential policy solutions to the SOE challenges and related market distortions discussed in the previous panel.  It will also address the increasing convergence of trade, investment, and competition/antitrust policies in the global economic and commercial arena.  Discussion will center on the policy tools that are currently available to U.S. trade and investment negotiators to address state-centric development models, the appropriate role of antitrust authorities, and new policy tools that may be needed in order to address challenges going forward.  Speakers will further provide their assessment of the current approach and readiness of U.S. government agencies—the Department of Justice, the Department of Commerce, the USTR, and the Federal Trade Commission—to tackle these growing challenges in a coordinated fashion and the costs to America’s competitiveness if they do not. Panel Discussants:                                  Dr. Paula Stern, The Stern Group, former ITC Chairwoman                                  William Blumenthal, Partner, Clifford Chance                                      D. Daniel Sokol, Professor, University of Florida, Levin                                                              College of Law

Register Now Contact Information [email protected] Send Email Payment Instructions $25 Members $40 Non-Members Government Officials Complimentary

Competition and financial markets: issues in the current financial crisis

Posted by D. Daniel Sokol

The OECD has released Competition and financial markets: issues in the current financial crisis.

ABSTRACT: The OECD’s Competition Committee debated competition issues in the current financial crisis on 17-18 February 2009. This document presents two key documents from that event: an Executive Summary which draws on the debate and the written materials and the Background Paper for the discussion. The full set of materials from the event, including national contributions and a summary of the discussion, can be found at www.oecd.org/competition/roundtables.

Price Regulation and Generic Competition in the Pharmaceutical Market

Posted by D. Daniel Sokol

Dag Morten Dalen (Handelshøyskolen BI), Tonje Habeth (Handelshøyskolen BI), and Steinar Strøm (Department of Economics, University of Oslo) explore Price Regulation and Generic Competition in the Pharmaceutical Market.

ABSTRACT: In March 2003 the Norwegian government implemented yardstick based price regulation schemes on a selection of drugs experiencing generic competition. The retail price cap, termed “index price”, on a drug (chemical substance) was set equal to the average of the three lowest producer prices on that drug, plus a fixed wholesale and retail margin. This is supposed to lower barriers of entry for generic drugs and to trigger price competition. Using monthly data over the period 1998-2004 for the 6 drugs (chemical entities) included in the index price system, we estimate a structural model enabling us to examine the impact of the reform on both demand and market power. Our results suggest that the index price helped to increase the market shares of generic drugs and succeeded in triggering price competition.

Tacit Collusion over Foreign Direct Investment under Oligopoly

Posted by D. Daniel Sokol

David Collie (Cardiff Business School) examines Tacit Collusion over Foreign Direct Investment under Oligopoly.

ABSTRACT: A two-country model of the FDI versus export decisions of firms is analysed. The analysis considers both the Cournot duopoly and the Bertrand duopoly models with differentiated products. It is shown that the static game is often a prisoners' dilemma where both firms are worse off when they both undertake FDI. To avoid the prisoners' dilemma, in an infinitely-repeated game, the firms can collude over their FDI versus export decisions. Then, a reduction in trade costs may lead firms to switch from exporting to undertaking FDI when trade costs are relatively high. Also, collusion over FDI may increase welfare.

“Competition is a click away”

Posted by D. Daniel Sokol

“Competition is a click away,” so says Google Antitrust GC Dana Wagner.  The NY Times has a full story on Google's efforts to minimize its antitrust risk.

Enforcing competition law in the UK, Europe and the US

Posted by D. Daniel Sokol

The Global Competition Review will host Enforcing competition law in the UK, Europe and the US .

Antitrust Litigation 2009 Enforcing competition law in the UK, Europe and the US Friday 2 October 2009, London

Early booking before 31 July 2009 - SAVE £100

Co-Chaired by John Pheasant, Partner, Hogan & Hartson LLP and Elizabeth Morony, Partner, Clifford Chance LLP, GCR's 2009 Antitrust Litigation conference brings together speakers from the European Commission's DG Competition together with leading competition and litigation experts from the Bar, the Judiciary, law firms and industry.

Register online here

Daniel Beard QC, Monckton Chambers Ingo Brinker, Partner, Gleiss Lutz Helen Davies QC, Brick Court Chambers Eddy de Smijter, Private Enforcement Unit, DG Competition European Commission Judge Nicholas Forwood QC, Court of First Instance of the EC Lord Hoffmann, Brick Court Chambers Mark Hoskins QC, Brick Court Chambers Stephen Kon, Partner, SJ Berwin LLP Jon Lawrence, Partner, Freshfields Bruckhaus Deringer LLP Anthony Maton, Partner, Hausfeld LLP Samantha Mobley, Partner, Baker & McKenzie LLP Nicola Northway, Head of Group Competition Law, Barclays Bank plc Robert O'Donoghue, Barrister, Brick Court Chambers Michael O'Kane, Partner, Peters and Peters Michael Sanders, Partner, Linklaters LLP Mario Siragusa, Partner, Cleary Gottlieb Steen & Hamilton LLP Romano Subiotto QC, Partner, Cleary Gottlieb Steen & Hamilton LLP Christoph Swaak, Partner, Stibbe Melanie Thill Tayara, Partner, Salans Alan Wiseman, Partner, Howrey LLP Bill Wood QC, Brick Court Chambers

Download the conference brochure here

Topics include:

A review of recent competition damage claims Jurisdiction, choice of law and privilege - where to bring your claim Forum shopping and implications of Rome II on choice of law Delaying tactics in national litigation: the 'torpedoes' Disclosure, privilege and access to the file of competition authorities Criminal investigations Arbitration and mediation in competition law cases Actions for damages: representative actions, opt-in and opt-out; compensatory damages, pass-on defence, direct and indirect purchaser claims, burden of proof Attempts to rely on EC law in the US courts Funding private actions A view from the judiciary - is competition law litigation different?

Cost of the conference

Book before 31 July and save £100! Early bird rates: Standard registration: UK£500 (+ 15% VAT = £575) In-House Lawyer and Government Agency registration: UK£400 (+ 15% VAT = £460)

Register online here

Discounts available for multiple bookings (please call +44 (0) 20 7908 1185 or email [email protected] for details)

New to the Antitrust and Competition Policy Blog

Posted by D. Daniel Sokol

June 14 - Back to the front

I have created a Linkedin site for readers of the blog to network and post announcements on substantive issues and also on any job announcements and tenders.  Click here to join.  If anyone can create a logo for the site, please let me know.

Audio and Materials from AAI June Events Available Online

Posted by D. Daniel Sokol

10th Annual Conference
The AAI held its 10th annual conference June 18th at the National Press Club in Washington, D.C. This year, the conference was titled "International Antitrust in a World without a Center" and focused on international challenges facing the antitrust community.  Click here for audio from the keynote address, panel discussions and luncheon program.  Reports from the eight breakout sessions will be posted in July.

 

Invitational Symposium on Systems Competition
On June 17, the AAI hosted an invitational symposium focusing on recent policy changes surrounding systems competition.  The symposium built on existing economic and legal analysis of systems and offered insights into how antitrust enforcement should address competitive issues that are arising with increasing frequency.  Click here for the audio recordings, presentations and materials.

Market Power versus Efficient-Structure in Arab GCC Banking

Posted by D. Daniel Sokol

Saeed Al-Muharrami - Sultan Qaboos University, Oman and Kent Matthews - Cardiff Business School look at Market Power versus Efficient-Structure in Arab GCC Banking.

ABSTRACT: This paper evaluates the performance of the Arab GCC banking industry in the context of the Structure-Conduct-Performance hypothesis in the period 1993-2002. The paper uses panel estimation differentiating between bank fixed effects and country fixed effects. It examines the Relative-Market-Power and the Efficient-Structure hypotheses differentiating between the two by employing a non-parametric measure of technical efficiency, and finds that the banking industry in the Arab GCC countries is best explained by the mainstream SCP hypothesis. The empirical results do not find any support for the Hicks (1935) "Quiet Life" version of the market power hypothesis.

The Neglected Effects of Demand Characteristics on the Sustainability of Collusion

Posted by D. Daniel Sokol

Andrea Gallice, University of Siena - Economics, discusses The Neglected Effects of Demand Characteristics on the Sustainability of Collusion.

ABSTRACT: According to traditional IO models, the characteristics of market demand (intercept, slope, elasticity) and of technology (level of symmetric marginal costs) do not play any role in defining the sustainability of collusive behaviors in Bertrand oligopolies. The paper modifies this counterintuitive result by showing that all the above mentioned factors do affect the sustainability of collusion when prices are assumed to be discrete rather than continuous. The sign of these effects is unambiguous. Their magnitude varies greatly: in some cases it is totally negligible, in others it becomes extremely relevant.

Judicial Decision in Argentina Tackles the Interplay between Enforcing Patent Rights and Antitrust Law within the Dispute between Monsanto and the Argentine Government on the “GM soy-seed RR”

Posted by D. Daniel Sokol

Mariano Municoy (Moeller IP Advisors) explains how a Judicial Decision in Argentina Tackles the Interplay between Enforcing Patent Rights and Antitrust Law within the Dispute between Monsanto and the Argentine Government on the “GM soy-seed RR”.

ABSTRACT: The conjunction between intellectual property rights and antitrust law has recently become a very important issue worldwide and Latin America is not an exception. Therefore, the relevance of this case, which is the first judicial decision on the topic in Argentina, cannot be overrated.

On September 30, 2008 the Federal Court of Appeals for Civil and Commercial Matters located in the city of Buenos Aires decided to stop an antitrust investigation conducted by the National Commission for the Defense of Competition (or “CNDC” as it is known in Spanish ) against Monsanto Europe NV, Monsanto Technology LLC. and Monsanto Argentina SAIC (hereinafter all referred to as “Monsanto”).

A preliminary phase within the administrative proceeding was initiated in early 2006 when the Argentine National Secretary of Agriculture, Livestock, Fishing and Food (“SAGPyA”) accused Monsanto of abusing its dominant position and therefore of violating Argentine Antitrust Law No. 21,156. The argument was based on the fact that Monsanto had enforced the patent rights it held in Europe (the company did not hold any Argentine patent right on the technology at stake here).

According to a preliminary resolution issued by the CNDC in September 2007, the authority was of the opinion that there were sufficient grounds for dismissing the defensive arguments of the company and therefore for converting the preliminary phase of the proceeding into a full antitrust investigation. However, the resolution was overturned by the decision of the Court of Appeals; the result is analyzed below.

Michael Jackson and Antitrust

Posted by D. Daniel Sokol

As you probably known by now, Michael Jackson - the King of Pop and among the most bizarre celebrities (if not the most bizarre) is dead.  I checked westlaw and found no articles written on antitrust that have a Michael Jackson angle to them. However, his Off the Wall is one of the best albums of all time.

Competition in Recession

Posted by D. Daniel Sokol

The UK Competition Commission has posted materials from its very interesting Competition in Recession: A Members' Roundtable Meeting held at the Competition Commission 30 March 2009.

Programme (pdf, 40kb)

Background paper prepared by the CC economics staff (pdf, 164kb)

Foreword by Peter Freeman, Competition Commission Chairman (pdf, 35kb)

Report (pdf, 56kb)

Competition in Recession: Implications for competition in the wider economy - a few thoughts - Michael Waterson (pdf, 44kb)

Economic Crisis and Competition Policy - Bruce Lyons (pdf, 63kb)

Competition Policy, Bailouts and the Economic Crisis - Bruce Lyons (pdf, 58kb)

Competition in recession: What are the implications for competition in the financial sector? - Alan Gregory (pdf, 111kb)

Implications for the wider economy - Anthony Stern (pdf, 69kb)

Attendance List (pdf, 53kb)

Competition Policy and Property Rights

Posted by D. Daniel Sokol

John Vickers (Oxford - Economics) explains Competition Policy and Property Rights.

ABSTRACT: One of the most controversial questions in current competition policy is when, if ever, should competition law require a firm with market power to share its property, notably intellectual property, with its rivals? And if supply is required, on what terms? These questions are discussed with reference to recent law cases including the EC Microsoft judgment of 2007 and the US linkLine case of 2009. The analysis focuses on whether competition law and regulation are complements or substitutes, and on incentives for investment and (sequential) innovation.

The Cartel Offences: An Elemental Pathology

Posted by D. Daniel Sokol

Caron Beaton-Wells and Brent Fisse (both University of Melbourne Law School) have posted The Cartel Offences: An Elemental Pathology.

ABSTRACT: The main purpose of this paper is to review the requirement of a contract, arrangement or understanding, including the amendments proposed by the Australian Competition and Consumer Commission (ACCC) to the meaning of ‘understanding’ (section 3) and the fault elements of the new cartel offences (section 4). We do not attempt here to provide a detailed analysis of the definition of a ‘cartel provision’ in s 44ZZRD. The main problems likely to be occasioned by s 44ZZRD have been discussed elsewhere and are summarised in section 2 of the paper. Examples of the problems of over-reach and uncertainty precipitated by s 44ZZRD are set out in Attachment 1 should those problems arise for discussion at the workshop.

Download Beaton-Wells & Fisse LCAFCA Paper 4 April 2009