Thursday, December 31, 2009

Efficiency Metrics for Competition Policy in Network Industries

Posted by D. Daniel Sokol

Timothy Tardiff addresses Efficiency Metrics for Competition Policy in Network Industries.

ABSTRACT: In evaluating competition and regulatory policies, economists typically emphasize the extent to which such policies promote economic efficiency. The outcome of such evaluations—particularly in network industries conducive to competitive inroads and technological change—may involve ascertaining whether short-run sacrifices of static efficiency (allocative and technical) are justified by long-run gains in dynamic efficiency. This determination is complicated by the fact that short-run sacrifices are frequently known and measureable, whereas long-run gains are uncertain and less easily measured. Although a growing number of economists—generally relying on the writings of Joseph Schumpeter—conclude that dynamic efficiency is of substantially greater importance in such tradeoffs, in many cases the conclusion is not based on specific measurements of the tradeoffs encountered in particular policies. This article presents a review of the economic arguments favoring (or perhaps opposing) the primacy of dynamic efficiency. On the basis of this review, an analytical framework based on adapting models typically used to evaluate market structure and performance (for example, Cournot models) is developed. This framework can be used to evaluate the static/dynamic efficiency tradeoffs of competition and regulatory policies.

December 31, 2009 | Permalink | Comments (0) | TrackBack (0)

The Limits of Antitrust and the Chicago School Tradition

Posted by D. Daniel Sokol

George Priest (Yale Law) explains The Limits of Antitrust and the Chicago School Tradition.

ABSTRACT: I situate Frank Easterbrook's article, The Limits of Antitrust, within the Chicago School antitrust tradition. I demonstrate the link between the article and the works of Aaron Director and Ronald Coase, in particular their emphasis (1) on the superior effect of markets to government attempts to correct monopoly behavior and (2) the expectation of judicial error. The Easterbrook article is shown to have extended the Director–Coase antitrust program.

December 31, 2009 | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 30, 2009

China’s Antimonopoly Law—One Year Down Part 5. A De Facto “Dual-Track” Competition Regime?

Posted by Wentong Zheng

In my previous post on this space (see here), I mentioned that SAIC and NDRC, China’s two government agencies charged with enforcing the AML’s abuse-of-dominance provisions, are giving a free pass to abuse-of-dominance conducts by China’s largest state-owned-enterprises (“SOEs”).  As I will discuss below, the two agencies’ inactivity is part of a larger pattern of not enforcing the AML against the largest SOEs.  In this post below I will offer my assessment of what this differential treatment for the largest SOEs means for China’s broader competition regime.

First, some brief backgrounds on China’s SOEs.  Before the 1980s, almost the entire Chinese economy consisted of SOEs.  Due to privatization and the emergence of the private sector in the last three decades, SOEs now account for only a third of the Chinese economy by some rough estimates.  However, the shrinkage of the relative share of SOEs in China’s overall economy masks their sheer sizes and dominance in many sectors.  Since the mid 1990s, China has been implementing a strategy of strengthening control of the largest SOEs while loosening control of or privatizing the smaller ones.  Today, a substantial number of the largest companies in China are SOEs directly controlled by the central government.  These largest SOEs are the dominant players in such sectors as energy, telecommunications, banking, petroleum and petrochemicals, transportation, heavy industry, and infrastructure.

So how does the AML deal with the SOE-dominated sectors?  The answer to that question lies in Article 7 of the AML, which in relevant part states (translation is my own): “In SOE-dominated sectors concerning the health of national economy and national security, and in sectors where state trading is authorized by law, the lawful operations of the undertakings are protected by the state.  The state will supervise and regulate the conducts of these undertakings and the prices of the goods or services provided by them to protect the interests of consumers and promote technology advancement.”  The language of Article 7, however, is remarkably ambiguous.  It pronounces that “lawful” operations of SOEs in SOE-dominated sectors are protected by the state—but “lawful” under what laws?  If the conducts of dominant SOEs have to be lawful under the AML in order to be protected, Article 7 will bring SOE-dominated sectors within its reach.  But if the conducts of dominant SOEs need only be lawful under laws other than the AML in order to be protected, Article 7 will effectively create a blanket exemption for SOE-dominated sectors.  From the text of Article 7 alone, it is just not clear which interpretation is correct.

Whether or not the AML creates a de jure exemption for dominant SOEs, all evidence indicates that the AML is simply not being enforced against such SOEs as a practical matter.  We have already seen an example of the non-enforcement in the abuse-of-dominance area in my previous post.  Similar non-enforcement could be found in other areas, too.  In the area of horizontal agreements, for example, blatant violations by the largest SOEs of the AML’s prohibition of price-fixing and market allocation—violations that would have almost certainly landed the responsible individuals in prison had they occurred in Western countries—are widely reported by the Chinese media but ignored by the antimonopoly enforcement agencies.  The Chinese media reported (see one report here in Chinese) that in April 2009, China’s two largest importers of potassium fertilizers—Sino-Chem and Sino-Agri, both being SOEs—decided at a meeting in Shanghai to jointly “maintain and push up” potassium fertilizers prices that were being pressured downwards by lagging domestic demands.  Another highly publicized attempt at price-fixing was done by none other than CNPC and Sinopec, which were also involved in the abuse-of-dominance conducts discussed in my previous post.  The Chinese media reported (see here for one report in Chinese) that in March 2009, CNPC and Sinopec carried out two joint “price pushing campaigns” to stabilize falling diesel prices in China.  Yet another high-profile horizontal agreement in violation of the AML is the market allocation agreement reached in February 2007 between China’s then landline telecommunications duopoly, China Telecom based in southern provinces and China Netcom based in northern provinces, both among China’s largest SOEs.  Under the agreement (see one report here in Chinese), the two telecommunications giants agreed not to compete for landline business in each other’s base territory.  Although the market allocation agreement was signed before the AML was enacted and China Netcom was later merged into China Unicom in October 2008 in China’s latest round of telecommunications restructuring, after the AML went into effect there has been no report that the agreement has been revoked, nor has there been any report of government investigations into the agreement.

Certainly, the fact that the AML is not being enforced against the largest SOEs in the areas of abuse of dominance and horizontal agreements does not, in and of itself, indicate a special treatment for the largest SOEs.  After all, the two agencies charged with enforcing the AML’s abuse-of-dominance and horizontal agreements provisions—SAIC and NDRC—have not brought enforcement actions under the AML against anybody.  An alternative explanation for the non-enforcement is the relatively short period since the AML went into effect and the slowly building capacity of the enforcement agencies.  This otherwise plausible explanation, however, is cast in doubt by the fact that NDRC once moved swiftly against price-fixing by China’s major instant noodle manufacturers in 2007 even before the AML was adopted (see here for one report in Chinese), when the companies involved in that incident happened to be private or foreign.

There is one area of the AML where evidence of a de facto exemption for the largest SOEs is more definitive, and that area is merger review.  As I pointed out in my earlier post on China’s new merger review regime under the AML (see here), all of the mergers for which MOFCOM has made its merger decisions publicly available involve foreign investors.  The question that is relevant for our purposes here is: Do mergers involving SOEs, particularly the largest SOEs, undergo merger review by MOFCOM under the AML?  The answer to that question is a clear “no” in at least one high-profile SOE merger case.  In a rare admission to the media in May 2009 (see here for a report in Chinese), MOFCOM confirmed that the merger between China Unicom and China Netcom, consummated in October 2008 as part of China’s restructuring of its telecommunications industry, was not notified to MOFCOM for merger review despite that it reached the notification threshold under the AML.  For other mergers involving the largest SOEs, definitive evidence is not available as to whether they underwent merger review by MOFCOM, but anecdotal evidence indicates that they very likely did not.  By my tally, since the AML went into effect in August 2008, there have been fourteen other mergers (excluding the China Unicom and China Netcom merger) (see list here in Chinese) involving China’s largest SOEs that are supervised by the State-Owned Assets Supervision and Administration Commission (“SASAC”).  The press releases issued by SASAC for all of these mergers only mentioned that the mergers were approved by the State Council and did not mention that they were approved by MOFCOM.

In short, more than a year after the AML went into effect, there appears to be emerging a de facto exemption from the AML for the largest SOEs.  But it will be wrong to say that China has entirely ruled out competition in SOE-dominated sectors.  Indeed, in recent years China has taken important, though limited, steps aimed at injecting competition into these sectors.  For example, in certain sectors such as telecommunications and electricity, China has been pushing for more competition for years by breaking up dominant SOEs into smaller ones or creating additional SOEs that compete with one another.  After several rounds of government-initiated restructuring, China’s telecommunications market has evolved from one in which a single SOE—China Telecom—monopolized the entire market to one in which three SOEs—China Telecom, China Unicom, and China Mobile—compete with one another for both landline and mobile businesses (see here for an analysis in English of the latest round of telecommunications restructuring in China).  In the electricity sector, China has broken up the all-powerful integrated electric power monopoly—China National Electricity Corporation—into two electric grid companies and five electric power generation companies. 

In addition to breaking up SOE monopolies, China has also opened up some of the SOE-dominated sectors to private and foreign capital, though only to a limited degree, by relaxing the stringent market entry restrictions in place in those sectors.  An important milestone in this respect is what becomes known in China as “Thirty-Six Articles on Non-Public Economy,” a guidance document issued by the State Council in February 2005 that allowed private capital to enter any sector into which the law does not otherwise forbid entry and any sector into which foreign capital has been allowed entry.  As a result, since 2005 China’s private capital has made forays into sectors long monopolized by SOEs, such as railroads, airlines, and petroleum, with varying degrees of success.

What all of these boil down to is that a de facto “dual-track” competition regime appears to be taking shape in China, with one track relying on the AML to promote competition in private and foreign-invested sectors and the other track relying on government-initiated market liberalization measures to promote competition in SOE-dominated sectors.  It remains to be seen how well this dual-track competition regime will serve China in promoting competition.  In the earliest stage of a country’s transition from a centrally planned economy to a market economy, government-initiated market liberalization measures, rather than antitrust law, would be the only way to open up market competition, as there would not be much competition in the first place to be regulated by antitrust law.  But I suspect that most of China’s industries have gone past that stage.  As market liberalization exposes a bigger and bigger portion of China’s economy to market competition, it will become more and more questionable to continue shielding the remaining SOEs from the reach of antitrust law.  But maybe—and just maybe—China’s de facto dual-track competition regime will become another successful example of its gradualist approach to economic reform, an approach characterized by tolerance of imperfections and even defects along the way to accomplishing the ultimate goal.

Speaking of goals, what makes the implementation of the AML and China’s broader competition regime particularly challenging is the fact that promoting competition is not the only goal of many of China’s economic policies.  In many areas, the goal of promoting competition comes into conflicts with other policy concerns, most notably industrial policy concerns.  In my next post, I will offer some thoughts on the tension between antitrust and industrial policy in China.  Stay tuned.

December 30, 2009 | Permalink | Comments (0) | TrackBack (0)

Rhetoric or Reform: Does the Law of Tying and Bundling Reflect the Economic Theory?

Posted by D. Daniel Sokol

Pranvera Këllezi, European Broadcasting Union asks Rhetoric or Reform: Does the Law of Tying and Bundling Reflect the Economic Theory?

ABSTRACT: This paper analyses the recent developments in European competition law with regard to tying and bundling, and assesses them in the light of economic theory. It considers the role of economic theory, whether the case law or the new Commission Guidance is consistent with economic thinking, and whether it is flexible enough to allow for economic learning to be taken into account.

Tying and bundling may have anticompetitive effects by transferring market power from one market to another and raising barriers to entry in one or more markets where the dominant undertaking is operating, thereby protecting its position in these markets. An economic analysis offers an explanation of mechanisms that lead to anticompetitive foreclosure, and identifies a number of factors that increase the likelihood of anticompetitive effects. The effects-based approach improves the methodology for finding anticompetitive effects, and the possibility to consider efficiencies acts as a supplementary screening device to avoid over-intervention. The Microsoft case and the Commission Guidance integrate economic analysis to differing degrees. By definition, the Guidance gives general directions on criteria for harmful tying and bundling. In the Microsoft case, the Commission carried out a detailed analysis on a specific set of facts, guided by economic thinking. This demonstrates what economic analysis can offer to competition law: general guidance which should be adapted to the specific facts of the case. In both instances, the Commission shows that it is carrying out a real reform in terms of approaching tying and bundling cases, and is consolidating the general approach as well as the principles governing tying and bundling.

The risk of competitors’ foreclosure is linked to their reduced capacity to realise economies of scale or scope, or to create and maintain a sufficient base of consumers for profitability, to continue to compete in a market, and to introduce new products or bring innovation to the market. In Microsoft, such economies of scale and network effects were present and fully analysed by the Commission. In contrast, the Guidance fails to clarify that anticompetitive foreclosure may arise only if the tied market structure is not competitive. The general framework for finding anticompetitive exclusionary conduct is however much improved, and the flexibility of the CFI judgment in the Microsoft case allows the Commission to analyse market conditions and a company’s conduct on a case-by-case basis and fully to consider economic theory.

December 30, 2009 | Permalink | Comments (0) | TrackBack (0)

On Revising the Horizontal Merger Guidelines

Posted by D. Daniel Sokol

Luke Froeb (Vanderbilt University) has a comment On Revising the Horizontal Merger Guidelines.

ABSTRACT: To determine whether a proposed merger is anticompetitive, one must compare the world without the merger—which is observed—to the world with the merger, which typically is not. Viewed in this way, the primary problem confronting antitrust enforcers is how to draw inference about the unobserved state of the world. The same problem characterizes monopolization or abuse-of-dominance cases, except that the world with the alleged abuse is observed, while the world without the abuse typically is not.

Enforcement Guidelines can facilitate inference by institutionalizing the language and analytic framework used by enforcers, but they must also be flexible enough to accommodate the many different ways in which firms compete. In this essay, I warn against one change, and advocate for another. Both the warning and the change are done with an eye towards facilitating inference about the competitive effects of mergers.

December 30, 2009 | Permalink | Comments (0) | TrackBack (0)

Rambus, N-Data, and the FTC: Creating Efficient Incentives in Patent Holders and Optimizing Consumer Welfare in Standards-Setting Organizations

Posted by D. Daniel Sokol

Theresa R. Stadheim (Minnesota Law) has a piece on Rambus, N-Data, and the FTC: Creating Efficient Incentives in Patent Holders and Optimizing Consumer Welfare in Standards-Setting Organizations.

ABSTRACT: This paper analyzes the Federal Trade Commission’s (“FTC”) actions in regards to standards-setting organizations (“SSOs”). After documenting the FTC’s actions in the cases of In re Dell Computer Corporation, In re Rambus, Inc., and In re Negotiated Data Solutions, LLC, I provide a law and economics analysis and present recommendations concerning two of the biggest issues in SSOs: RAND commitments and patent disclosure. The former can be dealt with using contract law, while the latter can be dealt with using contract law and patent pools overseen by the FTC. The FTC should choose enforcement mechanisms that will incentivize SSO members to act in a socially optimal manner. The FTC should generally limit itself to the use of antitrust powers, and make sure to give a meaningful limiting principle if unfair competition powers must be used.

December 30, 2009 | Permalink | Comments (0) | TrackBack (0)

Tuesday, December 29, 2009

The FTC and DOJ's Horizontal Guidelines Review Project: What Changes Might Be In Store for Merger Review?

Posted by D. Daniel Sokol

Mary Coleman (Compass Lexecon) examines The FTC and DOJ's Horizontal Guidelines Review Project: What Changes Might Be In Store for Merger Review?

ABSTRACT: As part of the FTC and DOJ's Horizontal Guidelines Review Project, the agencies released 20 questions regarding the Guidelines on which they were soliciting input. These questions are related to (among other topics): (1) whether clarification that the agencies do not use a rigid step-by-step approach would be useful; (2) the use of “direct evidence;” (3) market definition (both product and geographic); (4) use of shares and concentration in the review process; (5) unilateral effects analyses; (6) price discrimination; (7) the role of large buyers in merger review; (8) uncommitted versus committed entry; (9) analysis in dynamic markets and the impact of mergers on innovation; and (10) the types of efficiencies that are cognizable.

I discuss below what I believe will be some of the key issues in the Guidelines review process, including Market Definition, Market Share and Concentration Screens and Presumptions, Clarification on Unilateral Effects, and Use of Direct Evidence.

December 29, 2009 | Permalink | Comments (0) | TrackBack (0)

Most Downloaded Antitrust Law Professors on SSRN for 2009

Posted by D. Daniel Sokol

Most Downloaded Antitrust Law Professors of 2009 (at least 2 antitrust articles posted in 2009).
All law professor list of 1,000 or more downloads.

Revised 12/29 4:45pm

Damien Geradin (Tilburg, Michigan, College of Europe) 6039 
David Evans (UCL, Chicago) 5580
Greg Sidak (Tilburg)  4961 
Herb Hovenkamp (Iowa) 4558
Josh Wright (George Mason) 3604
Wouter Wils (Kings College, European Commission Legal Service) 3200
Randy Picker (Chicago) 2878
Spencer Waller (Chicago Loyola) 2302
Bob Lande (Baltimore) 2023
Marc Edelman (Barry) 2012
Keith Hylton (BU) 1941
Jon Baker (American) 1891
Maurice Stucke (Tennessee) 1647
Bruce Kobayashi (George Mason) 1580
Danny Sokol (Florida) 1433
Bill Page (Florida) 1426
Dan Crane (Michigan) 1301
Caron Beaton-Wells (Melbourne) 1016
Ioannis Lianos (UCL) 1008

December 29, 2009 | Permalink | Comments (1) | TrackBack (0)

Determinants of the Success of Remedy Offers: Evidence from European Community Mergers

Posted by D. Daniel Sokol

Peter L. Ormosi, ESRC Centre for Competition Policy provides some data on Determinants of the Success of Remedy Offers: Evidence from European Community Mergers.

ABSTRACT: This article proposes an empirical method for finding the determinants of the size of remedy offers relative to the level required by the European Commission in individual cases. Evidence is presented that merger characteristics, such as the size of the transaction, or the number of horizontal overlaps do not affect the probability of a remedy offer being successful. It is also shown that pre-merger expectations about merger-generated efficiencies increase the likelihood of successful offers. These findings are very important features of EC merger control, and a novelty in the existing literature. If parties are delay-averse, then the complexity of the case matters very little, as merging parties appear to be able to offer something outright acceptable for the Commission. This may lead to a counter-productive situation where less delay-averse mergers become more prone to offering too much, which can result in over-fixing the competition problem for those mergers where savings would be more likely.

December 29, 2009 | Permalink | Comments (0) | TrackBack (0)

Monday, December 28, 2009

Behavioral Antitrust: A New Approach To the Rule of Reason after Leegin

Posted by D. Daniel Sokol

Avishalom Tor, University of Haifa - Faculty of Law and William J. Rinner, Yale University - Law School argue for Behavioral Antitrust: A New Approach To the Rule of Reason after Leegin.

ABSTRACT: The Supreme Court’s recent decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc., which replaced the longstanding per-se rule against resale price maintenance (RPM) with a rule of reason approach, has resurrected the debate over RPM. Legal and economic proponents of this practice again point to its potential procompetitive benefits, while RPM detractors emphasize its possible anticompetitive consequences. Despite their disagreements regarding the overall RPM evaluation, however, scholars, the Court, and the limited empirical data appear near-unanimous in agreeing that such arrangements can either increase or decrease efficiency. Consequently, the RPM debate predominantly revolves around theoretical assertions regarding the likely frequency and significance of RPM's pro- versus anti-competitive manifestations. Importantly, however, all of these theories also assume – like traditional antitrust scholarship more generally – that manufacturers are strictly rational actors, who employ only profit-maximizing arrangements.

In contrast, a behavioral analysis suggests that real-world, boundedly-rational manufacturers are prone to overuse RPM, at times harming consumers. The available evidence reveals this excessive reliance on RPM slowly diminishes over time, as biased manufacturers are taught or disciplined by the market. The slow demise of this practice, however, may entail significant efficiency losses over many years. Yet because RPM will sometimes be procompetitive, Leegin's rejection of its per-se condemnation in favor of a rule of reason analysis is still justified. The present analysis therefore not only offers a novel account of resale price maintenance, but also shows how boundedly rational RPM challenges the various post-Leegin approaches developed by some courts, enforcement agencies, and scholars on both sides of the RPM debate. We close by outlining our alternative, behaviorally informed, structured rule of reason inquiry for this restraint.

December 28, 2009 | Permalink | Comments (0) | TrackBack (0)

Horizontal Merger Guidelines Revision: A Draftsman's Perspective

Posted by D. Daniel Sokol

Paul Denis (Dechert) has an interesting analysis on Horizontal Merger Guidelines Revision: A Draftsman's Perspective.

ABSTRACT: As the principal draftsman of the 1992 Guidelines, I developed what might fairly be described as an unusual attachment to the document and its framework. But even from that perspective, I must admit it is time to revise the 1992 Guidelines. In order to provide meaningful guidance, guidelines must reflect actual agency practice. But Agency practice has diverged from the 1992 Guidelines, in some respects for the better and in some respects for the worse.

Perhaps the best evidence of this divergence is the Commentary on the Horizontal Merger Guidelines (“the Commentary”) released by the Federal Trade Commission and the Department of Justice in 2006. The Commentary shows how the agencies, among other things, have de-emphasized market definition and market concentration, devoted greater attention to competitive effects, largely ignored issues of dynamic response, and attempted to break free from the step-wise framework permeating the 1992 Guidelines. This divergence between the 1992 Guidelines and actual agency practice itself is sufficient to warrant revision of the 1992 Guidelines, agency practice—or perhaps both.

December 28, 2009 | Permalink | Comments (0) | TrackBack (0)

Competition, IP and Contractual Issues in the Media Industry: Law and Practice

Posted by D. Daniel Sokol

UCL is pleased to announce a course starting on 27 January 2010 on

Competition, IP and Contractual Issues in the Media Industry: Law and Practice
delivered by Andrea Appella (
Director of Legal, Competition & Regulatory Affairs at News Corp, Europe & Asia at News Corporation)

The media industry is fast-moving and undergoing a process of development during the digital age. The objective of this course is to introduce the key features of the media industry and the significant issues arising from the application of competition and IP laws, as well as explaining the typical contractual structures in the industry.

Course schedule:

  • Seminar 1: 27 January 2010
    The media industry: key features and market definitions; sport rights (joint selling and access to sports content).
  • Seminar 2. 3 February 2010
    Music: rights-holders, collecting societies and online distribution
  • Seminar 3. 10 February 2010
    Music: industry consolidation. Digital Rights Management
  • Seminar 4. 17 February 2010
    Movies:industry features, theatrical distribution, pay TV, video and online distribution. Copyright issues in the digital world.
  • Seminar 5. 24 February 2010
    Broadcasting: Pay-TV.
  • Seminar 6. 3 March 2010
    Broadcasting: mergers and alliances.
  • Seminar 7. 10 March 2010
    Publishing, Multi-media and High-Tech mergers.
  • Seminar 8. 17 March 2010
    VOD, recent policy developments and challenges/opportunities going forward

The course is run on Wednesday evenings from 6-8pm at the UCL Faculty of Laws in Bloomsbury. The course is accredited with 16 CPD hours by the SRA and the Bar Standards Board.

Fees for the full course are £650 (a discounted ticket £540 is available to UCL Alumni).

Click on the link below for more information about the course and to book your place.

UCL Law Faculty
Bentham House
Endsleigh Gardens
WC1H 0EG London
United Kingdom
  Can you attend this event?  Respond Here

December 28, 2009 | Permalink | Comments (0) | TrackBack (0)

Sunday, December 27, 2009

OFT Seeks Assistant Economist

Posted by D. Daniel Sokol

Office of Fair Trading

Assistant Economist

Office of Fair Trading


Salary:  £28,500 – £33,500 + excellent benefits

Start date: September 2010 (earlier date may be negotiated)

We’re looking for enthusiastic individuals who are close to completing a PhD in the Economics of Industrial Organisation or Competition Economics to embark on a career with the Office of Fair Trading.  We would also welcome applicants from candidates with a Master’s degree in Economics with a strong industrial organisation background and relevant experience.

As an assistant economist at the OFT you would apply the microeconomic principles of how markets work to the real world.

Working in our Markets and Projects arm would give you the opportunity to consider competition and consumer matters across all sectors of the UK economy.  This could include working on Competition Act cases, market studies, or first stage merger assessments.  Working in our Policy and Strategy arm would see you either, helping to advocate and advise on competition policy across government, or being involved in assessing our impacts and commissioning research as part of the evaluation team.

As an Assistant Economist you would have an outstanding opportunity to experience the variety of work on offer at the OFT, you will be involved in high profile, challenging and interesting work that is integral to our success.  Responsibilities could include, providing economic advice and drawing out salient theories, leading on research projects, workstreams and literature reviews, liaising with internal and external stakeholders; and scoping and designing new projects.

About the OFT

The Office of Fair Trading is a non-ministerial government department. Its primary purpose is to make markets work well for consumers. This is achieved by enforcing competition and consumer protection law, investigating markets and through an active communications strategy.

Further detail about the work and structure of the OFT can be found on our website at

For more details on the job and the candidate requirements or email [email protected].

How to apply

To apply for this role, please submit a full CV together with a comprehensive covering letter (but no more than two sides of A4) setting out your reasons for applying, and the knowledge and experience that you feel you can bring to the role. Also, please complete and submit a diversity monitoring form

December 27, 2009 | Permalink | Comments (0) | TrackBack (0)

Saturday, December 26, 2009

European State Aids Control

Posted by D. Daniel Sokol


UCL CPD: Competition Law Courses 2009-10 Logo


UCL is pleased to announce a new course starting in January:

  • European State Aids Control
     7 weeks from January 2010, £600

The course, which runs for 2 hours each week, covers the following areas:

  • State aids control I: the fundamentals
    Wednesday 20 January - 6-8pm
  • State aids control II: the fundamentals
    Wednesday 27 January, 6-8pm
  • State aid law in times of crisis: an economic perspective
    Tuesday 3 February, 3-5pm
  • State aid control III: State aid control and the tax system
    Wednesday 10 January, 6-8pm
  • Case study in State aid control
    Tuesday 16 February, 3-5pm
  • Looking back and forth: The transformation of state aids law and policy: from applied politics to applied economics?
    Tuesday 23 February, 3-5pm
  • State aid control IV: Enforcement of State aids law
    Tuesday 9 March, 3-5pm

Other courses available include:

  • Competition Law and the State in Europe
    11 wks from January 2010, £950
  • European Competition Law: Enforcement and Comparative Issues
    11 weeks from January 2010, £950
  • Law and Economics of Regulated Industries: Between Competition and Regulation
    11 weeks from January 2010, £950

Please feel free to foward this email to others to whom these courses might be of interest.

For more information about the courses, fees and registration, click on the link below.

UCL Law Faculty
Bentham House
Endsleigh Gardens
London, WC1H 0EG
United Kingdom
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December 26, 2009 | Permalink | Comments (0) | TrackBack (0)

Friday, December 25, 2009

3rd Annual Experts' Guide of Best Antitrust Publications: 2009 Edition

Posted by D. Daniel Sokol

Our yearly Experts' Guide to the best antitrust publications is back.  Enjoy these works that you may have missed.  The big winner this year is Einer Elhauge, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, 123 Harvard Law Review 397 (2009):

John Connor

Purdue – Applied Economics

Nathan Miller, Strategic Leniency and Cartel Enforcement, American Economic Review, Vol 99, No. 3 (2009), 750-568

M. Elina Cruz

Catholic University of Chile – Law


Nic Economides

NYU – Stern School of Business

Nicholas Economides, Loyalty/Requirement Rebates and the Antitrust Modernization Commission: What is the Appropriate Liability Standard?, Antitrust Bulletin vol. 54, no. 2, Summer 2009, pp. 259-279;


Nicholas Economides and Ioannis Lianos, The Elusive Antitrust Standard on Bundling in Europe and in the United States at the Aftermath of the Microsoft Cases, in Antitrust Law Journal 76/3 (2009)

Alberto Heimler

Scuola Superiore della Pubblica Amministrazione (School of Public Administration) – Economics

Greg Werden, Essays on Consumer Welfare and Competition Policy ,

Max Huffman

IU-Indianapolis - Law

Alan Devlin, Antitrust in an Era of Market Failure, (forthcoming Harvard Journal of Law and Public Policy)

Ioannis Lianos

UCL – Law

Maurice Stucke, Does the Rule of Reason Violate the Rule of Law?, 42 U.C. Davis Law Review 1375 (2009); Einer Elhauge, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, 123 Harvard Law Review 397 (2009)

Barak Orbach

University of Arizona – Law

Herbert Hovenkamp, The Insurance Industry's Antitrust Immunity,; Einer Elhauge, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, 123 Harvard Law Review 397 (2009)

Nicolas Petit

University of Liege Law School

Einer Elhauge, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, 123 Harvard Law Review 397 (2009)

Barak Richman

Duke University – Law

Einer Elhauge, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, 123 Harvard Law Review 397 (2009)

Barry Rodger

University of Strathclyde - Law

D.I. Baker,  ‘An Enduring Antitrust divide Across the Atlantic over whether to Incarcerate Conspirators and when to restrain Abusive Monopolists’ [2009] 5(1) European Competition Journal145-200

Daniel Sokol

University of Florida – Law

Nathan Miller, Strategic Leniency and Cartel Enforcement, American Economic Review, Vol 99, No. 3 (2009), 750-568; Einer Elhauge, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, 123 Harvard Law Review 397 (2009)

Andreas Stephan

University of East Anglia – Law

Bruce Lyons, Competition Policy, Bailouts and the Economic Crisis, available at!CCP09-4.pdf.

Maurice Stucke

University of Tennessee – Law



Phil Weiser

University of Colorado – Law

Scott Hemphill, An Aggregate Approach to Antitrust: Using New Data and Rulemaking to Preserve Drug Competition," 109 Columbia Law Review 629 (2009).

December 25, 2009 | Permalink | Comments (0) | TrackBack (0)

Thursday, December 24, 2009

Inferring market power from retail deposit interest rates in the euro area

Posted by D. Daniel Sokol

Laura Vajanne (Bank of Finland Research) is Inferring market power from retail deposit interest rates in the euro area.

ABSTRACT: This paper tests for the existence of market power in banking, using data on demand deposit rates of households and corresponding market rates in five euro area countries. An implicit measure for market power is based on a partial adjustment model that also allows for an asymmetric response of deposit rates to changes in market rates. The period covers the ten years since introduction of the euro. The analysis indicates that banks are exercising major market power within the euro area. In addition to general sluggishness, bank deposit rates’ reactions are clearly asymmetric: flexible when market rates are decreasing and rigid when rates are increasing. The degree of asymmetric behaviour can be interpreted as a further indication of the market power banks exercise. Despite country differences, a general pattern of interest rate adjustment in demand deposit pricing is observable.

December 24, 2009 | Permalink | Comments (0) | TrackBack (0)

Testing Theories of Scarcity Pricing in the Airline Industry

Posted by D. Daniel Sokol

Steven L. Puller, Anirban Sengupta, and Steven N. Wiggins are Testing Theories of Scarcity Pricing in the Airline Industry.

ABSTRACT: This paper investigates why passengers pay substantially different fares for travel on the same airline between the same two airports. We investigate questions that are fundamentally different from those in the existing literature on airline price dispersion. We use a unique new dataset to test between two broad classes of theories regarding airline pricing. The first group of theories, as advanced by Dana (1999b) and Gale and Holmes (1993), postulates that airlines practice scarcity based pricing and predicts that variation in ticket prices is driven by differences between high demand and low demand periods. The second group of theories is that airlines practice price discrimination by using ticketing restrictions to segment customers by willingness to pay. We use a unique dataset, a census of ticket transactions from one of the major computer reservation systems, to study the relationships between fares, ticket charact! eristics, and flight load factors. The central advantage of our dataset is that it contains variables not previously available that permit a test of these theories. We find only mixed support for the scarcity pricing theories. Flights during high demand periods have slightly higher fares but exhibit no more fare dispersion than flights where demand is low. Moreover, the fraction of discounted advance purchase seats is only slightly higher on off-peak flights. However, ticket characteristics that are associated with second-degree price discrimination drive much of the variation in ticket pricing.

December 24, 2009 | Permalink | Comments (0) | TrackBack (0)

Efficiency of EU Merger Control in the 1990-2008 Period

Posted by D. Daniel Sokol

Goran Serdarevic (EEIP) and Petr Teply (EEIP) undertake work on Efficiency of EU Merger Control in the 1990-2008 Period.

ABSTRACT: The main goal of this paper is to provide an analysis of key regulatory changes in the European merger control and to evaluate their real impact on the efficiency of merger regulation. Our main contribution is an empirical analysis of a unique representative sample of 161 horizontal mergers covering the final regulatory assessments during the period from 1990 to 2008. We use stock market data to identify those cases where there are discrepancies between the Commission and market evaluation of the merger. The PROBIT model is then used to further investigate the sources of these discrepancies. Our results suggest that the Commission’s decisions are not purely explained by the motive of protecting consumer welfare and that other political and institutional factors do play a role in setting policy. We did not find evidence that the Commission protects competitors at the expense of consumers and foreign firms. Moreover, we ! conclude that the regulatory reform introduced in 2004 has significantly enhanced efficiency of the European merger control. To the authors’ best knowledge, this paper is the first study using stock market data to evaluate an impact of the recent EU merger control.

December 24, 2009 | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 23, 2009

Private label introduction: Does it benefit the supply chain?

Posted by D. Daniel Sokol

Marc Sachon (IESE Business School) and Victor Martinez de Albeniz (IESE Business School) ask Private label introduction: Does it benefit the supply chain?

ABSTRACT: Private labels, also called store brands or distributor brands, have changed the retail industry during the last three decades. Consumer data shows strong growth of private label market share, and in countries like Germany or Spain, the penetration of private labels is above 30% of total retail sales. This paper analyzes the channel dynamics in a category where a private label is introduced. We focus on the impact of private labels on retail and wholesale equilibrium prices, as well as on the profits of each firm of the supply chain. While private label introduction helps the retailer reduce manufacturer brand's prices, we find that it does not always improve the total profits of the supply chain. Generally, the supply chain benefits from this introduction only when cross-elasticities are small, i.e., competitive interactions are weak. With our model, we formulate the general conditions under which retailers should consider introducing private labels.

December 23, 2009 | Permalink | Comments (0) | TrackBack (0)

Price Controls and Consumer Surplus

Posted by D. Daniel Sokol

Jeremy Bulow (Graduate School of Business, Stanford University) and Paul Klemperer (Nuffield College, University of Oxford, Oxford, UK) analyze Price Controls and Consumer Surplus.

ABSTRACT: The condition for when a price control increases consumer welfare in perfect competition is tighter than often realised. When demand is linear, a small restriction on price only increases consumer surplus if the elasticity of demand exceeds the elasticity of supply; with log-linear or constant-elasticity, demand consumers are always hurt by price controls. The results are best understood - and can be related to monopoly-theory results - using the fact that consumer surplus equals the area between the demand curve and the industry marginal-revenue curve.

December 23, 2009 | Permalink | Comments (0) | TrackBack (0)