Antitrust & Competition Policy Blog

More details - Global Competition Law and Practice Conference in New Delhi, India

Posted by D. Daniel Sokol

I wanted to give readers of the blog some more information regarding the conference in New Delhi, India that Ioannis Lianos (UCL) and I (Daniel Sokol of the University of Florida) are organizing.  Within the next two weeks we will have an agenda and a conference website.  In the meantime, let me share some of the speakers for the Global Competition Law and Practice Conference in New Delhi, India on November 19, 2010:

Confirmed speakers include:
The Honorable Mr. Salman Khurshid, Indian Minister for Corporate Affairs
Mr. Dhanendra Kumar, Chairman of the Competition Commission of India
William Kovacic, Commissioner of the Federal Trade Commission
Frederic Jenny, Judge at the Supreme Court of France (Cour de Cassation), Chairman of the OECD Competition Law and Policy Committee
Damien Neven, Chief Economist of DG Competition
Howard Shelanski, Deputy Director for Antitrust of the Bureau of Economics, Federal Trade Commission

The conference also will involve law firm practitioners, in-house lawyers, academics and other government officials from India and around the world.  Again, we promise more names soon with a final agenda.

Mark the date in your calendar as an event that you must attend.

Competition Prize - competition (antitrust) law or economics written by young scholars

Posted by D. Daniel Sokol

THE HELLENIC COMPETITION COMMISSION

 

Wishing to promote competition culture in Greece, and in the context of its competition advocacy efforts, announces for 2010 a competition for the prize “Competition 2010”. The prize will be awarded to the best scientific article in competition (antitrust) law or economics written by young scholars that are not 31 years old or older on 30 November 2010.

The article must be written in Greek and must pertain to the broad subject of competition law or economics, more specifically either Greek or EU competition law & policy. The article must be unpublished and be based on recent research. It must not be longer than 15,000 words, including footnotes.

The prize amounts to 3,000 euros and the deadline for the submission of the articles is the 30th of November 2010.

More detailed information on the process of submission of the articles can be obtained from www.epant.gr.                                                               

EXCESSIVE PRICING: TOWARDS CLARITY AND ECONOMIC COHERENCE

Posted by D. Daniel Sokol

Claudio Calcagno (European University Institute) and Mike Walker (CRA) have a new article on EXCESSIVE PRICING: TOWARDS CLARITY AND ECONOMIC COHERENCE.

ABSTRACT: One of the thorniest areas of antitrust enforcement is whether, and how, to deal with excessive pricing allegations. Even in jurisdictions that have laws against excessive pricing, there has been little case law on the issue. A recent dispute over the pricing of flat steel in South Africa provides helpful guidance on the correct approach to excessive pricing cases. The Competition Tribunal took a structural approach and deduced the existence of excessive pricing on the basis of super-dominance and market segmentation. The Competition Appeal Court overturned this decision and clearly stated that (1) an empirical exercise comparing prices with cost benchmarks is required in assessing these cases, and (2) excessive prices need to be judged against the long-run average costs of an efficient firm. A purely structural approach was not deemed adequate. In this article, we describe the case and explain why the judgment by the Competition Appeal Court is sound from an economic perspective and why it sets an important precedent in this area of competition law.

Estimating Pass-On

Posted by D. Daniel Sokol

Jan Peter van der Veer & Andrea Lofaro (RBB Economics) have a paper on Estimating Pass-On.

ABSTRACT: When assessing the damage incurred by customers of a cartel, it may (depending on the applicable legal framework) be relevant to consider the extent to which these downstream firms have passed on some or all of any price increase caused by the cartel to their own customers. Since passing on a price increase will always reduce the overall damage, reference is often made to the "passing-on defense." However, it is important to note that any attempt by downstream firms to pass on cartel overcharges will lower their sales, implying that downstream firms will suffer a damage even when the entire price overcharge has been passed on. In view of this, the analysis of pass-on should, at least from an economic point of view, also consider the value of lost sales caused by any price increase.

In this short article, we discuss the economic analysis of pass-on. Section 2 reviews a number of useful insights from the economic literature into the incentive of firms to pass-on cost increases under different circumstances. Section 3 discusses the estimation of pass-on in practice. Section 4 offers some concluding remarks.

Private Litigation in England and Wales

Posted by D. Daniel Sokol

Renato Nazzini (University of Southampton) writes on Private Litigation in England and Wales.

ABSTRACT: The United Kingdom has been at the forefront of developments of private enforcement of competition law. However, as I discussed in a previous article co-authored with Ali Nikpay,this jurisdiction has also often adopted a cautious approach to measures aimed at facilitating litigation in this field, for fear of fostering spurious claims and a litigation culture that would be socially harmful and unfair to defendants.This article updates that article as to the current status of private litigation in England and Wales.

There is no doubt that England and Wales is well placed to be a forum for effective resolution of competition law disputes. First, English courts have adopted an expansive approach to territorial jurisdiction. In Provimi Ltd v Aventis Animal Nutrition SA, the court dismissed applications for striking out and summary judgment in actions brought by a German company against English defendants where the claimant had had no contractual dealings whatsoever with the English companies. However, the English companies were part of the same corporate group and formed the same "undertaking" as the German companies, from which the claimant had purchased goods at the allegedly higher cartel price. Higher prices in Germany would not have been tenable if the cartel had not been implemented on a supra-national scale. Therefore, the conduct of the English defendants had contributed to causing a loss to the claimant.

Second, almost uniquely in Europe, English law recognizes the principle that, in order to do justice between the parties, all relevant evidence must be placed before the court. Therefore, the parties are under a continuing duty to disclose all documents which are or have been in their possession and that either support their case, or support the other party's case, or undermine the disclosing party's case. Disclosure is essential in competition litigation. In civil law countries, the opposite general principle applies: A party does not have a duty to disclose evidence that supports the other party's case or undermines his own case. This principle has, of course, exceptions, particularly where the other party is able to identify a document with sufficient precision and applies to the court for specific disclosure of that document.

Third, competition cases in England and Wales must be issued in or transferred to the Chancery division of the High Court, where a small number of senior judges will be able to build significant experience in competition cases. The same judges can also sit as chairman of the Competition Appeal Tribunal ("CAT"), which, among other things, hears appeals against the decisions of the Office of Fair Trading ("OFT") or the regulators as to whether the national or European competition rules have been infringed. Furthermore, the CAT has jurisdiction to hear claims for damages or other sum of money when the infringement has already been established in a decision by the OFT, a regulator, or the European Commission (so-called "follow-on claims").

There are two main features of the English system that, however, are liable to constitute a significant obstacle to effective redress in competition cases: costs and the lack of a clearly established and effective procedure for collective claims.

Advance notice of Request for Offers for African Competition Forum (ACF) Coordinator assignment

Posted by D. Daniel Sokol

IDRC – International Development Research Centre

Advance notice of Request for Offers for African Competition Forum (ACF) Coordinator  assignment.

The newly formed African Competition Forum (ACF), whose primary members are Competition Authorities from African countries, is entering its scoping phase.  The objective is to carry out  an international needs assessment (continent wide) and determine a plan of activities and organizational structure for the operational phase of the ACF.  The scoping phase is being managed by the ACF Interim Steering Group under the Chairmanship of Mrs Mona Yassine, Egyptian Competition Authority.  A formal Request for Offers for a consultant Coordinator to manage this exercise will shortly be issued.  The consultant is expected to provide approximately 6 months of input over the next 8-9 months, and must fit the following profile:  an expert in competition policy with PhD in economics or law of competition  and/or at least 7 years relevant experience, able to provide full- or nearly full-time input over the relevant period, fluent in French or English (preferably both), and currently resident in Egypt, Kenya, Zambia, South Africa, Senegal, Tanzania or Morocco. 

If you fit this profile and are interested in responding to the Request for Offers please write to Mrs Mona Yassine ([email protected]) and Susan Joekes, IDRC Middle East and North African Regional Office ([email protected]).   The Request for Offers will be issued by Canada’s IDRC which, in collaboration with UK DFID, is providing funds for the ACF scoping phase (see www.idrc.ca/competition).  

Antitrust Forum-Shopping in England: Is Provimi Ltd v Aventis Correct?

Posted by D. Daniel Sokol

Brian Kennelly (Blackstone Chambers) asks Antitrust Forum-Shopping in England: Is Provimi Ltd v Aventis Correct?

ABSTRACT: This article examines the judgment of Aikens J in Provimi Ltd and ors v Aventis Animal Nutrition SA and ors, which opened the door to the stream (if not yet a flood) of non-U.K. claimants bringing competition law damages claims in this jurisdiction. Provimi found that a corporate entity (e.g. a subsidiary) may be liable for implementing a cartel contrary to Article 101(1) TFEU where it is part of the same undertaking as the cartelist, even if it had no knowledge of the cartel and never made sales of the cartelized products to the claimants (§§31, 39-41).

On this basis, and armed with Article 6(1) of the Judgments Regulation,a foreign victim can sue all of the foreign members of the cartel in England provided that there is at least one subsidiary of one of the cartelists in England. Provimi was clearly a welcome decision for U.K. competition litigators. It may, however, be wrong.

Vertical Control of a Distribution Network - An Empirical Analysis of Magazines

Posted by D. Daniel Sokol

Stijn Ferrari, Catholic University of Leuven (KUL) and Frank Verboven, Catholic University of Leuven (KUL) - Faculty of Business and Economics explore Vertical Control of a Distribution Network - An Empirical Analysis of Magazines.

ABSTRACT: How does an upstream firm determine the size of its distribution network, and what is the role of vertical restraints? To address these questions we develop and estimate two models of outlet entry, starting from the basic trade-o¤ between market expansion and fixed costs. In the coordinated entry model the upstream firm sets a market-specific wholesale price to implement the first-best number of outlets. In the restricted/free entry model the upstream firm has insufficient price instruments to target local markets. It sets a uniform wholesale price, and restricts entry in markets where market expansion is low, while allowing free entry elsewhere. We apply the two models to magazine distribution. The evidence is more consistent with the second model where the upstream firm sets a uniform wholesale price and restricts the number of entry licenses. We use the model to assess the profitability of modifying the vertical restraints. A government ban on restriced licensing would reduce profits by a limited amount, so that the business rationale for restricted licensing should be sought elsewhere. Furthermore, introducing market-specific wholesale prices would implement the first-best, but the profit increase would be small, providing a rationale for the current uniform wholesale prices.

Deliberate Concealment in Cartel Claims

Posted by D. Daniel Sokol

Romano Subiotto QC and Ruchit Patel (Cleary Gottlieb) describe Deliberate Concealment in Cartel Claims.

ABSTRACT: This paper examines the application of the deliberate concealment doctrine (as contained in the UK Limitation Act 1980) to damages claims based on alleged cartel activity ("cartel claims") brought in the English High Court.  The nature and scope of the cartel claims that have been brought to date indicate that the issue of whether, and to what extent, a claimant's action is brought "in time" raises novel, interesting, and complex legal questions.  It therefore seems likely that this important battleground is destined to be the subject of a great deal of further litigation in the near future.

It is perhaps instinctive to assume that because a claimant is usually unaware that he has a claim prior to the announcement of an infringement decision, time ought to run from the date of the infringement decision. However, as explained below, the position under English law is that, unless certain elements are evident (e.g., fraud, mistake, or deliberate concealment), time starts to run from the date that the cause of action accrues.  Cartel claims normally concern the level of any overcharge arising from the alleged cartel and, as such, time will normally begin to run from the date of the sale of the good or service. As some such sales may have taken place long before the expiry of the relevant limitation period, one of the key questions in cartel claims is often whether that limitation period has been postponed due to deliberate concealment by the defendant of a fact relevant to the claimant's action.

Section I of this paper examines the law and policy underlying the deliberate concealment doctrine, and Sections II and III highlight some of the key questions surrounding the respective elements of "deliberate" and "concealment" in the context of cartel claims.

Antitrust and Innovation: Where We Are and Where We Should Be Going

Posted by D. Daniel Sokol

Herb Hovenkamp (Iowa Law) has an important contribution on Antitrust and Innovation: Where We Are and Where We Should Be Going.

ABSTRACT: For large parts of their history intellectual property law and antitrust law have worked so as to undermine innovation competition by protecting too much. Antitrust policy often reflected exaggerated fears of competitive harm, and responded by developing overly protective rules that shielded inefficient businesses from competition at the expense of consumers. By the same token, the IP laws have often undermined rather than promoted innovation by granting IP holders rights far beyond what is necessary to create appropriate incentives to innovate.

Perhaps the biggest intellectual change in recent decades is that we have come to see patents less as a species of monopoly and more as a kind of property. While a good development overall, this makeover in conception has contributed to some less desirable expansions in the patent system. The “propertization” of patent law has not been attended by requirements that apply to other types of property. One principle of property law is that claimants have the obligation to articulate clear boundaries of ownership. Another is that property owners must communicate timely and effective notice of their claims, because the cost of giving notice is typically much lower than the cost of searching.

Although one should not push the point too far, antitrust law, which is judge made, claims relatively more freedom from interest group capture than does statutory IP law. And if antitrust tribunals go too far, Congress can be trusted to respond to the voices of IP holders, who have consistently shown themselves to be a more effective interest group than IP users or consumers. For its part, IP law can take some important lessons from the road that antitrust has taken toward reform and redemption. Roughly 40 years ago antitrust pursued a course of protecting small competitors at consumers’ expense and even condemning such practices precisely because they reduced costs. Then in the late 1970s the Supreme Court dramatically shifted the ground, requiring not only that injury be clearly proven, but also that it be the right kind of injury – that is, injury to competition and not merely injury to the plaintiff. This transformation was accomplished entirely by the Supreme Court, largely in the face of Congressional indifference and in apparent conflict with a private injury statute that guarantees liberal recovery for every kind of injury. Intellectual property law would profit by continuously examining its root motivations as antitrust law does.

Predation Analysis and the FTC's Case Against Intel

Posted by D. Daniel Sokol

Dan Crane (Michigan Law) has an interesting article on Predation Analysis and the FTC's Case Against Intel.

ABSTRACT: The Federal Trade Commission's pending antitrust case against Intel challenges a number of Intel's discounting and rebating practices. The Commission appears poised to apply a cost-price test to the challenged practices, but proposes to include "fixed sunk costs" in the appropriate measure of cost. This paper explains the importance of using cost-price screens to assess unilaterally imposed prices and analyzes the futility of including sunk costs in the relevant cost measure.

Age Eligibility Rules in Women's Professional Golf: A Legal Eagle or an Antitrust Bogey?

Posted by D. Daniel Sokol

Elizabeth A. Gregg, Indiana University, Lawrence W. Fielding, Jacksonville University and Ryan M. Rodenberg, Florida State University ask Age Eligibility Rules in Women's Professional Golf: A Legal Eagle or an Antitrust Bogey?

ABSTRACT: The LPGA's minimum age rule is analyzed under American antitrust law.

 

Dawn of a New Constitutional Era or Opportunity Wasted? An Intellectual Reappraisal of China’s Anti-Monopoly Law

Posted by D. Daniel Sokol

Oliver Zhong, US-Asia Law Institute, New York University School of Law writes on Dawn of a New Constitutional Era or Opportunity Wasted? An Intellectual Reappraisal of China’s Anti-Monopoly Law.

ABSTRACT: China’s nascent “competition law” legislation, the Anti-Monopoly Law, has piqued the interest of many an antitrust practitioner. This Article argues that the attention is well-deserved, but for the wrong reason. The AML, it argues, is far broader than a competition law, and one is already on a misleading track attempting to read it within an antitrust paradigm. Legislations work only within a certain constitutional context, and the Chinese one is particularly complex. An intellectual reappraisal is due. The Article aims to do three things: to reconceptualize the AML as promulgated and identify major policy ambiguities; to review official updates and developments since promulgation with an eye to clarify such ambiguities; and to place the AML in China’s intellectual tradition to ascertain what it signifies for the present and augurs for the future.

 

Promoting Innovation Through Patent and Antitrust Law and Policy

Posted by D. Daniel Sokol

Christine Varney (DOJ) has an important new speech up on the web titled Promoting Innovation Through Patent and Antitrust Law and Policy. There are her remarks for the Joint Workshop of the U.S. Patent and Trademark Office, the Federal Trade Commission, and the Department of Justice on the Intersection of Patent Policy and Competition Policy: Implications for Promoting Innovation

New Chambers USA Rankings Are Out - Texas Antitrust Elite Edition

Posted by D. Daniel Sokol

Antitrust: Texas

• Senior Statesmen
  Harry M Reasoner(Vinson & Elkins LLP)
• Band 1
  Jerry Beane(Andrews Kurth LLP)
  Curtis L Frisbie Jr(Gardere Wynne Sewell LLP)
  H Lee Godfrey(Susman Godfrey LLP)
  Gregory S C Huffman(Thompson & Knight LLP)
  Layne Kruse(Fulbright & Jaworski LLP)
  Barry McNeil(Haynes and Boone, LLP)
  Rufus W Oliver III(Baker Botts LLP)
  M Sean Royall(Gibson, Dunn & Crutcher LLP)
  Stephen D Susman(Susman Godfrey LLP)
  Allan Van Fleet(Greenberg Traurig, LLP)
• Band 2
  Richard Carrell(Fulbright & Jaworski LLP)
  Michael Ferrill(Cox Smith Matthews Incorporated)
  William Pakalka(Fulbright & Jaworski LLP)
  Alison Smith(Haynes and Boone, LLP)
• Band 3
  Barry C Barnett(Susman Godfrey LLP)
  Ronald W Breaux(Haynes and Boone, LLP)
  Kay Lynn Brumbaugh(Andrews Kurth LLP)
  Randy D Gordon(Gardere Wynne Sewell LLP)
  William M Katz Jr(Thompson & Knight LLP)
  Veronica Lewis(Vinson & Elkins LLP)
  James A Reeder Jr(Vinson & Elkins LLP)
  James K Spivey(Cox Smith Matthews Incorporated)
  Harry Susman(Susman Godfrey LLP)
• Up and Coming
  Brian E Robison(Vinson & Elkins LLP)

Petroleum Mergers and Competition in the Northeast United States

Posted by D. Daniel Sokol

Christopher T. Taylor, U.S. Federal Trade Commission - Bureau of Economics Louis Silvia, Government of the United States of America - Federal Trade Commission have a new paper on

Petroleum Mergers and Competition in the Northeast United States.

ABSTRACT: Sunoco’s 2004 acquisition of El Paso’s, New Jersey refinery and Valero’s 2005 acquisition of Premcor’s Delaware refinery significantly consolidated refinery control in the U.S. Northeast. The Federal Trade Commission investigated both transactions but challenged neither. We examine the FTC’s enforcement rationale and test whether these mergers were associated with post-merger price increases in either gasoline or diesel at retail and wholesale levels. Our findings indicate that the transactions were largely competitively neutral. There was some indication that some unbranded rack prices may have increased after the mergers, but this result was not robust across controls or assumptions. In some other instances, prices in merger affected areas may have fallen relative to prices elsewhere after the transactions.

Entry, Competitiveness and Exports: Evidence from Firm Level Data of Indian Manufacturing

Posted by D. Daniel Sokol

Alokesh Barua (International Trade and Development Division, School of International Studies, Jawaharlal Nehru University), Debashis Chakraborty (Indian Institute of Foreign Trade, New Delhi) and Hariprasad C. G. (International Trade and Development Division, School of International Studies, Jawaharlal Nehru University)analyze Entry, Competitiveness and Exports: Evidence from Firm Level Data of Indian Manufacturing.

ABSTRACT: The industry and trade policy regimes in India have witnessed drastic changes since 1991. The dismantling of the industrial licensing system and thereby allowing free entry to and exit from the industry of firms in 1991 followed by the WTO induced trade liberalization leading to substantial reduction in tariffs and gradual softening of foreign investment regulations, particularly in the context of foreign direct investment since 1995, may have had significant impact on the state of competitiveness in India industries. In this paper an attempt has been made to evaluate the effects of trade and industrial policy changes on domestic competitiveness for select Indian industries during post-liberalization period. Though there exists a pool of empirical literature focusing on the state of competitiveness in India, the link between theoretical models underlying the empirical analysis is not often strong. Moreover, a section of the literature focuses on a combination of firm and industry data for drawing conclusions on firm behavior, which may not reflect the actual scenario. Given this background, the present paper attempts to provide a unified approach to examine the inter-relationships between entry and competitiveness within a consistent oligopolistic market framework. The empirical analysis of the present study, carried out on the basis of firm data for 14 sectors over 1990-2008, indicates that Indian industry have shown considerable changes over the last decade in terms of entry and competitiveness. An overall decline in concentration is witnessed between the two end points, which signify the importance of newer entry in the markets. The Price-Cost Margin however behaves differently for different sectors, which could be explained by the differing level of spillover of technical changes as a result of increased pressure of competition due to liberalization. Demand curve is generally found to be inelastic and declines over the period. The relationship between th e size of the firms and their export volume turns out to be significantly positive.

New Chambers USA Rankings Are Out - Pennsylvania Antitrust Elite Edition

Posted by D. Daniel Sokol

 

Antitrust: Pennsylvania

• Band 1Dechert LLP
• Band 2Berger & Montague PCBuchanan Ingersoll & Rooney PCFine, Kaplan and Black, RPCPepper Hamilton LLP
• Band 3Ballard Spahr LLPDrinker Biddle & Reath LLPKohn Swift & Graf, PCLanger, Grogan & Diver PCMorgan, Lewis & Bockius LLPReed Smith LLP

Antitrust: Pennsylvania

• Star Individuals
  Joseph A Tate(Dechert LLP)
  Band 1
  Allen Black(Fine, Kaplan and Black, RPC)
  Howard Langer(Langer, Grogan & Diver PC)
  Roberta Liebenberg(Fine, Kaplan and Black, RPC)
  Barbara W Mather(Pepper Hamilton LLP)
  H Laddie Montague Jr(Berger & Montague PC)
  Barbara T Sicalides(Pepper Hamilton LLP)
• Band 2
  Steven E Bizar(Buchanan Ingersoll & Rooney PC)
  Daniel I Booker(Reed Smith LLP)
  Stephen D Brown(Dechert LLP)
  Eric Cramer(Berger & Montague PC)
  Merrill Davidoff(Berger & Montague PC)
  Mark Edwards(Morgan, Lewis & Bockius LLP)
  George G Gordon(Dechert LLP)
  Joseph Kohn(Kohn Swift & Graf, PC)
  Christine C Levin(Dechert LLP)
  Francis Patrick Newell(Cozen O'Connor)
  Howard D Scher(Buchanan Ingersoll & Rooney PC)
  Steve Shadowen(Hangley Aronchick Segal & Pudlin)
  Stephen A Stack Jr(Dechert LLP)
• Band 3
  Carolyn Feeney(Dechert LLP)
  Wayne A Mack(Duane Morris LLP)
  Wendy Newton(Buchanan Ingersoll & Rooney PC)
  Paul Saint-Antoine(Drinker Biddle & Reath LLP)
  Laurence Z Shiekman(Pepper Hamilton LLP)
• Up and Coming
  Gerard Dever(Fine, Kaplan and Black, RPC)
  Robin P Sumner(Pepper Hamilton LLP)

How Do Firms Set Prices? Survey Evidence from Ireland

Posted by D. Daniel Sokol

 Mary J. Keeney (Central Bank and Financial Services Authority of Ireland), Martina Lawless (Central Bank and Financial Services Authority of Ireland) and Alan Murphy (Central Bank and Financial Services Authority of Ireland) ask How Do Firms Set Prices? Survey Evidence from Ireland.

ABSTRACT: Despite the importance of understanding and estimating the “stickiness” of prices of goods and services, empirical assessment of price setting behaviour by firms has remained relatively limited. This is the first paper to provide detailed information on the pressures, manner and frequency with which Irish firms adjust their output prices. Using survey information from almost a thousand Irish firms, we present a number of stylised facts on price setting behaviour. One of the first of these relates to the level of control firms have over their pricing strategy – the most common approach for firms is to set a price based on costs and a self-determined profit margin. However, one-third of firms said that their price was set primarily by following that of their closest competitors. The perceived intensity of competition was found to be one of the most significant factors in determining the price-setting approach and is ! also a central factor in determining price changes

Important Scholarly News - Phil Areeda's Papers now Available for Researchers

Posted by D. Daniel Sokol

Harvard's Law Library has opened the papers of Phil Areeda for researchers.  See here for details.