Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Saturday, August 31, 2013

THE FTC AT A CROSSROADS: CAN IT BE BOTH PROSECUTOR AND JUDGE?

David Balto asks, THE FTC AT A CROSSROADS: CAN IT BE BOTH PROSECUTOR AND JUDGE?

ABSTRACT: Nearly 100 years ago Congress established the Federal Trade Commission (FTC) to protect consumers against unfair, deceptive, and anticompetitive practices. The goal of Congress was to create a single agency with a broad range of powers to address these important policy goals. When it was established in 1914, the FTC was designed to be an investigatory and adjudicative body empowered to clarify and enforce antitrust law. The agency was tasked with identifying and stopping “unfair methods of competition.”1 Part of the reason for the creation of the FTC was the dissatisfaction with the ability of generalist courts to enforce the antitrust laws. To strengthen the role of the FTC, Congress gave it the power to conduct studies, issue reports, and, most importantly, administratively litigate—to bring enforcement actions and serve as an administrative tribunal.

The FTC has met the goals of Congress in many respects. But the role of administrative litigation seems often unfulfilled. For years administrative litigation was criticized because of its glacial pace or the relatively minor cases that were litigated. In the mid-1990s, the FTC adopted a series of carefully structured time limits and other procedural reforms that have shortened and strengthened the litigation process and made it more like federal court litigation. Some observers have noted that FTC administrative litigation is akin to a “rocket docket.” Not surprisingly over the past decade, the FTC has concurrently increased the role of administrative litigation. In one important respect, the administrative litigation role is particularly unsettling. The FTC acts as both prosecutor and judge in administrative litigation. In the past, businesses, the American Bar Association, and former FTC Commissioners have all raised concerns about this appearance of unfairness. Those concerns were tempered in the past because administrative litigation was so slow that often the FTC’s five member Commission would change in composition after an administrative trial was held. And more importantly, the Commission frequently held that no law violation occurred. In the past 18 years, however, the Commission has found a law violation in every administrative case. This trend is unprecedented.

This LEGAL BACKGROUNDER addresses the FTC’s administrative process and the problem of procedural fairness. It highlights the recent history of the Commission’s decision-making and observes how some of the most important decisions were rejected by the federal courts of appeal. Finally, it observes the problems that arise from the appearance of unfairness and how those problems may undermine the FTC’s role in antitrust and consumer protection enforcement.

August 31, 2013 | Permalink | Comments (0) | TrackBack (0)

Friday, August 30, 2013

Asia Competition Association 2013 Annual Conference

Asia Competition Association 2013 Annual Conference

Please register for the conference at http://www.asiacmpetition.org

 Date:                  September 6, 2013

Venue:                Schubert Hall, 31st Floor, Hotel President

                           16, Euljiro, Jung-Gu, Seoul Korea 100-191

http://www.hotelpresident.co.kr/

Co-organizers:   Asia Competition Association

Korea Academic Society of Industrial Organization

Korea Competition Forum

Korea Competition Law Association

Korea Economic Law Association

 

Program

 

09:00
– 09:30  Registration

 

09:30 – 09:45  Opening
Remarks

Ÿ  
Hoil YOON, Chairman, Asia Competition
Association; Chairman, Yoon & Yang LLC

Ÿ   Shiying
XU, Vice-Chairman, Asia Competition Association; Professor, East China
University of Political Science and Law

Ÿ   Kimitoshi
YABUKI, Vice-Chairman, Asia Competition Association; Yabuki Law Offices

 

09:45 – 10:05      Keynote Speech

                       Dae-lae
NOH, Chairman, Korea Fair Trade Commission

Major recent developments and prospects of competition policies and
enforcement in Korea

 

10:10 – 12:10      Session 1:  Enforcers Roundtable

Recent developments and prospects of competition policies and enforcement
in East Asia

 

Co-Moderators:

Ohseung KWON, Professor, Seoul
National University Law School, Korea

Akinori
UESUGI, Consultant, Freshfields Bruckhaus Deringer

Xiaoye WANG, Professor of Law, Hunan University and
Chinese Academy of Social Sciences

 

Speakers:

Cholsoo HAN, Secretary
General, Korea Fair Trade Commission

Zhicheng CUI, Director of Anti-Monopoly
Bureau, MOFCOM

Jingli LI, Director of Anti-Monopoly and Anti-Unfair
Competition Enforcement Bureau, SAIC (Invited)

Toshiyuki
NAMBU, Deputy Secretary-General for International Affairs, Japan Fair Trade
Commission

 

12:10
– 13:30  Lunch

 

13:30 – 15:00      Session 2Trends in Cartel Regulation

Economic evidence for proving cartels; leniency; and
regulation of international cartels

 

Co-Moderators:

Chul-kyu KANG,
President, Woosuk University, Korea

Kimitoshi
YABUKI, Attorney, Yabuki Law Offices

 

Speakers:

Yanbo JIANG,
Dean, Law School of Jiangxi University of Finance and Economics

Jae
Young KIM, Attorney, Yoon & Yang LLC

Gary SPRATLING, Attorney, Gibson Dunn
& Crutcher LLP

Toshiaki TADA, Attorney, Hibiya Sogo
Law Office

 

15:00
– 15:10  Break

 

15:10 – 16:20      Session 3Recent Developments in Merger Regulation from an
Economic Perspective

Regulation of international mergers
using
economic analysis

 

Co-Moderators:

Kei AMEMIYA,
Attorney, Morrison Foerster

Shiying XU, Vice-Chairman, Asia Competition
Association; Professor, East China University of Political Science and Law

 

Speakers:

Keita FUKUNAGA, Chief
Investigator, Merger and Acquisition Division of the Japan Fair Trade
Commission

Yangsoo
JIN, Advisor, Kim & Chang

Jianmin
DAI, Attorney, Dacheng Law firm

 

16:20
– 16:40  Coffee Break

 

16:40 – 18:30      Session 4Abuse of Dominance in a Global Context

Global trends
in competition regulation of standard
essential patents
,
rebates, and so on

 

Co-Moderators:

Ji-sang CHANG,
Professor, Kyungpook National University, Korea

Shiying XU, Vice-Chairman, Asia Competition
Association; Professor, East China University of Political Science and Law

 

Speakers:

Gee-Hong KIM,
Attorney, Jipyong Jisung

Makoto KURITA,
Professor, Chiba University

Lizhi
NING, Professor, Wuhan University

Greg S.
SLATER, Director of Trade and Competition Policy, Intel Corporation

Seong Un YUN, Attorney, Bae, Kim & Lee LLC

 

18:30
– 18:45  Closing Remarks

Ÿ   Xiaoye
WANG, Professor of Law, Hunan University and Chinese Academy of Social Sciences

Ÿ  
Kiljun PARK, Professor, Yonsei University

Ÿ   Toshifumi
HIENUKI, Hokkai-Gakuen University

 

19:00               Dinner

Ÿ   Keynote Speech

Justice Inbok LEE, Supreme Court of Korea

The
role of the courts in development of antitrust law in Korea -
Judicial
review of KFTC decisions and recent developments in antitrust damages
litigation in Korea [Tentative topic]

August 30, 2013 | Permalink | Comments (0) | TrackBack (0)

Input price discrimination (bans), entry and welfare

Posted by D. Daniel Sokol

Markus Dertwinkel-Kalt, Justus Haucap, Christian Wey (all Dusseldorf Institute for Competition Economics) analyze Input price discrimination (bans), entry and welfare.

ABSTRACT: Katz (1987), DeGraba (1990), and Yoshida (2000) have formulated theories that price discrimination bans in intermediary goods markets tend to have positive effects on allocative, dynamic and productive efficiency, respectively. We show that none of these results is robust vis-a-vis endogenous changes in downstream market structure. An upstream monopolist’s ability to price discriminate can intensify competition through entry (by a technically inefficient entrant), resulting in socially preferable market outcomes. In contrast, discrimination bans tend to blockade entry of relatively inefficient fi…rms, thereby strengthening downstream market concentration.

August 30, 2013 | Permalink | Comments (0) | TrackBack (0)

Ex-post Merger Evaluation in the UK Retail Market for Books

Posted by D. Daniel Sokol

Luca Aguzzoni, LEAR, Elena Argentesi, University of Bologna, Lorenzo Ciari, European Bank for Reconstruction and Development, Tomaso Duso, Deutsches Institut für Wirtschaftsforschung (DIW Berlin) and Dusseldorf Institute for Competition Economics (DICE) and Massimo Tognoni, UK Competition Commission provide Ex-post Merger Evaluation in the UK Retail Market for Books.

ABSTRACT: This paper empirically evaluates the price effects of the merger of two major book retail chains in the UK: Waterstone’s and Ottakar’s. We employ differences-in-differences techniques and use a rich dataset containing monthly scanner data information on a sample of 200 books sold in 60 stores in 50 different local markets for a period of four years around the merger. Since retail mergers may have either local or national effects (or both) according to the level at which retail chains set prices, we undertake an ex-post assessment of the impact of the merger at both levels. At the local level, we compare the changes in the average price charged before and after the merger in the shops located in overlap areas –i.e. areas where both chains were present before the merger– and in non-overlap areas –i.e. areas where only one chain was present before the merger. At the national level, we employ two distinct control groups to evaluate the merger, namely the competitors and the top-selling titles. We find that the merger did not result in an increase in prices either at the local or at the national level. We also perform heterogeneous treatment effects estimations in order to assess whether the effect of the merger differs along various dimensions of heterogeneity that are present in our data.

August 30, 2013 | Permalink | Comments (0) | TrackBack (0)

Concentration in Mortgage Lending, Refinancing Activity and Mortgage Rates

Posted by D. Daniel Sokol

David Scharfstein, Harvard University and NBER Adi Sunderam, Harvard University discuss Concentration in Mortgage Lending, Refinancing Activity and Mortgage Rates.

ABSTRACT: We present evidence that high concentration in local mortgage lending reduces the sensitivity of mortgage rates and refinancing activity to mortgage-backed security (MBS) yields. A decrease in MBS yields is typically associated with greater refinancing activity and lower rates on new mortgages. However, this effect is dampened in counties with concentrated mortgage markets. We isolate the direct effect of mortgage market concentration and rule out alternative explanations based on borrower, loan, and collateral characteristics in two ways. First, we use a matching procedure to compare high- and low-concentration counties that are very similar on observable characteristics and find similar results. Second, we examine counties where concentration in mortgage lending is increased by bank mergers. We show that within a given county, sensitivities to MBS yields decrease after a concentration-increasing merger. Our results suggest that the strength of the housing channel of monetary policy transmission varies in both the time series and the cross section. In the cross section, increasing concentration by one standard deviation reduces the overall impact of a decline in MBS yields by approximately 50%. In the time series, a decrease in MBS yields today has a 40% smaller effect on the average county than it would have had in the 1990s because of higher concentration today.

August 30, 2013 | Permalink | Comments (1) | TrackBack (0)

Thursday, August 29, 2013

(Un)stable vertical collusive agreements

Posted by D. Daniel Sokol

Jean J. Gabszewicz (CORE, Université Catholique de Louvain, Belgique) and Skerdilajda Zanaj (CREA, Universite de Luxembourg) describe (Un)stable vertical collusive agreements.

ABSTRACT: In this paper, we extend the concept of stability to vertical collusive agreements, involving downstream and upstream firms, using a setup of successive Cournot oligopolies. We show that a stable vertical agreement always exists: the unanimous vertical agreement involving all downstream and upstream firms. Thus, stable vertical collusive agreements exist even for market structures in which horizontal cartels would be unstable. We also show that there are economies for which the unanimous agreement is not the only stable one.

August 29, 2013 | Permalink | Comments (0) | TrackBack (0)

Competition Law and Development

D. Daniel Sokol (University of Florida), Thomas K. Cheng (Hong Kong University), and Ioannis Lianos (UCL) have edited Competition Law and Development.

BOOK ABSTRACT: The vast majority of the countries in the world are developing countries—there are only thirty-four OECD (Organisation for Economic Co-operation and Development) countries—and yet there is a serious dearth of attention to developing countries in the international and comparative law scholarship, which has been preoccupied with the United States and the European Union. Competition Law and Development investigates whether or not the competition law and policy transplanted from Europe and the United States can be successfully implemented in the developing world or whether the developing-world experience suggests a need for a different analytical framework. The political and economic environment of developing countries often differs significantly from that of developed countries in ways that may have serious implications for competition law enforcement.

The need to devote greater attention to developing countries is also justified by the changing global economic reality in which developing countries—especially China, India, and Brazil—have emerged as economic powerhouses. Together with Russia, the so-called BRIC countries have accounted for thirty percent of global economic growth since the term was coined in 2001. In this sense, developing countries deserve more attention not because of any justifiable differences from developed countries in competition law enforcement, either in theoretical or practical terms, but because of their sheer economic heft. This book, the second in the Global Competition Law and Economics series, provides a number of viewpoints of what competition law and policy mean both in theory and practice in a development context.

 

August 29, 2013 | Permalink | Comments (0) | TrackBack (0)

Why Do Distilleries Produce Multiple Ages of Whisky?

Posted by D. Daniel Sokol

Ian B. Page, Department of Agricultural and Resource Economics, University of Maryland asks Why Do Distilleries Produce Multiple Ages of Whisky?

ABSTRACT: Unlike many other vintage goods, distilleries often opt to mature their stocks to different ages, selling a heterogeneous line of products which vary in quality. We develop a theoretical model to examine the maturation decisions of a whisky distillery and find that it is possible for a profit-maximizing distillery to produce multiple ages of whisky under perfect competition. Based on an analysis of retail whisky prices, we find evidence suggesting that most distilleries that produce multiple ages of whisky do not operate under perfect competition. However, a hedonic estimation of whisky prices does not find any strong link between a distillery’s size and its ability to influence market prices, suggesting that distilleries may achieve market power through brand recognition.

August 29, 2013 | Permalink | Comments (0) | TrackBack (0)

Do pay-as-bid auctions favor collusion? Evidence from Germany's market for reserve power

Posted by D. Daniel Sokol

Sven Heim and Georg Gotz (ZEW) ask Do pay-as-bid auctions favor collusion? Evidence from Germany's market for reserve power.

ABSTRACT: We analyze a drastic price increase in the German auction market for reserve power, which did not appear to be driven by increased costs. Studying the market structure and individual bidding strategies, we find evidence for collusive behavior in an environment with repeated auctions, pivotal suppliers and inelastic demand. The price increase can be traced back to an abuse of the auction's pay-as-bid mechanism by the two largest firms. In contrast to theoretical findings, we show that pay-as-bid auctions do not necessarily reduce incentives for strategic capacity withholding and collusive behavior, but can even increase them.

August 29, 2013 | Permalink | Comments (0) | TrackBack (0)

The European Antitrust Review 2014

GCR has come out with The European Antitrust Review 2014.

August 29, 2013 | Permalink | Comments (0) | TrackBack (0)

ON ENDOGENEITY OF RETAIL MARKET POWER IN AN EQUILIBRIUM ANALYSIS: A CONTROL FUNCTION APPROACH

Posted by D. Daniel Sokol

Vardges Hovhannisyan, Minnesota, Kyle Stiegert, Wisconsin and Marin Bozic, Minnesota have written ON ENDOGENEITY OF RETAIL MARKET POWER IN AN EQUILIBRIUM ANALYSIS: A CONTROL FUNCTION APPROACH.

ABSTRAST: The endogeneity of retail market power arises in the retail pricing equation due to the correlation between margins and unobserved cost components. Nevertheless, it has long been ignored in the equilibrium analysis of retail behavior. We address the issue via a control function approach in a new conceptual framework with consumer preferences represented by a benefit function. We further offer three test procedures to evaluate the endogeneity of retail market power. The empirical value of the model is illustrated in an application to the US yogurt industry. Outcomes from endogeneity tests provide strong evidence for market power endogeneity. Moreover, ignoring the issue results in downward bias in retail market power.

August 29, 2013 | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 28, 2013

Horizontal Mergers with Synergies: Cash vs. Profit-Share Auctions

Posted by D. Daniel Sokol

Wei Ding, University of Bonn - The Bonn Graduate School of Economics, Cuihong Fan, Shanghai University of Finance and Economics, and Elmar Wolfstetter, Humboldt University of Berlin - Faculty of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Korea University - College of Economics and Commerce; World Bank discuss Horizontal Mergers with Synergies: Cash vs. Profit-Share Auctions.

ABSTRACT: We consider takeover bidding in a Cournot oligopoly when firms have private information concerning the synergy effect of merging with a takeover target and bidders can influence rivals' beliefs through their bids. We compare cash and profit-share auctions, first- and second-price, supplemented by entry fees. Since non-merged firms benefit from a merger if synergies are low, bidders are subject to a positive externality with positive probability; nevertheless, pooling does not occur. Unlike cash auctions, profit-share auctions are not revenue equivalent, and the second-price profit-share auction is more profitable than the other auctions.

August 28, 2013 | Permalink | Comments (0) | TrackBack (0)

What Do Limitation Periods for Sanctions in Antitrust Matters Really Limit?

Posted by D. Daniel Sokol

Ondrej Blazo, Univerzita Komenskeho v Bratislave asks What Do Limitation Periods for Sanctions in Antitrust Matters Really Limit?

ABSTRACT: Limitation periods represent a legal safeguard for a person who has once broken the law in order not to be put at risk of sanctions and other legal liabilities for an indefinite amount of time. By contrast, public interest can sometimes require that a person who has committed a serious breach of law cannot benefit from limitation periods and that it is necessary to declare that the law had indeed been infringed and that legal liability shall be expected irrespective of the passage of time. This article aims to answer the question whether limitation periods for sanctions attached to competition restricting practices by Slovak competition law also limit the powers of its competition authority to declare the illegality of illicit behaviour or to prohibit it. Although this question can arise, and has done so already, as a defence in antitrust proceedings, as well as the fact that an answer to this question can potentially, as well as actually, affect rights of undertakings which have broken competition rules, Slovak jurisprudence cannot be seen as explicit in answering this question.

August 28, 2013 | Permalink | Comments (0) | TrackBack (0)

EVALUATING ANTITRUST LENIENCY PROGRAMS

Posted by D. Daniel Sokol

Joan-Ramon Borrell (Universitat de Barcelona), Juan Luis Jimenez and Carmen Garcia are EVALUATING ANTITRUST LENIENCY PROGRAMS.

ABSTRACT: This article identifies and then quantifies econometrically the impact of leniency programs on the perception of the effectiveness of antitrust policies in the business community using panel data for as many as 59 countries during a 14-year span. We use the dynamics of the gradual diffusion of leniency programs across countries and over time to evaluate the impact of the program, taking care of the bias caused by self-selection into the program. We find that leniency programs increase the perception of effectiveness by an order of magnitude ranging from 10 percent to 21 percent. Leniency programs have become weapons of mass dissuasion in the hands of antitrust enforcers against the more damaging forms of explicit collusion among rival firms in the market place.

August 28, 2013 | Permalink | Comments (0) | TrackBack (0)

Producer Liability and Competition Policy When Firms are Bound by a Common Industry Reputation

Posted by D. Daniel Sokol

Andrzej Baniak, Central European University (CEU) - Department of Economics, Peter Grajzl, Washington and Lee University - Department of Economics and A. Joseph Guse, Washington and Lee University - Williams School of Commerce, Economics, and Politics discuss Producer Liability and Competition Policy When Firms are Bound by a Common Industry Reputation.

ABSTRACT: We contrast the laissez-faire regime with the regime of strict producer liability, and draw the implications for competition policy, in a setting where oligopolistic firms cannot differentiate themselves from rivals but rather are bound by a common industry reputation for product safety. We show that, first, unlike in the traditional products liability model, firms' incentives to invest in precaution depend on market structure. Second, depending on the magnitude of expected damages awarded by the courts, laissez-faire can welfare-dominate strict producer liability. Third, the relationship between social welfare and industry size, and hence the role for competition policy, depends on the institutional regime governing the industry. Under some circumstances, restricting industry size is unambiguously welfare-enhancing.

August 28, 2013 | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 27, 2013

FTC to Host Roundtable on Consumer Protection and the New Healthcare Marketplaces

According to its press release:

The Federal Trade Commission, the  nation’s consumer protection agency, will host a roundtable in Washington, DC,  on September 19, 2013, to discuss how to empower and protect consumers from  scammers with the advent of healthcare marketplaces opening this fall under the  Affordable Care Act (ACA).

Scammers follow the headlines, often  seeking to exploit interest in new high-profile programs and developments in  the marketplace.  This discussion will bring together experts on the ACA,  federal and state consumer protection officials, representatives of legal  services and community-based organizations, and consumer advocates to discuss  key features of the law, state approaches to implementation, and how to help  consumers avoid potential scams.   
              
“Consumer Protection and the Healthcare  Marketplace” will take place from 9 a.m.  to 12:15 p.m. in the  FTC’s Satellite Building Conference Center, Room C,  601 New Jersey Avenue, NW, Washington, DC.  The event will be  webcast.  Space is limited.  To register to attend, please send an email  with your name and organization to Tracey Thomas at tthomas@ftc.gov

August 27, 2013 | Permalink | Comments (0) | TrackBack (0)

ABA Antitrust Merger Practice Workshop

Merger Practice Workshop

When

September 12, 2013

Where

  • George Washington University
  • Jack Morton Aud Sch of Media Pub Aff
  • 805 21st St NW
  • Washington, DC 20052-0029
  • United States of America
Sponsors

The Merger Practice Workshop is a new demonstration-based program that will take you inside the life cycle of a hypothetical merger, from pre-signing antitrust counseling, to second request compliance and advocacy to competition authorities, to negotiating remedies and consent decrees. This one-day session will highlight new developments in U.S. and international merger enforcement trends, with leading enforcers and private practitioners demonstrating how critical decisions are actually made and providing examples of important interactions between counsel and enforcers. The Merger Practice Workshop is an unparalleled opportunity for attorneys to gain deep practical insights into the merger review process from some of the most experienced practitioners in the government, corporate and private practice sectors.

August 27, 2013 | Permalink | Comments (0) | TrackBack (0)

A Reappraisal of the Canadian Anti-Combines Act of 1889

Posted by D. Daniel Sokol

Charles Paul Hoffman McGill University - Faculty of Law offers A Reappraisal of the Canadian Anti-Combines Act of 1889.

ABSTRACT: In 1889, in response to growing concern about the role of cartels and other "combines" in the economy, the Canadian parliament passed the Anti-Combines Act, the world’s first modern competition statute. A tentative first step, the Act made it a misdemeanour to enter into agreements that were previously unenforceable under the contract law restraint of trade doctrine. The Act, however, was not a success, with only a single prosecution (which resulted in acquittal) brought under it prior to its amendment in 1900. Since that time, it has been broadly criticized in the academic literature, with critics alleging three reasons for its failure: that it extended only to conduct already "unlawful" under the restraint of trade doctrine; that it criminalized only conduct already indictable under the crime of conspiracy; and that it was an intentional failure, a "political sham". Each of these critiques, however, is built on a flawed understanding of the restraint of trade doctrine, reading back into the law in 1889 two House of Lords’ decisions from the 1890s, Mogul Steamship v McGregor, Gow (1892) and Nordenfelt v Maxim Nordenfelt Guns & Ammunition (1894), which made it substantially more difficult to prove agreements were unreasonable vis-a-vis the public interest. Though the Act would not have been the panacea intended by its chief sponsor, Nathaniel Clarke Wallace, it would have been a useful tool against the most pernicious of combine agreements, had the law remained as it was at the time of enactment. The Anti-Combines Act should thus be remembered not for its failure, but as a Canadian legislative innovation hampered by judicial decisions rendered in Westminster.

August 27, 2013 | Permalink | Comments (0) | TrackBack (0)

Asia and Global Competition Law Convergence

Posted by D. Daniel Sokol

David Gerber (Chicago Kent) has written on Asia and Global Competition Law Convergence.

ABSTRACT: Two topics have featured in discussions of transnational competition law over the last few years — the evolution of competition law in Asia and the global convergence of competition laws. The role of Asia, especially China, in global competition law development has attracted attention primarily because of the dramatically increased economic importance of the region and because of the resulting political and economic leverage that this economic importance has generated for the enforcement of the region’s competition laws. Convergence is a central topic because it represents what is widely considered to be the only currently viable strategy for global competition law development. Curiously, however, the relationship between these two topics is seldom a focus of examination. This chapter sketches elements of that relationship.

My objective here is to identify some of the factors in the dynamics of Asian competition law systems that may influence Asia’s role in convergence as a global strategy and thereby impact both the success of such a strategy and its shape. We focus here on decisions and on decisional influences — that is, factors that can be expected to influence decisions by relevant decision-makers.

Recommended

August 27, 2013 | Permalink | Comments (0) | TrackBack (0)

Continental Drift in the Treatment of Dominant Firms: Article 102 TFEU in Contrast to § 2 Sherman Act

Posted by D. Daniel Sokol

Pierre Larouche, Tilburg Law and Economics Center (TILEC); College of Europe - Bruges; Tilburg University - Tilburg Law School; Center on Regulation in Europe (CERRE) and Maarten Pieter Schinkel, University of Amsterdam - Amsterdam Center for Law & Economics (ACLE); Tinbergen Institute - Tinbergen Institute Amsterdam (TIA) describe Continental Drift in the Treatment of Dominant Firms: Article 102 TFEU in Contrast to § 2 Sherman Act.

ABSTRACT: In this paper we compare the concepts of monopolization and abuse of dominance as in §2 of the Sherman Act and Article 102 of the TFEU, respectively. After identifying a number of distinctive features in wording and interpretation – including the special responsibility of the dominant firm, competition of the merits and protection of the competitive process – we discuss three lines of argument to explain these differences. The first builds on ordo-liberalism, with its concern for the absence of market power and for the resilience of competitive markets, which influenced EU competition law from the very beginning. The second line of argument derives from the observation that public competition law enforcement is fallible, which self-enforcement could remedy. The third argument explains some of these differences via innovation, whereby Article 102 would reflect a European perspective on innovation. We subsequently return to the underutilized EU category of exploitative abuses and argue that economic techniques developed in the context of damages litigation could open it up for future enforcement in a way that would be in line with ordo-liberal principles, properly understood.

August 27, 2013 | Permalink | Comments (0) | TrackBack (0)