Antitrust & Competition Policy Blog

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

Monday, June 30, 2014

State Aid, National Courts and the Separation of Powers: Should Judges be Bound to the European Commission's Unfinished State Aid Business?

Thomas Lubbig (Freshfields) and Tom Morgan ask State Aid, National Courts and the Separation of Powers: Should Judges be Bound to the European Commission's Unfinished State Aid Business?

ABSTRACT: This article considers a Court of Justice of the European Union (CJEU) State aid judgment that seemingly binds national courts to find State aid in cases where the Commission has already initiated its own formal investigation. In future the situation may be much easier for complainants who allege their competitors are recipients of State aid in national courts, even though the Commission still has significant doubts in its own investigation. Arguably the judgment infringes national courts' discretion and independence to make their own assessment in State aid matters.

June 30, 2014 | Permalink | Comments (0) | TrackBack (0)

Enforcement vs Deterrence in Merger Control: Can Remedies Lead to Lower Welfare?

Andreea Cosnita, Universite Paris I Pantheon-Sorbonne - Maison des Sciences Economiques and Lars Sorgard, Norwegian School of Economics and Business Administration (NHH); Norwegian School of Economics (NHH) - Department of Economics ask Enforcement vs Deterrence in Merger Control: Can Remedies Lead to Lower Welfare?

ABSTRACT: This paper deals with the enforcement of merger policy, and aims to study how merger remedies affect the deterrence accomplished by controlling mergers. We determine the optimal frequency of investigations launched by the agency, and identify situations where the introduction of remedies can lead to a lower welfare. We find that the potential for remedies can make it less likely that the worst mergers are deterred. Even if the worst mergers are deterred, the potential for remedies can lead to more mergers with a negative impact to be proposed, and eventually to more decision errors by the antitrust authorities.

June 30, 2014 | Permalink | Comments (0) | TrackBack (0)

Football broadcasting business in the EU: towards fairer competition?

Sara Moya Izquierdo and Miguel Troncoso Ferrer, Gomez-Acebo & Pombo Abogados, S.L.P. ask Football broadcasting business in the EU: towards fairer competition?

ABSTRACT: Broadcasting of major football events is now one of the most profitable businesses related to sports, and the number of Competition law cases related thereto has increased in recent years. European competition authorities have shaped the regulatory framework under which football broadcasting rights are negotiated, modifying the landscape of the market of media rights for top competitions. Nevertheless, recent European Court judgments seem to open the door to new market definitions, which are expected to continue changing during the coming decade, mainly due to developments in technology and consumer preferences. This new landscape will have a direct impact on the terms and conditions to be negotiated between holders of the rights (football clubs and/or federations) and broadcasters.

June 30, 2014 | Permalink | Comments (0) | TrackBack (0)

More than a cookie cutter: the global influence of European competition law

Marcus Pollard explains More than a cookie cutter: the global influence of European competition law.

ABSTRACT: As I now leave the JECLAP editorial team, and depart from private practice and Europe for new challenges in Asia, it seems an opportune moment to reflect on the growing influence of European competition laws on the rest of the world. Readers will be aware that in recent years there has been a significant proliferation of new and credible antitrust agencies. Across Africa, Latin America, and Asia, many countries are actively taking steps to introduce competition laws or revise existing provisions to ensure they keep apace with the more sophisticated regimes active in, for example, South Africa, Brazil, China, India, and Singapore. In designing their new systems, many non-European agencies have turned to European principles (as opposed to United States) for their guiding influence. New agencies have been able to seek inspiration and be willingly influenced by the tome of Commission guidelines and block exemptions—as well as detailed publicly available decisions and the ever-burgeoning case law from the European courts.

June 30, 2014 | Permalink | Comments (0) | TrackBack (0)

Saturday, June 28, 2014

Optimal and Just Financial Penalties for Competition Law Infringements 1 July 2014 from 17:15 to 19:15

Optimal and Just Financial Penalties for Competition Law Infringements

UCL Faculty of Laws
Tuesday, 1 July 2014 from 17:15 to 19:15 (BST)

London, United Kingdom

The CLES has completed a report on financial penalties for competition law infringements for the Chilean Economic Prosecutor (Fiscalia) taking a law and economics and a comparative law perspective (EU, UK, Germany, France, US) and making suggestions for the reform of the financial penalties regimes for competition law infringements in Chile but also other jurisdictions. The report was drafted by a CLES team composed by lawyers and economists.

Speakers at the launch include

  • Felipe Irarrázabal, Economic Prosecutor, Republic of Chile

  • Frederic Jenny, Chairman, Competition Committee, OECD

  • Ioannis Lianos, Director, Centre for Law, Economics and Society

  • Marc Braithwaite, Assistant Director, Competition and Markets Policy, Competition & Markets Authority

  • Florian Wagner-von Papp, UCL Laws

 

 The panel will particularly examine the following three topics.
(i) The need to adopt a more effects based approach in setting financial penalties for competition law infringements, instead of relying on proxies, such as a percentage of affected sales or commerce. (ii) The role of guidelines and the optimal degree of detail for these guidelines in assessing aggravating and mitigating circumstances. (iii) The role of the judiciary in the process and the optimal intensity of review.

 The discussion will provide insights from the relevant experience in the various jurisdictions covered by the report (United States, the EU, the UK, Germany, France).

Book your place at the conference website: https://www.eventbrite.co.uk/e/optimal-and-just-financial-penalties-for-competition-law-infringements-tickets-12016498671

June 28, 2014 | Permalink | Comments (0) | TrackBack (0)

Friday, June 27, 2014

Mobile Computing: The Next Platform Rivalry

Timothy Bresnahan, Stanford and Shane Greenstein, Northwestern analyze Mobile Computing: The Next Platform Rivalry.

ABSTRACT: All modern information and communications technology (ICT) industries use the platform organization. A platform in computing is a reconfigurable base of compatible components on which firms and users build applications. Applications share the general purpose components, which leads to the exploitation of increasing returns at an industry-wide level (Bresnahan and Trajtenberg, 1995). Platforms compete for developers, who create applications which make the platform valuable for users. Distinct platforms serve different or/or overlapping customers. Platforms also compete in their governance structures, which determine what obligations a developer assumes, and what rights the platform leader reserves for itself. Governance serves a useful function, mediating the terms of transactions and assigning responsibilities to build complements. We consider governance in mobile computing, specifically. The market involves many high profile companies, such as Microsoft, Google, Apple, Nokia, and Research in Motion, who employ different approaches to platform governance. That variance frames a seemingly simple question: why doesn’t one form of platform governance emerge as superior, dominating most markets in which platforms play an essential role? Our essay will stress the reasons for differentiation, and we propose an argument that is missing from the platform literature, about changes over time. Platform leaders commit to their approach to governance, but the governance that can help at one moment can get in the way at a later time. That opens up opportunities for differentiated platforms.

June 27, 2014 | Permalink | Comments (0) | TrackBack (0)

A STATISTICAL ANALYSIS OF U.K. ANTITRUST ENFORCEMENT

Cento Veljanovski (Case Associates) offers A STATISTICAL ANALYSIS OF U.K. ANTITRUST ENFORCEMENT.

ABSTRACT: The Office of Fair Trading (OFT) has been a highly rated competition law enforcer. Yet its antitrust performance activities fall far short of this image. Here a critical assessment is made of the OFT's antitrust enforcement activities, and of the claim that there is quantitative survey evidence that the OFT has had a “significant deterrent effect.” It concludes that the evidence for this claim is flawed and not credible.

June 27, 2014 | Permalink | Comments (0) | TrackBack (0)

Drafting Competition Law for Developing Jurisdictions: Learning from Experience

Eleanor M. Fox, New York University School of Law and Michal S. Gal, University of Haifa - Faculty of Law discuss Drafting Competition Law for Developing Jurisdictions: Learning from Experience.

ABSTRACT: Developing jurisdictions often share some socio-economic characteristics, including highly concentrated markets, state ownership of major businesses, scarce human and financial resources, poor infrastructure, systemic poverty, cronyism, and corruption. This article attempts to sketch some of the implications of such characteristics on the competition law rules to be adopted by developing jurisdictions, based, inter alia, on the experience some developing jurisdictions already have with such laws. The analysis raises intriguing and complex issues, such as what the country seeks to and can probably derive from a competition law; What should be the presumptions that stand at the basis of the law; How should the lack of resources and the political economy characteristics affect the design of competition law institutions and the formulation of substantive prohibitions; and should public interest considerations be incorporated into the law, and if so how and by whom.

June 27, 2014 | Permalink | Comments (0) | TrackBack (0)

Rebates and Competition Law: An Overview of EU and National Law

Hans Zenger, Charles River Associates (CRA) describes Rebates and Competition Law: An Overview of EU and National Law.

ABSTRACT: This short paper provides an overview of the different evidentiary standards that have been applied in recent case law and case practice, covering both leading EU and selected national cases. Section 2 first describes the established case law of the Court of Justice of the European Union. Section 3 then goes on to portray the Commission’s more recent effects-based approach and case practice. Section 4 summarizes some notable recent NCA cases and contrasts them with the Commission’s approach. Section 5, finally, concludes and provides an outlook on policy.

June 27, 2014 | Permalink | Comments (0) | TrackBack (0)

Thursday, June 26, 2014

The Psychology of Competition: A Social Comparison Perspective

Stephen M. Garcia, University of Michigan, Avishalom Tor, Notre Dame Law School, and Tyrone M. Schiff, University of Michigan at Ann Arbor provide thoughts on The Psychology of Competition: A Social Comparison Perspective.

ABSTRACT: Social comparison — the tendency to self-evaluate by comparing ourselves to others — is an important source of competitive behavior. We propose a new model that distinguishes between individual and situational factors that increase social comparison and thus lead to a range of competitive attitudes and behavior. Individual factors are those that vary from person to person: the relevance of the performance dimension, the similarity of rivals, and their relationship closeness to the individual, as well as the various individual differences variables relating to social comparison more generally. Situational factors, conversely, are those factors on the social comparison landscape that affect similarly situated individuals: proximity to a standard (i.e., near the number 1 ranking vs. far away), the number of competitors (i.e., few vs. many), social category fault lines (i.e., disputes across vs. within social categories), and more. The distinction between individual and situational factors also helps chart future directions for social comparison research and generates new vistas across psychology and related disciplines..

June 26, 2014 | Permalink | Comments (0) | TrackBack (0)

Understanding Behavioral Antitrust

Avishalom Tor, Notre Dame Law School is Understanding Behavioral Antitrust.

ABSTRACT: Behavioral antitrust – the application to antitrust analysis of empirical evidence of robust behavioral deviations from strict rationality – is increasingly popular and hotly debated by legal scholars and the enforcement agencies alike. This Article shows, however, that both proponents and opponents of behavioral antitrust frequently and fundamentally misconstrue its methodology, treating concrete empirical phenomena as if they were broad hypothetical assumptions. Because of this fundamental methodological error, scholars often make three classes of mistakes in behavioral antitrust analyses: First, they fail to appreciate the variability and heterogeneity of behavioral phenomena; second, they disregard the concrete ways in which markets, firms, and other institutions both facilitate and inhibit rational behavior by antitrust actors; and, third, they erroneously equate all deviations from standard rationality with harm to competition. After establishing the central role of rationality assumptions in present-day antitrust and reviewing illustrative behavioral analyses across the field – from horizontal and vertical restraints, through monopolization, to merger enforcement practices – the Article examines the three classes of mistakes, their manifestation, and their consequences in antitrust scholarship. It concludes by offering two sets of essential lessons that the behavioral approach already can offer to make antitrust law and policy more realistic and effective in protecting competition: One concerning the value of case-specific evidence in antitrust adjudication and enforcement, the other showing how antitrust law can and should account for systematic and predictable boundedly rational behavior that is neither constant nor uniform.

June 26, 2014 | Permalink | Comments (0) | TrackBack (0)

The Oxford Handbook of International Antitrust Economics

Roger D. Blair, University of Florida - Warrington College of Business Administration - Department of Economics and D. Daniel Sokol, University of Florida - Levin College of Law describe The Oxford Handbook of International Antitrust Economics.

ABSTRACT: Antitrust economics is a subset of industrial organization economics. What makes antitrust economics rather unique is the centrality of economic analysis to the development of antitrust law and policy. In the United States antitrust economics guides all antitrust analysis by government enforcers (at the federal level the Department of Justice Antitrust Division and the Federal Trade Commission) and courts. In other systems, the centrality of antitrust economics to antitrust law (typically called competition law) and policy has not been established. Instead, cutting edge antitrust economic analysis competes with non-antitrust economics goals. Nevertheless, across the major non-US jurisdictions, antitrust economics is far more utilized now than previously. With global mergers and various types of conduct, increased coordination across agencies, practitioner lawyers and economists around the world trained in the latest theories of antitrust economics, and a rise of economic analysis in decision-making by adjudicators, the increasing role of international antitrust economics seems somewhat inevitable. The desire to provide scholars and policy-makers across jurisdictions a reference tool to understand the most important developments in antitrust economics motivates this handbook. We have assembled many of the most important scholars in the field to provide overviews and analysis of the core issuers in antitrust economics. Although no handbook can be exhaustive, we have attempted to cover all of what we believe to be the major topics in the field. The developments in economic analysis across these areas that the handbook covers will shape policy and legal issues in the field for some time. We hope that the handbook will provide inspiration for new avenues of theoretical and empirical research in the field.

You can order an advanced copy here (Voume 1) and here (Volume 2).

June 26, 2014 | Permalink | Comments (0) | TrackBack (0)

The Economics of Retailing Formats: Competition versus Bargaining

Olav Johansen, University of Bergen - Department of Economics and Tore Nilssen, University of Oslo - Department of Economics discuss The Economics of Retailing Formats: Competition versus Bargaining.

ABSTRACT: We set up a merger game between retailing stores to study the incentives of independent stores to form a big store when some consumers have preferences for one-stop shopping. Such one-stop shopping creates complementarity between products, leading in turn to lower prices after a big store is formed but may also lead to an improvement in the bargaining position vis-à-vis producers through the creation of an inside option that small stores don't have. We find that big stores will not be formed when the stores' ex-ante bargaining power vis-a-vis producers is high. Otherwise, an asymmetric situation occurs with only one big store created when one-stop shoppers are abundant.

June 26, 2014 | Permalink | Comments (0) | TrackBack (0)

Economics of Competition Policy for Economists 9-10 OCTOBER 2014

Economics of Competition Policy for Economists

Course Details: 

Aimed at those with a good background in microeconomics, but who are relatively new to practical competition policy, this two day course will provide an introduction to the economics of competition policy. 

The course will consist of eight 90 minute sessions which will be delivered by different speakers with strong practical experience of competition policy work. Each will involve a mix of presentation and interactive work to help provide practical analytical tools. 

The focus will be on the UK/EU legal framework and core antitrust issues including the assessment of anti-competitive agreements and abuse of dominance and mergers. 

The course is limited to 40 attendees maximum. 

Full programme can be viewed here.

DATE & TIME: 9-10 OCTOBER 2014. 9.30am - 5.00pm

VENUE: etc. venues THE HATTON, LONDON (Map)

FEES: Private Sector £1350 + VAT  •   Public Sector / Academia £750 + VAT

20% 'early bird' discount if booked before July 31 2014

BOOKING: Details of how to book can be found here

If you have any enquiries please contact us on 01603 593715&nbsp;or email <a href="mailto:ccp@uea.ac.uk?subject=Economics%20of%20Competition%20Policy%20Course" data-mce-href="mailto:ccp@uea.ac.uk?subject=Economics%20of%20Competition%20Policy%20Course">ccp@uea.ac.uk</a>&nbsp;

June 26, 2014 | Permalink | Comments (1) | TrackBack (0)

Senate Judiciary Testimony - The AT&T/DIRECTV Merger: The Impact on Competition and Consumers in the Video Market and Beyond

The AT&T/DIRECTV Merger: The Impact on Competition and Consumers in the Video Market and Beyond

Antitrust, Competition Policy and Consumer RightsDate: Tuesday, June 24, 2014 Time: 02:30 PM Location: Dirksen 226Presiding: Senator Klobuchar

 

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Member Statements

  1. Senator Patrick Leahy D (VT)

Witnesses

  1. Randall L. Stephenson
    President and Chief Executive Officer
    AT&T
    Dallas , TX
  2. Michael D. White
    Chairman and Chief Executive Officer
    DIRECTV
    El Segundo , CA
  3. Christopher Keyser
    President
    Writers Guild of America West
    Los Angeles , CA
  4. Matthew F. Wood
    Policy Director
    Free Press
    Washington , DC
  5. Larry Downes
    Project Director
    Georgetown University, Center for Business and Public Policy
    Washington , DC
  6. Ross J. Lieberman
    Senior Vice President of Government Affairs
    American Cable Association
    Washington , DC

June 26, 2014 | Permalink | Comments (0) | TrackBack (0)

Patent Misuse and Antitrust: Rebirth or False Dawn?

Daryl Lim, The John Marshall Law School asks Patent Misuse and Antitrust: Rebirth or False Dawn?

ABSTRACT: This Article examines how two recent cases, F.T.C. v. Actavis and Kimble v. Marvel Enterprises Inc. could affect both the equitable defense of patent misuse and the patent-antitrust interface more generally. It begins by tracing the history of patent misuse and its reformulation into an “antitrust-lite” doctrine by the Federal Circuit. This Article presents new empirical data confirming this reformulation, and unveils the surprising influence of the Seventh Circuit and the Chicago School on that reformulation. The Article then explores Actavis and Kimble. It explains why Actavis will catalyze more antitrust challenges when patent rights are exercised, and why it also challenges the Federal Circuit’s formulation of patent misuse. The Article proceeds to observe Kimble’s misunderstanding of the patent policy underpinning the Supreme Court’s prohibition against post-expiration royalties. This Article confronts three key objections to a revival of misuse — its vagueness, lax standing requirements and punitive effects on patentees — and explains why these objections are misplaced. The Article concludes by recommending that judges and attorneys use the opportunity provided by Actavis to develop a more thoughtful framework for patent misuse that draws upon the strengths of its roots in patent policy and its interface with antitrust policy.

June 26, 2014 | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 25, 2014

Internal Versus External Growth in Industries with Scale Economies: A Computational Model of Optimal Merger Policy

Ben Mermelstein, Northwestern University, Volker Nocke, University of Mannheim, Mark Satterthwaite, Northwestern University - Kellogg School of Management, and Michael D. Whinston, MIT have an interesting paper on Internal Versus External Growth in Industries with Scale Economies: A Computational Model of Optimal Merger Policy.

ABSTRACT: We study optimal merger policy in a dynamic model in which the presence of scale economies implies that firms can reduce costs through either internal investment in building capital or through mergers. The model, which we solve computationally, allows firms to invest or propose mergers according to the relative profitability of these strategies. An antitrust authority is able to block mergers at some cost. We examine the optimal policy when the antitrust authority can commit to a policy rule and when it cannot commit, and consider both consumer value and aggregate value as possible objectives of the antitrust authority. We find that optimal policy can differ substantially from what would be best considering only welfare in the period the merger is proposed. We also find that the ability to commit can lead to a significant welfare improvement. In general, antitrust policy can greatly affect firms' optimal investment behavior, and firms' investment behavior can in turn greatly affect the antitrust authority's optimal policy.

June 25, 2014 | Permalink | Comments (0) | TrackBack (0)

A Legal-Historical Review of the EU Competition Rules

Anca Chirita, Durham Law School offers A Legal-Historical Review of the EU Competition Rules.

ABSTRACT: This article aims to review EU competition rules by undertaking a historical purposive interpretation of the drafting process of the Treaty of Rome. It reveals new insights based on a consideration of several historical archives starting with the Schuman plan, the Founding Treaty establishing the European Coal and Steel Community and the negotiations of the Treaty of Rome. Questions of contemporary relevance are explored, relating to the goals of competition law, the historical distinction between ‘object’ and ‘effect’ under Article 101 TFEU, the possibility of an enforcement gap under Article 102 TFEU, the relationship between unfair competition and the prohibition of discrimination and, finally, the broader meaning of competitive distortions.

June 25, 2014 | Permalink | Comments (0) | TrackBack (0)

SYMPOSIUM: EU AND U.S. COMPETITION ENFORCEMENT: CONVERGENCE OR DIVERGENCE?

Searching for a Modernized Voice: Economics, Institutions and Predictability in European Competition Law

David Gerber (Chicago Kent) is Searching for a Modernized Voice: Economics, Institutions and Predictability in European Competition Law.

ABSTRACT: Uncertainty has been an increasingly central theme in discussions of competition law in Europe since the beginning of “modernization” efforts in the 1990s. This may seem paradoxical, because the modernization programs – both institutional and substantive – were intended to reduce the range of variation in competition law rules and thereby increase uniformity and predictability of results throughout the expanding EU, and they were justified by claims that they would achieve these benefits. Does the chorus of concerns about the lack of predictability in European competition law mean that the modernization processes were misguided or that they have failed? In my view, the answer is “no”. They have, however, transformed and relocated uncertainty in ways that are seldom adequately recognized and rarely addressed. Insufficient recognition of these transformations and their implications has wide-ranging and potentially serious implications for competition law in Europe and even for global competition law development. How then are we to reconcile the aims of modernization with its consequences?
A basic theme of this Article is that although the two forms of modernization have in some ways reduced uncertainty in EU competition law, they have also generated new forms of uncertainty that have sometimes concealed and at other times transformed it. The Article analyzes the impacts of “modernization” on competition law decision-making in the EU and thus on the substance of the law itself. It identifies the areas and forms of uncertainty that have resulted from these modernizations. While some commentators have noted elements of the relationship between modernization and uncertainty, that relationship may be more fundamental to understanding European competition law than is generally recognized.
The Article also examines the conceptual tools typically used in thinking about European competition law and demonstrates how these can be inadequate for the legal situation in the wake of modernization. Often they no longer provide adequate analysis of the complex processes of decision-making in Europe today. I then go on to suggest ways in which these tools can themselves be “modernized” to account for these changing complexities. In order to deal effectively with European competition law, it is necessary to use a perspective that is specifically designed to identify the factors that shape competition law decisions.

June 25, 2014 | Permalink | Comments (0) | TrackBack (0)