Wednesday, February 17, 2016

The Application of EU Competition Law in the Pharmaceutical Sector

David W. Hull (Van Bael & Bellis) and Michael J. Clancy (Van Bael & Bellis) examine The Application of EU Competition Law in the Pharmaceutical Sector.

ABSTRACT: This survey article discusses the major EU competition law developments in the pharmaceutical sector from 1 July 2014 through 31 October 2015. During that period, the European Commission did not adopt any new decisions dealing with the pharmaceutical sector, but it published decisions that it had adopted earlier, which provide a rich source of information on its approach to IP, regulatory, and commercial strategies that delay generic entry. National competition authorities have been active, notably in the area of pricing and distribution/parallel trade.

February 17, 2016 | Permalink | Comments (0)

Tuesday, February 16, 2016

The Welfare Effects of Vertical Integration in Multichannel Television Markets

Gregory S. Crawford, University of Zurich - Department of Economics, Robin S. Lee, Harvard University - Department of Economics, Michael Whinston, Massachusetts Institute of Technology (MIT) - Sloan School of Management, and Ali Yurukoglu, Stanford Graduate School of Business; National Bureau of Economic Research (NBER) analyze The Welfare Effects of Vertical Integration in Multichannel Television Markets.

ABSTRACT: We investigate the welfare effects of vertical integration of regional sports networks (RSNs) with programming distributors in U.S. multichannel television markets. Vertical integration can enhance efficiency by reducing double marginalization and increasing carriage of channels, but can also harm welfare due to foreclosure and raising rivals' costs incentives. We estimate a structural model of viewership, subscription, distributor pricing, and affiliate fee bargaining using a rich dataset on the U.S. cable and satellite television industry (2000-2010). We use these estimates to analyze the impact of simulated vertical mergers and de-mergers of RSNs on competition and welfare, and examine the efficacy of regulatory policies introduced by the U.S. Federal Communications Commission to address competition concerns in this industry.

February 16, 2016 | Permalink | Comments (0)

DETERRING BIDDER COLLUSION: AUCTION DESIGN COMPLEMENTS ANTITRUST POLICY

Hong Wang, Southeast University, Nanjing and Hong-min Chen are DETERRING BIDDER COLLUSION: AUCTION DESIGN COMPLEMENTS ANTITRUST POLICY.

ABSTRACT: Bidder collusion is a serious problem in many auction markets and is generally illegal in the U.S., the EU, China, and many other countries. Such collusion can limit competition and decrease the revenue obtained by the seller (or buyer in the case of procurement) and distort the efficiency of the final allocation. This article provides an elementary, non-technical survey of theoretical and empirical research on bidder collusion with an emphasis on identifying factors that facilitate or inhibit collusive schemes as well as circumstances where detection is possible and an auctioneer's best response to bid rigging. The results of existing literature show that good auction design complements antitrust enforcement, and both play a role in deterring bidder collusion.

February 16, 2016 | Permalink | Comments (0)

European Union Competition Law in the Digital Era

Massimiliano Kadar, European Commission - Directorate General for Competition discusses European Union Competition Law in the Digital Era.

ABSTRACT: What is the role of competition policy in the digital economy? The question is not new, and many have commented on this topic already at the end of the 1990s, particularly in the context of the United States Department of Justice's proceedings against Microsoft. In recent years, however, the debate has been fuelled by the ever-growing digitalisation of our lives, as well as by the considerable public attention received by the European Commission’s competition case on Google’s activities related to general internet search.

Some believe that competition authorities should refrain from intervening in fast-moving, technology driven industries, as the cost of intervention in those industries would generally outweigh possible benefits. Almost on the opposite front, others have argued that a muscular intervention from competition authorities is needed, but that this is not sufficient to constrain the market power of large companies operating in the digital space. Some of those observers argue that a new regulatory framework would be required to address problems such as access to “essential” digital platforms by third parties, which are not within the scope of existing non-competition laws (e.g. on privacy and copyright) and are also not allegedly tackled by competition law enforcers effectively. A third group argues that competition policy is the right tool to address issues related to market power in digital markets, and conversely that ex-ante regulation would not be desirable insofar as it would likely result in undue constraints on innovation. However, according to these observers, the current European Union competition law legal framework may have to be reassessed and potentially improved to meet the challenges posed by digital markets.

In this article, after having defined the main features of digital markets, I will discuss in turn the above arguments and criticisms. I will conclude that (i) competition law enforcers’ intervention in digital markets is appropriate and desirable, when the circumstances of a case justify it; (ii) competition law cannot deal with all perceived issues in a given market. However, it is the right tool to remedy distortions to competition caused by market power. Conversely, the introduction of pervasive ex-ante regulation in digital markets to ensure access to “essential platforms” does not appear to be warranted; and (iii) in general, the current legal framework appears to be suitable and sufficiently flexible to allow the Commission to intervene and remedy competitive distortions in digital markets. Whilst some of the proposals to further enhance the effectiveness of the enforcement system may have some merit in principle, more in-depth research would be required before any legislative reform.

February 16, 2016 | Permalink | Comments (1)

Assertion of Standards-Essential Patents by Non-Practicing Entities

Jorge Contreras, Utah has an interesting empirical paper on Assertion of Standards-Essential Patents by Non-Practicing Entities.

ABSTRACT: An extensive literature exists regarding the patent disclosure and licensing commitments made by participants in standard-setting organizations (SSOs), and how such commitments affect the assertion of standards-essential patents (SEPs) by these participants. But this literature largely ignores the assertion of SEPs by entities that do not participate in SSOs (Outsiders). This study is the first to collect and analyze data relating to SEP assertions by SSO Outsiders, a large number of which are so-called non-practicing entities (NPEs).

We present descriptive statistics regarding NPE and Producer assertions of SEPs pertaining to seven broadly-adopted standards in the telecommunications and networking sectors over a 16.5-year period. Twenty-six NPEs were identified as asserting SEPs pertaining to the standards studied. NPEs initiated 64% of all SEP cases and 77% of all unique patent-defendant assertion events involving these SEPs. NPEs initiated 82% of all defendant-assertion events relating to the five standards subject to FRAND licensing commitments, but only 25% of such events relating to the two standards subject to royalty-free (RF) licensing commitments. When NPEs asserted SEPs from FRAND-based SSOs, the large majority of these assertions (73%) were of unencumbered SEPs. Producers, however, generally asserted FRAND-encumbered SEPs. In the case of SEPs from RF SSOs, NPEs asserted only unencumbered SEPs, while Producers asserted both encumbered and unencumbered SEPs. And while NPE SEP assertions were resolved by settlement at approximately the same rate as Producer SEP assertions, Producer plaintiffs were almost five times as likely to prevail on the merits as NPE plaintiffs.

We conclude with a discussion of the implications of these findings for current debates regarding FRAND licensing and SSO policy limitations, particularly proposals to impose SSO-based licensing encumbrances on SEPs held by Outsiders. We also observe that, while NPEs are responsible for a large number of assertions of unencumbered SEPs, the greater threat of hold-up and rent extraction, at least under U.S. law, appears to arise from assertions of unencumbered SEPs by SSO Outsiders that are themselves Producers.

February 16, 2016 | Permalink | Comments (0)

Monday, February 15, 2016

Cover Pricing and the Overreach of ‘Object’ Liability Under Article 101 TFEU

Andreas Stephan, University of East Anglia (UEA) - Centre for Competition Policy and Morten Hviid, University of East Anglia - Centre for Competition Policy (CCP) approach Cover Pricing and the Overreach of ‘Object’ Liability Under Article 101 TFEU.

ABSTRACT: This article uses the example of cover pricing to show a possible overreach of liability under Article 101 TFEU, in relation to arrangements deemed to have the ‘object’ of restricting competition. Cover pricing is where a bidder seeks a non-winning bid from a competitor so that he can participate in a tender process without securing the contract. The wide meaning of ‘concerted practice’ means that a potential breach of Article 101 may arise even where the party receiving the request refuses to provide a cover bid. It is important that a restriction by object (which leads to the finding of an infringement regardless of whether the practice was implemented or had any harmful effect) applies only to the most serious arrangements between undertakings. It is shown that cover pricing very rarely has any anti-competitive effect and indeed the alternative (lawful) behaviour, of openly announcing a non-intention to win the contract, is more likely to reduce competition. It is nevertheless treated as an object restriction, mainly because it involves direct communication between competitors of pricing intentions. Article 101 may therefore be unable to distinguish some arrangements with ambivalent effects from the most serious cartel practices. It is argued that a greater effects analysis is needed (either in applying the law or calculating penalties), to ensure fairness and proportionality.

February 15, 2016 | Permalink | Comments (0)

Restrictions on Innovation in EU Competition Law

Pablo Ibanez Colomo, London School of Economics - Law Department describes Restrictions on Innovation in EU Competition Law.

ABSTRACT: This paper discusses, in light of the practice of the European Commission, the different ways in which innovation considerations can be introduced in EU competition law. In some cases, such considerations have played an indirect role in the analysis. These are instances in which harm to innovation has been presumed or inferred by proxy from the effects of a practice on the competitive process (for instance, the foreclosure of a rival or the creation of a near monopoly). It is difficult to see anything controversial, or parameter-specific, in these cases. They reflect the approach to contemporary enforcement, which revolves essentially around the analysis of markets and does not require direct evidence of the impact of a practice on, inter alia, prices, output or product quality. Innovation-related arguments may also be introduced as an alternative to the orthodox approach to enforcement. For instance, they may be introduced in lieu of foreclosure analysis in a case where intervention requires evidence of an exclusionary effect. Instead of showing that the practice would lead to foreclosure, the authority or claimant would claim that the practice reduces the rate of innovation. It is submitted that there is no room in EU competition law for the direct introduction of innovation considerations.

February 15, 2016 | Permalink | Comments (0)

Due Process in Antitrust Settlements

Pranvera Kellezi, Kellezi Legal has written on Due Process in Antitrust Settlements.

ABSTRACT: A transactional resolution of antitrust proceedings brings many benefits to competition authorities and companies under investigation in public interest as well as private companies. Due process, as part of the rule of law, ensures that public interest is maximised in antitrust proceedings while safeguarding individual rights and freedoms at the basis of the market economy and our democracy. Starting with the investigation of sensitive points that can lead to an imbalanced result, this contribution aims to derive and propose recommendations on how transactional resolutions can achieve an optimal balance in terms of market intervention while safeguarding public interest on the one hand and protecting individual rights and freedoms on the other. At the end, the success of transactional resolution mechanisms will depend on procedural fairness and on the extent to which the rights of the parties involved will be safeguarded.

February 15, 2016 | Permalink | Comments (0)

Evading Portfolio Royalties for Standard-Essential Patents Through Validity Challenges

J. Gregory Sidak Criterion Economics, L.L.C. is thinking about Evading Portfolio Royalties for Standard-Essential Patents Through Validity Challenges.

ABSTRACT: A no challenge clause prevents a patent licensee from challenging the validity of a licensed patent. In the 2014 Guidelines on Technology Transfer Block Exemption Regulation, the European Commission discouraged parties from including a no challenge clause in a settlement and license agreement concerning standard essential patents (SEPs). The Commission said that eliminating invalid patents serves the public interest because it promotes competition. For similar reasons, in 2014, the Advocate General of the Court of Justice of the European Union opined in Huawei Technologies Co. v. ZTE Corp. that EU competition law should allow a licensee to retain the right to challenge a licensed SEP’s validity notwithstanding that the licensee has entered into a settlement and license agreement with the SEP holder. I analyze the Commission’s and the Advocate General’s assumption that a licensee’s challenging the validity of SEPs unambiguously benefits consumers. I assess the merits of that legal proposition within the well established economic framework of cost benefit analysis. I particularly focus on the marginal benefits and the marginal costs that eliminating no challenge provisions would generate for consumers. I explain that the Commission and the Advocate General exaggerated the marginal benefits and understated the marginal costs of validity challenges to licensed SEPs, particularly when the typical SEP holder repeatedly licenses its SEPs in a large portfolio to a sophisticated licensee. The discovery that several SEPs in a licensed portfolio of hundreds are invalid would neither surprise the parties nor justify reducing the portfolio royalty. The Commission and the Advocate General ignored that encouraging a licensee to challenge the validity of individual licensed SEPs invites opportunistic litigation by the licensee so as to delay paying the SEP holder the agreed-upon royalty for the use of the many more valid patents in its licensed portfolio. Thwarting the SEP holder’s ability to receive prompt compensation for its innovative contribution lessens the SEP holder’s incentive to invest in innovation and thus decreases quality of collective standard setting. Those effects in turn impose significant marginal harm on consumers. Consequently, the Commission and Advocate General erred to assume that consumers derive a net marginal benefit from the announced policy encouraging a licensee to challenge to the validity of licensed SEPs.

 

 

February 15, 2016 | Permalink | Comments (0)

Saturday, February 13, 2016

Careers in International Antitrust Law and Practical Tips For International Practitioners - Wednesday, March 9, 2016

The ABA Section of Antitrust Law’s International Committee and George Mason University School of Law

Present

Careers in International Antitrust Law and Practical Tips For International Practitioners

 

Wednesday, March 9, 2016

8:30-9a.m. EST –Networking Breakfast

9a.m.-10:15a.m. EST – Panel

 

With competition laws and agencies in approximately 130 jurisdictions, antitrust attorneys and economists are increasingly called upon to operate in the international competition arena. This panel of experts from government, private practice, and academia will share their insights on embarking on and thriving in a career as an international antitrust attorney or economist, including providing practical tips on how to conduct substantive research and learn local procedures.

Moderator

Daniel Weick, Associate, Wilson Sonsini Goodrich & Rosati LLP

Panelists

Elizabeth Kraus, Deputy Director, U.S. Federal Trade Commission

John Taladay, Partner and Antitrust Practice Group Chair, Baker Botts LLP

Su Sun, Vice President, Economists Incorporated

Joshua Wright, Professor of Law, George Mason University School of Law

Offered both in-person and via teleconference

Location:  George Mason University School of Law

3301 Fairfax Dr. Arlington, VA 22201

To register, visit http://shop.americanbar.org/ebus/ABAEventsCalendar/EventDetails.aspx?productId=238356052

February 13, 2016 | Permalink | Comments (0)

The School of Law of the University of Nottingham organises a workshop to honour Professor William Kovacic as the 2016 J.C. Smith Trust Fund Senior Visiting Scholar. The workshop is entitled ‘Competition Enforcement: How Private Rights of Action Can Change the Role of Public Competition Law Enforcement’. The J.C. Smith Trust Fund Senior Visiting Scholarship is awarded to scholars with a distinguished contribution in Law and was established in honour of Professor Sir John Smith.” Due to limited spaces you are kindly requested to contact the workshop organiser Dr Aris Georgopoulos at aris.georgopoulos@nottingham.ac.uk by Friday 19 February 2016.

 

“Competition Enforcement: How Private Rights of Action Can Change the Role of Public Competition Law Enforcement”
A workshop in honour of Professor William Kovacic
Orchard Hotel, University Park, Nottingham
Friday, February 26, 2016 from 9.30am to 5.30pm

The School of Law of the University of Nottingham organises this workshop to honour Professor William Kovacic as the 2016 J.C. Smith Trust Fund Senior Visiting Scholar. The J.C. Smith Trust Fund Senior Visiting Scholarship is awarded to scholars with a distinguished contribution in Law and was established in honour of Professor Sir John Smith.

Workshop participants:
Stephen Blake Senior Director, Cartels and Criminal Enforcement Directorate, Competition and Markets Authority
Kai–Uwe Kuhn Professor of Economics, UAE, Former Chief Economist, DG Competition, European Commission
Arijit Mukherjee Professor of Industrial Economics, University of Nottingham
Andreas Stephan Professor of Competition Law, UEA, Law School & Centre for Competition Policy
Peter Willis, Partner, Co-Head of Competition Legal Practice Group, Bird & Bird

The Concluding thoughts will be delivered by
William Kovacic
2016 J.C. Smith Trust Fund Senior Visiting Scholar
Global Competition Professor of Law and Policy, Director of the
Competition Law Center, George Washington Law School,
Former Chairman of the Federal Trade Commission

February 13, 2016 | Permalink | Comments (0)

Friday, February 12, 2016

Competition Law in Latin America: A Practical Guide

Julian Pena and Marcelo Calliari have edited Competition Law in Latin America: A Practical Guide.

BOOK ABSTRACT: In the past few years Latin American countries have taken giant steps to reposition their competition authorities in the global antitrust arena, granting them much greater autonomy both domestically and internationally. This is the first book to offer an in-depth analysis of this complex scenario. At the heart of the presentation are seven chapters detailing the competition regimes of the most active national jurisdictions in the region – Argentina, Brazil, Chile, Colombia. Mexico, Peru, and Uruguay. Written by practicing experts with considerable hands-on experience in their respective countries, each of these chapters provides a comprehensive description and explanation of the evolution, current state, and prospects for antitrust in the country. Preceding these country-by-country analyses are more general chapters on the use of economic analysis and on the special field of the information and communications technology industry, as well as chapters on the working of competition law in countries with regulated markets and in the cluster of Central American countries. Topics addressed encompass the following and more:

Editors and Contributors.

Preface.

Chapter 1 The Second Wave Latin American Competition Law and Policy D. Daniel Sokol.

Chapter 2 Competition Lifecycles in Latin America William E. Kovacic.

Chapter 3 The Failed Search for the Soul of Competition Policy Ignacio L. De Leon Bibliography.

Chapter 4 Competition Policy and Growth: Evidence from Latin America Esteban Greco, Diego Petrecolla, Carlos A. Romero & Juan P. Vila Martínez Bibliography.

Chapter 5 International Cooperation between Competition Agencies Eduardo Perez Motta & Mateo Diego Fernandez.

Chapter 6 Histories of Competition Law in Latin America Andrés Palacios Lleras & Juan David Gutiérrez.

Chapter 7 The Use of Economic Analysis in Latin American Competition Policy Manuel A. Abdala & Lucía Quesada.

Chapter 8 Competition in Regulated Markets in Latin America: Overview and Challenges Gesner Oliveira & Germán Orjuela Bibliography.

Chapter 9 Competition Law in the Information and Communications Technologies Industry in Latin America: The Need for a New Approach Pablo Márquez.

Chapter 10 Competition Law in Central America and the Years to Come Edgar Odio-Rohrmoser Bibliography.

Chapter 11 Competition Law in Argentina Julian Peña & Federico Rossi .

Chapter 12 Competition Law in Brazil Marcelo Calliari, Joana Temudo Cianfarani & Marcel Medon Santos.

Chapter 13 Competition Law in Chile Juan Cristóbal Gumucio Schönthaler & Guillermo Frene Candia.

Chapter 14 Competition Law in Colombia Alfonso Miranda Londoño.

Chapter 15 Competition Law in Mexico Amilcar Peredo & Gabriel Gonzalez.

Chapter 16 Competition Law in Peru Alfredo Bullard.

Chapter 17 Uruguay Juan Manuel Mercant & Javier Napoleone.

Index.

  • relevant institutions and legislation;
  • cartel investigations;
  • unilateral conduct policies;
  • merger review;
  • international coordination;
  • enforcement; and
  • remedies.

Each chapter includes analysis of relevant case law, allowing the reader to gauge the positions, views, and tendencies of each competition law regime. The authors also pay attention to the specificities and idiosyncrasies that are so important for a correct understanding of the practical realities of competition policy and enforcement. With its wide-ranging and in depth-approach, this book provides an incomparable analysis of a challenging region poised to become increasingly important in the international recognition and enforcement of antitrust law. It is in this sense an essential guide for lawyers, economists, corporations, academics, and government officials interested in understanding where competition law is, and where is it is going to, in Latin America.  

February 12, 2016 | Permalink | Comments (0)

EU Competition Law: Current Issues in a Global Context Brussels, Belgium 20 May 2016

 

 

King's College Centre of European Law Conference in co-operation with Crowell & Moring LLP EU Competition Law: Current Issues in a Global Context   Hilton Brussels Grand Place, Carrefour de l’Europe, 1000 Brussels, Belgium 20 May 2016, 8.45-17:30 (drinks to follow)  

EU Competition Law: Current Issues in a Global Context will be the first major conference organized in Brussels by the King’s College London Centre of European Law and the first organized in conjunction with Crowell & Morning, LLP.

The purpose of the event is to bring together leading judges, regulators, in-house counsel, academics and private practice lawyers to discuss current issues in EU law from an international perspective, with a particular focus on the EU-U.S. axis.

To that end, we have put together four panels that each unite contributors from multiple jurisdictions to give short presentations leading to interactive discussions and Q&A involving the panel members and the audience.

Panel Chairs  Professor William E Kovacic Judge Marc van der Woude Professor Richard Whish QC (Hon) Professor Renato Razzini  Panel Topics

  • Antitrust and IP – Standard Essential Patents and Patent Settlements
  • Cartel Damages Litigation – An EU-wide Overview
  • Antitrust and the Internet – The Google Cases and the Sector Inquiry
  • Merger Control - Recent Remedies Experiences

  Speakers to include

  •  Terrell McSweeny, FTC Commissioner
  • Michele Piergiovanni, Head of Unit, European Commission
  • Thomas Kramler, Head of Digital Task Force, European Commission
  • Michaelynn Ware, UTC, Assistant GC, Antitrust
  • Dina Kallay, Ericsson, Director IP & Competition

  Tickets £125.00.  You can book here http://bit.ly/20mkzZ5  -  Space is limited; for further information, please contact: Christine Copping,  King’s College, London, tel.  + 44 207 848 2387, email christine.copping@kcl.ac.uk  

 

February 12, 2016 | Permalink | Comments (0)

Vertical Foreclosure in the Movie Industry

Jaedo Choi, Yonsei University Yun Jeong Choi, Yonsei University and Minki Kim, Yonsei University Vertical Foreclosure in the Movie Industry.

ABSTRACT: In this paper, we analyze the market foreclosure effects resulting from vertical integration in the movie industry, which has special features such as revenue sharing, price uniformity, and uncertainty. These features are quite common in the media industry. Given these features, we construct a simple model to examine the effect of vertical integration. We then empirically scrutinize integrated exhibitors' favoritism toward affiliated movies and verify that the hypotheses implied by the model hold true. The first hypothesis is that integrated exhibitors play their affiliated movies more; the second is that they sign up more contracts with their own movies, giving up exhibition of rivals' movies with higher quality. We find that the foreclosure effects affect social welfare through quality channel rather than price channel. Our analysis can be applied to other media industries sharing similar features of the movie industry.

February 12, 2016 | Permalink | Comments (0)

Copyright Licensing and the EU Digital Single Market Strategy

Pablo Ibanez Colomo, London School of Economics - Law Department examines Copyright Licensing and the EU Digital Single Market Strategy.

ABSTRACT: In May 2015, the European Commission launched an ambitious Digital Single Market Strategy. One of the objectives of this agenda is to ensure that copyright-protected content is accessible across borders by end-users. The achievement of this goal requires the review of national copyright regimes to ease the cross-border transmission of content and the enforcement of EU competition rules. This piece explains the principles applying to the territorial licensing of copyright-protected content against the background of the Strategy and the proposals for legislative reform. As a matter of principle, it is lawful under EU competition law to grant an exclusive territorial licence to a single operator in a given Member State, and thus to prohibit the transmission of the same content by others in the territory subject to the licence. In certain circumstances, however, these agreements may be found to be contrary to Article 101(1) TFEU. The piece places an emphasis on the analysis of the Murphy case and provides the context to understand the ongoing proceedings against the ‘Big Six’ Hollywood major studios and Sky UK.

 

 

February 12, 2016 | Permalink | Comments (0)

Abuse Without Dominance in Competition Law: Abuse of Economic Dependence and its Interface with Abuse of Dominance

Mor Bakhoum, Max Planck Institute for Innovation and Competition writes on Abuse Without Dominance in Competition Law: Abuse of Economic Dependence and its Interface with Abuse of Dominance.

ABSTRACT: This paper investigates the interface between abuse of dominance and abuse of economic dependence, also known in some jurisdictions as abuse of superior bargaining position. When dealing with abuse-of-dominance cases, although the anticompetitive behavior is directed to competitors (exclusion) or consumers (exploitation), there is a fundamental requirement that competition in the relevant market be affected. This approach does not address relative dominance in cases when abuse occurs without dominance and may affect competition. This happens in situations where a relatively dominant market participant enjoys a superior bargaining position with respect to its business partners and uses this position to its own advantage. Taking the example of the distribution sector, the paper showcases how competition may be affected by an undertaking without a dominant position using a network of contracts. This situation can be illustrated in cases where a network of contracts is created by a relatively dominant firm whose sole objective is to lock in smaller or economically weaker business partners in a network and thereby limit their possibility to shift. Such networks of contractual relationships may hinder not only the economic freedom of the weaker party (vertical dimension), but may also strengthen the market power of the relatively dominant firm (horizontal dimension). As a consequence, the relevant market may be affected although the undertaking does not have a dominant position. Hence, there is a close link between economic dependence, freedom of contract and competition law. Situations of abuses by non-dominant firms are not captured by the requirements that the undertaking enjoy a dominant position and the relevant market be affected in abuse-of-dominance cases. This shows the limits of the concept of abuse of dominance as a legal tool used to protect competition in the relevant market. This paper argues that, in addition to abuse of dominance, there is a potential of using the concept of relative dominance (by sanctioning abuses of economic dependence) to protect not only the freedom of competition of the market participants, but also competition itself.

February 12, 2016 | Permalink | Comments (0)

Thursday, February 11, 2016

Assertion of Standards-Essential Patents by Non-Practicing Entities

Jorge Contreras, Utah examines Assertion of Standards-Essential Patents by Non-Practicing Entities.  Worth downloading!

ABSTRACT: An extensive literature exists regarding the patent disclosure and licensing commitments made by participants in standard-setting organizations (SSOs), and how such commitments affect the assertion of standards-essential patents (SEPs) by these participants. But this literature largely ignores the assertion of SEPs by entities that do not participate in SSOs (Outsiders). This study is the first to collect and analyze data relating to SEP assertions by SSO Outsiders, a large number of which are so-called non-practicing entities (NPEs). We present descriptive statistics regarding NPE and Producer assertions of SEPs pertaining to seven broadly-adopted standards in the telecommunications and networking sectors over a 16.5-year period. Twenty-six NPEs were identified as asserting SEPs pertaining to the standards studied. NPEs initiated 64% of all SEP cases and 77% of all unique patent-defendant assertion events involving these SEPs. NPEs initiated 82% of all defendant-assertion events relating to the five standards subject to FRAND licensing commitments, but only 25% of such events relating to the two standards subject to royalty-free (RF) licensing commitments. When NPEs asserted SEPs from FRAND-based SSOs, the large majority of these assertions (73%) were of unencumbered SEPs. Producers, however, generally asserted FRAND-encumbered SEPs. In the case of SEPs from RF SSOs, NPEs asserted only unencumbered SEPs, while Producers asserted both encumbered and unencumbered SEPs. And while NPE SEP assertions were resolved by settlement at approximately the same rate as Producer SEP assertions, Producer plaintiffs were almost five times as likely to prevail on the merits as NPE plaintiffs. We conclude with a discussion of the implications of these findings for current debates regarding FRAND licensing and SSO policy limitations, particularly proposals to impose SSO-based licensing encumbrances on SEPs held by Outsiders. We also observe that, while NPEs are responsible for a large number of assertions of unencumbered SEPs, the greater threat of hold-up and rent extraction, at least under U.S. law, appears to arise from assertions of unencumbered SEPs by SSO Outsiders that are themselves Producers.

February 11, 2016 | Permalink | Comments (0)

Regulation of interlocking directorates in the financial sector: a comparative case study

Alberto Baccini, University of Siena and Leonardo Marroni offer Regulation of interlocking directorates in the financial sector: a comparative case study.

ABSTRACT: Network analysis techniques are used for investigating the probable effects of a change in the regulation aiming to prevent the anticompetitive effects of interlocking directorates (ID), that is the crossed presence of directors in the boards of competing firms. The case study considers a recent Italian law (Section 36 of Law Decree n. 201/2011) which prohibits ID for credit, insurance and financial companies. The ID networks of the top-100 Italian listed companies and of the financial companies in this same list are considered and compared with the analogous networks in the US. The US networks represent a benchmark given that in the US companies act under Section 8 of the Clayton Act that has banned ID since 1914. The effects on the ID networks of the new Italian law are simulated under two different interpretations of the law. If the law will be applied according to a narrow interpretation, the Italian ID network will rest substantially unaltered. However, if the law will be applied according to a broad interpretation, the ID network for financial firms will be completely modified with a network configuration very similar to the American benchmark.

February 11, 2016 | Permalink | Comments (0)

Airport cities and multiproduct pricing

Tiziana D'Alfonso (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy) ; Valentina Bracaglia (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy) ; Yulai Wan (Department of Logistics and Maritime Studies, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong) examine Airport cities and multiproduct pricing.

ABSTRACT: We study multiproduct pricing of core and side goods in the case of a (monopoly) airport city. The consumption of the side services is not conditional on the consumption of the core service, i.e., travellers as well as non-travellers may demand side goods but derive different benefits. We obtain several results in two different settings. The first one depicts the case in which individuals make decisions about buying core and side goods independently. In this case, non-traveller demand induces the facility to increase the core price with respect to the case in which only travellers may purchase side services. In the second one, individuals make decisions simultaneously, depending on their degree of foresight over the surplus that they anticipate to obtain from the consumption of side goods. In this case, the non-passenger demand might incentivizes the transport facility to charge lower core price, with respect to the case in which only travellers may purch! ase side services. Manipulating the side products mix in order to enrich the shopping experience of travellers (i.e., to increase the benefit that they derive from the joint consumption of core and side goods) may be welfare-enhancing. Traveller surplus would certainly increase, but such positive effects occur to the detriment of non-travellers, who find themselves to pay a higher price for side products, whatever is the level of consumer foresight.

February 11, 2016 | Permalink | Comments (0)

Wednesday, February 10, 2016

The robustness of industrial commodity oligopoly pricing strategies

David M. Newbery and Thomas Greve analyze The robustness of industrial commodity oligopoly pricing strategies.

ABSTRACT: Industrial commodity markets are typically oligopolies in which firms set prices but need to make sunk and durable investment decisions, requiring them to make predictions of future prices. Mark-up pricing models are attractive both for setting prices and predicting future prices for investment analysis. Simple algorithms can find Nash equilibria, but these equilibria are not necessarily robust. This paper examines fixed and proportional mark-up models and demonstrates that they are robust to single firm Nash Cournot deviations but not against more sophisticated deviations in the deterministic case. Cournot equilibria are not robust under demand uncertainty, where proportional mark-up models emerge as the most robust when marginal costs are increasing.

February 10, 2016 | Permalink | Comments (0)