Antitrust & Competition Policy Blog

Moving Music Licensing into the Digital Era: More Competition and Less Regulation

Thomas M. Lenard, Technology Policy Institute and Lawrence J. White, New York University (NYU) - Leonard N. Stern School of Business, Department of Economics are Moving Music Licensing into the Digital Era: More Competition and Less Regulation.

ABSTRACT: The system for licensing music in the United States for public performances through radio, television, digital services and other distribution media is complicated, arcane and heavily regulated. Its basic structure is oriented toward transmitting music through analog channels. Although much of the pricing of music rights is supposed to be based on competitive prices, the current interdependent system of collective licensing of performing rights and widespread regulation of music prices (royalties) is inconsistent with the development of a competitive market and the associated efficiencies.

Collective licensing by a handful of performing rights organizations (PROs) provides the major rationale for price regulation. However, the existence of price regulation has entrenched collective licensing and the position of those PROs. A more competitive system entails moving away from collective licensing.

In this paper we review the current structure of the music licensing system and suggest ways of making it more competitive and less reliant on regulation. Central to our proposals are: a) a comprehensive, standardized database of musical compositions (including the specific sound recording version, where relevant) and their owners so that distributors and users can readily identify from whom they need to license rights, along with a “safe harbor” provision that would provide the appropriate incentives for rights owners to contribute their information to the database; b) a greater ability of intermediaries to aggregate the various categories of music ownership rights; and c) the consequent development of more competitive negotiations and transactions between music rights holders and music distributors.

The New Concept of Anti-Competitive Object: A Loose Cannon in EU Competition Law

Csongor Istvan Nagy University of Szeged, Faculty of Law; Hungarian Academy of Sciences CSS Institute for Legal Studies ponders The New Concept of Anti-Competitive Object: A Loose Cannon in EU Competition Law.

ABSTRACT: This article analyzes EU competition law’s recent developments in respect of anti-competitive object (Allianz, Cartes bancaires, the Commission’s new De Minimis Notice). It provides a critical evaluation of the new, elusive notion and demonstrates its devastating consequences.

 

 

Tom Rosch (1939-2016)

Former FTC Commissioner and Latham partner Tom Rosch has passed away.  Rosch was a significant force in the antitrust community.

Need for Competition Law – Discussing the Case of Georgia

Zurab Gvelesiani, Central European University analyzes the Need for Competition Law – Discussing the Case of Georgia. To my knowledge, this is the first English language paper I have seen about Georgia.

ABSTRACT: The article deals with the question whether the market needs to be regulated and if competition law is a desirable regulatory instrument for developing countries such as Georgia. This issue is not merely theoretical in nature, but reflects Georgia’s actual developments throughout the last decade when the country first repelled its existing antimonopoly law, since it was seen as unnecessary and hindering economic development, and yet later reintroduced it once again. For years Georgia was not regulating its market and, as the newly set up Competition Agency is starting to take its first steps, the question of the rationality for pro-competitive state intervention raises again. The chosen jurisdiction is unique for its unusual development path and history. It is even more special because of this particular point in time, witnessing the birth-phase of yet another competition law jurisdiction and the launching of its competition law enforcement authority. The article is dedicated to questions which are widely disputed in society, among politicians, in the media, within the local NGO sector etc. However, the academic community has not yet written much about them. This paper aims to fill this gap and encourage further academic discussion on this topic. Due to the limited number of academic sources and case-law in this field, a variety of sources has been used in this paper including: dissertations, reports of international organizations and local NGOs, personal interviews, blogs and so forth. The article is divided into sections. It starts by reviewing the evolution of competition law in Georgia and demonstrates its illogical development pattern. It moves on to outline the background and motivations present in Georgia at moments when breakthrough decisions were taken regarding its competition law regime. The article describes and analyses processes that took place on the un-regulated Georgian market in the last ten years. Based on the findings, it researches the question of the desirability of competition law, that is, whether Georgian market needs such state intervention, and what are the main challenges facing the effective enforcement of its recently adopted competition law.

 

 

University of Melbourne seeks Senior Tutor or Lecturer for Global Competition and Consumer Law fully online program

SENIOR TUTOR OR LECTURER

Job no: 0040542
Work type: Fixed Term
Location: Parkville

Melbourne Law School

Salary: Senior Tutor, Level A - AU$64,863 - $88,016 p.a. or Lecturer, Level B – AU$92,654 - $110,022 p.a., plus 9.5% superannuation

Melbourne Law School (MLS) is Australia's first all-graduate law faculty. It was the first Law School in Australia to teach law, and awarded this country's first law degrees. MLS is ranked the Number 1 Law School in Australia and the Asia-Pacific region and sits within the top 10 law schools in the world.

About the role

This is an academic position within Melbourne Law School (MLS) at the University of Melbourne on a fixed term (one year) contract, intended to commence in the second half of 2016 (start date negotiable). The position relates to the development and delivery of a fully online Masters program in Global Competition and Consumer Law. This program uses cutting edge technology and the expertise of an international faculty to deliver in-depth rigorous interactive postgraduate courses in this field to students around the world. For more information about the program, see its website at: https://online.unimelb.edu.au/law-courses/global-competition-and-consumer-law. 

You will contribute substantively to the development of content for a range of subjects in the program, including subjects in the areas of unilateral conduct, cartels, mergers and institutions, all of which have an international and comparative law orientation.  This contribution will involve elements of research, curriculum planning, script drafting, review and editing and assessment task design and editing.

You will also contribute to aspects of the teaching in the program, including review of student posts and interaction with students on discussion boards and in live tutorials, and assessment grading. 

Working under the direct supervision of the Program Director, Professor Caron Beaton-Wells, you will also work closely with other academic staff of the Law School (including external academics who are leading experts in the field from around the world) to support them in their contributions to the program.

This is an exciting opportunity to join a leading Law School, be associated with and make an important contribution to a pioneering initiative, and develop a global network of eminent academics, practitioners, and others who are involved in the program.

About you

You will have an excellent degree in law, and based on your prior studies and/or professional work experience, a sound knowledge of competition laws, and associated policies, practices and institutions in an international and comparative context.

Experience in teaching, including in developing curricula and teaching materials, and a keen interest and skills (or the capacity to develop) skills in online teaching, are required.

You will have demonstrated ability to work both independently and as a member of a team, high level organisational and time management skills, as well as excellent oral and written communication and interpersonal skills.

Close date: 28 Apr 2016

Position Description*
(*includes Selection Criteria or Core Accountabilities and Competencies)

 0040542.pdf

 

Advertised: 31 Mar 2016 12:00 AM Aus. Eastern Standard Time
Applications close: 28 Apr 2016 11:55 PM Aus. Eastern Standard Time

Shubha Ghosh to hold webcasts on upcoming Supreme Court cases

Syracuse College of Law to Offer Webcasts on Upcoming Supreme Court Cases

The College of Law’s Technology Commercialization Law Program (TCLP) and New York State Science & Technology Law Center will host three webcasts this spring on intellectual property law-related cases being argued before the Supreme Court. Shubha Ghosh, Crandall Melvin Professor of Law and director of the TCLP, will host the webcasts, providing insights on the intellectual property, patent infringement and copyright cases.

Shubha Ghosh

“Three cases currently before the Supreme Court will have a direct impact on how technology companies and entrepreneurs view patent litigation,” says Ghosh. “The webcasts offer an opportunity for anyone interested in learning more about the cases and how the Supreme Court’s rulings could affect technology commercialization.”

Thursday, March 31, 1-2:15 p.m.: Halo Electronics v. Pulse Electronics and Stryker Corp. v. Zimmer, Inc.

Patent owners pursuing infringement litigation argue that the standard for proving willful infringement in patent cases is overly rigid, making it difficult to recover enhanced damages. Courts are authorized to triple the amount of damage awards upon a finding of willful patent infringement. The standard by which damages are assessed for willful infringement will be considered by the U.S. Supreme Court in the consolidated Halo Electronics v. Pulse Electronics and Stryker Crop. v. Zimmer Inc. cases.

Thursday, April 21, 1-2:15 p.m.: Cuozzo Speed Technologies LLC v. Lee

The Supreme Court will consider whether the inter partes review procedures, which allow a third party to challenge the validity of a patent in front of the Patent Trial and Appeal Board, have made it too difficult for inventors to defend their patent claims (and too easy to successfully invalidate patents).

TBD: Kirtsaeng v. John Wiley & Sons, Inc.

In light of a number of different standards currently utilized by courts to determine whether attorney’s fees should be awarded in copyright infringement litigation, the Supreme Court will determine the appropriate standard for awarding attorney’s fees to a prevailing party under the Copyright Act. Please check the event website for the date and time.

The webinars are free, but require registration. Click here to register or for more background on the cases.

Development of Private Enforcement of Competition Law in Lithuania

Raimundas Moisejevas, Mykolas Romeris University describes the Development of Private Enforcement of Competition Law in Lithuania.

ABSTRACT: The article reviews the jurisprudence of Lithuanian courts on private enforcement of competition law and identifies the main obstacles for the development of this practice. The analysis of the jurisprudence makes it possible to summarise that: most rulings of the Lithuanian courts relate to cases on the abuse of dominance; usually, dominant undertakings were allegedly applying discriminatory conditions towards the injured party and; most of the claims were presented as follow-on actions after a decision of the Competition Council. The courts held that damages caused by a breach of competition law have to be recovered in accordance with Lithuania’s main principles of civil responsibility. At the same time, the courts made it clear that their jurisprudence is based on the rulings of European Courts and the main principles of EU competition law. The main obstacles for the successful development of antitrust damages claims in Lithuania are, inter alia: complexity of competition cases; difficulty in obtaining substantive evidence; proving a consequential relationship and; high legal costs. The article also analyses substantial and procedural provisions of Lithuanian legislation that regulate the submission of antitrust damage claims.

 

 

Individuals and the Enforcement of Competition Law – Recent Development of the Private Enforcement Doctrine in Polish and European Antitrust Law

Maciej Gac, Jagiellonian University in Krakow - Faculty of Law and Administration examines Individuals and the Enforcement of Competition Law – Recent Development of the Private Enforcement Doctrine in Polish and European Antitrust Law.

ABSTRACT: The following article focuses on the issue of private enforcement of competition law as one of the key elements of the current European and national debate on the efficiency of competition law. By analyzing this concept, the article aims to determine the influence of the European private enforcement model on the national competition law enforcement practice. The goal of the analysis is to answer two main questions: 1) Does the current convergence of the national competition law enforcement system towards the European model guarantee the establishment of an effective, public-private system of antitrust enforcement? 2) Under which conditions may the development of private methods of antitrust enforcement lead to an increase in the efficiency of Polish and European competition law? In order to address these questions, the article analyses the development of the private enforcement doctrine in the European Union and Poland. It refers to European and Polish jurisprudence on private enforcement, the competition policy of the European Commission as well as of the Polish competition authority – the UOKiK President. It also covers recent legislative changes introduced in the European and national legal orders. The analysis leads to the conclusion that the current convergence of the national antirust system towards the European model did not lead to the establishment of an effective mechanism of private enforcement in Poland. Nevertheless, the assessment of recent changes at the European level gives grounds to assume that the adoption of the Directive on Damages Actions, and its transposition into the national legal order, might overcome this problem and allow for better protection of individuals against anti-competitive behaviors.

 

 

Competition Law in Kosovo: Problems and Challenges

Orhan M Ceku Sr. Pjeter Budi College of Commercial Law analyzes Competition Law in Kosovo: Problems and Challenges.

ABSTRACT: Competition law is in the initial stage of its implementation in the Republic of Kosovo. Its development began in 2004 with the adoption of Kosovo’s Law on Competition, the country’s very first law passed to regulate the legal basis of free market competition. The Law on Competition of 2004 had many shortcomings both with respect to its content and implementation. New legislation was thus passed in 2010 under the name the Law on the Protection of Competition. The latter act is in force now along with an Amendment that entered into force in early 2014. Taken in its entirety, Kosovo’s competition law meets the standards and is in accordance with EU legislation. Kosovo, although it is only in the initial stage of its contractual relations with the EU, has aligned most of its laws with the requirements of EU legislation. Kosovo is Europe’s youngest country and as such, it has various problems when it comes to the functioning of the rule of law. This paper will discuss several topics related to the development of competition law in Kosovo including: the political, legal and economical situation in the field of competition law; the legal bases for the protection of competition in Kosovo; the Kosovo Competition Authority and the insufficiency in its capacities to combat competition law infringements; legal provisions on restrictive practices and merger control. The paper also includes comprehensive conclusions. A number of competition cases deal with by the Kosovo Competition Authority will be mentioned throughout the paper.

 

 

Leniency – The Polish Programme and the 'Semi-Formal' Harmonisation in the EU by the European Competition Network

Marcin Kulesza, Warsaw School of Social Sciences and Humanities describes Leniency – The Polish Programme and the 'Semi-Formal' Harmonisation in the EU by the European Competition Network.

ABSTRACT: When studying the legal character of the Polish leniency programme, one cannot overlook its origin and the harmonisation process of such programmes in the EU. From the beginning, the Polish programme has been, as it should be, bound to the EU programme and to the European Competition Network’s Model Leniency Programme. The paper briefly presents the European roots of the Polish leniency programme, its original convergence with the Commission’s programme and its current convergence with the Model Leniency Programme. In addition, the status of the Model Leniency Programme is analysed and questioned and its provisions are presented in the context of the evolution of Polish leniency. Some additions to the current Polish programme are suggested in conclusion.

 

 

Competitive Price Targeting with Smartphone Coupons

Jean-Pierre H. Dubé, Zheng Fang, Nathan Fong, and Xueming Luo apply Competitive Price Targeting with Smartphone Coupons.

ABSTRACT: We conduct a large-scale field experiment to study competitive price discrimination in a duopoly market with two rival movie theaters. The firms use mobile targeting to offer different prices based on location and past consumer activity. A novel feature of our experiment is that we test a range of relative ticket prices from both firms to trace out their respective best-response functions and to assess equilibrium outcomes. We use our experimentally-generated data to estimate a demand model that can be used to predict the consumer choices and corresponding firm best-responses at price levels not included in the test. We find an empirically large return on investment when a single firm unilaterally targets its prices based on the geographic location or historical visit behavior of a mobile customer. However, these returns can be mitigated by competitive interactions whereby both firms simultaneously engage in targeting. In practice, firms typically test only their own prices and do not consider the competitive response of a rival. In our study of movie theaters, competition enhances the returns to behavioral targeting but reduces the returns to geo-targeting. Under geographic targeting, each theater offers a discount in the other rival's local market, toughening price competition. In contrast, under behavioral targeting, the strategic complementarity of prices coupled with the symmetric incentives of the two theaters to raise prices charged to high-recency customers softens price competition. Thus, managers need to consider how competition moderates the profitability of price targeting. Moreover, field experiments that hold the competitor's actions fixed may generate misleading conclusions if the permanent implementation of a tested action would likely elicit a competitive response

Antitrust and Socially Responsible Collaboration: A Chilling Combination?

Inara Scott, Oregon State asks Antitrust and Socially Responsible Collaboration: A Chilling Combination?

ABSTRACT: A review of recent literature in the field of sustainable and socially responsible business practices reveals that companies are increasingly considering collaboration as a means of solving intractable global problems. Business entities concerned about human rights and labor practices are collaborating with other businesses, government agencies, and nongovernmental organizations (NGOs) on certifications and standards at shared factories and facilities. To save costs and reduce environmental impacts, the most ardent of competitors have agreed to share facilities and other assets, like less than full delivery trucks, as well as engage in joint research and development. Competitors in resource-intensive commodity markets, including those in the coffee and lumber industries, have collaborated on environmental certification standards for production and even have engaged in harvest share agreements to reduce overharvest and waste.

Section 1 of the Sherman Antitrust Act broadly prohibits “[e]very contract, combination … or conspiracy, in restraint of trade or commerce,” leaving all of these collaborations potentially vulnerable to challenge. However, the very breadth of this century-old statutory language has forced courts to engage in an evolving analysis of what behavior should and should not be prohibited. Seemingly unambiguous language prohibiting agreements among competitors may, in fact, not stand as a barrier to certain types of arrangements. The purpose of this article is to determine the outer limits courts have placed upon such agreements and to assess the potentially chilling effect of antitrust law on socially responsible collaboration. Based on this analysis, this article seeks to determine if statutory changes are needed to allow for the type of socially responsible collaboration in which businesses are seeking to engage in order to have the greatest potential impact on environmental, human rights, and sustainability challenges.

Part I of this article sets forth the economic and business justifications for collaborating across businesses, including those between and among competitors, and provides examples of key types of these collaborations. Part II considers the application of antitrust laws and examines the struggle to determine to what extent courts may find these collaborative practices acceptable. Based on this analysis, Part III then examines the chilling effect of antitrust law on socially responsible collaborations and considers changes necessary to facilitate these types of transactions. This article concludes with an examination of some of the basic policy assumptions that underlie antitrust law and a recommendation for the evolution of these assumptions in the face of increasing resource scarcity, global environmental degradation, and climate change.

Judging in Europe: Do Legal Traditions Matter?

Angela Huyue Zhang, King's College London – The Dickson Poon School of Law and Jingchen Liu, Columbia University ask Judging in Europe: Do Legal Traditions Matter?

ABSTRACT: The competition judgments of the General Court offer a unique opportunity to evaluate the relationship between legal traditions and judicial outcome. First, these judgments typically involve applications by private businesses to annul competition decisions made by the European Commission. Based on prior literature showing a divergence between common law and French legal tradition, we hypothesize that the legal origins of the judges will influence their attitudes in handling competition appeals. Second, competition cases are first assigned at random to a chamber, with a judge then designated as the rapporteur who will be most closely involved with the case. We hypothesize that this group dynamic will amplify the influence of the rapporteur. Using hand-collected data on the background characteristics of judges and on competition judgments between 1989 to 2015, we find that the legal origins of judges bear a statistically significant correlation with case outcomes, and that the rapporteur plays a crucial role in the decision-making process. In particular, if a rapporteur comes from a common law or Nordic law country, the decision is more likely to favor private businesses than if she is from any other EU country. More specifically, the odds that a competition judgment is annulled or partially annulled will be increased by a factor of 2.2.

A Third Way: Objective Anticompetitive Purpose

Katharine Kemp, University of New South Wales - Law Faculty offers A Third Way: Objective Anticompetitive Purpose.

ABSTRACT: This paper was drafted in response to the Discussion Paper on ‘Options to Strengthen the Misuse of Market Power Law’ released by the Australian Treasury in December 2015. In particular, it offers a potential compromise, or third way, in the current debate concerning the amendment to section 46(1) of the Competition and Consumer Act 2010 (Cth) proposed by the Competition Policy Review Panel in its Final Report dated March 2015 (‘the Harper Proposal’).

The Harper Panel reached the conclusion that the current ‘take advantage’ requirement in s 46(1) has proved uncertain and under-inclusive as a standard for unilateral anticompetitive conduct: it is not ‘fit for purpose’. This paper supports that view.

The Harper Proposal, by contrast, would allow courts to focus on the effect or likely effect of the impugned conduct on rivalry in a market. Large retailers have argued that this test creates uncertainty for dominant firms, who cannot be expected to predict accurately the actual outcome of every strategy and cannot be certain of how a court may interpret the mixed outcomes of conduct after the fact, even if the strategy was an attempt to ‘compete on the merits’. This submission acknowledges that the Harper Proposal may reduce dominant firm incentives to engage in some socially beneficial conduct.

As a third way, it is submitted that it is preferable for unilateral conduct rules to focus on whether the impugned conduct had an ‘objective anticompetitive purpose’: that is, whether, assessed objectively, the conduct had the purpose of enhancing or prolonging the dominant firm’s market power by suppressing rivalry in the market, without creating any proportionate benefits for consumer welfare.

Patent Licensing, Technology Transfer, & Innovation

Mark A. Lemley, Stanford Law School and Robin Feldman, University of California Hastings College of the Law discuss Patent Licensing, Technology Transfer, & Innovation.

ABSTRACT: Traditional justifications for patents are all based on direct or indirect contribution to the creation of new products. Patents serve the social interest if they provide not just invention, but innovation the world would not otherwise have. Non-practicing entities (NPEs) as well as product-producing companies can sometimes provide such innovation, either directly, through working the patent or transfer of technology to others who do, or indirectly, when others copy the patented innovation. The available evidence suggests, however, that patent licensing demands and lawsuits from NPEs are normally not cases that involve any of these activities.

Some scholars have argued that patents can be valuable even without technology transfer because the ability to exclude others from the market may drive commercialization that would not otherwise occur. We demonstrate that even if various commercialization theories can sometimes justify patent protection, they cannot justify most NPE lawsuits or licensing demands.

 

Market Power and Duration of R&D Investment in a Panel of Italian Firms

Maria Elena Bontempi, University of Bologna - Department of Economics, Luca Lambertini, University of Bologna - Department of Economics, Erica Medeossi, Prometeia explore Market Power and Duration of R&D Investment in a Panel of Italian Firms.

ABSTRACT: Studies about innovation find evidence of a positive relationship between technological advancement and firm performance, in particular when the innovative effort is continuous. This paper aims to further the analysis on the duration of R&D investment at the firm level. The contribution of this study is threefold: first, we extend Máñez et al. [2014], Triguero et al. [2014] analysis for Spain to the Italian case: we use a panel of manufacturing and service companies, thus enlarging the view of R&D duration within the European countries. Secondly, from a methodological point of view, we employ both discrete- and continuous-time duration models, in order to test the Proportional Hazards (PH) assumption, i.e. the assumption that the hazard rate is equivalent over time across groups. Last, but not least, we assess whether a firm’s likelihood of continuing investment in R&D depends on the market power of companies. We test alternative measures for market power: the classical price-cost margin and a new proxy for the firm demand elasticity, obtained from a specific survey question. Results are in line with the hypothesis that R&D presents considerable temporal spill overs and strong persistence, even once unobserved heterogeneity is controlled for. Also, we argue that the appropriate proxy for market power is the firm demand elasticity, and we find support for the Schumpeterian hypothesis.

The Practicalities and Pitfalls of the Smallest Saleable Patent Practicing Unit Doctrine: A Review of Teece and Sherry

Anne Layne-Farrar, Charles River Associates; Northwestern University describes The Practicalities and Pitfalls of the Smallest Saleable Patent Practicing Unit Doctrine: A Review of Teece and Sherry.

ABSTRACT: In early 2016, David Teece and Edward Sherry released a new paper assessing the economics of the “Smallest Saleable Patent Practicing Unit” (SSPPU) doctrine. The doctrine was first espoused in 2009 by Judge Randall Rader in Cornell v. Hewlett Packard. In the simplest terms, the SSPPU doctrine calls for setting the revenue base for reasonable royalty patent infringement damages at the smallest possible product level that still reflects the patented invention. In their new paper, Teece and Sherry walk through the justifications expressed in support of applying the SSPPU doctrine and discuss the assumptions embedded within those justifications. The authors also explain a number of the limitations of the doctrine, both logical and practical. In this brief review, I summarize the key findings reported in the Teece and Sherry paper and highlight the policy implications.

How High (and Far) Can You Go? On Setting Fines in Cartel Cases Involving Vertically-Integrated Undertakings and Foreign Sales

Marek Martyniszyn, Queen's University Belfast - School of Law asks How High (and Far) Can You Go? On Setting Fines in Cartel Cases Involving Vertically-Integrated Undertakings and Foreign Sales.

ABSTRACT: This article examines the recent developments concerning the treatment of internal sales (intra-group or captive sales) in the process of setting fines for violations of EU Competition Law. In particular, it looks into Guardian Industries, LG Display and InnoLux, in which the Court of Justice recognised the European Commission’s right to take into account internal sales, also in the transnational setting (when infringement-affected components are sold and incorporated into the finished products outside the EU), and to impose fines which more accurately reflect the scale and significance of the investigated infringements.

COMMENT OF THE GLOBAL ANTITRUST INSTITUTE, GEORGE MASON UNIVERSITY SCHOOL OF LAW, ON THE PROPOSED REVISIONS TO THE PEOPLE’S REPUBLIC OF CHINA ANTI-UNFAIR COMPETITION LAW

COMMENT OF THE GLOBAL ANTITRUST INSTITUTE, GEORGE MASON UNIVERSITY SCHOOL OF LAW, ON THE PROPOSED REVISIONS TO THE PEOPLE’S REPUBLIC OF CHINA ANTI-UNFAIR COMPETITION LAW is available for download.

UCL CPD courses on state aids and mergers

The Centre for Law, Economics and Society at UCL is organizing the following two CPD courses, one on State Aids control and the other on Merger control. These are taught by a team of practitioners.

 

Here is more Information on the courses:

State Aids Law: http://www.laws.ucl.ac.uk/event/eu-state-aid/ 

 

Merger control: http://www.laws.ucl.ac.uk/event/merger-control-clearances-2/