Tuesday, October 18, 2016
The new Journal of Antitrust Enforcement Agency Effectiveness Study is out.
ABSTRACT: The Agency Effectiveness Study explores a wide range of the daily concerns faced by competition agency heads and their staff, with an emphasis on the formal and informal ways in which they are addressed. Managing and operating a competition agency is very much a process of learning-by-doing. The aim of the study is, therefore, to capture and make available the know-how that competition agency officials accumulate during their service. In particular, it aims to provide a candid account of the practical challenges encountered and solved by heads of agencies and their staff as they navigate through changing legal, social, political, and organizational landscapes.
As part of the study, current and former agency heads and competition law officials, of both young and more established agencies, were interviewed and asked for their views on a wide range of topics linked to agency effectiveness. A qualitative method was adopted to capture the knowledge and first-hand experience of competition officials. The data were collected through both face-to-face interviews and questionnaires with the aim of exploring practical, managerial, and structural challenges, which may influence an agency’s effectiveness.
Brian Adams, Bureau of Labor Statistics, Joshua S. Gans, University of Toronto - Rotman School of Management; NBER, Richard Hayes, Government of New South Wales - Department of Primary Industries, Ryan Lampe, California State University, East Bay - Department of Economics have a caffeine infused paper - Does Organizational Form Drive Competition? Evidence from Coffee Retailing.
ABSTRACT: This article examines patterns of entry and exit in a relatively homogeneous product market to investigate the impact of entry on incumbent firms and market structure. In particular, we are interested in whether the organizational form of entrants matters for the competitive decisions of incumbents. We assess the impact of chain stores on independent retailers in the Melbourne coffee market using annual data on the location and entry status of 4,768 coffee retailers between 1991 and 2010. The long panel enables us to include market fixed effects to address the endogeneity of store locations. Logit regressions indicate that chain stores have no discernible effect on the exit or entry decisions of independent stores. However, each additional chain store increases the probability of another chain store exiting by 2.5 percentage points, and each additional independent cafe increases the probability of another independent cafe exiting by 0.5 percent. These findings imply that neighboring independents and chains operate almost as though they are in separate markets. We offer additional analysis suggesting consumer information as a cause of this differentiation.
Monday, October 17, 2016
Call for papers:
Papers are being solicited for a special issue of the Review of Industrial Organization on the topic of “Competition Policy in Developing Countries”. The special issue will be guest-edited by Yannis Katsoulacos (Athens University of Economics and Business), William Kovacic (George Washington University) and Thomas W. Ross (University of British Columbia). The editors welcome the submission of papers in all areas of competition policy with application to, or focus on, developing countries. Specific areas of interest include (but are not limited to):
- Differences between the appropriate application of competition policy in developing, as opposed to developed, countries.
- Studies of the development of competition policy, or of specific competition cases, in particular developing counties that have lessons that extend beyond the studied countries.
- The appropriate design of competition policy institutions in developing countries, and challenges associated with current actual designs.
Papers may be submitted to any of the three guest editors: Katsoulacos at firstname.lastname@example.org; Kovacic at email@example.com; or Ross at firstname.lastname@example.org, The deadline for submissions is July 31, 2017.
William E. Kovacic, George Washington University - Law School; King's College London – The Dickson Poon School of Law and David A. Hyman, University of Illinois College of Law ask Regulatory Leveraging: Problem or Solution?
ABSTRACT: Worldwide, there are approximately 130 jurisdictions with competition laws. The governmental entities charged with enforcing these laws are typically called “competition agencies,” but many of these entities do things other than competition law. Of the 36 agencies listed in the Global Competition Review’s 2015 annual review, half have responsibilities beyond their competition portfolio. Assume a competition agency that has significant regulatory power, such as the right to review certain mergers before they are consummated. Pursuant to this authority, the agency determines how quickly mergers are cleared, or whether they can proceed at all. This regulatory power is the functional equivalent of the market power that some private firms enjoy. Further assume that the agency has responsibilities beyond its competition portfolio — say, with regard to privacy and data security. A firm seeks the approval of the agency to merge with another company. What should we think if the agency uses its regulatory power in policy domain A (i.e., merger approval) to extract concessions with respect to policy domain B (i.e., privacy and data security)? Is that a good idea or a bad idea? Does your response differ if the agency is using its regulatory authority in policy domain A to obtain concessions that it could not obtain, or could realize only with great difficulty, if it focused solely on the behavior of the firm in policy domain B? What if the agency is using its regulatory authority in policy domain A to obtain concessions in policy domain B that would be unconstitutional if it sought to impose them directly? Does it make a difference if the agency has no regulatory authority over policy domain B? Stated bluntly, is regulatory leveraging a troublesome problem — or a useful solution? We describe leveraging in the private and public sectors; analyze four case studies of public sector leveraging; consider the costs and benefits of regulatory leveraging; and offer several suggestions for increasing the likelihood that leveraging is used for pro-social ends. We also briefly describe the leveraging of regulators.
Craig P. Seebald, Vinson & Elkins analyzes DOJ’s Catch-22: Corporate Criminal Antitrust Targets Walk A Blurry Line with Culpable Employees.
ABSTRACT: Recent DOJ policy, including the September 9, 2015 Memorandum from Deputy Attorney General Sally Yates regarding “Individual Accountability for Corporate Wrongdoing” (commonly known as the Yates Memo)2 and speeches delivered by Antitrust Division leadership create another related dilemma for companies under scrutiny. This tension exists between the Division’s desire for companies to fire or demote individuals who potentially engaged in wrongdoing and the DOJ’s demand that, “in order for a company to receive any consideration for cooperation . . . the company must completely disclose to the Department all relevant facts about individual misconduct.”
CRESSE Lawyers Course: “The Role of Economics in Competition Law and Practice” Friday, June 30th – Monday, July 3rd, 2017
Dae Sik Hong, Sogang University offers A Review of Korean Competition Law and Guidelines for Exercise of Standard-Related Patents.
ABSTRACT: The purpose and main scope of this paper is to focus on the types of specific conduct with potential issues, the standards for them, and the applicable factors to be considered that were provided with respect to the exercise of patent rights-related technology standards in the Review Guidelines on the Unfair Exercise of Intellectual Property Right (IPR Guidelines), review the methods to identify the types of such conduct and relevance of such proposed standards, and propose alternatives thereto.
This paper concludes with suggestions as follows: Firstly, the Korea Fair Trade Commission (KFTC) will use its guidelines as a primary framework to enforce the Monopoly Regulation and Fair Trade Act (MRFTA) by the KFTC officials even though it has no legislative basis; therefore, it is very important to carefully review its contents. Secondly, in order to regulate non-disclosure of relevant patent technology under the MRFTA, the IPR Guidelines needs to specifically provide that both the intent and effect of the non-disclosure on the standard setting process are required. Thirdly, provisions on imposing unreasonable or discriminatory royalties should be improved to take necessary considerations into account, provide specific factors or standards under the special circumstances where the patented technology is included in a standard. Fourthly, whether procedures for the disclosure of patent information and the ex ante negotiation for licensing terms have been complied with, which are provided as important factors to be considered in judging illegality, does not bear causation or close relationship with the violation of the MRFTA and failure to comply with such procedures should not be considered more seriously than other factors. Lastly, the standard for determining whether an FRAND-encumbered SEP holder’s filing for injunctive relief may be anti-competitive can be considered acceptable compared with the recent practical developments in other jurisdictions.
Germain Gaudin, Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE) models Vertical Relations, Opportunism, and Welfare.
ABSTRACT: This paper revisits the opportunism problem faced by an upstream monopolist contracting with several retailers over secret agreements, when contracts are linear. We characterize the equilibrium under secret contracts and compare it to that under public ones in a setting which allows for general forms of demand and retail competition. We find that market distortions are more severe under secret contracts than public ones if and only if retailers' actions are strategic complements. We also investigate the effect of opportunism on firms' profits. Our main results remain robust whether retailers hold passive or wary beliefs. Finally, we discuss the implications of our results for the antitrust analysis of information exchange between competing retailers, and for the empirical analysis of 'Nash-in-Nash' models.
Sunday, October 16, 2016
Pinar Akman, University of Leeds and D. Daniel Sokol, University of Florida - Levin College of Law discuss Online RPM and MFN Under Antitrust Law and Economics.
ABSTRACT: Depending on the legal framing, behavior that might in some circumstances resemble online resale price maintenance (RPM) agreements in other circumstances may instead resemble online most favored nation (MFN) agreements. Together, the cases that involve online RPM and MFN can be viewed as a natural experiment of how antitrust economics and law can adapt to an online world. Thus far, enforcement across jurisdictions has been based on economic theories that do not always match up with legal doctrine. Doctrinal confusion can thwart business practices that may be efficient.
This paper makes a number of contributions. We distinguish issues of online RPM from traditional RPM and online RPM from online MFN. Then, we apply the economic learning on RPM and analyze the antitrust cases of online RPM and MFN to date across the United States, Europe and Australia. The last part of this paper offers policy recommendations that reduce the confusion in current legal doctrine.
Saturday, October 15, 2016
Call for Papers: The Competition Law Scholars Forum (CLaSF) and the Centre for Antitrust and Regulatory Studies, University of Warsaw Friday 28th April 2017
Call for Papers
The Competition Law Scholars Forum (CLaSF) and
the Centre for Antitrust and Regulatory Studies, University of Warsaw
invite contributions to a workshop
“Reform of Regulation 1/2003 –Effectiveness of the NCAs and Beyond”
At the University of Warsaw, on Friday 28th April 2017
The Competition Law Scholars Forum (CLaSF) will be running a workshop on Friday 28th April 2017 at the University of Warsaw, Faculty of Management, Warsaw, Poland. The subject of the workshop will be the broad theme of ‘Reform of Regulation 1/2003 – Effectiveness of NCAs and Beyond’.
We invite abstract paper proposals from researchers, scholars, practitioners and policy-makers in relation to any issue within this broad theme. We welcome theoretical, economics-driven, practice-based or policy focused papers, and we are interested in receiving abstracts for papers which may be focused on perspectives or experience at national, regional (eg EU), or international levels, or a combination.
Contributions are invited particularly in the field of the following matters:
- Reform of Regulation 1/2003 – reactions to the EU Commission’s envisaged actions
- Independence of the NCAs
- Weaknesses of the NCAs: effective sanctions, leniency and inspections?
- The NCAs financial and expert resources
- Balancing effectiveness of the NCAs with respect to due process rights and transparency
- Effectiveness of the NCAs and judicial review by national courts (scope, intensity, level of expertness, structure)
- Functioning and effectiveness of the ECN
- Application of EU competition law by NCAs – divergence or convergence?
- The role of the EU Commission
- Local context and culture and the NCAs
The conference will consist of a mix of invited speakers and contributions chosen following this call for papers.
- Any person interested in being considered on the basis of the call for papers at the conference is asked to contact Professor Barry Rodger at email@example.com. An abstract is required of approximately 500-1000 words, to be submitted by no later than December 15, 2016, and decisions on successful submissions will be taken by January 15, 2017. Submission of presentation/draft paper is also required a week prior to the workshop.
Papers presented at the conference can be submitted to the Competition Law Review editorial board with a view to being published in the Review. Note that the Review is a fully refereed scholarly law journal: submission does not guarantee publication.
Friday, October 14, 2016
Alexander (Alexi) Maltas, Tony Lin, and Robert F. Baldwin III (all Hogan) offer A Comparison of the DOJ and FCC Merger Review Processes: A Practitioner’s Perspective.
ABSTRACT: Many headline-grabbing transactions in recent years have involved communications companies, such as Charter’s acquisition of Time Warner Cable and Bright House Networks (2016), AT&T’s acquisition of DIRECTV (2015), Comcast’s abandoned attempt to acquire Time Warner Cable (2015), AT&T’s abandoned attempt to acquire T-Mobile (2011), or Sirius’s merger with XM Radio (2008). These transactions, both successful and unsuccessful, have drawn attention to the process by which the U.S. government approves or blocks mergers and acquisitions in the communications and broadband Internet industries. Typically, before a transaction in those sectors may proceed, at least two federal agencies must clear it: the Federal Communications Commission and an antitrust agency, commonly the Department of Justice. 1 Review by these agencies differs in several key categories: (1) their standards for evaluating transactions, including who bears the burden of proof; (2) their procedures; and (3) the types of remedies that each agency is likely to pursue as a condition to approval. In addition, many other subtle differences can affect the merger review process, such as the methods of discovery employed by each agency. Understanding the similarities and differences between the agencies can help practitioners representing communications companies better navigate the review process and guide clients to a favorable outcome.
* Maureen Ohlhausen, Commissioner, Federal Trade Commission
* Xin Roger Zhang, East Concord Law
* Fay Zhou, Linklaters LLP
Stuart J. H. Graham, Georgia Institute of Technology - Scheller College of Business, Peter S. Menell, University of California, Berkeley - School of Law, Carl Shapiro, University of California, Berkeley - Haas School of Business, and Timothy Simcoe, Boston University - Questrom School of Business have put out Final Report of the Berkeley Center for Law & Technology Patent Damages Workshop.
ABSTRACT: The determination of patent damages lies at the heart of patent law and policy, yet it remains one of the most contentious topics in this field, particularly as regards the calculation of a reasonable royalty. In March 2016, the Berkeley Center for Law & Technology convened a workshop of leading “insiders” (in-house counsel, litigators (from both the assertion and defense sides), patent licensing professionals, and testifying expert witnesses) and academics (both law professors and economists) to clarify areas of consensus and disagreement regarding the treatment of patent damages. This report summarizes the discussion, key findings, and ramifications for patent case management.
Online Booking Platforms and EU Competition Law in the Wake of the German Bundeskartellamt's Booking.com Infringement Decision
Silke Heinz is a partner at law firm Heinz & Zagrosek Partnerschaft von Rechtsanwalten discusses Online Booking Platforms and EU Competition Law in the Wake of the German Bundeskartellamt's Booking.com Infringement Decision.
ABSTRACT: In price-parity or most-favoured-nation (‘MFN’) clauses, a party (supplier) agrees to grant the counterparty (customer) the best terms and conditions that it makes available to any third party. This may raise competition concerns if one party has market power because of the potential to create or increase barriers to entry for new or smaller players and because MFN clauses may reduce the supplier's incentive to lower prices, as it would have to offer the same to the MFN customer. This article examines the approach of the Federal Cartel Office (FCO) on price-parity or MFN clauses in the hotel platform sector as illustrated in its recent booking.com decision. General or ‘wide’ MFN clauses oblige hotels not to offer better terms and conditions than on the platform via any other sales channel.
Thursday, October 13, 2016
Daniel Hosken, FTC Nathan Miller, Georgetown and Matthew Weinberg, Drexel ask Ex Post Merger Evaluation: How Does it Help Ex Ante?
ABSTRACT: Economists have long understood that mergers can diminish competition. Mergers in concentrated markets can facilitate either tacit or explicit collusion by removing a competitor. The merger of competing firms selling differentiated products also can create a unilateral incentive to increase price. This happens when some of the sales that would have been lost as the result of a price increase by the acquiring firm pre-merger are now recaptured by the acquired firm post-merger. While these possibilities provide an economic rationale for merger enforcement, mergers may occur for many other reasons that could improve how markets function—they may reduce firms’ costs or improve corporate governance by disciplining bad management.
Competition Policy and the Digital Single Market in the Wake of Brexit: Is Geoblocking Always as Evil as Most Consumers Believe?
ABSTRACT: In the wake of the Brexit referendum, it is worth remembering and focusing on the Single Market as one of the European Union's major achievements. The European Commission's Digital Single Market Strategy is set out to do exactly that. It promises to unlock the full potential of the Single Market by creating better online access to digital goods and services and prohibiting geoblocking which prevents European users from shopping online cross-border or accessing digital content online across the European Union. However, will a broad prohibition of geoblocking foster competition in the Single Market?
Liyang Hou, KoGuan Law School, Shanghai Jiao Tong University explains Qualcomm: How China has Invalidated Traditional Business Models on Standard Essential Patents.
ABSTRACT: The decision adopted, last year, in China, in the Qualcomm case, by the National Development and Reform Commission has not always been interpreted correctly by commentators. For the author, that decision invalidates long-standing business models used by international firms in relation to licensing standard essential patents. It is so important that several of its aspects are likely to be taken over in guidelines currently in preparation, in that country, on antitrust regulation of IPRs.
Wednesday, October 12, 2016
Jaime Barahona, Guerrero Olivos describes Confidentiality of Leniency Material vis-a-vis Criminal Prosecution (Chile).
ABSTRACT: This article describes the institutional setting and the legal arguments that were confronted by the interested parties before the Constitutional Tribunal of Chile (‘Constitutional Tribunal’ or ‘the tribunal’) in the 2016 decision that rejected a request for criminal prosecutors to have full access to leniency material and confidential information
Allan Shampine, Compass Lexecon is Applying the Non-Discrimination Requirement of FRAND When Rates Change.
ABSTRACT: Standard-setting organizations (SSOs) incorporate patented technology into standards, such as those enabling cellular telephony. While there may have been alternatives to the patented technology prior to being included in a standard, once it is included in the standard, firms using the standard must then use the patented technology—it becomes standard essential. Holders of standard essential patents (SEPs) may be able to engage in strategic action, discriminate against some licensors, or hold up licensors by demanding payments related to access to the standard itself rather than the value of the patents. SSOs address these concerns by requiring firms whose patented technology may be included to agree to license those patents on fair, reasonable, and non-discriminatory (FRAND) terms. 1 This article will focus on the last of these requirements––that the license terms be non-discriminatory—more specifically, where license terms differ from previously negotiated arrangements. There is general agreement today that the non-discrimination requirement of FRAND means that similarly situated firms should receive similar terms and conditions (or have access to the same range of terms and conditions). 2 When a new license is being negotiated, this provides clear guidance for the course of that negotiation. The terms and conditions should be non-discriminatory relative to existing licenses. However, that does not settle all possible questions. Are there any circumstances where rates might change? If so, that change creates discrimination relative to existing licensees. When is this permissible, and how should existing licensees be treated under the non-discrimination requirement of FRAND in such circumstances?
Daniel Sokol, University of Florida examines Competition Law Compliance in India.
ABSTRACT: Although competition law compliance activities take many forms, this article focuses on the compliance function specific to cartel-related enforcement, as cartels and information exchanges between competitors have become perhaps the area of most significant emphasis in recent years in terms of detection of illegal (or potentially illegal) activity and its prosecution worldwide, including India.