Monday, May 28, 2018

Avi Goldfarb & Ajay Agrawal: "Prediction Machines: The Simple Economics of AI"

Worth watching!



May 28, 2018 | Permalink | Comments (0)

Analysis of Merger Control in A Network Products Market

Tsuyoshi Toshimitsu (School of Economics, Kwansei Gakuin University) offers an Analysis of Merger Control in A Network Products Market.

ABSTRACT: Using a horizontally differentiated three-firm model, we consider horizontal merger and antitrust policy in a network products market, where we observe network externalities and compatibilities (interconnectivities) between products and services. In particular, if the degree of network compatibilities in the case of a merger is sufficiently larger than that of product substitutability, consumer surplus is larger than in the premerger case. Thus, the proposed merger is allowed by antitrust authorities based on the positive effect on consumer surplus. In this case, the merger is Pareto improving.

May 28, 2018 | Permalink | Comments (0)

Sunday, May 27, 2018

10th IMEDIPA Conference on Competition Law and Policy Fri 8 June 2018

JUN 08

10th IMEDIPA Conference on Competition Law and Policy


£55 – £85

Actions and Detail Panel 

10th IMEDIPA Conference on Competition Law and Policy

Fri 8 June 2018, 08:30 – 18:30 EEST


£55 – £85



Event Information


10th IMEDIPA Conference on Competition Law and Policy

Organised by the UCL Centre for Law, Economics and Society, QMUL Centre for Commercial Law Studies and Institute of Studies in Competition Law and Policy - IMEDIPA 


8.45 Registration

9.00 – 9.15 Introduction and keynote speech
Judge Dimitrios Kyritsakis, Chairman of the Hellenic Competition Commission

9.15- 10.45 Panel 1: Recent developments in Greek and EU Competition Law
Chair: Prof. George Triantafillakis, Democritus University of Thrace

Lefkothea Nteka, Hellenic Competition Commission
- Emmanuel Dryllerakis, Dryllerakis & Associates
- Prof. Alexandra Mikroulea, University of Athens Law School
- Marina Androulakakis, Bernitsas Law Firm
- Violetta Panagiotopoulou, KG Law Firm

10.45 – 11.15 Break

11.15 – 12.45 Panel 2: Digital competition law [online vertical restraints, digital platforms and data protection, the Internet of Things and competition law]
Chair: Judge Ian Forrester, General Court of the EU

Nick Banasevic, European Commission, DG Competition
- Prof. William Kovacic, George Washington University, Kings’ College London and UK CMA
- Prof. Bjorn Lundqvist, University of Stockholm
- Prof. Damien Geradin, Tilburg University, UCL & Euclid Law Firm
- Dimitris Loukas, Potamitis Vekris
- Prof. Dimitris Tzouganatos, University of Athens Law School

12.45 – 14.00 Panel 3: Competition law and policy in the food sector
Chair: Dr. Bogdan Chiritoiu

Prof. Ioannis Lianos, UCL Faculty of Laws
- Prof. Nikos Vettas, Athens University of Economics and Business
- Gregory Pelecanos, Ballas, Pelecanos & Associates
- Vassilis Karagiannis, KLC Law Firm
- Prof. Ioannis Kokkoris, Queen Mary University London

14.00 – 15.00 Lunch

15.00 – 16.30 Panel 4: Article 102 TFEU after Intel and Google Search
Chair: Chair: Prof. Ioannis Kokkoris

- Judge Ian Forrester, General Court of the EU
- Prof. Yannis Katsoulacos, Athens University of Economics and Business
- Prof. Nick Economides, NYU Stern Business School
- Dr. Miguel de la Mano, Compass Lexecon
- Dr. Assimakis Komninos, White & Case
- Efthymia Armata, Stavropoulos and Partners

16.30 – 17.00 Break

17.00 – 18.30 Panel 5: Substantive and Procedural/Enforcement reforms in EU competition law in an era of populism
Chair: Prof. Ioannis Lianos, UCL Faculty of Laws 

- Judge Ian Forrester, General Court of the EU
- Ms Anna Nakou, Vice-President, Hellenic Competition Commission
- Dr. Bogdan Chiritoiu, President, Romanian Competition Council
- Dr. Sarunas Keserauskas, President, Lithuanian Competition Council
- Prof. William Kovacic, George Washington University, Kings’ College London and UK CMA
- Prof. Jacques Steenbergen, President of the Belgian Competition Authority

May 27, 2018 | Permalink | Comments (0)

Friday, May 25, 2018

Antitrust History: Hale Brothers Department Store


May 25, 2018 | Permalink | Comments (0)

Zone Pricing in Retail Oligopoly

Brian Adams (Bureau of Labor Statistics) and Kevin R. Williams (Cowles Foundation, Yale University) study Zone Pricing in Retail Oligopoly.

ABSTRACT: We quantify the welfare effects of zone pricing, or setting common prices across distinct markets, in retail oligopoly. Although monopolists can only increase profits by price discriminating, this need not be true when firms face competition. With novel data covering the retail home improvement industry, we find that Home Depot would benefit from finer pricing but that Lowe’s would prefer coarser pricing. Zone pricing softens competition in markets where firms compete, but it shields consumers from higher prices in rural markets, where firms might otherwise exercise market power. Overall, zone pricing produces higher consumer surplus than finer price discrimination does.

May 25, 2018 | Permalink | Comments (0)

Should Profit Margins Play a More Decisive Role in Merger Control? - A Rejoinder to Jorge Padilla

Tommaso M. Valletti, Imperial College Business School; University of Rome, Tor Vergata - Department of Financial and Quantitative Economics; Centre for Economic Policy Research (CEPR) and Hans Zenger, European Union - Directorate General for Competition ask Should Profit Margins Play a More Decisive Role in Merger Control? - A Rejoinder to Jorge Padilla.

ABSTRACT: According to empirical research, recent times have seen a significant increase in firms' profit margins. Higher profit margins are a reflection of increased pricing power. 
Prospective mergers are more likely to cause competition concerns the higher firms' pricing power is to begin with.

May 25, 2018 | Permalink | Comments (0)

Debunking the ‘Network Effects’ Bogeyman

David Evans - Global Economics Group and UCL and Richard Schmalensee Massachusetts Institute of Technology (MIT) - Sloan School of Management are Debunking the ‘Network Effects’ Bogeyman.

ABSTRACT: It is currently fashionable to argue that certain “network” industries—like telephones in the old days or various internet platforms today—are subject to market power because of “network effects”: lock-in by early movers. However, recent history belies that; Facebook displaced MySpace and Orkut, Amazon displaced eBay, Android and iPhone displaced Blackberry, Spotify displaced iTunes, Google displaced a slew of earlier search engines, and so forth. Though there are reasons to monitor these networks for market power, current fears of that power are more the product of political slogans than substantiated economics.

May 25, 2018 | Permalink | Comments (0)

Promoting Due Process in Global Antitrust Enforcement - Council of Foreign Relations Friday, June 1, 2018

Promoting Due Process in Global Antitrust Enforcement

SpeakerMakan Delrahim

Assistant Attorney General, Antitrust Division, U.S. Department of Justice

Presider John B. Bellinger III

Adjunct Senior Fellow for International and National Security Law, Council on Foreign Relations; Partner, Arnold & Porter Kaye Scholer LLP


Competition enforcement agencies around the world seek to promote due process in antitrust investigation and enforcement procedures. Policy recommendations from international organizations and legally binding commitments in free trade agreements reflect these concerns. Please join Makan Delrahim to discuss fresh thinking on ways to promote procedural convergence in global antitrust enforcement.


May 25, 2018 | Permalink | Comments (0)

Thursday, May 24, 2018

Corporate Financial Penalties for Cartel Conduct in Australia: A Critique

Caron Beaton-Wells, Melbourne Law School and Julie N. Clarke, Melbourne Law School offer Corporate Financial Penalties for Cartel Conduct in Australia: A Critique.

ABSTRACT: Moves are afoot to review the approach taken to assessment of civil penalties for contraventions of Australia’s competition laws. The Australian Competition and Consumer Commission has made it clear that penalties are being set at levels too low to effectively deter and the OECD has recently published a report confirming that Australia has failed to keep pace with international trends in this field over the last decade. This paper contributes to the debate, with a particular focus on the level of and method for setting financial penalties for corporations for cartel conduct. It presents detailed statistics on the level of corporate financial penalties imposed from the time of enactment of the then Trade Practices Act 1974 to December 2017. It draws comparisons with corporate fines imposed in other jurisdictions, highlighting the substantial gap between Australia and major jurisdictions, the European Union and United States especially. The paper compares and critically analyses the approach taken in Australia and that taken in many other jurisdictions to penalty assessment and makes a series of recommendations calling for reforms that would shift the dial towards more effective deterrence in this jurisdiction.

May 24, 2018 | Permalink | Comments (0)

Announcing the Death of Colgate: The Form and Substance of Vertical Price Fixing Agreements

Thomas K. Cheng, The University of Hong Kong - Faculty of Law is Announcing the Death of Colgate: The Form and Substance of Vertical Price Fixing Agreements.

ABSTRACT: This Article examines the agreement requirement in resale price maintenance (“RPM”) cases and the longstanding exception to the ban on RPM under the Colgate doctrine. It argues for the abolition of the doctrine for a number of reasons. First, there are no persuasive theoretical justifications for requiring an agreement in RPM cases as the most relevant purpose served by an agreement requirement under antitrust law does not apply to RPM. Second, there is no logically coherent and theoretically sound theory of agreement under the doctrine, which means that there is no principled way to apply the agreement concept in RPM cases. Third, there is no sound economic basis for requiring an agreement in RPM cases as none of the main theories of harm and pro-competitive justifications of RPM is premised on an agreement. Finally, it is argued that the Colgate doctrine has provided a highly unsatisfactory safe harbor for businesses to implement RPM due to costs and manpower involved in complying with the jurisprudence under Colgate. This Article also argues that dealer termination requires a different treatment from that accorded by Monsanto and Business Electronics after Leegin and proposes a framework for determining the legality of dealer termination independent of the existence of an RPM scheme.

May 24, 2018 | Permalink | Comments (0)

Antitrust History: Klors


May 24, 2018 | Permalink | Comments (1)

KPN BV v European Commission: EU Merger Clearance Annulled for Insufficient Reasoning

Jérémie Jourdan, and Martin Möllmann report on KPN BV v European Commission: EU Merger Clearance Annulled for Insufficient Reasoning.

ABSTRACT: On 26 October 2017, the General Court handed down a judgement annulling, for lack of reasoning, the Commission’s decision of 10 October 2014 clearing Liberty Global’s acquisition of Ziggo. This case follows a recent annulment by the General Court of the Commission decision prohibiting the UPS/TNT merger, but this time the Court annulled a clearance decision, following which the parties had consummated the transaction. It is rare that Commission decisions approving a merger are challenged successfully, and such outcomes raise significant practical challenges, for the Commission must re-examine the merger under current market conditions, which may have changed dramatically in fast-moving industries such as the telecom industry.

May 24, 2018 | Permalink | Comments (0)

Trade Associations, Information Exchange, and Cartels

Spencer Waller, Loyola Chicago explores Trade Associations, Information Exchange, and Cartels.

ABSTRACT: Trade associations can play a procompetitive role in an economy but, as an association of actual and potential competitors, can also raise important competition law issues that must be addressed carefully by legal counsel. This Issue Paper presents a hypothetical problem that illustrates many of the issues that counsel can confront in representing a trade association, its members, or company executives. The Issue Paper raises many of the issues from a United States’ perspective with occasional comparative examples from other jurisdictions. Carefully consider how your jurisdiction would, and should, address these all too real issues. In thinking about the competition law and best practices in your jurisdiction, also consider how the best legal advice possible will be subverted unless there is a true culture of compliance in the industry, enterprises, and employees in question.

May 24, 2018 | Permalink | Comments (0)

Wednesday, May 23, 2018

Antitrust's Unconventional Politics

Dan Crane, Michigan explores Antitrust's Unconventional Politics.

ABSTRACT: For the first time in a generation, political pressure is growing to reform antitrust in a considerably more interventionist direction. To the bafflement of many observers, these political pressures are emerging simultaneously from both wings of the political spectrum. Although unconventional in presentist right/left terms, antitrust's ideological ambiguity has longstanding historical roots. This Essay examines three historical friction points that help explain the current political dislocations around antitrust reform: (1) the coupling of ideological aversion to large scale in government and business; (2) the shifting meaning of the word "monopoly," from exclusive governmentally granted privilege to privately obtained market power; and (3) pragmatic concerns that antitrust enforcement is necessary to the survival of the capitalist order.

May 23, 2018 | Permalink | Comments (0)

The Competitive Effect of a Bank Megamerger on Credit Supply

Hombert, Johan; Fraisse, Henri; and Lé, Mathias discuss The Competitive Effect of a Bank Megamerger on Credit Supply.

ABSTRACT: We study the effect of a merger between two large banks on credit market competition. We identify the competitive effect of the merger using matched loan-level and firm-level data and exploiting variation in the merging banks' market overlap across local lending markets. On the credit market side, we find a reduction in lending, in particular through termination of relationships. In the average market, bank credit decreases by 2.7%. On the real side, firm exit increases by 4%, whereas firms that do not exit and firms that start up experience no adverse real effect on investment and employment.

May 23, 2018 | Permalink | Comments (0)

Four cases in sports competition policy: Baseball, judo, football, and motor racing

Oliver Budzinski discusses Four cases in sports competition policy: Baseball, judo, football, and motor racing.

ABSTRACT: Practices and conducts in professional and even amateur sports can be subject to competition laws as soon as commercial activities are involved. From an economic perspective, this implies that both directly commercial activities like the sale of broadcasting/media rights and indirectly commercial activities like defining and enforcing the rules of the games can be hit by competition policy interventions. Setting and enforcing the rules of the game is an activity with commercial effects because it influences attractiveness and marketability of the sports in question. After discussing fundamental issues, this contributions reviews selected landmark cases in sports competition policy from an economic perspective. This includes the U.S. baseball antitrust exemption, access rules to Judo tournaments, sale systems of media rights in European football as well as a unique combination of long-run exclusivity contracts, skewed allocation of common revenues, and special influences on rule-setting by some competitors in Formula One motor racing. Eventually, the areas of state aid to football clubs and mergers in Danish football are sketched.

May 23, 2018 | Permalink | Comments (0)

Market-internal financial regulation in sports as an anticompetitive institution

Oliver Budzinski explores Market-internal financial regulation in sports as an anticompetitive institution.

ABSTRACT: Financial regulation in sports is usually discussed in the context of representing an instrument against "financial doping". Notwithstanding the merits of this discussion, this paper takes the opposite perspective and analyses how market-internal financial regulation itself may anticompetitively influence sporting results. Virtually every regulative financial intervention distorts sporting competition to some extent and creates beneficiaries and losers. Sometimes, the actual winners and losers of financial regulation stand in line with the (legitimate) goals of the regulation like limiting financial imbalances or preventing distortive midseason insolvencies of teams. However, financial regulation may also display unintended side-effects like protecting hitherto successful teams from new challengers, cementing the competitive order, creating foreclosure and entry barriers, or serving vested interests of powerful parties. All of these effects may also be hidden agendas by those who are implementing and enforcing market-internal financial regulation or influencing it. This paper analyses various types of budget caps (including salary caps) with respect to potentially anticompetitive effects. UEFA's so-called Financial Fair Play Regulations are highlighted as an example. Furthermore, the paper discusses allocation schemes of common revenues (like from the collective sale of broadcasting rights) as another area of financial regulation with potentially anticompetitive effects. Eventually, the effects of standards for accounting, financial management, and auditing are discussed.

May 23, 2018 | Permalink | Comments (0)

Tuesday, May 22, 2018

Assistant Attorney General Makan Delrahim Delivers Remarks at the Jevons Colloquium in Rome

See Delrahim's speech All Roads Lead to Rome: Enforcing the Consumer Welfare Standard in Digital Media Markets here.

Highlights include:

I believe that three additional indicators of consumer welfare deserve greater attention in analyzing competitive effects in digital markets: innovation, choice, and quality. The Supreme Court and other courts, in describing antitrust as “a comprehensive charter of economic liberty,” often invoke these three concepts and note that innovation, consumer choice, and product quality constitute competitive effects that merit consideration in an antitrust analysis. Because these factors can be difficult to quantify, they often play a subsidiary role to price and output measures.

Given the challenges in defining and measuring output in platform markets, innovation, choice, and quality can serve as valuable metrics for competitive effects. They are all consistent with the Sherman Act’s overarching consumer welfare prescription.


As I explained in Chicago, a careful, evidence-based approach is necessary to evaluating these claims, in order to minimize the risk of false positives. Fresh thinking, including theoretical and empirical work in this area, is warranted. A key question that enforcers should answer is whether the presence of network effects can dilute the ability of new competitors to emerge or whether they pose a significant competitive challenge to entrenched incumbents. Network effects may work in different ways in different markets, but in certain markets, they may operate such that there is a higher risk—or an increased probability—of recoupment following a period of below-cost pricing. 

As enforcers, we must be very careful in our enforcement actions to ensure that we don’t punish the very competitors who have won the race we have encouraged them to compete in. At the same time, we must be vigilant in utilizing the tools provided to us within a sound antitrust and economic framework. In particular, we should not hesitate to bring an action where there is evidence of harm to competition manifested through higher prices, lower output, reduced innovation, undue restrictions in consumer choice, or a serious deterioration in quality. Failure to enforce the antitrust laws in a timely manner may result in heavy-handed government regulation later. Rarely a preferred result to free market competition. 


May 22, 2018 | Permalink | Comments (0)

Buyer Power and Non-Binding Retail Price Recommendations

In Kyung Kim (Nazarbayev University) and Vladyslav Nora (Nazarbayev University) share Buyer Power and Non-Binding Retail Price Recommendations.

ABSTRACT: We study how the use of non-binding retail price recommendations (RPRs) is affected by buyer power in grocery retail market. Adopting the idea that RPRs serve as information sharing device between manufacturers and retailers, we show that increasing buyer power discourages the use of RPRs. Using the hand collected data set on the presence of RPRs for grocery products in Korea, we find that the more the sales of a product rely on powerful retailers, the less likely the manufacturer is to recommend a price, and hence share the information.

May 22, 2018 | Permalink | Comments (0)

Multi-product firms and product quality

Manova, Kalina and Yu, Zhihong examine Multi-product firms and product quality.

ABSTRACT: We examine the global operations of multi-product firms. We present a flexible heterogeneous-firm trade model with either limited or strong scope for quality differentiation. Using customs data for China during 2002-2006, we empirically establish that firms allocate activity across products in line with a product hierarchy based on quality. Firms vary output quality across their products by using inputs of different quality levels. Their core competence is in varieties of superior quality that command higher prices but nevertheless generate higher sales. In markets where they offer fewer products, firms concentrate on their core varieties by dropping low-quality peripheral goods on the extensive margin and by shifting sales towards top-quality products on the intensive margin. The product quality ladder also governs firms' export dynamics, both in general and in response to the exogenous removal of MFA quotas on textiles and apparel. Our results inform the drivers and measurement of firm performance, the effects of trade reforms, and the design of development policies.

May 22, 2018 | Permalink | Comments (0)