Antitrust & Competition Policy Blog

Drip pricing and its regulation: Experimental evidence

Rasch, Alexander; Thöne, Miriam; Wenzel, Tobias offer Drip pricing and its regulation: Experimental evidence.

ABSTRACT: We experimentally examine the effects of drip pricing on seller strategies and buyer behavior as well as the implications for regulation. Sellers set two prices: a base price and a drip price. At first, buyers only observe the base prices and make a tentative purchase decision. Revealing the sellers' drip prices, however, comes at a cost. We find that sellers only compete in base prices and set the highest possible drip price. This makes the base price a reliable indicator for the lowest total price, and few consumers invest in drip-price search. A comparison with Bertrand competition reveals significant effects: With drip pricing, consumer surplus is lower, and seller profits are higher. When there is uncertainty over possible drip sizes, sellers also compete over drips, and consumers more frequently fail to identify the cheapest offer. Bertrand competition also leads to higher consumer surplus and lower firm profits in this case. Hence, our results point to positive effects of drip-price regulation.

Market Power and Welfare in Asymmetric Divisible Good Auctions

Manzano, Carolina (Rovira i Virgili University) and Vives, Xavier (IESE Business School) express Market Power and Welfare in Asymmetric Divisible Good Auctions.

ABSTRACT: We analyze a divisible good uniform-price auction that features two groups each with a finite number of identical bidders. Equilibrium is unique, and the relative market power of a group increases with the precision of its private information but declines with its transaction costs. In line with empirical evidence, we .nd that an increase in transaction costs and/or a decrease in the precision of a bidding group.s information induces a strategic response from the other group, which thereafter attenuates its response to both private information and prices. A "stronger" bidding group -which has more precise private information, faces lower transaction costs, and is more oligopsonistic- has more market power and so will behave competitively only if it receives a higher per capita subsidy rate. When the strong group values the asset no less than the weak group, the expected deadweight loss increases with the quantity auctioned and also with the degree of payoff asymmetries. Market power and the deadweight loss may be negatively associated.

The American Antitrust Institute is Seeking a Vice President of Policy

 

The American Antitrust Institute is Seeking a Vice President of Policy   The Vice President of Policy (VP of Policy) develops, implements, and integrates AAI's policy agenda across advocacy, education, and research programs to advance AAI's mission, expand AAI's influence and impact on competition enforcement and policy, and promote organizational sustainability. The VP of Policy works collaboratively with the AAI president, staff, consultants, Advisory Board, and other supporters, as appropriate, to fulfill the responsibilities of the position.   RESPONSIBILITIES: Policy Advocacy Agenda: Identify opportunities for and develop a variety of AAI work product (e.g., letters, white papers, commentary, testimony) that maintain and advance AAI positions on major antitrust policy issues. Leverage knowledge of complementary competition policy issues (e.g., regulation, privacy, trade, labor, intellectual property) to reinforce AAI policy positions. Integration Across Program Areas: Promote the integration of AAI's advocacy, research, and education programs. Identify and develop opportunities to highlight, advance, and expand AAI policy positions through mutually reinforcing advocacy, research, and education initiatives. Work with supporters to identify and create multi-program opportunities to encourage sustainable engagement. Outreach and Networking: Work to maximize exposure and attention to AAI's policy work product. Maintain existing relationships, and identify opportunities to establish new relationships, with other advocacy organizations to support AAI's mission and sustainability. Respond to media inquiries and seek outside speaking engagements, as appropriate, relevant to AAI's policy work. Regularly attend AAI and other meetings, conferences and other networking gatherings. Fundraising and Administration: Independently generate sponsorships, contributions, and other forms of financial and related support for AAI. Assist in planning, organizing, and implementing AAI events and other internal administrative matters. Utilize and manage AAI interns and research fellows. QUALIFICATIONS: Ideal candidates will possess an advanced degree in law, economics, or public policy, a portfolio of excellent academic credentials, experience, and references, and 12+ years of professional experience in private, government, or other advocacy settings.  Candidates must have excellent analytical and writing skills and a comprehensive understanding of antitrust enforcement, policy, and law.  Candidates will have a demonstrated record of working collaboratively on teams, a robust network of connections in the competition community, and the ability to fulfill organizational mission and sustainability objectives. Please direct inquiries to [email protected].

Antitrust Out of Focus: The FTC Misses the Mark In Dogged Pursuit of 1-800’s Trademark Settlements

Geoffrey A. Manne, International Center for Law & Economics (ICLE), Hal J. Singer, Econ One, and Joshua D. Wright, George Mason University - Antonin Scalia Law School, suggest Antitrust Out of Focus: The FTC Misses the Mark In Dogged Pursuit of 1-800’s Trademark Settlements.

ABSTRACT: On November 14, 2018, the Federal Trade Commission (“Commission”) issued an opinion condemning as an antitrust violation trademark settlement agreements between 1-800 Contacts (“1-800”) and fourteen online sellers of contact lenses. The settlement agreements arise from trademark infringement claims brought by 1-800 against these online rivals. FTC Chairman Joseph Simons authored the Commission’s opinion, joined by the two Democratic Commissioners, Rohit Chopra and Rebecca Slaughter. In finding that the settlement agreements violated Section 1 of the Sherman Act, Chairman Simons and the majority commit two critical errors—one legal, the other economic—that render the Commission’s opinion, in our view, highly vulnerable to reversal upon its inevitable appeal. With respect to the legal infirmity, the Commission incorrectly concludes the challenged agreements are “inherently suspect,” and applies a truncated rule of reason analysis to assess whether the agreements harmed competition. As explained in Commissioner Noah Phillips’ dissent, a truncated analysis is not supported in this case either by judicial experience or economic learning, and was thus inappropriately applied. The second error is application of an economic analysis to claim the agreements have caused anticompetitive effects that falls woefully short of evidence of consumer injury. We predict reversal by an appellate court.

Suppliers As Forgotten Cartel Victims

Jens-Uwe Franck, University of Mannheim - Department of Law and Martin Peitz, University of Mannheim - Department of Economics discuss Suppliers As Forgotten Cartel Victims. Worth downloanding!

ABSTRACT: Antitrust law has always allowed buyers of the products of a pricefixing cartel to obtain compensation even when the buyers are not consumers, but rather downstream firms in the supply chain, and even when these firms are able to pass the increase in price brought about by the cartel on to the ultimate consumer of the finished good. Antitrust has so far failed to appreciate, however, that suppliers to a cartel or to the cartel’s customers are in the same economic position as buyers from a cartel insofar as they suffer the harm of reduced output, because those higher cartel prices reduce demand, and that in turn reduces the amount of inputs the cartel demands from suppliers. Moreover, component suppliers will have to lower their prices in reaction to the reduced demand and so will sustain damage due to a cartel-induced underpayment that is economically related to the overcharge that harms the cartel’s customers. It is argued that the courts should reverse the current doctrine, which essentially limits antitrust standing to direct purchasers. While this would constitute a major change under federal law, it would be consistent with current law in those states that grant antitrust standing to indirect purchasers.

Who Benefits From Banning Discriminatory Wholesale Pricing When Retailers Can Price Match?

Arcan Nalca, Smith School of Businessand Gangshu (George) Cai, Santa Clara University ask Who Benefits From Banning Discriminatory Wholesale Pricing When Retailers Can Price Match?

ABSTRACT: In this paper, we identify the impact of retailers’ price-matching guarantees on supply chain efficiency and consumer welfare by taking the manufacturer’s pricing decision into consideration. Specifically, we investigate the interaction between retailers’ price-matching guarantees and manufacturer’s discriminatory wholesale pricing.

We show that, in the presence of a regulation against discriminatory wholesale pricing regime, retailers tacitly collude by offering the price-matching guarantee. However, the collusive role of price-matching guarantees subsides if the manufacturer is allowed to follow a discriminatory wholesale pricing regime. Therefore, a ban on wholesale price discrimination (e.g., the Robinson- Patman Act) in an industry where retailers can offer price-matching guarantees reduces supply chain efficiency, consumer welfare, and consumer surplus. As such, we find wholesale price discrimination to be welfare improving. These findings complement the extant literature, which shows that (i) banning wholesale price discrimination can be welfare improving in the absence of price-matching guarantees, and (ii) price-matching guarantees allow retailers to collude when the wholesale prices are exogenously set. Moreover, the negative impact of price-matching guarantees arising from banning wholesale price discrimination grows stronger with retailer asymmetry, and is more likely to happen if retailers are asymmetric in terms of operational rather than market efficiency. In the presence of a regulation against discriminatory wholesale pricing under retailer asymmetry, there exists a Pareto zone such that all firms prefer that only one of the two retailers offer a price-matching guarantee. Our results are robust with respect to customer heterogeneity on price-matching information.

The Increasing Cross-Border Importance of Innovation in Merger Review

Jennifer Fauver, Marsh & McLennan Companies - Washington, D.C. Office, Subbu Ramanarayanan, University of California, Los Angeles (UCLA) - Policy Area, and Nicola Tosini, NERA Economic Consulting explore The Increasing Cross-Border Importance of Innovation in Merger Review.

ABSTRACT: In this article, we discuss the specific economic mechanisms underlying how mergers might affect the merging parties’ incentives to innovate ex post. We then discuss these mechanisms in the context of several illustrative merger reviews and challenges brought by U.S. and EU antitrust authorities where concerns about innovation played a meaningful role in the agency’s decision to challenge the merger. And, finally, to provide specific guidance to antitrust practitioners on navigating agency investigations where innovation concerns may feature prominently, we discuss the evidence and analyses used by the antitrust agencies to assess innovation effects in recent merger reviews.

Latest Competition Lore podcast episodes

Ep 20 with Dr Katharine Kemp, University of New South Wales, explaining the ACCC’s preliminary findings and recommendations in its Inquiry into Digital Platforms; and

Ep 21 with Samantha Knox, Facebook’s Associate General Counsel, Competition, responding to the ACCC’s analysis and proposals.

Burdens and Balancing in Multisided Markets: The First Principles Approach of Ohio v. American Express

Joshua D. Wright, George Mason University - Antonin Scalia Law School, Faculty and John M. Yun, George Mason University - Antonin Scalia Law School, Faculty describe Burdens and Balancing in Multisided Markets: The First Principles Approach of Ohio v. American Express.

ABSTRACT: Multisided platforms have distinct and critical features that set them apart from single-sided markets. This realization has led to a split among courts, antitrust practitioners, and economists as to the best method to assess whether mergers or conduct that involve platforms result in the creation or maintenance of monopoly power and violate the antitrust laws. Some argue that each side of a platform constitutes a separate relevant product market. Others argue for a single, integrated market that incorporates all sides. We argue that any prima facie antitrust assessment of competitive harm must incorporate the impact to consumers on all sides regardless of market definition. We also explain why output effects should be the primary emphasis of competitive effects analyses. The Supreme Court recently and correctly adopted this approach in Ohio v. American Express.

Artificial Intelligence, Algorithmic Pricing and Collusion

Emilio Calvano, University of Bologna - Department of Economics; University of Toulouse 1 - Department of Economics; CSEF - Center for Studies in Economics and Finance, Giacomo Calzolari, European University Institute - Economics Department (ECO); Centre for Economic Policy Research (CEPR); University of Bologna, Vincenzo Denicolò, University of Bologna, and Sergio Pastorello, University of Bologna - Department of Economics have a fascinating paper on Artificial Intelligence, Algorithmic Pricing and Collusion. Worth downloading!

ABSTRACT: Pricing algorithms are increasingly replacing human decision making in real marketplaces. To inform the competition policy debate on possible consequences, we run experiments with pricing algorithms powered by Artificial Intelligence in controlled environments (computer simulations).
In particular, we study the interaction among a number of Q-learning algorithms in the context of a workhorse oligopoly model of price competition with Logit demand and constant marginal costs. We show that the algorithms consistently learn to charge supra-competitive prices, without communicating with each other. The high prices are sustained by classical collusive strategies with a finite punishment phase followed by a gradual return to cooperation. This finding is robust to asymmetries in cost or demand and to changes in the number of players.

 

Mergers of Capacity-Constrained Firms

Daniel Greenfield, FTC and Jeremy Sandford, FTC analyze Mergers of Capacity-Constrained Firms.

ABSTRACT: Merging firms regularly argue that mergers involving capacity-constrained firms are unlikely to be anti-competitive, because the incentive for the merged firm to raise prices and reduce quantity may not be strong enough to generate slack in the capacity constraints and lead to higher prices. We construct a modified notion of upward pricing pressure called ccGUPPI, or capacity constrained GUPPI, which accounts for the upward prices pressure from binding capacity constraints, in addition to standard merger price effects. ccGUPPI is sufficient to correctly predict whether a merger of capacity-constrained firms will have positive price effects, irrespective of the functional form of demand. Further, using Monte Carlo simulation, we show that ccGUPPI is generally a useful proxy for actual price effects, with lower informational requirements than full merger simulation.

Collusion By Blockchain And Smart Contracts

Thibault Schrepel, Utrecht University School of Law; University Paris 1 Panthéon-Sorbonne identifies Collusion By Blockchain And Smart Contracts.

ABSTRACT: Blockchain may transform transactions the same way Internet altered the dissemination and nature of information. If that were to be the case, all relationships between companies would change, including prohibited ones such as collusive agreements. For that reason, the stakes are fundamental and the absence of academic studies entirely dedicated to the issue must be remedied.

To this end, this article introduces the first taxonomy of collusion on blockchain. The discussion then moves on to explore their functioning, their robustness and their limits through the three fundamental stages of the existence of collusive agreements: their birth, life and death. The article further highlights how companies may use smart contracts and sophisticated algorithms to collude in the blockchain environment, thus contributing to the literature solely focused on algorithms.

Using empirical studies, economic analyses and existing case law, we draw legal conclusions that we extend beyond the sole blockchain technology. Along the way, we propose methods of action for antitrust and competition agencies.

Memorandum: Will the International Trade Commission or the Antitrust Division Set Policy on Monopoly and Innovation?

J. Gregory Sidak Criterion Economics, L.L.C. asks Memorandum: Will the International Trade Commission or the Antitrust Division Set Policy on Monopoly and Innovation?

ABSTRACT: Will the U.S. International Trade Commission (ITC) or the Antitrust Division set policy on monopoly and innovation? I submit this memorandum to the Antitrust Division to pose this question, which arises from the ITC’s serious misapplication of antitrust law and economics in Investigation No. 337-TA-1065, Certain Mobile Electronic Devices and Radio Frequency and Processing Components Thereof (the 1065 Investigation). I was an expert economic witness for Qualcomm in this patent-infringement dispute with Apple. I explain in this memorandum why it is my opinion that the administrative law judge (ALJ) in the 1065 Investigation reached findings that conflict with controlling American antitrust jurisprudence. Those errors concern (1) the incorrect inference of monopoly power from market share alone and (2) the incorrect view that Schumpeterian competition across successive generations of monopoly cannot deliver innovation and lower quality-adjusted prices. The ALJ’s findings drive a wedge between the Antitrust Division and the ITC on how properly to use economic principles to diagnose monopoly power. As the quality of administrative adjudication deteriorates at the ITC, patent holders engaged in global disputes over licensing or infringement can choose to litigate their multijurisdictional disputes before highly sophisticated tribunals in other countries. Given what the 1065 Investigation reveals about how far the ITC’s economic sophistication on monopoly and innovation lags behind that of the Antitrust Division, why would any patent holder having the choice litigate before the ITC rather than a court in London or Germany or China?

Assistant Attorney General Makan Delrahim Delivers Remarks at George Mason Law Review 22nd Annual Antitrust Symposium Arlington, VA ~ Friday, February 15, 2019

Assistant Attorney General Makan Delrahim Delivers Remarks at George Mason Law Review 22nd Annual Antitrust Symposium Arlington, VA ~ Friday, February 15, 2019. See here.

Legitimacy Test for Criminal Sanction: Antitrust Law Perspective

Godefroy de Moncuit, University of Paris saclay; DANTE Lab; Versailles has written on a Legitimacy Test for Criminal Sanction: Antitrust Law Perspective.

ABSTRACT: The issue of imprisonment as a means to deter competition law offences is widely debated in doctrine. The purpose of this article is not to expound the ideas already mentioned in the legal literature on the advantages/disadvantages of such a sentence. This paper will focus on the question of whether imprisonment is a legitimate punishment to deter anti-competitive behaviours, regarding the theoretical, legal and/or practical difficulties encountered for a successful policy of European antitrust criminalization. To answer this question, the prison sentence issue against managers involved in cartel practices requires the application of a legitimacy test. Regarding this test, three conditions must be examined to legitimize the imprisonment of individuals responsible for an anticompetitive practice: the seriousness of the practice, the risk of type 1 error, and the social consensus on the seriousness of market violations.

Inequality and Market Concentration, When Shareholding is More Skewed than Consumption

Joshua S. Gans, University of Toronto - Rotman School of Management; NBER, Andrew Leigh, Centre for Applied Macroeconomic Analysis, ANU, Martin C. Schmalz, University of Oxford - Finance; CEPR; CESifo; European Corporate Governance Institute (ECGI), and Adam Triggs, Australian National University (ANU) address Inequality and Market Concentration, When Shareholding is More Skewed than Consumption.

ABSTRACT: Economic theory suggests that monopoly prices hurt consumers but benefit shareholders. But in a world where individuals or households can be both consumers and shareholders, the impact of market power on inequality depends in part on the relative distribution of consumption and corporate equity ownership across individuals or households. The paper calculates this distribution for the United States, using data from the Survey of Consumer Finances and the Consumer Expenditure Survey, spanning nearly three decades from 1989 to 2016. In 2016, the top 20 percent consumed approximately as much as the bottom 60 percent, but had 13 times as much corporate equity. Because ownership is more skewed than consumption, increased mark-ups increase inequality. Moreover, over time, corporate equity has become even more skewed relative to consumption.

GCR Live Pharmaceuticals, Thursday, 28 February 2019, 2112 Pennsylvania Avenue, Washington, DC

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Thursday, 28 February 2019, 2112 Pennsylvania Avenue, NW Washington, DC 20037

 

GCR is delighted to host the inaugural GCR Live Pharmaceuticals event on Thursday, 28 February 2019, chaired by J. Mark Gidley, of White & Case and Christine Siegwarth Meyer, of NERA Economic Consulting. The conference is designed to create a forum for antitrust professionals in the pharmaceuticals sector to come together and hear from the leading names in the space. It promises to be an insightful conference for lawyers specialising in both defendant and plaintiff work, in-house practitioners, consultants, industry professionals and service providers. Topics for discussion include pricing cases and what they mean for the future of pharma; and the costs and pitfalls of innovation in the industry. The conference is expected to bring in audience members from across the US and internationally, allowing delegates to connect with and learn from like-minded individuals.

E-mail Tel: +44 20 3780 4183

Register now

Chairs

J. Mark Gidley

White & Case, Washington, DC

J. Mark Gidley chairs the White & Case Global Antitrust/Competition practice, which is the only such practice to have been named Competition Group of the Year for seven years by Law360. His practice focuses on mergers and acquisitions, cartel cases, class actions, and pharmaceutical antitrust cases, with an emphasis on trying antitrust cases.

Christine Siegwarth Meyer

NERA Economic Consulting, New York

Featured as one of Global Competition Review's "Women in Antitrust," Dr. Christine Meyer is considered one of the foremost testifying economists in the areas of complex commercial litigation involving intellectual property, antitrust claims, and commercial damages. In the area of intellectual property, Dr. Meyer has analyzed damages and provided expert testimony concerning issues arising from patent, trademark, and copyright infringement, the misappropriation of trade secrets, and breaches of contract. She has considerable expertise in analyzing lost profits, reasonable royalties, price erosion, commercial success, and irreparable harm.

Keynote Speaker

Paul Csiszár

Director, Directorate General for Competition of the European Commission, Brussels

After graduating from ELTE School of Law of Budapest, Paul Csiszár studied international comparative law and earned a second Juris Doctorate at Loyola Law School in the United States. Following his admission to the Bar in 1986 in California he practiced as a corporate, securities and M&A lawyer in the US and then from 1997 in Central Europe with the international law firm of Squire Sanders until 2003 when he joined the public sector. Currently Mr Csiszár serves as Director of "Basic Industries, Manufacturing and Agriculture" at the Directorate General for Competition of the European Commission.

Speakers

Kathleen Bradish

Cleary Gottlieb Steen & Hamilton, Washington, DC

Kathleen Bradish

Cleary Gottlieb Steen & Hamilton, Washington, DC

Full biography available here

Kathleen Bradish’s practice focuses on antitrust matters, including mergers, litigation, and government investigations. Kathleen originally joined Cleary Gottlieb Steen & Hamilton in 2005 and became counsel in 2014. In 2015, she joined the U.S. Department of Justice.

Most recently, she was Assistant Chief of the DOJ Antitrust Division’s International Section. In that capacity, she served as deputy chief handling the Antitrust Division’s international relations. She was responsible for presenting the enforcement views in international settings and within U.S. agencies. Between 2015 and 2018, she was International Counsel in the DOJ’s Antitrust Division and led the Justice Department’s relationship with Canadian, Australian, and New Zealand antitrust authorities and worked extensively on matters involving China. She also worked on the revision of DOJ-FTC International Enforcement and Cooperation Guidelines.

Kathleen returned to Cleary Gottlieb Steen & Hamilton as a counsel in 2018.

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Mike Cowie

Dechert, Washington, DC

Mike Cowie

Dechert, Washington, DC

Full biography available here

Mike Cowie has handled strategic projects for some of the world’s largest and most successful companies. His advice builds upon insights gained while directing investigations for the government.

Mr. Cowie served in the Federal Trade Commission’s Bureau of Competition as Assistant Director, where he managed a 25-attorney team responsible for antitrust merger investigations. Mr. Cowie earlier served as the FTC’s Senior Litigation Counsel responsible for leading the Commission’s antitrust litigation. The FTC awarded Mr. Cowie several honors, including the FTC’s Meritorious Service and Superior Service awards, and selected him to represent the FTC in its Merger Investigation Best Practices Initiative. Mr. Cowie has been called upon to testify on antitrust matters before the U.S. Congress and in statehouse and has received honors or recognition from the Financial Times, Global Competition Review, Chambers, and The Deal.

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Thomas Dillickrath

Deputy Chief Trial Counsel, Federal Trade Commission, Virginia

Thomas Dillickrath

Deputy Chief Trial Counsel, Federal Trade Commission, Virginia

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David Emanuelson

Global Antitrust Counsel, Intel, Santa Clara

David Emanuelson

Global Antitrust Counsel, Intel, Santa Clara

David Emanuelson is the Global Antitrust Counsel at Intel Corporation.  In this role, he advises on a broad range of antitrust areas including M&A, litigation, and compliance, focusing on Intel’s Data Center Group.  Prior to working at Intel, David was the lead Americas antitrust counsel for Novartis Corporation for approximately four years and spent over a decade in private practice in Washington D.C. 

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Kai-Uwe Kühn

Professor of Economics, University of East Anglia, Norwich

Kai-Uwe Kühn

Professor of Economics, University of East Anglia, Norwich

Full biography available here

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Edward Schwartz

Reed Smith, Washington, DC

Edward Schwartz

Reed Smith, Washington, DC

Full biography available here

Ed co-leads our Antitrust & Competition Team in the Global Regulatory Enforcement Group, and has over three decades of experience defending clients in antitrust class actions and other antitrust and commercial litigation, and in criminal and civil antitrust investigations (both federal and state). He is recognized for his aggressive and successful pursuit of clients’ interests in litigation and investigations, and for his advocacy skills both in and out of the courtroom, including through trial.  He also regularly represents clients in civil and criminal investigations by the DOJ Antirust Division, the FTC and states attorneys general.

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Seth Silber

Wilson Sonsini Goodrich & Rosati, Washington, DC

Seth Silber

Wilson Sonsini Goodrich & Rosati, Washington, DC

Full biography available here

Seth Silber is a partner in the firm's Washington, D.C., office, where he focuses on advising clients in the pharmaceutical and healthcare markets, including issues concerning pharmaceutical patent settlements, mergers and acquisitions, and anticompetitive conduct. He regularly represents clients before both the Federal Trade Commission and U.S. Department of Justice.

Seth joined Wilson Sonsini Goodrich & Rosati in September 2006 after serving for six years at the Federal Trade Commission (FTC). During his tenure at the FTC, Seth obtained unique experience and insights into the commission's antitrust activities and enforcement practices, having served at all levels of the commission.

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Chris Stomberg

NERA Economic Consulting, Washington, DC

Chris Stomberg

NERA Economic Consulting, Washington, DC

Full biography available here

Dr. Chris Stomberg is an economic expert with expertise in health care and life sciences, who brings a quantitative and rigorous approach to his work. He has served as expert witness in several matters, and has led numerous litigation and consulting engagements. Chris Stomberg has focused on a range of issues affecting these industries.

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Programme

 8.45: Welcome coffee and registration

9.15: Chairs’ opening remarks

J. Mark Gidley, White & Case, Washington, DC
Christine Siegwarth Meyer, NERA Economic Consulting, New York 

9.30: Keynote address

Paul Csiszár, Director, Directorate General for Competition of the European Commission, Brussels

10.15: Pricing cases: what do they mean for the future of pharma?

The scrutiny of pricing in the pharmaceuticals sector has, if anything, become fiercer in 2018. How has this enforcement by the agencies and court decisions from private litigation affected the industry and its business practices?

Questions the panel are expected to discuss include:

• What is the effect of industry consolidation on drug pricing?

• How are the agencies evaluating the effect of mergers on short-term and longer-term pricing?

• How has alleged collusion in the generic drugs market affected pricing, and how will those cases affect future enforcement?
• How effective are “pay-for-delay” settlements in today’s industry?

Moderator:
Seth Silber, Wilson Sonsini Goodrich & Rosati, Washington, DC

Panellists:
Thomas Dillickrath, Deputy Chief Trial Counsel, Federal Trade Commission, Virginia
Edward Schwartz, Reed Smith, Washington, DC
Chris Stomberg, NERA Economic Consulting, Washington, DC

11.30: Coffee break and welcome from Ken Reinker, Cleary Gottlieb Steen & Hamilton

12.00: Innovation: a double-edged sword?

Innovation is commonly accepted as beneficial for consumers and the market, but pharmaceutical companies have also been accused of using innovation and patents as an anti-competitive sword against potential competitors. How can companies understand what is ‘good’ and ‘bad’ innovation?

Questions the panel are expected to discuss include:

• Is the pharmaceutical industry in need of more regulation - or less?
• Is product hopping to extend patent life a clever tactic, or deleterious for the market?
• How are method of use patents seen by authorities and courts?
• What has been and will be the impact of alleged sham patent litigation?
• How should innovation be considered in merger review in the pharma sector?

Moderator:
Kathleen Bradish, Cleary Gottlieb Steen & Hamilton, Washington, DC

Panellists:
Mike Cowie, Dechert, Washington, DC
David Emmanuelson, Global Antitrust Counsel, Intel, California
J. Mark Gidley, White & Case, Washington, DC
Kai Uwe-Kuhn, Professor of Economics, University of East Anglia, Norwich

13.15: Chairs’ closing remarks

J. Mark Gidley, White & Case, Washington, DC
Christine Siegwarth Meyer, NERA Economic Consulting, New York 

13.30: Networking lunch

LeadershIP 2019 March 26 | Newseum | Washington, DC

LeadershIP 2019 Register here. March 26 | Newseum | Washington, DC Since 2014, LeadershIP has been a platform for experts, thought leaders, and policy makers with diverse viewpoints to debate global legal and economic issues at the intersection of international IP and competition law.   The program for LeadershIP 2019 will begin with a morning keynote by Senator Thom Tillis (R-NC), where he will address the current state of patent legislative reforms in the US Congress. In addition, USPTO Director Andrei Iancu and AAG Makan Delrahim will be featured in a Fireside Chat moderated by the Honorable Kathleen O'Malley, US Court of Appeals for the Federal Circuit.     The agenda themes for the day are: The impact of 5G: Why Innovation Policy Matters The IP Policy Landscape: US and The World IP and Antitrust: Global Agency Dynamics International Antitrust: What Rules and Whose Standards?

Can Partial Horizontal Ownership Lessen Competition More Than a Monopoly?

Duarte Brito, New University of Lisbon, Ricardo Ribeiro, Universidade Católica Portuguesa, Católica Porto Business School, and Helder Vasconcelos, Universidade do Porto - Faculdade de Economia (FEP) ask Can Partial Horizontal Ownership Lessen Competition More Than a Monopoly?

ABSTRACT: In this paper we investigate the anti-competitive effects of partial horizontal ownership in a setting where: (i) two cost-asymmetric firms compete à la Cournot; (ii) managers deal with eventual conflicting interests of the different shareholders by maximizing a weighted sum of firms' operating profits; and (iii) weights result from the corporate control structure of the firm they run. Within this theoretical structure, we find that if the manager of the more efficient firm weights the operating profit of the (inefficient) rival more than its own profit, then partial ownership can lessen competition more than a monopoly.

Should Jurisdictional Clauses Be Interpreted Differently in Competition Law Cases? A Comment on Case C-595/17 Apple

Pedro Caro de Sousa, Organization for Economic Co-Operation and Development (OECD) asks Should Jurisdictional Clauses Be Interpreted Differently in Competition Law Cases? A Comment on Case C-595/17 Apple.

ABSTRACT: Does a widely worded jurisdictional clause encompass competition law disputes? In Europe, the starting point for this analysis is Article 23 of Regulation No 44/2001 – i.e. the Brussels I Regulation – which allows parties to agree on the jurisdiction where to settle any disputes which have arisen or which may arise in connection with a particular legal relationship.

In CDC Hydrogen Peroxide, the ECJ held that a generally worded jurisdiction clause “can concern only disputes which have arisen or which may arise in connection with a particular legal relationship, which limits the scope of an agreement conferring jurisdiction solely to disputes which arise from the legal relationship in connection with which the agreement was entered into.” It follows that generally worded jurisdiction clauses cannot extend to a dispute relating to the tortious liability that one party allegedly incurred as a result of its participation in an unlawful cartel because a cartel could not have been reasonably foreseen by the parties when they entered into such a clause, and such litigation cannot be regarded as stemming from a contractual relationship.

What if one party in a contract brings a claim against the other on the basis of another competition infringement, such as an abuse of a dominant position under Article 102 TFEU? This question arose in the recent Apple case reviewed in this note. It is argued that this decision creates a presumption that abuses by a supplier who holds a dominant position which have caused losses to its distributor will usually be sufficiently linked to the contractual relationship and would, in the context of distribution contracts, normally be in the reasonable contemplation of the parties. It is further argued that such a presumption merely specifies how the general principles governing the interpretation of jurisdictional clauses apply to competition law claims in the context of distribution – and potentially, other vertical – relationships.