Friday, February 15, 2019

The Relationship between Article 4 (1)(b) Cross-Border Merger Directive and the European Merger Regulation

Marco Claudio Corradi, Stockholm Centre for Commercial Law; Stockholm University and Julian Nowag, Lund University - Faculty of Law; Oxford Centre for Competition Law and Policy identify The Relationship between Article 4 (1)(b) Cross-Border Merger Directive and the European Merger Regulation.

ABSTRACT: In a time when protectionism is re-merging as a strong policy stance on a global scale, the opposition to cross mergers based on public interest grounds may once more become more frequent. The lack of a common policy at the EU level leaves each Member State free to set its own framework the opposing mergers based on the public interest. However, such frameworks need to comply with Article 4(1)(b) of the Cross-Border Merger Directive (CBMD) which expressly introduces a non-discrimination principle in respect of MS’s provision which regulate the opposition of public interest. This paper compares the protection offered under Article 4(1)(b) with the one offered under the EU Merger Regulation (EUMR). It shows that the protection under the EUMR are greater and that the EUMR provides a robust ex ante assessment of public interest claims raised against the merger. However, it also shows that the role of the EUMR in the protection of mergers against public interest opposition is limited due to the threshold for establishing a Union dimension within the meaning for that Regulation. The paper suggests that while the scope of the CBMD covers more mergers the real playing field of public interest opposition is prior to the merger, during the takeover by a foreign company or the change of control in the terms of the EUMR.

February 15, 2019 | Permalink | Comments (0)

Procedural Fairness in Competition Law: A Comparative Perspective, 18.00 -19.30 6 March 2019

 

 

Centre of European Law
The Dickson Poon School of Law
Public Seminar

 

Register here

Procedural Fairness in Competition Law: A Comparative Perspective

Panel:

Roger P Alford, International Deputy Assistant Attorney General, US Department of Justice (Antitrust Division)

John McInnes, Legal Director, Competition and Markets Authority

Michele Davis, Partner, Freshfields Bruckhaus Deringer 

D Daniel Sokol, Professor of Law, University of Florida

The panel will discuss issues of procedural fairness in Competition Law Investigations and international initiatives to develop fair and clear procedures governing the rights and limitations of affected and interested parties.

 

Renato Nazzini,  Professor of Law, King's College London & Professor of Law, George Washington University in the Chair

18.00 -19.30

6 March 2019

Edmond Safra Lecture Theatre

King's College London, Strand Campus

Strand, London

WC2R 2LS

The seminar will be followed by a drinks reception





To reserve a place for this event click here
 

 

February 15, 2019 | Permalink | Comments (0)

Multimarket Value Creation and Competition

Qiang Fu, National University of Singapore (NUS) and Ganesh Iyer, University of California, Berkeley - Marketing Group investigate Multimarket Value Creation and Competition.

ABSTRACT: We analyze multi-market interactions between firms which must invest limited budgets in value (surplus) creation as well as in competitive rent-seeking activities. Firms are horizontally differentiated on a line segment and compete for multiple markets/prizes which differ in the relative effectiveness of each firm's competitive rent-seeking spending. Each firm faces a dual trade-off: First they must choose how much to invest in value creation versus to spend in rent-seeking competition. Second, they must decide on how to allocate resources across the different markets. When the market values are exogenous (and identical across markets) the intensity of competition is highest for the market in the middle, rather than in (advantaged) markets which are close or in (disadvantaged) markets which are closer to the rival. Counter to what one would expect, greater firm differentiation actually intensifies the competition in the middle markets. When firms endogenously invest in value creation, they invest more in value creation in closer markets and the investments decline towards the middle. This results in the most intense competition moving away from the middle to a market in each firm's turf. The analysis also provides a competitive perspective on the home turf bias phenomenon.

February 15, 2019 | Permalink | Comments (0)

Competition on Inventory Availability and Price Under Customer Heterogeneity

Junfei Lei, University of Washington - Department of Information Systems and Operations Management, Yugang Yu, University of Science and Technology of China (USTC), Fuqiang Zhang, Washington University in St. Louis - John M. Olin Business School, Renyu (Philip) Zhang, New York University Shanghai study Competition on Inventory Availability and Price Under Customer Heterogeneity.

ABSTRACT: Inventory availability has been widely recognized as an important leverage to enhance the competitive edge of a firm. This paper develops an integrated newsvendor and Hotelling model to study the competition between two retailers under customer heterogeneity. The retailers make decisions on their prices and stocking quantities; customers do not observe the inventory information of the retailers, and thus have to form beliefs about the availability probabilities. We analyze the strategic interactions between the retailers and customers, and draw the following insights. First, contrary to intuition, the retailers may charge a higher price under competition than in the monopoly setting. A high price signals high product availability, thus facilitating the retailer to attract more customers in the presence of competition. It is well known that strategies like monetary compensation and inventory commitment can mitigate strategic customer behavior and improve a monopoly retailer’s profit. In a competitive market, however, both monetary compensation and inventory availability would lead to a prisoner’s dilemma. Although these strategies are preferred regardless of the competitor’s price and inventory decisions, the equilibrium profit of each retailer is lower in the presence of monetary compensation or inventory commitment because either strategy would intensify the competition between retailers. In contrast to the widely held belief that market competition improves customer surplus in general, it may hurt customers in our setting. This is because competition may drive the retailers to charge higher prices to signal inventory availabilities. We also show that monetary compensation and inventory commitment strategies provide incentives for customers to patronize the retailers, thus mitigating the customer surplus loss caused by competition.

February 15, 2019 | Permalink | Comments (0)

Thursday, February 14, 2019

Common Ownership and Coordinated Effects

Edward B. Rock, New York University School of Law; European Corporate Governance Institute and Daniel L. Rubinfeld, University of California at Berkeley - School of Law; National Bureau of Economic Research (NBER); NYU Law School discuss Common Ownership and Coordinated Effects.

ABSTRACT: With the growth of common ownership and investor engagement with portfolio firms, the possibility of adverse competitive effects of common ownership has become an important issue. To date, most of the focus has been on “unilateral” effects. In this Article, we shift the focus to the potential “coordinated” effects of common ownership and the appropriate antitrust treatment. After examining the ways in which a common owner could be a particularly effective cartel facilitator, we identify five scenarios, based on antitrust case law and enforcement experience, in which common ownership could plausibly increase the potential for coordinated conduct in concentrated markets. For each, we provide an economic analysis of the potential anticompetitive coordinated effects and we consider the appropriate legal treatment under Section 1 of the Sherman Act. The five scenarios are: Common Owners as Cartel Initiators; Common Owners as Trustworthy Conduits; a Common Compensation Structure as a Facilitating Practice; Common Owners as Brakes; and Common Owners as Vectors of Infection. We then turn to whether and how the anticompetitive potential for coordinated effects of common ownership might affect merger analysis under Section 7 of the Clayton Act or the EU Merger Regulation.

February 14, 2019 | Permalink | Comments (0)

Antitrust and the Politics of State Action

Tom Nachbar Antitrust and the Politics of State Action. Worth downloading!

ABSTRACT: In North Carolina State Board of Dental Examiners, the Court refused to exempt the board from the second element of Parker immunity (active supervision by the state) because the Board was made up largely of “active market participants.” This paper argues that the “active market participant” rule laid out in North Carolina State Board, while intuitively appealing, ignores important political values represented by antitrust law, values most evident in the context of state action immunity. By focusing on the potential market harm from self-interested regulators, the Court ignored a series of political harms inherent in the structure of the North Carolina State Board of Dental Examiners, harms having little to do with whether the members of the board were market participants. The result in North Carolina State Board is misguided, but should not be surprising. It is the natural result of the Court’s reliance on an economically oriented test – the Midcal/Hallie framework – for what is a political rather than an economic problem. Thus, North Carolina State Board is not so much a mis-application of the modern antitrust law of state action as it is a demonstration of how state action law has gone awry and how the Court can return the doctrine to its political roots.

February 14, 2019 | Permalink | Comments (0)

Competition, Data and Innovation in the Digital Economy - CCIA annual discussion Thursday, March 28, 2019 12:00 PM – 1:30 PM EDT

Join CCIA for its annual lunch discussion during the ABA Antitrust Spring Meeting to explore the role that data plays in competition and innovation in the digital economy. We will examine important topics such as how data should be analyzed in the context of mergers; the intersection between privacy, competition and data; and whether structural remedies should be applied to data driven businesses in the context of competition investigations.

Moderated by Marianela López-Galdos, CCIA’s Director of Competition & Regulatory Affairs, our panel will feature:

  • James Cooper, Deputy Director for Economic Analysis, Federal Trade Commission, and and Associate Professor, Antonin Scalia Law School, George Mason University
  • Antonio Gomes, Acting Deputy Director, Directorate for Financial and Enterprise Affairs, OECD
  • Terrell McSweeny, Partner, Covington & Burling LLP, and former Commissioner, Federal Trade Commission
  • Daniel Sokol, Senior Of Counsel, Wilson Sonsini Goodrich & Rosati and Professor, University of Florida Levin College of Law

 

Registration will open at 11:45am and the program will begin promptly at 12:00pm. Complimentary lunch will be served.

Date And Time

Thu, March 28, 2019

12:00 PM – 1:30 PM EDT

Add to Calendar

Location

Renaissance Hotel Downtown DC

999 9th Street NW

Washington, DC 20001

View Map

 

Register here.

February 14, 2019 | Permalink | Comments (0)

Canada’s (In)efficiency Defence: Why Section 96 May Do More Harm Than Good for Economic Efficiency and Innovation

Matthew Chiasson, Competition Bureau of Canada and Paul A. Johnson, Competition Bureau of Canada; Bates White Economic Consulting discuss Canada’s (In)efficiency Defence: Why Section 96 May Do More Harm Than Good for Economic Efficiency and Innovation.

ABSTRACT: Since 1986, Canada’s Competition Act has had an “efficiencies defence” for mergers that seeks to promote economic efficiency at the expense of competition, instead of through competition. This paper questions whether that policy makes sense. We review a large body of literature and case studies demonstrating that competition spurs innovation and efficiency of enormous magnitude. However, these significant beneficial effects of competition are often overlooked because the dynamic process through which they occur is less susceptible to ex ante prediction or quantification. The perverse result, we argue, is that the Competition Act has a bias towards authorizing anticompetitive mergers in the name of economic efficiency even though such mergers are more likely to reduce efficiency overall.

February 14, 2019 | Permalink | Comments (0)

Wednesday, February 13, 2019

Governing China's Administrative Monopolies Under the Anti-Monopoly Law: A Ten-Year Review (2008-2018) and Beyond

Zhanjiang Zhang, Shanghai University of Finance and Economics - School of Law and Baiding Wu offer Governing China's Administrative Monopolies Under the Anti-Monopoly Law: A Ten-Year Review (2008-2018) and Beyond.

ABSTRACT: The enforcement of China’s Anti-Monopoly Law (AML) against administrative monopolies has made some achievements in the last decade. However, prominent shortcomings, including the limited concluded cases, the inadequate expertise of competition agencies and some courts, and the ill-designed Chapter 5 of AML, still exist.

Three major reasons may explain such shortcomings. First, the legislature adopted a very narrow scope of administrative monopolies. Second, the legislature introduced an improper “standard of legitimacy” into Chapter 5. Third, the legislature overstated the Chinese characteristics of these distortions, and truthfully (but improperly) authorized other administrative bodies, rather than competition agencies, to rectify them.

This paper, built on China’s and international experience and the fundamental understanding of competition mechanism, first takes a strictly logical approach to devise a comprehensive solution to enhance the effectiveness of AML enforcement. This feasible solution is consisted of four interconnected pillars. Firstly, it advises the State Council to timely upgrade the Fair Competition Review System to grant larger policy review power to competition agencies. Secondly, it proposes that competition agencies need to adopt new tools to facilitate a more vigorous competition advocacy program. Thirdly, it urges the competition agencies and courts to strengthen enforcement and only accept limited government conduct defenses. It advocates that the legislature has to confirm that AML enjoys supremacy among all laws and regulations, except the Constitution Law, in regard to the regulation of the unreasonable government distortions of competition. Finally, it appeals to the legislature for partially or entirely authorizing competition agencies to litigate such government conducts in China’s intermediate courts.

February 13, 2019 | Permalink | Comments (0)

The Lamentable Rise of an Expanded Essential Facilities Doctrine in Canada: The Troubling Economic Foundations of the Toronto Real Estate Board Decision

Jeff Church, U Calgary has published The Lamentable Rise of an Expanded Essential Facilities Doctrine in Canada: The Troubling Economic Foundations of the Toronto Real Estate Board Decision.

ABSTRACT: This paper documents the successful, if lamentable, rise of a made-in-Canada essential facilities doctrine. This made-in-Canada essential facilities doctrine is a consequence of recent enforcement of the abuse of dominance provisions of the Competition Act in the Toronto Real Estate Board case. The analysis in this paper finds that the rise of the made-in-Canada essential facilities doctrine is one implication of the developing jurisprudence of the Federal Court of Appeal and the Competition Tribunal with respect to all three of the elements required for a finding of abuse of dominance: control, practice of anticompetitive acts, and a substantial prevention or lessening of competition. This paper explains the error made in the Toronto Real Estate Board case for all three of these required elements and how they combine to result in the made-in-Canada essential facilities case. The policy and economic incoherence of this made-in-Canada essential facilities doctrine are fully manifested in the current abuse of dominance case against the Vancouver Airport Authority. This paper explains that this made-in-Canada essential facilities doctrine is inconsistent with the economics of vertical foreclosure and the economic foundations of the abuse of dominance provisions in the Competition Act. The problem in both of these cases is not conduct that creates, enhances, or maintains market power, but instead exclusion downstream is possible because of market power upstream and it may enhance efficiency.

February 13, 2019 | Permalink | Comments (0)

Antitrust in the Financial Sector: Hot Issues & Global Perspectives, Wednesday, May 1 2019 from 2:20 pm to 6:30 pm at Fordham University School of Law

May

01

Antitrust in the Financial Sector: Hot Issues & Global Perspectives

Description

PANEL TOPICS

Panel 1: Lending Syndicates Coordination: What is the Antitrust Risk?

Panel 2: Funds and Exchanges Collaboration: What are the Limits?

Panel 3: The Counsels’ Perspective: How to ensure Antitrust Compliance?

 


 

CONFIRMED SPEAKERS (In alphabetical order)

Makan DELRAHIM | Assistant Attorney General, US Department of Justice, Washington, DC

Phillip GILLESPIE | Executive VP & General Counsel, State Street Global Advisors, Salem

Scott HEMPHILL | Professor, NYU Law, New York

Dean HOFFMAN | Head of Antitrust JP Morgan Chase for North America, New York

James KEYTE | Director Fordham Competition Law Institute, New York

Timothy MAGEE | Americas Head of Investigations and Enforcement, Barclays

John ROELLKE | Partner, Morgan, Lewis & Bockius, New York

Martin SCHMALZ | Associate Professor, Saïd Business School, University of Oxford

Rainer SCHWABE | Senior Manager, Cornerstone Research, New York

Richard S. TAFFET | Partner, Morgan, Lewis & Bockius, New York

 


 

PANEL SPONSORS

Morgan, Lewis & Bockius

Cornerstone Research

February 13, 2019 | Permalink | Comments (0)

Justifying Competition Law in the Face of Consumers' Bounded Rationality

Avishalom Tor, Notre Dame is Justifying Competition Law in the Face of Consumers' Bounded Rationality.

ABSTRACT: The central economic justification for competition law is that the protection of competition promotes welfare. In particular, perfect competition among firms catering to consumer demand for goods and services maximizes social welfare by generating both allocative and productive efficiencies. This standard account rests inter alia, however, on the assumption that consumer demand reveals rational consumer beliefs and preferences. Hence, an otherwise competitive market that caters to “erroneous” demand based on consumers’ mistaken beliefs or constructed, ad-hoc preferences will fail to maximize efficiency and welfare. Yet, empirical behavioural findings show that boundedly rational consumers exhibit mistaken beliefs and constructed preferences regarding some of the products and services they demand in the market. These behavioural findings, therefore, challenge the conventional economic justification for the important role served by competition law and its institutions as the means for protecting competition in the market. After explaining the challenges that the behavioural evidence poses for the standard economic account, this chapter outlines two key elements of the behavioural economic case that suggest competition law still has an important role to play in advancing efficiency and welfare even after the bounded rationality of consumers is accounted for, albeit perhaps a more modest role than competition law discourse usually ascribes to it.

February 13, 2019 | Permalink | Comments (0)

Social Comparison Before, During, and After the Competition

Stephen M. Garcia, University of Michigan, Zachary A. Reese, University of Michigan, Avishalom Tor Notre, Dame Law School; University of Haifa - Faculty of Law Social Comparison discuss Before, During, and After the Competition.

ABSTRACT: This chapter provides an overview of the interplay between social comparison and competition before, during, and after the competition. We define competition broadly to include an act or process of competition, explicit or implicit, and link it to basic social comparison processes. Before the competition, we consider the lessons of the social comparison literature on motives, individual differences, cultural and social norms, and competition entry decisions. We then review relevant findings on the role of individual factors (personal and relational) as well as situational factors that affect motivation and competitive behavior during the competition. Finally, the chapter examines the social comparison literature on downward comparison, upward comparison, and competition re-entry decisions after the competition.

February 13, 2019 | Permalink | Comments (0)

Tuesday, February 12, 2019

Orange Polska v Commission: Abuse of Dominance, Fines & Effects

Floris ten Have; Stijn de Jong discuss Orange Polska v Commission: Abuse of Dominance, Fines & Effects.

ABSTRACT: The European Court of Justice issues a fact-specific judgment and does not rule on whether the Commission should take into account actual or likely effects when determining the gravity of an infringement in an abuse of dominance case On 25 July 2018, the Court of Justice of the European Union (CoJ) rendered its judgment in Case C-123/16 Orange Polska. The Commission welcomed the judgment, stating that ‘the Court confirmed that when the Commission determines a fine for an antitrust violation, it does not need to take into account anticompetitive effects, actual or likely, when calculating the amount of the fine.’ (Competition weekly e-news update, 27 July 2018).

February 12, 2019 | Permalink | Comments (0)

Twelfth Annual Conference on Antitrust Economics and Competition Policy Submission Deadline: May 1, 2019

Twelfth Annual Conference on
Antitrust Economics and Competition Policy

 

Call for Papers

 

Friday, September 20, 2019—Saturday, September 21, 2019

 

Submission Deadline: May 1, 2019

 

The Center on Law, Regulation, and Economic Growth at Northwestern Pritzker School of Law is issuing a call for original research papers to be presented at the Twelfth Annual Conference on Antitrust Economics and Competition Policy at Northwestern Pritzker School of Law.  This year’s conference will run from approximately 9:00 AM on Friday, September 20, 2019 to 12:30 PM on Saturday, September 21, 2019.

 

The conference is co-sponsored by the Center for the Study of Industrial Organization at Northwestern University.

 

The goal of this conference is to provide a forum where leading scholars from across the world can gather together with Northwestern’s own distinguished faculty to present and discuss high quality research relevant to antitrust economics and competition policy. Both theoretical and empirical submissions are welcome.  Papers in industrial organization or applied microeconomic theory that address issues relevant to antitrust policy are welcome even if they do not directly focus on particular antitrust policy issues or institutions.  While papers on all topics are welcome, we especially encourage submissions related to the following topic areas: 

 

  • innovation and competition policy
  • data markets, internet search markets and competition policy
  • privacy, data security, and competition policy
  • vertical contracting, vertical integration and competition policy
  • the effectiveness of behavioral remedies
  • buyer power and monopsony power
  • EU platform regulation

 

We hope to involve leading thinkers from the government, non-profit, and private sector, as well as leading academics from economics departments, business schools, law schools and public policy schools. While most of the conference will be devoted to presentation and discussion of original academic research, we also expect to schedule a small number of panels on important current topics or policy issues.   

 

 

If you have questions about the appropriateness of your topic for the conference, or suggestions for panel subjects, please contact Professor William Rogerson, Professor of Economics and Center on Law, Regulation, and Economic Growth Research Director on Competition, Antitrust and Regulation at wrogerson@northwestern.edu.

 

We will make hotel reservations and pay for hotel lodging for Thursday, September 19 and Friday, September 20 for paper presenters and will also reimburse paper presenters for additional travel expenses (flights, taxis) up to $750.00.

 

The conference will also include a dinner reception and Keynote Dinner Address (speaker TBA) on Friday evening.

 

Papers prepared for the Twelfth Annual Conference on Antitrust Economics and Competition Policy will be permanently hosted on the Center on Law, Regulation, and Economic Growath website as part of our Working Papers Series: www.law.northwestern.edu/searlecenter.          

 

Authors will be free to publish their work in other venues (with appropriate acknowledgement of the Center on Law, Regulation, and Economic Growth).

 

 

RESEARCH PROPOSALS: SUBMISSION, REVIEW PROCEDURE AND TIMELINE

 

Research Proposals should include an abstract (300 words maximum) and c.v.

 

Proposal Submission Deadline: Research Proposals should be submitted to searlecenter@law.northwestern.edu by May 1, 2019.

 

Notification Deadline:  Research Proposals will be reviewed by a committee.  Authors will be notified of the committee’s decisions on or around June 3, 2019.

 

Discussion Draft Deadline:  Authors should plan to submit a paper suitable for distribution to discussants and other conference participants no later than September 4, 2019.

 

Potential Discussants or panel members should send a message indicating their interest to searlecenter@law.northwestern.edu.

February 12, 2019 | Permalink | Comments (0)

e-Commerce and the Pricing Behavior of Traditional Retailers

 Alberto Cavallo studies e-Commerce and the Pricing Behavior of Traditional Retailers.

ABSTRACT: As online retailers such as Amazon have increased the frequency with which they adjust prices, perhaps due to their use of dynamic pricing algorithms, traditional retailers are following suit. In More Amazon Effects: Online Competition and Pricing Behaviors (NBER Working Paper No.25138), Alberto Cavallo analyzes data on retail prices for both multi-channel retailers — those that sell online and in brick-and-mortar stores — and Amazon. He finds that the frequency of price changes at multi-channel retailers increased from 15 percent per month in 2008-10 to almost 30 percent in 2014-17. 

The change in the frequency of price changes was greater in sectors in which online retailers are especially competitive, such as electronics, and weaker in sectors such as food and non-alcoholic beverages. The period of time over which prices remained stable in the food and beverages sector, for example, started falling in 2015, around the time that Amazon started competing aggressively in this sector.

To identify a causal link between online competition and multi-channel retailer pricing behavior, the study also examines a smaller subsample of products sold on Walmart's website between 2016 and 2018. Price durations were about 20 percent shorter for Walmart products that were easily found on Amazon. This was most pronounced in the clothing and footwear sector, where Amazon and Walmart compete aggressively. The findings "are consistent with intense online competition, characterized by the use of algorithmic or 'dynamic' pricing strategies and the constant monitoring of competitors' prices," Cavallo writes.

He also examines retailer pricing practices for identical goods sold at multiple locations. In general, online retailers tend to charge consumers the same price for a given product in all locations. To assess whether this practice influences the pricing strategies of multi-channel retailers, he compares prices across multiple zip codes for Amazon and three large multi-channel retailers — Walmart, Safeway, and Best Buy. For Amazon, prices across zip codes are identical 91 percent of the time. For the three multi-channel retailers, they are the same 78 percent of the time. Almost all of the geographic pricing variation occurs in the food and beverages category. Prices for electronics have nearly uniform pricing for all three retailers. Walmart products that are easily found on Amazon are more likely to be uniformly priced, which suggests that competition from online retailers is leading traditional retailers to adopt more uniform pricing across locations.

Cavallo argues that the combination of higher frequency price changes and uniform pricing is affecting the way traditional retailers respond to nationwide economic shocks such as fluctuations in gasoline prices and nominal exchange rates. For exchange rate shocks, the pass-through at Walmart is 26 percent for goods that are not easily found on Amazon, and 44 percent for those that are. For gasoline price movements, the analogous magnitudes are 19 and 28 percent. Using a larger sample of retailers, Cavallo finds that both the short- and long-run effects of exchange rates on online price indices have increased over time, especially in sectors such as electronics with more competition from online retailers. This evidence "suggests that online competition is making U.S. retail prices far more sensitive to exchange rates than in the past," the researcher concludes. More generally, the acceleration in the rate at which retail prices react to macroeconomic shocks may affect the dynamics of economy-wide inflation.

February 12, 2019 | Permalink | Comments (0)

Injunctions in Patent Litigation Following the CJEU Huawei v ZTE Ruling (Germany)

Nadine Herrmann addresses Injunctions in Patent Litigation Following the CJEU Huawei v ZTE Ruling (Germany).

ABSTRACT:In its landmark Huawei ruling, the CJEU established a process-driven framework that market-dominating holders of standard-essential patents (SEPs) must follow to preserve their right to an injunction against unlicensed implementers of the patented technology. The new 'Huawei rules' effectively replace the previous 'Orange Book Standard' in German SEP litigation. 

February 12, 2019 | Permalink | Comments (0)

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

. Joshua Gans, Andrew Leigh, Martin Schmalz, and Adam Triggs  investigate 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. 

February 12, 2019 | Permalink | Comments (0)

Monday, February 11, 2019

Assistant Attorney General Makan Delrahim Delivers Keynote Address at Silicon Flatirons Annual Technology Policy Conference at The University of Colorado Law School

The speech is here.

Some of the highlights:

In addition to their many benefits, zero-price strategies also pose challenges for antitrust enforcement. 

In the absence of price competition, market definition can be difficult.  The traditional analytical test applied by enforcers to define relevant markets, which looks at small but significant and non-transitory increases in price (or “SSNIP”), does not translate directly to a zero-price market.  We cannot look at the effects of a five percent increase in price because five percent of zero is still zero.  Choosing variables for measuring market shares also can be more complicated where shares of revenue is not an option. 

In light of these challenges, and the increased prominence of zero-price strategies in the digital economy, many currently are debating how antitrust enforcement should treat such products and services, especially when offered by a large digital platform. 

On one end of the spectrum, some argue that zero-price products and services should be exempt from antitrust scrutiny.  They argue that consumers and competition cannot be harmed if users are getting a product for free.  An argument Microsoft used, without success, in defending the DOJ’s antitrust action in 1998.  Some argue that the benefits of free products and the complexity of the antitrust analysis should lead us to forgo antitrust enforcement in this area entirely. 

On the other end of the spectrum, commentators and some foreign antitrust enforcers call for more aggressive enforcement efforts against digital platforms that provide free services.  These commentators and enforcers consider the collection of consumer data in exchange for goods to be potentially anticompetitive.  Some even propose throwing out the long-standing consumer welfare standard and crafting new rules to address these businesses.

The long history of zero-price strategies teaches us, however, that both of these extreme views are misplaced. 

First, we should not exempt zero-price models from antitrust scrutiny and give a free pass to free services.  U.S. antitrust laws apply in full to zero-priced products and services.  Traditional conduct that is unlawful under the antitrust laws is still unlawful in the zero-price models more prevalent in today’s digital economy.

...

Second, our long history with zero-price strategies also tells us that we do not need a wholesale revision of the antitrust laws to address competitive concerns in these contexts.  

...

As in all enforcement matters, we should engage in careful case-by-case analyses in which we look closely at the evidence. When appropriate, we can tailor our approach to consider unique characteristics of a zero-price market.  The fact that market definition and other issues can be more challenging in the absence of price competition does not mean we should give up on our rigorous, evidence-based approach.

February 11, 2019 | Permalink | Comments (0)

Examining Market Power in the Finnish Dairy Chain

Valtiala, Juho P.; Rezitis, Anthony N. are Examining Market Power in the Finnish Dairy Chain.

Abstract: This study examined whether processors and retailers have market power in the Finnish dairy chain. Both the dairy processing and the retail sector are highly concentrated in Finland, and market imperfections in the chain are not well known. The results indicate that the retailers have market power over the consumers in the retail market but the processing market is competitive. According to the results, the retailers employ full mark-up in the retail market. It is emphasised that market power in the Finnish dairy chain should be further studied with different approaches to gain more evidence for market power.

February 11, 2019 | Permalink | Comments (0)