Despite broad statutory language authorizing “any person” injured by an antitrust law violation to sue for damages, the Supreme Court of the United States has construed that language to bar antitrust damages claims by indirect purchasers, such as consumers, two or more steps removed from antitrust violators. The Court and some scholars have justified the indirect purchaser rule on the ground that assigning direct purchasers exclusive rights to recover antitrust damages increases the likelihood of suit. But this article presents new evidence that the rule reduced private antitrust litigation by twenty percent. It argues that the rule should be abandoned, consistent with the statutory text.
Wednesday, March 31, 2021
Federal Trade Commission Microeconomics Conference: Call for Papers
Federal Trade Commission Microeconomics Conference
November 4 - 5, 2021
Washington, D.C.
Call for Papers
The Federal Trade Commission's Bureau of Economics and the Tobin Center for Economic Policy at Yale University will host the 14th Annual FTC Microeconomics Conference on November 4 and 5, 2021, in Washington, D.C. This event will bring together scholars working in areas related to the FTC’s antitrust, consumer protection, and public policy missions.
We welcome submissions from related fields including industrial organization, information economics, health policy, behavioral economics, quantitative marketing, and other areas of applied microeconomics. We especially would like to encourage submission of papers on topics of Commission interest such as vertical integration, potential competition mergers, and information in online markets. More broadly, past conferences have featured topics such as advertising, collusion, consumer decision-making, demand estimation, innovation, intellectual property, merger policy, privacy and data security, and vertical contracting.
Interested participants should submit an abstract or completed paper by June 23, 2021 to [email protected]. Please note preference will be given to completed papers. We also welcome suggestions for panel discussions. You should receive an email confirming receipt of your submission. If you do not, it means that we have not received it. Accepted participants should expect to provide a financial disclosure statement meeting the AEA’s guidelines to be included in their conference bios.
We are continually monitoring the coronavirus situation as it pertains to our conference. If circumstances are such that an in-person conference would not be wise or feasible, we are making contingency plans to have an online event.
Scientific committee:
- Alessandro Bonatti (Massachusetts Institute of Technology)
- Judith A. Chevalier (Yale School of Management)
- Robin S. Lee (Harvard University)
Organizers: Yan Lau (FTC) and Tom Koch (FTC)
This conference will be held at the Constitution Center Plaza Level Conference Center, 400 7th Street, SW, Washington, D.C. 20024. For more information and past conference agendas, please visit www.ftc.gov/microeconomics.
March 31, 2021 | Permalink | Comments (0)
Merger Remedies, Incomplete Information, and Commitment
Merger Remedies, Incomplete Information, and Commitment
Current EU law states that the competition authorities, in dealing with a merger proposal, cannot commit to specific remedies when rejecting proposals and essentially have to resort to accept or reject remedies proposed to it. We show that giving the authorities the power to propose, and commit to, remedies for a merger that they cannot accept in full will lead to a more efficient merger policy. We do this by setting up a theoretic model where government lacks information about the various markets affected by the merger and has resources to collect information on some but not all of them. The benefit of being able to commit is that government, in some cases, is able to obtain remedies rather than full stop of a merger by collecting information on relatively benign markets and, in some other cases, is able to obtain remedies even without spending resources on collecting information.
March 31, 2021 | Permalink | Comments (0)
Merger Analysis in the App Economy: An Empirical Model of Ad-Sponsored Media
Merger Analysis in the App Economy: An Empirical Model of Ad-Sponsored Media
This paper proposes a new model of imperfect competition of ad-sponsored media, which can sell "free" products, for a merger analysis applicable to the mobile app industry. To analyze developers’ monetizing with both price and advertising in an app, we consider a consumer who faces both budget and time constraints. Moreover, to catch up with newly created and quickly redefined markets, we automate the conversion from in-text product descriptions to numerical product attributes by combining word embedding and dimension reduction techniques. The model defines an equilibrium over consumers’ downloads, usage, and in-app purchase decisions and app developers’ price and non-price competition. We estimate the model using mobile app data from Japan from 2015 to 2017. The estimate revealed that the marginal disutility of watching advertisements is 12.4% of the ad price for games and 3.1% for other apps. The relevant markets defined by a Small, Non-transitory but Significant Increase in Cost (SSNIC) test are larger than the product categories. Merger simulations show that the app market is, at the static level, competitive and even a merger among the top 10 apps has negligible effects on surplus. The proportional transaction fee imposed by the platform, whose welfare implication is ambiguous because it increases the advertisements and decreases the download prices, is more influential. For game apps, the total surplus is maximized at 12% ‐ 15% rather than the actual 30%, increasing welfare by 2.4% and app developers’ profits by 44%. For other apps, the total surplus curve is almost flat around 30%.
March 31, 2021 | Permalink | Comments (0)
The EU Digital Markets Act: A Report from a Panel of Economic Experts
The EU Digital Markets Act: A Report from a Panel of Economic Experts
Cabral, L., Haucap, J., Parker, G., Petropoulos, G., Valletti, T., and Van Alstyne, M ., The EU Digital Markets Act, Publications Office of the European Union, Luxembourg, 2021,ISBN 978-92-76-29788-8, d oi:10.2760/139337, JRC122910.
Over the last years, several reports highlighted the market power of very large online platforms that are gatekeeping intermediaries between businesses and consumers, and the difficulty for classic competition policy tools to deal effectively with anti-competitive practices in these platforms. In response to this, the European Commission recently published a proposal for a Digital Markets Act (DMA) to complement existing competition policy tools by means of ex-ante obligations for platforms. This report presents an independent economic opinion on the DMA, from a high-level Panel of Economic Experts, established by the JRC and based on existing economic research and evidence. The Panel endorses the vision encapsulated in the DMA, including the designation of large gatekeeper platforms and a series of ex-ante obligations they should comply with. The Panel points out the challenge of striking a balance between the benefits from network effects of large platforms and the potential negative effects from anti-competitive behaviour and winner-takes-all market forces in online services. While some types of anti-competitive behaviour are well-known from classic competition cases, data-driven multi-sided platforms have found new ways of tying, bundling and self-preferencing that present new challenges. The report explores these behaviours in specific settings, including in online advertising and mobile ecosystems. It discusses ways to use valuable data gathered by platforms for pro-competitive purposes and the wider benefit of society in order to achieve a higher standard of fairness in the distribution of the social value generated by large platforms. Information asymmetry between platforms and regulators remains an issue in the effective implementation of the obligations.
March 31, 2021 | Permalink | Comments (0)
Common Ownership, Corporate Control and Price Competition
Common Ownership, Corporate Control and Price Competition
We examine price competition with homogeneous products in the presence of general common ownership arrangements allowing for different corporate control structures. Common ownership leads managers to internalize other firms profits. We show that equilibria with positive profits exist (including the monopoly out- come) when the manager places the same weight on the profit of her firm as on the average profit of all the other firms. This condition supports symmetric and asymmetric stakes and can arise as an equilibrium of a network formation game or a bargaining process.
March 31, 2021 | Permalink | Comments (0)
Tuesday, March 30, 2021
Lessons to Learn from Brazil’s Competition Law and Practice
Lessons to Learn from Brazil’s Competition Law and Practice
March 30, 2021 | Permalink | Comments (0)
Silver Plastics v Commission: The Court of Justice on hearing witnesses, the upper limit of fines and single continuous infringement
The Indirect Purchaser Rule and Private Enforcement of Antitrust Law: A Reassessment
March 30, 2021 | Permalink | Comments (0)
Sustainability, the Green Deal and Art 101 TFEU: Where We Are and Where We Could Go
Sustainability, the Green Deal and Art 101 TFEU: Where We Are and Where We Could Go
Key Points
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The Green Deal of the Commission has triggered a debate on how competition policy and sustainability work together. EU competition law is often perceived as an obstacle to private sustainability initiatives.
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Essentially four analytical routes are available for sustainability agreements: (i) out of scope of Art 101 TFEU (Albany); (ii) ancillary regulatory restraint (Wouters); (iii) no restriction of competition; (ii) individual exemption under Art 101(3) TFEU.
March 30, 2021 | Permalink | Comments (0)
Monday, March 29, 2021
Skip Nav Destination Comparing the Role of Economics/Effects-Based in Antitrust Enforcement and Its Relation to the Judicial Review in the EC to Other Countries
ABSTRACT: The last 25 or so years are widely considered as witnessing, in many jurisdictions throughout the world, a substantial increase in the role of economists and, though this view has not relied on much formal empirical backing, even in the extent and sophistication of economic analysis applied in the assessment of cases and in reaching decisions in competition law (CL) enforcement. A few countries, such as the USA and Canada, are generally thought of as leading the way in this regard. But whilst this view, or, better, hypothesis, can be thought of as uncontroversial for merger control, it is far from uncontroversial for antitrust enforcement in many jurisdictions.
March 29, 2021 | Permalink | Comments (0)
Antitrust Harm and Causation
Antitrust Harm and Causation
Abstract
How should plaintiffs show harm from antitrust violations? The inquiry naturally breaks into two issues: first, what is the nature of the harm? and second, what does proof of causation require? The best criterion for assessing harm is likely or reasonably anticipated output effects. Antitrust’s goal should be output as high as is consistent with sustainable competition.
The standard for proof of causation then depends on two things: the identity of the enforcer and the remedy that the plaintiff is seeking. It does not necessarily depend on which antitrust statute the plaintiff is seeking to enforce. For public agencies, enforcement involves both the condemnation of past harm and the management of future risks. The concern, as in most areas of public enforcement, is with behavior that is likely to have harmful anticompetitive consequences unless it is restrained. While a showing of actual harm has evidentiary importance, in most cases the public authorities need not show that the harm has actually occurred, but only that the challenged conduct poses an unreasonable danger that it will occur.
By contrast, private enforcers operate under stricter causation requirements that require an actual injury for damages actions, or individually threatened injury for an injunction. These differences are explicit in the various federal statutes that authorize enforcement actions. They are also similar to the division of requirements in the legal system generally, particularly in the distinction between public criminal law and the private law of tortious conduct.
March 29, 2021 | Permalink | Comments (0)
Equality of Opportunity and Antitrust: The Curious Case of the U.S. News & World Report Ranks
Equality of Opportunity and Antitrust: The Curious Case of the U.S. News & World Report Ranks
Abstract
Rankings increasingly dominate our world. We use them to choose just about everything—from which pizza or ice cream to buy, to which doctors to trust with our health, to which universities to trust with our intellectual growth and flourishing. But should we trust them? Taking popular academic ranks as an example, such as the U.S. News ranks, this article contends not necessarily, for several reasons. First, because as this article argues, the U.S. News ranks may mislead rather than inform consumers. Second, by fueling a prestige battle between universities in which the ‘winner takes all’, the U.S. News ranks incentivizes universities to harm cultural and economic diversity—important facets of educational quality. These conclusions, critical in their own right, raise additional important but underexplored questions for antitrust law. Should universities be allowed to boycott the U.S. News ranks so that they can free themselves of the prestige battle in which they involuntarily participate? Can an ‘anti- rankings boycott’ be justified by antitrust law on the basis that it may allow universities to promote diversity and access to the underserved? Although these questions are not easy to address, they are at the heart of this article.
March 29, 2021 | Permalink | Comments (0)
Sunday, March 28, 2021
Annual Loyola Antitrust Colloquium: School of Law: Loyola University Chicago 21st ANNUAL LOYOLA ANTITRUST COLLOQUIUM. April 15-16, 2021. Via Zoom. Institute for Consumer Antitrust Studies Loyola University Chicago School of Law
LOYOLA UNIVERSITY > SCHOOL OF LAW > CURRENT STUDENTS > EVENTS > EVENTS DIRECTORY > ANNUAL LOYOLA ANTITRUST COLLOQUIUM
Annual Loyola Antitrust Colloquium
21ST ANNUAL LOYOLA ANTITRUST COLLOQUIUM
April 15-16, 2021
Via Zoom
Institute for Consumer Antitrust Studies
Loyola University Chicago
School of Law
THURSDAY, APRIL 15, 2021
| 3:00 PM | Welcome Professor Spencer Weber Waller Professor and Director Institute for Consumer Antitrust Studies Loyola University Chicago School of Law |
| 3:10 PM |
Opening Address When Antitrust Comes to the Fork in the Road, Take It! |
| 3:45 PM |
Christopher Leslie, University California-Irvine School of Law Commentators Salil Mehra, Temple University Beasley School of Law |
| 5:00 PM | Virtual Happy Hour and Toast |
FRIDAY, APRIL 16, 2021
| 9:00 AM |
Christine Bartholomew, University at Buffalo School of Law Antitrust Class Actions in the Wake of Procedural Reform Commentators Andy Gavil, Howard University School of Law |
| 10:20 AM |
Felix Chang, University of Cincinnati College of Law Ethnically Segmented Markets (PDF) Commentators Barak Richman, Duke University School of Law |
| 11:50 AM |
Concluding Remarks |
March 28, 2021 | Permalink | Comments (0)
Friday, March 26, 2021
Green Antitrust: Why Would Restricting Competition Induce Sustainability Efforts?
Growing Through Competition: The Reduction of Entry Barriers Among Chinese Manufacturing Firms
Growing Through Competition: The Reduction of Entry Barriers Among Chinese Manufacturing Firms
Abstract
Exploiting the gradualism of the Chinese economic reforms and cross-sectional variations in entry rates, we show empirical evidence from firm-level data that industries with higher entry rates achieve higher growth and a more competitive market structure in subsequent years. We then embed firm entry into a model of endogenous productivity and market structure with heterogeneous firms and sectors, and calibrate it to the Chinese manufacturing sector in 2004-7. We find the positive impact of entry on growth is achieved primarily through a pro-competitive effect, whereby entry induces endogenously a larger fraction of industries to be more competitive in the economy. We quantify the contribution on growth from the reduction of entry barriers associated with the state-owned enterprise reforms in the late 1990s and early 2000s and find it explains 20% of the aggregate growth of the manufacturing sector from 2004-7. More generally, we highlight the critical role of reducing entry barriers in promoting competition and growth in developing countries.
March 26, 2021 | Permalink | Comments (0)
Market Size and Product Composition: Evidence from Hollywood
Market Size and Product Composition: Evidence from Hollywood
This paper examines how outside and inside competition affect the number and composition of product offerings. The question is addressed using the example of the U.S. motion picture industry, which has experienced declining attendance in the past decade due to outside competition from streaming services and smart phone applications. Using data on 1,486 releases between 2009 and 2018, we estimate a structural model of endogenous product choice in which studios allocate a fixed budget to low-, medium-, and high-budget movie projects each year. Counterfactual estimates using our parameter estimates indicate that an increase in the value of the outside option leads to a significant reduction in the number of medium-budget movies but little change in the number of low- and high-budget movies. Additional counterfactual exercises that simulate a change to the level of competition inside the market, such as a merger between two studios or the entry of a new studio, confirm the existence of an inverse relationship between competition and the number of medium-budget movies.
March 26, 2021 | Permalink | Comments (0)
Anything You Can Do, I Can Do Better - Except in Big Tech?: Antitrust's New Inhospitality Tradition
Anything You Can Do, I Can Do Better - Except in Big Tech?: Antitrust's New Inhospitality Tradition
Today, the question of how competition is—or is not—functioning in the big tech space has become a particularly compelling topic. The last several years have seen an increasing popular interest in antitrust, and it appears that wave of interest may soon be cresting. Rhetoric has grown increasingly aggressive, and the list of alleged ills is long. Companies are simply too big, too influential, too powerful; they are destroying our democracy and undermining our social values. While allegations run the gambit, under particular attack are tech firms that operate in multiple, complementary markets.
This critical rhetoric is eerily similar to that of a bygone era of antitrust enforcement—namely, the time when the inhospitality tradition prevailed. By the middle of the 20th century, antitrust courts routinely—often summarily—condemned any contract or behavior they deemed to be nonstandard or unusual. This approach reflected an extreme hostility to firm behavior—a hostility that seems to be making a resurgence today— and led to the coining of the phrase “inhospitality tradition” to describe the prevailing antitrust regime. The inhospitality tradition often led to incoherent, nonsensical outcomes. Courts condemned conduct that made firms better competitors in the name of preserving competition. And they ignored the actual or likely competitive effects of conduct before them because they found the form of that conduct offensive. The courts eventually abandoned this approach. As economic learning advanced and court experience grew, the negatives of condemning as per se unlawful large swaths of firm conduct on the basis of its form—rather than its effects—crystalized and could no longer be ignored. From this new economic learning, economists and scholars came to realize that many procompetitive reasons can, and often do, underlie much of the conduct that had been summarily condemned. And they learned that judging the conduct on its face, much like judging a book by its cover, tended to yield inferior outcomes.
Part I of this Article delves into the history of the inhospitality tradition within antitrust law, tracing its rise and demise. Part II explicates the apparent resurgence of hostile sentiment, particularly as applied to the tech context. Part III then investigates whether there is evidence of a market failure in big tech. Part IV analyzes what may—or may not—be warranted given the current state of the empirical literature.
March 26, 2021 | Permalink | Comments (0)
Thursday, March 25, 2021
Shrinking Market Doctrine for Aging Stagnant Economies?: The JFTC 2019 Revision of Merger Guidelines
Shrinking Market Doctrine for Aging Stagnant Economies?: The JFTC 2019 Revision of Merger Guidelines
While Japan is aging rapidly and the local communities in rural areas are struggling to maintain their essential societal function, the Japan Fair Trade Commission (JFTC) has revised the merger guidelines to allow for mergers that create a monopoly. Under the new approach, which the author calls the shrinking market doctrine, such a merger is deemed to lack an anti-competitive effect if the market is no longer large enough to hold multiple companies. The article examines the precedent of the doctrine (a regional bank merger case), the logic behind it (counterfactual analysis and minimum efficient scale argument) and the way the JFTC is likely to apply the doctrine. The author then concludes that the careless application of the doctrine would lead to harm on the local community and that the doctrine should not add much to the already existent efficiency defence and failing company doctrine.
March 25, 2021 | Permalink | Comments (0)
Keeping Geo-Blocking Practices in Check: Competition Law and Regulation
Keeping Geo-Blocking Practices in Check: Competition Law and Regulation
Abstract
The increased use of online sales channels has led the Commission to prioritise competition law enforcement and regulatory intervention in digital markets. In this paper we show how the Commission has stepped up its efforts to ensure that there is a single digital market so that consumers in the EU can shop freely, irrespective of the location of the trader. On matters of substance, antitrust and the Geo-Blocking Regulation converge in achieving this objective. In this paper we caution against an overly aggressive stance by suggesting an effects-based approach to assess these practices, which is supported by recent case-law as well as by economic studies considering the impact of facilitating cross –border sales of copyrighted content. On matters of procedure, both antitrust and the Geo-blocking regulation appear to converge towards a more responsive method of enforcement which should be developed and codified.
March 25, 2021 | Permalink | Comments (0)
