Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Friday, October 16, 2020

ATTITUDES TOWARD COLLUSION IN CHILE

In the last two decades, competition agencies around the world have increasingly directed their attention to enforcement against cartels. With the encouragement of the antitrust authorities of the United States, and the Organization of Economic Cooperation and Development, various countries have introduced leniency programs, and sanctions for individuals found guilty of colluding. Critics are concerned, however, that these measures are not backed by broad public support, which could jeopardize their enforcement. This paper explores public attitudes toward cartels in Chile, an emerging economy that introduced a leniency program in 2009 and criminal sanctions in 2016, by presenting the results of a public opinion survey conducted in this country in August–September 2019. The results of the survey show high awareness of cartels and the harm they cause, and high public disapproval of cartel conduct among the Chilean respondents. In particular, up to 70 percent of the respondents support prison sentences against individuals found guilty of colluding. Such strong public support for anti-cartel measures could be considered positive from the perspective of enforcement. The results also emphasize the importance of continued competition advocacy directed at the society to explain and gain public support for the anti-cartel agenda.

October 16, 2020 | Permalink | Comments (0)

CPI and CCIA Live: Oct. 20 – Back to the Future: In Need of a New Antitrust Framework?

Oct. 20 – Back to the Future: In Need of a New Antitrust Framework?

Antitrust in an Election Year:
Challanges Ahead

 
 

This month, CPI has teamed up with the CCIA to organize a series of special sessions on the most pressing challenges for antitrust practitioners as we approach the U.S. presidential election. Over the next 2 weeks, our invited expert panels will explore the some issues for the future of U.S. antitrust, and their global impact.

The “Antitrust in An Election Year” law & economics sessions will run from October 20-29, as four separate virtual events.

As a companion to this series of panel discussions, CPI, in collaboration with POLITICO’s Leah Nylen, will hold a series of short interviews with top figures in regulation and antitrust enforcement, probing their in-depth knowledge of the issues and providing insight and context to help inform the larger discussion of the day.

See below to register for the sessions & learn more here.


Session 1
October 20, 2020, 12:00 pm ET / 8:00 am PT

| Back to the Future: In Need of a New Antitrust Framework?

 
 
 

Register for Session 1


Other Confirmed Speakers

  • Makan DELRAHIM
  • David EVANS
  • Leigh FREUND
  • Renata HESSE
  • Diana MOSS
 
 
 
  • Noah PHILLIPS
  • Dick SCHMALENSEE
  • Nikhil SHANBHAG
  • Darren TUCKER
  • Christopher YOO
 
Register here


Other Sessions
October 22-29, 2020, 12:00 pm ET / 8:00 am PT

| Digital Advertising & Antitrust

| Digital Platforms: In Need of Regulation?

| Open v. Close Ecosystems from an Antitrust Perspective

 
 

Stay Connected

Competition Policy International (CPI) provides comprehensive resources and continuing education for members. Subscribe to CPI's FREE daily newsletter and get all the top antitrust news, as well as access to thousands of articles, delivered straight to your inbox!

JOIN HERE

This email was sent to sokold@law.ufl.edu
why did I get this?  unsubscribe from this list    update subscription preferences
Competition Policy International (CPI) · 111 Devonshire Street · Boston, MA 02108 · USA

October 16, 2020 | Permalink | Comments (0)

Pivotality: A Sound New Theory of Harm in Horizontal Mergers?

Considerable attention has recently been given to the expansion by the European Commission of its theories of harm in merger control, in particular regarding innovation.1 But the Commission’s latest addition to its theory of harm toolkit for horizontal mergers is in fact a static one. Indeed, in its in-depth review of the Novelis/Aleris merger, 2 the Commission considered a novel pivotality theory of harm as a central part of its case.3

October 16, 2020 | Permalink | Comments (0)

Should Children Pay for Their Parent’s Sins? The Sumal Preliminary Reference

October 16, 2020 | Permalink | Comments (0)

Thursday, October 15, 2020

Germany’s ‘Lex Apple Pay’: Payment Services Regulation Overtakes Competition Enforcement

Mobile payments appear to be the payment technology of the near future in the point-of-sale business. As in most markets when a wave of digitalization sweeps through, incumbents, big tech companies, and newcomers are all struggling to secure the biggest slice of the cake for themselves. In Germany, recent regulatory intervention has the potential to rebalance the relative strengths of the protagonists: the legislature enacted a provision with effect from 1 January 2020 that aims to help payment service providers to access the ‘technical infrastructure’1 that contributes to mobile and internet-based payment services

October 15, 2020 | Permalink | Comments (0)

Generics (UK) Ltd and Others v. CMA: Patent Settlement Agreements Unpacked

Judgment of 30 January 2020, Generics (UK) Ltd and Others v. Competition and Markets Authority, Case C-307/18, ECLI: EU:C:2020:52.

The Court of Justice of the EU, in a preliminary ruling, rendered its first judgment on the compatibility with the EU competition rules of patent settlement agreements, thereby providing important guidance on key concepts of competition law, such as restrictions of competition ‘by effect’ and ‘by object’ and ‘potential competition’.

October 15, 2020 | Permalink | Comments (0)

Merger Control for IRPs: Do Acquisitions of Distressed Firms Warrant Competition Scrutiny?

Merger Control for IRPs: Do Acquisitions of Distressed Firms Warrant Competition Scrutiny?

 

M. P. Ram Mohan

Indian Institute of Management Ahmedabad

Vishakha Raj

Indian Institute of Management Ahmedabad

Abstract

In July 2019, the Competition Law Review Committee Report had recommended that Insolvency Resolution Plans (IRP) which result in combinations should be green-channelled. This would mean that IRP combinations would be automatically approved without any merger scrutiny. The theoretical basis of this recommendation is the ‘failing firm defence’ which allows parties to enter into mergers if they show that the exit of a firm from the market will be more harmful to competition than the merger. This paper assesses the advisability of green-channelling IRPs through the lens of competition law. It examines the IRPs which have been scrutinised by the CCI and examines whether they are treated differently from other mergers. We use the European Union as a point of comparison to describe how the failing firm defence is being implemented and to show that there can be anticompetitive effects to green-channelling IRPs without a full competition assessment. We conclude that while the failure of a firm is an important consideration when assessing mergers, it cannot be the sole determinant of their desirability.

October 15, 2020 | Permalink | Comments (0)

Separation: A Cure for Abuse of Platform Dominance?

Separation: A Cure for Abuse of Platform Dominance?

 

Richard Gilbert

University of California, Berkeley

Abstract

Political candidates, legislators and academics have made proposals to separate services provided by dominant digital platforms from activities that rely on these services. Although the platforms have different economic and technical characteristics, common themes that motivate these proposals are the incentives of platforms to favor their own products and to suppress investment by imitating rivals. As has been shown in other contexts, this paper demonstrates that structural separation does not eliminate incentives for platforms to discriminate in the provision of service quality. Furthermore, the ability of vertically integrated platforms to imitate rivals does not necessarily harm consumers. Structural or functional separation can address some complaints lodged against activities by dominant platforms, but experience demonstrates that separation requirements are difficult to administer and can harm innovation. Public policy should rely on a mix of antitrust enforcement and regulation to address concerns about privacy, data security, and potential influence of major platforms in politics and the media, as well as the abuse of market power.

October 15, 2020 | Permalink | Comments (0)

Wednesday, October 14, 2020

Deputy Assistant Attorney General Michael Murray Delivers Remarks at University of Michigan Law School Washington, DC ~ Wednesday, October 14, 2020

See here.

October 14, 2020 | Permalink | Comments (0)

Transaction Cost Economics in the Digital Economy: A Research Agenda

Transaction Cost Economics in the Digital Economy: A Research Agenda

 

Frank Nagle

Harvard Business School

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business

Steven Tadelis

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Abstract

Transaction Cost Economics (TCE) theory has played an important role in understanding when it is more efficient for a transaction between two parties to occur within the market or within an organization. However, as more transactions occur in a digitally-mediated fashion, open questions remain as to how TCE applies in the digital economy. In this article, we consider how digital transformation helps us probe the boundary conditions of TCE and how, despite all the changes wrought by digital transformation, TCE can still provide a useful lens to help scholars and practitioners understand the organization of economic activity in the market-based economic system. We highlight three characteristics of digitally-mediated transactions: reputation mechanisms, private information, and non-pecuniary transactions and then discuss how these characteristics offer opportunities for future research and lay out a research agenda for this increasingly important area.

October 14, 2020 | Permalink | Comments (0)

Radical Restorative Remedies for Digital Markets

Radical Restorative Remedies for Digital Markets

Michal Gal

University of Haifa - Faculty of Law

Nicolas Petit

European University Institute - Department of Law (LAW)

Abstract

Much evidence from recent antitrust cases casts doubt on the ability of conventional remedies to restore competition in digital markets. This paper considers three untested remedies for antitrust enforcement in digital markets: mandatory sharing of algorithmic learning; subsidization of competitors; and temporary shutdowns. All three remedies are radical from several perspectives. First, they go beyond halting specific anticompetitive conduct by actively seeking to restore structural conditions favoring competition. Second, they entail government interference with freedom of enterprise and property rights to a substantially higher degree than the market-driven process which normally governs antitrust remedy design. However, the remedies fall short of outright economic regulation in that they aim to restore the competitive process, not to impose a competitive outcome. Third, all three remedies create complex tradeoffs, in that they could lead either to competitive benefits (e.g., the entry of new firms) or to harms (e.g., consumer losses in cases of platform shutdowns, or anticompetitive coordination in cases of algorithmic sharing). All three thus require careful balancing before implementation.

October 14, 2020 | Permalink | Comments (0)

EU Competition Law and the Rule of Reason Revisited

EU Competition Law and the Rule of Reason Revisited

 

Giorgio Monti

Tilburg Law and Economics Center (TILEC)

Abstract

In 1987, Richard Whish and Brenda Sufrin published an important comparison of EU and US antitrust law as applied to restrictive practices. They concluded that it would be unhelpful for the EU to borrow the language and the analytical framework developed in the US: the rule of reason is a phrase and a method suitable for the US only. This paper reviews the developments in EU and US antitrust law since then and, while sharing the same reluctance to describe EU competition law using US-based terminology, suggests that there are parallels between the two systems in that both have had to contend with similar challenges in calibrating antitrust enforcement. Comparing the two approaches to this problem allows us to view these efforts more clearly. In particular, it helps understand the significance of the paradigm shift found in Cartes Bancaires, Intel and Generics. While both systems have developed a comparable analytical framework, they continue to diverge when it comes to the interests protected by the two legal orders.

October 14, 2020 | Permalink | Comments (0)

Sharpening the European Commission’s Tools: Interim Measures

Sharpening the European Commission’s Tools: Interim Measures

 

Alexandre Ruiz Feases

Tilburg Law and Economics Center (TILEC)

Abstract

The European Commission is looking for new ways of enforcing EU competition law faster to enhance the effectiveness of antitrust intervention. Against this context, this article explores a tool that is already at the Commission’s disposal: interim measures. These allow the Commission to intervene quickly in those markets where anticompetitive harm must be addressed as soon as possible. The antitrust community generally encourages the Commission to use this tool more frequently. However, there is room to think about how to make interim measures sharper. For this purpose, the article first studies whether there are some necessary changes to make to overcome obstacles that may be impeding the Commission from using interim measures; and, second, it explores aspects that can be reformed to enhance the effectiveness of this instrument. The article concludes that, while there is no need to make any fundamental change for the Commission to resort to interim measures, there is space to introduce some reforms in three aspects: the standard of “irreparable damage”, the notion of victims, and the procedure. For each of them, this article offers two options for reform drawing from the experience of other jurisdictions.

October 14, 2020 | Permalink | Comments (0)

Tuesday, October 13, 2020

CALL FOR APPLICATIONS Penn Carey Law Center for Technology, Innovation and Competition Fellowship

 

CALL FOR APPLICATIONS

Center for Technology, Innovation and Competition Fellowship


The Center for Technology, Innovation and Competition (CTIC) invites applications for a CTIC Fellowship at the University of Pennsylvania Carey Law School starting in the Fall of 2020 for a one-year appointment with the potential for a one-year extension. The fellow will work with Professors Christopher Yoo and Rakesh Vohra on their Economics of Digital Services project.


Supported by the John S. and James L. Knight Foundation, the project seeks to provide a foundation for evidence-based decisionmaking regarding the economics of digital services. The project aims to better understand technology companies whose business models are predicated on access to user data.
 
Responsibilities of the fellow will include but are not limited to:

  • Conducting research on competition policy and antitrust as it relates to digital platform companies
  • Assisting with outreach for and development of an annual conference
  • Drafting project reports, research protocols, and other project documents
  • Managing grant compliance process
  • Leading website content development

Two years of experience in antitrust law is preferred. Applicants must have earned a law degree or have earned or be pursuing a PhD or equivalent in a related field and should not yet have held a full-time tenure track legal academic appointment.

Applicants should submit the following materials at https://apply.interfolio.com/78639.

  1. Curriculum vitae
  2. Detailed research proposal (no more than 2,500 words)
  3. Writing sample(s)
  4. Law school and/or graduate school transcript(s)
  5. Two references, minimum (at least one must be an academic reference)

Applications may be considered on a rolling basis. As a result, this position may be filled prior to the application deadline. Questions about this position should be sent to Caroline Olson, CTIC Managing Director, at cmolson@law.upenn.edu.

Penn adheres to a policy that prohibits discrimination on the basis of race, color, sex, sexual orientation, gender identity, religion, creed, national or ethnic origin, citizenship status, age, disability, veteran status, or any other legally protected class.

 

October 13, 2020 | Permalink | Comments (0)

Reasons to Be Cheerful: The Benevolent Market Power of Decentralised Blockchains

Reasons to Be Cheerful: The Benevolent Market Power of Decentralised Blockchains

Chris Pike

Organization for Economic Co-Operation and Development (OECD) - Competition Division

Gabriele Carovano

Organization for Economic Co-Operation and Development (OECD) - Competition Division

Abstract

Blockchain technology has in recent years captured attention and funding based on its promise to build trust among multiple parties without the need for a trusted intermediary. Born out of government-funded research on game theoretic Byzantine consensus, it offers the prospect of a more efficient way to build trust in transactions; trust in a product’s provenance, or trust in a contract’s execution. In competition policy, the focus of work on blockchains has, since the OECD’s thought leading work on the topic began in 2018, been on the possible anticompetitive risks posed by the technology, and the question of whether there was anything new about these risks. While we remain highly uncertain as to the prospects of a Blockchain revolution, in this paper, we therefore focus instead on the reasons for optimism, and in particular, why we think that decentralised permission-less blockchains offer the prospect of radical pro-competitive and inclusive efficiencies, and hence might contribute to a pro-competitive industrial policy. We therefore expect that blockchain will continue to capture the attention of policymakers that are keen to deliver shared prosperity in a post-COVID world, and we suggest that competition agencies might usefully engage in facilitating the emergence of a particular type of Blockchain, specifically decentralised permission-less blockchains with platform functionality.

October 13, 2020 | Permalink | Comments (0)

AI and Interdependent Pricing: Combination Without Conspiracy?

AI and Interdependent Pricing: Combination Without Conspiracy?

 

Joshua P. Davis

University of San Francisco - School of Law

Anupama Reddy

Abstract

Artificial Intelligence (AI) holds the potential to enhance the ability of competitors to coordinate prices without forming agreements. That could cause widespread market failures. Competitors in a broad range of industries could use AI to cause the same harms brought about horizontal price fixing without triggering legal liability. This Article suggests a solution to this potential problem: adopting the long-contemplated policy of imposing civil liability when competitors achieve supracompetitive prices regardless of whether they enter an agreement to do so.

October 13, 2020 | Permalink | Comments (0)

When Does Agreements Restrict Competition in EU Competition Law?

When Does Agreements Restrict Competition in EU Competition Law?

Christian Bergqvist

University of Copenhagen - Faculty of Law

Abstract

Under EU competition law it is prohibited to conclude anti-competitive agreements. If found, such conduct warrants fines in the millions. How-ever, little guidance on what to consider restrictive practices are available from the relevant statute, referring the matter to case law. Here a pattern is emerging, holding some practices anti-competitive by object while others must be assessed whether they are anti-competitive or not against their effect, without offering workable definitions on the lines between these. Moreover, other issues remains equally open-ended e.g. when the anti-competitive effect is appreciable. In this paper a framework, including four analytical steps, will be provided as road-map for the appraising of restrictive agreements and practices under EU competition law.

October 13, 2020 | Permalink | Comments (0)

Competition and Telecommunications Network Sharing October 23, 2020

We invite you to the international online workshop Competition and Telecommunications Network Sharing,
organized by the Department of European Law, Faculty of Law Charles University, in cooperation with Antitrust, Czech
competition law review, with a support of the Representation of the European Commission in the Czech Republic and
of the law firm Rowan Legal. The attendance is free for all registered participants.
We hereby ask you to register by answering this e-mail invitation or sending expression of your interest to
redakce@antitrust.cz The webinar uses the Zoom software. Therefore, we strongly recommend to all participants to
have the Zoom application installed on their PC, Mac, iPad, iPhone or Android device (https://zoom.us/). You will be
able to join the workshop also through your usual web browser by clicking on a provided link - as all registered
participants will receive on the D-Day their personal link to the e-mail address of their registration.
Languages: English (Translation will not be provided)
Please check out the latest version of the program:
9:30-10:45 Keynote presentations
 Rita Wezenbeek, Head of Unit C1, Antitrust: Telecoms, DG Competition, European Commission
Pro’s and con’s of mobile network sharing under EU anti-trust rules
 Hana Továrková, Chair of the Czech Telecommunication Office Council
The Regulatory Role of CTU in the 5G Networks Deployment Process
 Hynek Brom, First Vice-Chairman, Czech Office for the Protection of Competition
Sharing – benefit or cartel?
10:45-11:00 break
11:00-12:30 Expert presentations
 Jan Měkota, Managing Associate, Rowan Legal, law firm
State aid rules and governmental support of rapid 5G deployment
 Martin Lukáš, Partner Weinhold Legal, law firm
Network sharing: Historical experience of virtual network operator with supervising authorities
 Jiří Kindl, Partner Skils, law firm, Charles University Law School
Network sharing and counterfactual analysis under EU competition law
 Miroslav Jakab, Charles University Law School
How well can old theories of harm apply to the new generation of networks?
 Jiří Mňuk, Masaryk University Law School and Skils, law firm
Geographical scope of mobile network sharing

October 13, 2020 | Permalink | Comments (0)

Switching Costs, Brand Premia and Behavioral Pricing in the Pharmaceutical Market

Switching Costs, Brand Premia and Behavioral Pricing in the Pharmaceutical Market

 

Aljoscha Janssen

Singapore Management University; Research Institute of Industrial Economics (IFN)

Date Written: May 20, 2020

Abstract

This article examines the market power of branded prescription drugs faced with generic competition. Using prescription-level and matched socioeconomic panel data of the entire Swedish population between 2010 and 2016, I provide evidence for the key role of switching costs. A discontinuity surrounding patent expirations establishes that the effect is causal. Further, by comparing patients with and without medical education, I show that those without medical education experience higher brand premia. A unique feature of the Swedish market allows me to rule out patients' inattention due to information costs as a source of market power. Therefore, switching costs and perceived quality differences are the key determinants of market power. I then estimate a dynamic oligopoly model with forward-looking firms which is used in counterfactual studies of the effect of switching costs and perceived quality differences on prices. First, an increase in the length of procurement mimics a reduction of switching costs and increases prices. While the effect of switching costs on prices in theory is ambiguous, moderate switching costs and sufficient competition for new patients increase competitive pressure. Second, if everyone acts as a medical expert and experiences fewer brand premia, prices decrease.

October 13, 2020 | Permalink | Comments (0)

Monday, October 12, 2020

Pricing Algorithms as Collusive Devices

Pricing Algorithms as Collusive Devices

Cento Veljanovski

Abstract

This paper undertakes a critical review of the prospect that self-learning pricing algorithms will lead to widespread collusion independently of the intervention and participation of humans. There is no concrete evidence, no example yet, and no antitrust case that self-learning pricing algorithms have colluded let alone increased the prospect of collusion across the economy.

October 12, 2020 | Permalink | Comments (0)