Antitrust & Competition Policy Blog

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

Saturday, March 16, 2019

Twelfth Annual Federal Trade Commission Microeconomics Conference: Call for Papers

Twelfth Annual Federal Trade Commission Microeconomics Conference

12th Annual Federal Trade Commission Microeconomics Conference

CONSTITUTION CENTER400 7th St SW, Washington, DC 20024 | Directions & Nearby



The Federal Trade Commission's Bureau of Economics and the Tobin Center for Economic Policy at Yale will host a two-day conference to bring together scholars working in areas related to the FTC’s antitrust, consumer protection, and public policy missions. Those fields include industrial organization, information economics, health policy, behavioral economics, and quantitative marketing. Examples of potentially relevant topics include healthcare provider competition, vertical contracting, advertising, merger policy, industrial policies, innovation, privacy, intellectual property, bargaining, collusion, e-commerce, demand estimation, pharmaceutical markets, competition in technology markets, and consumer decision-making.

The scientific committee for the conference is:

  • Panle Jia Barwick (Cornell University)
  • Mark Schankerman (London School of Economics)
  • Joel Sobel (University of California, San Diego)

Organizers: Ted Rosenbaum (FTC) and Antara Dutta (FTC)

Staff Contact: Alexander Avramov (202-326-3003)


This conference is sponsored by the Federal Trade Commission’s Bureau of Economics and the Tobin Center for Economic Policy at Yale University. The FTC conference organizers are Ted Rosenbaum and Antara Dutta.


Interested participants should send an abstract or completed paper to by
June 21, 2019. Please note that preference will be given to completed papers. We also
welcome suggestions for panel discussions. Participants will be expected to include a
financial disclosure statement meeting the AEA’s guidelines in their bios.
The scientific committee for the conference is:
 Panle Jia Barwick (Cornell University)
 Mark Schankerman (London School of Economics)
 Joel Sobel (University of California, San Diego)


March 16, 2019 | Permalink | Comments (0)

Friday, March 15, 2019

Consumer Surplus-enhancing Collusions, Patent Pools, and R&D

Linfeng Chen, Changzhou Institute of Technology theorizes about Consumer Surplus-enhancing Collusions, Patent Pools, and R&D.

Abstract: This study reveals two different rationales for consumer surplus-enhancing collusion. The first model considers two competitive firms in the final product market, each with one essential patent necessary for production. The equilibrium price under collusion is lower than the price under competitive equilibrium. The second model considers a differentiated duopoly product market, where two firms make R&D investment with symmetric spillover in the framework of d'Aspremont and Jacquemin (1988). If the spillover rate is high enough, collusive equilibrium will involve higher R&D investment, which could lead to higher output in equilibrium.

March 15, 2019 | Permalink | Comments (0)

Competition Policy, Trade and the Global Economy: Existing WTO Elements, Commitments in Regional Trade Agreements, Current Challenges and Issues for Reflection

Robert D. Anderson, World Trade Organization, William E. Kovacic, George Washington University - Law School; King's College London – The Dickson Poon School of Law, Anna Caroline Müller, World Trade Organization (WTO), and Nadezhda Sporysheva, World Trade Organization (WTO) identify Competition Policy, Trade and the Global Economy: Existing WTO Elements, Commitments in Regional Trade Agreements, Current Challenges and Issues for Reflection.

ABSTRACT: Competition policy, today, is an essential element of the legal and institutional framework for the global economy. Whereas decades ago, anti-competitive practices tended to be viewed mainly as a domestic phenomenon, most facets of competition law enforcement now have an important international dimension. Examples include: the investigation and prosecution of price fixing and market sharing arrangements that often spill across national borders and, in important instances, encircle the globe; multiple recent, prominent cases of abuses of a dominant position in high-tech network industries; important current cases involving transnational energy markets; and major corporate mergers that often need to be simultaneously reviewed by multiple jurisdictions. Beyond competition law enforcement per se, increasingly, major issues of competition policy (e.g., the impact on competition of the structure and scope of intellectual property rights or the role of state-owned enterprises) implicate the interests of multiple jurisdictions.

To date, efforts to establish a general agreement on competition policy in the framework of the international trading system have been unsuccessful. Nonetheless, provisions relating to competition policy are incorporated in the WTO General Agreement on Tariffs and Trade (GATT); the General Agreement on Trade in Services (GATS); the Agreement on Trade-Related Intellectual Property Rights (TRIPS Agreement); the Agreement on Trade-Related Investment Measures (TRIMs Agreement); and other WTO instruments. Effective national competition policies are also essential to realizing the benefits derivable from participation in the (plurilateral) WTO Agreement on Government Procurement (GPA). The importance of competition policy for world trade is also manifested by the increasing incorporation of undertakings on competition policy in the Protocols of Accessions that apply to new WTO Members, and in the work of the WTO Trade Policy Review Body, which systematically references developments regarding national competition policies in developed and developing jurisdictions.

Beyond this, as set out in this paper and further manifesting the significance of competition policy for international trade, detailed chapters on competition policy have been incorporated in numerous bilateral and regional trade agreements (RTAs) linking developed and developing economies around the globe. 

The WTO Working Group on the Interaction between Trade and Competition Policy, which was active from 1997 through 2003 and which considered the case for a more general agreement on competition policy in the WTO, has been inactive since 2004. It is, nonetheless, available as a potential vehicle for stocktaking of developments and reflection on relevant issues if ever WTO Members find this useful and timely. A salient related consideration is that, whereas in 1997, when discussion commenced in the WTO Working Group, only around 50 economies in the world had national competition legislation, currently, about 135 WTO Members have such laws. These include all of the BRICS economies (Brazil, Russia, India, China and South Africa) and a large number of other developing WTO Members.

Concurrent with the foregoing developments, increasing attention is being given, in international policy circles, to particular issues of competition law enforcement and competition policy with significance for the global economy. These include: 

• The international dimension of competition law cases: the resulting positive spillovers for economic welfare and potential for conflicts of jurisdiction; 

• The broadening application of competition policy vis-à-vis intellectual property rights in the global economy; 

• Important issues concerning the potential for monopolization and the maintenance of competition in digital markets; 

• Issues concerning state-owned enterprises, the role of industrial policy and the maintenance of competitive neutrality in emerging economies; and 

• A mounting concern, on the part of global businesses, to ensure non-discrimination, transparency and procedural fairness in competition law enforcement worldwide. 

This paper reviews and reflects upon these and related developments. It proceeds from the premises that important synergies exist between trade and competition policy and that it is reasonable to acknowledge this and inquire whether additional steps are desirable to ensure the full realization of the relevant synergies. The paper is intended to serve as a resource for reflection on related issues, if and/or when WTO Members decide to undertake such an exercise. Even so, it is recognized that the issues are complex, and that simplistic or overly ambitious or prescriptive solutions will not be helpful. In this light, the closing portions of the paper reflect upon the importance of relevant international learning processes; the actual and potential contributions of the WTO in this regard; and prospects for the future.

March 15, 2019 | Permalink | Comments (0)


Herb Hovenkamp weights in on AMEX's RULE OF REASON. Worth reading.

ABSTRACT: In Ohio v. American Express Co., the Supreme Court applied antitrust’s rule of reason to an allegedly anticompetitive practice on a two-sided platform. The challenge was to an “anti-steering” rule, a vertical restraint preventing merchants from shifting customers who offered an AmEx card from to a less costly alternative such as Visa or Mastercard. 
A two-sided platform is a business that depends on relationships between two different, noncompeting groups of transaction partners. For example, a printed periodical such as a newspaper earns revenue by selling both advertising and subscriptions to the paper itself. Depending on its business model, the periodical might obtain very different mixtures of advertising and subscriber revenue. In some cases, such as most credit cards, card holders are actually negative contributors of revenue: they receive awards for using a particular card, paid through merchant fees. Success depends on a platform’s ability to maintain the appropriate balance between participation on one side and the other. For example, if Uber, a two-sided platform offering transportation services, sets too high a fare it will have enough drivers but too few passengers. If the price is too low, it will have too many passengers in relation to available drivers.
Administering antitrust under the rule of reason depends on careful fact finding. Under antitrust’s per se rule, once a practice is proven little evidence of anticompetitive effects is relevant. By contrast, the rule of reason requires a searching factual examination of a record, enabling the court to understand the effects of the defendant’s activities. This obliges appellate courts to review the record, and the Supreme Court’s AmEx opinion should be tested against this requirement. The Court simply ignored specific district court fact findings to the effect that AmEx’s anti-steering rule imposed higher costs on everyone, including customers who purchased with cash.
The Court also mistakenly concluded that AmEx’s anti-steering rule combatted free riding, because otherwise competing card issuers could profit from AmEx’s business model. That might be true if one could obtain AmEx’s perks merely by owning the card, but the record and AmEx’s own literature were clear that one received the perks only for transactions actually made with the card, so there was no free riding.
More generally, the Court’s analysis assumed that costs on one side of a two-sided platform are offset by gains on the other side. In some situations, such as the Uber example above, that may be true. But in the AmEx case both sides of the platform were harmed by the anti-steering rule. Suppose that the merchant fee for use of an AmEx card was $30 but only $20 if the customer purchased with a Visa card. This $10 difference creates bargaining room—a Coasean “surplus”—for the merchant and the cardholder to strike a mutually beneficial deal. The merchant might offer the customer a $6 discount for using a Visa card instead, which would make the customer $6 better off for that particular transaction and the merchant $4 better off. The customer would agree if the value it placed on AmEx’s perks was less than the $6 price discount.
The anti-steering provision would prohibit this transaction. As a result, the customer stays with the AmEx card and experiences a $6 loss. The merchant loses $4 as well. Far from being a situation where value goes up on one side and down on the other, it actually goes down on both sides. In addition, the competing platform, Visa, is also worse off because it was denied the opportunity to offer a lower cost substitute transaction. The only entity that is better off is AmEx—the owner of the platform itself, but not the dealing parties on one or the other side of the platform.
Competition always exists at the margin. One cannot evaluate the competitive effects of a particular restraint by considering whether the overall costs of a defendant’s business practices exceed the benefits. For example, in the NCAA case the challenge was not to the existence or legitimacy of the NCAA as an association, which no one was challenging. Rather it was to the effect of a limitation on the televising of games. The AmEx challengers were not trying to tear down AmEx’s entire business model, but only to enjoin its anti-steering rule. That requires assessing the marginal costs and benefits of the anti-steering rule. The record was clear that at the margin each merchant affected by the steering rule was worse off, and each cardholder was worse off as well.
The Court’s assumption about offsetting cost and benefits also led it to reach the economically absurd conclusion that in a qualifying two-sided platform, both sides should be included in the market definition. The two sides are, of course, complements in production, not substitutes. This holding is thus in conflict with an idea that is central to antitrust analysis, which is that relevant markets consists of a “collusive group,” or substitutes.
Further, the Court exacerbated this problem by holding that in a case involving a vertical restraint a relevant market must be defined, even if proof is proceeding through examination of direct effects. That conclusion, which was never properly briefed or argued, flies in the face of decades of progress toward more accurate methodologies for assessing power. Further, it turns into a question of law something that is clearly an issue of fact – namely whether the defendant has sufficient power to produce an anticompetitive restraint.
The Court did limit the scope of its holding to situations involving a simultaneous one-to-one transaction across the two sides of the platform. That would likely include credit card networks as well as other direct transactional networks such as Uber. However, it would exclude situations where there is not a simultaneous one-to-one relationship between transactions on the two sides, such as Netflix or music streaming services, periodicals or search engines partially supported by advertising, or most exchanges on sports networks. Neither would it include situations where the relationship between the transactions on the two sides is actuarial, such as health insurance networks.

March 15, 2019 | Permalink | Comments (0)

Thursday, March 14, 2019

International Post Organisations: A European Perspective

Oliver Bischoff, Dagmar Kollmann, Jürgen Kühling, Thomas Nöcker, Achim Wambach and Angelika Westerwelle offer International Post Organisations: A European Perspective.

ABSTRACT: In Europe, there have not been evolved a single market for postal services so far. The markets for postal services are predominantly restricted to the national boundaries determined by the different socio-economic and legal conditions that are still present in the Member States of the European Union (EU). However, market integration of postal services, ending up to a single market, would intensify competition among postal services providers, thus, finally increasing welfare. One barrier of market integration could be the multilateral agreements for cross-border postal services of the International Post Corporation (IPC) and of the Universal Postal Union (UPU) that apply exclusively to the Universal Service Providers (USP).

March 14, 2019 | Permalink | Comments (0)

Establishing Unfairly High Prices: The Implications of the CAT’s Judgment in Flynn and Pfizer v Competition and Market Authority

Alison Jones, King's College London – The Dickson Poon School of Law and Christopher Stothers, University College London - Faculty of Laws describe Establishing Unfairly High Prices: The Implications of the CAT’s Judgment in Flynn and Pfizer v Competition and Market Authority.

ABSTRACT: Research and development of new and innovative pharmaceutical treatments is important but expensive and risky. Although patents, regulatory data exclusivity and other factors can result in pharmaceutical manufacturers and distributors holding significant market power, the rewards available are, to some extent, constrained by limitations in healthcare budgets (whether public or private). Nonetheless, the price of drugs has been attracting considerable attention across the globe, especially where dramatic increases in prices occur and where the price increases are implemented over a short period of time and relate to drugs which are old. The judgment of the UK’s Competition Appeal Tribunal (CAT) in Flynn and Pfizer v Competition and Market Authority (CMA), partly setting aside the CMA's decision to fine Pfizer and Flynn for charging unfairly high prices for an anti-epilepsy drug, has reaffirmed that, however lurid the headline, any challenge to pricing on competition grounds must be carefully reasoned. The CAT's judgment, and the appeal against it, has important implications not only for this case but also for other competition investigations pending before the CMA into high pricing in the pharmaceutical sector.

March 14, 2019 | Permalink | Comments (0)

Antitrust Chronicle - LeadershIP EU - Innovation, IP & Competition Challenges (special issue)




Effects-Based Analysis: Where Do We Stand on Both Sides of the Atlantic?


By Douglas Ginsburg, Robin Jacob & Jean-François Bellis


A recap of the fireside chat which took place at LeadershIP between U.S. and EU judges exploring the competition law trends in each jurisdiction. The panel featured the Honorable Douglas Ginsburg Senior Circuit Judge, United States Court of Appeals for District of Columbia; Sir Robin Jacob, Sir Hugh Laddie Chair of Intellectual Property Law, University College London and former Justice in the Court of Appeal of England and Wales; and moderated by Jean-François Bellis, Partner, Van Bael & Bellis.


Click here for the full article.


New Fault Lines in Antitrust: The Rising Threat of Growing Divergence to IP-Centric Business Practices

By Paul Lugard & David Gabathuler

The last two decades have shown a remarkable degree of convergence in the area of antitrust enforcement and the dissemination of antitrust regimes around the globe has brought significant welfare gains. However, the wide adoption of antitrust regimes as a preferred model for economic regulation also comes at a price: as a result of the multitude of agencies that may each claim jurisdiction over particular transactions, the potential for incorrect and inconsistent outcomes and “system clashes” increases. International, IP-centric, and innovation-intense business transactions are the most likely recipients of the negative consequences of these frictions. It is in our view highly questionable whether the current, traditional cooperation mechanisms are in and of themselves sufficient to avoid major frictions between jurisdictions. The call for supplemental bilateral and multilateral mechanisms to ensure effective, coherent, and economically rational antitrust enforcement, such as the proposal for a Multilateral framework on procedures in competition law investigation and enforcement, is legitimate and should be taken seriously and further explored.


Click here for the full article.



Substantive Criteria and Legal Standards in Recent Abuse of Dominance Decisions in Hi-Tech Markets: EU vs. U.S. and Lessons Learned


By Yannis Katsuolacos


We focus on recent Abuse of Dominance antitrust cases in high-tech markets and discuss the important role of differences in the Substantive Criteria in explaining differences in the Legal Standards adopted in EU and U.S. Also, we consider the reasons that the rule of reason is not adopted in either EU or U.S. in these cases and, finally, we consider whether and how recognising the potential impact of anticompetitive (exclusionary) conduct on innovation in hi-tech markets, such as the “digital platforms,” should affect enforcement procedures.


Click here for the full article.


Abuse of a Dominant Position: A Post-Intel Calm?


By Giorgio Monti


While the Intel judgment might be a watershed moment for the ECJ’s interpretation of Article 102 TFEU, there may be risks that this development is countered by two trends: first, a concern by some competition agencies that a more aggressive approach is required to counter firms with exorbitant market power; second, a retreat to formalism by competition agencies who find the effects-based approach too problematic to implement. Moreover, for a proper integration of an effects-based approach, agencies focusing on prohibiting likely anticompetitive effects could develop improved approaches to the design of remedies and the measurement of fines.

Click here for the full article.



With Increased Powers to National Competition Authorities in the EU, Will We have Appropriate Procedural Safeguards too?


By Kaarli H. Eichhorn

Following the recent adoption of the EU’s “ECN+ Directive,” this article highlights the importance of the rule of law in the EU, including in competition proceedings. It applauds the Directive’s many improvements to enhancing national competition enforcement, and contends that due process issues should have received more attention, in parallel with the substantially increased powers given to EU Member State competition authorities. This article finds that a genuinely effective competition regime can only be attained with robust procedural safeguards to accompany the greater powers that competition agencies across Europe will exercise in the future.

Click here for the full article.





Dear Readers,

The March 2019 CPI Antitrust Chronicle addresses issues related to the second annual LeadershIP EU Conference, “Innovation, IP and Competition Challenges for Global Businesses in the 21st Century,” which took place in Brussels, Belgium on November 13, 2018. The panelists at the conference came from the private and public sectors: regulators, academics, and private practitioners.

A focus of the day-long conference featured ranging views on innovation policy, intellectual property policy, and international antitrust policy. Notably, the intersection and overlay of IP and antitrust with respect to the development of standardized technology and the continuing “Great Patent Debate” were hotly-discussed topics.

The sixth annual LeadershIP Conference will take place later this month on March 26, 2019 in Washington, DC. The agenda themes for the day are: (i) The impact of 5G: Why Innovation Policy Matters; (ii) The IP Policy Landscape: U.S. and The World; (iii) IP and Antitrust: Global Agency Dynamics; and (iv) International Antitrust: What Rules and Whose Standards? Among the many great panelists, the conference will feature a Fireside Chat with Makan Delrahim, Assistant Attorney General, United States Department of Justice Antitrust Division; and Andrei Iancu, Director, United States Patent Trademark Office. We hope to see many of our readers there.

As always, thank you to our great panel of authors.


CPI Team*

*CPI thanks Qualcomm Inc. for their sponsorship of this issue of the Antitrust Chronicle. Sponsoring an issue of the Chronicle entails the suggestion of a specific topic or theme for discussion in a given publication. CPI determines whether the suggestion merits a dedicated conversation, as is the case with the current issue of the Chronicle, and takes steps to ensure that the viewpoints relevant to a balanced debate are invited to participate.





For April 2019, we will feature Chronicles focused on issues related to (1) Public Procurement; and (2) Online Advertising and Antitrust.






CPI wants to hear from our subscribers. In 2019, we will be reaching out to members of our community for your feedback and ideas. Let us know what you want (or don’t want) to see, at:


For May 2019, we will feature Chronicles focused on issues related to (1) Healthcare; and (2) Common Ownership.

Contributions to the Antitrust Chronicle are about 2,500 – 4,000 words long. They should be lightly cited and not be written as long law-review articles with many in-depth footnotes. As with all CPI publications, articles for the CPI Antitrust Chronicle should be written clearly and with the reader always in mind.

Interested authors should send their contributions to Sam Sadden
( with the subject line “Antitrust Chronicle,” a short bio and picture(s) of the author(s).

The CPI Editorial Team will evaluate all submissions and will publish the best papers. Authors can submit papers on any topic related to competition and regulation, however, priority will be given to articles addressing the abovementioned topics. Co-authors are always welcome.

Copyright © 2018, All rights reserved.
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Editorial Team & Editorial Advisory Board

March 14, 2019 | Permalink | Comments (0)

Changing South Africa's Competition Law Regime: A Populist Departure from International Best Practices

John Oxenham, Michael-James Currie and Andreas Stargard examine Changing South Africa's Competition Law Regime: A Populist Departure from International Best Practices.

ABSTRACT: The Amendment Bill alters key provisions of the South African Competition Act focusing specifically on the redistribution of wealth and transformation of ownership in lieu of pursuing traditional antitrust goals.

The Bill provides for greater ministerial intervention at the initial stage of a merger (based on national security), during the merger investigation (based on public-interest grounds) and broadens the right of appeals to parties outside the merger control review.

The Bill lowers the standard that the South African Competition Commission must meet to prosecute cases and foreshadows a risk of increased third-party interventionism more generally.

The departure from a traditional substantial lessening of competition (SLC) test to an adverse effects-based test, which takes public interests considerations into account, is likely to result in the injection of greater subjectivity into the decision-making process and parties’ increased difficulty in self-assessment of conduct particularly in relation to dominant firms.

March 14, 2019 | Permalink | Comments (0)

The International dimension of Competition Law: EU, Brexit and beyond… The Competition Law Scholars Forum Workshop, Thursday 25th April 2019

The International dimension of Competition Law: EU, Brexit and beyond…


The Competition Law Scholars Forum Workshop


Co-organized by the   The Interdisciplinary Centre for Competition Law and Policy

Thursday 25th April 2019

Queen Mary University of London, School of Law,339 Mile End Road, London E1 4NS

Mandatory prior registration by  14th April 2019 at


09:30 – 09.50: Registration

09.50: Introduction: Barry Rodger (CLaSF),  Eyad Maher Dabbah (ICC)

10.00-10.30 Keynote Speaker - tbc


10.30-10.45 Coffee

10.45-12.15 Brexit and UK competition law, chair: tbc

Eyad Maher M Dabbah, Brexit and competition law: the future relationship between the UK and EU competition law regimes, ICC, QMUL

Barry Rodger, UK Competition Law Enforcement Post-Brexit: Parallel or Subsidiary to EU Law Enforcement?, Strathclyde University

David Little, A “Deep And Special Partnership”? 
Risks of Misalignment In UK And EU Merger Control  Post-Brexit,
Cleary Gottlieb Steen & Hamilton LLP

12.15-13:15  Brexit and Private Enforcement, chair: tbc

Annalies Outhuijse, The Netherlands, the new cartel claim paradise after Brexit?, University of Groningen

Konrad Zawodziński, Antitrust compliance and private enforcement of competition law – at the crossroads of disappearing EU law effet utile and supremacy principles, Koźmiński University


13:15-14:30 LUNCH


14:30- 15.30  Supra-national Competition law Enforcement, chair: tbc

Viktoria Robertson, The ECN+ Directive: Strengthening the Pillars of the European Competition Network’s Architecture, University of Graz

Francisco Marcos, Towards a Supranational Competition Policy in Central America, IE, Madrid


15.30-15.45 Coffee Break


15:45- 16.45  Competition Law and Trade Policy, chair: tbc

Kalpana Tyagi, China’s (Ab-) use of Competition & IPRs to pursue the Industrial Policy Objectives: Does the WTO (really) have all the answers?, University of Arhus

Galyna Kostiukevych, Competition provisions in preferential trade agreements and their impact on anticompetitive conduct within global supply chains: the EU perspective, EUI


16.45-17:15 Closing Speaker- Colin Raftery, Senior Director of Mergers, CMA


17:15-17:30 Closing remarks: Maria Ioannidou (ICC), Barry Rodger (CLaSF)


17.30 Drinks, followed by speakers dinner , locations tbc


March 14, 2019 | Permalink | Comments (0)

U.S. Chamber Antitrust Panel Session Tuesday, March 26th 11:00 AM-12:30 PM

U.S. Chamber Antitrust Panel Session 

Tuesday, March 26th 

11:00 AM-12:30 PM

1615 H St NW

The U.S. Chamber welcomes you to an antitrust panel session on the margins of the ABA Spring Meeting that will examine the work done in the past decade on procedural fairness in antitrust proceedings, efforts currently underway, and the direction of these efforts going forward. The session will feature enforcers from various jurisdictions to discuss the relationship between sound economic analysis and good process.

University of Florida Professor of Law Daniel Sokol will moderate the session, and other panelists will include: 

Roger Alford, Deputy Assistant Attorney General, U.S. Department of Justice

Nicholas Banasevic, Head of Unit in DG Competition, European Commission 

Alexandre Cordeiro, Commissioner, Administrative Council for Economic Defense of Brazil 

Toh Han Li, Chief Executive and Commissioner, Competition Commission of Singapore

Bruce Kobayashi, Director, Bureau of Economics, U.S. Federal Trade Commission 

Jeanne Pratt, Senior Deputy Commissioner, Canadian Competition Bureau


Register here

March 14, 2019 | Permalink | Comments (0)

The New Best Practices Code for State Aid: A Check against Reality

Thomas Lübbig offers The New Best Practices Code for State Aid: A Check against Reality.

ABSTRACT: It was with much enthusiasm that Commissioner Vestagerannounced the adoption of a new Best Practices Code for State aid control on 16 July 2018. The New Code is meant to replace and consolidate the 2009 predecessor version of the then adopted Code of Best Practices, and the simplified Procedure Notice, also adopted in 2009.

March 14, 2019 | Permalink | Comments (0)

Wednesday, March 13, 2019

Competition law enforcement on digital markets—lessons from recent EU case law

Adrian Kuenzler offers Competition law enforcement on digital markets—lessons from recent EU case law.

ABSTRACT: This article is set against the Court of Justice of the European Union’s (CJEU) decisions in Pierre Fabre and Coty Germany GmbH, observing that in the digital economy, price is no longer the sole important parameter of competition and that competition law therefore has to reconstruct the theoretical background required to explain the tensions contained in the design of concentrated marketplaces. As the CJEU’s approach taken in Pierre Fabre and Coty shows, competition authorities and courts also need to consider the market’s distinct psychological properties when they contemplate the legal framework that governs it. The article thus explains the CJEU’s decisions not against the well-known debate about inter- and intrabrand competition but with reference to the notion of creating distinct types of ‘variety’ in the marketplace so as to enable consumers to choose not just between the alternative options that they face but also to enable them to make decisions that will shape the manner in which they think about whether they should consider alternative options at all. The article’s findings aim to advance debates about the overarching policy goals of the way in which digital markets ought to be regulated.

March 13, 2019 | Permalink | Comments (0)

HBS Platform Strategy Conference: What is Next? March 29, 2019

HBS Platform Strategy Conference: What is Next? March 29, 2019

In the past few years, much has been written by academics and practitioners on platform strategies. We hope to use this conference to take stock of existing knowledge and think about new research questions or directions. To this end, we have invited a few thought leaders to share their perspectives.


All sessions will take place in Chao Hall, Room 340 unless otherwise noted.

Mar 29

Check-in & Breakfast



Feng Zhu (Harvard Business School)

Session 1

Chair: Karim Lakhani (Harvard Business School)
  • “Market Expanding or Market Stealing? Competition with Network Effects in Bike-Sharing”
    Ginger Jin (University of Maryland)
  • “Platform Power and (Possible) Platform Bias in Recorded Music”
    Joel Waldfogel (University of Minnesota)
  • “Platform Shift and the Inverted Firm Hypothesis”
    Marshall Van Alstyne (Boston University)

Coffee Break


Session II

Chair: Shane Greenstein (Harvard Business School)
  • “Network of Complementarities in Platform Ecosystems”
    Rahul Kapoor (University of Pennsylvania)
  • “Platform Design Over the Platform Life Cycle”
    Liran Einav (Stanford University)
  • “Compatibility Strategies of Asymmetric Digital Platforms”
    Raffi Amit (University of Pennsylvania)



Session III (Rapid Presentations)

Chair: Marco Iansiti (Harvard Business School)
  • “A Model of Online Trading Platforms: Provisioning Trust for Transactions versus Enabling Discoveries”
    Karthik Kannan (Purdue University)
  • “Designing Online Platforms for Offline Services: The Bigger, the Better?”
    Brian Wu (University of Michigan)
  • “Disintermediation in Platform Markets”
    Grace Gu (Harvard Business School)
  • “Private Contracts in Two-Sided Markets”
    Francisco Ruiz-Aliseda (Pontificia Universidad Católica de Chile)
  • “Wholesale Price Discrimination in Global Sourcing”
    Ruomeng Cui (Emory University)

Coffee Break


Session IV

Chair: Feng Zhu (Harvard Business School)
  • Platform Verticalization at Upwork
    Zak Hubbard (Upwork)
  • “The Business of Platforms”
    Michael Cusumano (MIT)

Coffee Break


Session V

Chair: David Homa (Harvard Business School)
  • “Reflections on Platform Economics”
    Marc Rysman (Boston University)
  • “Antitrust and Platforms—Mind the Gaps”
    Daniel Sokol (University of Florida)

Reception & Dinner

Meredith Room, Spangler Center

March 13, 2019 | Permalink | Comments (0)

The Effect of Common Ownership on Profits: Evidence from the U.S. Banking Industry

Jacob Gramlich, Board of Governors of the Federal Reserve System and Serafin Grundl, Board of Governors of the Federal Reserve System determine The Effect of Common Ownership on Profits: Evidence from the U.S. Banking Industry.

ABSTRACT: Theory predicts that "common ownership" (ownership of rivals by a common shareholder) can be anticompetitive because it reduces the weight firms place on their own profits and shifts weight toward rival firms held by common shareholders. In this paper we use accounting data from the banking industry to examine empirically whether shifts in the profit weights are associated with shifts in profits. We present the distribution of a wide range of estimates that vary the specification, sample restrictions, and assumptions used to calculate the profit weights. The distribution of estimates is roughly centered around zero, but we find statistically significant estimates in either direction in some cases. Economically, most estimates are fairly small. Our interpretation of these findings is that there is little evidence for economically important effects of common ownership on profits in the banking industry.

March 13, 2019 | Permalink | Comments (0)

Data Standardization

Michal Gal, University of Haifa - Faculty of Law and Daniel L. Rubinfeld, University of California at Berkeley - School of Law; National Bureau of Economic Research (NBER); NYU Law School explore Data Standardization.

ABSTRACT: With data rapidly becoming the lifeblood of the global economy, the efficiency of its use significantly affects both social and private welfare. While the volume of data collected has reached astronomical proportions, the fact that most data are collected in a system that is largely modular and distributed creates a “Tower of Babel” of different databases, thereby potentially limiting synergetic knowledge production. Data standardization is key to facilitating and improving the use of data. Indeed, standardization is a precondition for the operation of industries in which cross-firm and cross-industry data exchanges are critical. It can also create substantial benefits when data synergies carry high value. It does so by reducing the three main technological obstacles to data portability and interoperability: metadata uncertainties, data transfer obstacles, and missing data. 

Despite the importance of data standardization, the role of the government in such standardization is rarely examined. This article analyzes the justifications for and the limitations of data standardization in light of data’s special characteristics. We first review the relevant characteristics of data and data markets. We discuss the three main technological obstacles to widening the use of data, based on interviews with data scientists. We then explain how data standardization affects these obstacles and analyze the benefits and costs of data standardization. As shown, data raises new considerations about the appropriate interventionist role for regulators, that are generally absent from debates about the standardization of other products, and adds a novel dimension to some of the traditional considerations raised in more typical cases. For example, on the plus side, data standardization can lead to smoother data flows, better machine learning, and easier policing in cases where rights are infringed or unjustified harms are created by data-fed algorithms. It might also help support a more competitive and distributed data collection ecosystem. At the same time, increasing the scale and scope of data analysis can create negative externalities in the form of better profiling, increased harms to privacy, and cybersecurity harms. Repercussions for investment and innovation in data collection and analysis are also analyzed. 

Finally, we explore whether market-led standardization initiatives can be relied upon to increase welfare, and evaluate the role governmental-facilitated standardization should play, if at all. We show that the need for reviewing and possibly facilitating data standards can be especially strong where potential data synergies are cross-industry or inter-temporal. We also explore the appropriateness of different regulatory methods for achieving these tasks. While governmental facilitation of data standardization may be justified only in limited scenarios, the current situation in which data standardization is rarely considered carries a large price tag. 

March 13, 2019 | Permalink | Comments (0)

Cost Efficiencies and Upward Pricing Pressure

Jessica Dutra, University of Kansas, and Tarun Sabarwal, University of Kansas identify Cost Efficiencies and Upward Pricing Pressure.

ABSTRACT: We investigate the accuracy of UPP as a tool in antitrust analysis when there are cost efficiencies from a horizontal merger. We include model-based, merger-specific cost efficiencies in a tractable manner and extend the standard UPP formulation to account for these efficiencies. The efficacy of the new UPP formulations is analyzed using Monte Carlo simulation of 40,000 mergers (8 scenarios, 5,000 mergers in each scenario). We find that the new UPP formulations yield substantial gains in prediction of post-merger prices, as compared to existing practice, and there are substantial gains in merger screening accuracy as well. Moreover, the new UPP formulations outperform the standard UPP formulation at higher thresholds for all the standard cases in the paper. The results support the inclusion of model-based cost efficiencies in the standard UPP formulation for more accurate antitrust decision-making.

March 13, 2019 | Permalink | Comments (0)

Tuesday, March 12, 2019

Accommodating Competition: Harmonizing National Economic Commitments

Jonathan Baker, American University discusses Accommodating Competition: Harmonizing National Economic Commitments.

ABSTRACT: This article shows how the norm supporting governmental action to protect and foster competitive markets was harmonized with economic rights to contract and property during the 19th century, and with the development of the social safety net during the 20th century. It explains why the Constitution, as understood today, does not check the erosion of the entrenched but threatened national commitment to assuring competitive markets.

March 12, 2019 | Permalink | Comments (0)

Regulating Abuse of SEPs in Mobile Communications Market: Reviewing 1st and 2nd Qualcomm Cases in Korea

Dae Sik Hong, Sogang University has written on Regulating Abuse of SEPs in Mobile Communications Market: Reviewing 1st and 2nd Qualcomm Cases in Korea.

ABSTRACT: The purpose of this chapter is to analyze the 1st and 2nd Qualcomm cases of the Korea Fair Trade Commission (KFTC) from a legal perspective. This chapter examines and analyzes some of the competition law issues in the two cases. The review deals with the issue of defining relevant markets, the criteria for determining whether there is a violation or evasion of fair, reasonable and non-discriminatory (FRAND) commitment, the competition law assessment of FRAND commitment infringements, and the theories and establishment of competitive harm.

March 12, 2019 | Permalink | Comments (0)

The Economics of Markets and Platforms

Daniel F. Spulber, Northwestern University - Kellogg School of Management explores The Economics of Markets and Platforms.

ABSTRACT: Advances in the study of both markets and platforms contribute to economics. Platforms are typically digital markets, although platforms can designate markets generally. So, the economics of markets and the economics of platforms are one and the same. Platforms show the critical role of intermediaries in endogenous price adjustment and market clearing. The platform model remedies problems with general equilibrium analysis by combining and extending the basic Walrasian and Marshalian market models. The analysis of platforms provides explanations for the bid–ask spread, including market power, search costs, matching costs, adverse selection, and moral hazard. The study of platforms demonstrates the importance of participation and coordination in the formation of markets. The discussion emphasizes that platforms have significant implications for the theory of the firm. The analysis further considers how platforms affect innovation and entrepreneurship.

March 12, 2019 | Permalink | Comments (0)

Consumer Surplus-enhancing Collusions, Patent Pools, and R&D

Linfeng Chen, Changzhou Institute of Technology identifies Consumer Surplus-enhancing Collusions, Patent Pools, and R&D.

ABSTRACT: This study reveals two different rationales for consumer surplus-enhancing collusion. The first model considers two competitive firms in the final product market, each with one essential patent necessary for production. The equilibrium price under collusion is lower than the price under competitive equilibrium. The second model considers a differentiated duopoly product market, where two firms make R&D investment with symmetric spillover in the framework of d'Aspremont and Jacquemin (1988). If the spillover rate is high enough, collusive equilibrium will involve higher R&D investment, which could lead to higher output in equilibrium.

March 12, 2019 | Permalink | Comments (0)