Law Commons^™

Regulation And The Marginalist Revolution, Herbert Hovenkamp

Florida Law Review

The marginalist revolution in economics became the foundation for the modern regulatory State with its “mixed” economy. For the classical political economists, value was a function of past averages. Marginalism substituted forward looking theories based on expectations about firm and market performance. Marginalism swept through university economics, and by 1920 or so virtually every academic economist was a marginalist.

This Article considers the historical influence of marginalism on regulatory policy in the United States. My view is at odds with those who argue that marginalism saved capitalism by rationalizing it as a more defensible buttress against incipient socialism. While marginalism …

Vertical Mergers And Entrepreneurial Exit, D. Daniel Sokol

Florida Law Review

The idea that tech companies should be permitted to acquire nascent start-ups is under attack from antitrust populists. Yet, this debate on vertical mergers has overlooked important empirical contributions regarding innovation-related mergers in the strategy literature. This Article explores the extant empirical strategy literature, which generally identifies a procompetitive basis that supports vertical mergers as efficiency enhancing. This literature solidifies the current general vertical merger presumption that favors a procompetitive vertical merger policy for purposes of government merger enforcement. However, the procompetitive benefit for a presumption of merger approval for most vertical mergers does not end with the synthesis of …

The Rule Of Reason, Herbert Hovenkamp

Florida Law Review

Antitrust’s rule of reason was born out of a thirty-year Supreme Court debate concerning the legality of multi-firm restraints on competition. By the late 1920s the basic contours of the rule for restraints among competitors was roughly established. Antitrust policy toward vertical restraints remained much more unstable, however, largely because their effects were so poorly understood. This Article provides a litigation field guide for antitrust claims under the rule of reason—or more precisely, for situations when application of the rule of reason is likely. At the time pleadings are drafted and even up to the point of summary judgment, the …

Remarks From The 5th Annual Antitrust Law Leaders Forum / Antitrust: Helping Drive The Innovation Economy, Renata B. Hesse Antitrust

Journal of Technology Law & Policy

The year 2015 was a busy year for the Antitrust Division (Division) of the U.S. Department of Justice (Department)—we opened a number of investigations, logged a lot of trial time, and recorded several victories of note, all of which I will quickly highlight in a moment. But while these actions give you a snapshot of what we do on a day-to-day basis, they don’t fully capture our role in helping drive innovation. What I want to discuss first is how all of that work that we do maintaining competitive markets intersects with an economy that is constantly changing. Today, there …

Rems-Restricted Drug Distribution Programs And The Antitrust Economics Of Refusals To Deal With Potential General Competitors, Henry N. Butler

Florida Law Review

The Food and Drug Administration Amendments Act of 2007 (FDAAA) grants the Food and Drug Administration (FDA) authority to require a Risk Evaluation and Mitigation Strategy (REMS) from drug manufacturers to ensure that a certain drug’s benefits outweigh its risks. Through REMS, the FDA restricts the distribution of drugs with dangerous characteristics, such as high toxicities and severe side effects, to qualified medical professionals. Such restrictions limit the ability of generic drug manufacturers to obtain samples of the REMS-restricted drugs for bioequivalence testing for an Abbreviated New Drug Application (ANDA).Without the ability to demonstrate bioequivalence in the ANDAs, potential generic …

Antitrust Limits On Targeted Patent Aggregation, Alan Devlin

Florida Law Review

Patent-assertion entities (PAEs) are non-technology-practicing companies that aggregate and license patents under threat of suit. Their activities have drawn fire, including presidential condemnation, and spurred proposed legislation to protect operating firms against them. PAEs leverage flaws in the patent system to extort firms that independently invent and sell technological goods to consumers. Since PAEs tax innovators and appear to restrict rather than facilitate wealth transfer to original patentees, their worst rent-seeking practices almost certainly reduce net incentives to innovate and harm consumers. This result is more likely if the principal desirable incentive that PAEs create is to file patents rather …

Rems-Restricted Drug Distribution Programs And The Antitrust Economics Of Refusals To Deal With Potential General Competitors, Henry N. Butler

Florida Law Review

The Food and Drug Administration Amendments Act of 2007 (FDAAA) grants the Food and Drug Administration (FDA) authority to require a Risk Evaluation and Mitigation Strategy (REMS) from drug manufacturers to ensure that a certain drug’s benefits outweigh its risks. Through REMS, the FDA restricts the distribution of drugs with dangerous characteristics, such as high toxicities and severe side effects, to qualified medical professionals. Such restrictions limit the ability of generic drug manufacturers to obtain samples of the REMS-restricted drugs for bioequivalence testing for an Abbreviated New Drug Application (ANDA).Without the ability to demonstrate bioequivalence in the ANDAs, potential generic …

Rems-Restricted Drug Distribution Programs And The Antitrust Economics Of Refusals To Deal With Potential General Competitors, Henry N. Butler

Florida Law Review

The Food and Drug Administration Amendments Act of 2007 (FDAAA) grants the Food and Drug Administration (FDA) authority to require a Risk Evaluation and Mitigation Strategy (REMS) from drug manufacturers to ensure that a certain drug’s benefits outweigh its risks. Through REMS, the FDA restricts the distribution of drugs with dangerous characteristics, such as high toxicities and severe side effects, to qualified medical professionals. Such restrictions limit the ability of generic drug manufacturers to obtain samples of the REMS-restricted drugs for bioequivalence testing for an Abbreviated New Drug Application (ANDA).Without the ability to demonstrate bioequivalence in the ANDAs, potential generic …

Antitrust Limits On Targeted Patent Aggregation, Alan Devlin

Florida Law Review

Patent-assertion entities (PAEs) are non-technology-practicing companies that aggregate and license patents under threat of suit. Their activities have drawn fire, including presidential condemnation, and spurred proposed legislation to protect operating firms against them. PAEs leverage flaws in the patent system to extort firms that independently invent and sell technological goods to consumers. Since PAEs tax innovators and appear to restrict rather than facilitate wealth transfer to original patentees, their worst rent-seeking practices almost certainly reduce net incentives to innovate and harm consumers. This result is more likely if the principal desirable incentive that PAEs create is to file patents rather …

Antitrust Limits On Targeted Patent Aggregation, Alan Devlin

Florida Law Review

Patent-assertion entities (PAEs) are non-technology-practicing companies that aggregate and license patents under threat of suit. Their activities have drawn fire, including presidential condemnation, and spurred proposed legislation to protect operating firms against them. PAEs leverage flaws in the patent system to extort firms that independently invent and sell technological goods to consumers. Since PAEs tax innovators and appear to restrict rather than facilitate wealth transfer to original patentees, their worst rent-seeking practices almost certainly reduce net incentives to innovate and harm consumers. This result is more likely if the principal desirable incentive that PAEs create is to file patents rather …

Do Automated Trading Systems Dream Of Manipulating The Price Of Futures Contracts? Policing Markets For Improper Trading Practices By Algorithmic Robots, Gregory Scopino

Florida Law Review

This Article seeks to determine if the CFTC needs new tools to combat disruptive, manipulative, or otherwise harmful trading practices that originate solely from the “minds” of ATSs. Part I of this Article provides a brief regulatory background of the derivatives markets, then examines the increased automation in those markets today, and concludes by looking at the CFTC’s initial responses to the issues raised by automation. Part II briefly looks at the law concerning different mental states for causes of action. Part III examines the CFTC’s pre and post-Dodd–Frank Act tools to police disruptive and manipulative trading practices, which are …

Misuse Of Information Under The Computer Fraud And Abuse Act: On What Side Of The Circuit Split Will The Second And Third Circuits Wind Up?, Robert D. Sowell

Florida Law Review

The Computer Fraud and Abuse Act (CFAA) has reached a breaking point. The much-discussed issue is whether the CFAA provides a cause of action against persons who use electronic information in a way that violates a relevant computer-use policy. Four circuit courts of appeals have held that the CFAA provides a cause of action for misuses of information, while two have disagreed. In two undecided circuits, the district courts have favored the latter interpretation. As the Supreme Court recently refused to address the issue, these two undecided circuits will play a pivotal role in determining the direction of the CFAA.

New Decisions Highlight Old Misgivings: A Reassessment Of The Foreign Trade Antitrust Improvements Act Following Minn-Chem, Robert D. Sowell

Florida Law Review

What role does the United States play in policing international commerce? At what point do the laws of the United States end and those of other nations begin? These questions, among others, arise in determining when U.S. antitrust laws apply to foreign conduct. Looking back, the Sherman Act, for some time, has applied to foreign conduct so long as that conduct satisfied certain requirements. However, common law tests proved inconsistent and difficult to apply. As a result, ninety-two years after the enactment of the Sherman Act, Congress intervened with the intent to clarify the common law by way of the …

Should The Internet Exempt The Media Sector From The Antitrust Laws?, Thomas J. Horton, Robert H. Lande

Florida Law Review

Suppose the twenty largest traditional news media companies in the United States, including the Wall Street Journal, New York Times, Washington Post, ABC, NBC, CBS, Fox, and CNN, announced the merger of their news operations.

They would likely claim that this merger would result in tremendous cost savings by eliminating duplicative news gathering expenses. They would be correct. They also would argue that prices would not be affected. After all, they compete for advertising dollars and personnel with many other TV and radio shows that are not in the news business. It would be difficult to demonstrate …

League Structure &Stadium Rent Seeking— The Role Of Antitrust Revisited, David Haddock, Tonja Jacobi, Matthew Sag

Florida Law Review

Professional North American sporting teams receive enormous public funding for new and renovated stadiums after threatening to depart their hometowns, or by actually moving elsewhere. In contrast, English sporting teams neither receive much public money for such projects, nor move towns. This Article argues that no inherent cultural or political transatlantic variations cause the differences; rather, it is the industrial organization of sports in the two countries—the structure of league control—that enables rent-seeking by American teams but not by their English counterparts. Cross-country time series data contrasting American professional football and baseball stadiums with English soccer grounds support our claim, …

Does A Cartel Aim Expressly? Trusting Calder Personal Jurisdiction When Antitrust Goes Global?, Larry Dougherty

Florida Law Review

Suppose your law firm represents CrabApple, the large, Californiabased manufacturer of the BuyPod, a portable digital music player. CrabApple also sells songs from its online music store, BuyTunes, for use on the BuyPod. One morning, a class-action antitrust lawsuit lands on your desk. It accuses CrabApple of illegal tying—because the BuyPod is designed to play only music from BuyTunes, and BuyTunes songs only play on BuyPods. CrabApple customers claim the tying has forced them to make unwanted purchases—BuyPod ownersfelt compelled to buy their music from BuyTunes, and anyone who wanted to use BuyTunes had to get a BuyPod. These consumers …

Much Ado About Nothing? The Antitrust Implications Of Private Equity Club Deals, Jessica Jackson

Florida Law Review

In May 1976, with merely $120,000 and a few metal chairs left behind from a prior tenant, Kolberg Kravis Roberts & Co. (KKR) opened its doors. Though few people outside Wall Street circles knew of this start-up company, by the 1980s its reputation as a takeover machine brought it notoriety. One can only imagine what went on behind closed doors, but whatever happened, it worked. By 1989, KKR had become the largest client of accounting giant Deloitte & Touche, with General Motors following as a close second. The “Age of Leverage” peaked in 1990 when KKR took over RJR Nabisco. …