Law Commons^™

Obama's Antitrust Agenda, Daniel A. Crane

Articles

Antitrust law is back in vogue. After years in the wilderness, antitrust enforcement has reemerged as a hot topic in Washington and in the legal academy. In one heady week inMay of 2009, a frontpage story in the New York Times reported the dramatic decision of Christine Varney —theObama administration’s new AntitrustDivision head—to jettison the entire report onmonopolization offenses released by the Bush JusticeDepartment just eightmonths earlier. In a speech before the Center for American Progress, Varney announced that the Justice Department is “committed to aggressively pursuing enforcement of Section 2 of the Sherman Act.” As if to prove that …

Should The Government Prosecute Monopolies?, Maurice Stucke

Scholarly Works

In the past few years, courts and the Department of Justice have cited approvingly the Court's dicta in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP. This article analyzes why the economic thinking in Trinko is wrong, and how the Court ignores its precedent involving the Sherman Act's concerns of monopolies' political, social and ethical implications. It responds to the Court's claim that cartel behavior is easier to identify and remedy than monopolistic behavior and proposes an improvement to the Court's current rule of reason standard to reduce the risk of false positives, while enabling the antitrust …

The Trojan Horse Of Electric Power Transmission Line Siting Authority, Jim Rossi

Vanderbilt Law School Faculty Publications

Reform proposals pending in the U.S. Congress would increase federal and regional power to preempt states in siting transmission lines on order to allow the development of a high-votage transmission grid for renewable resources. This Article recognizes the inadequacy of existing state siting authority over transmission, but takes a skeptical approach to expanding federal siting jurisdiction as a solution to the problem and argues that the over-attention to transmission line siting authority is a bit of a Trojan horse in the climate change debate. Specifically, because it ignores the more difficult issues of how the costs and benefits of transmission …

The Future Of International Antitrust And Improving Antitrust Agency Capacity, D. Daniel Sokol

UF Law Faculty Publications

One of the key issues in international antitrust has been how to make antitrust more effective around the world. Most antitrust laws have been adopted or significantly modified since 1990. A number of key jurisdictions are either fairly new to antitrust altogether or to an antitrust regime that effectively employs the latest in economic thinking and the legal tools necessary to promote competition. Jurisdictions that have made antitrust a new and important cornerstone to economic policy include Brazil, Russia, India, and China. Because of the stakes involved in the ability of antitrust to foster economic development and to prevent misguided …

New Antitrust Realism, Maurice Stucke

Scholarly Works

In the midst of a failing economy, the incoming Obama administration will not likely adopt its predecessor's antitrust policies. So if change is afoot, what form should change take? This essay outlines the needed transformative change in today's competition policy. The essay proposes more empirical analysis by the U.S. competition authorities, outlines how behavioral economics can assist in this new antitrust realism, and concludes in explaining why such antitrust realism is needed.

Remedies, Antitrust Law, And Microsoft: Comment On Shapiro, Keith N. Hylton

Faculty Scholarship

The subject of remedies is a relatively under-theorized area of antitrust law, and Professor Shapiro has done the antitrust community a great favor by offering some innovative and useful theoretical insights on the design of antitrust remedies. He applies his theoretical insights to the Microsoft III case to reach the conclusion that the remedies adopted were inadequate to restore competition in the market for software platforms. In this review, I will offer additional theoretical insights on remedies and explain my reasons for rejecting his conclusions on Microsoft III.

Complex Bundled Discounts And Antitrust Policy, Herbert J. Hovenkamp, Erik Hovenkamp

All Faculty Scholarship

A bundled discount occurs when a seller conditions a discount or rebate on the buyer's purchaser or two or more different products. Firms that produce fewer than all the good in the bundle find it difficult to compete because they must amortize the discount across a smaller range of goods. For example, if the dominant firm offers a 10% discount for purchase of both good A and good B, but the rival makes only good B, it will have to offer a discount that is large enough to match the dominant firm's B discount as well as the foregone discount …

Cartels As Two-Stage Mechanisms: Implications For The Analysis Of Dominant-Firm Conduct, William E. Kovacic

GW Law Faculty Publications & Other Works

Cartels often act like single dominant firms. Because there are a number of difficulties in determining market effects of single dominant firms, this article proposes that enforcement policy recognize the connection between cartels and firms engaged in monopolization. The resulting insight would be useful to determine whether or not cartel conduct should be viewed with suspicion when engaged in or by a dominant firm in a similar industry. Many cartels do not focus solely on suppressing interfirm rivalry; rather, many operate as two-stage mechanisms: the first stage consists of reaching a consensus on a plan to restrict output and curb …

Competition Policy And Comparative Corporate Governance Of State-Owned Enterprises, D. Daniel Sokol

UF Law Faculty Publications

The legal origins literature overlooks a key area of corporate governance-the governance of state-owned enterprises ("SOEs"). There are key theoretical differences between SOEs and publicly-traded corporations. In comparing the differences of both internal and external controls of SOEs, none of the existing legal origins allow for effective corporate governance monitoring. Because of the difficulties of undertaking a cross-country quantitative review of the governance of SOEs, this Article examines, through a series of case studies, SOE governance issues among postal providers. The examination of postal firms supports the larger theoretical claim about the weaknesses of SOE governance across legal origins. In …

Patents, Property, And Competition Policy, Herbert J. Hovenkamp

All Faculty Scholarship

The decision to regulate involves the identification of markets where simple assignment of property rights is not sufficient to ensure satisfactory competitive results, usually because some type of market failure obtains. By contrast, if property rights are well defined when they are initially created and can subsequently be traded to some reasonably competitive equilibrium, then regulation is thought not to be necessary. In such cases the antitrust laws have a significant role to play in ensuring that the market can be as competitive as free trading allows. One problem with the patent system is that once a patent is granted …

Efficiencies In Merger Analysis: Alchemy In The Age Of Empiricism?, Thomas L. Greaney

All Faculty Scholarship

One is hard-pressed to find in law an undertaking more fraught with uncertainty than the application of the efficiencies defense in merger analysis. Generalist fact finders (judges) and politically-attuned government officials (prosecutors and regulators) are charged with two Herculean tasks: (1) predicting the outcome of organic changes in business enterprises and (2) comparing the magnitude of those changes to the equally uncertain amount of harm to future competition that the transaction will cause. Given the enormous, perhaps intractable, uncertainty of this inquiry, it is therefore paradoxical that many of the strongest advocates for strengthening the role of efficiencies analysis in …

Measuring Compliance With Compulsory Licensing Remedies In The American Microsoft Case, William H. Page, Seldon J. Childers

UF Law Faculty Publications

Section III.E of the final judgments in the American Microsoft case requires Microsoft to make available to software developers certain communications protocols that Windows client operating systems use to interoperate with Microsoft's server operating systems. This provision has been by far the most difficult and costly to implement, primarily because of questions about the quality of Microsoft's documentation of the protocols. The plaintiffs' technical experts, in testing the documentation, have found numerous issues, which they have asked Microsoft to resolve. Because of accumulation of unresolved issues, the parties agreed in 2006 to extend Section III.E for up to five more …

Bargaining In The Shadow Of Rate-Setting Courts, Daniel A. Crane

Articles

Judges will tell you that they are comparatively poor rate regulators. The specialized, technical competence and supervisory capacity that public utilities commissions enjoy are usually absent from judicial chambers. Nonetheless, when granting antitrust remedies-particularly remedies for monopolistic abuse of intellectual property-courts sometimes purport to act as rate regulators for the licensing or sale of the defendant's assets. At the outset, we should distinguish between two forms ofjudicial rate setting. In one form, a court (or the FTC in its adjudicative capacity) grants a compulsory license and sets a specific rate as part of a final judgment or an order. The …

Can Bundled Discounting Increase Consumer Prices Without Excluding Rivals?, Daniel A. Crane, Joshua D. Wright

Articles

Since we abhor suspense, we will quickly answer the question our title poses: No. As a general matter, bundled discounting schemes lower prices to consumers unless they are predatory—that is to say, unless they exclude rivals and thereby permit the bundled discounter to price free of competitive restraint. The corollary of this observation is that bundled discounting is generally pro-competitive and pro-consumer and should only be condemned when it is capable of excluding rivals. We pose and answer this question because it is at the heart of Section VI of Professor Elhauge’s provocative draft article which is the subject of …

Linkline's Institutional Suspicions, Daniel A. Crane

Articles

Antitrust scholars are having fun again. Not so long ago, they were the poor, redheaded stepchildren of the legal academy, either pining for the older days of rigorous antitrust enforcement or trying to kill off what was left of the enterprise. Other law professors felt sorry for them, ignored them, or both. But now antitrust is making a comeback of sorts. In one heady week in May of 2009, a front-page story in the New York Times reported the dramatic decision of Christine Varney-the Obama Administration's new Antitrust Division head at the Department of Justice-to jettison the entire report on …

Limiting Anticompetitive Government Interventions That Benefit Special Interests, D. Daniel Sokol

UF Law Faculty Publications

When government regulates, it may either intentionally or unintentionally generate restraints that reduce competition ("public restraints"). Public restraints allow a business to cloak its action in government authority and to immunize it from antitrust regulation. Private businesses may misuse the government's grant of antitrust immunity to facilitate behavior that benefits businesses at consumers' expense. One way is by obtaining government grants of immunity from antitrust scrutiny. A recent series of Supreme Court decisions has made this situation worse by limiting the reach of antitrust law in favor of sector regulation. This is true even though the Supreme Court refers to …

Substance, Procedure, And Institutions In The International Harmonization Of Competition Policy, Daniel A. Crane

Articles

Many people who pay attention to the rapid development of antitrust regimes across the globe hold two tenets in common. First, most of the relevant stakeholders would benefit if competition policy could be harmonized interjurisdictionally.' Second, and alas, this beneficial harmonization is unlikely to happen on a significant scale in the foreseeable future.2 To many, antitrust harmonization is thus a noble but utopian aspiration. I generally share both the former sentiment and the latter lament but both are far too general to be of much use without further specification. Uniformity of competition policy is valuable to be sure, but not …

Pangloss Responds, Daniel A. Crane

Articles

I am afraid that William Shieber and I are speaking past each other. I agree wholeheartedly with his assertion that anyone who believes that political appointees do not exert a considerable influence over the antitrust agencies is naïve. However, Technocracy and Antitrust does not advance the Panglossian view that the antitrust agencies are apolitical, if by that we mean that robotic machines devoid of human perspective or ideological commitment churn out scientifically predetermined antitrust results.

Slides: Lower Arkansas Valley Super Ditch Company, Inc.: Water Leasing Program, Peter Nichols

Evolving Regional Frameworks for Ag-to-Urban Water Transfers (December 11)

Presenter: Peter Nichols, General Counsel of the Lower Arkansas Valley “Super Ditch” Company, Trout, Raley, Montano, Witwer & Freeman PC, Colorado

33 slides

Toward A Unified Theory Of Access To Local Telephone Systems, Daniel F. Spulber, Christopher S. Yoo

All Faculty Scholarship

One of the most distinctive developments in telecommunications policy over the past few decades has been the increasingly broad array of access requirements regulatory authorities have imposed on local telephone providers. In so doing, policymakers did not fully consider whether the justifications for regulating telecommunications remained valid. They also allowed each access regime to be governed by its own pricing methodology and set access prices in a way that treated each network component as if it existed in isolation. The result was a regulatory regime that was internally inconsistent, vulnerable to regulatory arbitrage, and unable to capture the interactions among …

The Enduring Lessons Of The Breakup Of At&T: A Twenty-Five Year Retrospective, Christopher S. Yoo

All Faculty Scholarship

On April 18-19, 2008, the University of Pennsylvania Law School hosted a landmark conference on “The Enduring Lessons of the Breakup of AT&T: A Twenty-Five Year Retrospective.” This conference was the first major event for Penn’s newly established Center for Technology, Innovation, and Competition, a research institute committed to promoting basic research into foundational frameworks that will shape the way policymakers think about technology-related issues in the future. The breakup of AT&T represents an ideal starting point for reexamining the major themes of telecommunications policy that have emerged over the past quarter century. The conference featured a keynote address by …

The Fundamental Goal Of Antitrust: Protecting Consumers, Not Increasing Efficiency, John B. Kirkwood, Robert H. Lande

All Faculty Scholarship

The conventional wisdom in the antitrust community is that the purpose of the antitrust laws is to promote economic efficiency. That view is incorrect. As this article shows, the fundamental goal of antitrust law is to protect consumers.

This article defines the relevant economic concepts, summarizes the legislative histories, analyzes recent case law in more depth than any prior article, and explores the most likely bases for current popular support of the antitrust laws. All these factors indicate that the ultimate goal of antitrust is not to increase the total wealth of society, but to protect consumers from behavior that …

'Dynamic Competition' Does Not Excuse Monopolization, Jonathan Baker

Articles in Law Reviews & Other Academic Journals

This comment on a forthcoming article by Keith Hylton and David Evans explains why considerations of "dynamic competition" do not argue against antitrust enforcement. While the prospect of achieving monopoly may foster innovation, that observation misleads as to appropriate antitrust policy unless qualified by the observation that the push of competition generally spurs innovation more than the pull of monopoly. Moreover, the longstanding doctrinal rule that mere monopoly pricing is not illegal should not be read as demonstrating that antitrust law values monopolies for their role in promoting innovation.

Schumpeterian Competition And Antitrust, Herbert J. Hovenkamp

All Faculty Scholarship

Joseph Schumpeter's vision of competition saw it as a destructive process in which effort, assets and fortunes were continuously destroyed by innovation. One possible implication is that antitrust's attention on short-run price and output issues is myopic: what seems at first glance to be a monopolistic exclusionary practice might really be an innovative enterprise with enormous payoffs in the long run. While this may be the case, three qualifications are critical. First, one must not confuse the prospect of innovation with the scope of the intellectual property laws; their excesses and special interest capture cast serious doubt on the proposition …

Why The Filed Rate Doctrine Should Not Imply Blanket Judicial Deference To Regulatory Agencies, Jim Rossi

Vanderbilt Law School Faculty Publications

The filed rate doctrine is a venerable doctrine of public utility regulation. Federal courts applying the doctrine frequently defer to the regulatory agency and refuse to consider the merits of alleged violations of antitrust, tort or contract claims where resolution would require a departure from a filed rate. For over a century, the filed rate doctrine has served many important purposes. However, with increased attention to market-based approaches to electric power, natural gas and telecommunications regulation, there is reason to question both the doctrine's continued applicability and usefulness. This short essay argues that, as regulators implement competitive markets in utility …

The Walker Process Doctrine: Infringement Lawsuits As Antitrust Violations, Herbert J. Hovenkamp

All Faculty Scholarship

Antitrust law's Walker Process doctrine permits a patent infringement defendant to show that an improperly maintained infringement action constitutes unlawful monopolization or an unlawful attempt to monopolize. The infringement defendant must show both that the lawsuit is improper, which establishes the conduct portion of the violation and generally satisfies tort law requirements, and also that the structural prerequisites for the monopolization offense are present. The doctrine also applies to non-patent infringement actions and has been applied by the Supreme Court to copyright infringement actions. Walker Process itself somewhat loosely derives from the Supreme Court's Noerr-Pennington line of cases holding that …

Is Europe Unfairly Attacking Another U.S. High Technology Company?, Robert H. Lande

All Faculty Scholarship

This short piece considers whether the EU antitrust action against Intel constitutes an example of European regulators attacking a successful US company in order to protect a European competitor, or whether it instead is an example of legitimate law enforcement.

World War 4.0: The Intel Antitrust Wars, Robert H. Lande

All Faculty Scholarship

This short piece gives an overview of antitrust actions filed around the world against Intel for allegedly undertaking anticompetitive actions in the market for X 86 PC chips.

Unilateral Refusals To Deal, Vertical Integration, And The Essential Facility Doctrine, Herbert J. Hovenkamp

All Faculty Scholarship

Where it applies, the essential facility doctrine requires a monopolist to share its "essential facility." Since the only qualifying exclusionary practice is the refusal to share the facility itself, the doctrine comes about as close as antitrust ever does to condemning "no fault" monopolization. There is no independent justification for an essential facility doctrine separate and apart from general Section 2 doctrine governing the vertically integrated monopolist's refusal to deal. In its Trinko decision the Supreme Court placed that doctrine about where it should be. The Court did not categorically reject all unilateral refusal to deal claims, but it placed …

Better Competition Advocacy, Maurice Stucke

Scholarly Works

Today's competition advocacy censures governmental restraints that diminish competition. But such advocacy glosses over four fundamental questions: First, what is competition? Second, what are the goals of a competition policy? Third, how does one achieve, if one can, the objectives of such desired competition? Fourth, how does one know if the economy is progressing toward these goals? This Article outlines the conventional wisdom underlying today's competition advocacy. It examines what is meant by competition, and what is being valued. It examines the goals of competition, as expressed by various governmental agencies, and the structural mechanisms that the government can provide …