Law Commons^™

Megacorporations Are Jacking Up Prices 'Because They Can,' Pushing Red-Hot Inflation To Historic Levels, Robert H. Lande

All Faculty Scholarship

This article argues that corporations may be taking advantages of supply chain bottlenecks and shortages to collude and raise prices illegally. Although price fixing is illegal, the current levels of penalties are far too low. This gives firms an incentive to collude. Before the pandemic, when inflation was low, consumers and the antitrust enforcers would have been more likely to notice any sudden price increases and investigate whether they were caused by collusion. But using bottlenecks and shortages as cover, companies can take advantage of their years of consolidation and collude more easily with less chance of it being detected. …

Patents And Price Fixing By Serial Colluders, Michael J. Meurer, William Kovacic, Robert Marshall

Faculty Scholarship

Antitrust law has long been mindful of the danger that firms may misuse their patents to facilitate price fixing. Courts and commentators addressing this danger have assumed that patent-facilitated price fixing occurs in a single market. In this Article, we extend conventional analysis to address firms’ patent misuse to facilitate price fixing across multiple products lines. By doing so, we expose gaps in existing agency enforcement and scholarly proposals for reform. Important legal tests that make sense in the single market setting do not carry over to the context we call serial collusion, where certain offenders engage in repeat collusion …

Submission Of Robert H. Lande To House Judiciary Antitrust Subcommittee Investigation Of Digital Platforms, Robert H. Lande

All Faculty Scholarship

The House Judiciary Antitrust Subcommittee asked me to submit suggestions concerning the adequacy of existing antitrust laws, enforcement policies, and enforcement levels insofar as they impact the state of competition in the digital marketplace. My submission recommends the following nine reforms:

1. A textualist analysis of the Sherman Act shows that Section 2 actually is a no-fault monopolization statute. At a minimum Congress should enact a strong presumption that every firm with a 67% market share has violated Section 2. This would move the Sherman Act an important step in the right direction, the direction Congress intended in 1890. My …

Ethnically Segmented Markets, Felix B. Chang

Faculty Articles and Other Publications

Races often collide in segmented markets where buyers belong to one ethnic group while sellers belong to another. This Article examines one such market: the retail of wigs and hair extensions for African Americans, a multi-billion-dollar market controlled by Korean Americans. Although previous scholarship attributed the success of Korean American ventures to rotating credit and social capital, this Article ascribes their dominance in wigs and extensions to collusion and exclusion, tactics scrutinized under antitrust.

This Article is the first to synthesize the disparate treatment of ethnically segmented markets in law, sociology, and economics into a comprehensive framework. Its primary contribution …

The Rise And (Potential) Fall Of U.S. Cartel Enforcement, Vivek Ghosal, D. Daniel Sokol

UF Law Faculty Publications

Government enforcement against collusion, now viewed by the Supreme Court as the “supreme evil” in antitrust, has gone through various phases of enforcement in the United States. There have been periods in which cartels have been able to collude more or less effectively given various institutional tools at the disposal of the government. By analyzing enforcement and prosecutions data over a long time horizon, 1969–2016, this Article examines the attributes of cartel enforcement over time and the changing use of tools to assist with detection and punishment. We provide a comprehensive description of critical cartel enforcement events and institutional developments …

Direct Evidence Of A Sherman Act Agreement, William H. Page

UF Law Faculty Publications

In cases that allege price fixing or other per se violations of Section 1 of the Sherman Act, courts usually begin their opinions by saying there is no direct evidence of agreement—evidence like a “recorded phone call” that is “explicit and requires no inferences to establish” that the necessary direct communications occurred. Only at that point do the courts turn to the sufficiency of the inferences of agreement from circumstantial evidence. Courts highlight the absence of direct evidence of agreement in this way because of its special role on motions to dismiss or for summary judgment, when courts do not …

Report On The Investigation Into Russian Interference In The 2016 Presidential Election, Volumes I And Ii (Redacted Version Of April 18, 2019), Robert S. Mueller Iii

United States Department of Justice: Publications and Materials

EXECUTIVE SUMMARY TO VOLUME I

RUSSIAN SOCIAL MEDIA CAMPAIGN

The Internet Research Agency (IRA) carried out the earliest Russian interference operations identified by the investigation–a social media campaign designed to provoke and amplify political and social discord in the United States. The IRA was based in St. Petersburg, Russia, and received funding from Russian oligarch Yevgeniy Prigozhin and companies he controlled. Priozhin is widely reported to have ties to Russian President Vladimir Putin [redacted]

In mid-2014, the IRA sent employees to the United States on an intelligence-gathering mission with instructions [redacted]

The IRA later used social media accounts and interest …

Does Crime Pay? Cartel Penalties And Profits, John M. Connor, Robert H. Lande

All Faculty Scholarship

This article seeks to answer a fundamental antitrust question: does crime pay? Do the current overall levels of U.S. cartel sanctions adequately discourage firms from engaging in illegal collusion? Seven years ago our research showed that the unfortunate answer was clearly that, yes, criminal collusion usually is profitable! The expected costs (in terms of criminal fines and prison time, civil damages, etc.) was significantly less than expected gains to the price fixers. Sadly, the most recent data re-affirm this conclusion.

The great majority of companies participating in illegal cartels make a profit even after they pay all the penalties. The …

Reinvigorating Criminal Antitrust?, D. Daniel Sokol

UF Law Faculty Publications

Contemporary rhetoric surrounding antitrust in an age of populism has potential implications with regard to criminal antitrust enforcement. In areas such as resale price maintenance, monopolization, and Robinson-Patman violations, antitrust criminalization remains the law on the books. Antitrust populists and traditional antitrust thinkers who embrace a singular economic goal of antitrust push to enforce antitrust law that is already “on the books.” A natural extension of enforcement by the antitrust populists would be to advocate the use of criminal sanctions, outside of collusion, for various antitrust violations which are “on the books” but have not been used in over a …

Serial Collusion By Multi-Product Firms, Michael J. Meurer, William Kovacic, Robert Marshall

Faculty Scholarship

We provide empirical evidence that many multi-product firms have each participated in several cartels over the past 50 years. Standard analysis of cartel conduct, as well as enforcement policy, is rooted in the presumption that each cartel in which a given firm participates is a singular activity, independent of other cartel conduct by the firm. We argue that this analysis is deficient in many respects in the face of serial collusion by multi-product firms. We offer policy recommendations to reign in serial collusion, including a mandatory coordinated effects review for any merger involving a serial colluder, regardless of the apparent …

Rwu First Amendment Blog: David Logan's Blog: Discovering Trump 06-22-2018, David A. Logan

Law School Blogs

No abstract provided.

Snowing And Towing In Montréal: The Inspector General's Fight Against Collusion In Two Industries, The Office Of The Inspector General Of Montréal

Center for the Advancement of Public Integrity (Inactive)

Offices of Inspectors General (OIGs) provide a highly valuable service by fostering and promoting integrity, transparency, and accountability in government. These offices provide independent oversight and monitor governmental operations, acting as watchdogs for the people and helping to maintain or restore the public’s confidence in their institutions.

The mandate of Montréal’s OIG is to conduct administrative investigations and to oversee contracting processes and the implementation of contracts by the City of Montréal in order to prevent breaches of integrity and violations of rules. Created in 2014, Montréal’s OIG has already had a meaningful impact on public procurement and management policies. …

Class Warfare: Why Antitrust Class Actions Are Essential For Compensation And Deterrence, Robert H. Lande

All Faculty Scholarship

Recent empirical studies demonstrate five reasons why antitrust class action cases are essential: (1) class actions are virtually the only way for most victims of antitrust violations to receive compensation; (2) most successful class actions involve collusion that was anticompetitive; (3) class victims’ compensation has been modest, generally less than their damages; (4) class actions deter significant amounts of collusion and other anticompetitive behavior; and (5) anticompetitive collusion is underdeterred, a problem that would be exacerbated without class actions. Unfortunately, a number of court decisions have undermined class action cases, thus preventing much effective and important antitrust enforcement.

Suppressing Bid Rigging: Lessons From Japan, Takaki Soto

Center for the Advancement of Public Integrity (Inactive)

Bid rigging is a form of procurement fraud that occurs when participants in a bidding process for public contracts conspire to undermine the integrity or transparency of the process, sometimes with the complicity of public officials. Common examples of violations include collusion among bidders to fix a common price, requests for proposals deliberately and unnecessarily tailored so that only select bidders can meet their requirements, and lowballed bids with hidden costs and fees.

In Japan, where corruption is generally perceived to be relatively rare, bid rigging—nyusatsu dango—is a persistent and problematic form of public corruption. In many cases, …

Online Platforms And The Eu Digital Single Market, Maurice Stucke, Ariel Ezrachi

College of Law Faculty Scholarship

Our submission to the U.K. House of Lords, Internal Market Sub-Committee is based on our joint research, which explores the effects Big Data and technology have on competition dynamics. It reviews the use of technology to facilitate collusion, conscious parallelism, and unilateral price discrimination as well as the effects of online and mobile platforms.Our submission addresses the following issues: • What role does data play in the business model of online platforms? • Can data-driven online platforms have excessive market power? • If so, how can they abuse this power? • If so, how does this happen and what effect …

Online Platforms And The Eu Digital Single Market, Maurice Stucke, Ariel Ezrachi

Scholarly Works

Our submission to the U.K. House of Lords, Internal Market Sub-Committee is based on our joint research, which explores the effects Big Data and technology have on competition dynamics. It reviews the use of technology to facilitate collusion, conscious parallelism, and unilateral price discrimination as well as the effects of online and mobile platforms.

Our submission addresses the following issues: • What role does data play in the business model of online platforms? • Can data-driven online platforms have excessive market power? • If so, how can they abuse this power? • If so, how does this happen and what …

Cguppi: Scoring Incentives To Engage In Parallel Accommodating Conduct, Serge Moresi, David Reitman, Steven C. Salop, Yianis Sarafidis

Georgetown Law Faculty Publications and Other Works

We propose an index for scoring coordination incentives, which we call the “coordination GUPPI” or cGUPPI. While the cGUPPI can be applied to a wide range of coordinated effects concerns, it is particularly relevant for gauging concerns of parallel accommodating conduct (PAC), a concept that received due prominence in the 2010 U.S. Horizontal Merger Guidelines. PAC is a type of coordinated conduct whereby a firm raises price with the expectation—but without any prior agreement—that one or more other firms will follow and match the price increase. The cGUPPI is the highest uniform price increase that all the would-be coordinating firms …

Competition Policy And The Technologies Of Information, Herbert J. Hovenkamp

All Faculty Scholarship

When we speak about information and competition policy we are usually thinking about oral or written communications that have an anticompetitive potential, and mainly in the context of collusion of exclusionary threats. These are important topics. Indeed, among the most difficult problems that competition policy has had to confront over the years is understanding communications that can be construed as either threats to exclude or as offers to collude or facilitators of collusion.

My topic here, however, is the relationship between information technologies and competition policy. Technological change can both induce and undermine the use of information to facilitate anticompetitive …

Profile In Public Integrity: Adam Graycar, Center For The Advancement Of Public Integrity

Center for the Advancement of Public Integrity (Inactive)

Adam Graycar is Professor of Public Policy at the Australian National University (ANU), where he is also Director of the Transnational Research Institute on Corruption. He joined ANU in 2010 when he became the Foundation Dean of the Australian National Institute for Public Policy for two years. He recently stepped down after four years as Director of the Research School of Social Sciences at ANU.

Graycar acquired extensive policy experience over 22 years in the senior posts he held in Australian government at state and federal levels. He has had long experience in both academia and in government. His most …

Institutional Advantage In Competition And Innovation Policy, Herbert J. Hovenkamp

All Faculty Scholarship

In the United States responsibility for innovation policy and competition policy are assigned to different agencies with different authority. The principal institutional enforcers of patent policy are the United States Patent and Trademark Office (USPTO), the International Trade Commission (ITC), and the federal district courts as overseen by the United States Court of Appeals for the Federal Circuit, and ultimately the Supreme Court. While competition policy is not an explicit part of patent policy, competition issues arise frequently, even when they are not seen as such.

Since early in the twentieth century antitrust courts have had to confront practices that …

Cartels As Rational Business Strategy: Crime Pays, John M. Connor, Robert H. Lande

All Faculty Scholarship

This article is the first to analyze whether cartel sanctions are optimal. The conventional wisdom is that the current level of sanctions is adequate or excessive. The article demonstrates, however, that the combined level of current United States cartel sanctions is only 9% to 21% as large as it should be to protect potential victims of cartelization optimally. Consequently, the average level of United States anti-cartel sanctions should be approximately quintupled.

The United States imposes a diverse arsenal of sanctions against collusion: criminal fines and restitution payments for the firms involved and prison, house arrest and fines for the corporate …

Antitrust And The Movement Of Technology, Herbert J. Hovenkamp

All Faculty Scholarship

Patents create strong incentives for collaborative development. For many technologies fixed costs are extremely high in relation to variable costs. A second feature of technology that encourages collaborative development is the need for interoperability or common standards. Third, in contrast to traditional commons, intellectual property commons are almost always nonrivalrous on the supply side. If ten producers all own the rights to make a product covered by a patent, each one can make as many units as it pleases without limiting the number that others can make. That might seem to be a good thing, but considered ex ante it …

Too Libor, Too Late: Time To Move To A Market Rate, Michael S. Barr

Articles

Barclays has been fined, the British have issued their report, and now the market is anxious for everything to go on as usual with the London Interbank Offer Rate (“LIBOR”). I think that would be a serious mistake. The U.S. and British investigations into rate-fixing by Barclays revealed a widespread culture of pervasive, deceitful conduct in the setting of the most important private sector benchmark for over $300 trillion in derivative contracts and $10 trillion in adjustable-rate loans. It is highly unlikely that Barclays was the only major bank engaging in this conduct, and public investigations and private lawsuits against …

Plus Factors And Agreement In Antitrust Law, William E. Kovacic

GW Law Faculty Publications & Other Works

Despite the crucial role of concerted action to collusion among rival firms, few elements are more perplexing than the design of evidentiary standards to determine whether parallel conduct stems from collective or from unilateral decision making. Courts allow a collusive agreement to be established by circumstantial evidence, but the evidence must show additional evidence — “plus factors” — beyond parallel movement in price. Chief plus factors identified by courts have included actions contrary to each defendant’s self-interest unless pursued as part of a collective plan, phenomena that can be explained rationally only as a result of concerted action, evidence that …

The Roberts Court And The Limits Of Antitrust, Thom Lambert

Faculty Publications

This article first describes the fundamental limits of antitrust and the decision-theoretic approach such limits inspire. It then analyzes the Roberts Court’s antitrust decisions, explaining how each coheres with the decision-theoretic model. Finally, it predicts how the Court will address three issues likely to come before it in the future: tying, loyalty rebates, and bundled discounts.

Revitalizing Section 5 Of The Ftc Act Using “Consumer Choice” Analysis, Robert H. Lande

All Faculty Scholarship

This paper makes two points. First, Section 5 of the FTC Act, properly construed, is indeed significantly broader and more encompassing than the Sherman Act or Clayton Act. Section 5 violations include incipient violations of the other antitrust laws, and also violations of their policy or spirit.

Second, the best - and probably the only - way to interpret Section 5 in an expansive manner is to do so in a way that also is relatively definite, predictable, principled and clearly bounded. This best can be done if Section 5 is articulated using the consumer choice framework. Without the discipline …

Standards Ownership And Competition Policy, Herbert J. Hovenkamp

All Faculty Scholarship

Antitrust law is a blunt instrument for dealing with many claims of anticompetitive standard setting. Antitrust fact finders lack the sophistication to pass judgment on the substantive merits of a standard. In any event, antitrust is not a roving mandate to question bad standards. It requires an injury to competition, and whether the minimum conditions for competitive harm are present can often be determined without examining the substance of the standard itself.

When government involvement in standard setting is substantial antitrust challenges should generally be rejected. The petitioning process in a democratic system protects even bad legislative judgments from collateral …

Conservation Cartels: How Competition Policy Conflicts With Environmental Protection, Jonathan H. Adler

Faculty Publications

The alleged purpose of antitrust law is to improve consumer welfare by proscribing actions and arrangements that reduce output and increase prices. Conservation seeks to improve human welfare by maximizing the long-term productive use of natural resources, a goal that often requires limiting consumption to sustainable levels. While conservation measures might increase prices in the short run, they enhance consumer welfare by increasing long-term production and ensuring the availability of valued resources over time. That is true whether the restrictions are imposed by a private conservation cartel or a government agency. Insofar as antitrust law fails to take this into …

The Size Of Cartel Overcharges: Implications For U.S. And Ec Fining Policies, John M. Connor, Robert H. Lande

All Faculty Scholarship

The purpose of this article is to examine whether the current cartel fine levels of the European Union (EU) and the United States are at the optimal levels. We collected and analyzed the available information concerning the size of the overcharges caused by hard-core pricing fixing, bid rigging, and market allocation agreements. Data sets of United States cartels were assembled and examined. These cartels overcharged an average of 18% to 37%, depending upon the data set and methodology employed in the analysis and whether mean or median figures are used. Separate data sets for European cartels also were analyzed, which …

Do Ask And Do Tell: Rethinking The Lawyer’S Duty To Warn In Domestic Violence Cases, Margaret B. Drew, Sarah Buel

Faculty Publications

Empirical data document that while domestic violence victims face high risk of recurring abuse, batterers’ lawyers may be privy to information that could avert further harm. Attorneys owe a duty of confidentiality to their clients that can be breached only in extraordinary circumstances, such as when counsel learns her client plans to commit a crime. To resolve the tension between client confidentiality and victim safety, this Article argues that, in the context of domestic violence cases, lawyers have an affirmative duty to (1) screen battering clients who have indicated a likelihood of harming others, (2) attempt to dissuade them from …