Law Commons^™

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

William H. Page

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 …

Deactivating Actavis: The Clash Between The Supreme Court And (Some) Lower Courts, Joshua Davis, Ryan Mcewan

Joshua P. Davis

Numerous trial courts have misinterpreted the Supreme Court’s recent decision in FTC v. Actavis, Inc. An interesting question is why they have done so. Perhaps lower courts disagree with the Supreme Court about so-called “reverse payment” cases, the subject of the Actavis opinion. Or perhaps they simply have made random mistakes, as is perhaps inevitable, particularly in a challenging area of the law like antitrust. This Article suggests an alternative account: that lower courts are seeking clear guidance from Actavis, clear guidance that the Supreme Court has not tended to provide in antitrust cases in general and that it did …

Acpera And What Business Lawyers Need To Know Right Away In An Antitrust Investigation, Robert Sanger

Robert M. Sanger

Just about every practitioner advising businesses needs to be up-to-date on antitrust law. It is all too easy for a person involved in business to make casual comments or engage in what they think is legitimate activity only to find that they are the subject of a federal or state investigation for horizontal or vertical restraint of trade or price fixing, customer allocation, bid-rigging, or some other form of technically prohibited behavior. Blatant willful violations are, understandably, criminal but technical violations are a part of the trend of state and federal overcriminalization. Potential criminal prosecution for technical antitrust violations is …

Reexamining The Role Of Illinois Brick In Modern Antitrust Standing Analysis, Jeffrey Harrison

Jeffrey L Harrison

This Article argues that it is time for either the Court or Congress to reexamine Illinois Brick for the purpose of reconciling it with more general principles of antitrust standing. The overall goals of such an endeavor would be to ensure consistent treatment of similarly situated potential plaintiffs and to rationalize private antitrust enforcement.

Monopolization, Innovation, And Consumer Welfare, John Lopatka, William Page

William H. Page

While most commentators and the enforcement agencies voice support for the consumer welfare standard, substantial disagreement exists over when economic theory justifies a presumption of consumer injury. Virtually all would subscribe to the theoretical prediction that an effective cartel will likely inflict consumer injury by reducing output and thus increasing prices. But the academic and judicial consensus disappears when the theory at issue predicts that a practice -- a merger or a predatory pricing campaign, for example -- will harm consumers in the future through some complex sequence of events.

In our view, the desire to protect innovation is legitimate, …

Joe Bauer Was Quoted In The Cbs Money Watch Article Reynolds American-Lorillard Merger Could Face Antitrust Hurdles, July 16., Joseph Bauer

Joseph P. Bauer

Joe Bauer was quoted in the CBS Money Watch article Reynolds American-Lorillard merger could face antitrust hurdles on July 16.

Strategic Effects Of Three-Part Tariffs Under Oligopoly, Yong Chao

Yong Chao

The distinct element of a three-part tariff, compared with linear pricing or a two-part tariff, is its quantity target within which the marginal price is zero. This quantity target instrument enriches the firm's strategy set in dictating the competition to a specific level, even in the absence of usual price discrimination motive. With general differentiated linear demand system, the competitive effect of a three-part tariff in contrast to linear pricing depends on the degree of substitutability between products: competition is intensified when two products are more differentiated, yet softened when two products are more substitutable.

Defying Conventional Wisdom: The Case For Private Antitrust Enforcement, Joshua Davis, Robert Lande

Joshua P. Davis

The conventional wisdom is that private antitrust enforcement lacks any value. Indeed, skepticism of private enforcement has been so great that its critics make contradictory claims. The first major line of criticism is that private enforcement achieves too little—it does not even minimally compensate the actual victims of antitrust violations and does not significantly deter those violations. A second line of criticism contends that private enforcement achieves too much—providing excessive compensation, often to the wrong parties, and producing overdeterrence. This Article undertakes the first ever systematic evaluation of these claims. Building upon original empirical work and theoretical inquiry by the …

The Failure Of Corporate Governance Standards And Antitrust Compliance, Jesse Markham

Jesse Markham

This article explores the interplay between corporate governance law and antitrust law, and concludes that fiduciary standards should be strengthened. Part I explains the need for powerful incentives to comply with antitrust laws, given the economic rewards from violations. Part II explores recent trends in antitrust law enforcement to show that violations continue more or less unabated despite major improvements in detection and prosecution of violations. Part III argues why monetary sanctions imposed on corporations should be abandoned as the primary enforcement tool, given that they merely place economic burdens on shareholders who are powerless to intervene ex ante, or …

Towards An Empirical And Theoretical Assessment Of Private Antitrust Enforcement, Joshua Davis, Robert Lande

Joshua P. Davis

The dominant view in the antitrust field is that private enforcement cases, and especially class actions, accomplish little or nothing positive but, on the contrary, are counterproductive. Despite strongly worded convictions, that view has been premised on anecdotal, self-serving and insufficiently substantiated claims. Indeed, the authors' 2008 study of 40 private cases appears to constitute the only systematic effort to gather information about a significant number of private antitrust actions. That study generated a great deal of controversy, including questioning of our conclusions by high officials at the Department of Justice and by Professor Daniel Crane at the University of …

The Extraordinary Deterrence Of Private Antitrust Enforcement: A Reply To Werden, Hammond, And Barnett, Joshua Davis, Robert Lande

Joshua P. Davis

Our article, "Comparative Deterrence from Private Enforcement and Criminal Enforcement of the U.S. Antitrust Laws," 2011 B.Y.U. L. Rev. 315, documented an extraordinary but usually overlooked fact: private antitrust enforcement deters a significant amount of anticompetitive conduct. Indeed, the article showed that private enforcement "probably" deters even more anticompetitive conduct than the almost universally admired anti-cartel enforcement program of the United States Department of Justice. In a recent issue of Antitrust Bulletin, Gregory J. Werden, Scott D. Hammond, and Belinda A. Barnett challenged our analysis. They asserted that our comparison “is more misleading than informative.” It is unsurprising that they …

Summaries Of Twenty Cases Of Successful Private Antitrust Enforcement, Joshua Davis, Robert Lande

Joshua P. Davis

This document summarizes twenty cases of successful private antitrust enforcement. These twenty summaries build on earlier summaries of forty additional cases of successful private enforcement available at http://ssrn.com/abstract=1105523. An analysis of the data from the original forty cases is available at http://ssrn.com/abstract=1090661 (published as Robert L. Lande and Joshua P. Davis, Benefits From Private Antitrust Enforcement: An Analysis of Forty Cases, 42 U.S.F. L. REV. 879 (2008)) and an argument based on the forty cases that private antitrust enforcement has greater deterrence effects than criminal enforcement by the Department of Justice is available at http://ssrn.com/abstract=1565693 (published as Robert L. Lande …

Sailing A Sea Of Doubt: A Critique Of The Rule Of Reason In U.S. Antitrust Law, Jesse W. Markham Jr.

Jesse Markham

The purpose of the article is to offer a critique of the rule of reason, tracing its disintegration from its original articulation 100 years ago in Standard Oil Co. v. United States, 221 U.S. 1, 60 (1911). The article then describes a construct for restoring transparency and content to the rule of reason. The rule of reason is the default standard for assessing restraints under the Sherman Act. The role for the rule of reason has expanded in recent years as the Supreme Court has reversed a number of per se rules, thus relegating additional categories of restraints to the …

Lessons For Competition Law From The Economic Crisis: The Prospect For Antitrust Responses To The 'Too-Big-To-Fail' Phenomenon, Jesse Markham

Jesse Markham

This article explores the failure of antitrust law to prevent or intercede to remedy the catastrophic failures of large enterprises. Given the historic focus of antitrust on problems relating to the dangers of out-sized business enterprise, the failure of antitrust in this regard raises interesting questons about whether its mission has drifted from the law's original intent. The article explores the current relationship between antitrust rules and "bigness" and offers a modest proposal for reviving antitrust as a public policy tool that might help to address the too-big-to-fail phenomenon.

Of Vulnerable Monopolists?: Questionable Innovation In The Standard For Class Certification In Antitrust Cases, Joshua P. Davis, Eric L. Cramer

Joshua P. Davis

Some courts appear to have begun to revise the standard for granting class certification, including in antitrust cases. The new standard, if there is one, may empower courts to find facts relevant to the merits in a way that historically they have not been permitted to do. If courts are ratcheting up the standard at class certification by forcing plaintiffs to make a showing on the merits, then it seems an unfortunate development for various reasons. First, the rationale for the change is unsubstantiated and implausible. Neither theory nor evidence supports the claim that corporations settle meritless class actions with …

Comparative Deterrence From Private Enforcement And Criminal Enforcement Of The U.S. Antitrust Laws, Joshua P. Davis

Joshua P. Davis

The debate over the value of private antitrust enforcement long has been heavy with self-serving assertions by powerful economic interests, but light on factual evidence. To help fill this void we have been conducting research for several years on a variety of empirical topics. This article develops and then explores the implications of a startling finding. Even those who do not deride private enforcement usually believe its only function is to compensate victims of antitrust violations by modest amounts. Significant deterrence is commonly thought to be the effect only of government enforcement, especially criminal enforcement. Our article's conclusion that the …

Conscious Parallelism Revisited, Reza Dibadj

Reza Dibadj

Conscious parallelism, sometimes called tacit collusion, occurs where firms adopt their business practices based on what other firms are doing, rather than competing for customers. The most obvious manifestation occurs where prices across companies in an industry not only become suspiciously similar, but also change rapidly in strikingly parallel ways. Suggested examples are legion and varied: airline tickets, gasoline, cellular phone text messaging and roaming rates, interest rates on bank accounts, credit card interchange fees, movie tickets, recorded music, breakfast cereals, real estate and travel agent commissions, electricity prices in deregulated markets, and air cargo fuel surcharges, just to name …

Antitrust, Class Certification, And The Politics Of Procedure, Joshua P. Davis, Eric L. Cramer

Joshua P. Davis

This Article develops two arguments against a possible trend in federal appellate courts toward imposing a new, heightened standard for class certification in antitrust cases. Recent case law can be read to imply that trial judges may make findings of fact on the merits in deciding class certification, including about whether plaintiffs will be able to show with class-wide evidence that every class member was harmed by allegedly anticompetitive conduct. The first argument is that the potential new standard would require a showing at class certification on an issue—whether all class members were injured—that plaintiffs need not, and typically do …

Applying Litigation Economics To Patent Settlements: Why Reverse Payments Should Be Per Se Illegal, Joshua P. Davis

Joshua P. Davis

One of the most pressing issues in antitrust law is how to assess settlements of patent disputes that involve payments from brand name to generic drug manufacturers. At stake are billions of dollars, both in inflated prices to consumers attempting to meet their medical needs and in exposure to liability for drug manufacturers. This Article applies the economics of dispute resolution to clarify the costs and benefits of various approaches to assessing patent settlements in the context of the Hatch-Waxman Act. It concludes that reverse payments should be banned under a per se rule, unless and until courts are presented …

Article 82: Gestalt, Myths, Lessons, Reza Dibadj

Reza Dibadj

Article 82 of the Treaty Establishing the European Community, which prohibits abuse of a dominant position, is the counterpart to the anti-monopolization provisions contained in Section 2 of the Sherman Act. Unfortunately, however, commentators have variously criticized recent applications of Article 82 as outdated, protectionist, inconsistent - and perhaps most damaging of all, based on faulty economics. This paper takes issue with these critiques to offer support for a robust Article 82. Narrow analyses focused on the provision's language or specific judicial decisions offer little insight. Rather, an appreciation for Article 82 can only emerge through a richer contextual analysis …

A Modest Enterprise, Reza Dibadj

Reza Dibadj

This article discusses The Antitrust Enterprise by Herbert Hovenkamp. While generally praising the book for its refreshing style, its recognition of antitrust's institutional limits, and its efforts to simplify antitrust doctrine, the article ultimately criticizes it as unnecessarily wedded to neoclassical economics. The piece discusses similarities between Hovenkamp's ideas and Chicago school economics, as well as Hovenkamp's apparent skepticism of post-Chicago thinking. Ultimately, the article calls for a more dramatic reimagination of antitrust's role, arguing that neoclassical economics should not be the frontline arbiter of competition policy. Instead, the author urges returning antitrust to its former prominence through the use …

Review Of Antitrust Law: Economic Theory And Common Law Evolution, Reza Dibadj

Reza Dibadj

Professor Keith Hylton provides a timely discussion of the most important doctrines of modern antitrust. Underlying his discussion is the thesis that antitrust can perhaps be best understood through the lens of federal common law. This book review begins by discussing how Professor Hylton's book differs from other books in the field, what topics it covers, and who might profitably read the book. The bulk of the review provides a perspective on the book. On the positive side, Hylton has written a lucid text that fruitfully analyzes antitrust from both a legal and a traditional economic perspective. The review's critique, …

Saving Antitrust, Reza Dibadj

Reza Dibadj

Commentators regularly criticize antitrust for its wobbly intellectual foundations and ineffectual results. To address this malaise, this Article attempts a new path: a systemic deconstruction of antitrust, followed by a reconstruction of the economic and institutional foundations of a new competition law. Paradoxically, saving antitrust will require looking beyond its traditions to incorporate learnings from economic regulation. First, the piece attempts to link antitrust's modern woes to two root causes: predominantly laissez-faire economics and limited institutions. Influential commentators have falsely defined antitrust's consumer welfare goal according to the strictures of neoclassical price theory, while ignoring antitrust's legislative history. In parallel, …