Law Commons^™

New Powers- New Vulnerabilities? A Critical Analysis Of Market Inquiries Performed By Competition Authorities, Tamar Indig, Michal Gal

Michal Gal

In the past two decades the number of jurisdictions which have empowered their Competition Authorities to engage in market inquiries (MIs) has grown substantially. Although jurisdictions differ in the scope and procedure adopted for such studies, they all share an important common trait: attempting to allocate the roots of limited competition in the studied market. Market studies differ from traditional competition law tools in their triggers, range, object, and the level of pro-activity of the Competition Authority. They are not triggered by a suspicion of anti-competitive conduct of specific firm(s), but rather allow the Authority to use a broad prism …

The Hidden Costs Of Free Goods: Implications For Antitrust Enforcement, Michal Gal, Daniel Rubinfeld

Michal Gal

Today a growing number of goods and services are provided in the marketplace free of charge; indeed, free or the appearance of free, have become part of our ecosystem. More often than not, free goods and services provide real benefits to consumers and are clearly pro-competitive. Yet free goods may also create significant costs. We show that despite the fact that the consumer does not pay a direct price, there are indirect prices that reflect the opportunity cost associated with the consumption of free goods. These indirect costs can be overt or covert, in the same market in which the …

Viral Open Source: Competition Vs. Synergy, Michal Gal

Michal Gal

The creation of free and open source software (FOSS) through social networks has been celebrated as one of the most interesting and inspiring developments of the information age. The main legal platform selected for facilitating this collaborative creation is the GNU General Public License (GPL). Software released under the GPL enables anyone to use, modify, and distribute the code. Yet, these rights are contingent upon virality: every copy or work based on the original code must also be subject to such terms and conditions. This article analyzes the interesting and intricate effects of virality on welfare and innovation. Virality increases …

Regional Agreements Of Developing Jurisdictions: Unleashing The Potential, Michal Gal, Inbal Wassmer-Faibish

Michal Gal

No abstract provided.

The Dearth Of Antitrust Sanctions (In Hebrew), Michal Gal, Amir Israeli

Michal Gal

No abstract provided.

Merger Policy For Small And Micro Jurisdictions, Michal Gal

Michal Gal

Merger policy is an important tool for limiting privately-erected artificial barriers to competition. Its unique qualities, mainly the fact that it is applied ex ante in order to prevent external changes in market structure which harm social welfare, and the fact that it is the most effective tool in a competition law's toolbox for limiting oligopolistic coordination, serve to explain its spread around the world. Countries of all sizes and economic characteristics have adopted it into their competition laws, from India to Guernsey, from China to Barbados. Indeed, the number of countries with merger regulation has increased from 8 in …

New Perspectives On International Antitrust, Michal Gal

Michal Gal

No abstract provided.

The Bagel And Its Hole: Changes In Competition Law (In Hebrew), Michal Gal

Michal Gal

No abstract provided.

International Antitrust Solutions: Discrete Steps Or Causally Linked?, Michal Gal

Michal Gal

No abstract provided.

Regional Competition Law Agreements: An Important Step For Antitrust Enforcement, Michal Gal

Michal Gal

This essay argues that regional competition law agreements on joint enforcement and advocacy (RJCAs) hold an important potential to solve many of the enforcement problems that small and developing jurisdictions face and can provide additional benefits that go beyond such solutions. It also argues that the costs involved in such agreements are not prohibitive and that many of these costs can be overcome by structuring appropriate solutions. Accordingly, RJCAs have the potential to create Pareto superior solutions to enforcement problems relative to unilateral enforcement. The essay then broadens the analysis to the potential effects of RJCAs on non-member states. It …

Expansion And Contraction In Monopolization Law, Michal Gal, Spencer Waller Weber, Avishalom Tor

Michal Gal

This article introduces a special symposium issue of the Antitrust Law Journal based on a conference on monopolization. It argues that monopolization law has been experiencing simultaneous expansion and contraction processes that are not wholly contradictory but at least partly complementary. Specifically, the authors suggest that the contraction of monopolization law in the United States and the EU might serve to facilitate its expansion and increased importance worldwide, providing other antitrust regimes with more focused and effective tools to address the challenges involved in regulating dominant firms. Moreover, monopolization law's increased reach internationally also has made its refinement and rationalization …

The Follower Phenomenon: Implications For The Design Of Monopolization Rules In A Global Economy, Michal Gal, Jorge A. Padilla

Michal Gal

Laws are oftentimes modeled, at least in part, on those of jurisdictions with established antitrust regimes, a trend we call “the follower phenomenon.” Follower behavior might involve a transplant of a legal rule, its interpretation, or both.

This article analyzes the main causes of the follower phenomenon in antitrust and its welfare effects, both on the following jurisdiction and on the followed one. It argues that the proliferation of one's antitrust prohibitions can sometimes act as a boomerang, negatively affecting the welfare of the followed jurisdiction as well as third jurisdictions. This boomerang effect can result from three main causes: …

Free Movement Of Judgments: Increasing Deterrence Of International Cartels Through Jurisdictional Reliance, Michal Gal

Michal Gal

This article challenges the conventional wisdom that not much can be done under the existing atomistic system of antitrust enforcement to solve the problem of sub-optimal deterrence of international cartels. Low deterrence results from two main facts: first, international cartels are generally prosecuted by only a fraction of the jurisdictions harmed by them. Second, monetary sanctions imposed by those jurisdictions are generally based only on the harm incurred to their domestic markets. To solve this problem, this article proposes a novel legal tool that would enable countries to adopt and rely upon foreign findings of international hard-core cartels, provided that …

When The Going Gets Tight: Institutional Solutions When Antitrust Enforcement Resources Are Scarce, Michal Gal

Michal Gal

This article seeks to explore whether institutional solutions to antitrust enforcement problems can be transported from one jurisdiction to another. It does so by focusing on the effects of scarce enforcement resources (both financial and human) on optimal institutional design. The prevalence of this characteristic in small, developing and transition economies makes it an interesting and important subject to study. Accordingly, the following question is raised: if a country has a small institutional endowment, can it transplant the institutional structure of another jurisdiction with a large resource endowment and simply shrink it to fit its budget - like the shrinking …

The 'Cut And Paste' Of Article 82 Of The Ec Treaty In Israel: Conditions For A Successful Transplant, Michal Gal

Michal Gal

A bit over a decade ago the Israeli competition law was amended. The legislator simply 'cut and paste' Article 82 of the Treaty of Rome, which prohibits the abuse of dominance, into the Israeli Competition Act. The question this article addresses is whether the copying of Article 82 has been a Trojan horse - in that its adoption into brought in doctrines and legal rules which did not serve well Israeli competition law, or whether it served as a racing horse, in that it move forward the Israeli law of abuse. The answer, I suggest, is a hybrid horse. Nonetheless, …

The Effects Of Smallness And Remoteness On Competition Law - The Case Of New Zealand, Michal Gal

Michal Gal

The economic characteristics of an economy — most notably its size, its openness to trade and its remoteness from its trading partners — greatly affect the competitiveness and performance of its markets by reducing internal and external competitive pressures. Accordingly, small, insulated economies should devise appropriate policies that offset at least some of these effects. This article analyses some of the effects of smallness and remoteness on optimal competition law. The first part provides a basis for the discussion by surveying the basic economic effects of small market size. The second part builds upon these observations to analyse some of …

Six Principles For Limiting Government-Facilitated Restraints On Competition, Michal Gal, Inbal Faibish

Michal Gal

Regulation is an important tool to deal with market imperfections. Regulation might, however, sometimes go beyond what is socially justified and create undue restraints on competition. The problem of social engineering is thus to devise a system that will ensure that the optimum combination of competition and regulation is achieved.

This article suggests harnessing the comparative advantages of competition authorities to this task. It proposes six general principles that are aimed at creating a system of "checks and balances" which maintains adequate safeguards to ensure that competition will be limited only where socially warranted. Whereas much has been written about …

Necessary Reforms Of The Israeli Competition Law (In Hebrew), Michal Gal

Michal Gal

No abstract provided.

A Bell On The Cat's Neck: Monopoly Declarations Under The Israeli Competition Law (In Hebrew), Michal Gal, Amir Israeli

Michal Gal

No abstract provided.

50 Colors Of Formica: Legal Realism In The Israeli Competition Law (In Hebrew), Michal Gal

Michal Gal

No abstract provided.

Below-Cost Price Alignment: Meeting Or Beating Competition, Michal Gal

Michal Gal

May a dominant firm justify below-cost pricing by simply arguing that it aligned its prices with those of its rivals? In this essay I show that generally the answer is negative. I also argue, however, that such a rule should not be categorical and that in some circumstances a below-price meeting competition defense should be allowed, in order to protect competition. Such an exception is necessary in order to take account of the special economic characteristics of dynamic industries which differ from the brick-and-mortar industry model that assumes that scale economies are small and entry barriers are low. The article …

Concentrated Monopolies (In Hebrew), Michal Gal, Menachem Perlman, Talya Solomon

Michal Gal

No abstract provided.

Monopolies In Competition: The Balance Between Innovativeness And Competition In The Israeli Competition Law (In Hebrew), Michal Gal

Michal Gal

No abstract provided.

Regulation By Declaration: A Novel Method To Limit Abuse Of Market Power, Michal Gal

Michal Gal

In most jurisdictions the legal inquiry into whether a firm enjoys a monopoly position is an integral part of an inquiry into whether a firm has abused its market power, and a positive answer to the first is a precondition for conducting the second. This combination creates some inefficiencies. Most notably, market participants, including the would-be monopolist, are uncertain of the monopolist's market position until its conduct is challenged before the courts. This paper explores a novel regulatory mechanism which seeks to separate the two stages of inquiry and to empower the antitrust authorities to declare a firm a monopoly …

What Is An Agreement? (In Hebrew), Michal Gal

Michal Gal

No abstract provided.

Separating The Wheat From The Chaff: Restrictive Agreement In Light Of The Supreme Court’S Recent Decisions (In Hebrew), Michal Gal

Michal Gal

No abstract provided.

The Ecology Of Antitrust: Preconditions For Competition Law Enforcement In Developing Countries, Michal Gal

Michal Gal

The number of developing countries that have adopted a competition law has grown exponentially over the past two decades. Yet the mere adoption of a competition law is a necessary but not sufficient condition for it to be part of market reform. Just as ecological conditions determine the ability of a flower to bloom, so do some preconditions affect the ability to apply a competition law effectively. This study seeks to identify the ecology of antitrust in developing countries: the soil, sun, water and pesticides of competition law adoption and enforcement. In particular, it analyzes the socio-economic ideology (soil), the …

Monopoly Pricing As An Antitrust Offense In The U.S. And The Ec: Two Systems Of Belief About Monopoly?, Michal Gal

Michal Gal

Monopoly pricing per se, that is without need of proof of anti-competitive conduct or intent, is regulated very differently on both sides of the Atlantic, at least in theory. U.S. antitrust law sets a straightforward rule: monopoly pricing, as such, is not regulated. In contrast, under EC law excessive pricing is considered an abuse of dominance and is punishable by fine and subject to a prohibitory order. These approaches fit the divide between the regulation of exclusionary and exploitative conduct: whereas exclusionary conduct is an offense against antitrust law on both sides of the Atlantic, exploitative conduct generally only breaches …

Reality Bites (Or Bits): The Political Economy Of Antitrust Enforcement, Michal Gal

Michal Gal

A realistic analysis of antitrust must deal in positive terms with political influences. Political influences are especially strong in the antitrust arena, where decisions and policy measures often significantly affect the profitability of market players. It is thus important, in designing an antitrust regime, to acknowledge such influences and to design institutions and methods that will harness political aspirations to the achievement of antitrust goals. Accordingly, the goal of this article is to analyze the different effects political motivations might have on antitrust, and to suggest tools that may minimize such effects. A short theoretical analysis of the political economy …

Size Does Matter: General Policy Prescriptions For Optimal Competition Rules In Small Economies, Michal Gal

Michal Gal

For the most part, competition policy literature focuses on large economies. Yet the economic paradigms on which such competition policies are based do not necessarily apply to the many small market economies that exist around the world. As this paper argues, the size of an economy necessarily affects the optimal competition policy that should be adopted by it. The paper demonstrates the effects of market size both on rules of thumb used in competition policy as well as on more general policy prescriptions, such as policy goals, trade-offs and remedial tools. The implications of this article extend beyond domestic competition …