Law Commons^™

Eminent Need: Proposing A Market Participation Exception For Municipal Parker Immunity, Scott B. Weese

Scott B Weese

A township is using its eminent domain powers to become a monopsony in the real estate market for the designated area. That township’s monopsony power is then being exploited to create a price-fixing scheme that would violate antitrust laws, either as a per se violation under § 1 of the Sherman Antitrust Act, or as a monopolizing or attempted monopolizing offense under § 2. Under the Sherman Act, effected residents could force the township to appraise each property individually and pay the full market value; if the township refused, they would be subject to the treble damage penalty, erasing any …

Resale Price Maintenance: Consignment Agreements, Copyrighted Or Patented Products And The First Sale Doctrine, Herbert J. Hovenkamp

All Faculty Scholarship

The rule of reason adopted for resale price maintenance in the Supreme Court’s Leegin decision, which upset the century old Dr. Miles rule of per se illegality, requires some reconsideration of a number of issues about antitrust treatment of RPM. Under the old per se rule, bona fide “consignment” agreements were not covered by Section 1 of the Sherman Act at all because there was said to be no qualifying “agreement” between the supplier and the dealer. Rather the dealer was simply said to be acting as an agent of the seller. However, insofar as RPM produces competitive dangers, such …

Leegin, The Rule Of Reason, And Vertical Agreement, Herbert J. Hovenkamp

All Faculty Scholarship

The Supreme Court’s Leegin decision overturned the longstanding rule of per se illegality for resale price maintenance and applied a rule of reason. One might think that the question whether a vertical “agreement” exists between a manufacturer and a dealer should not be affected by the mode of analysis to be applied after an agreement is found. First one asks whether an agreement exists, and determines whether the per se rule or rule of reason applies only after receiving an affirmative answer. Nevertheless, ever since Colgate the Supreme Court has generally taken a more restrictive approach on the agreement issue …

Vertical Restraints, Dealers With Power, And Antitrust Policy, Herbert J. Hovenkamp

All Faculty Scholarship

The Supreme Court’s Leegin decision has now brought the rule of reason to all purely vertical intrabrand distribution restraints. But the rule of reason does not mean per se legality and occasions for anticompetitive vertically imposed restraints may still arise. Of all those that have been suggested the most plausible are vertical restraints imposed at the behest of a powerful dealer or group (cartel) of dealers.

Although a vertical distribution restraint resembles a dealer cartel in that both limit intraband competition, a manufacturer restraining the distribution of its product shuns the excess dealer profits a dealer cartel would seek. Accordingly, …

Framing Franchise Antitrust Litigation: The Legacy Of Kodak And Queen City Pizza, Randy D. Gordon

Faculty Scholarship

A decade ago, many antitrust commentators were predicting a “revival” of franchise antitrust claims flowing in the wake of Eastman Kodak Co. v. Image Technical Services, Inc. The thinking was that Kodak’s recognition of a claim for monopolization of an “aftermarket” for parts and services separate from each other and from a primary product might be extended to cover franchise relationships in which the franchisee is required to purchase fungible products from its franchisor, even though those products could be purchased elsewhere on more favorable terms. Fairly quickly, though, the Third Circuit decided Queen City Pizza, Inc. v. Domino’s Pizza, …

Antitrust 2025, Maurice Stucke

Scholarly Works

Antitrust policy in the United States has roughly twenty to thirty year cycles. So if past cycles are reliable indicators of future ones, we are at (or approaching) a new antitrust policy cycle, with 2025 being the approximate midpoint.

Any new policy cycle will be defined by three fundamental questions: a. What is competition? b. What are the goals of competition law? c. What should be the legal standards to promote these goals?

Rather than predict the state of antitrust policy in 2025 (such as more or less cartel enforcement), this Essay maps two scenarios based on these three fundamental …

Merging In The Shadow Of The Law: The Case For Consistent Judicial Efficiency Analysis, Jamie H. Moffitt

Vanderbilt Law Review

This Article examines current judicial interpretation of Section 7 of the Clayton Act through the lens of negotiation theory. The research exposes a gap between how courts state they are analyzing efficiency claims in Section 7 Clayton Act enforcement actions and what they are actually doing. During periods of lax antitrust enforcement, this pattern is not readily visible, since almost all proposed merger and acquisition ("M&A") deals are approved. With a shift to more aggressive antitrust policy, however, it is critical that merger review include appropriate weighing of transaction-generated efficiencies-something missing from courts' current antitrust analysis. Although only a small …

Kicking "Single-Entity" To The Sidelines: Reevaluating The Competitive Reality Of Major League Soccer After American Needle And The 2010 Collective Bargaining Agreement, Matthew J. Jakobsze

Northern Illinois University Law Review

The negotiation of the 2010 Collective Bargaining Agreement brought tense times for professional soccer in the United States. The Major League Soccer Players’ Union sought free agency as a part of the 2010 CBA, a term that would have brought considerable relief from the restrictions imposed through Major League Soccer’s centralized contracting system. In a steadfast effort to retain control, minimize labor costs, and avoid antitrust liability, Major League Soccer refused to yield to the players’ demands. As a result, the parties reached impasse. Devoid of decertification as an option to expose the teams to antitrust scrutiny, the players threatened …

Toward A Unified Theory Of Exclusionary Vertical Restraints, Daniel A. Crane, Graciela Miralles

Law & Economics Working Papers

The law of exclusionary vertical restraints—contractual or other business relationships between vertically related firms—is deeply confused and inconsistent in both the United States and the European Union. A variety of vertical practices including predatory pricing, tying, exclusive dealing, price discrimination, and bundling are treated very differently based on formalistic distinctions that bear no relationship to the practices’ exclusionary potential. We propose a comprehensive, unified test for all exclusionary vertical restraints that centers on two factors, foreclosure and substantiality. We then assign economic content to these factors. A restraint forecloses if it denies equally efficient rivals a reasonable opportunity to make …

The Theorem Of The Social Value Of Inventions And The Happiness Machine Patent Syndrome, Nuno P. Carvalho

Nuno P Carvalho

The higher the social value of inventions the lower is the proportion of revenue that inventors are able to capture from their exploitation. This formulation is a hypothesis that stems from the observation of facts: most patents covering highly valuable inventions are subject to attacks that are difficult to explain. Those attacks have social causes, such as the monopoly stigma, the urge for penance and the idea of just price. Together they form the happiness machine patent syndrome. There is no evidence making a definitive case for the theorem above, and yet observation of the difficulties that have insistently haunted …

The Intel And Microsoft Settlements, Robert H. Lande

All Faculty Scholarship

This article briefly compares and contrasts the recent U.S. Federal Trade Commission's antitrust settlement with Intel, and the antitrust cases brought against Microsoft. The article praises the FTC's settlement with Intel, and predicts that history will judge it very favorably compared to the settlement by the U.S. Department of Justice of its antitrust case against Microsoft.

Is The Public Utility Holding Company Act A Model For Breaking Up The Banks That Are Too-Big-To-Fail?, Roberta S. Karmel

Roberta S. Karmel

ABSTRACT FOR “IS THE PUBLIC UTILITY HOLDING COMPANY ACT A MODEL FOR BREAKING UP THE BANKS THAT ARE TO-BIG-TO-FAIL?”

BY ROBERTA S. KARMEL

During the financial crisis of 2007-08 and the debates on regulatory reform that followed, there was general agreement that the “too-big-to-fail” principle creates unacceptable moral hazard. Policy makers divided, however, on the solutions to this problem. Some argued that the banking behemoths in the United States should be broken up. Others argued that dismantling the big banks would be bad policy because these banks would not be able to compete with universal banks in the global capital …

Racial Cartels, Daria Roithmayr

Michigan Journal of Race and Law

This Article argues that we can better understand the dynamic of historical racial exclusion if we describe it as the anti-competitive work of "racial cartels." We can define racial cartels to include a range of all-White groups - homeowners' associations, school districts, trade unions, real estate boards and political parties - who gained signficant social, economic and political profit from excluding on the basis of race. Far from operating on the basis of irrational animus, racial cartels actually derived significant profit from racial exclusion. By creating racially segmented housing markets, for example, exclusive White homeowners' associations enjoyed higher property values …

Reviving An Epithet: A New Way Forward For The Essential Facilities Doctrine, Sandeep Vaheesan

Sandeep Vaheesan

For sound economic reasons, the antitrust laws, in general, do not require firms to share their assets with rivals. When a particular asset has natural monopoly characteristics and is used as an input in other markets, however, the essential facilities doctrine requires that the asset be shared with firms in related markets. In recent decades, the Supreme Court and leading scholars have criticized the doctrine, claiming it is economically inefficient and taxes the institutional capacity of the judiciary.

Historically, the courts most often applied the doctrine to tangible natural monopolies like electric transmission grids and bottleneck railroad lines. In recent …

Plus Factors, Robert C. Marshall

Robert C Marshall

Plus factors are economic actions and outcomes, above and beyond parallel conduct by oligopolistic firms, that are largely inconsistent with unilateral conduct but largely consistent with coordinated action. Possible plus factors are typically enumerated without any attempt to distinguish them in terms of a meaningful economic categorization or in terms of their probative strength for inferring collusion. In this paper, we provide a taxonomy for plus factors as well as a methodology for ranking plus factors in terms of their strength for inferring explicit collusion, the strongest of which are referred to as “super plus factors.”

American Needle And The Boundaries Of The Firm In Antitrust Law, Herbert J. Hovenkamp

All Faculty Scholarship

In American Needle the Supreme Court unanimously held that for the practice at issue the NFL should be treated as a “combination” of its teams rather than a single entity. However, the arrangement must be assessed under the rule of reason. The opinion, written by Justice Stevens, was almost certainly his last opinion for the Court in an antitrust case; Justice Stevens had been a dissenter in the Supreme Court’s Copperweld decision 25 years earlier, which held that a parent corporation and its wholly owned subsidiary constituted a single “firm” for antitrust purposes. The Sherman Act speaks to this issue …

Antitrust & The Bowl Championship Series, Nathaniel Grow

Nathaniel Grow

This Article analyzes the potential antitrust liability of the Bowl Championship Series (“BCS”), college football’s current system for selecting the participants of both the national championship game as well as other highly desirable post-season bowl games. The BCS has recently been the subject of increasing attack from politicians and law enforcement officials, who allege that the system constitutes an illegal restraint of trade due to its preferential treatment of universities from certain traditionally stronger conferences, at the expense of teams from other historically less competitive conferences. Meanwhile, the academic literature considering the antitrust status of the BCS is mixed, with …

Panel I: Professor Brodley’S General Contributions To Antitrust Scholarship : Introduction, Keith N. Hylton

Faculty Scholarship

When I began teaching Antitrust, I was the junior colleague of a more senior antitrust scholar, teaching the course on opposite semesters to the relatively few students who were forced by scheduling conflicts to take the course with me as their teacher. After my senior colleague departed for another school – and after the departure of some other senior Law and Economics colleagues – I was for a brief period the senior antitrust scholar at the institution, and this was in only my fifth year of teaching law. Boston University soon approached me and my wife with the offer of …

Property's End: Why Competition Policy Should Limit The Right Of Publicity, Steven Semeraro

Steven Semeraro

The right of publicity is an intellectual property right that empowers celebrities to prohibit the unauthorized use of their names, images, and identities. Over the past two decades, academic commentators have presented powerful critiques of this right. Yet, legislatures and courts have turned a deaf ear, continuing to expand publicity rights. This article has two goals. First, it explains why the seemingly persuasive critique of the right of publicity has failed to influence law makers. The right’s critics claim that publicity cannot be property because the arguments used to justify actual property simply do not apply to publicity. When one …

From Energy Sector Inquiry To Recent Antitrust Decisions In European Energy Markets: Competition Law As A Means To Implement Energy Sector Regulation In Eu, Michael Diathesopoulos

Michael Diathesopoulos

This paper presents the conceptual path followed by European Union, European Commission and European Competition Network, after the Energy Sector Inquiry (2007) towards the realisation of the objective of an Energy Internal Market, fully functional and open to competition. Firstly, we examine the findings of Sector Inquiry and then we describe how the Third Energy Package - that followed - tried to address the issues highlighted by the Inquiry and how Third Energy Package introduces a promising but complex system, in order to develop sector rules. Following the above, we proceed to a brief but close examination of 10 recent …

Antitrust, Institutions, And Merger Control, D. Daniel Sokol

UF Law Faculty Publications

This Article makes two primary contributions to the antitrust literature. First, it identifies the dynamic interrelationship across antitrust institutions. Second, it provides new empirical evidence from practitioner surveys to explore how the dynamic institutional interrelationship plays out in the area of merger control. This Article provides a descriptive, analytical overview of the various institutions to better frame the larger institutional interrelations for a comparative institutional analysis. In the next Part it examines mergers as a case study of how one might apply antitrust institutional analysis across these different kinds and levels of antitrust institutions. The Article utilizes both quantitative and …

How Do (And Should) Competition Authorities Treat A Dominant Firm's Deception?, Maurice Stucke

Scholarly Works

This Article discusses deception and its potential anticompetitive effects. Since deception lacks any redeeming ethical, moral, or economic justifications, and trust in the marketplace is paramount, multiple laws seek to deter and punish deception. Although the federal antitrust laws seek to deter acts of unfair competition, which historically included a competitor’s deception, some federal courts, recently have erected hurdles for antitrust plaintiffs injured by a monopolist’s deception. Such hurdles are contrary to the Sherman Act's legislative aim, the common law antecedents of the Sherman Act, and other congressional policies. Moreover, the courts’ legal standards for evaluating a monopolist’s deception involving …

American Needle: The Sherman Act, Conspiracy, And Exclusion, Herbert J. Hovenkamp

All Faculty Scholarship

This essay, part of a colloquium in the CPI Antitrust Journal, explores the meaning and significance of the Supreme Court’s decision in American Needle v. NFL. The Supreme Court held that for purposes of the dispute at hand the NFL should be treated as a collaboration of its member teams rather than a single entity. The factors that the Supreme Court considered most important were, first, that the NFL’s member teams are individually owned profit making entities who compete with each other in at least some economic markets, such as that for the sale of apparel bearing NFL symbols. …

Antitrust & The Bowl Championship Series, Nathaniel Grow

Nathaniel Grow

This Article analyzes the potential antitrust liability of the Bowl Championship Series (“BCS”), college football’s current system for selecting the participants of both the national championship game as well as the other most desirable post-season bowl games. The BCS has recently been the subject of increasing attack from both politicians and law enforcement officials, who allege that the system constitutes an illegal restraint of trade due to its preferential treatment of universities from certain traditionally stronger conferences, at the expense of teams from other, historically less competitive conferences. Meanwhile, the academic literature considering the antitrust status of the BCS is …

Proposed Horizontal Merger Guidelines: Economists’ Comment, Michael R. Baye, Aaron S. Edlin, Richard J. Gilbert, Jerry A. Hausman, Daniel L. Rubinfeld, Steven C. Salop, Richard L. Schmalensee, Joshua D. Wright

Richard Gilbert

No abstract provided.

Proposed Horizontal Merger Guidelines: Economists’ Comment, Michael R. Baye, Aaron S. Edlin, Richard J. Gilbert, Jerry A. Hausman, Daniel L. Rubinfeld, Steven C. Salop, Richard L. Schmalensee, Joshua D. Wright

Daniel L. Rubinfeld

No abstract provided.

Proposed Horizontal Merger Guidelines: Economists’ Comment, Michael R. Baye, Aaron S. Edlin, Richard J. Gilbert, Jerry A. Hausman, Daniel L. Rubinfeld, Steven C. Salop, Richard L. Schmalensee, Joshua D. Wright

Aaron Edlin

No abstract provided.

Role Of Individuals Discrimination In Free Exercise Claims: Putting Iqbal In Its Place, The, Leila Mcneill

Missouri Law Review

Ashcroft v. Iqbal has been widely discussed for three reasons: (1) its extension of Twombly's pleading standard to cases outside the realm of antitrust suits, (2) its application of the collateral order doctrine to a district court order denying an official's motion to dismiss on the basis of qualified immunity in a Bivens claim, and (3) its implication for national security and postSeptember 11th terrorist detainments and investigations. However, Iqbal also implicates the nature of what constitutes unconstitutional religious discrimination under the First Amendment's Free Exercise Clause. Therefore, the Iqbal Court's discussion of religious liberty will present problems of interpretation …

Predation Analysis And The Ftc’S Case Against Intel, Daniel A. Crane

Law & Economics Working Papers

The Federal Trade Commission's pending antitrust case against Intel challenges a number of Intel's discounting and rebating practices. The Commission appears poised to apply a cost-price test to the challenged practices, but proposes to include "fixed sunk costs" in the appropriate measure of cost. This paper explains the importance of using cost-price screens to assess unilaterally imposed prices and analyzes the futility of including sunk costs in the relevant cost measure.

Dynamic Efficiencies And Technological Progress In Ec Merger Control, Magdalena Laskowska

Magdalena Laskowska

Economic growth largely hinges upon technological progress and productivity gains are the key to rising incomes and living standards. As high technology industries have significantly increased their prominence in global economic performance in the 1980s and 1990s and economic policy has focused on innovation, merger laws have become a crucial part of antitrust enforcement on both sides of the Atlantic. In recent years, many mergers and acquisitions of control have occurred in innovation-driven industries. Hence, it is important to ask a fundamental question : how is the importance of technological progress reflected in the competition authorities’ decisional practice? Due to …