Antitrust and Trade Regulation Commons^™

Antitrust And Platform Monopoly, Herbert J. Hovenkamp

All Faculty Scholarship

Are large digital platforms that deal directly with consumers “winner take all,” or natural monopoly, firms? That question is surprisingly complex and does not produce the same answer for every platform. The closer one looks at digital platforms the less they seem to be winner-take-all. As a result, competition can be made to work in most of them. Further, antitrust enforcement, with its accommodation of firm variety, is generally superior to any form of statutory regulation that generalizes over large numbers.

Assuming that an antitrust violation is found, what should be the remedy? Breaking up large firms subject to extensive …

Vertical Merger Enforcement Actions: 1994–April 2020, Steven C. Salop, Daniel P. Culley

Georgetown Law Faculty Publications and Other Works

We have revised our earlier listing of vertical merger enforcement actions by the Department of Justice and Federal Trade Commission since 1994. This revised listing includes 66 vertical matters beginning in 1994 through April 2020. It includes challenges and certain proposed transactions that were abandoned in the face of Agency concerns. This listing can be treated as an Appendix to Steven C. Salop and Daniel P. Culley, Revising the Vertical Merger Guidelines: Policy Issues and an Interim Guide for Practitioners, 4 JOURNAL OF ANTITRUST ENFORCEMENT 1 (2016).

Common Ownership And Executive Incentives: The Implausibility Of Compensation As An Anticompetitive Mechanism, David I. Walker

Faculty Scholarship

Mutual funds, pension funds and other institutional investors are a growing presence in U.S. equity markets, and these investors frequently hold large stakes in shares of competing companies. Because these common owners might prefer to maximize the values of their portfolios of companies, rather than the value of individual companies in isolation, this new reality has lead to a concern that companies in concentrated industries with high degrees of common ownership might compete less vigorously with each other than they otherwise would. But what mechanism would link common ownership with reduced competition? Some commentators argue that one of the most …

Raising Rivals' Costs: Can The Agencies Do More Good Than Harm?, Alan J. Meese

Alan J. Meese

No abstract provided.

The Raising Rivals' Cost Foreclosure Paradigm, Conditional Pricing Practices, And The Flawed Incremental Price-Cost Test, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

There are two overarching legal paradigms for analyzing exclusionary conduct in antitrust – predatory pricing and the raising rivals’ costs characterization of foreclosure. Sometimes the choice of paradigm is obvious. Other times, it may depend on the structure of the plaintiff’s allegations. Some types of conduct, notably conditional pricing practices (CPPs), might appear by analogy to fit into both paradigms. CPPs involve pricing that is conditioned on exclusivity or some other type of favoritism in a customer’s purchases or input supplier’s sales. The predatory pricing paradigm would attack the low prices of CPPs. By contrast, the RRC foreclosure paradigm would …

Revising The U.S. Vertical Merger Guidelines: Policy Issues And An Interim Guide For Practitioners, Steven C. Salop, Daniel P. Culley

Georgetown Law Faculty Publications and Other Works

Mergers and acquisitions are a major component of antitrust law and practice. The U.S. antitrust agencies spend a majority of their time on merger enforcement. The focus of most merger review at the agencies involves horizontal mergers, that is, mergers among firms that compete at the same level of production or distribution.

Vertical mergers combine firms at different levels of production or distribution. In the simplest case, a vertical merger joins together a firm that produces an input (and competes in an input market) with a firm that uses that input to produce output (and competes in an output market). …

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 …

A Critical Appraisal Of The Legal Framework For Mergers And Acquisitions In Nigeria, Oluwaseun Viyon Ojo

Oluwaseun Viyon Ojo

ABSTRACT Mergers and Acquisitions is popularly gaining ground as a corporate option and strategy amongst companies desirous of staying afloat in business, increasing profitability, wanting expansion and complying with regulatory directives .As such, it bears similarly an important status in the Nigerian Company law and, hopefully there exists a legal framework for its regulation under relevant Statutes and regulations within the corporate sector. This research provides a comprehensive analysis of the concept of mergers and acquisitions from the definitional perspective, reasons for and types with reference to the relevant source materials on the concept. The paper will consider the history …

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

D. Daniel Sokol

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 …

A Comprehensive Economic And Legal Analysis Of Tying Arrangements, Guy Sagi

Seattle University Law Review

The law of tying arrangements as it stands does not correspond with modern economic analysis. Therefore, and because tying arrangements are so widely common, the law is expected to change and extensive academic writing is currently attempting to guide its way. In tying arrangements, monopolistic firms coerce consumers to buy additional products or services beyond what they intended to purchase. This pressure can be applied because a consumer in a monopolistic market does not have the alternative to buy the product or service from a competing firm. In the absence of such choice, the monopolistic firm can allegedly force the …

E-Books, Collusion, And Antitrust Policy: Protecting A Dominant Firm At The Cost Of Innovation, Nicholas Timchalk

Seattle University Law Review

Amazon’s main rival, Apple, went to great lengths and took major risks to enter the e-book market. Why did Apple simply choose not to compete on the merits of its product and brand equity (the iPad and iBookstore) as it does with its other products? Why did Apple decide not to continue to rely on its earlier success of situating its products differently in the market than other electronics and working hard to be different and cutting-edge with its e-book delivery? This Note argues that the combination of Amazon’s 90% market share, network externalities, and an innovative technology market creates …

Market Power In Power Markets: The Filed-Rate Doctrine And Competition In Electricity, Sandeep Vaheesan

University of Michigan Journal of Law Reform

State and federal initiatives have opened the American electric power industry to competition over the past four decades. Although the process has not occurred uniformly across the country, wholesale electricity markets exist everywhere today. Independent power producers can construct generation facilities and sell their output to utilities and industrial customers through bilateral contracts. In many regions, centralized power markets now facilitate the sale of billions of dollars in electricity annually through auctions. Although market forces have replaced direct price regulation in electricity, antitrust enforcement has not expanded its role commensurately. A lack of competition has been a serious problem in …

Banking And Competition In Exceptional Times, Brett Christophers

Seattle University Law Review

This Article has two main aims: to provide a critical consideration of this contemporary antitrust “revival” from an explicitly political–economic perspective and to point toward some theoretical resources that might facilitate such an assessment.Part II looks backward at the evolution and application of competition law in the banking sector over the relatively longue durée. In this Part, I invoke the concept of “exception” to understand how antitrust policy has developed, and my chief interlocutors are the perhaps unlikely figures of Giorgio Agamben and Karl Marx. Part III looks forward and considers the central question around which the recent resurgence of …

Stop Being Evil: A Proposal For Unbiased Google Search, Joshua G. Hazan

Michigan Law Review

Since its inception in the late 1990s, Google has done as much as anyone to create an "open internet." Thanks to Google's unparalleled search algorithms, anyone's ideas can be heard, and all kinds of information are easier than ever to find. As Google has extended its ambition beyond its core function, however it has conducted itself in a manner that now threatens the openness and diversity of the same internet ecosystem that it once championed. By promoting its own content and vertical search services above all others, Google places a significant obstacle in the path of its competitors. This handicap …

Rise Of The Intercontinentalexchange And Implications Of Its Merger With Nyse Euronext, Latoya C. Brown

Latoya C. Brown, Esq.

This paper examines the impending merger between the IntercontinentalExchange (ICE) and NYSE Euronext against the backdrop of the current structure of the global financial services industry. The paper concludes that the merger embodies what the financial services industry is becoming and captures the model that will allow exchanges to remain competitive in today’s marketplace: mega-exchanges with broader asset classes and electronic platforms. As technology and globalization threaten their vitality, exchanges will need to continue reinventing and adapting. Increasingly over the last decade they have done so by merging and by moving, at least a part of, their operations on screen. …

Antitrust Rulemaking As A Solution To Abuse On The Standard-Setting Process, Adam Speegle

Michigan Law Review

While many recognize the critical role that technology plays in modern life, few appreciate the role that standards play in contributing to its success. Devices as prevalent as the modern laptop computer for example, may be governed by over 500 interoperability standards, regulating everything from the USB drive to the memory chip. To facilitate adoption of such standards, firms are increasingly turning to standard-setting organizations. These organizations consist of members of an industry who agree to abide by the organization's bylaws, which typically regard topics such as patent disclosure and reasonable licensing. Problems arise, however, when members violate these bylaws …

Reflections On Section 5 Of The Ftc Act And The Ftc's Case Against Intel, Daniel A. Crane

Articles

The Federal Trade Commission’s (“FTC’s”) unprecedented enforcement action against Intel raises profound issues concerning the scope of the FTC’s powers to give a construction to Section 5 of the FTC Act that goes beyond the substantive reach of the Sherman Act. While I have urged the FTC to assert such independence from the Sherman Act, this is the wrong case to make a break. Indeed, if anything, Intel poses a risk of seriously setting back the development of an independent Section 5 power by provoking a hostile appellate court to rebuke the FTC’s effort and cabin the FTC’s powers in …

Mergers And Market Dominance, Herbert J. Hovenkamp

All Faculty Scholarship

Mergers involving dominant firms legitimately receive close scrutiny under the antitrust laws, even if they involve tiny firms. Further, they should be examined closely even in markets that generally exhibit low entry barriers. Many of the so-called "unilateral effects" cases in current merger law are in fact mergers that create dominant firms. The rhetoric of unilateral effects often serves to disguise this fact by presenting the situation as if it involves the ability of a small number of firms (typically two or three) in a much larger market to increase their price to unacceptable levels. In fact, if such a …

Regulatory Competition, Choice Of Forum And Delaware’S Stake In Corporate Law, Faith Stevelman

Articles & Chapters

As Delaware corporate law confronts the twenty-first-century global economy, the state's legislators and jurists are becoming sensitive to increased threats to the law's sustained preeminence. The increased presence of federal laws and regulations in areas of corporate governance traditionally allocated to the states has been widely noted. The growth of federal corporate law standards may be undermining Delaware's confidence in the sustained prosperity of its chartering business - which has been a vital source of revenues and prestige for Delaware, its equity courts, and especially its corporate bar. The Delaware Court of Chancery appears to be concerned about the emigration …

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 …

Raising Rivals' Costs: Can The Agencies Do More Good Than Harm?, Alan J. Meese

Faculty Publications

No abstract provided.

Antitrust Enfocement And High-Technology Markets, William J. Baer, David A. Balto

Michigan Telecommunications & Technology Law Review

Although the antitrust laws apply to all industries, the application must be tempered in each case by the myriad ways in which competition can be modified by structural, behavioral, technological, regulatory, and other characteristics. The Commission applies the antitrust laws with sensitivity to the special characteristics of high-tech industries and of intellectual property, but also with the recognition that--as in other industries--competition plays an important role in spurring innovation and in spreading the benefits of that innovation to consumers. This focus is not new. This balanced approach has roots that go back at least to the 1977 Antitrust Guide to …

Competition, Integration And Economic Efficiency In The Eec From The Point Of View Of The Private Firm, Michel Waelbroeck

Michigan Law Review

As early as 1956, experts appointed by the six original Member State governments to investigate measures to pursue integration after the failure of the European Defence Community clearly established this link between the abolition of barriers to trade and an increase in the intensity of competition. In what has come to be known as the "Spaak Report," the experts noted the technology gap then separating Europe from the United States and proposed, as a remedial measure, the creation of a ''vast zone of common economic policy, constituting a powerful production unit, and allowing a continued expansion, and increased stability, an …

Introduction: Transnational Corporate Concentration-The Issues, Thomas E. Kauper

Michigan Journal of International Law

Competition policy in the United States, particularly reflected in antitrust policy, in recent years has focused on corporate structure. To some, this emphasis simply reflects a belief in a close correlation between corporate structure and behavior. A single firm monopoly inevitably will restrict output and raise prices above levels that would prevail under competition conditions, distorting allocative efficiency. The behavioral pattern is a direct consequence of structure. Many believe that high corporate concentration, even short of single firm monopoly, is at least conducive to, if not a cause of, monopolistic behavior. Some also view high corporate concentration, and the aggregation …

International Implications Of Limitations On "Aggregate Concentration", David Boies

Michigan Journal of International Law

Traditionally, antitrust laws have been concerned with competition and concentration within a single market. In the past few years, however, increasing attention has been given to economywide or aggregate concentration-especially when such concentration is accomplished by merger rather than by internal growth. In 1979 and 1980, Congress considered Senate Bill S. 600 which would limit mergers based on size criteria that are unrelated, at least directly, to proof of a lessening of competition within any given market. The international implications of applying this principle are complex and difficult, and have yet to be fully addressed. It is the purpose of …

Reflections On Recent Oecd Activities: Regulation Of Multinational Corporate Conduct And Structure, Kurt Stockmann

Michigan Journal of International Law

In recent, years, the Organization for Economic Cooperation and Development (OECD) has repeatedly addressed, in a variety of forms, the problem of transnational corporate concentration. In the field of restrictive business practices, it has made suggestions on specific antitrust problems, issued council recommendations, and promulgated the 1976 Concil Guidelines for multinational enterprises. Not surprisingly for an organization that adheres to the principle of unanimity and, consequently, is governed by the law of the smallest common denominator, these efforts have thus far focused more on procedure than on substance. Even where quasisubstantive rules have been adopted, such as in competition guideline …

Doctrines And Problems Relating To U.S. Control Of Transnational Corporate Concentration, Douglas E. Rosenthal, Stuart E. Benson, Lisa Chiles

Michigan Journal of International Law

It is the principal thesis of this article that important recent case decisions in U.S. antitrust law reflect just this conflict over the extent to which intraindustry (horizontal) concentration is economically harmful. We are at a point where the future direction of the law is difficult to discern. Until there is greater U.S. policy agreement, and consistency within U.S. law itself, it is unlikely that any common transnational response will emerge to even horizontal corporate concentration. Ironically, it may not be possible to clarify U.S. antitrust law as long as the underlying policy conflict remains so sharp. For the present, …

The "Economic" Analysis Of Transnational Mergers, William James Adams

Michigan Journal of International Law

No congregation of lawyers can be considered complete without a token economist. The role of the economist consists of describing the economic mode of analyzing the legal problem under consideration. Unfortunately from the standpoint of the token, economists rarely agree on criteria appropriate for the appraisal of economic phenomena. With respect to transnational corporate mergers, four modes of analysis may be described legitimately as economic.

Sherman Act Applications To Predation By Controlled Economy Enterprises Marketing In The United States: Departures From Mechanical Formulae, Deborah M. Levy

Michigan Journal of International Law

In a reproachful dissent in United States v. Columbia Steel, the late Justice Douglas sought to remind his brethren what the antitrust laws of the United States are all about: [A]ll power tends to develop into a government in itself. Power that controls the economy should be in the hands of elected representatives of the people, not in the hands of an industrial oligarchy. Industrial power should be decentralized.... That is the philosophy and the command of the Sherman Act.

United Kingdom Regulation Of Transnational Corporate Concentration, J. Denys Gribbin

Michigan Journal of International Law

This article begins by describing the United Kingdom's policy toward outward and inward direct investment and then sets out the essentials of the competition laws that are among the major, nondiscriminatory regulatory mechanisms that affect corporate behavior and planning. The article also analyzes the development of competition policy as a microeconomic instrument along with its application to monopoly, oligopoly, and cartels involving transnational corporations. Competition policy, except for cartels, is shown to be relatively benign toward mergers until recently, and with respect to monopoly and oligopoly has sought remedies in regulation of prices and behavior rather than through structural change. …