Antitrust and Trade Regulation Commons^™

Competing Explanations For Parallel Conduct: Lessons From The Australian Detergent Case (Colgate-Palmolive), George Hay, E. Jane Murdoch

Cornell Law Faculty Publications

Parallel conduct by competing firms is an almost unavoidable phenomenon in the real world. Of course, parallel conduct can be the result of completely independent and uncontroversial behaviour, such as when all suppliers are affected by and respond unilaterally to an identical increase in costs. Few would suggest that, in such circumstances, the firms’ conduct should be subject to sanctions. At the other extreme, parallel conduct can be the result of interdependent and deliberately coordinated behaviour, such as when all suppliers meet in the proverbial smoke-filled room and agree to fix prices. Few would hesitate to condemn such conduct under …

Trade And Development In An Era Of Multipolarity And Reterritorialization, Chantal Thomas

Cornell Law Faculty Publications

This essay will consider two phenomena emergent within international trade law and policy: multipolarity (the emergence of new global powers alongside existing hegemons) and reterritorialization (the rise, sometimes in quite virulent form, of economic nationalism as a basis for asserting State controls over, and barriers to, cross-border trade). These new dynamics present serious challenges and dangers. This essay will consider whether they might also create opportunities for reshaping the international economic order to be more supportive of the longstanding concerns of developing States. In doing so, the essay will elucidate key aspects of both the global political economy and the …

The Limits Of Private Ordering Within Modern Financial Markets, Dan Awrey

Cornell Law Faculty Publications

From standardized contracts for loans, repurchase agreements, and derivatives, to stock exchanges and alternative trading platforms, to benchmark interest and foreign exchange rates, private market structures play a number of important roles within modern financial markets. These market structures hold out a number of significant benefits. Specifically, by harnessing the powerful incentives of market participants, these market structures can help lower information, agency, coordination, and other transaction costs, enhance the process of price discovery, and promote greater market liquidity. Simultaneously, however, successful market structures are the source of significant and often overlooked market distortions. These distortions--or limits of private ordering--stem …

A Tale Of Two Cities: From Davids Holdings To Metcash, George A. Hay, E. Jane Murdoch

Cornell Law Faculty Publications

In 1994, the Full Federal Court upheld the decision of the trial judge to prevent the acquisition of QIW by Davids, on the grounds that, Davids would become the only supplier of groceries to independent retailers in the geographic market. While the independent retailers faced significant competition in the downstream (retail) business from the integrated retail chains, the Court found that such competition would not be sufficient to prevent the exercise of monopoly power in the upstream (wholesale) business.

In 2011, the Full Federal Court upheld the decision of the trial judge not to prevent the acquisition by Metcash of …

The Diverging Approach To Price Squeezes In The United States And Europe, George A. Hay, Kathryn Mcmahon

Cornell Law Faculty Publications

Notwithstanding assertions of greater harmonization and convergence between United States and European Union competition law, recent case law has identified significant differences in their approaches to the regulation of a price or margin squeeze. In the US after linkLine the likelihood of a successful claim has been significantly diminished, particularly if there has been no prior course of voluntary dealing and no downstream predatory pricing. In contrast, in a series of decisions in liberalized telecommunications markets, the EU Courts in applying an “as efficient competitor test” have focused on the preservation of competitive rivalry as “equality of opportunity.” This significantly …

The Elephantine Google Books Settlement, James Grimmelmann

Cornell Law Faculty Publications

The genius - some would say the evil genius - of the proposed Google Books settlement was the way it fuses legal categories. The settlement raised important class action, copyright, and antitrust issues, among others. But just as an elephant is not merely a trunk plus legs plus a tail, the settlement was more than the sum of the individual issues it raised. These “issues” were really just different ways of describing a single, overriding issue of law and policy - a new way to concentrate an intellectual property industry.

In this essay, I argue for the critical importance of …

D Is For Digitize: An Introduction, James Grimmelmann

Cornell Law Faculty Publications

This symposium issue of the New York Law School Law Review collects seven articles springing from the D Is for Digitize conference on the Google Books lawsuit and settlement, held at New York Law School October 8-10, 2009. In the spirit of Chaucer's "good feyth," thirty panelists and over one hundred attendees (plus dozens more watching online) gathered to discuss the legal and social issues raised by the proposed settlement. For three days, lawyers, academics, librarians, programmers, and public-interest advocates met for a rich, respectful, and wide-ranging conversation on this once-in-a-lifetime settlement. These articles continue that conversation.

Insource The Shareholding Of Outsourced Employees: A Global Stock Ownership Plan, Robert C. Hockett

Cornell Law Faculty Publications

With the American economy stalled and another federal election campaign season well underway, the “outsourcing” of American jobs is again on the public agenda. Latest figures indicate not only that claims for joblessness benefits are up, but also that the rate of American job-exportation has more than doubled since the last electoral cycle. This year’s political candidates have been quick to take note. In consequence, more than at any time since the early 1990s, continued American participation in the World Trade Organization, in the North American Free Trade Agreement, and in the processes of global economic integration more generally appear …

"Why Can't A Woman Be More Like A Man?" American And Australian Approaches To Exclusionary Conduct, George Hay, Rhonda L. Smith

Cornell Law Faculty Publications

Much of antitrust law (in the U.S.) or trade practices law (in Australia) is about “exclusionary conduct,” things that large firms do to acquire an even larger share of the market or to preserve their large market share from being eroded by smaller rivals or new entrants. In the U.S., the main vehicle for policing inappropriate exclusionary conduct by large firms against smaller competitors is Section 2 of the Sherman Act, which prohibits monopolization or attempted monopolization. In Australia, the main vehicle is Section 46 which, generally speaking, prohibits the misuse of market power. The main purpose of this paper …

The Quiet Revolution In U.S. Antitrust Law, George Hay

Cornell Law Faculty Publications

In this paper, I report on a series of recent decisions in antitrust cases by the U.S. Supreme Court. While each decision, read separately, may be only of moderate interest (even to a U.S. audience), the slate of decisions, looked at in its entirety, conveys a significant message, and one that may have meaning for scholars and practitioners in Australia and other jurisdictions outside the U.S. I would suggest that a quiet revolution is occurring in which the arguments economists have been making for nearly fifty years have suddenly been embraced by both the left and the right on the …

Harmonizing Preferential Rules Of Origin In The Wto System, John J. Barceló Iii

Cornell Law Faculty Publications

Preferential arrangements (bilateral and multilateral free trade areas and GSP systems (preferences for developing countries)) are emerging everywhere in the world trading system and are causing concern because they discriminate against non-members and add complexity, distortions and inconsistency to the global system. Rules of origin (ROOs) linked to these arrangements are a significant part of the problem. More and more they have become the source in their own right of distortions in trade patterns, complexity, non-transparency and inconsistency. This essay argues that WTO members should authorize negotiations seeking to harmonize preferential ROOs (rules of origin linked to preferential arrangements) around …

The Status Of Wto Rules In U.S. Law, John J. Barceló Iii

Cornell Law Faculty Publications

Under U.S. implementing legislation and recent court decisions the WTO agreements and rulings have neither direct nor even indirect effect within the U.S. legal system. Political-economic theory can explain this result and the paradox of Congressional support (even mandate) for the more legally binding WTO dispute settlement regime that emerged from the Uruguay Round appearing side-by-side with Congressional insistence on a firewall of separation between WTO law and the U.S. legal system. It can also explain the few exceptional cases - for example, the TRIPS and Government Procurement Agreements - in which the parties adopted a form of quasi-direct effect. …

Horizontal Agreements: Concept And Proof, George A. Hay

Cornell Law Faculty Publications

It is well established that, absent some very special circumstances, agreements on price or certain other terms of trade by otherwise competing entities (i.e., "horizontal agreements") are unlawful per se under the Sherman Act. In practical effect, once the fact of the horizontal agreement has been established, an adverse impact on competition is presumed, and therefore that the plaintiff is spared the burden of proving such an impact. The principal task for plaintiffs in such cases, therefore, is establishing the existence of an agreement.

In the ideal world (from plaintiffs' perspective), there would be "hard" evidence of a "formal" agreement. …

Trinko: Going All The Way, George A. Hay

Cornell Law Faculty Publications

The Meaning Of "Agreement" Under The Sherman Act: Thoughts From The "Facilitating Practices" Experience, George A. Hay

Cornell Law Faculty Publications

While the Economic Policy Office was involved in a number of interesting and important matters during the six years I was Director (1973–1979), for the most part my involvement in individual investigations and cases was vicarious, i.e., supervising, supporting, and advising the staff economists assigned to the particular matter. The one major exception – a matter in which I became personally involved in an intensive way – was the General Electric (GE)-Westinghouse price signaling matter. In what follows, I provide a brief summary of what transpired in the GE-Westinghouse matter and then trace through some of the longer term consequences …

Innovations In Antitrust Enforcement, George A. Hay

Cornell Law Faculty Publications

Each antitrust administration, both at the Department of Justice and the Federal Trade Commission, has its theme—one or a few areas of antitrust enforcement that it wants to pay particular attention to and in that way be identified with. And, as part of this emphasis, administrations often seek to innovate in some way or another, to do something different, or in a different way than previous administrations.

One factor stimulating innovation in antitrust enforcement is simply that new people with new ideas come into a new job. Sometimes those new people bring with them ideas that they had been developing …

The "Duty To Deal" Under Section 46: Panacea Or Pandora's Box?, George A. Hay, Kathryn Mcmahon

Cornell Law Faculty Publications

The privatisation and restructuring of public monopolies and the deregulation of other essential services in Australia and other countries have focused attention on the need for rules which can foster competition and efficiency in the resulting markets. Australia, of course, already has the Trade Practices Act 1974 (Cth) (the "Act"), and the question that has been raised is whether the Act is adequate to deal with the kind of competitive problems that are likely to arise in such markets. Of particular concern is the situation in which a firm controls the supply of an input that is critical in the …

Is The Glass Half-Empty Or Half-Full?: Reflections On The Kodak Case, George A. Hay

Cornell Law Faculty Publications

Horizontal Mergers: Law, Policy, And Economics, George A. Hay, Gregory J. Werden

Cornell Law Faculty Publications

The legality of a horizontal merger under section 7 of the Clayton Act turns on a reckoning of its social costs and benefits. This paper reviews what economics has to say about that reckoning and explores the relationship between economic learning and merger law and policy.

Harmonisation Of Trade Laws In The African Economic Community, Muna Ndulo

Cornell Law Faculty Publications

No abstract provided.

Observations: Sylvania In Retrospect, George A. Hay

Cornell Law Faculty Publications

No abstract provided.

Market Power In Antitrust, George A. Hay

Cornell Law Faculty Publications

The concept of market power is at the core of antitrust. Philosophically, antitrust policy is aimed primarily at preventing firms from achieving, retaining, or abusing market power. Operationally, assessing whether a firm or firms have market power or any reasonable prospect for achieving it is often the first (and sometimes, the only) step in performing an antitrust analysis.

Few would dispute that market power should play a prominent role in antitrust analysis. Nevertheless, important questions remain. Some of these questions quite naturally focus on the precise degree of importance given to market power. Is it an essential ingredient in antitrust …

A History Of Gatt Unfair Trade Remedy Law--Confusion Of Purposes, John J. Barceló Iii

Cornell Law Faculty Publications

This paper presents an analytical history of anti-dumping and anti-subsidy law in GATT and its member countries. In recent years this body of ‘unfair trade remedy’ law has flourished in the western trading system. Important trading countries have adopted new or expanded anti-dumping and anti-subsidy laws and imposed trade-blocking remedies under them more frequently than ever before. I try to explain in this essay how and why these laws--which I view as protectionist--have prospered and become so rooted in GATT and its member countries.

Predatory Pricing, George A. Hay

Cornell Law Faculty Publications

No abstract provided.

Single Firm Conduct, George A. Hay

Cornell Law Faculty Publications

My assignment is to discuss likely future developments involving single firm conduct. I will first discuss general trends and then move on to discuss some specific areas of the law. At the outset, however, I should remind the reader that what follows are predictions, not endorsements.

Geographic Market Definition In An International Context, George A. Hay, John C. Hilke, Philip B. Nelson

Cornell Law Faculty Publications

Market definition is generally regarded as a key step in antitrust analysis. Market definition has two components. Product market definition seeks to include all products that are meaningful substitutes. Geographic market definition seeks to incorporate all relevant sources of the product in question. This paper is concerned with geographic market definition and, in particular, how geographic markets are defined in situations where competition may, at least to some extent, transcend national boundaries.

The subject of the paper may be of some current interest for two reasons. First, the perception is widespread that, over the past twenty or so years, competition …

The Direction Of Antitrust In The Decade Ahead: Some Predictions—Panel Discussion, Donald I. Baker, Thomas E. Kauper, William F. Baxter, Gordon B. Spivack, James T. Halverson, Robert Pitofsky, George A. Hay, Alan H. Silberman

Cornell Law Faculty Publications

The Free Rider Rationale And Vertical Restraints Analysis Reconsidered, George A. Hay

Cornell Law Faculty Publications

No abstract provided.

Vertical Restraints, George A. Hay

Cornell Law Faculty Publications

No abstract provided.

Vertical Restraints After Monsanto, George A. Hay

Cornell Law Faculty Publications

The decision in Monsanto Co. v. Spray-Rite Service Corp. represents the Supreme Court's latest effort to articulate the standards governing vertical restraints of trade under the United States anti-trust law. It is unlikely that this will be the last time the Court addresses this topic. Notwithstanding the many Supreme Court decisions in this area, several issues remain unresolved. Indeed, Monsanto may have created (or resurrected) as many new questions as it answered, a phenomenon characteristic of most prior opinions in this area.

At least part of the reason for this unsettled state is that, from the outset, the Supreme Court …