Antitrust and Trade Regulation Commons^™

The Actavis Inference: Theory And Practice, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

In FTC v. Actavis, Inc., the Supreme Court considered "reverse payment" settlements of patent infringement litigation. In such a settlement, a patentee pays the alleged infringer to settle, and the alleged infringer agrees not to enter the market for a period of time. The Court held that a reverse payment settlement violates antitrust law if the patentee is paying to avoid competition. The core insight of Actavis is the Actavis Inference: a large and otherwise unexplained payment, combined with delayed entry, supports a reasonable inference of harm to consumers from lessened competition.

This paper is an effort to assist courts …

Administrating Patent Litigation, Jacob S. Sherkow

Articles & Chapters

Recent patent litigation reform efforts have focused on every branch of govemment-Congress, the President, and the federal courts-save the fourth: administrative agencies. Agencies, however, possess a variety of functions in patent litigation: they serve as "gatekeepers" to litigation in federal court; they provide scientific and technical expertise to patent disputes; they review patent litigation to fulfill their own mandates; and they serve, in several instances, as entirely alternative fora to federal litigation.

Understanding administrative agencies' functions in managing or directing, i.e., "administrating," patent litigation sheds both descriptive and normative insight on several aspects of patent reform. These include several problems …

The Influence Of The Areeda-Hovenkamp Treatise In The Lower Courts And What It Means For Institutional Reform In Antitrust, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

It is often pointed out that while the United States Supreme Court is the final arbiter in setting antitrust policy and promulgating antitrust rules, it does so too infrequently to be an efficient regulator. And since the antitrust agencies, the Federal Trade Commission ("FTC") and the Antitrust Division of the Department of Justice ("DOJ"), rarely issue guidelines, and even more rarely issue rules or regulations, very little antitrust law is handed down from on high. Instead, circuits split, and lower courts must muddle through new antitrust problems by finding analogies in technologically and socially obsolete precedents. When faced with this …

Oligopoly, Shared Monopoly, And Antitrust Law, George A. Hay

George A. Hay

No abstract provided.

The Ftc And Pricing: Of Predation And Signaling, George A. Hay

George A. Hay

This paper summarizes and comments on two recent FTC cases. The first case involved accusations of predatory pricing against Borden, the manufacturer of ReaLemon, the dominant brand of reconstituted lemon juice. The second involved price-signaling and other so-called facilitating practices by the four makers of lead-based antiknock compounds.

Antitrust Merger Efficiencies In The Shadow Of The Law, D. Daniel Sokol, James A. Fishkin

D. Daniel Sokol

This Essay provides an overview of U.S. antitrust merger practice in addressing efficiencies both in terms of actual practice before the agencies and in scholarly work as a response to Jamie Henikoff Moffitt's Vanderbilt Law Review article Merging in the Shadow of the Law: The Case for Consistent Judicial Efficiency Analysis. Moffitt’s analysis could have benefited from a more thorough discussion of the Department of Justice and Federal Trade Commission’s (collectively, the “agencies”) analysis of efficiencies during investigations and the broader process of negotiations involving mergers. For instance, the article does not discuss the empirical work addressing when the agencies …

Actavis And Error Costs: A Reply To Critics, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

The Supreme Court’s opinion in Federal Trade Commission v. Actavis, Inc. provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. In our previous article, Activating Actavis, we identified and operationalized the essential features of the Court’s analysis. Our analysis has been challenged by four economists, who argue that our approach might condemn procompetitive settlements.

As we explain in this reply, such settlements are feasible, however, only under special circumstances. Moreover, even where feasible, the parties would not actually choose such a settlement in equilibrium. These considerations, and others discussed in the reply, serve to …

Non-Price Competition In “Substitute" Drugs: The Ftc's Blind Spot, Gregory Dolin

All Faculty Scholarship

As the recent case of United States v. Lundbeck illustrates, the Federal Trade Commission’s lack of knowledge in medical and pharmacological sciences affects its evaluation of transactions between medical and pharmaceutical companies that involve transfers of rights to manufacture or sell drugs, causing the agency to object to such transactions without solid basis for doing so. This article argues that in order to properly define a pharmaceutical market, one must not just consider the condition that competing drugs are meant to treat, but also take into account whether there are “off-label” drugs that are used to treat a relevant condition, …

Where Do We Go From Here: Open Questions And Policy Considerations, Jonathan Baker, Fiona Scott Morton, Daniel Crane, Richard Steuer, Michael Whinston, C. Hemphill, Deborah Feinstein, Renata Hesse

Presentations

The Federal Trade Commission and the Antitrust Division of the Department of Justice held a one-day public workshop on June 23, 2014 to explore the economics and legal policy implications of certain pricing practices, such as loyalty and bundled pricing. The workshop, consisted of presentations and roundtable discussions, that focused on practices in which prices are explicitly or effectively contingent on commitments to purchase or sell a specified share or volume of a single product or a mix of multiple products. Workshop participants considered theoretical and empirical developments in the economic understanding of these practices, discussed developments in the relevant …

Should Section 5 Guidelines Focus On Economic Efficiency Or Consumer Choice?, Robert H. Lande

All Faculty Scholarship

FTC Commissioner Joshua Wright is right that it would be desirable for the Commission to issue Section 5 antitrust guidelines. This article will demonstrate, however, that the best way to formulate Section 5 guidelines is to focus them on the goal of protecting consumer choice, rather than to embrace Commissioner Wright's proposal to neuter the FTC Act by confining it in an economic efficiency straitjacket. Only if Section 5 guidelines were formulated appropriately would they improve consumer welfare during the Commission's second century.

The Reasonable Information Security Program, Peter Sloan

Richmond Journal of Law & Technology

Our information inhabits a perilous world. Cyber theft, cyber extortion, mobile device loss, misappropriation of confidential business information, and unauthorized disclosures of protected information are real and present dangers for organizations of all sizes and across all industries.

Activating Actavis, Aaron Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

In Federal Trade Commission v. Actavis, Inc., the Supreme Court provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. The Court came down strongly in favor of an antitrust solution to the problem, concluding that “an antitrust action is likely to prove more feasible administratively than the Eleventh Circuit believed.” At the same time, Justice Breyer’s majority opinion acknowledged that the Court did not answer every relevant question. The opinion closed by “leav[ing] to the lower courts the structuring of the present rule-of-reason antitrust litigation.”

This article is an effort to help courts and …

Josh Wright’S “Chicago School Papers”: An Overview, William H. Page

UF Law Faculty Publications

In what follows, I consider three of FTC Commissioner Josh Wright's “Chicago School Papers.” In these papers, Commissioner Wright considers the past, present, and future role of the Chicago School of antitrust analysis in the shaping of law and policy, offering along the way some interesting insights into what his priorities at the FTC are likely to be. The papers discussed have common themes: the mischaracterization of the “Chicago School,” the scientific advantage of dispensing altogether with “School” labels, and a focus on empirical findings in shaping antitrust analysis.

How The Ftc Could Beat Google, Robert H. Lande, Jonathan L. Rubin

All Faculty Scholarship

The U.S. Federal Trade Commission is rumored to be deciding whether to bring a “pure Section 5” case against Google as a result of complaints that the company unfairly favors its own offerings over those of its rivals in its search results. But the case will fail miserably at the hands of a reviewing court and the agency will be confined to relatively non-controversial enforcement violations if the FTC fails to impose upon itself a tightly bounded and constrained legal framework that contains clear limiting principles. The only way a court will allow the FTC to pursue a pure Section …

Antitrust Merger Efficiencies In The Shadow Of The Law, D. Daniel Sokol, James A. Fishkin

UF Law Faculty Publications

This Essay provides an overview of U.S. antitrust merger practice in addressing efficiencies both in terms of actual practice before the agencies and in scholarly work as a response to Jamie Henikoff Moffitt's Vanderbilt Law Review article Merging in the Shadow of the Law: The Case for Consistent Judicial Efficiency Analysis. Moffitt’s analysis could have benefited from a more thorough discussion of the Department of Justice and Federal Trade Commission’s (collectively, the “agencies”) analysis of efficiencies during investigations and the broader process of negotiations involving mergers. For instance, the article does not discuss the empirical work addressing when the agencies …

Equity, Antitrust, And The Reemergence Of The Patent Unenforceability Remedy, Jorge Contreras

Articles in Law Reviews & Other Academic Journals

The conventional legal analysis of technical standard setting derives primarily from antitrust law. But antitrust remedies, taken alone, may not be broad enough to address recent abuses of the standardization process. The principal example of this shortcoming is the well-known case of Rambus, Inc., which, over the course of several years, was alleged to have concealed relevant patent applications from a standards organization in which it participated and then successfully sued the entire DRAM industry for royalties after the standard was “locked-in.” Remarkably, Rambus prevailed in its litigation campaign despite aggressive enforcement efforts by the Federal Trade Commission. Rambus’s success …

Antitrust Merger Efficiencies In The Shadow Of The Law, D. Daniel Sokol, James A. Fishkin

UF Law Faculty Publications

This Essay provides an overview of U.S. antitrust merger practice in addressing efficiencies both in terms of actual practice before the agencies and in scholarly work as a response to Jamie Henikoff Moffitt's Vanderbilt Law Review article Merging in the Shadow of the Law: The Case for Consistent Judicial Efficiency Analysis. Moffitt’s analysis could have benefited from a more thorough discussion of the Department of Justice and Federal Trade Commission’s (collectively, the “agencies”) analysis of efficiencies during investigations and the broader process of negotiations involving mergers. For instance, the article does not discuss the empirical work addressing when the agencies …

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.

Intel And The Death Of U.S. Antitrust Law, Keith N. Hylton

Faculty Scholarship

The Federal Trade Commission’s (“FTC’s”) new legal attack on Intel threatens to leave the company a shell of its former self. The Commission claims that Intel violated Section 5 of the FTC Act by giving discounts and rebates to customers in a manner that harmed its main rival AMD, by designing its products in a way that disadvantages rivals, and acting too aggressively in protecting its intellectual property. The remedies the FTC is seeking would impose broad restrictions on pricing, product design, and protection of intellectual property.

The FTC’s claims are not well founded in U.S. antitrust law, though they …

Efficiencies In Merger Analysis: Alchemy In The Age Of Empiricism?, Thomas L. Greaney

All Faculty Scholarship

One is hard-pressed to find in law an undertaking more fraught with uncertainty than the application of the efficiencies defense in merger analysis. Generalist fact finders (judges) and politically-attuned government officials (prosecutors and regulators) are charged with two Herculean tasks: (1) predicting the outcome of organic changes in business enterprises and (2) comparing the magnitude of those changes to the equally uncertain amount of harm to future competition that the transaction will cause. Given the enormous, perhaps intractable, uncertainty of this inquiry, it is therefore paradoxical that many of the strongest advocates for strengthening the role of efficiencies analysis in …

Four Lessons From The Whole Foods Case, Thom Lambert

Faculty Publications

One of the most maligned antitrust decisions in history involved a merger of grocery store chains. Indeed, even those voices inclined toward substantial antitrust intervention believe the U.S. Supreme Court erred in its 1966 Von's Grocery decision, which condemned the merger of the third- and sixth-largest grocery store chains in Los Angeles. For example, the president of the reliably interventionist American Antitrust Institute conceded that the Supreme Court "probably went too far" and acknowledged that "if Von's Grocery had remained the rule, all of our industries would be highly fragmented and consumers would have lost out on many cost-cutting efficiencies." …

The Role Of Market Definition In Unilateral Effects Analysis And In The Litigation Of Unilateral Effects Cases, Jonathan Baker, Kathryn Fenton, Richard Parker, Daniel Wall, Jeffrey Schmidt

Presentations

The Federal Trade Commission is planning to host a public workshop on February 12, 2008 to examine the application of unilateral effects theory to mergers of firms that sell competing, but differentiated products. ”Unilateral effects” as a formal theory of competitive harm was added to the joint FTC/DOJ Horizontal Merger Guidelines in 1992. The theory recognizes that, in some instances, mergers may create or enhance market power by allowing the merged firm to profitably raise prices, without accommodation of other rival market incumbents. While section 2.2 of the Guidelines explains that unilateral competitive effects can arise in a variety of …

Gasoline Prices And Antitrust Law: Fixing The Price-Fixing Dilemma Of Sherman Act § 1 Analysis, Greg Hubbard

Nevada Law Journal

No abstract provided.

Academic Testimony On Unilateral Conduct Before The U.S. Dept. Of Justice & Federal Trade Commission Hearings, Aaron S. Edlin

Aaron Edlin

No abstract provided.

Thirty Years Of Solicitude: Antitrust Law And Physician Cartels, Thomas L. Greaney

All Faculty Scholarship

Over the last thirty years the Federal Trade Commission and the Department of Justice have challenged dozens of physician cartels, networks, and other arrangements that they alleged constituted price fixing or other restraints of trade under the antitrust laws. In addition, the antitrust agencies have issued numerous advisory opinions, published detailed statements of enforcement policy, and made dozens of public statements on the issue of physician collaboration. The puzzle explored in this essay is why the government's deployment of unparalleled enforcement resources has not curtailed physician attempts to engage in collective bargaining and other attempts to restrain price competition. It …

The Importance Of History To The Design Of Competition Policy Strategy: The Federal Trade Commission And Intellectual Property Law, William E. Kovacic

Seattle University Law Review

The Article's framework for considering the value of history in shaping strategy is the effort of the Federal Trade Commission (FTC) to apply its competition policy powers to issues involving intellectual property (IP). The Article chooses the example of intellectual property because of its importance to the modern work of the FTC and the increasingly significant place that intellectual property and, more generally, technology-driven innovation hold in the field of competition policy. To provide context for the discussion, Part II of the Article presents a profile of the FTC's modern competition policy initiatives concerning intellectual property. Part III then reviews …

Antitrust Issues In The Settlement Of Patent Disputes, Part Iii, Thomas B. Leary

Seattle University Law Review

Once again, I will address the issue of litigation settlements between companies that hold patents on pharmaceutical products (sometimes "pioneers") and would-be generic entrants ("generics") who challenge the validity of the patent and/or a claim of infringement. This discussion will focus on the Tamoxifen opinion, with passing reference to other decisions. Obviously, reasonable people can disagree on these issues, but I still believe the Commission's approach in Schering was correct.

Understanding Single-Firm Behavior: Empirical Perspectives Session, Jonathan Baker, Luke Froeb, Robert Marshall, Wally Mullin, David Reitman, F. Michael Scherer, Clifford Winston

Presentations

In 2006 and 2007, the Antitrust Division and the Federal Trade Commission (FTC) cohosted hearings on single-firm conduct and antitrust law. For more information, consult the hearings information page or contact the Legal Policy Section at singlefirmconduct@usdoj.gov.

Nonprofit Solicitation Under The Telemarketing Sales Rule, Rita Marie Cain

Federal Communications Law Journal

In 2003, the Federal Trade Commission ("FTC") revised its Telemarketing Sales Rule ("TSR") to establish a national Do-Not-Call Registry for commercial telemarketing. Congress directed the Federal Communications Commission ("FCC") to coordinate its telemarketing regulations under the Telephone Consumer Protection Act ("TCPA") of 1991 to achieve maximum consistency between the two agencies' telemarketing restrictions. Nonprofit solicitation is exempt from the national Do-Not-Call Registry, but is covered by other provisions of the FTC rule. The TSR created a new in-house no-call list requirement and imposed additional restrictions not previously known for nonprofit solicitors. The separate nonprofit provisions of the TSR raise unique …

Economists And Lawyers Roundtable, Jonathan Baker, R. Hewitt Pate, William Baer, Wayne "Dale" Collins, James Loftis, James Rill, Daniel Rubinfeld, Robert Willig, Dennis Carlton

Presentations

This three-day workshop brought together prominent practitioners, academics and enforcement officials to discuss the Horizontal Merger Guidelines. The workshop explored state-of-the-art application of the Guidelines by those with the most experience using them. In preparation for this workshop, the Agencies released data associated with their enforcement efforts.