Consumer Protection Law Commons^™

Antitrust Liability For False Advertising: A Response To Carrier & Tushnet, Susannah Gagnon, Herbert J. Hovenkamp

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This reply briefly considers when false advertising can give rise to antitrust liability. The biggest difference between tort and antitrust liability is that the latter requires harm to the market, which is critically dependent on actual consumer response. As a result, the biggest hurdle a private plaintiff faces in turning an act of false advertising into an antitrust offense is proof of causation – to what extent can a decline in purchase volume or other market rejection be specifically attributed to the defendant’s false claims? That requirement dooms the great majority of false advertising claims attacked as violations of the …

What’S In Your Wallet (And What Should The Law Do About It?), Natasha Sarin

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In traditional markets, firms can charge prices that are significantly elevated relative to their costs only if there is a market failure. However, this is not true in a two-sided market (like Amazon, Uber, and Mastercard), where firms often subsidize one side of the market and generate revenue from the other. This means consideration of one side of the market in isolation is problematic. The Court embraced this view in Ohio v. American Express, requiring that anticompetitive harm on one side of a two-sided market be weighed against benefits on the other side.

Legal scholars denounce this decision, which, …

Predatory Pricing Under The Areeda-Turner Test, Herbert J. Hovenkamp

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Few works of legal scholarship have had the impact enjoyed by Areeda and Turner's 1975 article on predatory pricing. Proof of predatory pricing under the Areeda-Turner test requires two things. The plaintiff must show a market structure such that the predator could rationally foresee "recouping the losses through higher profits earned in the absence of competition." This requirement, typically called "recoupment," requires the plaintiff to show that, looking from the beginning of the predation campaign, the predator can reasonably anticipate that the costs of predation will be more than offset by the present value of a future period of monopoly …

A Traditional And Textualist Analysis Of The Goals Of Antitrust: Efficiency, Preventing Theft From Consumers, And Consumer Choice, Robert H. Lande

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This Article ascertains the overall purpose of the antitrust statutes in two very different ways. First, it performs a traditional analysis of the legislative history of the antitrust laws by analyzing relevant legislative debates and committee reports. Second, it undertakes a textualist or "plain meaning" analysis of the purpose of the antitrust statutes, using Justice Scalia's methodology. It does this by analyzing the meaning of key terms as they were used in contemporary dictionaries, legal treatises, common law cases, and the earliest U.s. antitrust cases, and it does this in light of the history of the relevant times.

Both approaches …

Cartels As Rational Business Strategy: Crime Pays, John M. Connor, Robert H. Lande

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This article is the first to analyze whether cartel sanctions are optimal. The conventional wisdom is that the current level of sanctions is adequate or excessive. The article demonstrates, however, that the combined level of current United States cartel sanctions is only 9% to 21% as large as it should be to protect potential victims of cartelization optimally. Consequently, the average level of United States anti-cartel sanctions should be approximately quintupled.

The United States imposes a diverse arsenal of sanctions against collusion: criminal fines and restitution payments for the firms involved and prison, house arrest and fines for the corporate …

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

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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 …

Consumer Choice As The Best Way To Describe The Goals Of Competition Law, Robert H. Lande

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This article is both a short introduction to the Consumer Choice explanation for Competition Law or Antitrust Law, and also a short advocacy piece suggesting that Consumer Choice is the best way to articulate the goals of European Competition Law and United States Antitrust Law.

This article briefly:

1. defines the consumer choice approach to antitrust or competition law and shows how it differs from other approaches;
2. shows that the antitrust statutes and theories of violation embody a concern for optimal levels of consumer choice;
3. shows that the United States antitrust case law embodies a concern for optimal levels of consumer …

As Antitrust Case Ends, Microsoft Is Victorious In Defeat, Norman Hawker, Robert H. Lande

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As the final judgment in the celebrated Microsoft case ends, this piece very briefly assesses the impact of its remedy. When evaluated in terms of its most important goals, the remedy has proven to be a failure. Microsoft's monopoly power in the PC operating systems market is now as great as it was when the case was brought in 1998 or the remedy was ordered in 2002. The article also very briefly discusses the implications of this remedy for Google and AT&T.

"Consumer Choice" Is Where We Are All Going - So Let's Go Together, Neil W. Averitt, Robert H. Lande, Paul Nihoul

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Globalisation of business makes it important for firms to predict how their behaviour is likely to be treated in the roughly 200 nations that have competition laws. In that context, a crucial question is: are we in a position to develop a common intellectual framework that would give coherence to policy statements made on specific competition related issues and, at the same time, be acceptable, broadly, in a variety of legal systems, not necessarily based on identical assumptions? We believe that the answer is “yes.” A concept is emerging as a possible source of unification for competition policies around the …

The Intel And Microsoft Settlements, Robert H. Lande

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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.

Consumer Choice As The Best Way To Recenter The Mission Of Competition Law, Robert H. Lande

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This article will (1) define the consumer choice approach to competition law or antitrust law and show how it differs from other approaches; (2) discuss the types of situations where a consumer choice focus is likely to make a difference in enforcement outcomes, producing better results than the other paradigms; (3) show that another important advantage of using the consumer choice approach would be to nudge decisions in the right direction; and (4) offer a brief overview of implementation issues.

This is a chapter of a forthcoming ASCOLA book, and is a condensation and update of Neil W. Averitt & …

The Price Of Abuse: Intel And The European Commission Decision, Robert H. Lande

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The May 13, 2009 decision by the European Commission ('EC') holding that Intel violated Article 82 of the Treaty of Rome and should be fined a record amount and prohibited from engaging in certain conduct, set off a predictable four part chorus of denunciations:

1. Intel did nothing wrong and was just competing hard;
2. Intel's discounts were good for consumers;;
3. The entire matter is just another example of Europeans protecting their own against a more efficient U.S. company; and;
4. Even if Intel did engage in anticompetitive activity, the fine was much too large. These assertions will be addressed in turn.;

Revitalizing Section 5 Of The Ftc Act Using “Consumer Choice” Analysis, Robert H. Lande

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This paper makes two points. First, Section 5 of the FTC Act, properly construed, is indeed significantly broader and more encompassing than the Sherman Act or Clayton Act. Section 5 violations include incipient violations of the other antitrust laws, and also violations of their policy or spirit.

Second, the best - and probably the only - way to interpret Section 5 in an expansive manner is to do so in a way that also is relatively definite, predictable, principled and clearly bounded. This best can be done if Section 5 is articulated using the consumer choice framework. Without the discipline …

The Fundamental Goal Of Antitrust: Protecting Consumers, Not Increasing Efficiency, John B. Kirkwood, Robert H. Lande

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The conventional wisdom in the antitrust community is that the purpose of the antitrust laws is to promote economic efficiency. That view is incorrect. As this article shows, the fundamental goal of antitrust law is to protect consumers.

This article defines the relevant economic concepts, summarizes the legislative histories, analyzes recent case law in more depth than any prior article, and explores the most likely bases for current popular support of the antitrust laws. All these factors indicate that the ultimate goal of antitrust is not to increase the total wealth of society, but to protect consumers from behavior that …

Is Europe Unfairly Attacking Another U.S. High Technology Company?, Robert H. Lande

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This short piece considers whether the EU antitrust action against Intel constitutes an example of European regulators attacking a successful US company in order to protect a European competitor, or whether it instead is an example of legitimate law enforcement.

The Microsoft-Yahoo Merger: Yes, Privacy Is An Antitrust Concern, Robert H. Lande

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Privacy and antitrust? Isn't antitrust only supposed to be concerned with price? Well, no. Antitrust is actually about consumer choice, and price is only one type of choice. The ultimate purpose of the antitrust laws is to help ensure that the free market will bring to consumers everything they want from competition. This starts with competitive prices, of course, but consumers also want an optimal level of variety, innovation, quality, and other forms of non-price competition. Including, in the Google-Doubleclick and Microsoft-Yahoo transactions, privacy protection.

The Chicago School's Foundation Is Flawed: Antitrust Protects Consumers, John B. Kirkwood, Robert H. Lande

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Chicago School antitrust policy rests on the premise that the purpose of the antitrust laws is to promote economic efficiency. That foundation is flawed. The fundamental goal of antitrust law is to protect consumers.

This essay defines the relevant economic concepts, summarizes the legislative histories, and analyzes recent case law. All these factors indicate that the ultimate goal of antitrust is not to increase the total wealth of society, but to protect consumers from behavior that deprives them of the benefits of competition and transfers their wealth to firms with market power. When conduct presents a conflict between the welfare …

Cartel Overcharges And Optimal Cartel Fines, John M. Connor, Robert H. Lande

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This Article examines whether the current penalties in the United States Sentencing Guidelines are set at the appropriate levels to deter illegal price fixing cartels optimally. The authors analyze two data sets to determine how high on average cartels raise prices. The first consists of every published scholarly economic study of the effects of cartels on prices in individual cases. The second consists of every final verdict in a U.S. antitrust case in which a neutral finder of fact reported collusive overcharges. They report average overcharges of 49% and 31% for the two data sets, and median overcharges of 25% …

Should Predatory Pricing Rules Immunize Exclusionary Discounts?, Robert H. Lande

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The purpose of this commentary is to analyze some of the empirical issues that help lay the foundation for the policy conclusions in the excellent and provocative article by Professor Herbert Hovenkamp, Discounts and Exclusion (hereinafter "D&E"). To oversimplify, D&E asserts that discounts usually are procompetitive. It also concedes, but essentially in its footnotes, that discounts can be anticompetitive, but argues that these anticompetitive situations are so rare they should have little impact on public policy. D&E then asserts that efficiencies from discounts are common and significant. It then asserts that the only way to bring clarity, predictability, and an …

The Size Of Cartel Overcharges: Implications For U.S. And Ec Fining Policies, John M. Connor, Robert H. Lande

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The purpose of this article is to examine whether the current cartel fine levels of the European Union (EU) and the United States are at the optimal levels. We collected and analyzed the available information concerning the size of the overcharges caused by hard-core pricing fixing, bid rigging, and market allocation agreements. Data sets of United States cartels were assembled and examined. These cartels overcharged an average of 18% to 37%, depending upon the data set and methodology employed in the analysis and whether mean or median figures are used. Separate data sets for European cartels also were analyzed, which …

Beware Buyer Power, Robert H. Lande

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The conventional antitrust wisdom is that buyer side market power or monopsony is so unusual and so rarely anticompetitive that it should not merit more than a scholarly afterthought. Moreover, these brief mentions typically say it is essentially the mirror image of seller power or that, while seller-side power is suspect since it leads to higher consumer prices, buyer-side power is usually benign, because the public should not care which layer of a distribution channel gets any potential savings that can arise. This short article discusses how buyer power can be anticompetitive. It also discusses how buyer power or monopsony …

Ub Viewpoint – Aol/Microsoft Settlement Could Harm Consumers, Robert H. Lande

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No abstract provided.

The European Union’S Microsoft Case: No Time For Jingoism, Albert A. Foer, Robert H. Lande

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No abstract provided.

Why Are We So Reluctant To "Execute" Microsoft?, Robert H. Lande

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On June 28, 2001, the D.C. Court of Appeals held that Microsoft has violated the antitrust laws repeatedly, relentlessly, and over a multi-year period. The court ruled eight separate times that Microsoft engaged in conduct that illegally maintained its monopoly in PC operating systems. Despite these strongly worded conclusions concerning Microsoft’s liability, the court was extremely cautious when it considered whether to break up the company. It held that divestiture was a “radical” remedy that should be imposed with “great caution.”

The Perfect Caper?: Private Damages And The Microsoft Case, Robert H. Lande, James Langenfeld

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As readers of crime novels know, there are many definitions of the perfect caper. Under most, the perpetrator gets to keep its ill-gotten gains and goes unpunished. Even if the perpetrator is arrested and brought to trial, he or she still typically escapes punishment completely due to a variety of unusual circumstances. This is essentially what Professors John E. Lopatka and William H. Page are arguing about Microsoft's actions. They assert that even though Microsoft has violated the antitrust laws, it will not be made to pay for its anticompetitive conduct, at least not by private plaintiffs.

Resurrecting Incipiency: From Von's Grocery To Consumer Choice, Robert H. Lande

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The merger incipiency doctrine is virtually ignored in the courts today. This article argues that it should be resurrected, and it also explores the ways that effectuating Congressional intent in the area would reinvigorate merger policy.

The article documents how the legislative history of the antimerger statutes shows that Congress intended mergers to be evaluated under an incipiency approach, and explores the possible meanings of this idea. It then shows that this is a strong basis for reviving significantly stricter or more prophylactic merger enforcement.

The article shows how there are aspects of the doctrine that could be revived without …

Legalizing Merger To Monopoly And Higher Prices: The Canadian Competition Tribunal Gets It Wrong, Alan A. Fisher Ph.D., Robert H. Lande, Stephen F. Ross

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This article analyzes the Canadian Superior Propane decision, apparently the first merger decision in world history to consider explicitly what to do when a merger was predicted to lead to both higher consumer prices and to net efficiencies. The article advocates analyzing the merger under a "price to consumers" or "consumer welfare" standard, rather than a total efficiency standard, and advocates that the enforcers and the courts block such mergers.

Consumer Sovereignty: A Unified Theory Of Antitrust And Consumer Protection Law, Neil W. Averitt, Robert H. Lande

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This article is about the relationship between antitrust and consumer protection law. Its purpose is to define each area of law, to delineate the boundary between them, to show how they interact with each other, and to show how they ultimately support one another as the two component parts of an overarching unity: effective consumer choice (also called consumer sovereignty).

Consumer choice only is effective when two fundamental conditions are present. There must be a range of consumer options made possible through competition, and consumers must be able to choose effectively among these options. The antitrust laws are intended to …

Consumer Choice: The Practical Reason For Both Antitrust And Consumer Protection Law, Neil W. Averitt, Robert H. Lande

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This article is about the relationship between antitrust and consumer protection law. Its purpose is to define each area of law, to delineate the boundary between them, to show how they interact with each other, and to show how they ultimately support one another as the two components of a single overarching unity. That overarching unity is consumer choice. Antitrust and consumer protection law share a common purpose in that both are intended to facilitate the exercise of consumer sovereignty or effective consumer choice. Such consumer choice exists when two fundamental conditions are present: (l) there must be a range …

Anticonsumer Effects Of Union Mergers: An Antiitrust Solution, Robert H. Lande, Richard O. Zerbe Jr.

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Should unions and corporations be treated identically under the antitrust laws? This article explores this provocative question by examining whether union mergers should be subject to the antitrust laws. Currently unions and corporations are treated very differently. Large corporate mergers are blocked if their effect "may be substantially to lessen competition, or to tend to create a monopoly". They are permitted if they are likely to be benign, procompetitive, or proconsumer.

Collective bargaining, by contrast, enjoys a broad exemption from the antitrust laws. If they follow appropriate procedures, unions - even unions that, when taken together, cover all workers within …