Economics Commons^™

Teece's Competing Through Innovation, Herbert J. Hovenkamp

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This essay reviews David J. Teece's book, Competing Through Innovation: Technological Strategies and Antitrust Policies (2013).

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

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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 …

Public Good Economics And Standard Essential Patents, Christopher S. Yoo

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Standard essential patents have emerged as a major focus in both the public policy and academic arenas. The primary concern is that once a patented technology has been incorporated into a standard, the standard can effectively insulate it from competition from substitute technologies. To guard against the appropriation of quasi-rents that are the product of the standard setting process rather than the innovation itself, standard setting organizations (SSOs) require patentholders to disclose their relevant intellectual property before the standard has been adopted and to commit to license those rights on terms that are fair, reasonable, and non-discriminatory (FRAND).

To date …

Competition Policy And The Technologies Of Information, Herbert J. Hovenkamp

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When we speak about information and competition policy we are usually thinking about oral or written communications that have an anticompetitive potential, and mainly in the context of collusion of exclusionary threats. These are important topics. Indeed, among the most difficult problems that competition policy has had to confront over the years is understanding communications that can be construed as either threats to exclude or as offers to collude or facilitators of collusion.

My topic here, however, is the relationship between information technologies and competition policy. Technological change can both induce and undermine the use of information to facilitate anticompetitive …

Response To Questions In The First White Paper, 'Modernizing The Communications Act', Randolph J. May, Richard A. Epstein, Justin (Gus) Hurwitz, Daniel Lyons, James B. Speeta, Christopher S. Yoo

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The House Energy and Commerce Committee has begun a process to review and update the Communications Act of 1934, last revised in any material way in 1996. As the Committee begins the review process, this paper responds to questions posed by the Committee that all relate, in fundamental ways, to the question: "What should a modern Communications Act look like?"

The Response advocates a "clean slate" approach under which the regulatory silos that characterize the current statute would be eliminated, along with almost all of the ubiquitous 'public interest' delegation of authority found throughout the Communications Act. The replacement regime …

Harm To Competition Under The 2010 Horizontal Merger Guidelines, Herbert J. Hovenkamp

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In August, 2010, the Antitrust Division and the Federal Trade Commission issued new Guidelines for assessing the competitive effects of horizontal mergers under the antitrust laws. These Guidelines were long awaited not merely because of the lengthy interval between them and previous Guidelines but also because enforcement policy had drifted far from the standards articulated in the previous Guidelines. The 2010 Guidelines are distinctive mainly for two things. One is briefer and less detailed treatment of market delineation. The other is an expanded set of theories of harm that justify preventing mergers or reversing mergers that have already occurred.

The …

Wickard For The Internet? Network Neutrality After Verizon V. Fcc, Christopher S. Yoo

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The D.C. Circuit’s January 2014 decision in Verizon v. FCC represented a major milestone in the debate over network neutrality that has dominated communications policy for the past decade. This article analyzes the implications of the D.C. Circuit’s ruling, beginning with a critique of the court’s ruling that section 706 of the Telecommunications Act of 1996 gave the Federal Communications Commission (FCC) the authority to mandate some form of network neutrality. Examination of the statute’s text, application of canons of construction such as ejusdem generis and noscitur a sociis, and a perusal of the statute’s legislative history all raise questions …

Consumer Welfare In Competition And Intellectual Property Law, Herbert J. Hovenkamp

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Whether antitrust policy should pursue a goal of "general welfare" or "consumer welfare" has been debated for decades. The academic debate is much more varied than the case law, however, which has consistently adopted consumer welfare as a goal, almost never condemning a practice found to produce an actual output reduction or price increase simply because productive efficiency gains accruing to producers exceeded consumer losses.

While some practices such as mergers might produce greater gains in productive efficiency than losses in consumer welfare, identifying such situations would be extraordinarily difficult. First, these efficiencies would have to be "transaction specific," meaning …