Business Commons^™

A Suggested Revision Of The 2020 Vertical Merger Guidelines (July 2021), Steven C. Salop

Georgetown Law Faculty Publications and Other Works

The DOJ/ FTC Vertical Merger Guidelines (VMGs) were adopted by the FTC in June 2020 by a party-line 3-2 party line over the dissent of the Acting Chair. One might expect that the VMGs will be withdrawn and/or revised, now that there is a Democratic majority. Revision is appropriate because the VMGs are both incomplete and overly permissible. This Suggested Revision can aid that process.

Potential Competition And Antitrust Analysis: Monopoly Profits Exceed Duopoly Profits, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

This short note prepared for an OECD meeting in June 2021 examines several antitrust issues involving analysis of potential competition. While the analysis is not new, it is still useful to collect them together in a unified fashion to show how they are related. In this regard, all the analysis and conclusions flow from the overarching (and obvious) points that exclusionary conduct and agreements that maintain monopoly power very often harm consumers, and that monopoly profits typically exceed the combined duopoly profits earned by the dominant firm and the entrant, if there is successful entry. While this is not inevitably …

Vertical Mergers In A Model Of Upstream Monopoly And Incomplete Information, Serge Moresi, David Reitman, Steven C. Salop, Yianis Sarafidis

Georgetown Law Faculty Publications and Other Works

We examine the role of private information on the impact of vertical mergers. A vertical merger can improve the information that is available to an upstream monopolist because, after the merger, the monopolist can observe the cost of its downstream merger partner. In the pre-merger world, because the costs of the downstream firms are private information, the monopolist has incomplete information and cannot implement the monopoly outcome: The expected pre-merger equilibrium price of the downstream product is lower than the monopoly price. After a vertical merger, the equilibrium input price that is charged to the downstream rival can either increase …

When Vertical Is Horizontal: How Vertical Mergers Lead To Increases In “Effective Concentration”, Serge Moresi, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

This article explains the inherent loss of an indirect competitor and reduction in competition when a vertical merger raises input foreclosure concerns. We then calculate a measure of the effective increase in the HHI measure of concentration for the downstream market, and we refer to this “proxy” measure as the “dHHI.” We derive the dHHI measure by comparing the pricing incentives and associated upward pricing pressure (“UPP”) involved in two alternative types of acquisitions: (i) vertical mergers that raise unilateral input foreclosure concerns (and the associated vertical GUPPI measures), and (ii) horizontal acquisitions of partial ownership interests among …

Recommendations And Comments On The Draft Vertical Merger Guidelines, Jonathan B. Baker, Nancy L. Rose, Steven C. Salop, Fiona Scott Morton

Georgetown Law Faculty Publications and Other Works

These recommendations and comments respond to the request by the Federal Trade Commission and the Department of Justice’s Antitrust Division for public comment on the draft 2020 Vertical Merger Guidelines. We commend the agencies for updating the 1984 non-horizontal merger guidelines by recognizing the substantial advances in economic thinking about vertical mergers in the thirty-five years since those guidelines were issued. Our comments emphasize four issues: (i) the treatment of the elimination of double marginalization (“EDM”), particularly that the draft vertical merger guidelines appear inappropriately to make proof of cognizability part of the agencies burden and that they appear to …

Quantifying The Increase In “Effective Concentration” From Verticle Mergers That Raise Input Foreclosure Concerns: Comment On The Draft Vertical Merger Guidelines, Serge Moresi, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

This comment responds to the request by the Federal Trade Commission and the Department of Justice’s Antitrust Division for public comment on the draft 2020 Vertical Merger Guidelines. In this comment, we show that there is an inherent loss of an indirect competitor and competition when a vertical merger raises input foreclosure concerns. We also show that it then is possible to calculate an effective increase in the HHI measure of concentration for the downstream market. We refer to this “proxy” measure as the “dHHI.” We derive the dHHI measure by comparing the pricing incentives and associated upward …

The Case For More Debt: Expanding College Affordability By Expanding Income-Driven Repayment, John R. Brooks

Georgetown Law Faculty Publications and Other Works

Income-Driven Repayment (IDR) for federal student loans is rapidly becoming the primary tool that the federal government uses to provide progressive funding to individuals to pay for college. Under these programs, borrowers can choose to pay back their loans as a percentage of income, with eventual debt forgiveness after 10-25 years. If administered well, these programs can make student loans affordable for everyone, regardless of income. In this symposium essay, I argue that for IDR to meet its goal of providing affordable higher education to everyone, the federal government needs to raise the individual borrowing limits on Direct Loans and …

Quasi-Public Spending, John R. Brooks

Georgetown Law Faculty Publications and Other Works

The United States has increasingly designed certain public spending programs not as traditional tax-financed programs, but rather as mixtures of private expenditures, subsidies, and limited taxes. Thus part of what could have gone to the government as a tax is instead used to purchase the good or service directly, with only incremental taxes and subsidies to manage distributional goals. This Article terms this “quasi-public spending,” and argues that it is descriptive of our evolving approaches to both health care and higher education. Based on this observation, the Article defines and analyzes quasipublic spending and compares it to both traditional public …

From Hierarchies To Markets: Fedex Drivers And The Work Contract As Institutional Marker, Julia Tomassetti

Georgetown Law Faculty Publications and Other Works

Judges are often called upon today to determine whether certain workers are “employees” or “independent contractors.” The distinction is important, because only employees have rights under most statutes regulating work, including wage and hour, anti-discrimination, and collective bargaining law. Too often judges exclude workers from statutory protection who resemble what legal scholars have described as typical, industrial employees — long-term, full-time workers with set wages and routinized responsibilities within a large firm. To explain how courts reach these counterintuitive results, the article examines recent federal decisions finding that FedEx delivery drivers are independent contractors rather than employees. It argues that …

Behavioral Ethics, Behavioral Compliance, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

The design of an effective legal compliance system for an organization fearing prosecution for white-collar crime or regulatory violations requires skill at predicting human behavior. It is entirely plausible to use the economist’s simplifying assumptions of rational choice and pecuniary self-interest in making these predictions. But the realism of these assumptions has been under attack for decades now, suggesting that we should at least consider more nuanced behavioral possibilities when designing and implementing compliance programs. The label “behavioral compliance” can be attached to the design and management of compliance that draws from this wider range of behavioral predictions about individual …

Judgment Day For Fraud-On-The-Market: Reflections On Amgen And The Second Coming Of Halliburton, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

The Supreme Court has reaffirmed the "fraud on the market" presumption of reliance, facilitating large scale class actions for this kind of securities fraud. This essay traces the road from its decision last year in Amgen to this year's reaffirmation in Halliburton II, and considers some of the issues that will emerge as lower courts struggle with Halliburton II's secondary holding--that the issue of "price impact" is crucial to class certification, even if the burden of proof is on the defendants.

What Makes A Homepage Effective – Aals 2014 Presentation, Leslie R. Steinberg, Steven Barnes, Roger Skalbeck

Georgetown Law Faculty Publications and Other Works

As the approach to website development is constantly evolving to accommodate the latest technology, what are the best practices in law school home page design? Speakers will include Roger Skalbeck, author of the annual "Top 10 Law School Home Pages" ranking, who will explain the methodology, analysis and trends related to the study, and Steven Barnes, who will share the award-winning approach used at Penn Law to earn accolades from key constituencies, tie for #1 in “The Top 10 Home Pages” and earn a 2013 Webby People’s Voice Award.

Household Regulation And European Integration: The Family Portrait Of A Crisis, Philomila Tsoukala

Georgetown Law Faculty Publications and Other Works

This article develops a theoretical framework for analyzing the regulation of the household and its effects on the economy. Incorporating insights from family economics, comparative family law, legal realism, political economy and feminism, it describes the array of different legal regimes that can affect household composition and function. The article then analyzes the case of Greece using this framework. It argues that the role of households organized as families was a central element in the Greek debt crisis, overlooked by scholars and policymakers alike. It identifies the host of legal regimes that helped consolidate families as the main providers of …

Ipos And The Slow Death Of Section 5, Donald C. Langevoort, Robert B. Thompson

Georgetown Law Faculty Publications and Other Works

Since its enactment, Section 5 of the Securities Act of 1933 has restricted sales-based communications with investors, but that effort is nearly dead even with respect to the most sensitive of offerings, the IPO. Our paper traces that devolution, which began almost as soon as the ’33 Act came into existence, though the SEC’s 2005 deregulatory reforms and Congress’ intervention in the JOBS Act of 2012. We show how much of this related to an embrace of “book-building” as the industry’s preferred method of price discovery, which requires private two-way communications between underwriters and potential sophisticated investors. But book-building (and …

Merger Settlement And Enforcement Policy For Optimal Deterrence And Maximum Welfare, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

Merger enforcement today relies on settlements more than litigation to resolve anti-competitive concerns. The impact of settlement policy on welfare and the proper goals of settlement policy are highly controversial. Some argue that gun-shy agencies settle for too little while others argue that agencies use their power to delay to extract over-reaching settlement terms, even when mergers are not welfare-reducing. This article uses decision theory to throw light on this controversy. The goal of this article is to formulate and analyze agency merger enforcement and settlement commitment policies in the face of imperfect information, litigation costs, and delay risks by …

Top 10 Law School Home Pages Of 2012, Roger V. Skalbeck, Matthew L. Zimmerman

Georgetown Law Faculty Publications and Other Works

For a fourth consecutive year, every website home page of every ABA-accredited law school is evaluated and ranked based on objective criteria. The goal is to identify well-executed sites adopting best practices. For the 2012 report, twenty-six elements are evaluated across these three categories: Design Patterns and Metadata, Accessibility and Validation, & Marketing and Communications. For 2012, there are four new elements, two prior elements have been combined, and one element was dropped.

For 2012, forty-six schools now use the HTML5 doctype, which is up from thirteen in 2011 and just one in 2010. Eighteen schools achieve perfect scores in …

Reducing Unlawful Prescription Drug Promotion: Is The Public Health Being Served By An Enforcement Approach That Focuses On Punishment?, Vicki W. Girard

Georgetown Law Faculty Publications and Other Works

Despite the imposition of increasingly substantial fines and recently successful efforts to impose individual liability on corporate executives under the Park doctrine, punishing pharmaceutical companies and their executives for unlawful promotional activities has not been as successful in achieving compliance with the Federal Food, Drug, and Cosmetic Act (FD&C Act) as the protection of the public health demands. Over the past decade, the Food and Drug Administration (FDA) and the Department of Justice (DOJ) have shifted their focus from correction and compliance to a more punitive model when it comes to allegedly unlawful promotion of pharmaceuticals. The shift initially focused …

Can An Old Dog Learn New Tricks? Applying Traditional Corporate Law Principles To New Social Enterprise Legislation, Alicia E. Plerhoples

Georgetown Law Faculty Publications and Other Works

Seven U.S. states have recently adopted the benefit corporation or the flexible purpose corporation—two novel corporate forms intended to house social enterprises, i.e., those ventures that pursue social and environmental missions along with profits. And yet, these corporate forms are not viable or sustainable if they do not attract social entrepreneurs or social investors due to the lack of understanding and inquiry into how traditional corporate law principles will be applied to them. This article begins this necessary examination. As a first approach, this article assesses shareholder primacy and the shareholder wealth maximization norm in the context of the sale …

What Were They Thinking? Insider Trading And The Scienter Requirement, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

On its face, the connection between insider trading regulation and the state of mind of the trader or tipper seems intuitive. Insider trading is a form of market abuse: taking advantage of a secret to which one is not entitled, generally in breach of some kind of fiduciary-like duty. This chapter examines both the legal doctrine and the psychology associated with this pursuit. There is much conceptual confusion in how we define unlawful insider trading—the quixotic effort to build a coherent theory of insider trading by reference to the law of fraud, rather than a more expansive market abuse standard—which …

Top 10 Law School Home Pages Of 2011, Roger Skalbeck

Georgetown Law Faculty Publications and Other Works

For the third consecutive year, the website home pages for all ABA-accredited law schools are evaluated and ranked based on objective criteria. For 2011, law school home pages advanced in some areas. For instance, there are now thirteen sites using the HTML5 doctype, up from a single site in 2010. In addition, seventeen schools achieved a perfect score for three tests focused on website accessibility, up from eight in 2010. Nonetheless, there’s enough diversity in coding practices and content to help separate the great from the good.

For this year’s survey, twenty-four elements of each home page are assessed across …

Looking At The Lanham Act: Images In Trademark And Advertising Law, Rebecca Tushnet

Georgetown Law Faculty Publications and Other Works

Words are the prototypical regulatory subjects for trademark and advertising law, despite our increasingly audiovisual economy. This word-focused baseline means that the Lanham Act often misconceives its object, resulting in confusion and incoherence. This Article explores some of the ways courts have attempted to fit images into a word-centric model, while not fully recognizing the particular ways in which images make meaning in trademark and other forms of advertising. While problems interpreting images are likely to persist, this Article suggests some ways in which courts could pay closer attention to the special features of images as compared to words.

Towards Symmetry In The Law Of Branding, Rebecca Tushnet

Georgetown Law Faculty Publications and Other Works

Companies sometimes want to abandon an old identity and rebrand with a new one. Trademark law probably does not have much to say about rebranding in itself. But we should be careful about how we think about rebranding and other undisclosed source relationships because, if not handled properly, law’s recognition of such techniques could end up reinforcing trademark owners’ ability to deter competition and control free speech.

Top 10 Law School Home Pages Of 2010, Roger Skalbeck, Jason Eiseman

Georgetown Law Faculty Publications and Other Works

This ranking report attempts to identify the best law school home pages based exclusively on objective criteria. The goal is to assess elements that make websites easier to use for sighted as well as visually-impaired users. Most elements require no special design skills, sophisticated technology or significant expenses.

Ranking results in this report represent reasonably relevant elements. In this report, 200 ABA-accredited law school home pages are analyzed and ranked for twenty elements in three broad categories: Design Patterns & Metadata; Accessibility & Validation; and Marketing & Communications. As was the case in 2009, there is still no objective way …

Managers, Shareholders, And The Corporate Double Tax, Michael Doran

Georgetown Law Faculty Publications and Other Works

The United States generally imposes two levels of federal income tax on corporate profits. The first level taxes income to the corporation; the second level taxes dividends to the shareholders. Academics and policymakers have long considered this double tax to be "unusual, unfair, and inefficient." Legislators from both political parties have proposed integration of the corporate and individual income taxes on many occasions, but the proposals consistently fail. Prior academic analyses have struggled to explain the failure of integration. This paper demonstrates how certain managers, shareholders, and collateral interests rationally favor certain integration proposals and oppose other integration proposals, while …

Preemption & Human Rights: Local Options After Crosby V. Nftc, Robert Stumberg

Georgetown Law Faculty Publications and Other Works

In June 2000, the Supreme Court held in Crosby v. National Foreign Trade Council (NFTC) that federal sanctions against Burma preempted the Massachusetts Burma law. With its "Burma Law," Massachusetts sought to replicate the anti-Apartheid boycott, one of the most successful human rights campaigns in history. Massachusetts' Burma law authorized state agencies to exercise a strong purchasing preference in favor of companies that do not conduct business in Burma unless the preference would impair essential purchases or result in inadequate competition.

In Crosby, the Court held that Congress preempted the Massachusetts Burma law when it adopted federal sanctions on …