Law Commons^™

"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 …

Software Development As An Antitrust Remedy: Lessons From The Enforcement Of The Microsoft Communications Protocol Licensing Requirement, William H. Page, Seldon J. Childers

UF Law Faculty Publications

An important provision in each of the final judgments in the government's Microsoft antitrust case requires Microsoft to "make available" to software developers the communications protocols that Windows client operating systems use to interoperate "natively" (that is, without adding software) with Microsoft server operating systems in corporate networks or over the Internet. The short-term goal of the provision is to allow developers, as licensees of the protocols, to write applications for non-Microsoft server operating systems that interoperate with Windows client computers in the same ways that applications written for Microsoft's server operating systems interoperate with Windows clients. The long-term goal …

The Legal Periphery Of Dominant Firm Conduct, Herbert J. Hovenkamp

All Faculty Scholarship

This essay explores two different but related problems and how U.S. antitrust law and EU competition law approach them. The first is the offense of attempt to monopolize, which concerns the acts that a firm that is not yet dominant might undertake in order to become dominant. The second is the offense of monopoly or dominant firm leveraging, which occurs when a firm uses its dominant position in one market to cause some kind of harm in a different market where it also does business.

The language of EU and U.S. provisions concerning dominant firms provokes one to think that …

Antitrust Process And Vertical Deference: Judicial Review Of State Regulatory Inaction, Jim Rossi

ExpressO

Courts struggle with the tension between national competition laws, on the one hand, and state and local regulation, on the other – especially as traditional governmental functions are privatized and as economic regulation advances beyond its traditional role to address market monitoring. This Article defends a process-based account of the state action antitrust exception against alternative interpretations, such as the substantive efficiency preemption approach recently advanced by Richard Squire, and elaborates on what such a process-based account would entail for courts addressing the role of state economic regulation as a defense in antitrust cases. It recasts the debate as focused …

Internet 3.0: Identifying Problems And Solutions To The Network Neutrality Debate , Robert M. Frieden

ExpressO

What Internet Service Providers (“ISPs”) can and cannot do to diversify services lies at the core of the debate over network neutrality. In prior generations ISPs had little incentive or technological capability to deviate from plain vanilla best efforts routing for content providers and from standard “all you can eat” subscription terms for consumer access to the World Wide Web. The next generation Internet has the technological capability and ISPs have the commercial motivation to offer “better than best efforts” routing and premium services for both content providers and consumers seeking higher quality of service and more reliable traffic delivery. …

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

Aaron Edlin

No abstract provided.

Software Development As An Antitrust Remedy: Lessons From The Enforcement Of The Microsoft Communications Protocol Licensing Requirement , William H. Page, Seldon J. Childers

Michigan Telecommunications & Technology Law Review

An important provision in each of the final judgments in the government's Microsoft antitrust case requires Microsoft to "make available" to software developers the communications protocols that Windows client operating systems use to interoperate "natively" (that is, without adding software) with Microsoft server operating systems in corporate networks or over the Internet. The short-term goal of the provision is to allow developers, as licensees of the protocols, to write applications for non-Microsoft server operating systems that interoperate with Windows client computers in the same ways that applications written for Microsoft's server operating systems interoperate with Windows clients. The long-term goal …

Microsoft Tying Consumers' Hands - The Windows Vista Problem And The South Korean Solution, Daniel J. Silverthorn

Michigan Telecommunications & Technology Law Review

Currently, more than ninety percent of the world's PCs operate under Windows. To cement its market power, Microsoft has engaged in controversial business practices. Those practices have led to adverse antitrust decisions in the United States, the European Union (EU), and South Korea. Many of these decisions, both judicial and administrative, revolve around Microsoft's bundling, or "tying," of certain subsidiary applications with the Windows operating system, including Internet Explorer and Windows Media Player. In doing so, Microsoft arguably gains a greater than deserved market share with these bundled applications, inhibiting fair competition in the software marketplace. The United States, EU …

Using The "Consumer Choice" Approach To Antitrust Law, Neil W. Averitt, Robert H. Lande

All Faculty Scholarship

The current paradigms of antitrust law - price and efficiency - do not work well enough. They were an immense improvement over their predecessors, and they have served the field competently for a generation, producing reasonably accurate results in most circumstances. Accumulated experience has also revealed their shortcomings, however. They are hard to fully understand and are not particularly transparent in their application. Moreover, in a disturbingly large number of circumstances they are unable to handle the important issue of non-price competition.

In this article we suggest replacing the older paradigms with the somewhat broader approach of "consumer choice." The …

Beyond Schumpeter Vs. Arrow: How Antitrust Fosters Innovation, Jonathan Baker

Articles in Law Reviews & Other Academic Journals

The relationship between competition and innovation is the subject of a familiar controversy in economics, between the Schumpeterian view that monopolies favor innovation and the opposite view, often associated with Kenneth Arrow, that competition favors innovation. Taking their cue from this debate, some commentators reserve judgment as to whether antitrust enforcement is good for innovation. Such misgivings are unnecessary. The modern economic learning about the connection between competition and innovation helps clarify the types of firm conduct and industry settings where antitrust interventions are most likely to foster innovation. Measured against this standard, contemporary competition policy holds up well. Today's …

"Give The Lady What She Wants" -- As Long As It's Macy's, Mark D. Bauer

Mark D Bauer

In 2005, Federated Department Stores, which does business as Macy’s and Bloomingdales, acquired May Company Department Stores for $17 billion. Federal antitrust regulators took no action against this merger and in fact released an unprecedented statement explaining the decision to permit the merger.

State antitrust regulators demanded that Federated sell approximately 20% of the former May stores, including branches of L.S. Ayres, Marshall Field, Lord & Taylor, Filenes, Hecht and Strawbridge & Clothier. In the fall of 2006, Federated sold the remaining Lord & Taylor stores to a private investment group. Substantially all of the stores remaining with Federated were …

The Effects Of Smallness And Remoteness On Competition Law - The Case Of New Zealand, Michal Gal

Michal Gal

The economic characteristics of an economy — most notably its size, its openness to trade and its remoteness from its trading partners — greatly affect the competitiveness and performance of its markets by reducing internal and external competitive pressures. Accordingly, small, insulated economies should devise appropriate policies that offset at least some of these effects. This article analyses some of the effects of smallness and remoteness on optimal competition law. The first part provides a basis for the discussion by surveying the basic economic effects of small market size. The second part builds upon these observations to analyse some of …

Necessary Reforms Of The Israeli Competition Law (In Hebrew), Michal Gal

Michal Gal

No abstract provided.

50 Colors Of Formica: Legal Realism In The Israeli Competition Law (In Hebrew), Michal Gal

Michal Gal

No abstract provided.

Market Definition: An Analytical Overview, Jonathan Baker

Articles in Law Reviews & Other Academic Journals

This essay surveys important issues in antitrust market definition. It identifies settings in which market definition is useful, and evaluates methods of defining markets. It considers whether markets should be defined with respect to demand substitution only or whether supply substitution also should count. It addresses practical issues in defining markets, including the probative value of various types of evidence, how much buyer substitution is too much, application of the market definition algorithm of the Horizontal Merger Guidelines, the Cellophane fallacy, and the advantages and disadvantages of defining submarkets. It also evaluates several controversial approaches to market definition, including price …

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 …

A Turning Point In Merger Enforcement: Federal Trade Commission V. Staples, Jonathan B. Baker, Robert Pitofsky

Contributions to Books

This book chapter (forthcoming in Antitrust Stories) tells the story of the FTC's successful 1997 effort to block the proposed Staples/Office Depot merger. It describes the competing presentations of the FTC and the merging firms during the preliminary injunction hearing and places that trial in a broader context.

The Robinson-Patman Act And Consumer Welfare: Has Volvo Reconciled Them?, John B. Kirkwood

Seattle University Law Review

In this article, I address that broader question. In Part II, I summarize the facts and opinions in Volvo, particularly the final section of the majority opinion where the Court observed that Volvo's discrimination was procompetitive. In Part III, I review the growing consensus in antitrust law that the fundamental goal of the antitrust statutes (other than the Robinson-Patman Act) is to promote consumer welfare. Today when most courts say that a practice furthers competition, they mean that it improves consumer welfare-specifically, the welfare of consumers in the relevant market. In Part IV, I use that interpretation of …

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.

Patent Ships Sail An Antitrust Sea, Joseph Scott Miller

Seattle University Law Review

The deeper truths evoked by patent ships sailing an antitrust sea are three. First, free competition is the pervasive, baseline reality, the background norm; patent protection is the temporary, partial exception. Second, we grasp both patent and antitrust policy with a common science: economics. Third, although neither patent nor antitrust law doctrines are good tools for fixing fundamental problems in the other body of law, both bodies of law help us better understand the shortcomings of the other. I explore these ideas in turn, below.

Independent Ink At The Crossroads Of Antitrust And Intellectual Property Law: The Court's Holding Regarding Market Power In Cases Involving Patents And Implications In Cases Involving Copyrights, Leonard J. Feldman, Rima J. Alaily, Chad D. Farrell

Seattle University Law Review

By eliminating the market power presumption for patent holders, Independent Ink calls into question the presumption's continued validity for tying arrangements involving copyrights. While the Court's holding directly applies only to patents, we present three reasons why, after Independent Ink, the presumption can no longer be viable in antitrust lawsuits challenging a tying arrangement involving a copyrighted product. First, the Court's rationale for eliminating the presumption including citations to extensive academic writings, agency guidelines, and legislative amendments precludes the presumption's continued application in any other context. Second, copyrights are significantly less likely than patents to confer market power because …

Antitrust Around The World: An Empirical Analysis Of The Scope Of Competition Laws And Their Effects, Keith N. Hylton, Fei Deng

Faculty Scholarship

Since the early studies of Arnold Harberger,' George Stigler,² and Richard Posner,³ there has been a growing movement calling for the use of empirical evidence to judge the effectiveness of antitrust law in securing its goals.⁴ That there have been relatively few such studies is attributable to the lack of useful statistical information on the law, enforcement policies, and penalties.

In this article, we present an effort to use information on competition laws around the world to assess their scope and effectiveness. The foundation of this study is a dataset that codes key features of the competition …

A Comparison Between U.S. And E.U. Antitrust Treatment Of Tying Claims Against Microsoft: When Should The Bundling Of Computer Software Be Permitted?, James F. Ponsoldt, Christopher D. David

Scholarly Works

This article will analyze the recent U.S. and E.U. judicial approaches to tying charges which stem from software bundling. Part II reviews U.S. tying jurisprudence both generally and as applied to software bundling. Part III outlines the D.C. Circuit's approach to Microsoft's Windows/Internet Explorer bundle. Part IV briefly covers tying jurisprudence in the European Union. Part V describes the European Commission's (“E.C.”) analysis of Microsoft's Window/Windows Media Player bundle. By comparing the two approaches, Part VI shows that neither approach is ideal: although the U.S. approach offers too little guidance to software manufacturers seeking to avoid liability and unduly discounts …

Patent Ships Sail An Antitrust Sea, Joseph S. Miller

Scholarly Works

This brief essay arises from my participation in an April 2006 conference at Seattle University Law School, entitled At the Intersection of Antitrust and Intellectual Property Law: Looking Both Ways to Avoid a Collision. This intersection metaphor is a common one for describing antitrust law's relationship with intellectual property law, among both courts and commentators. This essay explores a different metaphor: patent ships sail an antitrust sea, protecting those aboard from competition's harshest dangers - but only for a time. The nautical metaphor evokes three ideas that the crossroads metaphor does not. First, vigorous competition is the pervasive, baseline reality; …

Mandating Access To Telecom And The Internet: The Hidden Side Of Trinko, Daniel F. Spulber, Christopher S. Yoo

All Faculty Scholarship

Antitrust has long played a major role in telecommunications policy, demonstrated most dramatically by the equal access mandate imposed during the breakup of AT&T. In this Article we explore the extent to which antitrust can continue to serve as a source of access mandates following the Supreme Court's 2004 Trinko decision. Although Trinko sharply criticized access remedies and antitrust courts' ability to enforce them, it is not yet clear whether future courts will interpret the opinion as barring all antitrust access claims. Even more importantly, the opinion contains language hinting at possible bases for differentiating among different types of access, …

Restraints On Innovation, Herbert J. Hovenkamp

All Faculty Scholarship

Beginning with the work of Joseph Schumpeter in the 1940s and later elaborated by Robert W. Solow's work on the neoclassical growth model, economics has produced a strong consensus that the economic gains from innovation dwarf those to be had from capital accumulation and increased price competition. An important but sometimes overlooked corollary is that restraints on innovation can do far more harm to the economy than restraints on traditional output or pricing. Many practices that violate the antitrust laws are best understood as restraints on innovation rather than restraints on pricing.

While antitrust models for assessing losses that result …

Nervine' And Knavery: The Life And Times Of Dr. Miles Medical Company, Rudolph J.R. Peritz

Articles & Chapters

No abstract provided.

Antitrust Process And Vertical Deference: Judicial Review Of State Regulatory Inaction, Jim Rossi

Vanderbilt Law School Faculty Publications

Courts struggle with the tension between national competition laws, on the one hand, and state and local regulation, on the other--especially as traditional governmental functions are privatized and as economic regulation advances beyond its traditional role to address market monitoring. This Article defends a process-based account of the antitrust state-action exception against alternative interpretations, such as the substantive efficiency-preemption approach that Richard Squire recently advanced, and it elaborates on what such a process-based account would entail for courts addressing the role of state economic regulation as a defense in antitrust cases. It recasts the debate as focused around delegation issues …