Law Commons^™

A Comment On Markovits's Welfare Economics And Antitrust, Keith N. Hylton

Faculty Scholarship

I criticize two features of the new book by Richard Markovits. One is the notion that ethics or moral judgments should be part of our analysis of antitrust. The other is the notion that market definition is incoherent.

Patents And Price Fixing By Serial Colluders, Michael J. Meurer, William Kovacic, Robert Marshall

Faculty Scholarship

Antitrust law has long been mindful of the danger that firms may misuse their patents to facilitate price fixing. Courts and commentators addressing this danger have assumed that patent-facilitated price fixing occurs in a single market. In this Article, we extend conventional analysis to address firms’ patent misuse to facilitate price fixing across multiple products lines. By doing so, we expose gaps in existing agency enforcement and scholarly proposals for reform. Important legal tests that make sense in the single market setting do not carry over to the context we call serial collusion, where certain offenders engage in repeat collusion …

In Defense Of Breakups: Administering A “Radical” Remedy, Rory Van Loo

Faculty Scholarship

Calls for breaking up monopolies—especially Amazon, Facebook, and Google—have largely focused on proving that past acquisitions of companies like Whole Foods, Instagram, and YouTube were anticompetitive. But scholars have paid insufficient attention to another major obstacle that also explains why the government in recent decades has not broken up a single large company. After establishing that an anticompetitive merger or other act has occurred, there is great skepticism of breakups as a remedy. Judges, scholars, and regulators see a breakup as extreme, frequently comparing the remedy to trying to “unscramble eggs.” They doubt the government’s competence in executing such a …

Serial Collusion By Multi-Product Firms, Michael J. Meurer, William Kovacic, Robert Marshall

Faculty Scholarship

We provide empirical evidence that many multi-product firms have each participated in several cartels over the past 50 years. Standard analysis of cartel conduct, as well as enforcement policy, is rooted in the presumption that each cartel in which a given firm participates is a singular activity, independent of other cartel conduct by the firm. We argue that this analysis is deficient in many respects in the face of serial collusion by multi-product firms. We offer policy recommendations to reign in serial collusion, including a mandatory coordinated effects review for any merger involving a serial colluder, regardless of the apparent …

The Policy Challenge Of Artificial Intelligence, James Bessen

Faculty Scholarship

New "artificial intelligence" (AI) technology promises to bring dramatic social and economic changes, demanding major policy changes. In intellectual property and antitrust law, AI will exacerbate a damaging trend: across all major sectors of the economy, proprietary information technology is increasing the market dominance of large firms. This trend might not seem like bad news, but it is evidence of a slowdown in the spread of technical knowledge throughout the economy. The result is rising industry concentration, slower productivity growth and growing wage inequality. The key challenge to IP and antitrust policy will be counter this trend yet maintain innovation …

The Role Of Design Choice In Intellectual Property And Antitrust Law, Stacey Dogan

Faculty Scholarship

When is it appropriate for courts to second-guess decisions of private actors in shaping their business models, designing their networks, and configuring the (otherwise non-infringing) products that they offer to their customers? This theme appears periodically but persistently in intellectual property and antitrust, especially in disputes involving networks and technology. In both contexts, courts routinely invoke what I call a “non-interference principle” — the presumption that market forces ordinarily bring the best outcomes for consumers, and that courts and regulators should not meddle in the process. This non-interference principle means, for example, that intermediaries need not design their networks to …

Antitrust And Intellectual Property: A Brief Introduction, Keith N. Hylton

Faculty Scholarship

Intellectual property law and antitrust have been described as conflicting bodies of law, and the reason is easy to see. Antitrust law aims to protect consumers from the consequences of monopolization. Intellectual property law seeks to enhance incentives to innovate by granting monopolies in ideas or expressions of ideas. The purpose of this chapter is to explore the purported conflict between antitrust and intellectual property. The chapter is largely descriptive, and focuses on current or developing litigation rather than historical controversies. Many of the modern examples of conflict can be attributed to problems of classification.

Brief Of Amici Curiae Antitrust Law Professors In O'Bannon V. Ncaa, Thomas C. Arthur, Amitai Aviram, Edward D. Cavanagh, Jorge L. Contreras, Daniel A. Crane, Susan Beth Farmer, Herbert Hovenkamp, Keith N. Hylton, Michael S. Jacobs, Alan J. Meese, Salil K. Mehra, William H. Page, Gary R. Roberts, D. Daniel Sokol, Alexander Volokh

Faculty Scholarship

On November 21, 2014, 15 professors of antitrust law at leading U.S. universities submitted an amicus brief in the O'Bannon v. NCAA 9th Circuit appeal in support of the NCAA. They have an interest in the proper development of antitrust jurisprudence, and they agree that the court below misapplied the “less restrictive alternative” prong of the rule of reason inquiry for assessing the legality of restraints of trade under Section 1 of the Sherman Act, 15 U.S.C. § 1. They are concerned that the district court’s approach to the antitrust rule of reason, if affirmed, would grant undue authority to …

Panel I: Professor Brodley’S General Contributions To Antitrust Scholarship : Introduction, Keith N. Hylton

Faculty Scholarship

When I began teaching Antitrust, I was the junior colleague of a more senior antitrust scholar, teaching the course on opposite semesters to the relatively few students who were forced by scheduling conflicts to take the course with me as their teacher. After my senior colleague departed for another school – and after the departure of some other senior Law and Economics colleagues – I was for a brief period the senior antitrust scholar at the institution, and this was in only my fifth year of teaching law. Boston University soon approached me and my wife with the offer of …

The Law And Economics Of Monopolization Standards, Keith N. Hylton

Faculty Scholarship

Monopolization, the restriction of competition by a dominant firm, is regulated in roughly half of the world’s nations. The two most famous laws regulating monopolization are Section 2 of the Sherman Act, in the United States, and Article 82 of the European Community Treaty. Both laws have been understood as prohibiting ‘abuses’ of monopoly power.

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 …

Remedies, Antitrust Law, And Microsoft: Comment On Shapiro, Keith N. Hylton

Faculty Scholarship

The subject of remedies is a relatively under-theorized area of antitrust law, and Professor Shapiro has done the antitrust community a great favor by offering some innovative and useful theoretical insights on the design of antitrust remedies. He applies his theoretical insights to the Microsoft III case to reach the conclusion that the remedies adopted were inadequate to restore competition in the market for software platforms. In this review, I will offer additional theoretical insights on remedies and explain my reasons for rejecting his conclusions on Microsoft III.

Antitrust Law And Regulatory Gaming, Stacey Dogan

Faculty Scholarship

Antitrust law promotes competition in the service of economic efficiency. Government regulation may or may not promote either competition or efficiency, depending on both the goals of the agency and the effects of industry "capture." Antitrust courts have long included regulated industries within their purview, working to ensure that regulated industries could not use the limits that regulation imposes on the normal competitive process to achieve anticompetitive ends. Doing so makes sense; an antitrust law that ignored anticompetitive behavior in any regulated industry would be a law full of holes.

The role of antitrust in policing regulated industries appears to …

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 …

Bidder Collusion And Antitrust Law: Refining The Analysis Of Price Fixing To Account For The Special Features Of Auction Markets, Robert Marshall, Michael J. Meurer

Faculty Scholarship

Courts and commentators have painstakingly analyzed antitrust policy toward horizontal price fixing, but surprisingly, one of the most common forms of price fixing--bidder collusion-has escaped the sustained attention of antitrust lawyers. We attribute this inattention to the mistaken belief that the economics of bidder collusion is essentially equivalent to the economics of price fixing in posted-price markets. However, there are significant differences regarding the economics of collusion in auction and procurement markets as compared to posted-price markets, and we derive antitrust policy recommendations that apply specifically to bidder collusion in this article.

Antitrust Intent, Keith N. Hylton, Ronald A. Cass

Faculty Scholarship

Many legal rules turn on a party's state of mind or intent with respect to some action or consequence. Legal scholars have long debated the contours of such requirements and the sorts of proof required for them. Intent has been an especially controversial issue in antitrust law. This paper provides a theory of legal standards that explains the role of intent analysis in antitrust and in other areas of the law. We argue that intent requirements, and many other legal rules, can be understood by focusing on the goal of minimizing the expected costs from legal errors. After developing a …

The Boeing-Mcdonnell Douglas Merger: Competition Law, Parochialism, And The Need For A Globalized Antitrust System, Kathleen Luz

Faculty Scholarship

On July 1, 1997, the Federal Trade Commission (FTC) closed its investigation of the merger of the Boeing Company (Boeing) and the McDonnell Douglas Corporation (McDonnell Douglas), essentially approving the merger. The proposed $14 billion merger was quite significant, as it would unite the first and third largest civil aircraft companies in the world. Although the proposed merger had passed muster under U.S. antitrust laws, Boeing still faced the obstacle of gaining approval from the European Commission (EC), the antitrust enforcement agency of the European Union (EU). The EC initially sought to reject the merger and to levy heavy penalties …

Measuring Market Power When The Firm Has Power In The Input And Output Markets, Keith N. Hylton, Mark Lasser

Faculty Scholarship

We examine the problem of measuring market power when the firm has monopoly power in the output market and monopsony power in the input market - a case we refer to as 'dual-market' power. We show how the Lerner index, which measures the mark-up over the marginal cost, can be modified to reflect the firm's ability to set price above the competitive level.

Striking A Delicate Balance: Intellectual Property, Antitrust, Contract And Standardization In The Computer Industry, Maureen A. O'Rourke

Faculty Scholarship

Shortly before the Second Intermational Harvard Conference on Internet & Society, the Department of Justice ("DOJ") brought a widely publicized suit against the Microsoft Corporation. In its complaint, the DOJ charged Microsoft with engaging in a variety of antitrust wrongs connected with its alleged monopoly position in the market for personal computer ("PC") operating system software. The Conference panel on Antitrust and the Internet, which had planned to focus on how antitrust law affects standard-setting efforts and the implications for the Intermet, quickly abandoned that topic in favor of discussion of the Microsoft suit.

Multiemployer Bargaining, Antitrust Law, And Team Sports: The Contingent Choice Of A Broad Exemption, Michael C. Harper

Faculty Scholarship

Twenty-four years after pronouncing that "Congress[ ,]... not... this Court[, must remedy] any inconsistency or illogic" in the long standing exemption of baseball, but not other sports from the reach of the antitrust laws,' the Supreme Court last term reduced substantially the uniqueness of Major League Baseball's control over its labor market. The Court did so not by exposing baseball to antitrust attack, but rather by clarifying that restrictions on player labor mobility and freedom of contract imposed by all North American leagues of professional sports teams² also enjoy an exemption from antitrust scrutiny as long as their labor …

Economic Rents And Essential Facilities, Keith N. Hylton

Faculty Scholarship

This paper presents an economic analysis of the essential facility doctrine of antitrust. According to this doctrine, a firm or group of firms that possesses exclusive access to a cost-reducing facility must be prepared to share such access on fair terms with competitors.