Law Commons^™

The Factor/Element Distinction In Antitrust Litigation, Christopher R. Leslie

William & Mary Law Review

Most price-fixing litigation turns on whether the plaintiffs can present sufficient circumstantial evidence from which a reasonable jury could infer that the defendants did, in fact, conspire to raise prices. This generally entails the proffering of plus factors, a type of evidence that suggests parallel conduct by the defendants was the product of collusion, not independent decisions. As their name suggests, plus factors are just that—factors. Proving a collection of factors may be necessary for a plaintiff’s case, but no individual factor is ever required. If it were, it wouldn’t be a factor; it would be an element.

Several federal …

The Probative Synergy Of Plus Factors In Price-Fixing Litigation, Christopher R. Leslie

Northwestern University Law Review

Private plaintiffs alleging that defendants conspired to fix prices in violation of antitrust law must usually prove their claims through circumstantial evidence, generally in the form of “plus factors”—evidence indicating that the defendants’ parallel conduct was caused by collusion, not by independent decision-making. Supreme Court precedent requires fact finders to examine antitrust plaintiffs’ evidence holistically. With increasing frequency, however, federal courts in price-fixing cases improperly isolate each piece of circumstantial evidence presented by the plaintiff and then deprive it of all probative value because that single piece of evidence is insufficient, standing alone, to prove a price-fixing conspiracy. As a …

Submission Of Robert H. Lande To House Judiciary Antitrust Subcommittee Investigation Of Digital Platforms, Robert H. Lande

All Faculty Scholarship

The House Judiciary Antitrust Subcommittee asked me to submit suggestions concerning the adequacy of existing antitrust laws, enforcement policies, and enforcement levels insofar as they impact the state of competition in the digital marketplace. My submission recommends the following nine reforms:

1. A textualist analysis of the Sherman Act shows that Section 2 actually is a no-fault monopolization statute. At a minimum Congress should enact a strong presumption that every firm with a 67% market share has violated Section 2. This would move the Sherman Act an important step in the right direction, the direction Congress intended in 1890. My …

Uber's Efficiencies: A Modest Proposal For Limiting Use Of Antitrust's Per Se Rule, Kathleen Guilfoyle

University of Colorado Law Review

In antitrust law, the per se rule against horizontal price-fixing seems set in stone. Over time, however, antitrust enforcers and courts have declined to use this rule and instead have used the rule of reason. This change stems directly from the recognition that the per se rule's blunt application may end up harming consumers in some contexts. Using Uber as an example of a consumer-friendly, efficiencyenhancing business model, this Comment argues that using the per se rule to analyze horizontal arrangements like Uber's sacrifices consumer welfare. Instead, courts should use the rule of reason and engage in cost-benefit analysis where …

Does Crime Pay? Cartel Penalties And Profits, John M. Connor, Robert H. Lande

All Faculty Scholarship

This article seeks to answer a fundamental antitrust question: does crime pay? Do the current overall levels of U.S. cartel sanctions adequately discourage firms from engaging in illegal collusion? Seven years ago our research showed that the unfortunate answer was clearly that, yes, criminal collusion usually is profitable! The expected costs (in terms of criminal fines and prison time, civil damages, etc.) was significantly less than expected gains to the price fixers. Sadly, the most recent data re-affirm this conclusion.

The great majority of companies participating in illegal cartels make a profit even after they pay all the penalties. The …

How Meyer V. Uber Could Demonstrate That Uber And The Sharing Economy Fit Into Antitrust Law, Nicholas Andrew Passaro

Michigan Business & Entrepreneurial Law Review

Recently, Uber driver (and former Uber CEO) Travis Kalanick has been sued under antitrust laws. The plaintiffs argue that Mr. Kalanick and the other Uber drivers have engaged in a price fixing arrangement that violates §1 of the Sherman Act. The case, Meyer v. Uber (originally Meyer v. Kalanick), is still being litigated. This Comment will analyze each side’s potential arguments and will ultimately conclude that the court should find Uber drivers not guilty of a Sherman Act violation. This determination will be based on: the merits of the various arguments, how such a holding would fit within the …

Deterrence And Antitrust Punishment: Firms Versus Agents, Keith N. Hylton

Faculty Scholarship

Antitrust enforcement regimes rely on penalties against two groups of actors for deterrence: penalties against the violating firm and penalties against the violating firm's agents. Here, I examine the economics of punishing agents versus firms. My area of application is antitrust, but the argument applies generally to other fields in which the government has the choice of punishing the agent, the firm, or both. This analysis suggests that whenever the firm has an incentive, given existing penalties, to engage in some illegal act that may result in relatively modest punishment for its agents, the firm can almost always induce its …

Licensing Of Intellectual Property Rights, Mark Joelson

Georgia Journal of International & Comparative Law

No abstract provided.

The Meaning Of "Agreement" Under The Sherman Act: Thoughts From The "Facilitating Practices" Experience, George A. Hay

George A. Hay

While the Economic Policy Office was involved in a number of interesting and important matters during the six years I was Director (1973–1979), for the most part my involvement in individual investigations and cases was vicarious, i.e., supervising, supporting, and advising the staff economists assigned to the particular matter. The one major exception – a matter in which I became personally involved in an intensive way – was the General Electric (GE)-Westinghouse price signaling matter. In what follows, I provide a brief summary of what transpired in the GE-Westinghouse matter and then trace through some of the longer term consequences …

The Antitrust Implications Of Collaborative Standard Setting By Insurers Regarding The Use Of Genetic Information In Life Insurance Underwriting, Robert H. Jerry Ii

Robert H. Jerry II

Whenever two or more market participants collaborate to restrain trade, the potential applicability of federal and state antitrust laws must be considered. When the collaborating parties are insurance companies, a further layer of analysis may be necessary to determine whether the activity is exempt from federal antitrust regulation. Even if the activity enjoys an exemption, state antitrust law may have different things to say about the activity. Embedded in each of these levels of analysis are many difficult and complex subsidiary questions. In short, the law of insurance antitrust is not a subject for the faint of heart. Antitrust law …

The Gary Dinners And The Meaning Of Concerted Action, William H. Page

William H. Page

Between 1907 and 1911, executives of American steel manufacturers gathered in a series of social events and meetings that became known as the Gary dinners. Their founder, Judge Elbert H. Gary, chairman of the board of the United States Steel Corporation (U.S. Steel), believed the dinners were a lawful way to stabilize steel prices by enabling manufacturers to tell each other "frankly and freely what they were doing, how much business they were doing, what prices they were charging, how much wages they were paying their men, and... all information concerning their business." The government agreed that the dinners stabilized …

Kamakahi V. Asrm: The Egg Donor Price Fixing Litigation, Kimberly D. Krawiec

Faculty Scholarship

In April 2011, Lindsay Kamakahi caused an international stir by suing the American Society for Reproductive Medicine (ASRM), the Society for Assisted Reproductive Technology (SART), SART-member fertility clinics, and a number of egg donor agencies on behalf of herself and other oocyte donors. The suit challenged the ASRM-SART oocyte donor compensation guidelines, which limit payments to egg donors to $5,000 ($10,000 under special circumstances), as an illegal price-fixing agreement in violation of United States antitrust laws.

Ensuing discussion of the case has touched on familiar debates surrounding coercion, commodification, and exploitation. It has also revealed many misconceptions about oocyte donation, …

Price-Fixing: Hefty Penalties On Big-Biz Cartels Will Provide Level Playing Field To Small Businesses, John M. Connor, Robert H. Lande

All Faculty Scholarship

Cartels are illegal in India, as they are almost everywhere. They are subject to heavy fines. Why, then, do businesses frequently try to fix prices? Because doing so usually is profitable. On average cartels raise prices by more than 20%, and probably face less than a 25% chance of being caught and convicted. Based upon a sample of 75 international cartels, the authors calculate that the expected profits from price fixing almost always exceed the penalties. No wonder businesses often try to fix prices.

All Of The Economic Aid The U.S., Eu, And Japan Give To The Developing World Is Stolen Back By Our Illegal Price-Fixing Cartels, Robert H. Lande

All Faculty Scholarship

This compares the magnitudes of two forms of economic interaction between the developed and developing world. The first is the amount of economic foreign aid provided by the developed world to the developing world during a single year. The second is an estimate of the yearly amount that illegal price fixing cartels, comprised of companies from the U.S., the EU, and Japan, overcharge – steal! – from purchasers in these same countries. This comparison shows these amounts are roughly equivalent. If anything, cartels probably steal more from the developing world than the developed world gives them in economic assistance.

This …

The Gary Dinners And The Meaning Of Concerted Action, William H. Page

UF Law Faculty Publications

Between 1907 and 1911, executives of American steel manufacturers gathered in a series of social events and meetings that became known as the Gary dinners. Their founder, Judge Elbert H. Gary, chairman of the board of the United States Steel Corporation (U.S. Steel), believed the dinners were a lawful way to stabilize steel prices by enabling manufacturers to tell each other "frankly and freely what they were doing, how much business they were doing, what prices they were charging, how much wages they were paying their men, and... all information concerning their business." The government agreed that the dinners stabilized …

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

All Faculty Scholarship

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% …

The Leegin Decision: The End Of The Consumer Discounts Or Good Antitrust Policy?: Hearing Before The Subcomm. On Antitrust, Competition Policy, And Consumer Rights Of The S. Comm. On The Judiciary, 110th Cong., July 31, 2007 (Statement Of Robert Pitofsky, Geo. U. L. Center), Robert Pitofsky

Testimony Before Congress

No abstract provided.

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

All Faculty Scholarship

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 …

What's So Great About Nothing? The Gnu General Public License And The Zero-Price-Fixing Problem, Heidi S. Bond

Michigan Law Review

In 1991, Linus Torvalds released the first version of the Linux operating system. Like many other beneficiaries of the subsequent dot-com boom, Torvalds worked on a limited budget. Clad in a bathrobe, clattering away on a computer purchased on credit, subsisting on a diet of pretzels and dry pasta, hiding in a tiny room that was outfitted with thick black shades designed to block out Finland's summer sun, Torvalds programmed Linux. Like some other beneficiaries of the subsequent dot-com boom, Torvalds created a product that is now used by millions. He owns stock options worth seven figures. Computer industry giants, …

Narrower Is Better - The Third Circuit's Latest Word On Conscious Parallelism And The Problem Of Plus Factors: In Re Flat Glass, Joseph Skocilich

Villanova Law Review

No abstract provided.

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.

The Antitrust Implications Of Collaborative Standard Setting By Insurers Regarding The Use Of Genetic Information In Life Insurance Underwriting, Robert H. Jerry Ii

UF Law Faculty Publications

Whenever two or more market participants collaborate to restrain trade, the potential applicability of federal and state antitrust laws must be considered. When the collaborating parties are insurance companies, a further layer of analysis may be necessary to determine whether the activity is exempt from federal antitrust regulation. Even if the activity enjoys an exemption, state antitrust law may have different things to say about the activity. Embedded in each of these levels of analysis are many difficult and complex subsidiary questions. In short, the law of insurance antitrust is not a subject for the faint of heart.

Antitrust law …

The Meaning Of "Agreement" Under The Sherman Act: Thoughts From The "Facilitating Practices" Experience, George A. Hay

Cornell Law Faculty Publications

While the Economic Policy Office was involved in a number of interesting and important matters during the six years I was Director (1973–1979), for the most part my involvement in individual investigations and cases was vicarious, i.e., supervising, supporting, and advising the staff economists assigned to the particular matter. The one major exception – a matter in which I became personally involved in an intensive way – was the General Electric (GE)-Westinghouse price signaling matter. In what follows, I provide a brief summary of what transpired in the GE-Westinghouse matter and then trace through some of the longer term consequences …

The Three Types Of Collusion: Fixing Prices, Rivals, And Rules, Robert H. Lande, Howard P. Marvel

All Faculty Scholarship

Collusion can profitably be classified into three distinct types. In our classification, "Type I" collusion is the familiar direct agreement among colluding firms (a cartel) to raise prices or, equivalently, restrict output. Alternatively, firms can collude to disadvantage rivals in ways that causes those rivals to cut output. We term this "Type II" collusion. Its indirect effect is an increase in market prices.

A number of important collusion cases neither direct manipulation of prices or output, nor direct attacks on rivals. Examples include Supreme Court cases such as National Society of Professional Engineers v. US, Bates v. State Bar of …

Empirical Methods In Antitrust Litigation: Review And Critique, Jonathan Baker, Daniel Rubinfeld

Articles in Law Reviews & Other Academic Journals

The use of empirical methods in antitrust has been growing at an exponential rate. It is now commonplace for multiple regression and other statistical methods to be utilized in merger cases, especially those involving predictions of the price increases that may result from the strategic decisions of the merging firms. These methods are also prominently employed in civil nonmerger investigations by the federal antitrust enforcement agencies (including price fixing, monopolization, and exclusive dealing cases) and in private litigation (including damage claims and class action suits). This article surveys the methodologies that have been used and the range of questions that …

Albrecht After Arco: Maximum Resale Price Fixing Moves Toward The Rule Of Reason, Roger D. Blair, Gordon L. Lang

Vanderbilt Law Review

For some time, both economic and legal commentators have recognized the economic irrationality of the Supreme Court's ruling in Albrecht v. Herald Co. which prohibited the imposition of maximum resale prices by a supplier on its resellers. Ordinarily, unwise decisions receive critical reviews and eventually lose their force as they are over-ruled explicitly or by implication in subsequent decisions. In order for this evolution to occur, however, the Court must be presented with an opportunity to alter its earlier rulings. Recently, the Supreme Court had just such an opportunity to revisit the Albrecht rule in Atlantic Richfield Co. v. USA …

Rent Control Price Fixing: Another Look At The Emperor's New Clothes, Robert N. Markle

Touro Law Review

No abstract provided.

Tying Arrangements And Class Actions, Herbert Hovenkamp

Vanderbilt Law Review

This Article does not attempt to identify socially harmful tying arrangements." Rather, it draws upon the vast literature and case law of tying arrangements to suggest possible solutions to a perplexing problem in the law of antitrust class actions: under what circumstances do common questions predominate over individual questions in tying arrangement cases and thereby justify class action treatment? Courts today agree generally that although the amount of damages may vary considerably from one prospective class member to another, certification of a class action requires that the fact of injury be demonstrable by proof common to all members of a …

Pennsylvania Antitrust Law: What Is The Commonwealth's Policy On Competition, Stephanie G. Spaulding

Duquesne Law Review

Because there is no state antitrust statute in Pennsylvania, it is difficult to ascertain the Commonwealth's policy on restrictive trade practices. The author of this comment looks first to Pennsylvania common law, then to selected Pennsylvania statutes, to determine if there is a clearly enunciated policy on competition. She concludes that Pennsylvania cases and legislation provide little help to the lawyer or business person seeking to determine what is encouraged and what is proscribed.

Antitrust-Limitation Of Actions-Clayton Act Statute Of Limitations Tolled On Treble Damage Suits Against Non-Government Defendant Co-Conspirators-- Michigan V. Morton Salt Co., Michigan Law Review

Michigan Law Review

Plaintiffs, several states and smaller governmental units, filed related antitrust treble damage claims against ten rock salt companies that had allegedly conspired to fix prices. These private actions were instituted subsequent to civil and criminal antitrust proceedings brought by the federal government in which four of the ten companies had been named as defendants and five designated as co-conspirators but not prosecuted. Section 5(b) of the Clayton Act provides that when such actions are brought by the government, "the running of the statute of limitations in respect of every private right of action arising under said laws and based in …