Law Commons^™

Antitrust And Platform Monopoly, Herbert J. Hovenkamp

All Faculty Scholarship

Are large digital platforms that deal directly with consumers “winner take all,” or natural monopoly, firms? That question is surprisingly complex and does not produce the same answer for every platform. The closer one looks at digital platforms the less they seem to be winner-take-all. As a result, competition can be made to work in most of them. Further, antitrust enforcement, with its accommodation of firm variety, is generally superior to any form of statutory regulation that generalizes over large numbers.

Assuming that an antitrust violation is found, what should be the remedy? Breaking up large firms subject to extensive …

Antitrust Harm And Causation, Herbert J. Hovenkamp

All Faculty Scholarship

How should plaintiffs show harm from antitrust violations? The inquiry naturally breaks into two issues: first, what is the nature of the harm? and second, what does proof of causation require? The best criterion for assessing harm is likely or reasonably anticipated output effects. Antitrust’s goal should be output as high as is consistent with sustainable competition.

The standard for proof of causation then depends on two things: the identity of the enforcer and the remedy that the plaintiff is seeking. It does not necessarily depend on which antitrust statute the plaintiff is seeking to enforce. For public agencies, enforcement …

Competitive Harm From Vertical Mergers, Herbert J. Hovenkamp

All Faculty Scholarship

The antitrust enforcement Agencies' 2020 Vertical Merger Guidelines introduce a nontechnical application of bargaining theory into the assessment of competitive effects from vertical acquisitions. The economics of such bargaining is complex and can produce skepticism among judges, who might regard its mathematics as overly technical, its game theory as excessively theoretical or speculative, or its assumptions as unrealistic.

However, we have been there before. The introduction of concentration indexes, particularly the HHI, in the Merger Guidelines was initially met with skepticism but gradually they were accepted as judges became more comfortable with them. The same thing very largely happened again …

The Rule Of Reason, Herbert J. Hovenkamp

All Faculty Scholarship

Antitrust’s rule of reason was born out of a thirty-year (1897-1927) division among Supreme Court Justices about the proper way to assess multi-firm restraints on competition. By the late 1920s the basic contours of the rule for restraints among competitors was roughly established. Antitrust policy toward vertical restraints remained much more unstable, however, largely because their effects were so poorly understood.

This article provides a litigation field guide for antitrust claims under the rule of reason – or more precisely, for situations when application of the rule of reason is likely. At the time pleadings are drafted and even up …

Buying Monopoly: Antitrust Limits On Damages For Externally Acquired Patents, Erik N. Hovenkamp, Herbert J. Hovenkamp

All Faculty Scholarship

The “monopoly” authorized by the Patent Act refers to the exclusionary power of individual patents. That is not the same thing as the acquisition of individual patent rights into portfolios that dominate a market, something that the Patent Act never justifies and that the antitrust laws rightfully prohibit.

Most patent assignments are procompetitive and serve to promote the efficient commercialization of patented inventions. However, patent acquisitions may also be used to combine substitute patents from external patentees, giving the acquirer an unearned monopoly position in the relevant technology market. A producer requires only one of the substitutes, but by acquiring …

Harm To Competition Or Innovation, Herbert J. Hovenkamp

All Faculty Scholarship

This book of CASES AND MATERIALS ON INNOVATION AND COMPETITION POLICY is intended for educational use. The book is free for all to use subject to an open source license agreement. It differs from IP/antitrust casebooks in that it considers numerous sources of competition policy in addition to antitrust, including those that emanate from the intellectual property laws themselves, and also related issues such as the relationship between market structure and innovation, the competitive consequences of regulatory rules governing technology competition such as net neutrality and interconnection, misuse, the first sale doctrine, and the Digital Millennium Copyright Act (DMCA). Chapters …

A Primer On Antitrust Damages, Herbert J. Hovenkamp

All Faculty Scholarship

This paper considers the theory of antitrust damages and then discusses some simple models for proving them. Antitrust damages theory begins with the premise that many practices alleged to violate the antitrust laws cause no consumer harm. Others are inefficient and have few socially redeeming virtues. Still others may simultaneously increase both the efficiency of the participants and their market power. A perfectly designed antitrust policy would exonerate the first set of practices, condemn the second set, and condemn the third set only when the social cost of the restraint exceeds its social value or they produce net harm to …

Quantification Of Harm In Private Antitrust Actions In The United States, Herbert J. Hovenkamp

All Faculty Scholarship

This paper discusses the theory and experience of United States courts concerning the quantification of harm in antitrust cases. This treatment pertains to both the social cost of antitrust violations, and to the private damage mechanisms that United States antitrust law has developed. It is submitted for the Roundtable on the Quantification of Harm to Competition by National Courts and Competition Agencies, Organization for Economic Cooperation and Development (OECD), Feb., 2011.

In a typical year more than 90% of antitrust complaints filed in the United States are by private plaintiffs rather than the federal government. Further, when the individual states …