Law Commons^™

Topps Gets Exclusive License, Leaving Upper Deck On The Bench: An Analysis Of Major League Baseball's Antitrust Exemption In The Modern Era, Sarah A. Padove

Marquette Sports Law Review

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Markets In Ip And Antitrust, Herbert J. Hovenkamp

All Faculty Scholarship

The purpose of market definition in antitrust law is to identify a grouping of sales such that a single firm who controlled them could maintain prices for a significant time at above the competitive level. The conceptions and procedures that go into “market definition” in antitrust can be quite different from those that go into market definition in IP law. When the issue of market definition appears in IP cases, it is mainly as a query about the range over which rivalry occurs. This rivalry may or may not have much to do with a firm’s ability to charge a …

Antitrust's "Jurisdictional" Reach Abroad, Herbert J. Hovenkamp

All Faculty Scholarship

In its Arbaugh decision the Supreme Court insisted that a federal statute’s limitation on reach be regarded as “jurisdictional” only if the legislature was clear that this is what it had in mind. The Foreign Trade Antitrust Improvement Act (FTAIA) presents a puzzle in this regard, because Congress seems to have been quite clear about what it had in mind; it simply failed to use the correct set of buzzwords in the statute itself, and well before Arbaugh assessed this requirement.

Even if the FTAIA is to be regarded as non-jurisdictional, the constitutional extraterritorial reach of the Sherman Act is …

Mergers, Market Dominance And The Lundbeck Case, Herbert J. Hovenkamp

All Faculty Scholarship

In Lundbeck the Eighth Circuit affirmed a district court’s judgment that a merger involving the only two drugs approved for treating a serious heart condition in infants was lawful. Although the drugs treated the same condition they were not bioequivalents. The Eighth Circuit approved the district court’s conclusion that they had not been shown to be in the same relevant market.

Most mergers that are subject to challenge under the antitrust laws occur in markets that exhibit some degree of product differentiation. The Lundbeck case illustrates some of the problems that can arise when courts apply ideas derived from models …

Arbitration And Antitrust: Navigating The Contours Of Mandatory Law, Charles H. Brower Ii

Law Faculty Research Publications

No abstract provided.

Antitrust Review Of The At&T/Tmobile Transaction, Allen P. Grunes, Maurice E. Stucke

Federal Communications Law Journal

In August 2011, the United States brought a landmark antitrust lawsuit to prevent the merger of two of the nation's four largest mobile wireless telecommunications services providers, AT&T Inc. and T-Mobile USA, Inc. But why are so many elected officials asking the Obama administration to intercede in the Department of Justice's lawsuit to force a settlement? Why are they approving a merger that would likely lead to higher prices, fewer jobs, less innovation, and higher taxes for their constituents? Does it have anything to do with the money they are receiving from AT&T and T-Mobile? This Article examines the recent …

Plus Factors And Agreement In Antitrust Law, William E. Kovacic, Robert C. Marshall, Leslie M. Marx, Halbert L. White

Michigan Law Review

Plus factors are economic actions and outcomes, above and beyond parallel conduct by oligopolistic firms, that are largely inconsistent with unilateral conduct but largely consistent with explicitly coordinated action. Possible plus factors are typically enumerated without any attempt to distinguish them in terms of a meaningful economic categorization or in terms of their probative strength for inferring collusion. In this Article, we provide a taxonomy for plus factors as well as a methodology for ranking plus factors in terms of their strength for inferring explicit collusion, the strongest of which are referred to as "super plus factors."

Rethinking Merger Efficiencies, Daniel A. Crane

Articles

The two leading merger systems-those of the United States and the European Union-treat the potential benefits and risks of mergers asymmetrically. Both systems require considerably greater proof of efficiencies than they do of potential harms if the efficiencies are to offset concerns over the accumulation or exercise of market power The implicit asymmetry principle has important systemic effects for merger control. It not only stands in the way of some socially desirable mergers but also may indirectly facilitate the clearance of some socially undesirable mergers. Neither system explicitly justifies this asymmetry, and none of the plausible justifications are normatively supportable. …

Antitrust Review Of The At&T/T-Mobile Transaction, Maurice Stucke, Allen Grunes

Scholarly Works

In this Essay, we review AT&T Inc.’s proposed $39 billion acquisition of T-Mobile USA, Inc., under federal merger law, under the U.S. Department of Justice and Federal Trade Commission’s 2010 Horizontal Merger Guidelines, and with a focus on possible remedies. We find, under a rule of law approach, that the proposed acquisition is presumptively anticompetitive, and the merging parties in their public disclosures have failed to overcome this presumption. Next we find that under the Merger Guidelines, there is reason to believe that the transaction may result in higher prices to consumers under several different plausible theories. Finally, we turn …

Unfit For Prime Time: Why Cable Television Regulations Cannot Perform Trinko's 'Antitrust Function', Keith Klovers

Michigan Law Review

Until recently, regulation and antitrust law operated in tandem to safeguard competition in regulated industries. In three recent decisions-Trinko, Credit Suisse, and Linkline-the Supreme Court limited the operation of the antitrust laws when regulation "performs the antitrust function." This Note argues that cable programming regulations-which are in some respects factually similar to the telecommunications regulations at issue in Trinko and Linkline-do not perform the antitrust function because they cannot deter anticompetitive conduct. As a result, Trinko and its siblings should not foreclose antitrust claims for damages that arise out of certain cable programming disputes.

Search Neutrality As An Antitrust Principle, Daniel A. Crane

Law & Economics Working Papers

Google's perceived dominance in Internet search, and the perception that Google exploits this dominance to favor its own websites and service, has led to call for a mandatory legal requirement of "search neutrality." This essay argues that a general principle of search neutrality ignores the realities of Internet search and would stymie search innovation.

Shutting The Black Door: Using American Needle To Cure The Problem Of Improper Product Definition, Daniel A. Schwartz

Michigan Law Review

Section 1 of the Sherman Act is designed to protect competition by making illegal any agreement that has the effect of limiting consumer choice. To make this determination, courts first define the product at issue and then consider the challenged restraint's impact on the market in which that product competes. When considering § 1 allegations against sports leagues, courts have tended to define products according to the structure of the leagues. The result of this tendency is that harm to competition between the leagues' teams is not properly accounted for in the courts' analyses. This, in turn, grants leagues a …

Consumidores De Libre Competencia, Críspulo Marmolejo

Críspulo Marmolejo

No abstract provided.

Crony Capitalism And Antitrust, Maurice Stucke

Scholarly Works

In August 2011, the United States brought a landmark antitrust lawsuit to prevent the merger of two of the nation’s four largest mobile wireless telecommunications services providers, AT&T Inc. and T‑Mobile USA, Inc. But why are so many elected officials asking the Obama administration to intercede in the Department of Justice’s lawsuit to force a settlement? Why are they approving a merger that would likely lead to higher prices, fewer jobs, less innovation, and higher taxes for their constituents? Does it have anything to do with the money they are receiving from AT&T and T-Mobile?

This Essay examines the recent …

Behavioral Antitrust, Maurice Stucke, Amanda P. Reeves

Scholarly Works

Competition policy is entering a new age. Interest in competition laws has increased world-wide, and the United States no longer holds a monopoly on antitrust policy. In the aftermath of the financial crisis, the question for competition authorities is whether and to what extent does bounded rationality, self-interest and willpower matter. This article explores how the behavioral economics literature will advance competition policy. With increasing interest in the United States and abroad in the implications of behavioral economics for competition policy, this Article first provides an overview of behavioral economics. It next discusses how the assumption of rational, self-interested profit …

Cross Check, Críspulo Marmolejo

Críspulo Marmolejo

Op ed about LAN /TAM merger.

Reconsidering Competition, Maurice E. Stucke

College of Law Faculty Scholarship

In light of the financial crisis and the empirical findings from behavioral economics, policymakers should reconsider the fundamental question: what is competition? Only in understanding competition can one understand what competition can or cannot achieve under certain circumstances.

This Article reexamines one premise of competition, namely the extent to which firms, consumers, and the government are rational and act with perfect willpower. In varying this assumption, this Article maps four scenarios of competition.

Competition authorities should revisit their conception of competition, including the underlying assumptions, to better understand the competitive dynamics in different industries. In engaging in this review, competition …

Reconsidering Antitrust's Goals, Maurice E. Stucke

College of Law Faculty Scholarship

Antitrust policy today is an anomaly. On the one hand, antitrust is thriving internationally. On the other hand, antitrust’s influence has diminished domestically. Over the past thirty years, there have been fewer antitrust investigations and private actions. Today the Supreme Court complains about antitrust suits, and places greater faith in the antitrust function being subsumed in a regulatory framework. So what happened to the antitrust movement in the United States?

Two import factors contributed to antitrust policy’s domestic decline. The first is salience, especially the salience of the U.S. antitrust goals. In the past thirty years, enforcers and courts abandoned …

Who Captures The Rents From Unionization? Insights From Multiemployer Pension Plans, D. Bruce Johnsen

D. Bruce Johnsen

From 1945 to 2010 the proportion of private-sector workers covered by collective bargaining agreements declined from 36 percent to a once unthinkable 6.9 percent. The decline raises the question of how well labor unions serve their rank and file. This study addresses the economics of labor unions in an attempt to determine who captures the rents from unionization. Among other things, it examines the generosity of multiemployer defined benefit pension plans for rank-and-file union members and the officer and staff plans for the union that administers them. For given wage, it finds that union officers and staff enjoy pensions and …

Network Neutrality: The Global Dimension, Pierre Larouche

Pierre Larouche

This paper first sets out a framework for understanding network neutrality, by organizing the various issues raised in the course of the network neutrality debate. Secondly, recent US legal and regulatory initiatives are briefly reviewed. Thirdly, the situation under EU law is surveyed. Finally, the conclusion compares the two regulatory responses and considers how the global network neutrality debate could unfold. In the short term, ISPs must take measures to deal with imbalances and congestion on their networks. Beyond that, in the longer term, ISPs are looking to introduce differentiated Quality of Service (QoS) offerings, so as to turn their …

The Creation And Destruction Of Price Cartels: An Evolutionary Theory, William Bradford

william bradford

This Article sketches the goals of antitrust law, describes the causes and effects of anticompetitive pricing generally and supracompetitive pricing specifically, explains the inability of antitrust law to suppress some instances of supracompetitive pricing, establishes the importance of trust between firms as a necessary condition for supracompetitive pricing, and illustrates how the strategic exchange of information is crucial to the creation and destruction of trust and thus to the evolution and devolution of price cartels. Part II develops a positive theory that explains and predicts the evolution and devolution of price cartels as a function of the ability of rival …

The Giants Among Us, Robin Feldman, Thomas Ewing

Robin C Feldman

The patent world is undergoing a change of seismic proportions. A small number of entities have quietly amassed vast treasuries of patents. These are not the typical patent trolls that we have come to expect. Rather, these entities have participants such Apple, Google, Microsoft, Sony, the World Bank, and non-profit institutions. The largest and most secretive of these has accumulated a staggering 30,000-60,000 patents.

Investing thousands of hours of research and using publicly available sources, we pieced together a detailed picture of these giants and their activities. We consider the potential positive effects, including facilitating rewards for forgotten inventors, creating …

Tying Arrangements And Lawful Alternatives: Transaction Costs Considerations, Herbert J. Hovenkamp

All Faculty Scholarship

Tying arrangements often increase welfare by promoting product quality and protecting the supplier's goodwill in the tying product. When the tying product works effectively only with ancillary materials or accessories or services of a particular kind or quality, its supplier can assure the requisite quality of the ancillary product only by supplying that product itself. The cost savings defense and the defenses of quality control or good will are the most widely recognized and accepted tying defenses.

One characteristic of manufactured products is differentiation among the offerings of various brands. This in turn produces a need for more specialized provision …

Quasi Exclusive Dealing, Herbert J. Hovenkamp

All Faculty Scholarship

A firm's discounting policies over a single product raise concerns analogous to exclusive dealing in two situations. First, the firm may offer conditional discounts structured in such a way as to induce customers to take most of their requirements for a given product from the defendant. In addition, a firm may employ “slotting” fees or similar allowances paid by manufacturers to retailers, with the possible result that rivals have difficulty obtaining access to shelf space. Neither practice is literally "exclusive dealing," because neither involves a condition that the purchaser not deal in the goods of a rival, although they may …

Anticompetitive Product Design In The New Economy, John M. Newman

John M. Newman

Claims alleging anticompetitive product design and redesign lie at the very core of one of antitrust law’s most challenging dilemmas: the intersection between innovation and regulation, invention and intervention. For over three decades, courts and scholars have struggled to determine the proper analytical framework within which to address such cases. Meanwhile, the very industries in which challenged conduct occurs have been undergoing fundamental changes.

As demonstrated by the ongoing and recent antitrust litigation involving high-technology firms Apple, Intel, and Microsoft, distinctive features characterize most product markets in what has been called the “New Economy”—and increasingly has become simply “the economy.” …

The Need For Transparency In Health Care Markets: Clearing The Fog To Make The Market Work, David Balto

David Balto

This paper will examine what all health care market participants stand to gain from increased transparency as well as the importance of standardization, data reporting to regulators, and disclosure to consumers in achieving the potential benefits of cost control, quality effects and access impact. With respect to the recent health care reform bill, I will outline the transparency provisions achieved under PPACA and will evaluate them in terms of the necessary preconditions of transparency. Using the hospital systems in Wisconsin and Colorado, detailed hospital reports published by New Hampshire and Maine, and the savings resulting from transparent contracts with pharmacy …

Rationales For And Against Fcc Involvement In Resolving Internet Service Provider Interconnection Disputes, Rob M. Frieden

Rob Frieden

Internet Service Providers (“ISPs”) provide end users with access to and from the Internet cloud. In addition to providing the first and last mile carriage of traffic, ISPs secure upstream access to sources of content via other ISPs typically on a paid (transit), or barter (peering) basis. Because a single ISP operates in two separate segments of traffic routing, both the terms and conditions of network interconnection and the degree of marketplace competition can vary greatly. In this double-sided market, ISPs typically have many transit and peering opportunities upstream to content providers, but downstream end users may have a limited …

Rationales For And Against Fcc Involvement In Resolving Internet Service Provider Interconnection Disputes, Rob M. Frieden

Rob Frieden

Internet Service Providers (“ISPs”) provide end users with access to and from the Internet cloud. In addition to providing the first and last mile carriage of traffic, ISPs secure upstream access to sources of content via other ISPs typically on a paid (transit), or barter (peering) basis. Because a single ISP operates in two separate segments of traffic routing, both the terms and conditions of network interconnection and the degree of marketplace competition can vary greatly. In this double-sided market, ISPs typically have many transit and peering opportunities upstream to content providers, but downstream end users may have a limited …

Tying Noncompetitive Goods, Herbert J. Hovenkamp

All Faculty Scholarship

Many of the classic tying cases involved tied products that were common staples such as button fasteners, canned ink, dry ice, or salt. These products were sold in competitive markets, presumably at prices very close to cost. For most of them the most likely explanations for the tie were quality control or price discrimination, both with competitively benign results in the great majority of situations. When the tied good is sold in a noncompetitive market, however, an additional consumer welfare enhancing result is likely to obtain – namely, the elimination of double marginalization, which occurs when separate sellers of complementary …

A Preface To Neoclassical Legal Thought, Herbert J. Hovenkamp

All Faculty Scholarship

Most legal historians speak of the period following classical legal thought as “progressive legal thought.” That term creates an unwarranted bias in characterization, however, creating the impression that conservatives clung to an obsolete “classical” ideology, when in fact they were in many ways just as revisionist as the progressives legal thinkers whom they critiqued. The Progressives and New Deal thinkers whom we identify with progressive legal thought were nearly all neoclassical, or marginalist, in their economics, but it is hardly true that all marginalists were progressives. For example, the lawyers and policy makers in the corporate finance battles of the …