Law Commons^™

Tax Court Find Stars Transaction Lacks Economic Substance, Robert D. Probasco, Lee S. Meyercord

Robert Probasco

In Bank of New York Mellon Corp. v. Commissioner, the Tax Court found that a structured trust advantaged repackaged securities (“STARS”) transaction entered into by BNY Mellon lacked economic substance, and disallowed foreign tax credits of $199 million as well as transactional expenses of $8 million. BNY Mellon is the first test case to emerge from the IRS’s attempts to disallow tax benefits to several financial institutions that participated in the STARS transaction.

The STARS transaction is one of a number of different transactions that the IRS refers to as “foreign tax credit generators.” These transactions generally rely on inconsistent …

Bookit Ip Series - Federal Trade Commission Privacy Law And Policy, Chris Hoofnagle

Chris Jay Hoofnagle

The Federal Trade Commission (FTC) was established in 1914 to prevent unfair competition in commerce. Since that time, the FTC has been given greater authority to police anticompetitive practices. It has evolved into the most important regulator of information policy and now regulates our technological future. Unfortunately, the agency is often poorly understood. In his book Federal Trade Commission Privacy Law and Policy, Professor Hoofnagle will redress this confusion by explaining how the FTC arrived at its current position of power. He will offer practical tips for lawyers, legal academics, political scientists, historians, and those interested in obtaining a better …

The Actavis Inference: Theory And Practice, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

Aaron Edlin

In FTC v. Actavis, Inc., the Supreme Court considered "reverse payment" settlements of patent infringement litigation. In such a settlement, a patentee pays the alleged infringer to settle, and the alleged infringer agrees not to enter the market for a period of time. The Court held that a reverse payment settlement violates antitrust law if the patentee is paying to avoid competition. The core insight of Actavis is the Actavis Inference: a large and otherwise unexplained payment, combined with delayed entry, supports a reasonable inference of harm to consumers from lessened competition.This paper is an effort to assist courts and …

Activating Actavis, Aaron Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

Aaron Edlin

In Federal Trade Commission v. Actavis, Inc., the Supreme Court provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. The Court came down strongly in favor of an antitrust solution to the problem, concluding that “an antitrust action is likely to prove more feasible administratively than the Eleventh Circuit believed.” At the same time, Justice Breyer’s majority opinion acknowledged that the Court did not answer every relevant question. The opinion closed by “leav[ing] to the lower courts the structuring of the present rule-of-reason antitrust litigation.”This article is an effort to help courts and counsel …

Actavis And Error Costs: A Reply To Critics, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

Aaron Edlin

The Supreme Court’s opinion in Federal Trade Commission v. Actavis, Inc. provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. In our previous article, Activating Actavis, we identified and operationalized the essential features of the Court’s analysis. Our analysis has been challenged by four economists, who argue that our approach might condemn procompetitive settlements.As we explain in this reply, such settlements are feasible, however, only under special circumstances. Moreover, even where feasible, the parties would not actually choose such a settlement in equilibrium. These considerations, and others discussed in the reply, serve to confirm …

Purchase Of Consumer Paper And Subjection To Collateral Forces, Benjamin Geva

Benjamin Geva

The purchase of commercial paper issued in return for consumer goods [hereinafter referred to as consumer paper] is a common and wide-spread sales financing practice. Various judicial techniques and legislative schemes have been employed to disqualify purchasers of consumer paper from becoming holders in due course [hereinafter referred to as HDC], thus rendering these purchasers subject to defenses to the instrument based upon consumer dissatisfaction with the goods. Underlying the denial of HDC sttus to purchasers of consumer paper are the following premises: (1) the sale of consumer goods is not a commercial transaction and should not be governed by …

Do You Think Banks Are Debt Collectors? The Cfpb And The Ftc Do, Jolina Cuaresma, Katherine Lamberth, Brent Yarborough

Jolina C. Cuaresma

No abstract provided.

Josh Wright’S “Chicago School Papers”: An Overview, William H. Page

William H. Page

In what follows, I consider three of FTC Commissioner Josh Wright's “Chicago School Papers.” In these papers, Commissioner Wright considers the past, present, and future role of the Chicago School of antitrust analysis in the shaping of law and policy, offering along the way some interesting insights into what his priorities at the FTC are likely to be. The papers discussed have common themes: the mischaracterization of the “Chicago School,” the scientific advantage of dispensing altogether with “School” labels, and a focus on empirical findings in shaping antitrust analysis.

The Ftc's Procedural Advantage In Discovering Concerted Action, William H. Page

William H. Page

Scholars have long argued that Section 5 of the Federal Trade Commission Act can or should be interpreted to reach more conduct than Section 1 of Sherman Act - whether, in other words, there are gaps in the coverage of Section 1 that allow certain forms of anticompetitive conduct that Section 5 should condemn. Perhaps the most important issue in the interpretation of Section 1 concerns how courts should distinguish conscious parallelism from unlawful concerted action. In this paper, I argue that there is no substantive gap between the two antitrust statutes on this issue-both statutes prohibit (and permit) the …

Payment Methods For Consumer-To-Consumer Online Transactions, David E. Sorkin

David E. Sorkin

Participants in online auctions use a variety of payment mechanisms, but checks and money orders still represent the most commonly used means of payment. Credit cards afford greater protection to buyers, but until recently payment by credit card was not even an option for person-to-person transactions. However, several online payment services have been established that enable individuals to make credit card payments to one another, generally with the payment service acting as an intermediary. These services are growing rapidly, mainly because of the speed and convenience that they offer. Yet relatively little attention has been paid to the risks and …

Agency Boundaries And Network Neutrality, Tejas N. Narechania

Tejas N. Narechania

Oligopoly, Shared Monopoly, And Antitrust Law, George A. Hay

George A. Hay

No abstract provided.

The Ftc And Pricing: Of Predation And Signaling, George A. Hay

George A. Hay

This paper summarizes and comments on two recent FTC cases. The first case involved accusations of predatory pricing against Borden, the manufacturer of ReaLemon, the dominant brand of reconstituted lemon juice. The second involved price-signaling and other so-called facilitating practices by the four makers of lead-based antiknock compounds.

Antitrust Merger Efficiencies In The Shadow Of The Law, D. Daniel Sokol, James A. Fishkin

D. Daniel Sokol

This Essay provides an overview of U.S. antitrust merger practice in addressing efficiencies both in terms of actual practice before the agencies and in scholarly work as a response to Jamie Henikoff Moffitt's Vanderbilt Law Review article Merging in the Shadow of the Law: The Case for Consistent Judicial Efficiency Analysis. Moffitt’s analysis could have benefited from a more thorough discussion of the Department of Justice and Federal Trade Commission’s (collectively, the “agencies”) analysis of efficiencies during investigations and the broader process of negotiations involving mergers. For instance, the article does not discuss the empirical work addressing when the agencies …

The Fda And The Ftc Join Forces,, Robert Sanger

Robert M. Sanger

To those of us in the trenches dealing with civil and criminal enforcement of government regulation, it is not surprising that more than one federal agency will join in an investigation. Sometimes this takes the form of a “tag along” where, for instance, the Internal Revenue Service (IRS) may follow up on a Federal Bureau of Investigation (FBI) white collar fraud case to assert the claim that taxes were not paid on the ill-gotten proceeds of the transaction. There are other cases where two federal agencies both attempt to take the lead in an investigation and clash in a “turf” …

"Do-Not-Track" As Contract, Joshua A.T. Fairfield

Joshua A.T. Fairfield

Support for enforcement of a do-not-track option in browsers has been gathering steam. Such an option presents a simple method for consumers to protect their privacy. The problem is how to enforce this choice. The Federal Trade Commission (FTC) could enforce a do-not-track option in a consumer browser under its section 5 powers. The FTC, however, currently appears to lack the political will to do so. Moreover, the FTC cannot follow the model of its successful do-not-call list since the majority of Internet service providers (ISPs) assign Internet addresses dynamically — telephone numbers do not change, whereas Internet protocol (IP) …

Trusting (And Verifying) Online Intermediaries' Policing, Frank A. Pasquale

Frank A. Pasquale

All is not well in the land of online self-regulation. However competently internet intermediaries police their sites, nagging questions will remain about their fairness and objectivity in doing so. Is Comcast blocking BitTorrent to stop infringement, to manage traffic, or to decrease access to content that competes with its own for viewers? How much digital due process does Google need to give a site it accuses of harboring malware? If Facebook censors a video of war carnage, is that a token of respect for the wounded or one more reflexive effort of a major company to ingratiate itself with the …

In Personam And Beyond The Grasp: In Search Of Jurisdiction And Accountability For Foreign Defendants, Andrew Popper

Andrew Popper

The focus of this article is on the difficulty of securing in personam jurisdiction over foreign entities who steal information technology and intellectual property (IT and IP). The value of stolen IT and IP is somewhere in the range of a trillion dollars over the last decade. Given the current inability to prevent those losses or deter meaningfully those engaged in the misconduct, the article explores the core of the problem: the difficulty of satisfying the minimum contact/fairness requirements of Article III courts. The article addresses several alternative approaches that might allow for more efficient protection of IT and IP. …

Beneficiaries Of Misconduct: A Direct Approach To It Theft, Andrew Popper

Andrew Popper

Stolen information technology (IT) is a domestic and global problem. Theft of IT by upstream producers has a pernicious effect on the competitive market and violates fundamental policies designed to protect those who create and invent such assets. Companies profiting from stolen IT are not just free-riding on the successes of those who design and produce the products and ideas that are a driving force in the U.S. economy – they are destabilizing rational pricing and distorting lawful competition by virtue of outright theft. Current legal recourse is insufficient to address such misconduct; new approaches are needed at the state …

Beneficiaries Of Misconduct: A Direct Approach To It Theft, Andrew Popper

Andrew Popper

Stolen information technology (IT) is a domestic and global problem. Theft of IT by upstream producers has a pernicious effect on the competitive market and violates fundamental policies designed to protect those who create and invent such assets. Companies profiting from stolen IT are not just free-riding on the successes of those who design and produce the products and ideas that are a driving force in the U.S. economy – they are destabilizing rational pricing and distorting lawful competition by virtue of outright theft. Current legal recourse is insufficient to address such misconduct; new approaches are needed at the state …

Thought Experiment: Would Congressional Short Bill Titles Survive Ftc Scrutiny?, Brian Christopher Jones, Randal M. Shaheen

Brian Christopher Jones

Many of those close to the Congressional legislative process seem to view the short titles of bills as “branding” rather than official legal instruments. In fact, this may be one of the reasons that some short titles for bills and laws have become tendentious and overly aspirational. This is problematic for such titles, as they are formally recognized by their inscription into federal law, and thus transcend their “branding” purposes, thereby putting the legal status of short titles in an awkward juxtaposition. By stripping away all of the current legal barriers that would technically negate such a prospect, this Article …

Marketing Goods, Marketing Images: The Impact Of Advertising On Race, Deseriee A. Kennedy

Deseriee A. Kennedy

No abstract provided.

Proposed Horizontal Merger Guidelines: Economists’ Comment, Michael R. Baye, Aaron S. Edlin, Richard J. Gilbert, Jerry A. Hausman, Daniel L. Rubinfeld, Steven C. Salop, Richard L. Schmalensee, Joshua D. Wright

Richard Gilbert

No abstract provided.

Proposed Horizontal Merger Guidelines: Economists’ Comment, Michael R. Baye, Aaron S. Edlin, Richard J. Gilbert, Jerry A. Hausman, Daniel L. Rubinfeld, Steven C. Salop, Richard L. Schmalensee, Joshua D. Wright

Daniel L. Rubinfeld

No abstract provided.

Proposed Horizontal Merger Guidelines: Economists’ Comment, Michael R. Baye, Aaron S. Edlin, Richard J. Gilbert, Jerry A. Hausman, Daniel L. Rubinfeld, Steven C. Salop, Richard L. Schmalensee, Joshua D. Wright

Aaron Edlin

No abstract provided.

Regulating Online Buzz Marketing: Untangling A Web Of Deceit, Robert Sprague, Mary Ellen Wells

Robert Sprague

During the past fifteen years, the Internet has swelled into its own virtual world of commentary, opinion, criticism, news, music, videos, gaming, role playing, shopping, banking, finance, and digital commerce. Coupled with the growth of blogs and social networking sites, millions of Americans appear willing to share online their own thoughts and experiences regarding products, services and companies. In response to the public’s interest, companies have begun to rely more heavily in recent years on word of mouth marketing, often referred to as “buzz marketing,” a technique that attempts to generate conversations among and with current and potential customers. Marketers …

Multi-Level Marketing And Its Brethren: The Legal And Regulatory Environment In The Down Economy, Adam Epstein

Adam Epstein

This article explores the legal and regulatory environment of multi-level marketing companies also known as MLM. Legal research is lacking in this area of business law though the regulatory environment involves a combination of federal and state laws including administrative agencies such as the FTC and SEC. In the current down economy, criminal enterprises such as Ponzi schemes have been exposed. MLMs are often compared to Ponzi and pyramid schemes and do share similarities. The article offers that personal responsibility is vital when determining whether to join any MLM in light of the volume of resources available on the internet.

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

Aaron Edlin

No abstract provided.