Law Commons^™

Defining Relevant Markets In Digital Ecosystems, Daniel A. Crane

Articles

Traditional market definition focuses on the substitutability of two products or geographies. In digital ecosystems, competition often occurs in important ways that elide definition in conventional substitutability terms. This Article considers three kinds of economic rivalry that do not fit the conventional market definition mold: (1) Single-side competition: In two sided markets, firms may compete on just one side of the market. For example, Google and Facebook compete for the same advertisers, but their users on the other side of the market do not necessarily think of the offerings (social media and universal search) as substitutes; (2) Ecosystem competition: Technology …

Rebuilding Platform Antitrust: Moving On From Ohio V. American Express, Steven C. Salop, Daniel Francis, Lauren Sillman, Michaela Spero

Georgetown Law Faculty Publications and Other Works

Now that the immediate fallout from the Supreme Court’s blockbuster Amex decision has cooled, this Article aims to give a first draft of its place in antitrust history and to offer a roadmap for the next stage of the evolution of platform antitrust analysis. We focus on several issues that have not been fully analyzed in the literature. First, we argue that, rather than mangling the law of market definition, the Court should have explicitly permitted multi-market balancing of effects across the separate markets in which the platform was active. Second, we propose standards to implement such balancing in cases …

Market Power And Antitrust Enforcement, John B. Kirkwood

Faculty Articles

Antitrust is back on the national agenda. The Democratic Party, leading Senators, progressive organizations, and many scholars are calling for stronger antitrust enforcement. One important step, overlooked in the discussion to date, is to reform how market power — an essential element in most antitrust violations — is determined. At present the very definition of market power is unsettled. While there is widespread agreement that market power is the ability to raise price profitably above the competitive level, there is no consensus on how to determine the competitive level. Moreover, courts virtually never measure market power (or its larger variant, …

Understanding Online Markets And Antitrust Analysis, D. Daniel Sokol, Jingyuan Ma

UF Law Faculty Publications

Antitrust analysis of online markets is a hot topic around the world. In a number of jurisdictions, online markets already have been subject to antitrust review in merger or conduct cases. In other jurisdictions, these issues are in a nascent stage of policy. A number of lessons can be learned from the cases to date involving online markets with regard to optimal antitrust policy. What these cases tend to share are some basic features as to how online markets work. Some jurisdictions understand the particular dynamics of multi-sided online markets. Other competition authorities sometimes may misidentify these markets. This essay …

Antitrust And Information Technologies, Herbert J. Hovenkamp

All Faculty Scholarship

Technological change strongly affects the use of information to facilitate anticompetitive practices. The effects result mainly from digitization and the many products and processes that it enables. These technologies of information also account for a significant portion of the difficulties that antitrust law encounters when its addresses intellectual property rights. In addition, changes in the technologies of information affect the structures of certain products, in the process either increasing or decreasing the potential for competitive harm.

For example, digital technology affects the way firms exercise market power, but it also imposes serious measurement difficulties. The digital revolution has occurred in …

Re-Imagining Antitrust: The Revisionist Work Of Richard S. Markovits, Herbert J. Hovenkamp

All Faculty Scholarship

This review discusses Richard Markovits’ two volume book "Economics and the Interpretation" and "Application of U.S. and E.U. Antitrust Law" (2014), focusing mainly on Markovits’ approaches to antitrust tests of illegality, pricing offenses, market definition and the assessment of market power, and his important work anticipating unilateral effects theory in merger cases. Markovits argues forcefully that the Sherman and Clayton Acts were intended to employ different tests of illegality. As a result, even when they cover the same practices, such as mergers, exclusive dealing, or tying, they address them under different tests. He then shows how he would analyze various …

Recent Journalism Awards Won By "Old," "New," And "Hybrid" Media, Robert H. Lande, Thomas J. Horton, Virginia Callahan

All Faculty Scholarship

This compares the quality of the "old" media to that of the "new" media by determining how often each type of media source wins major journalism awards. It divides media sources into three categories: old, new and hybrid. New media is limited to publications that were started purely as online news publications. Old media is classified in the traditional sense to include such newspapers as the New York Times. Hybrid media combines elements of both new and old media. Our research compares the number of Pulitzer Prizes and other major journalism awards won by these three types of media sources …

Ftc V. Lundbeck: Is Anything In Antitrust Obvious, Like, Ever?, Chris Sagers, Richard M. Brunell

Law Faculty Articles and Essays

In FTC v. Lundbeck, the Eighth Circuit affirmed a bench verdict finding a merger to monopoly, followed by a 1400% price increase, not only legal, but effectively not even subject to antitrust. The result followed from the district court's view that peculiarities in the market for hospital-administered drugs rendered it essentially immune from price competition. That being the case, the court found that even products very plainly substitutable on any traditional "functional interchangeability" analysis are not in the same "relevant market" for purposes of rules governing horizontal mergers. We think the court's analysis was incorrect for a number of …

Harm To Competition Under The 2010 Horizontal Merger Guidelines, Herbert J. Hovenkamp

All Faculty Scholarship

In August, 2010, the Antitrust Division and the Federal Trade Commission issued new Guidelines for assessing the competitive effects of horizontal mergers under the antitrust laws. These Guidelines were long awaited not merely because of the lengthy interval between them and previous Guidelines but also because enforcement policy had drifted far from the standards articulated in the previous Guidelines. The 2010 Guidelines are distinctive mainly for two things. One is briefer and less detailed treatment of market delineation. The other is an expanded set of theories of harm that justify preventing mergers or reversing mergers that have already occurred.

The …

Should The Internet Exempt The Media Sector From The Antitrust Laws?, Thomas J. Horton, Robert H. Lande

All Faculty Scholarship

This article examines whether the "old media" and the "new media", including the Internet, should be considered to be within the same relevant market for antitrust purposes. To do this the article first demonstrates that proper antitrust consideration of the role of non-price competition necessitates that “news” and “journalism” be analyzed in two distinct ways. First, every part of the operations of a newspaper (or other type of media source), including its investigative reporting and local coverage, should be assessed separately. We present empirical evidence collected for this study which demonstrates that the old media continues to win the vast …

A Competition Act By India, For India: The First Three Years Of Enforcement Under The New Competition Act, Dorothy S. Lund

Faculty Scholarship

In 2002, India unveiled its new Competition Act. The Act substantially improves upon the previous competition regime, which regulated and condemned dominance even absent culpable conduct. Despite improvements, provisions of the Act have proven difficult for the fledgling Competition Commission (“the Commission”) to implement. For one, the Act overwhelmingly prefers rule of reason analysis to per se illegality for horizontal and vertical agreements. While this approach gives the Commission the flexibility to conduct a nuanced inquiry, the economic analysis required is challenging. So far, the Commission has struggled when applying basic antitrust economics in the hundred or so orders that …

Brown Shoe Versus The Horizontal Merger Guidelines, Keith N. Hylton

Faculty Scholarship

The new Horizontal Merger Guidelines, if treated by courts as a source of law, would reduce the discretion traditionally exercised by courts in defining relevant markets and market power in merger cases. This is an undesirable shift in the balance of power because courts have used the market power inquiry stage of merger analysis as a general checkpoint or weigh station for evaluating factors relevant to the welfare effects of a merger.

Antitrust Language Barriers: First Amendment Constraints On Defining An Antitrust Market By A Broadcast's Language, And Its Implications For Audiences, Competition, And Democracy, Catherine J. K. Sandoval

Faculty Publications

This Article contends that the decision to define an antitrust market by the broadcast's language raises concerns about its constitutionality and its effect on competition and democracy. If inaccurate, the market definition may not only distort competition, it may limit the broadcaster's freedom of speech and the public's ability to hear that programming. The First Amendment protects speakers and those who wish to hear that speaker's message.

Using First Amendment jurisprudence, Section II of this Article analyzes the standard of review for evaluating a market definition based on a broadcast's language.

This Article uses social science research on Spanish- and …

Market Power Without A Large Market Share: The Role Of Imperfect Information And Other “Consumer Protection” Market Failures, Robert H. Lande

All Faculty Scholarship

There are two very different sources of market power in antitrust cases. The first is traditional market share-based market power. Market power in antitrust cases also can come from deception, significantly imperfect or asymmetric information, or other types of market failures that usually are associated with consumer protection violations.

When these “consumer protection” market failures are present in antitrust cases, market power can arise even if no firm has a market share large enough for a finding of traditional market share based market power. However, instead of traditional end-use consumers being harmed, the direct victims are businesses.

The “consumer protection” …

Market Definition: An Analytical Overview, Jonathan Baker

Articles in Law Reviews & Other Academic Journals

This essay surveys important issues in antitrust market definition. It identifies settings in which market definition is useful, and evaluates methods of defining markets. It considers whether markets should be defined with respect to demand substitution only or whether supply substitution also should count. It addresses practical issues in defining markets, including the probative value of various types of evidence, how much buyer substitution is too much, application of the market definition algorithm of the Horizontal Merger Guidelines, the Cellophane fallacy, and the advantages and disadvantages of defining submarkets. It also evaluates several controversial approaches to market definition, including price …

Economic Evidence In Antitrust: Defining Markets And Measuring Market Power In Paolo Buccirossi, Jonathan Baker, Timothy Bresnahan

Articles in Law Reviews & Other Academic Journals

This paper addresses an important aspect of the interdisciplinary collaboration between law and economics: the use antitrust courts can and should make of empirical industrial organization economics, in light of the expansion of empirical knowledge generated during the last few decades. First we show how courts can apply what economists have learned about identification of alternative theories of industry structure and firm strategy to the problems of defining markets and determining whether market power has been exercised. We emphasize that the same analytic issues arise regardless of whether the evidence on these concepts is quantitative or qualitative. Second we show …

Economic Authority And The Limits Of Expertise In Antitrust Cases, John E. Lopatka, William H. Page

UF Law Faculty Publications

In antitrust litigation, the factual complexity and economic nature of the issues involved require the presentation of economic expert testimony in all but a few cases. This dependence on economics has increased in recent years because of the courts' narrowing of per se rules of illegality and the courts' expansion of certain areas of factual inquiry. At the same time, however, courts have limited the scope of allowable expert testimony through the methodological strictures of Daubert and its progeny and through heightened sufficiency requirements. In this Article, Professors Page and Lopatka make four important points about these judicially imposed constraints …

Night Landings On An Aircraft Carrier: Hospital Mergers And Antitrust Law, Thomas L. Greaney

All Faculty Scholarship

Abstract: Analysis of the competitive effects of hospital mergers requires antitrust tribunals to make exceedingly fine-tuned appraisals of complex economic relationships. The law requires fact finding in a number of complex areas, e.g., defining product and geographic markets, predicting the possibility of that firms will engage in coordinated behavior; and assessing efficiencies flowing from the merger. Further complicating the process is the fact that these decisions require judgments regarding what the future may hold in an industry undergoing revolutionary change. Like pilots landing at night aboard an aircraft carrier, courts are aiming for a target that is small, shifting and …

Geographic Market Definition In An International Context, George A. Hay, John C. Hilke, Philip B. Nelson

Cornell Law Faculty Publications

Market definition is generally regarded as a key step in antitrust analysis. Market definition has two components. Product market definition seeks to include all products that are meaningful substitutes. Geographic market definition seeks to incorporate all relevant sources of the product in question. This paper is concerned with geographic market definition and, in particular, how geographic markets are defined in situations where competition may, at least to some extent, transcend national boundaries.

The subject of the paper may be of some current interest for two reasons. First, the perception is widespread that, over the past twenty or so years, competition …