Antitrust and Trade Regulation Commons^™

Oligopoly Coordination, Economic Analysis, And The Prophylactic Role Of Horizontal Merger Enforcement, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

For decades, the major United States airlines have raised passenger fares through coordinated fare-setting when their route networks overlap, according to the United States Department of Justice. Through its review of company documents and testimony, the Justice Department found that when major airlines have overlapping route networks, they respond to rivals’ price changes across multiple routes and thereby discourage competition from their rivals. A recent empirical study reached a similar conclusion: It found that fares have increased for this reason on more than 1000 routes nationwide and even that American and Delta, two airlines with substantial route overlaps, have come …

Protecting And Fostering Online Platform Competition: The Role Of Antitrust Law, Jonathan Baker

Contributions to Books

This essay provides a perspective on the role of antitrust law in protecting and fostering competition in the digital economy, with particular attention to online platforms. It highlights the danger of anti-competitive exclusionary conduct by dominant online platforms and describes ways that antitrust law can challenge and deter such conduct. The essay also identifies a number of difficulties that U.S. courts and enforcers face in challenging harmful exclusionary conduct by dominant platforms, and discusses some ways regulation can supplement antitrust law in fostering competition.

Joint Response To The House Judiciary Committee On The State Of Antitrust Law And Implications For Protecting Competition In Digital Markets, Jonathan Baker, Joseph Farrell, Andrew Gavil, Martin Gaynor, Michael Kades, Michael Katz, Gene Kimmelman, A. Melamed, Nancy Rose, Steven Salop, Fiona Scott Morton, Carl Shapiro

Legislative Testimony & Comments

Economic research establishes that market power is now a serious problem. Growing market power harms consumers and workers, slows innovation, and limits productivity growth. Market power is on the rise in a number of major industries, including, for example, airlines, brewing, and hospitals, where multiple horizontal mergers that were allowed to proceed without antitrust challenge have markedly increased concentration in important markets and facilitated the exercise of market power. Exclusionary conduct by dominant companies that stifles competition from actual and potential rivals — including nascent rivals with capabilities for challenging a dominant firm’s market power and firms with competing R&D …

The Decline And Fall Of Circumstantial Evidence In Antitrust Law, Christopher R. Leslie

American University Law Review

No abstract provided.

Labor, Trade, And Populism: How Ilo-Wto Collaboration Can Save The Global Economic Order, Sungjoon Cho, Cesar F. Rosado-Marzan

American University Law Review

Populists are trying to take down the global economic order and its institutions. While some of those forces might be fueled by racism, they also play to legitimate social concerns that include massive plant closings and deindustrialization, inadequate skills programs, and lack of decent jobs. Some of these problems also concern the Global South, as workers there face exploitation, unhealthy working conditions, and other social ills caused by global capitalism. In light of these problems, this Article argues that the International Labor Organization (ILO) should design new conventions on lead firm liability and mass layoffs. While other scholars and policymakers …

The Sherman Act Is A No-Fault Monopolization Statute: A Textualist Demonstration, Robert H. Lande, Richard O. Zerbe

American University Law Review

The drafters of the Sherman Act originally designed Section 2 to impose sanctions on all monopolies and attempts to monopolize, regardless whether the firm had engaged in anticompetitive conduct. This conclusion emerges from the first ever textualist analysis of the language in the statute, a form of interpretation originally performed only by Justice Scalia but now increasingly used by the Supreme Court, including in its recent Bostock decision.

Following Scalia’s methodology, this Article analyzes contemporaneous dictionaries, legal treatises, and cases and demonstrates that when the Sherman Act was passed, the word “monopolize” simply meant that someone had acquired a monopoly. …

The Not-So-Free Spirit Of Coachella: Coachella's Overbearing Radius Clause And The Sherman Antitrust Act, Holly Santapaga

American University Business Law Review

No abstract provided.

Five Principles For Vertical Merger Enforcement Policy, Jonathan Baker, Nancy Rose, Steven Salop, Fiona Scott Morton

Scholarly Articles in Law Reviews & Journals

There seems to be consensus that the Department of Justice’s 1984 Vertical Merger Guidelines do not reflect either modern theoretical and empirical economic analysis or current agency enforcement policy. Yet widely divergent views of preferred enforcement policies have been expressed among agency enforcers and commentators. Based on our review of the relevant economic literature and our experience analyzing vertical mergers, we recommend that the enforcement agencies adopt five principles: (i) The agencies should consider and investigate the full range of potential anticompetitive harms when evaluating vertical mergers; (ii) The agencies should decline to presume that vertical mergers benefit competition on …

Valueact Partners And Hart-Scot-Rodino: Ending The Competition Between Investor Interest And Antitrust Law, Amy D'Avella

American University Business Law Review

No abstract provided.

Accommodating Competition: Harmonizing National Economic Commitments, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

This article shows how the norm supporting governmental action to protect and foster competitive markets was harmonized with economic rights to contract and property during the 19th century, and with the development of the social safety net during the 20th century. It explains why the Constitution, as understood today, does not check the erosion of the entrenched but threatened national commitment to assuring competitive markets.

The New Social Contracts In International Supply Chains, David Snyder

Scholarly Articles in Law Reviews & Journals

This Article considers, from legal, practical, moral, and policy perspectives, Model Contract Clauses (MCCs) to protect the human rights of workers in international supply chains. The product of the ABA Business Law Section Working Group to Draft Human Rights Protections in International Supply Contracts, the MCCs are an effort to provide companies with carefully researched and well-drafted clauses to incorporate human rights policies into supply contracts (purchase orders, master vendor agreements, and the like). The Article discusses the impetus, goals, and strategies of the MCCs and explains the paradigm of the corporate, operational, and political landscape for which they are …

Five Principles For Vertical Merger Enforcement Policy, Jonathan Baker, Steven Salop, Fiona M. Scott Morton, Nancy Rose

Scholarly Articles in Law Reviews & Journals

There seems to be consensus that the Department of Justice’s 1984 Vertical Merger Guidelines do not reflect either modern theoretical and empirical economic analysis or current agency enforcement policy. Yet widely divergent views of preferred enforcement policies have been expressed among agency enforcers and commentators. Based on our review of the relevant economic literature and our experience analyzing vertical mergers, we recommend that the enforcement agencies adopt five principles: (i) The agencies should consider and investigate the full range of potential anticompetitive harms when evaluating vertical mergers; (ii) The agencies should decline to presume that vertical mergers benefit competition on …

Worldwide Frand Licensing Standard, Garry A. Gabison

American University Business Law Review

No abstract provided.

Welcome And Introductory Remarks, Jonathan Baker

Presentations

Video link: https://vimeo.com/352303633 Audio link: https://www.ftc.gov/news-events/audio-video/audio/economics-big-data-privacy-competition-introduction The Federal Trade Commission held the sixth session in its Hearings initiative, with two and a half days of sessions on November 6 – 8, 2018, at American University Washington College of Law, in Washington, D.C. The hearings examined the role that data play in competition and innovation and will also consider the antitrust analysis of mergers and firm conduct where data is a key asset or product. The Commission invited public comment on these issues, including the questions listed below. Comments were due January 7, 2019. If any entity has provided funding for …

Has The Us Economy Become More Concentrated And Less Competitive: A Review Of The Data, Jonathan Baker, Steven Berry, Fiona Scott Morton, Joshua Wright, Gregory Werden

Legislative Testimony & Comments

FTC Chairman Joe Simons presented opening remarks, followed by a day of discussion by a distinguished set of panelists who discussed the following topics (some of which will be discussed on the rescheduled date):

• the current landscape of competition and consumer protection law and policy;
• whether the U.S. economy has become more concentrated and less competitive;
• the regulation of consumer data;
• antitrust law and the consumer welfare standard; and
• the analysis of vertical mergers.

Extraterritoriality Of Antitrust Law: Applying The Supreme Court's Analysis In Rjr Nabisco To Foreign Component Cartels, Megan L. Masingill

American University Law Review

No abstract provided.

Sec Regulation Of Foreign-Domiciled Investment Advisers: A Study Of The Policy Vision Inspiring The Unibanco Letter, John H. Walsh

American University Business Law Review

No abstract provided.

Unlocking Antitrust Enforcement, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

No abstract provided.

Cartel Ringmaster Or Competition Creator? The Ebooks Case Against Apple (2013), Jonathan Baker

Contributions to Books

In 2013, a federal district court found that Apple had orchestrated a cartel agreement involving it and five major book publishers three years earlier, when Apple opened the iBookstore in conjunction with the introduction of its iPad tablet computer. According to the court, Apple organized collective action by the publishers to take away ebook pricing authority from Amazon, an aggressive discounter, and to raise the retail prices of ebooks.

This chapter describes the case from an economic point of view. It examines the competing views of the government and Apple over the competitive impact of various provisions in the iBookstore’s …

Antitrust Enforcement Against Platform Mfns, Jonathan Baker, Fiona M. Scott Morton

Scholarly Articles in Law Reviews & Journals

Antitrust enforcement against anticompetitive platform most favored nations (MFN) provisions (also termed pricing parity provisions) can help protect competition in online markets. An online platform imposes a platform MFN when it requires that providers using its platform not offer their products or services at a lower price on other platforms. These contractual provisions may be employed by online platforms offering hotel and transportation bookings, consumer goods, digital goods, and handmade craft products. They have been the subject of antitrust enforcement in Europe but have drawn only limited antitrust scrutiny in the U.S. Our paper explains why MFNs employed by online …

Market Power In The U.S. Economy Today, Jonathan Baker

Presentations

Market concentration measures the extent to which market shares are concentrated between a small number of firms. It is often taken as a proxy for the intensity of competition. Indeed, in recent years changes in concentration have increasingly been used to argue that the intensity of competition is falling, that the growth of large firms with high market shares is driving up profits, damaging innovation and productivity, and increasing inequality. Some have argued that the competition rules need to be rewritten and a crackdown by overly antitrust agencies is required. The simplicity of this framing has found supporters across the …

Citizen Petitions: Long, Late-Filed, And At-Last Denied, Michael A. Carrier, Carl Minniti

American University Law Review

No abstract provided.

The Ultimate Fighting Championship And Zuffa: From ‘Human Cock-Fighting' To Market Power, Carl J. Gaul Iv

American University Business Law Review

No abstract provided.

Insider Trading Flaw: Toward A Fraud-On-The-Market Theory And Beyond, Kenneth R. Davis

American University Law Review

No abstract provided.

Big Pharma Monopoly: Why Consumers Keep Landing On "Park Place" And How The Game Is Rigged, Mark S. Levy

American University Law Review

No abstract provided.

Patents V. Antitrust: Preempting Conflict, Matthew G. Sipe

American University Law Review

No abstract provided.

$=Euro=Bitcoin, Hilary Allen

Scholarly Articles in Law Reviews & Journals

Bitcoin (and other virtual currencies) have the potential to revolutionize the way that payments are processed, but only if they become ubiquitous. This Article argues that if virtual currencies are used at that scale, it would pose threats to the stability of the financial system-threats that have been largely unexplored to date. Such threats will arise because the ability of a virtual currency to function as money is very fragile-Bitcoin can remain money only for so long as people have confidence that bitcoins will be readily accepted by others as a means of payment. Unlike the U.S. dollar, which is …

Overlapping Financial Investor Ownership, Market Power, And Antitrust Enforcement: My Qualified Agreement With Professor Elhauge, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

As is well known among financial economists but not previously recognized within the antitrust community, large and diversified institutional investors such as BlackRock, Fidelity, State Street, and Vanguard collectively own roughly two-thirds of the shares of publicly traded U.S. firms overall, up from about one-third in 1980. Recent economic research involving airlines and banking raises the possibility that overlapping ownership of horizontal rivals by diversified financial institutions facilitates anticompetitive conduct throughout the economy, and that the problem has been growing for decades, unnoticed until now. This response to an article by Professor Einer Elhauge, explains why it may be more …

Evaluating Appropriability Defenses For The Exclusionary Conduct Of Dominant Firms In Innovative Industries, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

In response to antitrust cases challenging the exclusionary conduct of dominant firms, some dominant firms offer an “appropriability defense.” This defense is the claim that prohibiting the challenged conduct would lessen the dominant firm’s return to investment in research and development (R&D), undermine that firm’s incentive to innovate, and harm the prospects for industry innovation. An appropriability defense should be questioned, and often rejected, if the dominant firm would be expected to increase its own R&D effort in response to increased R&D by its rivals after liability on a dominant firm is imposed. An analytical framework for determining whether a …

Exclusionary Conduct Of Dominant Firms, R&D Competition, And Innovation, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

This paper evaluates the innovation consequences of antitrust enforcement against the exclusionary conduct of dominant firms through a Nash equilibrium model of research and development (R&D) competition to create new products. In the two-firm model, whether one firm regards the other firm’s R&D investment as a strategic complement or strategic substitute turns on an increasing differences condition: whether the first firm’s incremental benefit of increased R&D investment is greater if its rival’s R&D effort succeeds or if its rival’s R&D effort fails. Antitrust prohibitions on pre-innovation exclusion and post-innovation exclusion are found to be effective in different strategic settings: preventing …