Antitrust and Trade Regulation Commons^™

A Socio-Economic Approach To Antitrust: Unpacking Competition, Consumer Surplus, And Allocative Efficiency, Jeffrey L. Harrison

UF Law Faculty Publications

This Article demonstrates the relationship between socio-economics and antitrust law. It uses socio-economics to both deconstruct the current economic foundation of antitrust policy and to suggest ways to improve that policy. There are four steps in this presentation. Part II examines the core elements of the economic approach to antitrust and its shortcomings, if any. For those even moderately versed in economics, it will note that the analysis begins at the most basic level. Obviously, antitrust is designed to make markets more competitive. But that goal is merely a means to the end of greater consumer surplus and allocative efficiency. …

Misuse Of Information Under The Computer Fraud And Abuse Act: On What Side Of The Circuit Split Will The Second And Third Circuits Wind Up?, Robert D. Sowell

Florida Law Review

The Computer Fraud and Abuse Act (CFAA) has reached a breaking point. The much-discussed issue is whether the CFAA provides a cause of action against persons who use electronic information in a way that violates a relevant computer-use policy. Four circuit courts of appeals have held that the CFAA provides a cause of action for misuses of information, while two have disagreed. In two undecided circuits, the district courts have favored the latter interpretation. As the Supreme Court recently refused to address the issue, these two undecided circuits will play a pivotal role in determining the direction of the CFAA.

Quality-Enhancing Merger Efficiencies, Roger D. Blair, D. Daniel Sokol

UF Law Faculty Publications

The appropriate role of merger efficiencies remains unresolved in US antitrust law and policy. The Patient Protection and Affordable Care Act (ACA) has led to a significant shift in health care delivery. The ACA promises that increased integration and a shift from quantity of performance through increased competition will create a system in which quality will go up and prices will go down. Increasingly, due to the economic trends that respond to the ACA, including considerable consolidation both horizontally and vertically, it is imperative that the antitrust agencies provide an economically sound and administrable legal approach to efficiency enhancing mergers. …

Licensing Health Care Professionals, State Action And Antitrust Policy, Roger D. Blair, Christine Piette Durrance

UF Law Faculty Publications

In this Essay, we raise some economic concerns about the wisdom of conferring antitrust immunity on professional licensing boards, which are often comprised of members of the profession and therefore apt to be motivated by self-interest rather than the public interest. In Part II, we examine the political economy of special interest legislation, which suggests that little public good results from replacing competitive market forces with self-regulation. In Part III, we employ a basic economic model to generate predictions of the economic effects of professional licensing. Part IV provides a survey of the empirical research in this area, which confirms …

Judicial Treatment Of The Antitrust Treatise, Hillary Greene, D. Daniel Sokol

UF Law Faculty Publications

This essay examines Herbert Hovenkamp's influence in antitrust law and policy in the courts. This essay focuses its attention primarily with the Treatise and primarily in the area of merger law – procedural with issues of antitrust injury and substantively with merger efficiencies. The essay provides a case count citation analysis of Hovenkamp's scholarship and compares Hovenkamp to other major figures in antitrust scholarship (Bork and Posner) and to the other antitrust treatises (Kintner and Sullivan) in the courts. Our meta-level findings show that Hovenkamp is far more cited than other treatise writers or scholars who have been recognized for …

The Revolving Door, Wentong Zheng

UF Law Faculty Publications

The revolving door between the government and the private sector has long been presumed to lead to the capture of regulators by industry interests. A growing body of empirical literature, however, either finds no conclusive evidence of a capture effect or finds evidence of an opposite effect that the revolving door indeed results in more aggressive, not less aggressive, regulatory actions. To account for these incongruous results, scholars have formulated and tested a new “human-capital” theory positing that revolving-door regulators have incentives to be more aggressive toward the regulated industry as a way of signaling their qualifications to prospective industry …

New Decisions Highlight Old Misgivings: A Reassessment Of The Foreign Trade Antitrust Improvements Act Following Minn-Chem, Robert D. Sowell

Florida Law Review

What role does the United States play in policing international commerce? At what point do the laws of the United States end and those of other nations begin? These questions, among others, arise in determining when U.S. antitrust laws apply to foreign conduct. Looking back, the Sherman Act, for some time, has applied to foreign conduct so long as that conduct satisfied certain requirements. However, common law tests proved inconsistent and difficult to apply. As a result, ninety-two years after the enactment of the Sherman Act, Congress intervened with the intent to clarify the common law by way of the …

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

Florida Law Review

This Article will demonstrate that concern over the potential harms from media mergers can best be expressed not in terms of price, cost, savings or efficiency, but rather in terms of consumer choice with regard to the perspectives quality, and varieties of approaches to news coverage. Indeed, competition in terms of the quality and variety of offerings is crucial in this sector. These non-price attributes, rather than price or cost competition, should be the focus of market definition and other issues of antitrust concern for media cases. This Article focuses its analysis on newspapers, but much of the analysis also …

Tensions Between Antitrust And Industrial Policy, D. Daniel Sokol

UF Law Faculty Publications

Sound antitrust law and policy is in tension with industrial policy. Antitrust promotes consumer welfare whereas industrial policy promotes government intervention for privileged groups or industries. Unfortunately, industrial policy seems to be alive and well both within antitrust law and policy and within a broader competition policy worldwide. This Article identifies how industrial policy impacts both antitrust and competition policy. It provides examples from the United States, Europe and China of how industrial policy has been used in antitrust. However, this Article also makes a broader claim that the overt or subtle use of industrial policy in antitrust and a …

“Antitrust's Least Glorious Hour”: The Robinson-Patman Act, Roger D. Blair, Christina Depasquale

UF Law Faculty Publications

In The Antitrust Paradox, Robert Bork explored many of antitrust’s misadventures. Specifically, Bork severely criticized the Robinson-Patman Act, which he characterized as “antitrust’s least glorious hour.” In this paper, we explore Bork’s criticism of the Robinson-Patman Act along with those of other legal scholars and economists. We analyze the central prohibitions of the act and explore their competitive implications. We also show that the act’s unfortunate prohibitions have been muted by the antitrust agencies’ benign neglect and three recent Supreme Court decisions.

The Law And Economics Of (Functional) Antitrust Standing In The United States And The European Union, Jeffrey L. Harrison

UF Law Faculty Publications

To date, and despite pressures toward convergence, the United States and the European Union have taken different paths with respect to the enforcement of antitrust laws by private parties and, therefore, differ dramatically in levels of functional standing. U.S. law is more encouraging to private enforcement than E.U. law but has a narrower view of whom those private parties are permitted to be. In the European Union, the eligible parties are broad but the motivation of any single party to bring an action is quite low. In the United States, the substantive law and much of the procedural law flow …

Judging Monopolistic Pricing: F/Rand And Antitrust Injury, William H. Page

UF Law Faculty Publications

In a 2013 opinion in Microsoft v. Motorola, Judge James Robart calculated “reasonable and nondiscriminatory” or RAND royalties that Motorola could lawfully charge Microsoft for licenses to use Motorola patents that were essential to two industry standards. Although the case involved only a claim for breach of contract, Judge Robart’s opinion regulated monopoly pricing, a task courts try to avoid in other contexts, claiming institutional incapacity. In this instance, however, Judge Robart identified standards that he believed adequately guided him in the task. He recognized that the economic purposes of the RAND commitment were to prevent owners of standards-essential patents …

The Transformation Of Vertical Restraints: Per Se Illegality, The Rule Of Reason, And Per Se Legality, D. Daniel Sokol

UF Law Faculty Publications

Robert Bork probably had the single most lasting influence on antitrust law and policy of anyone in the past 50 years. To read the 1978 Antitrust Paradox today, one is struck by how closely contemporary case law tracks Bork's policy prescriptions. The speed at which the transformation in law and policy occurred in antitrust is perhaps unprecedented across any area of common law. In the 1970s, antitrust jurisprudence and enforcement policies were in tension with industrial organization economics. Bork created a unified goal for antitrust based on a “consumer welfare prescription” to shape the development of the case law. The …

Policing The Firm, D. Daniel Sokol

UF Law Faculty Publications

Criminal price fixing cartels are a serious problem for consumers. Cartels are hard both to find and punish. Research into other kinds of corporate wrongdoing suggests that enforcers should pay increased attention to incentives within the firm to deter wrongdoing. Thus far, antitrust scholarship and policy have ignored this insight in the cartel context. This Article suggests how to improve antitrust enforcement by focusing enforcement efforts on changing the incentives of internal firm compliance.

League Structure & Stadium Rent Seeking—The Role Of Antitrust Revisited, David Haddock, Tonja Jacobi, Matthew Sag

Florida Law Review

Professional North American sporting teams receive enormous public funding for new and renovated stadiums after threatening to depart their hometowns, or by actually moving elsewhere. In contrast, English sporting teams neither receive much public money for such projects, nor move towns. This Article argues that no inherent cultural or political transatlantic variations cause the differences; rather, it is the industrial organization of sports in the two countries—the structure of league control—that enables rent-seeking by American teams but not by their English counterparts. Cross-country time series data contrasting American professional football and baseball stadiums with English soccer grounds support our claim, …

Merger Control Under China's Anti-Monopoly Law, D. Daniel Sokol

UF Law Faculty Publications

This essay explores the factors that drive merger outcomes under China's Anti-Monopoly Law (AML). While there are currently only a small number of published merger decisions, this paper overcomes that obstacle by utilizing a unique practitioner survey of antitrust lawyers across multiple jurisdictions. This survey captures transactions contemplated, but never undertaken (deterred by the merger regime), as well as mergers notified for approval under the AML. The survey allows for broader inferences to be drawn about the development of Chinese antitrust law, including: the welfare standard used in merger analysis, what industrial policy and other political factors may impact merger …

Counting Once, Counting Twice: The Precarious State Of Subsidy Regulation, Wentong Zheng

UF Law Faculty Publications

Subsidy regulation is in a precarious state. While it has been so ever since the conception of the current subsidy regulation regime, the recent disputes between the United States and China over the “double counting” or “double remedies” of subsidies have threatened the mere functionality of the current regime. This Article argues that the double counting controversy reveals the self-contradictions of the current subsidy regulation regime as to the fundamental question of why subsidies need to be regulated. These self-contradictions make it impossible to devise a coherent solution to the double counting problem within the framework of the current subsidy …

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

UF Law Faculty Publications

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.

Welfare Standards In U.S. And E.U. Antitrust Enforcement, Roger D. Blair, D. Daniel Sokol

UF Law Faculty Publications

The potential goals of antitrust are numerous. Goals matter to antitrust. We believe that it is total welfare rather than consumer welfare that should drive antitrust analysis. We use this Article as an opportunity to explore both a comparative analysis of welfare standards across E. U. and US. competition systems and the impact of welfare standards on global antitrust systemwide welfare.

In this Article, we analyze two types of situations in which there would be a different outcome based on the goal implemented. One scenario involves resale price maintenance (RPM). For RPM, we argue that even if there were a …

Objective And Subjective Theories Of Concerted Action, William H. Page

UF Law Faculty Publications

Communication is useful and often necessary for rivals to coordinate price and output decisions. All would agree that evidence of communication on these issues is relevant to the issue of whether firms reached an illegal agreement or engaged in concerted action in violation of Section 1 of the Sherman Act. Most courts and commentators would go further and define agreement and concerted action to require communication of one kind or another. I call this view the objective theory of concerted action. Louis Kaplow has recently challenged this approach in three important articles, all of which argue that the focus on …

Does A Cartel Aim Expressly? Trusting Calder Personal Jurisdiction When Antitrust Goes Global, Larry Dougherty

Florida Law Review

This Note suggests that while Calder jurisdiction fits well with some types of antitrust allegations, the Calder analogy weakens when charges of broad-based anticompetitive conduct collide with the long-arm statutes of particular states. The risk of forcing the analogy too far, of course, is a violation of due process. Part II of this Note reviews the facts and holding of Calder, and some of the key cases that followed it. Part III addresses the question of how the effects test might be different for antitrust complaints. Part IV reviews one type of anticompetitive conduct that seems to place particular …

Much Ado About Nothing? The Antitrust Implications Of Private Equity Club Deals, Jessica Jackson

Florida Law Review

This Note addresses the antitrust issues that clubbing raises and argues that the antitrust laws should not restrict clubbing—absent some egregious conduct—and that courts should apply rule of reason analysis rather than per se rules to these sorts of antitrust claims. Part II provides a general background of antitrust law and the various standards that courts apply to private equity clubs. Part III explains private equity and fleshes out what a club deal is and how it works. Part IV discusses antitrust law within the context of joint ventures and sets out the varying standards that could apply to private …

The Lessons From Libor For Detection And Deterrence Of Cartel Wrongdoing, Rosa M. Abrantes-Metz, D. Daniel Sokol

UF Law Faculty Publications

In late June 2012, Barclays entered into a $453 million settlement with UK and U.S. regulators due to its manipulation of Libor between 2005 and 2009. Among the agencies that investigated Barclays is the Department of Justice Antitrust Division (as well as other antitrust authorities and regulatory agencies from around the world). Participation in a price fixing conduct, by its very nature, requires the involvement of more than one firm.

We are cautious to draw overly broad conclusions until more facts come out in the public domain. What we note at this time, based on public information, is that the …

Antitrust Energy, D. Daniel Sokol, Barak Orbach

UF Law Faculty Publications

Marking the centennial anniversary of Standard Oil Co. v. United States, we argue that much of the critique of antitrust enforcement and the skepticism about its social significance suffer from “Nirvana fallacy” — comparing existing and feasible policies to ideal normative policies, and concluding that the existing and feasible ones are inherently inefficient because of their imperfections. Antitrust law and policy have always been and will always be imperfect. However, they are alive and kicking. The antitrust discipline is vibrant, evolving, and global. This essay introduces a number of important innovations in scholarship related to Standard Oil and its modern …

The Strategic Use Of Public And Private Litigation In Antitrust As Business Strategy, D. Daniel Sokol

UF Law Faculty Publications

This Article claims that there may be a subset of cases in which private rights of action may work with public rights as an effective strategy for a firm to raise costs against rival dominant firms. A competitor firm may bring its own case (which is costly) and/or have government bring a case on its behalf (which is less costly). Alternatively, if the competitor firm has sufficient financial resources, it can pursue an approach that employs both strategies simultaneously. This situation of public and private misuse of antitrust may not happen often. As the Article will explore, it is not …

Antitrust, Innovation, And Product Design In Platform Markets: Microsoft And Intel, William H. Page, Seldon J. Childers

UF Law Faculty Publications

The Antitrust Division’s Microsoft case and the Federal Trade Commission’s Intel case both rested on claims that antitrust intervention was necessary to preserve innovation in technological platforms at the heart of the personal computer. Yet, because those very platforms support markets that are among the most innovative in the American economy, injudicious intervention might well have jeopardized the very innovation that antitrust should promote. In this article, we review the role of platforms in technological innovation and consider how antitrust standards should apply to them. We then examine how Microsoft resolved antitrust issues affecting platform design at various stages of …

Beyond Labor Rights: Which Core Human Rights Must Regional Trade Agreements Protect?, Stephen J. Powell, Trisha Low

UF Law Faculty Publications

As World Trade Organization ("WTO") Members relentlessly pursue new regional trade agreements to achieve even faster economic growth than the extraordinary numbers posted by global trade rules, the smaller number of parties and their greater cultural affinity have led negotiators to address the intersection of trade and human rights to an extent unparalleled in the culturally disparate and near-unmanageable, 150-plus member WTO itself. These new provisions have used trade's huge power to improve worker rights, secure environmental protections, and make initial inroads toward defending indigenous populations from trade's adverse effects. Employing the perspectives both of trade negotiators and students of …

Standard Oil And U.S. Steel: Predation And Collusion In The Law Of Monopolization And Mergers, William H. Page

UF Law Faculty Publications

The Supreme Court’s 1911 decision in Standard Oil gave us embryonic versions of two foundational standards of liability under the Sherman Act: the rule of reason under Section 1 and the monopoly power/exclusionary conduct test under Section 2. But a case filed later in 1911, United States v. United States Steel Corporation, shaped the understanding of Standard Oil’s standards of liability for decades. U.S. Steel, eventually decided by the Supreme Court in 1920, upheld the 1901 merger that created "the Corporation," as U.S. Steel was known. The majority found that the efforts of the Corporation and its …

A Neo-Chicago Approach To Concerted Action, William H. Page

UF Law Faculty Publications

In this article, I offer an approach to concerted action that builds on traditional Chicago School analyses of the issue, but adds a focus on the role of communication. Chicago scholars uniformly identify cartels as the primary target of antitrust enforcement. They have also established much of the framework within which courts and economists analyze concerted action. George Stigler’s seminal theory of oligopoly, which sought to identify the determinants of effective collusion, has spawned an enormous literature in game theory that models the pricing behavior of oligopolists. Richard Posner’s early analysis of tacit collusion - rivals’ coordination of noncompetitive pricing …

The Rule Of Reason And The Goals Of Antitrust: An Economic Approach, Roger D. Blair, D. Daniel Sokol

UF Law Faculty Publications

In this paper, we discuss the problem of the rule of reason and the welfare standard in antitrust. We begin with the Introduction (Section I), which provides an overview of the problem. In Section II, we review the Supreme Court’s guidance on the standard for conducting a rule of reason analysis. Put simply, the Supreme Court has failed to identify clearly what standard to use in conducting a rule of reason inquiry. After a careful — albeit selective — reading of Supreme Court opinions it is simply not clear. While a case can be made for total welfare as the …