Antitrust and Trade Regulation Commons^™

Data Advantage And Merger Review: Can Entrenchment Theory Reform Antitrust Enforcement?, Shin-Ru Cheng

Seattle University Law Review

A merger involving giant digital companies is likely to dampen competition, as it allows those companies to combine and control data access, enabling them to entrench their dominant positions in relevant markets and extend those positions into related markets. While competition law in many jurisdictions aims to prohibit mergers that may substantially lessen competition or create a monopoly, arguably the review of digital mergers is failing because antitrust agencies lack an effective approach to identify data-generated anticompetitive harms. This Article demonstrates that entrenchment theory, recently reintroduced in the 2023 U.S. Merger Guidelines, would help reform the process of antitrust enforcement. …

Anticompetitive Corporate Spin-Offs, Alexa Rosen Grealis

University of Miami Business Law Review

Section 355 of the Internal Revenue Code allows corporations to “spin-off” parent-controlled businesses tax-free. Traditionally an important tool for divestitures and restructurings with U.S. tax consequences, recent trends suggest section 355 is also of interest to firms facing US antitrust consequences. Statements and maneuvering by some such companies indicate firms are considering spinning-off businesses to avert liability and ‘break up’ on their own terms. Despite widespread renewed interest in using antitrust laws to break up large corporations, the antitrust implications of corporate spin-offs have thus far escaped scholarly notice and scrutiny.

This Note posits that it is a mistake to …

A Letter To The United States Government On Wealth And Income Inequality, Matthieu Maier

English Department: Research for Change - Wicked Problems in Our World

The United States of America is the world’s hotspot when it comes to income and wealth inequality. The wealthiest Americans are accumulating more and more wealth everyday while most Americans, who fall somewhere around middle-class, remain struggling and stagnant. The United States’ unchecked and deregulated system of capitalism is the root cause of our country’s inequities along with our government’s refusal to set aside self-interests and biases in order to combat these issues. From the inequality caused by rouged American systems larger issues are created that lead to complications in health, wages, standard of living, and race relations within our …

In Defense Of Breakups: Administering A “Radical” Remedy, Rory Van Loo

Faculty Scholarship

Calls for breaking up monopolies—especially Amazon, Facebook, and Google—have largely focused on proving that past acquisitions of companies like Whole Foods, Instagram, and YouTube were anticompetitive. But scholars have paid insufficient attention to another major obstacle that also explains why the government in recent decades has not broken up a single large company. After establishing that an anticompetitive merger or other act has occurred, there is great skepticism of breakups as a remedy. Judges, scholars, and regulators see a breakup as extreme, frequently comparing the remedy to trying to “unscramble eggs.” They doubt the government’s competence in executing such a …

A New Corporate Tax, Reuven S. Avi-Yonah

Articles

If we can regulate our corporations simply through the medium of taxation, we can destroy every trust in a fortnight. It would be a great deal better for the Finance Committee to turn its attention to the imposition of such a tax upon corporations and the persons who actually need regulation, who are exercising powers that are injurious to the American people, destroying competition and invading our prosperity, than to attempt to levy a revenue tax upon all the little shareholders of all the little corporations throughout the length and breadth of the United States.

Fascism And Monopoly, Daniel A. Crane

Michigan Law Review

The recent revival of political interest in antitrust has resurfaced a longstanding debate about the role of industrial concentration and monopoly in enabling Hitler’s rise to power and the Third Reich’s wars of aggression. Proponents of stronger antitrust enforcement argue that monopolies and cartels brought the Nazis to power and warn that rising concentration in the American economy could similarly threaten democracy. Skeptics demur, observing that German big business largely opposed Hitler during the crucial years of his ascent. Drawing on business histories and archival material from the U.S. Office of Military Government’s Decartelization Branch, this Article assesses the historical …

Antitrust And The Corporate Tax: Why We Need Progressive Corporate Tax Rates, Reuven S. Avi-Yonah, Lior Frank

Articles

In this article, Avi-Yonah and Frank explore how progressive corporate tax rates could address the abuse of power by monopolistic big tech companies.

Antitrust's "Curse Of Bigness" Problem, D. Daniel Sokol

Michigan Law Review

Review of Tim Wu's The Curse of Bigness: Antitrust in the New Gilded Age.

Brief Of Amici Curiae Law And Economics Scholars In Support Of Appellee And Affirmance, Mark A. Lemley, A. Douglas Melamed, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

In reliance on Qualcomm’s FRAND promises, key SSOs incorporated its technologies into wireless standards. Qualcomm takes the position that its patented technologies are essential to those standards and, therefore, that any firm making or selling a standard-compliant product infringes its patents. As a result, the SSOs’ incorporation of Qualcomm’s patented technologies into wireless standards created a huge market for licenses to Qualcomm’s SEPs.

The district court held that Qualcomm used its chipset monopolies, not only to extract the high chip-set prices to which it was entitled, but also to perpetuate those monopolies by disadvantaging rival chip-makers and raising entry barriers. …

Books And Olive Oil: Why Antitrust Must Deal With Consolidated Corporate Power, Carl T. Bogus

University of Michigan Journal of Law Reform

Following an epic battle in the marketplace between Apple and major book publishers, on one side, and Amazon, on the other side, the United States Department of Justice and thirty-three states filed an antitrust lawsuit against Apple and the publishers, alleging that they had conspired to fix the prices of ebooks. Both the district court and a divided panel of the United States Court of Appeals for the Second Circuit decided the case in the government’s favor. This Article argues that government regulators and the courts took the wrong side in the dispute and did so because of fundamental flaws …

Antitrust's Unconventional Politics, Daniel A. Crane

Articles

Antitrust law stands at its most fluid and negotiable moment in a generation. The bipartisan consensus that antitrust should solely focus on economic efficiency and consumer welfare has quite suddenly come under attack from prominent voices calling for a dramatically enhanced role for antitrust law in mediating a variety of social, economic, and political friction points, including employment, wealth inequality, data privacy and security, and democratic values. To the bewilderment of many observers, the ascendant pressures for antitrust reforms are flowing from both wings of the political spectrum, throwing into confusion a conventional understanding that pro-antitrust sentiment tacked left and …

How Meyer V. Uber Could Demonstrate That Uber And The Sharing Economy Fit Into Antitrust Law, Nicholas Andrew Passaro

Michigan Business & Entrepreneurial Law Review

Recently, Uber driver (and former Uber CEO) Travis Kalanick has been sued under antitrust laws. The plaintiffs argue that Mr. Kalanick and the other Uber drivers have engaged in a price fixing arrangement that violates §1 of the Sherman Act. The case, Meyer v. Uber (originally Meyer v. Kalanick), is still being litigated. This Comment will analyze each side’s potential arguments and will ultimately conclude that the court should find Uber drivers not guilty of a Sherman Act violation. This determination will be based on: the merits of the various arguments, how such a holding would fit within the …

Troubled Waters Between U.S. And European Antitrust, D. Daniel Sokol

Michigan Law Review

Review of The Atlantic Divide in Antitrust: An Examination of US and EU Competition Policy by Daniel J. Gifford and Robert T. Kudrle.

The Arc And Architecture Of Private Enforcement Regimes In The United States And Europe: A View Across The Atlantic, Jason Rathod, Sandeep Veheesan

The University of New Hampshire Law Review

The United States and Europe have traditionally taken very different approaches to the regulation of harmful conduct. Previously, European nations relied almost entirely on the public enforcement of laws, whereas the United States relied on a mix of public and private actors. In the United States, private rights of action have played a central role deterring illegal conduct—and, in fact, provided greater deterrence than public enforcers in some areas of law. They have also allowed injured parties to obtain compensation. Despite their very different histories, the private enforcement systems in the United States and Europe are showing signs of convergence …

All I Really Need To Know About Antitrust I Learned In 1912, Daniel A. Crane

Articles

Herbert Hovenkamp has indisputably earned the deanship of contemporary antitrust scholarship. One could point to many different attributes by which he has earned his laurels: fantastic scholarly productivity; clarity and precision in the craft of writing; analytical depth in both law and economics; moderation in a field apt to polarization; and custodianship of the influential Areeda treatise. In this Essay, I hope to honor another quality that has contributed significantly to Herb’s tremendous success as an antitrust scholar—his engagement with history. Much contemporary antitrust scholarship bursts with excitement at the discovery of new phenomena or theories that in all actuality …

The Long Road To Reformulating The Understanding Of Directors' Duties: Legalizing Team Production Theory?, Thomas Clarke

Seattle University Law Review

In this Article, the historical evolution of corporate governance is considered, highlighting the different eras of governance, the dominant theoretical and practical paradigms, and the reformulation of paradigms and counter paradigms. Two alternative and sharply contrasting theorizations, one collective and collaborative (the work of Berle and Means), the other individualistic and contractual (agency theory and shareholder value) are focused upon. The explanatory potential of Blair and Stout’s team production theory is elaborated, along with its conception of the complexity of business enterprise, with a mediating hierarch (the board of directors) securing a balance between the interests of different stakeholders. The …

When Bigger Is Better: A Critique Of The Herfindahl-Hirschman Index’S Use To Evaluate Mergers In Network Industries, Toby Roberts

Pace Law Review

This Article argues that the current framework used by the Department of Justice (“DOJ”) and Federal Trade Commission (“FTC”) to evaluate mergers is inadequate in that it fails to account for network benefits. In particular, I argue for abandoning the use of the HHI in analyzing network industry mergers because the index generates little useful information about these mergers’ effect on consumer welfare. Part II describes the HHI’s historical and theoretical underpinnings and its integration into the current Merger Guidelines. Part III considers general objections to the HHI before turning to its problems in evaluating network industries. Part IV presents …

Toward An Empirical And Theoretical Assessment Of Private Antitrust Enforcement, Joshua P. Davis, Robert H. Lande

Seattle University Law Review

The predominant view in the antitrust field has been that private enforcement, and especially class action cases, yields little or no positive results. This Article analyzes these twenty cases, compares and contrasts their analysis with that of our earlier group of forty cases, and draws new insights from the results of all sixty combined. This Article demonstrate that private antitrust litigation has provided a substantial amount of compensation for victims of anticompetitive behavior: at least $33.8 to $35.8 billion. The studies also demonstrate that private antitrust enforcement has had an extremely strong deterrent effect. In fact, this research demonstrates that …

Who Wants To Watch? A Comment On The New International Paradigm Of Financial Consumer Market Regulation, Toni Williams

Seattle University Law Review

This Article explores the capacity of the G20’s model of financial consumer protection to reconfigure relationships between financial firms and consumers, focusing in particular on the market conduct of financial firms. Although this Article does not focus directly on Adolf A. Berle’s work, it does engage with some of his enduring concerns about economic relations between corporations, regulators, and individuals; the socialcontext of those economic relations; and the role of law and legal regulation in shaping market relations. More specifically, this Article considers new international regulatory principles related to corporate social responsibility— a recurring theme of Berle’s work11—in the somewhat …

Dinner Parties During “Lost Decades”: On The Difficulties Of Rethinking Financial Markets, Fostering Elite Consensus, And Renewing Political Economy, David A. Westbrook

Seattle University Law Review

This Article addresses two groups of problems that ought to be understood in relation to one another. This Article has three movements. In Part II, I discuss conceptual obstacles to forming the new elite consensus that rethinking the role of financial markets requires. To produce policy reform, it is not enough to have new ideas; the ideas must be understood, adopted, and acted upon by people. Policy reform is thus always a function of conversations. In Part III, I discuss some possible ways the elite consensus might be formed. In Part V, the conclusion, I offer a preliminary assessment of …

On The Rise Of Shareholder Primacy, Signs Of Its Fall, And The Return Of Managerialism (In The Closet), Lynn A. Stout

Seattle University Law Review

In their 1932 opus "The Modern Corporation and Public Property," Adolf Berle and Gardiner Means famously documented the evolution of a new economic entity—the public corporation. What made the public corporation “public,” of course, was that it had thousands or even hundreds of thousands of shareholders, none of whom owned more than a small fraction of outstanding shares. As a result, the public firm’s shareholders had little individual incentive to pay close attention to what was going on inside the firm, or even to vote. Dispersed shareholders were rationally apathetic. If they voted at all, they usually voted to approve …

Rebalancing Private Placement Regulation, William K. Sjostrom, Jr.

Seattle University Law Review

Regulating securities offerings entails balancing investor protection and capital formation. Inevitably, this balance gets upset. As financial markets evolve, Congress passes new legislation, the Securities and Exchange Commission (SEC) adopts new rules, and the courts issue unanticipated opinions. These events upset the balance because they happen in an uncoordinated and haphazard manner and oftentimes produce unintended consequences.The Article proceeds as follows. To set the stage, Part II provides background on the Securities Act and describes the differences between public offerings and private placements. Part III explains why rebalancing private placement regulation may be warranted. Part IV offers proposed statutory language …

Equity Derivatives And The Challenge For Berle’S Conception Of Corporate Accountability, Janis Sarra

Seattle University Law Review

With the proliferation of equity derivatives and related structured financial products, the North American conception of corporate governance faces a new and distinct challenge to its underlying premises.This Article analyzes these developments with a focus on the implications for director and officer accountability and corporate sustainability, using the occasion of the third symposium of the Adolf A. Berle, Jr. Center on Corporations, Law & Society to consider whether Berle’s analysis of corporate accountability offers any insights into how to address the uncoupling of economic interest and legal rights in corporate governance. Part II of this Article sets the context for …

Hedge Funds And Risk Decoupling: The Empty Voting Problem In The European Union, Wolf-Georg Ringe

Seattle University Law Review

The law must remain adaptive and responsive to the constantly changing challenges of our society and our business life. One of the most pressing challenges of the past years is the emergence of alternative investment funds, in particular hedge funds, which masterfully exploit the traditional categories of corporate law, financial derivatives, and risk management. This Article is only concerned with the first of these two forms— negative decoupling.9 It looks at the various forms of negative riskdecoupling strategies and tries to shed light on their overall desirability. Three distinct theoretical perspectives are used as an analytical framework to examine the …

Revisiting “Truth In Securities” Revisited: Abolishing Ipos And Harnessing Private Markets In The Public Good, A. C. Pritchard

Seattle University Law Review

This article's focus is the idea that the transition between private- and public company status could be less bumpy if we unify the public–private dividing line under the Securities Act and Exchange Act. Part II of this article outlines the current public–private dividing lines under the Securities Act and the Exchange Act. This part also explores Facebook’s recent transition from private to public status under that framework, as well as Congress’s recent intervention in the field with the JOBS Act. Part III explores the problems of making the transition from private to public, focusing on IPOs and their role in …

Corporate Governance As A School Of Social Reform, Ciarán O’Kelly

Seattle University Law Review

In this paper, I present a vision of the corporation as a moral person. I point to “the separation of ownership and control” as a moment when the corporation broke away from the moral lives of ownermanagers. I then draw out the manner in which we can speak of the company as a moral person. Finally, through a discussion of social reporting in two British banks, I point to a shift in how this moral personhood is articulated, with the rise of corporate governance—or doing business well—as its own foundation of corporate responsibility. I propose a view of corporate responsibility …

The Common Link In Failures And Scandals At The World’S Leading Banks, Justin O’Brien, Olivia Dixon

Seattle University Law Review

This Article argues that both the root cause of the crisis and the route to restoring trust and confidence is to be found in ascertaining how to regulate culture across mandates, processes, and use of discretion. Part II identifies the internal and external failings of four of the most recent global banking scandals within the CEDAR matrix. Part III discusses the regulatory challenges faced when compliance serves no practical function and the consequent material risk to market integrity. This Article concludes by suggesting that it is unsustainable for regulation to be decided, implemented, and monitored at a national level. Global …

Shareholder Social Responsibility, David Millon

Seattle University Law Review

Amidst concerns about the negative effects on long-run value and competitiveness, one overlooked consequence of short-termism is its impediment to corporate social responsibility (CSR).In this Article, Part II examines the short-termism phenomenon, first from the point of view of investors and then from that of corporate managers, and summarizes widely held views about the social costs of short-termism. Part III then shifts the focus to the impact of shorttermism on CSR, a problem that has been largely overlooked, and develops two theories or models of CSR: the “ethical” and the “strategic.” Part III also explains how short-termism presents a significant …

The Financialization Of The U.S. Corporation: What Has Been Lost, And How It Can Be Regained, William Lazonick

Seattle University Law Review

As the U.S. economy struggles to recover from the Great Recession, the erosion of middle-class jobs and the explosion of income inequality have endured long enough to raise serious questions about whether the U.S. economy is beset by deep structural problems. My argument is that the employment problem that the United States now faces is largely structural. But the structural problem is not a labormarket mismatch between the skills that prospective employers want and the skills that potential workers have, as many economists have argued. Nor is the problem automation. Rather, the employment problem stems from changes in the ways …

The Modern Corporation Magnified: Managerial Accountability In Financial-Services Holding Companies, Anita K. Krug

Seattle University Law Review

This Article first recalls the primary contours of Adolf Berle and Gardiner Means’s acclaimed observations regarding the separation of ownership and control in the “modern corporation,” as well as their conclusions about the implications of those observations for the doctrine of shareholder primacy. Second, the Article describes how the activities of FSHCs generally differ from what we think corporations do and, certainly, from what Berle and Means conceived of as the purpose of corporations or, indeed, any business enterprise. Third, this Article articulates how those business activities render more acute the problem of the separation of ownership and control that …