Antitrust and Trade Regulation Commons^™

Regulating Unfair Practices Under The Ftc Act: The Need For A Legal Standard Of Unfairness, Teresa M. Schwartz

Akron Law Review

This article will examine the Commission's past and proposed use of the unfairness theory to justify these trade regulation rules. It is the thesis of this article that the Commission has not defined adequately the parameters of the amorphous statutory term "unfair... acts or practices" nor analyzed the term sufficiently or consistently in its application to trade regulation rules. By purposefully leaving the unfairness theory vague, the Commission invites judicial reversals of its regulations and legislative limitations on its authority.

Sui Generis'?: An Antitrust Analysis Of Buyer Power In The United States And European Union, Richard Scheelings, Joshua D. Wright

Akron Law Review

The argument of this paper is simple: from an economic policy point of view, there is nothing special about market power on the buyer side of markets. In particular, we reject the contention that retail sector buying power requires different treatment from antitrust authorities compared to other sectors in the economy. Likewise, we find arguments contending that ‘buyer power’ requires that new or different laws be enacted or judicially developed ultimately unpersuasive. This paper is divided into three parts. Part I summarizes the relevant economics of buyer power, and more generally, monopsony. Part II compares the relevant antitrust treatment, in …

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 …

Where Do We Go From Here: Open Questions And Policy Considerations, Jonathan Baker, Fiona Scott Morton, Daniel Crane, Richard Steuer, Michael Whinston, C. Hemphill, Deborah Feinstein, Renata Hesse

Presentations

The Federal Trade Commission and the Antitrust Division of the Department of Justice held a one-day public workshop on June 23, 2014 to explore the economics and legal policy implications of certain pricing practices, such as loyalty and bundled pricing. The workshop, consisted of presentations and roundtable discussions, that focused on practices in which prices are explicitly or effectively contingent on commitments to purchase or sell a specified share or volume of a single product or a mix of multiple products. Workshop participants considered theoretical and empirical developments in the economic understanding of these practices, discussed developments in the relevant …

Should Section 5 Guidelines Focus On Economic Efficiency Or Consumer Choice?, Robert H. Lande

All Faculty Scholarship

FTC Commissioner Joshua Wright is right that it would be desirable for the Commission to issue Section 5 antitrust guidelines. This article will demonstrate, however, that the best way to formulate Section 5 guidelines is to focus them on the goal of protecting consumer choice, rather than to embrace Commissioner Wright's proposal to neuter the FTC Act by confining it in an economic efficiency straitjacket. Only if Section 5 guidelines were formulated appropriately would they improve consumer welfare during the Commission's second century.

The Reasonable Information Security Program, Peter Sloan

Richmond Journal of Law & Technology

Our information inhabits a perilous world. Cyber theft, cyber extortion, mobile device loss, misappropriation of confidential business information, and unauthorized disclosures of protected information are real and present dangers for organizations of all sizes and across all industries.

After Search Neutrality: Drawing A Line Between Promotion And Demotion, Daniel A. Crane

Articles

The Federal Trade Commission's (“FTC” or “the commission”) January 3, 2013 decision to close its longstanding investigation of Google1 brings to a close a flurry of discussion over the possibility that Google could become subject to a “search neutrality” principle in the United States. Although the Commission found against Google on several grounds, it rejected petitions from Google's critics to create a search neutrality principle as a matter of antitrust law. This essay briefly analyzes what remains of U.S. antitrust scrutiny of Internet search bias after the Google settlement. In particular, it suggests that a sensible line can be drawn …

Paradoxes Of Digital Antitrust, Frank A. Pasquale

Faculty Scholarship

No abstract provided.

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.

Section 5 And The Innovation Curve, Daniel A. Crane

Book Chapters

the ftc’s authority to use Section 5 of the FTC Act to reach anticompetitive conduct that would not be illegal under the Sherman or Clayton Acts has been much discussed in recent years, particularly in conjunction with the FTC’s enforcement action against Intel. As of this writing, a Section 5 action against Google seems imminent.

Bargaining Over Loyalty, Daniel A. Crane

Articles

Contracts between suppliers and customers frequently contain provisions rewarding the customer for exhibiting loyalty to the seller. For example, suppliers may offer customers preferential pricing for buying a specified percentage of their requirements from the supplier or buying minimum numbers of products across multiple product lines. Such loyalty-inducing contracts have come under attack on antitrust grounds because of their potential to foreclose competitors or soften competition by enabling tacit collusion among suppliers. This Article defends loyalty inducement as a commercial practice. Although it can be anticompetitive under some circumstances, rewarding loyal customers is usually procompetitive and price reducing. The two …

How The Ftc Could Beat Google, Robert H. Lande, Jonathan L. Rubin

All Faculty Scholarship

The U.S. Federal Trade Commission is rumored to be deciding whether to bring a “pure Section 5” case against Google as a result of complaints that the company unfairly favors its own offerings over those of its rivals in its search results. But the case will fail miserably at the hands of a reviewing court and the agency will be confined to relatively non-controversial enforcement violations if the FTC fails to impose upon itself a tightly bounded and constrained legal framework that contains clear limiting principles. The only way a court will allow the FTC to pursue a pure Section …

The Institutions Of Antitrust Law: How Structure Shapes Substance, William E. Kovacic

Michigan Law Review

Daniel Crane's The Institutional Structure of Antitrust Enforcement ("Institutional Structure") may do for antitrust law what Essence of Decision did for public administration. Unlike most literature on antitrust law, this superb volume does not address pressing issues of substantive analysis (e.g., when can dominant firms offer loyalty discounts?). Instead, Institutional Structure studies the design and operation of the institutions of U.S. antitrust enforcement. Professor Crane skillfully advances a basic and powerful proposition: to master analytical principles without deep knowledge of the policy implementation mechanism is dangerously incomplete preparation for understanding the U.S. antitrust system, or any body of competition law. …

Antitrust Rulemaking As A Solution To Abuse On The Standard-Setting Process, Adam Speegle

Michigan Law Review

While many recognize the critical role that technology plays in modern life, few appreciate the role that standards play in contributing to its success. Devices as prevalent as the modern laptop computer for example, may be governed by over 500 interoperability standards, regulating everything from the USB drive to the memory chip. To facilitate adoption of such standards, firms are increasingly turning to standard-setting organizations. These organizations consist of members of an industry who agree to abide by the organization's bylaws, which typically regard topics such as patent disclosure and reasonable licensing. Problems arise, however, when members violate these bylaws …

Trolling For Standards: How Courts And The Administrative State Can Help Deter Patent Holdup And Promote Innovation, Niels J. Melius

Vanderbilt Journal of Entertainment & Technology Law

Antitrust law and patent law share the common goal of improving economic welfare by facilitating competition and innovation. But these legal fields conflict when baseless claims of patent infringement disrupt the competitive process. In its eBay decision, the Supreme Court muddied the precedential waters by promulgating a vague doctrine of injunctive relief in patent infringement cases. In the years since, a split has emerged in the district courts on the question of which entities generally qualify for injunctive relief as an additional remedy to damages. This uncertainty has failed to mitigate an antitrust phenomenon known as "patent holdup," whereby an …

A Neo-Chicago Perspective On Antitrust Institutions, Daniel A. Crane

Articles

It has long been fashionable to categorize antitrust by its "schools." From the Sherman Act's passage to World War II, there were (at least) neo-classical marginalism, populism, progressivism, associationalism, business commonwealthism, and Brandeisianism. From World War II to the present, we have seen (at least, and without counting the European Ordo-Liberals) PaleoHarvard structuralism, the Chicago School, Neo-Harvard institutionalism, and Post -Chicagoans. So why not Neo-Chicago? I am already on record as suggesting the possible emergence of such a school, so it is too late for me to dismiss the entire "schools" conversation as window-dressing. This Symposium is dedicated to defining …

Pharmaceutical Patent Litigation Settlements: Balancing Patent & Antitrust Policy Through Institutional Choice, Timothy A. Cook

Michigan Telecommunications & Technology Law Review

Should a branded pharmaceutical company be allowed to pay a generic competitor to stay out of the market for a drug? Antitrust policy implies that such a deal should be prohibited, but the answer becomes less clear when the transaction is packaged as a patent-litigation settlement. Since Congress passed the Hatch-Waxman Act, which encourages generic manufacturers to challenge pharmaceutical patent validity, settlements of this kind have been on the rise. Congress, the Department of Justice, and the Federal Trade Commission have condemned these agreements as anticompetitive and costly to American consumers, but none of these bodies has been able to …

Silence Of The Spam: Improving The Can-Spam Act By Including An Expanded Private Cause Of Action, David J. Rutenberg

Vanderbilt Journal of Entertainment & Technology Law

In the last decade, email spam has become more than just an annoyance for email users. Unsolicited messages now comprise more than 95 percent of all email sent worldwide. This costs US businesses billions of dollars in lost productivity each year. The US Congress passed the CAN-SPAM Act of 2003 to regulate the spam industry. Unfortunately, data show that spam only increased since the Act's passage. Part of the reason for this failure is that the Act only authorizes the Federal Trade Commission, state attorneys general, and Internet Service Providers to bring action under its provisions. Each of these authorized …

Toward A Unified Theory Of Exclusionary Vertical Restraints, Daniel A. Crane, Graciela Miralles

Articles

The law of exclusionary vertical restraints-contractual or other business relationships between vertically related firms-is deeply confused and inconsistent in both the United States and the European Union. A variety of vertical practices, including predatory pricing, tying, exclusive dealing, price discrimination, and bundling, are treated very differently based on formalistic distinctions that bear no relationship to the practices' exclusionary potential. We propose a comprehensive, unified test for all exclusionary vertical restraints that centers on two factors: foreclosure and substantiality. We then assign economic content to these factors. A restraint forecloses if it denies equally efficient rivals a reasonable opportunity to make …

The Intel And Microsoft Settlements, Robert H. Lande

All Faculty Scholarship

This article briefly compares and contrasts the recent U.S. Federal Trade Commission's antitrust settlement with Intel, and the antitrust cases brought against Microsoft. The article praises the FTC's settlement with Intel, and predicts that history will judge it very favorably compared to the settlement by the U.S. Department of Justice of its antitrust case against Microsoft.

Ftc V. Intel: Applying The "Consumer Choice" Framework To "Pure" Section 5 Allegations, Robert H. Lande

All Faculty Scholarship

This short article analyzes the "pure" Section 5 allegations in the recent FTC complaint against Intel. It first shows that Section 5 of the Federal Trade Commission Act is more encompassing than the Sherman Act and why this breath is in the public interest. It next analyzes allegations from the Intel Complaint, showing why each appears to be in the public interest yet might not be permitted by the Sherman Act. It also discusses other advantages that would arise if these charges were litigated under Section 5 rather than the Sherman Act.

The article notes assertions by Intel and others …

Reflections On Section 5 Of The Ftc Act And The Ftc's Case Against Intel, Daniel A. Crane

Articles

The Federal Trade Commission’s (“FTC’s”) unprecedented enforcement action against Intel raises profound issues concerning the scope of the FTC’s powers to give a construction to Section 5 of the FTC Act that goes beyond the substantive reach of the Sherman Act. While I have urged the FTC to assert such independence from the Sherman Act, this is the wrong case to make a break. Indeed, if anything, Intel poses a risk of seriously setting back the development of an independent Section 5 power by provoking a hostile appellate court to rebuke the FTC’s effort and cabin the FTC’s powers in …

Revitalizing Section 5 Of The Ftc Act Using “Consumer Choice” Analysis, Robert H. Lande

All Faculty Scholarship

This paper makes two points. First, Section 5 of the FTC Act, properly construed, is indeed significantly broader and more encompassing than the Sherman Act or Clayton Act. Section 5 violations include incipient violations of the other antitrust laws, and also violations of their policy or spirit.

Second, the best - and probably the only - way to interpret Section 5 in an expansive manner is to do so in a way that also is relatively definite, predictable, principled and clearly bounded. This best can be done if Section 5 is articulated using the consumer choice framework. Without the discipline …

Anticompetitive Trade Remedies: How Antidumping Measures Obstruct Market Competition, Sungjoon Cho

All Faculty Scholarship

Through trade policies such as antidumping remedies, the United States government often protects domestic producers at the expense of market competition. Yet a judicially created antitrust immunity, the Noerr-Pennington doctrine, obstructs the Federal Trade Commission’s antitrust investigations of these trade remedies. This Article argues that judicial and administrative interventions are needed to restore antitrust oversight when implementing trade remedies. This Article does not propose a repealing of the current antidumping statue, an act that would be politically infeasible in the current protectionist atmosphere of Congress. Instead, it takes a more modest yet realistic stance: antidumping remedies must be sanitized by …

Linkline's Institutional Suspicions, Daniel A. Crane

Articles

Antitrust scholars are having fun again. Not so long ago, they were the poor, redheaded stepchildren of the legal academy, either pining for the older days of rigorous antitrust enforcement or trying to kill off what was left of the enterprise. Other law professors felt sorry for them, ignored them, or both. But now antitrust is making a comeback of sorts. In one heady week in May of 2009, a front-page story in the New York Times reported the dramatic decision of Christine Varney-the Obama Administration's new Antitrust Division head at the Department of Justice-to jettison the entire report on …

The Role Of Market Definition In Unilateral Effects Analysis And In The Litigation Of Unilateral Effects Cases, Jonathan Baker, Kathryn Fenton, Richard Parker, Daniel Wall, Jeffrey Schmidt

Presentations

The Federal Trade Commission is planning to host a public workshop on February 12, 2008 to examine the application of unilateral effects theory to mergers of firms that sell competing, but differentiated products. ”Unilateral effects” as a formal theory of competitive harm was added to the joint FTC/DOJ Horizontal Merger Guidelines in 1992. The theory recognizes that, in some instances, mergers may create or enhance market power by allowing the merged firm to profitably raise prices, without accommodation of other rival market incumbents. While section 2.2 of the Guidelines explains that unilateral competitive effects can arise in a variety of …

Antitrust Modesty, Daniel A. Crane

Michigan Law Review

Given Hovenkamp's influence and intellect, the publication of The Antitrust Enterprise is a major event, particularly since he sets out, according to the book's jacket, to provide "the first authoritative and compact exposition of antitrust law since Robert Bork's classic The Antitrust Paradox was published more than thirty years ago." Nevertheless, one could quibble with the jacket's claim. Richard Posner substantially updated his own authoritative and compact exposition of antitrust law in 2001. In a 2003 book review, Hovenkamp called Posner's second edition a "marvelous and important book." So, before beginning a review of Hovenkamp's new work, it seems necessary …

Antitrust Issues In The Settlement Of Patent Disputes, Part Iii, Thomas B. Leary

Seattle University Law Review

Once again, I will address the issue of litigation settlements between companies that hold patents on pharmaceutical products (sometimes "pioneers") and would-be generic entrants ("generics") who challenge the validity of the patent and/or a claim of infringement. This discussion will focus on the Tamoxifen opinion, with passing reference to other decisions. Obviously, reasonable people can disagree on these issues, but I still believe the Commission's approach in Schering was correct.

The Importance Of History To The Design Of Competition Policy Strategy: The Federal Trade Commission And Intellectual Property Law, William E. Kovacic

Seattle University Law Review

The Article's framework for considering the value of history in shaping strategy is the effort of the Federal Trade Commission (FTC) to apply its competition policy powers to issues involving intellectual property (IP). The Article chooses the example of intellectual property because of its importance to the modern work of the FTC and the increasingly significant place that intellectual property and, more generally, technology-driven innovation hold in the field of competition policy. To provide context for the discussion, Part II of the Article presents a profile of the FTC's modern competition policy initiatives concerning intellectual property. Part III then reviews …

A Turning Point In Merger Enforcement: Federal Trade Commission V. Staples, Jonathan B. Baker, Robert Pitofsky

Contributions to Books

This book chapter (forthcoming in Antitrust Stories) tells the story of the FTC's successful 1997 effort to block the proposed Staples/Office Depot merger. It describes the competing presentations of the FTC and the merging firms during the preliminary injunction hearing and places that trial in a broader context.