Business Organizations Law Commons^™

Adjudicating Fake News, Filippo Lancieri, Caio Mario Da Silva Pereira Neto, Rodrigo Moura Karolczak, Barbara Marchiori De Assis

Georgetown Law Faculty Publications and Other Works

On July 30, 2025, U.S. President Donald Trump imposed 50% tariffs on imports from Brazil and sanctioned a sitting Brazilian Supreme Court Justice, both partially because of Brazil’s online content moderation decisions. This is an extreme, but not an isolated event: worldwide, legislators and regulators struggle to craft public policies that address problems of disinformation and online harassment while protecting the freedom of expression—leading to increasing international confrontations. One key question in content moderation is content adjudication—or who is responsible for deciding what type of speech violates the law and should be taken down (or not). This article contributes to …

The National Security Internet, Anupam Chander

Georgetown Law Faculty Publications and Other Works

In response to widespread foreign surveillance and growing geopolitical distrust, governments are erecting a national security internet. Pioneered by China, national firewalls have gone global. But where firewalls sought to keep information out, they now seek to keep data in. Governments keen to avoid their citizens’ data from falling into foreign hands demand not only that personal data be stored on local servers, but also require that it be stored on local servers by local companies—what this Article calls “data localization squared.” Enforcing this demand requires a new mechanism of transnational control: immunity from foreign jurisdiction. Artificial Intelligence (AI) systems, …

Distillation Laundering: Regulatory Arbitrage And A Potential Beijing Effect In Ai, Laura Edelson, Filippo Lancieri

Georgetown Law Faculty Publications and Other Works

This essay introduces distillation laundering, a new form of regulatory arbitrage. Distillation, a technique for training large language models based on the outputs of other models instead of from scratch, is generally prohibited by the terms of service of closed-weight frontier models. However, it is economically efficient and has been key to the success of the cheap, distilled (largely Chinese) open-weight models, which have reshaped the global political economy of AI regulation. US companies have now begun to re-import the effects of distillation through various means—a process we call distillation laundering. We also discuss how attempts to lobby these models …

The Moving Pieces Of Corporate Disclosure: Truth, Falsity, And Half-Truths In Between, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

The half-truth doctrine is made operational in the common statutory and rule-based admonitions in the securities laws (particularly Rule 10b-5) not to omit “material fact[s] necessary in order to make . . . statements made . . . not misleading . . . .” It cabins the temptation to exploit the privilege of nondisclosure through what has been called “artful paltering.” Unfortunately, the evolution of the half-truth doctrine has become more of a poor stepsister than a muscular companion. It carries less than a full load in the complex ecosystem that exists for public company disclosure today. And it is …

Biomanipulation, Laura K. Donohue

Georgetown Law Faculty Publications and Other Works

Scientific and technological advances in the latter part of the twentieth century transformed the field of biometrics. Carleton Simon, for instance, first postulated using retinal vasculature for biometric identification in 1935, but it was not until forty years later that an Eyedentify patent brought the idea to fruition. In 1937, John Henry Wigmore anticipated using oscilloscopes to identify individuals by speech patterns. Decades later, digitization and speech processors made voiceprint identification possible. In the 1970s, biological discoveries similarly led to the development of deoxyribonucleic acid (DNA) sequencing. And while Alphonse Bertillon in the late nineteenth century postulated iris distinctions, it …

Asking The Right Questions: How Jill Fisch Debunks Narratives And Arrives At Solutions, Hillary A. Sale

Georgetown Law Faculty Publications and Other Works

Without a doubt, Professor Jill E. Fisch is one of the most influential scholars in the corporate and securities law space. Whether we measure her contributions by awards, areas of influence, or volume, Professor Fisch’s work is at the top of the list. It is, indeed, no surprise that the Institute for Law and Economic Policy (ILEP) chose to honor Professor Fisch at this year’s corporate and securities symposium, hosted with the University of Pennsylvania Journal of Business Law. I am honored to write this introduction about Professor Fisch and explore her work and influence over time, with an emphasis …

Leveraging Information Forcing In Good Faith, Hillary A. Sale

Georgetown Law Faculty Publications and Other Works

Leveraging Information Forcing in Good Faith, a chapter in Research Handbook on Law and Time, argues that the information-forcing-substance theory has a significant role to play both in how courts decide duty of good faith and oversight matters and in how active and engaged directors can add value in the boardroom. As explored in the chapter, by deploying the theory in corporate-law matters, the courts can reveal the information gaps between officers and directors and create pressure for better processes and discourse within the corporation. In turn, this can impact both the way in which fiduciaries interact with …

In Re The Walt Disney Co. Derivative Litigation Rewritten, Hillary A. Sale

Georgetown Law Faculty Publications and Other Works

In re The Walt Disney Co. Derivative Litigation is notable for upholding the broad latitude courts afford to boards through the business judgment rule. The case addressed a $130 million termination package delivered to former Disney CEO, Michael Ovitz, after fourteen months of underperformance at the company. This rewritten opinion, to be published in “Feminist Judgements: Rewritten Corporate Law,” (Kelli Alces Williams, Anne Choike, & Usha R. Rodrigues, eds.) (Cambridge Univ. Press, forthcoming 2022), follows the style of the Delaware Supreme Court and reaches the same outcome with a different approach. The opinion expounds on the corporate governance practices in …

Purpose Driven Companies In The United States, Alicia E. Plerhoples

Georgetown Law Faculty Publications and Other Works

The United States is the birthplace of benefit corporations precisely because of American society’s over-reliance on the private sector to solve societal problems. U.S. federal and state regulation continuously fails to provide robust social safety nets or prevent ecological disasters. American society looks to companies to do such work. U.S. social enterprise entities attempt to upend the U.S. legal framework which binds fiduciaries to focus on shareholder value. These entities are permitted, and sometimes required, to take into account environmental, social, and governance (“ESG”) impacts of their operations, essentially internalizing ESG costs that would otherwise be paid by American communities …

Monitoring Facebook, Hillary A. Sale

Georgetown Law Faculty Publications and Other Works

Few companies still in business have a track record as negative as Facebook. Facebook has paid billions of dollars in government fines and paid hundreds of millions in private settlements. Yet, the financial penalties are actually minimal relative to the harm done. Facebook seems to have been involved one way or another in privacy breaches, organized crime, election manipulation, suicide, and even genocide. Mark Zuckerberg, who still controls Facebook, appears to ignore the consequences of his choices, seemingly prioritizing profits over people. He appears to disregard the law and operate without integrity or honesty, excommunicating insiders who speak out or …

Soft Law, Risk Cultures, And Law Abidingness: The Caremark Connection, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

As Vice Chancellor, Chancellor, Chief Justice, and recidivist law review author, Leo Strine has had much to say about the often-frustrating effort at corporate behavior modification. One point he makes very insistently is that pursuant to their state-granted charters, corporations are authorized to take part only in lawful business, not any profitable business. Respect for life-giving law is thus a necessary corollary of good corporate citizenship. But good citizenship is so hard to instill, which irks him. An angry display of this is Strine’s Delaware Supreme Court dissenting opinion in City of Birmingham Retirement System v. Good, involving Duke …

Corporate Adolescence: Why Did “We” Not Work?, Donald C. Langevoort, Hillary A. Sale

Georgetown Law Faculty Publications and Other Works

This article explores a series of rent-seeking behaviors and fiduciary deficits that are playing a role in the “growth” and demise of U.S. companies. Start-up financing occurs through exemptions that remove disclosure obligations required in public markets, assuming that private ordering suffices. The exemptive-privilege premise is that parties to financing rounds will be faithful agents, i.e., fiduciaries, to their sources of capital. Where there are conflicts of interest, fiduciary deficits will arise unless either the threat of litigation for breaches of duty sufficiently deters the resulting opportunism or the sources of capital are themselves sufficiently watchful and savvy to combat …

Potential Competition And Antitrust Analysis: Monopoly Profits Exceed Duopoly Profits, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

This short note prepared for an OECD meeting in June 2021 examines several antitrust issues involving analysis of potential competition. While the analysis is not new, it is still useful to collect them together in a unified fashion to show how they are related. In this regard, all the analysis and conclusions flow from the overarching (and obvious) points that exclusionary conduct and agreements that maintain monopoly power very often harm consumers, and that monopoly profits typically exceed the combined duopoly profits earned by the dominant firm and the entrant, if there is successful entry. While this is not inevitably …

Vertical Mergers In A Model Of Upstream Monopoly And Incomplete Information, Serge Moresi, David Reitman, Steven C. Salop, Yianis Sarafidis

Georgetown Law Faculty Publications and Other Works

We examine the role of private information on the impact of vertical mergers. A vertical merger can improve the information that is available to an upstream monopolist because, after the merger, the monopolist can observe the cost of its downstream merger partner. In the pre-merger world, because the costs of the downstream firms are private information, the monopolist has incomplete information and cannot implement the monopoly outcome: The expected pre-merger equilibrium price of the downstream product is lower than the monopoly price. After a vertical merger, the equilibrium input price that is charged to the downstream rival can either increase …

When Vertical Is Horizontal: How Vertical Mergers Lead To Increases In “Effective Concentration”, Serge Moresi, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

This article explains the inherent loss of an indirect competitor and reduction in competition when a vertical merger raises input foreclosure concerns. We then calculate a measure of the effective increase in the HHI measure of concentration for the downstream market, and we refer to this “proxy” measure as the “dHHI.” We derive the dHHI measure by comparing the pricing incentives and associated upward pricing pressure (“UPP”) involved in two alternative types of acquisitions: (i) vertical mergers that raise unilateral input foreclosure concerns (and the associated vertical GUPPI measures), and (ii) horizontal acquisitions of partial ownership interests among …

Vertical Merger Enforcement Actions: 1994–April 2020, Steven C. Salop, Daniel P. Culley

Georgetown Law Faculty Publications and Other Works

We have revised our earlier listing of vertical merger enforcement actions by the Department of Justice and Federal Trade Commission since 1994. This revised listing includes 66 vertical matters beginning in 1994 through April 2020. It includes challenges and certain proposed transactions that were abandoned in the face of Agency concerns. This listing can be treated as an Appendix to Steven C. Salop and Daniel P. Culley, Revising the Vertical Merger Guidelines: Policy Issues and an Interim Guide for Practitioners, 4 JOURNAL OF ANTITRUST ENFORCEMENT 1 (2016).

Asymmetric Stakes In Antitrust Litigation, Erik Hovenkamp, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

Private antitrust litigation often involves a dominant firm being accused of exclusionary conduct by a smaller rival or entrant. Importantly, the firms in such cases generally have asymmetric stakes: the defendant typically has a much larger financial interest on the line. We explore the broad policy implications of this fact using a novel model of litigation with endogenous effort. Asymmetric stakes lead dominant defendants to invest systematically more resources into litigation, causing the plaintiff's success probability to fall below the efficient level--a distortion that carries over to ex ante settlements. We explain that enhanced damages may reduce the problem, but …

Recommendations And Comments On The Draft Vertical Merger Guidelines, Jonathan B. Baker, Nancy L. Rose, Steven C. Salop, Fiona Scott Morton

Georgetown Law Faculty Publications and Other Works

These recommendations and comments respond to the request by the Federal Trade Commission and the Department of Justice’s Antitrust Division for public comment on the draft 2020 Vertical Merger Guidelines. We commend the agencies for updating the 1984 non-horizontal merger guidelines by recognizing the substantial advances in economic thinking about vertical mergers in the thirty-five years since those guidelines were issued. Our comments emphasize four issues: (i) the treatment of the elimination of double marginalization (“EDM”), particularly that the draft vertical merger guidelines appear inappropriately to make proof of cognizability part of the agencies burden and that they appear to …

Quantifying The Increase In “Effective Concentration” From Verticle Mergers That Raise Input Foreclosure Concerns: Comment On The Draft Vertical Merger Guidelines, Serge Moresi, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

This comment responds to the request by the Federal Trade Commission and the Department of Justice’s Antitrust Division for public comment on the draft 2020 Vertical Merger Guidelines. In this comment, we show that there is an inherent loss of an indirect competitor and competition when a vertical merger raises input foreclosure concerns. We also show that it then is possible to calculate an effective increase in the HHI measure of concentration for the downstream market. We refer to this “proxy” measure as the “dHHI.” We derive the dHHI measure by comparing the pricing incentives and associated upward …

Watching Insider Trading Law Wobble: Obus, Newman, Salman, Two Martomas, And A Blaszczak, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

“The crime of insider trading,” Judge Jed Rakoff has said, “is a straightforward concept that some courts have managed to complicate.” In the last eight years or so, insider trading law has wobbled visibly (in the Second Circuit in particular) in applying the standard for tipper-tippee liability originally set in the Supreme Court’s Dirks decision in 1983: from Obus (2012) to Newman (2014), with a detour to the Supreme Court in Salman (2016), and then two Martoma opinions (2017 and 2018). Most recently, the court of appeals offered what to many was a major surprise in its Blaszczak …

Gatekeepers, Cultural Captives, Or Knaves? Corporate Lawyers Through Different Lenses, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

Studying the behavior of high-status corporate lawyers is challenging. Much writing (including some of my own) addresses the risk of lawyer enabling of client misconduct by drawing from work in behavioral ethics suggesting that at least some apparent complicity is without full awareness of the impropriety. Is this naïve? The first part of this essay pushes harder on consciousness by looking more closely at the lengthy continuum—not a binary yes/no—in the awareness of wrongdoing risk as heavily influenced by the “slippery slope.” Looking at corporate lawyers’ professional responsibility through this lens has some interesting, and as far as I can …

The Effects Of Shareholder Primacy, Publicness, And “Privateness” On Corporate Cultures, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

There is widespread belief in both scholarship and business practice that internal corporate cultures materially affect economic outcomes for firms. In turn, there is also a growing belief that corporate governance arrangements materially affect corporate cultures. If this is true, it suggests an intriguing three-link causal chain: governance choices influence corporate performance, at least in part via their effects on internal culture. This essay, written for the “Berle XI” symposium, explores that possibility. This subject is important to lawyers and legal scholars because of the symbiotic nature of law and governance, with an increasing risk of enhanced corporate criminal and …

The Corporate Purpose Of Social License, Hillary A. Sale

Georgetown Law Faculty Publications and Other Works

This Article deploys the sociological theory of social license, or the acceptance of a business or organization by the relevant communities and stakeholders, in the context of the board of directors and corporate governance. Corporations are generally treated as “private” actors and thus are regulated by “private” corporate law. This construct allows for considerable latitude. Corporate actors are not, however, solely “private.” They are the beneficiaries of economic and political power, and the decisions they make have impacts that extend well beyond the boundaries of the entities they represent.

Using Wells Fargo and Uber as case studies, this Article explores …

Revising The Vertical Merger Guidelines (Ftc Hearings), Steven C. Salop

Georgetown Law Faculty Publications and Other Works

This slide deck was the author’s presentation at the FTC Hearings on Vertical Mergers (November 1, 2018). The deck sets out a summary of the author’s economic analysis and proposed revisions to the U.S. Vertical Merger Guidelines.

Accountability As A Debiasing Strategy: Testing The Effect Of Racial Diversity In Employment Committees, Jamillah Bowman Williams

Georgetown Law Faculty Publications and Other Works

Congress passed Title VII of the Civil Rights Act of 1964 with the primary goal of integrating the workforce and eliminating arbitrary bias against minorities and other groups who had been historically excluded. Yet substantial research reveals that racial bias persists and continues to limit opportunities and outcomes for racial minorities in the workplace. Because these denials of opportunity result from myriad individual hiring and promotion decisions made by vast numbers of managers, finding effective strategies to reduce the impact of bias has proven challenging. Some have proposed that a sense of accountability, or “the implicit or explicit expectation that …

“Encroachments And Oppressions”: The Corporatization Of Procedure And The Decline Of Rule Of Law, J. Maria Glover

Georgetown Law Faculty Publications and Other Works

This Article begins by providing a brief account of the corporatization of procedure through judicial decision-making and noting some of the detrimental effects it has had on the preservation of rule of law and access to justice. Part II goes on to explore how the judiciary does not retain full control over procedure and how corporate entities have little care for whether a procedural reform simply cuts back at litigation or goes further and cuts back at judicial power and the judicial role itself. To illustrate these points, Part II examines the most recent attempt at "procedural reform" by corporate …

Adolf Berle During The New Deal: The Brain Truster As An Intellectual Jobber, Robert Thompson

Georgetown Law Faculty Publications and Other Works

Thirty-seven year old law professor Adolf Berle had a career year in 1932. His book published that year, The Modern Corporation and Private Property (written with Gardiner Means), framed the fundamental twentieth century change in understanding modern corporations. Berle’s exchange with Merrick Dodd on the purpose of the corporation that played out that spring on the pages of the Harvard Law Review launched a still fierce debate over the role of shareholders and other stakeholders. His service as a brain truster for Franklin Roosevelt during the fall election gave voice to the transformative economic policies of the New Deal. This …

The Raising Rivals' Cost Foreclosure Paradigm, Conditional Pricing Practices, And The Flawed Incremental Price-Cost Test, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

There are two overarching legal paradigms for analyzing exclusionary conduct in antitrust – predatory pricing and the raising rivals’ costs characterization of foreclosure. Sometimes the choice of paradigm is obvious. Other times, it may depend on the structure of the plaintiff’s allegations. Some types of conduct, notably conditional pricing practices (CPPs), might appear by analogy to fit into both paradigms. CPPs involve pricing that is conditioned on exclusivity or some other type of favoritism in a customer’s purchases or input supplier’s sales. The predatory pricing paradigm would attack the low prices of CPPs. By contrast, the RRC foreclosure paradigm would …

Breaking Down Bias: Legal Mandates Vs. Corporate Interests, Jamillah Bowman Williams

Georgetown Law Faculty Publications and Other Works

Bias and discrimination continue to limit opportunities and outcomes for racial minorities in American institutions in the twenty-first century. The diversity rationale, touting the broad benefits of inclusion, has become widely accepted by corporate employers, courts, and universities. At the same time, many view a focus on antidiscrimination law and the threat of legal enforcement as outmoded and ineffective. Thus, many organizations talk less in terms of the mandates of laws such as the 1964 Civil Rights Act, or a “legal case,” and more in terms of a “business case” where benefits of inclusion seem to accrue to everyone. It …

Cultures Of Compliance, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

There has been a "cultural turn" in discussion and debates about the promise of corporate compliance efforts. These efforts are occurring quickly, without great confidence in their efficacy. Thus the interest in culture. This article explores what a culture of compliance means and why it is so hard to achieve. The "dark side" that enables non-compliance in organizations is powerful and often hidden from view, working via scripts that rationalize or normalize, denigrations of regulation, and celebrations of beliefs and attitudes that bring with them compliance dangers. The article addresses how both culture and compliance should be judged by those …