Law and Economics Commons^™

Extending Predation Analysis To Monopolist's Bundled Discounts Under Section 2: An Economic, Legal, And Comparative Perspective, Seth B. Chertok

ExpressO

In LePage’s v. 3M, the Third Circuit decided the first case at the federal appellate court level that dealt with the subject of bundled discounts by a monopolist under Section 2 of the Sherman Act in the period following the U.S. Supreme Court’s decision in Brooke Group Ltd. v. Brown & Williamson Tobacco Corporation. Prior to the decision in Brooke Group, the Third Circuit had only once before addressed this topic in Smithkline Corp. v. Eli Lilly and Company. Smithkline is only significant because it nearly suggested that any bundled discount, regardless of whether above or below cost, was anti-competitive. …

Ip And Antitrust Policy: A Brief Historical Overview, Herbert J. Hovenkamp

All Faculty Scholarship

The history of IP/antitrust litigation is filled with exaggerated notions of the power conferred by IP rights and imagined threats to competition. The result is that antitrust litigation involving IP practices has seen problems where none existed. To be sure, finding the right balance between maintaining competition and creating incentives to innovate is no easy task. However, the judge in an IP/antitrust case almost never needs to do the balancing, most of which is done in the language of the IP provisions. The role of antitrust tribunals is the much more limited one of ensuring that any alleged threat to …

How High Do Cartels Raise Prices? Implications For Optimal Cartel Fines, John M. Connor, Robert H. Lande

All Faculty Scholarship

This Article examines whether the current penalties in the United States Sentencing Guidelines are set at the appropriate levels to deter cartels optimally The authors analyze two data sets to determine how high on average cartels raise prices. The first consists of every published scholarly economic study of the effects of cartels on prices in individual cases. The second consists of every final verdict in a US. antitrust case in which a neutral finder of fact reported collusive overcharges. They report average overcharges of 49% and 31% for the two data sets, and median overcharges of 25% and 22%. They …

The Comparative Analysis On The Presumption Of Cartel Agreements Which Is Unique In The Korean Cartel Regulation Provision, Woo-Jong Jon

ExpressO

In terms of cartel regulation, Korea has a “presumption of agreement” provision that does not exist in the United States or in the European Union (EU). This provision is Article 19(5) of the Monopoly Regulation and Fair Trade Act (MRFTA). This provision was created for the convenience of enforcement because firms made cartel agreements by more sophisticated methods as the cartel regulation became more intense. Accordingly, in the continental law of Korea the approach of the courts in relation to cartel regulation is somewhat different to the United States. However, in terms of a standard for deciding specifically what to …

Federalism And Antitrust Reform, Herbert J. Hovenkamp

All Faculty Scholarship

Currently the Antitrust Modernization Commission is considering numerous proposals for adjusting the relationship between federal antitrust authority and state regulation. This essay examines two areas that have produced a significant amount of state-federal conflict: state regulation of insurance and the state action immunity for general state regulation. It argues that no principle of efficiency, regulatory theory, or federalism justifies the McCarran-Ferguson Act, which creates an antitrust immunity for state regulation of insurance. What few benefits the Act confers could be fully realized by an appropriate interpretation of the state action doctrine. Second, the current formulation of the antitrust state action …

Digital Wars -- Legal Battles And Economic Bottlenecks In The Digital Information Industries, Curt A. Hessler

ExpressO

The Digital Age has spawned major legal battles over the fundamental principles of intellectual property law and antitrust law. These diverse struggles can best be analyzed using the basic norm of "value added" from neo-classical normative economics. This analysis suggests that current intellectual property doctirnes provide excessive protection and current antitrust doctrines remain awkward in dealing with the cross-market leveraging of monopoly power in the presence of "natural monopolies" created by network effects.

Exclusive Dealing, The Theory Of The Firm, And Raising Rivals' Costs: Toward A New Synthesis, Alan J. Meese

Faculty Publications

No abstract provided.

Breaking The Bank: Revisiting Central Bank Of Denver After Enron And Sarbanes-Oxley, Celia Taylor

ExpressO

No abstract provided.

An Analysis Of The Duties And Obligations Of The International Legal Community To The Eradication Of Poverty And Growth Of Sustainable Development In Light Of The Jus Cogens Nature Of The Declaration Of The Right To Development, Freda R. Murray-Bruce

ExpressO

This paper examines the copious problem of world poverty affecting half of the world’s population in the South and assesses the international legal obligations of the international legal community, viz., developed states, transnational corporations and the international financial institutions of the IMF, World Bank and WTO to the eradication of poverty and the growth of sustainable development, in view of the inviolability and peremptory nature of the Charter of the UN, and the international human rights provisions arising therefrom. To this extent, we examine the 1986 General Assembly Declaration on the Right to Development, along with the other International Bill …

Discounts And Exclusions, Herbert J. Hovenkamp

All Faculty Scholarship

The discounting practices of dominant firms has emerged as one of the most problematic areas of private antitrust enforcement against single-firm conduct. The most difficult discount practices to assess are bundled, or multi-product discounts in situations where no significant rival produces every product that is included in the bundle. A debate has emerged over whether such discounts are properly assessed under a legal test that analogizes them to predatory pricing or to tying. Defendants typically prefer predatory pricing analogies, requiring a showing that the price of the assembled bundle was below a relevant measure of cost, such as marginal cost …

Unilateral Refusals To License In The Us, Herbert J. Hovenkamp, Mark D. Janis, Mark A. Lemley

All Faculty Scholarship

Most antitrust claims relating to intellectual property involve challenges to agreements, licensing practices or affirmative conduct involving the use or disposition of the intellectual property rights or the products they cover. But sometimes an antitrust claim centers on an intellectual property owner's refusal to use or license an intellectual property right, perhaps coupled with efforts to enforce the intellectual property right against infringers. The allegation may be that the intellectual property right is so essential to competition that it must be licensed across the board, or that a refusal to license it to one particular party was discriminatory, or that …

The Ghost Of Telecommunications Past, Philip J. Weiser

Michigan Law Review

When the canon for the field of information law and policy is developed, Paul Starr's The Creation of the Media will enjoy a hallowed place in it. Like Lawrence Lessig's masterful Code and Other Laws of Cyberspace, Starr's tour de force explains how policymakers have made a series of "constitutive choices" about how to regulate different information technologies that helped to shape the basic architecture of the information age. In so doing, Starr displays the same literary and analytical skill he used in writing the Pulitzer Prizewinning The Social Transformation of American Medicine, the firsthand experience he gained …

The Ftc And State Action: Evolving Views On The Proper Role Of Government, John T. Delacourt, Todd Zywicki

George Mason University School of Law Working Papers Series

The state action doctrine was born in an era of exceptional confidence in government, with governmental entities widely regarded as unbiased and conscientious defenders of the public interest. Over time, however, more cautious and skeptical theories of government began to gain sway. In particular, the school of thought known as “public choice” – which holds that governmental entities, like private firms, will act in their economic self-interest – began to influence both legal theory and competition policy. Indeed, a close examination of recent state action case law suggests that public choice thinking has driven a slow, but consistent, evolution of …

Antitrust And Inefficient Joint Ventures: Why Sports Leagues Should Look More Like Mcdonald’S And Less Like The United Nations, Stephen F. Ross

ExpressO

Antitrust law generally favors joint ventures that allow separate firms to integrate economic functions while continuing to compete as independent entities. In evaluating the risks to competition that joint ventures could pose, insufficient attention has been paid to the risk that joint ventures with market power may be structured so that the parties, acting in their independent self-interest, will prevent the venture from providing innovative goods and services responsive to consumer demand. In these cases, it may be better if a single firm provided services rather than having them provided jointly.

We illustrate this problem by challenging the conventional wisdom …

Are Public Sector Assets By Nature Insuitable For Financing Transnational Investments? , Lucien A. Rapp

ExpressO

Does the legal regime applicable to publicly owned assets constitute a policy instrument to protect public investment? In what way can this benefit public sector property ? Are the structures of the regime sufficiently well established to provide investors with enough certainty?

This paper aims to answer these questions by taking a trans-national perspective. The main concern is to resolve the problems of ownership or non-ownership of public sector assets in the context of financing trans-national investments.

This paper responds to this issue by examining (in two stages) the various consequences for trans-national investment; the first regarding the acquisition of …

From St. Ives To Cyberspace: The Modern Distortion Of The Medieval 'Law Merchant', Stephen E. Sachs

ExpressO

Modern advocates of corporate self-regulation have drawn unlikely inspiration from the Middle Ages. On the traditional view of history, medieval merchants who wandered from fair to fair were not governed by domestic laws, but by their own lex mercatoria, or "law merchant." This law, which uniformly regulated commerce across Europe, was supposedly produced by an autonomous merchant class, interpreted in private courts, and enforced through private sanctions rather than state coercion. Contemporary writers have treated global corporations as descendants of these itinerant traders, urging them to replace conflicting national laws with a law of their own creation. The standard history …

Monopolization, Exclusion, And The Theory Of The Firm, Alan J. Meese

Faculty Publications

No abstract provided.

Market Failure And Non-Standard Contracting: How The Ghost Of Perfect Competition Still Haunts Antitrust, Alan J. Meese

Faculty Publications

No abstract provided.

Beyond Network Neutrality, Christopher S. Yoo

All Faculty Scholarship

In this Article, Professor Yoo takes issue with the emerging scholarly consensus in favor of ""network neutrality,"" which would prohibit network owners from employing proprietary protocols or entering into exclusivity agreements with content providers that would reduce the transparency of the Internet. Economic theory suggests that network neutrality advocates are focusing on the wrong policy problem. Rather than directing attention on the market for Internet content and applications, the segments of the industry that are the most competitive and the most likely to remain that way, communications policy would be better served if the focus were placed on the segment …

Architectural Censorship And The Fcc, Christopher S. Yoo

All Faculty Scholarship

Most First Amendment analyses of U.S. media policy have focused predominantly on “behavioral” regulation, which either prohibits the transmission of disfavored content (such as indecent programming) or mandates the dissemination of preferred content (such as children’s educational programming and political speech). In so doing, commentators have largely overlooked how program content is also affected by “structural” regulation, which focuses primarily on increasing the economic competitiveness of media industries. In this Article, Professor Christopher Yoo employs economic analysis to demonstrate how structural regulation can constitute a form of “architectural censorship” that has the unintended consequence of reducing the quantity, quality, and …

Institutional Competition To Regulate Corporations: A Comment On Macey, Jill E. Fisch

All Faculty Scholarship

No abstract provided.

Law As Design: Objects, Concepts, And Digital Things, Michael J. Madison

Articles

This Article initiates an account of things in the law, including both conceptual things and material things. Human relationships matter to the design of law. Yet things matter too. To an increasing extent, and particularly via the advent of digital technology, those relationships are not only considered ex post by the law but are designed into things, ex ante, by their producers. This development has a number of important dimensions. Some are familiar, such as the reification of conceptual things as material things, so that computer software is treated as a good. Others are new, such as the characterization of …

Do Institutions Matter? The Impact Of The Lead Plaintiff Provision Of The Private Securities Litigation Reform Act, Stephen Choi, Jill E. Fisch, A. C. Pritchard

All Faculty Scholarship

When Congress enacted the Private Securities Litigation Reform Act in 1995 (“PSLRA”), the Act’s “lead plaintiff” provision was the centerpiece of its efforts to increase investor control over securities fraud class actions. The lead plaintiff provision alters the balance of power between investors and class counsel by creating a presumption that the investor with the largest financial stake in the case will serve as lead plaintiff. The lead plaintiff then chooses class counsel and, at least in theory, negotiates the terms of counsel’s compensation.

Congress’s stated purpose in enacting the lead plaintiff provision was to encourage institutional investors—pension funds, mutual …