Antitrust (Competition Law) Chapter
Tuyển tập bài về pháp luật Cạnh Tranh
Dưới đây là tựa đề và tóm tắt các bài viết về pháp luật cạnh tranh của các tác giả khác mà Ngữ vô tình thấy được bắt đầu từ ngày hôm nay (24/3/2021) và sẽ được cập nhật dần theo thời gian. Nhiều bài Ngữ cũng chỉ đọc qua tóm tắt và đưa lên đây chứ chưa kịp đọc hết. Click tựa đề để tải trọn bài từ nguồn chính chủ. Mong hữu ích.
Nhưng trước hết là phần giới thiệu về nguồn miễn phí để tìm hiểu căn bản về chủ đề này.
Pre-Merger Review and Challenges Under the Clayton Act and the Federal Trade Commission Act (Congressional Research Service, 2017)
The Business Professor (Antitrust Law)
Guide to Antitrust Laws (FTC)
Merger Review (FTC)
US Antitrust Laws: A Primer (Prof. Alden F. Abbott)
Principles of Antitrust Law (Jeff Miles, 2016)
The Globalization of Antitrust: History and Prospects (Prof. Alden F. Abbott)
US Antitrust Law and Policy in Historical Perspective (Prof. Sawyer, 2019)
Blog & Website
OECD (Mergers)
International Competition Network (Merger)
Antonin Scalia Law School, George Mason University, Law & Economics Research Paper Series
Prof. Herbert Hovenkamp (dubbed “the Dean of American Antitrust Law”) on SSRN
Merger Control 2021 (Global Legal Insights, Wachtell Lipton)
Lexology Getting The Deal Through: Merger Control 2022 (US, David Polk)
Vietnam merger control guide (Allens, Apr. 2021)
Vietnam: Merger Control and on Legal500 and ICLG - Merger Control 2022 (LNT & Partners)
Venture North Law's Legal Guide To Merger Control In Vietnam (2020)
Handbook on Competition Policy and Law in ASEAN for Business 2019
Lưu ý về một số nội dung trong hồ sơ thông báo tập trung kinh tế (VCCA, 2020)
OECD Competition Trends (Volume II. Global Merger Control, 2021)
Economics for Judges in the Competition Law Context (download here)
(31/5/2022)
Article 13 of Decree 35/2020 sets out two different sets of merger filing threshold. In particular, the one provided under Article 13.2 (Special Threshold) applies to transactions involving regulated companies such as credit institutions, insurance companies, and securities companies (Special Company), whereas the remaining one under Article 13.1 (Regular Threshold) applies to transactions involving remaining types of companies (Regular Company). The two sets of different merger filing thresholds give rise to various uncertainties for a M&A transaction involving a Special Company.
(9/2/2022)
Present-day advocates of antitrust reform referred to as “New Brandeisians” have invoked history in pressing the case for change. The New Brandeisians bemoan the upending of a mid-20th century “golden age” of antitrust by an intellectual movement known as the Chicago School. In fact, mid-20th century enforcement of antitrust was uneven and large corporations exercised substantial market power. The Chicago School also was not as decisive an agent of change as the New Brandeisians suggest. Doubts about the efficacy of government regulation and concerns about foreign competition did much to foster the late 20th century counter-revolution antitrust experienced.
(02/02/2022)
Doj’s Failure to Prove Its "Killer Acquisition" Claim in Sabre/Farelogix and Parallels to Other Recent Government Merger Litigation Losses
On August 20, 2019, the U.S. Department of Justice (DOJ) sued to block Sabre Corporation (Sabre), a provider of a global distribution system (GDS) to travel agents, from acquiring Farelogix, Inc. (Farelogix), an IT provider to airlines. DOJ advocated a killer acquisition theory, portraying Sabre as a dominant firm intent on “tak[ing] out” Farelogix, a “disruptive competitor that has been an important source of competition and innovation.’” Yet after a full trial, Judge Leonard P. Stark of the U.S. District Court for the District of Delaware roundly rejected the notion that Sabre was buying Farelogix simply to snuff out a nascent competitor. Tasked with predicting future competitive conditions, he instead reached the opposite conclusion: that Sabre “intend[ed] to continue offering [Farelogix’s product] by integrating it into the Sabre GDS platform,” which would allow Sabre “to better meet the demands of airlines and travel agencies.” Thus, far from diminishing innovation, Judge Stark believed that the merger “may well promote” it.
Where did the DOJ’s theory go wrong? And what parallels can be drawn between Sabre and other recent merger litigation losses by government enforcers?
(06/01/2022)
The present study analyzes the current level of progress in introducing a regional competition law and policy that would create a level playing field for the businesses within the ASEAN Economic Community (AEC). It is specifically focused on the state-owned enterprises (SOEs), which dominate various key industries in the ASEAN countries. […] In this respect, the paper discusses the experiences of the European Competition Network (ECN) in assessing economic concentrations involving SOEs. A recent string of merger cases involving Chinese SOEs has raised a number of practical problems in applying traditional competition law concepts such as single economic entity, control, etc. in relation to SOEs. The insights drawn from the ECN practice should be instructive for the development of the regional framework for competition law and policy in the AEC and wider Asia-Pacific region.
(04/12/2021)
PHỤ LỤC 1: BẢNG CẬP NHẬT KHUNG PHÁP LÝ CƠ BẢN THƯƠNG MẠI ĐIỆN TỬ VIỆT NAM
(27/11/2021)
Failure to File Reportable Mergers -- Update from China
Like many other jurisdictions, China has a system of compulsory pre-closing merger control. Like other jurisdictions, the Chinese antitrust authority – the State Administration for Market Regulation (“SAMR”) – investigates and punishes companies for failing to file reportable transactions. Quite unique to China, in contrast, is that companies are queuing up before SAMR to get fined. Why? This paper will take a deep look at China’s failure-to-file decisions and reply to this and other questions.
(17/11/2021)
Start-up or nascent firms play a vital role in competitive markets, but traditionally, their relevance to merger control has been limited to providing evidence that a relevant market was likely to become increasingly competitive. Recent empirical work has shown that in some cases the acquisition of a nascent firm has triggered the loss of not only a competitive constraint, but also a product (as when a retail acquisition results in a store closure). Such cases have been labelled ‘killer acquisitions’. Killer acquisitions are therefore a theory of harm, which is a particular variation on the more general ‘loss of potential competition through acquisition of a nascent firm’ theory of harm.
(29/10/2021)
(22/10/2021)
The Patent-Competition Interface in Developing Countries [on Google Books]
The conflict between the antitrust and patent laws arises in the methods they
embrace that were designed to achieve reciprocal goals.
(20/10/2021)
In October 2020, India and South Africa submitted an unprecedented proposal to the Council for Trade-Related Aspects of Intellectual Property Rights of the World Trade Organization, calling for a temporary waiver to combat the global pandemic. […] This chapter offers a critical appraisal of the COVID-19 TRIPS waiver proposal. It begins by identifying the arguments for the waiver. It then turns to arguments against the proposal, including those made by policymakers and commentators who question the waiver's effectiveness. After documenting both sides of the debate, this chapter concludes by exploring whether we should support the text-based negotiations on this instrument – and if so, whether we should also support its adoption.
(19/10/2021)
The Vietnam Competition and Consumer Authority ("VCCA") reports that 125 merger control notifications, most of which related to real estate, have been submitted since the law took effect in 2019.
In particular, in July 2019 to July 2021:
Approximately 10% of deals submitted were subject to further review.
30% of cases notified involved offshore transactions. These are subject to Vietnam's merger control regime if the enterprises participating in the transaction have (i) a commercial presence in Vietnam (through its subsidiaries, branches, or authorized agents in Vietnam), or (ii) business operations in Vietnam (including exporting goods or providing cross-borders services into Vietnam).
The VCCA also clarified that the Vietnam merger control regime seeks to regulate only relevant transactions that may have an anticompetitive impact on Vietnamese markets, especially those that enable enterprises to hold a dominant or monopoly position and heighten the risk of an abuse of dominance.
(12/10/2021)
There is no doubt that a robust competition policy and its proper enforcement through transparent competition law contributes to the growth and economic development by way of offering choices to the stakeholders, reduced prices due to reduced costs of production or otherwise (say innovation). Despite the aforesaid principle, we find that the Governments lack in promoting sustainable economic growth through competition reforms; this is more so true for the developing countries which have many more other things on the agenda (like tackling the challenges of malnutrition, poverty, unemployment, health and others) than competition. On this aspect, it is important to note that the developing countries did not realize the role an effective competition policy may play in a strong economy. While developed countries like Australia and UK have been able to map the inter-relationship between the competition law enforcement and economic / social benefits to the stakeholders, for developing countries this exercise has not been easy to carry out. There are several reasons for that, some of them include capacity building issues, institutional reforms, roles to be played by various stakeholders.
This article argues that company takeover regulation regimes must carefully balance two opposing notions. On the one hand, the regime must be designed to enable or facilitate the initiation and successful implementation of takeovers and mergers in the interests of economic growth and technological advancement. On the other hand, such a regulatory framework ought to be sensitive to the ever-increasing need to protect national security interests, especially from veiled threats. These threats include cybercrimes, private data hacking and espionage, which are endemic to takeovers contemplated by foreign persons that possess technological sophistication and are leaders in the rapidly unfolding Fourth Industrial Revolution. Recently some jurisdictions, such as the United States of America and the United Kingdom, have been active in reforming their investment laws to particularly strengthen the protection of national security interests. Similarly, in South Africa the debut introduction of section 18A of the Competition Amendment Act 18 of 2018 has enabled the addition of a concurrent but parallel standard to the pre-existing merger control criteria prescribed under section 12A of the Competition Act 89 of 1998. This article evaluates the efficacy of South Africa's framework for national security interests' protection in the context of merger control using its US and UK counterparts as comparators. Ultimately, the article proposes reforming the existing statutory and institutional framework to effectively accommodate national security interests in South African merger control.
Price controls damage markets by preventing the supply of products rising to meet demand. They can cause significant welfare losses, a deterioration in product quality, a reduction in investment and, in the long run, higher prices. Price controls also encourage black markets and illegal economic activity.
(10/10/2021)
The growing presence of the Chinese state-owned enterprises (SOEs) on the global markets through trade and investments makes the potential cross-border (anti)competitive effects of their consolidations relevant to multiple jurisdictions around the world. The following examples from the European Union (EU) and US, two leading competition law enforcers, demonstrate the regulatory concerns arising in connection with the continuous consolidation of Chinese SOEs, which have achieved substantial business presence in both jurisdictions.
(8/10/2021)
Economic Concentration in Vietnam [This is from IC. Scroll down for more briefs from other firms.]
The Ministry of Industry and Trade (MOIT) under the Vietnam Competition and Consumer Authority (VCCA) has recently issued its report on economic concentration activities in Vietnam over the period from July 2019 to July 2021. (You can access the report in English on the MOIT’s website here.) This article will briefly review some of the main findings of the report and discuss the recent developments in the laws that affect economic concentration, or Merger and Acquisition activities within Vietnam.
(25/9/2021)
The antitrust laws were not passed as an academic exercise. They were passed to break up the great Trusts, and to preserve competition. These were and are business issues. Our current debate over the impact of mergers on innovation seems to have left that business purpose and dimension out of the discussion. It is time to bring business reality back into the antitrust analysis. Innovation drives progress, and is a key factor in determining the success or failure of a business, an industry, and society overall. Innovation also is a concept with a rich heritage in business and social science. But our current legal discussions focus on only a part of what makes innovation important.
We have set up a distinction between the idea of an innovation and the development of that idea into a successful product, and then downgraded or ignored that second part. But the transition from idea to product is a critical step in the process. After reviewing the ways in which innovation has been defined in the legal literature, we propose a definition arising out of the business world that captures the full meaning of innovation. It turns out that the current approach to evaluating the impact of mergers on innovation doesn’t really have much to do with innovation at all.
(24/9/2021)
July 2021 marked the two-year anniversary of the entry into force of Vietnam’s new Competition Law (Law No. 23/2018/QH14). Among other things, the Competition Law established a brand-new merger control regime implemented by the Vietnamese Competition and Consumer Authority (“VCCA”) under the oversight of the Ministry of Industry and Trade (“MOIT”), pending the complete establishment of the new National Competition Commission.
(23/9/2021)
Từ tháng 7 năm 2019 đến tháng hết tháng 6 năm 2021, Bộ Công Thương đã tiếp nhận 125 hồ sơ thông báo tập trung kinh tế và tổ chức thẩm định việc tập trung kinh tế theo quy định của Luật Cạnh tranh năm 2018 và các văn bản quy định chi tiết và hướng dẫn thi hành.
(22/9/2021)
By any measure, the last 40 years of U.S. antitrust enforcement has been an abject failure.
(31/8/2021)
Part of a larger textbook on business law and economics, this Chapter surveys how economic analysis has been applied to competition, or antitrust, law, in the main jurisdictions on both sides of the Atlantic. The first part chronicles the successive schools of thought in the US and the EU, with emphasis on their link with the economics of the time and place where each school took shape. The second part illustrates how, in practice, the introduction of economics into the application of the law has led to trans-Atlantic convergence to a large extent, except as concerns the treatment of dominant firms. In the third part, the tools of law and economics are brought to bear to assess whether the now widespread use of economics in the application of the law has actually improved the effectiveness and efficiency of the law.
(26/8/2021)
The Vietnam Competition and Consumer Authority (VCCA) recently published an article explaining in detail the fundamental issues regarding agreements on price fixing, how such issue is addressed in other jurisdictions with developed antitrust regulations, and how it should be viewed within the context of Vietnam's Competition Law No. 23/2018/QH14 ("Competition Law").
Therein, the VCCA shares its views on what types of arrangement between competitors, or between enterprises operating in the same production/supply chain of goods/services, may be considered an "agreement to directly or indirectly fix the price of goods or services” pursuant to Article 11.1 of the Competition Law. Such arrangements may include setting minimum resale prices of goods and services and sharing of pricing information.
(25/8/2021)
Competition policy, today, is an essential element of the legal and institutional framework for the global economy. Increasingly, major issues of competition law enforcement and policy implicate the interests of multiple jurisdictions. This Article examines a range of related issues and developments, including the international dimensions of competition law enforcement and the resulting potential for both positive spillovers and conflicts of jurisdiction; issues concerning the role of competition policy in digital markets; issues concerning the application of competition law and policy in relation to intellectual property rights; issues concerning state-owned enterprises, subsidies, and the maintenance of competitive neutrality in markets; and recent progress in implementing standards to ensure procedural fairness (including transparency and nondiscrimination) in competition law enforcement worldwide. Consideration is given to the potential gains from greater international coordination with respect to aspects of these issues, while taking due account, also, of progress already made in relevant fora. Modest proposals are set out for related international dialogue, including in the context of the World Trade Organization (“WTO”) and other fora.
My colleague, Herbert Hovenkamp, is almost universally recognized as the most cited and the most authoritative US antitrust scholar. Among his many honors, his status as the senior author of the authoritative Areeda and Hovenkamp treatise makes him the unquestioned leader of the New Harvard School, which has long served as the bellwether for how courts are likely to resolve emerging issues in modern antitrust doctrine. Unfortunately, its defining tenets and its positions on emerging issues remain surprisingly obscure. My contribution to this festschrift explores the core commitments that distinguish the New Harvard School from other approaches to antitrust. It then explores Hovenkamp’s scholarship on key issues, including tying, the neo-Brandeisian/hipster antitrust movement, and digital platforms. A better understanding of Hovenkamp’s work and the New Harvard School should prove invaluable to anyone wishing to understand antitrust’s likely future.
The inherent limitations of remedies as a method of resolving competitive concerns with mergers have become more evident. The expansive use of remedies in actual practice has likely exceeded the capabilities of agencies and courts; and empirical evidence has increasingly cast doubt on their effectiveness. Accordingly, we propose a “no-remedies” policy under which the antitrust agency would not accept any conduct remedies and only limited divestitures. The agencies would only consider those structural changes that have been undertaken (or at least committed to) prior to the parties’ filing their merger proposal and would not enter into negotiation with the parties during the review period. This “Fix It or Forget It” (“FIFI”) policy would encourage merging parties to initiate the necessary competitive fixes and permit the agency to evaluate precisely what the parties file in their proposal. We believe this policy would strengthen merger enforcement by restoring the traditional roles of the agencies and the courts.
(20/8/2021)
The FTC filed an amended complaint against Facebook yesterday, reviving its ongoing federal antitrust case against the leading online social network.
U.S. District Court Judge James Boasberg surprised many observers when he dismissed the FTC’s original complaint in June 2021 for failing to allege sufficient facts to support the agency’s allegation that Facebook had monopoly power in a relevant market. The dismissal was unexpected as the federal antitrust agencies rarely face motions to dismiss and even more rarely lose them.
The FTC’s amended complaint again alleges that the social networking company has illegally maintained its monopoly in the market for personal social networking through a series of anticompetitive acquisitions, including Instagram and WhatsApp. The legal case has received criticism from Republican Commissioners and some commentators because the FTC previously blessed the acquisitions the agency now alleges to be part of an anticompetitive scheme to suppress competition.
The amended complaint attempts to address with data and evidence what Judge Boasberg considered to be the claim’s critical flaw—the FTC’s failure to demonstrate Facebook’s dominant share of the relevant market through anything other than naked allegations.
(17/8/2021)
This paper provides a full characterization of the price effects of horizontal mergers in the Cournot model with heterogeneous firms and constant returns to scale. We show that the price change brought about by a merger only depends on the smaller merging firm's share and the number of firms, but is independent of the distribution of shares among other firms. Price effects are determined by factors that are either directly observable by competition authorities or can be bounded under relatively mild assumptions on demand curvature or pass-through. Estimates based on concentration measures can instead be seriously misleading. We also provide closed-form solutions for calibration that approximate merger effects on the basis of simple pre-merger parameters.
(15/8/2021)
Our work draws from two key strands of economic literature that are routinely overlooked (or summarily dismissed) by critics of the status quo. For a start, as Frank Easterbrook argued in his pioneering work on The Limits of Antitrust, antitrust enforcement is anything but costless. In the case of merger enforcement, not only is it expensive for agencies to detect anticompetitive deals, but overbearing rules may deter beneficial merger activity that creates value for consumers. Indeed, not only are most mergers welfare-enhancing, but barriers to merger activity have been shown to significantly, and negatively, affect early company investment.
Second, critics mistake the nature of causality. Scholars routinely surmise that incumbents use mergers to shield themselves from competition. Acquisitions are thus seen as a means of eliminating competition. But this overlooks an important alternative: It is at least plausible that incumbents’ superior managerial or other capabilities make them the ideal purchasers for entrepreneurs and startup investors who are looking to sell. This dynamic is likely to be amplified where the acquirer and acquiree operate in overlapping lines of business. In other words, competitive advantage, and the ability to profitably acquire other firms, might be caused by business acumen rather than anticompetitive behavior.
Thus, significant and high-profile M&A activity involving would-be competitors may be the procompetitive byproduct of a well-managed business, rather than anticompetitive efforts to stifle competition. Critics systematically overlook this possibility. Indeed, Henry Manne’s seminal work on Mergers and Market for Corporate Control—the first to argue that mergers are a means of applying superior management practices to new assets—is almost never cited by contemporary researchers in this space. Our paper attempts to set the record straight.
What influences adoption of competition law? The case of ASEAN economies [Paywalled; abstract only]
We investigate the factors that influence adoption of competition law using a panel of countries from 1970 to 2015. We find that in addition to development level, trading arrangements and peer pressure have also influenced adoption. The spread of competition laws adopted from Western precedents left a question regarding the extent they have been tailored to the diverse circumstances of the Association of Southeast Asian Nations countries. We document the nature, structure, conduct and scope of competition laws by comparing and contrasting the experience of the Philippines and Thailand. Our descriptive analysis reveals that the force and influence of the law are not entirely dependent on early adoption.
(14/8/2021)
Giao dịch M&A: Những điểm cần chú ý khi khung pháp lý thay đổi (By Tung Tran, Global Vietnam Lawyers)
So với Luật Cạnh tranh 2004, đã có sự thay đổi lớn trong cách thức kiểm soát tập trung kinh tế trong Luât Cạnh Tranh 2018. Luật Cạnh Tranh 2018 không chỉ căn cứ vào tiêu chí thị phần để đánh giá tác động của tập trung kinh tế đối với cạnh tranh mà dựa vào tác động tổng thể - tác động “hạn chế cạnh tranh một cách đáng kể”.
(23/7/2021)
In this chapter, we address a number of critical questions. Is there a problem with large technology firms, or platforms, purchasing nascent competitors and suppressing competition before they can mature into vibrant competitors? Further, if there is a problem, are the current antitrust laws and the enforcement of those laws sufficient to combat the problem? If not, is there a legislative solution? In addressing these questions, we offer a clear delineation and classification scheme to differentiate potential competition, nascent competitors, and killer acquisitions. Ultimately, while classification schemes are helpful, the assessment of all horizontal acquisitions, whether the rivalry is currently happening or will happen in the future, comes down to the core analytical considerations involving competitive effects, entry, and efficiencies.
The use of NCAs is currently regulated under state law. These laws embody diverse approaches to the regulation of NCAs which generally limit enforcement of NCAs to those with reasonable and narrowly tailored terms. State law also incorporates various approaches to mitigating the negative effects NCAs might have on workers, including requiring adequate disclosure, consideration, and banning their use in certain employment contracts. These diverse approaches can leave regulatory gaps in certain states and can result in overregulation in others. But this can also be a feature—diverse approaches to legal regulation of NCAs at the state level takes advantage of the laboratory of the states to generate information that will allow economic research to better evaluate the effects of these diverse legal approaches without exposing the entire nation to potential mistakes.
On March 24, 2021, the Competition Commission of India (‘CCI’) took suo moto cognizance and launched an investigation against WhatsApp and Facebook (‘Investigation Order’). This was a result of WhatsApp’s recent notification to its users of changes in its privacy policy and terms of services, which allowed WhatsApp to share user data with its parent company Facebook. The CCI formed a preliminary view that the ‘take it or leave it’ nature of WhatsApp’s updated privacy policy and terms of service appears to be an abuse of dominance and, as such, violates the Competition Act 2002 (‘Competition Act’). This landmark order is the first by which the Indian competition watchdog has, contrary to former practice, delved into an issue such as privacy, which ordinarily falls under other areas of law, such as constitutional law.
(16/7/2021)
Asia Pacific Competition Highlights - Vietnam [Baker periodic update]
The VCCA recently issued a press release on what it considers may constitute a prohibited price-fixing agreement under Article 11.1 of the competition law, which offers very limited guidance:
Agreements to directly fix prices of goods and services include, but are not limited to, agreements on: (i) application of specific prices for goods and services; (ii) increasing price to a specific level or agreeing on the rate of price increase; (iii) not reducing price or reducing the price at a specific level or a discount rate; (iv) determining price calculation formula or price components; (v) specifying the minimum price of goods and services; (vi) determining or maintaining prices within a certain range; (vii) sharing information and engaging in consultation when increasing or decreasing the selling price; (viii) determining prices of goods and services for contract negotiation with a third party.
Agreements to indirectly fix prices of goods and services include, but are not limited to, agreements on: (i) not to discount, promote, or grant credit, or not to carry out after-sales programs, customer care or other commercial conditions directly related to the price; (ii) the minimum resale price of goods and services to customers; (iii) exchanging information on prices, promotions, price reductions, and discounts.
In the absence of relevant guiding legislation, the VCCA's interpretation provides helpful clarity on the types of price-related practices that may be considered a potentially anti-competitive agreement. This notably includes minimum resale price maintenance, which has generally been assessed as conduct that may amount to an abuse of dominance under Vietnam competition law.
More information can be found here. [The link will lead you to an article by VCCA entitled “Thỏa thuận ấn định giá dưới góc độ pháp luật Cạnh tranh”.]
(7/7/2021)
Key Takeaways:
The decision to depart from the consumer welfare standard (and possibly the rule of reason) leaves Section 5 without a standard; this will encourage a greater level of FTC intervention in business activity and will require time before businesses can ascertain how to comply with the new rules.
FTC staff will now have an expedited ability to carry out compulsory process requests, undoubtedly increasing the number and scope of investigations conducted by the FTC.
The Democratic Commissioners stressed that the changes adopted will increase transparency and allow the FTC to be more nimble and responsive in its enforcement, and will allow the FTC to fully live up to its statutory mandate and be a more aggressive enforcer.
The Republican Commissioners made repeated arguments that the resolutions went beyond the FTC's statutory mandate, citing AMG Capital Management LLC v. FTC as a recent warning against agency overreach, where the Supreme Court unanimously held that the FTC exceeded its statutory authority under Section 13(b) when seeking disgorgement in federal court. The Republican Commissioners also criticized the lack of notice and public comment, as well as the lack of staff involvement in the lead-up to the meeting.
All four votes were decided along partisan lines, with the three Democratic Commissioners voting in favor of all the resolutions and the two Republican Commissioners voting against. This partisan division is likely indicative of what is to come under the Biden FTC as long as the current line-up of Commissioners remains.
The public comments at the end of the meeting were largely from participants in various industries, including many from the restaurant, healthcare, and farming industries, calling for more aggressive antitrust and consumer protection enforcement against food delivery services, dominant pharmaceutical companies, dominant technology contractors, predatory franchisors, and grocery suppliers. We can expect that all of these areas will receive some attention in the coming years.
(4/7/2021)
We divide our agenda into four R’s for the Biden administration: restore integrity, rejoin the world, reinvigorate enforcement, and rethink key approaches. The first three R’s focus on the immediate; they are goals for the first year of Biden antitrust. The fourth–rethinking key approaches—is critical for making more fundamental changes in antitrust.
Premerger process: The present balkanized system of pre‐merger notification is ostensibly wasteful. The same multi‐jurisdictional merger must be filed in scores of jurisdictions around the world. Staffs of resource‐stretched agencies (and less stressed ones) devote hundreds of hours per merger to getting and analyzing documents and predicting economic effects, even though the effects are likely to be substantially the same in a number of the jurisdictions, most of the documents needed for analysis are identical, and 95% of mergers filed have no anticompetitive effects. Vested interests (including lawyers), nationalistic interests, and simple lack of vision keep us from breaking out of this dysfunctional system.
We need a common clearing house for first filings, which give enough information for jurisdictions to request a tailored second filing when indicated. This suggestion was made in both the ICPAC Report6 and the Antitrust Modernization Commission Report7 but no action has been taken. The US antitrust agencies should develop the concept and take it to the International Competition Network for further refinement and consensus‐building.
(28/6/2021)
Government Antitrust Lawsuits Against Facebook Thrown Out by Federal Judge [And as usual, a full copy of the judgment is right here. This is one of the things that I love most about America: you can get access to a judicial opinion quickly (or in many cases, like this one, instantly). Fantastic!]
A federal judge dismissed antitrust lawsuits against Facebook Inc. filed by the U.S. government and most states, a major win for the company before the cases even got off the ground.
U.S. District Judge James Boasberg in Washington on Monday granted the social-media giant’s requests to dismiss lawsuits filed by the Federal Trade Commission and state attorneys general in December. The dismissals, which came in a pair of rulings, came before any pretrial proceedings had progressed.
Judge Boasberg said the FTC’s lawsuit was “legally insufficient” because it didn’t plead enough allegations to support monopolization claims against Facebook. The judge, however, said the commission can try again and gave it 30 days to attempt to file an amended lawsuit.
The rulings dealt a direct, early blow to bipartisan government efforts to pursue Big Tech giants on allegations they have unlawfully monopolized the marketplace. They also served as a reminder that antitrust cases—particularly against dynamic tech-sector firms that offer free, nontraditional products—can be difficult to win before federal courts that have narrowed the reach of antitrust laws over several decades.
[Update: You might also wish to read this “The Antitrust Case Against Facebook Crumbles”, and this “Facebook Is Big But Maybe Not a Monopoly”]
(22/6/2021)
Merger Control Unchained – On the legal (un)certainty of the substantive test in EU merger control [Lund University’s master thesis]
The existing substantive test in EU merger control was adopted in 2004 with
the aim of covering concentrations between undertakings which would
significantly impede effective competition in the market without creating or strengthening a dominant position. Concentrations giving rise to such so-
called unilateral effects typically take place in oligopolistic markets, which is why the perceived gap in the legislation was referred to as the ‘oligopoly gap’. In closing the gap, the scope of the substantive test in EU merger control was widened. This gave rise to concern as to the legal certainty of the test, which has not yet been remedied.
This paper deals with legal certainty issues related to the substantive test in
the EU merger control regime and the way the test is applied by the European
Commission. By identifying current problems, the paper further aims to
examine how legal certainty could be increased in merger appraisals. Special
attention is given to the application of the test to concentrations between
undertakings in oligopolistic markets.
The introductory part of the paper gives a background to the adoption of the
substantive test as well as an overview of its design and scope. Furthermore,
the concept of legal certainty is discussed and the understanding of legal
certainty which is adopted in the paper and which forms the basis for the
analysis is established. The core feature of legal certainty, i.e. predictability, as well as legal certainty in the EU context are also discussed.
The analysis suggests that the main problem with merger assessments is the
lack of predictability. The factors contributing to the legal uncertainty stem
from the legislation and the uncertainty as to the normative value of the
Commission’s guidelines for applying the test, as well as the Commission’s
way of applying the latter. The paper suggests a domino-efficient solution
which mainly targets the Commission’s way of applying the test and which
should increase legal certainty all while taking into account the need for
flexibility in the market.
Patent Law: An Open-Source Casebook (Entire Book) [I don't have a separate IP law chapter on this page, so I just leave this book right here.] [See also “Vietnam: IP Litigation & Enforcement Guide” by Rouse]
Less than a handful of casebooks are truly open source, in the sense of being fully modifiable. Patent Law: An Open-Source Casebook is the first patent law casebook that provides adopting professors, students, and others the ability to fully modify its contents. This file comprises the casebook in its entirety, including the cover, table of contents, preface, and chapters covering historical and economic perspectives on patent law, an overview of the modern patent system, the patent document and its claims, subject matter eligibility, utility, disclosure, anticipation, obviousness, infringement, defenses, and remedies.
(21/6/2021)
This paper presents a broad retrospective evaluation of mergers and merger decisions in markets dominated by multisided digital platforms. First, we document almost 300 acquisitions carried out by three major tech companies—Amazon, Facebook, and Google—between 2008 and 2018. We cluster target companies on their area of economic activity providing suggestive evidence on the strategies behind these mergers. Second, we discuss the features of digital markets that create new challenges for competition policy. By using relevant case studies as illustrative examples, we discuss theories of harm that have been used or, alternatively, could have been formulated by authorities in these cases. Finally, we retrospectively examine two important merger cases, Facebook/Instagram and Google/Waze, providing a systematic assessment of the theories of harm considered by the UK competition authorities as well as evidence on the evolution of the market after the transactions were approved. We discuss whether the competition authority performed complete and careful analyses to foresee the competitive consequences of the investigated mergers and whether a more effective merger control regime can be achieved within the current legal framework.
(20/6/2021)
This paper addresses the potentially negative implications of proposed antitrust legislation on the entrepreneurial ecosystem in general and particularly focuses on the Venture Capitalists (VCs) that fund them. First, it offers a review of how antitrust merger law currently works and how proposed legislative changes to antitrust may threaten the innovative VC-backed ecosystem that has made the United States the center of global innovation across many different industries. Accompanying this review are some empirical observations. Second, recognizing that understanding innovative entrepreneurial activity calls for a deep appreciation of those who back it, the paper provides an overview of the entrepreneurial ecosystem and the motivations of VCs. In so doing, it identifies the drivers of entrepreneurial innovation and explain why changes to merger law may threaten these models of facilitating innovative growth-orientated entrepreneurs. Lastly, the paper concludes that changes to merger law may have negative effects on the entire entrepreneurial ecosystem and hinder US innovation.
(19/6/2021)
The article will discuss the boundaries of UK merger control set by national security concerns against the background of public interest considerations in the decisional practice of the competent authorities. The article will first present an overview of the existing legal framework for considering public interest when reviewing mergers and acquisitions in strategic industries or companies. It will then present the main precedents where issues of national security were raised and will discuss how the CMA and the Secretary of State assessed these transactions from both a competition and national security angle. Finally, the article will present the recent legislative initiative by the UK Government to extend national security grounds reflects a new approach towards FDI.
Killer acquisitions and European merger control in the digital era [Master's Thesis]
The Big Tech companies, more precisely the five American giants: Google, Apple, Facebook, Amazon and Microsoft, have been performing a massive number of startup acquisitions and strengthening their dominant position in the market. In an economical study about mergers in the pharmaceutical sector the term killer acquisition was firstly adopted to define a transaction in which an incumbent, after acquiring a innovative target, terminates the development of the target’s innovations in order to prevent a future competitor. This term has also been employed for the technological sector as a harm theory to determine anticompetitive behaviour. In Europe, it has given raise to concerns because such transactions are not scrutinised by the competition authorities. And that is the reason why there is a lively debate about the necessity or not of the change of the Mergers Regulation in order to prevent the occurrence of killer acquisitions.
Since 1914, Section 8 of the Clayton Act has prohibited interlocking directorates — when competing corporations are represented on each other’s boards. In 1990, the act was amended to add officers, thereby barring anyone from serving as a director or officer of any two competitors, defined as businesses where “the elimination of competition by agreement between them would constitute a violation of the antitrust laws.” There are exemptions and safe harbors, including one based on the degree of overlap in the businesses, so minor competition at the fringes of core businesses may not trigger the law. But the definitions are broad enough to potentially encompass many companies in the same industry, even in the absence of direct competition.
Unlike most other antitrust provisions, Section 8 does not require any actual anticompetitive behavior. It is enough that companies could violate the law by reaching an anticompetitive agreement. If the potential to violate the act exists, the companies are prohibited from sharing directors or naming directors or officers to the other’s board. As one court said, the law was designed to “nip in the bud incipient violations of the antitrust laws by removing the opportunity or temptation to such violations through interlocking directorates.”
(18/6/2021)
The modern antitrust debate has become characterized by sustained attacks on the integrity of antitrust institutions and by unsubstantiated dismissals of debate. This atmosphere has led to a variety of proposals for radical change to the antitrust laws and their enforcement that we believe are unsupported by the evidence, counterproductive to promoting competition and consumer welfare, and offered with an unwarranted degree of certainty. Many of these current proposals would (1) undermine the rule of law; (2) undo the healthy evolution of antitrust law in the courts over time; (3) require antitrust agencies to micromanage the economy by picking winners and losers; (4) abandon a focus on consumer welfare in favor of vague and politically-oriented goals; and (5) undermine successful American businesses and their competitiveness in the global economy at the worst-imaginable time.
The assertions about the state of antitrust law and policy that purportedly justify these radical changes are not supported by the evidence. A more accurate reading of the evidence supports the following view of the American economy and the role of antitrust law: (1) the American economy—including the digital sector—is competitive, innovative, and serves consumers well; (2) structural changes in the economy have resulted from increased competition; (3) lax antitrust enforcement has not allowed systemic increases in market power; (4) existing antitrust law is adequate for protecting competition in the modern economy; (5) history teaches that discarding the modern approach to antitrust would harm consumers; and (6) common sense reforms should be pursued to improve antitrust enforcement.
An attempt is made by this study in order to determine whether AML [Anti-monopoly Law] is for protectionism or a leap forward. For this reason, the first part of this article sheds light on AMLs background along with aims and objectives of it while providing a precise glimpse into proposed merger under the AML. For this reason, the researcher took Coca Cola’s case in China. In addition to this, some concerns raised by scholars over the decision of China with regard to Coca Cola’s merger with Huiyuan are also addressed. The third part of this paper lays out a legal framework in order to create as well as implement AML, with special focus on the process of merger review. It is argued by the researcher that Coca Cola’s proposed merger was blocked by China under AML, which also drew world’s attention along with criticism. The reason is China flexed its antitrust practice muscles at the expense of this since a Coca Cola’s merger was blocked; while there is no doubt that it always attracts international business community. For decades China has been seen as the land of opportunity and growth for foreign investors and only time will determine whether this decision signals a change in that policy. The role of protectionism is explained by part three while investigating concerns with reference to public interests under AML. In this section, underlying rationale to block merger of Coca Cola with Huiyuan is analyzed by proposing that how can improvement be made by China in the merger review process. China made us believe that the decision to block such merger was for lessening and protecting competition, however, clear guidelines are greatly required by enforcement agencies in order to follow as well as increase transparency in the processes of decision making, it would ultimately help china to make better plans for enterprises in the future while showing China as a greatly attractive and fertile ground in order to grow and expand. The paper is concluded in part four along suggesting the adoption of clear merger guidelines which would diminish all the concerns raised by legal scholars; such guidelines would help foreign firms in terms of merger with domestic enterprise in China in the future. Qualitative research methodology has been applied to the following article.
This chapter explores investment, entrepreneurship, and innovation in the United States and Europe and takes stock of the two region’s relative performance in encouraging technological change. Although there is no single perfect metric for measuring success in innovation, there are several qualitive and quantitative measures through which we can assess how countries compare in fostering a culture that promotes the improvement or development of products and services. That evidence suggests that, at least for now, the United States has a far healthier innovation culture than Europe. This chapter also explores some of the specific criticisms that assert that innovation has declined in the United States as compared to Europe in part because of ineffective competition policy in America. In the end, the fact that the United States continues to be the world’s innovation hub warns against implementing sweeping and radical changes to antitrust and broader regulatory policy that might undermine a culture that fosters competition, innovation, and economic growth.
(14/6/2021)
Each of us—one an attorney and the other two software experts—has substantial experience monitoring the implementation of court-ordered remedies in two leading hi-tech cases: United States v. Microsoft Corp. and United States v. Bazaarvoice, Inc. We discuss challenges that attorney and expert monitors confront in overseeing company compliance with antitrust remedial decrees in cases against hi-tech companies. We first summarize the legal principles applicable to antitrust remedies. Thereafter, we discuss oversight in the Microsoft and Bazaarvoice cases. Finally, we offer takeaways on effective antitrust decree monitoring.
(6/6/2021)
The main issue that is still disrupting private enforcement of competition law is the calculation of damages. The 2014 Damages Directive contains some alleviations. Particularly Article 17(2) Damages Directive foresees a rebuttable presumption that cartels cause harm. Despite the clear statement in Recital 47 Damages Directive that this presumption should not cover the concrete amount of harm and studies that vary significantly regarding the typical overcharge, some Member States have created presumptions related to the amount of harm. Other Member States want to expand the presumption to non-cartel violations. This article takes a comparative analysis of the different Member States approaches and attempts to test the Damages Directive and EU competition law boundaries more generally. The article takes a [skeptical] perspective on some of the Member States’ approaches and proposes other solutions to ease the predicaments of damage quantifications: (i) a focus on illicit gains, (ii) amending the calculation guidelines and create a EU-wide competition damages database, (iii) create further procedural measures, such as collective redress instruments, special legal venues for private enforcement of competition law and expert judges, and (iv) foster further party-led solutions.
(27/5/2021)
The Globalization of Antitrust: A Cost-Benefit Appraisal (This will lead you to “The Globalization of Antitrust: History and Prospects”. And it’s precious.)
The United States stood virtually alone when it enacted its first antitrust statute in 1890. Today, almost all nations have adopted competition laws (the term used in most other nations), and US antitrust agencies interact with foreign enforcers on a daily basis[…]
The development of European competition law in the 1950s, and its incorporation into treaties that laid the foundation for the European Union (EU), was particularly significant. The EU administrative approach to antitrust, based on civil law (as compared to the U.S. common law approach), has greatly influenced the contours of most new competition laws. The EU, like the U.S., focuses on anticompetitive joint conduct, single firm conduct, and mergers. EU enforcement (carried out through the European Commission’s Directorate General for Competition) initially relied more on formal agency guidance than American antitrust law, but it began to incorporate an economic effects-based consumer welfare-centric approach over the last 20 years. Nevertheless, EU enforcers still pay greater attention to the welfare of competitors than their American counterparts.[…]
Developing and former communist bloc countries rapidly enacted and implemented competition laws over the last three decades. Many newly minted competition agencies suffer from poor institutional capacity. The U.S. Government and the EU have worked to enhance the quality and consistency of competition enforcement in these jurisdictions by supporting technical support and training.
(23/5/2021)
A monopoly refers to when a company and its product offerings dominate a sector or industry. The term monopoly is often used to describe an entity that has total or near-total control of a market.
Monopolies can result from extreme free-market capitalism; in that absent any restriction or restraints, a single company or group becomes large enough to own all or nearly all of the market (including by acquiring competitors) for a particular type of product or service.
On the other hand, monopolies can also arise and be sustained by government-enforced barriers to entry or regulations that limit competition (e.g., in the case of utilities).
(22/5/2021)
In recent years, academics and regulators have raised concerns about the high levels of common ownership within U.S. firms. The argument is that common owners—that is, investors holding stakes in multiple firms within a single industry—have incentives to discourage competition among industry rivals in their portfolios. Common ownership has increased steadily over the past few decades, fueled by the rise in institutional ownership and the emergence of large and highly diversified institutional investors. Whereas only 17% of S&P 500 firms had a blockholder that also owned a block in a competitor firm in 1990, this fraction increased to 81% by the end of 2015. A growing number of academic studies conclude that the rise in common ownership has indeed caused cooperation among firms to increase and competition to decrease.[…]With a more thorough understanding of the advantages and shortcomings of each approach, we then revisit the conclusions of prior empirical studies that common ownership affects firm behavior.
(21/5/2021)
In December 2020, the Federal Trade Commission (FTC) and a group of 46 state attorneys general (state AGs) filed separate antitrust lawsuits against Facebook. Both lawsuits challenge the same conduct: Facebook’s acquisitions of the photo-sharing service Instagram and the messaging app WhatsApp, and its treatment of software developers whose apps compete with Facebook products. Both complaints also seek noteworthy remedies—divestitures of Instagram and WhatsApp, plus limitations on Facebook’s ability to engage in future mergers and acquisitions. This Sidebar reviews the lawsuits, flags the legal issues on which they will likely turn, and discusses proposals to amend the existing merger-enforcement regime.
(20/5/2021)
There is void in the literature at the intersection of antitrust law and legacy business practices. This issue has come to forefront with Epic Games’ antitrust suit against Apple for its App Store policies, which have been in place ever since the online marketplace opened in 2008. The same issues are at the center of the current Apple v. Pepper litigation and in regulatory proposals to alter Apple’s business practices both at the state and federal levels. Legacy conduct has also played a role in the Supreme Court’s controversial Ohio v. American Express decision and the Ninth Circuit’s FTC v. Qualcomm decision. This raises a question as to how antitrust should treat long-standing business practices—practices that this Article labels “legacy conduct”—that initially were benign or even procompetitive, but which come under heavy scrutiny once the firm employing it obtains considerable market power. The fundamental question raised here is whether the fact that a product has become highly successful turns a previously legitimate business practice into one that antitrust should treat as objectionable.
Antitrust is atomistic: deliberately focused on trees, not forests. It pays attention to the consequences of individual acts alleged to be anticompetitive. That focus is misplaced. Companies and markets don’t focus on one particular act to the exclusion of all else. Business strategy emphasizes wholistic, integrated planning. And market outcomes aren’t determined by a single act, but by the result of multiple acts by multiple parties in the overall context of the structure and characteristics of the market…Unfortunately, modern antitrust law has strayed too far down the atomistic pathway. Courts and agencies too often take a narrow, transaction-specific focus to challenged conduct. Instead of asking “is the overall behavior of this company reducing competition in the market,” they focus on a particular merger or challenged monopolistic practice in isolation. Courts and agencies need to move beyond atomistic antitrust and take a more holistic look at the circumstances and effects of an overall pattern of conduct. Our goal in this article is to set out a framework for integrated antitrust, in which individual actions can be understood not just on their own but also as part of a comprehensive whole.
Partial ownership of stock in multiple competing firms is an important scholarly and policy topic in both corporate and antitrust law. Until now, the discussion has focused on ownership. This essay shifts the debate from a focus on common ownership to a focus on common control. No prior work has addressed the role of debt-related corporate control in corporate governance and competition, but debt-control-based governance is a critical part of the corporate landscape. Further, various creditors can exert control over more than one company in the same industry without any ownership. These insights in the corporate finance and bankruptcy law literatures have not penetrated antitrust debates or policy. Applying such insights, this essay suggests that a fundamental change in antitrust policy is necessary to police against debt-control-based collusion.
(15/5/2021)
In this chapter, we address three issues relating to vertical mergers and antitrust: (1) incorporating the elimination of double marginalization into the analysis of the likelihood of a unilateral price effect rather than treating it as a separate efficiencies defense; (2) recognizing, inter alia, the importance of reduced transaction costs in analyzing the efficiencies commonly associated with vertical mergers; and (3) highlighting that the weight of the empirical evidence continues to support the proposition that vertical mergers are less likely to generate competitive concerns than horizontal mergers.
Vertical restraints are contractual arrangements between firms at different levels in a supply chain (e.g., manufacturer and retailer, manufacturer and distributor, distributor and retailer) that are more complex than simple per-unit pricing arrangements. The purpose of this chapter is to provide an overview of the economics of vertical restraints and thereby provide an economic foundation for the antitrust analysis of vertical restraints. The literature on vertical restraints is large. This chapter touches on many of the relevant concepts at a high level, references past work for certain ideas, and focuses in depth on four main issues: (i) the general nature of double marginalization and the benefits of vertical restraints that eliminate it in both single- and multi-product settings; (ii) the welfare effects of vertical restraints that address service externalities; (iii) the implications of bilateral contracting and bargaining for the effects of vertical restraints; and (iv) the effects of anti-steering provisions, a vertical restraint that does not appear explicitly in most textbooks but has been prominent in antitrust cases in the digital age.
(14/4/2021)
Antitrust litigation often requires courts to consider challenges to vertical “control.” How does a firm injure competition by limiting the behavior of vertically related firms? Competitive injury includes harm to consumers, labor, or other suppliers from reduced output and higher margins. Historically antitrust considers this issue by attempting to identify a market that is vertically related to the defendant, and then consider what portion of it is “foreclosed” by the vertical practice. There are better mechanisms for identifying competitive harm, including a more individualized look at how the practice injures the best placed firms or bears directly on a firm’s ability to reduce output and increase its price without losing so many sales that the price increase is unprofitable.
(13/4/2021)
A nascent competitor is a firm whose prospective innovation represents a serious threat to an incumbent...In this Article, we identify nascent competition as a distinct analytical category and outline a program of antitrust enforcement to protect it. We make the case for enforcement even where the ultimate competitive significance of the target is uncertain, and explain why a contrary view is mistaken as a matter of policy and precedent. Depending on the facts, troubling conduct can be scrutinized under ordinary merger law or as unlawful maintenance of monopoly, an approach that has several advantages…Finally, our suggested approach poses little risk of dampening desirable investment in startups, as it is confined to acquisitions by those firms most threatened by nascent rivals.
(12/4/2021)
Computational antitrust comes to us at a time when courts and agencies are underfunded and overwhelmed, all while having to apply indeterminate rules to massive amounts of information in fast-moving markets. In the same way that Amazon disrupted e-commerce through its inventory and sales algorithms and TikTok’s progressive recommendation system keeps users hooked, computational antitrust holds the promise to revolutionize antitrust law. Implemented well, computational antitrust can help courts curate and refine precedential antitrust cases, identify anticompetitive effects, and model innovation effects and counterfactuals in killer acquisition cases. The beauty of AI is that it can reach outcomes humans alone cannot define as “good” or “better” as the untrained neural network interrogates itself via the process of trial and error.
Curious about “computational antitrust”? See Computational Antitrust: An Introduction and Research Agenda.
(8/4/2021)
On 26 March 2021, the European Commission (EC) published new guidance on when it will accept referrals from EU National Competition Authorities (NCAs) to review deals involving potential “killer acquisitions” that would previously have avoided merger review. The new Article 22 EU Merger Regulation guidance follows on from a Vestager speech in September 2020 that noted the EC’s intention of “accepting referrals from national competition authorities of mergers that are worth reviewing at the EU level – whether or not those authorities had the power to review the case themselves”.
(7/4/2021)
Unfair competition law and antitrust law are the cornerstones of competition law, which aims to enhance economic efficiency, protect consumers and promote private competitive markets. In China, the Anti-Unfair Competition Law and Anti-Monopoly Law accordingly constitute the country’s main regulatory structure of competition policy. China began to adopt antitrust rules only after its transition to the market economy in the late 1970s and early 1980s. With the purpose of fostering a market economy, the Chinese government started its legislation on fair and free market competition in the 1990s. The promulgation and implementation of the first Anti-Unfair Competition Law in 1993 was considered a swift success and a milestone from this perspective. On the other hand, although legislators since 1994 had been making endeavours to enact the country’s Anti-Monopoly Law, the first codified version was not adopted until 2007. This chapter introduces the regulatory framework of Anti-Unfair Competition Law and Anti-Monopoly Law. In addition to the anti-competitive, monopolistic, and abusive conducts prohibited by the law, the chapter also focusses on the interface and relationship between IP and these two laws.
(30/3/2021)
This chapter examines recent developments in economic research relating to antitrust regulation, paying specific attention to research in the areas of collusion and merger enforcement. […] With respect to mergers, this includes important work on the impact of enforcement institutions, both theoretical and empirical work on unilateral effects, and theoretical work on the selection of which mergers get proposed to antitrust agencies and optimal policy in the face of that selection.
(28/3/2021)
This paper […] studies the impact of the 2010 Horizontal Merger Guidelines after 10 years.
Horizontal shareholdings exist when a common set of investors own significant shares in corporations that are horizontal competitors in a product market. Economic models show that substantial horizontal shareholdings are likely to anticompetitively raise prices when the owned businesses compete in a concentrated market. […] I also show that stock acquisitions that create anticompetitive horizontal shareholdings are illegal under current antitrust law, and I recommend antitrust enforcement actions to undo them and their adverse economic effects.
This Article shows that new economic proofs and empirical evidence provide powerful confirmation that, even when horizontal shareholders individually have minority stakes, horizontal shareholding in concentrated markets often has anticompetitive effects. The new economic proofs show that, without any need for coordination or communication, horizontal shareholding will cause corporate managers to lessen competition to the extent they care about their vote share or re-election odds and will cause executive compensation to be based less on firm performance and more on industry performance. […] I further demonstrate that the various excuses for delaying enforcement action are meritless. Finally, I provide new legal theories for tackling the problem of horizontal shareholding. I show that when horizontal shareholding has anticompetitive effects, it is illegal not only under Clayton Act §7, but also under Sherman Act §1. […] I further show that anticompetitive horizontal shareholding also constitutes an illegal agreement or concerted practice under EU Treaty Article 101, as well as an abuse of collective dominance under Article 102.
(26/3/2021)
How should plaintiffs show harm from antitrust violations? The inquiry naturally breaks into two issues: first, what is the nature of the harm? and second, what does proof of causation require? The best criterion for assessing harm is likely or reasonably anticipated output effects. […] The standard for proof of causation then depends on two things: the identity of the enforcer and the remedy that the plaintiff is seeking. […] For public agencies, enforcement involves both the condemnation of past harm and the management of future risks. […] While a showing of actual harm has evidentiary importance, in most cases the public authorities need not show that the harm has actually occurred, but only that the challenged conduct poses an unreasonable danger that it will occur. By contrast, private enforcers operate under stricter causation requirements that require an actual injury for damages actions, or individually threatened injury for an injunction.
(24/3/2021)
Implied Immunity & CALERA
Under the proposed Competition and Antitrust Law Enforcement Reform Act of 2021 (CALERA), conduct in regulated securities and commodities markets that has enjoyed a complete pass from antitrust scrutiny for decades would be subject to lawsuits seeking treble damages.
[T]ucked into CALERA are sections that would all but end a fairly obscure judicial doctrine called “implied immunity.” The doctrine currently disallows antitrust complaints about conduct that is regulated under another complex federal statutory framework. In other words, where Congress is silent on the issue of antitrust law overlapping with another statute, courts have occasionally stepped in to close off areas from antitrust scrutiny.
Cases in which the defense was raised have included not only antitrust claims against financial market conduct, but also complaints about anticompetitive conduct in, patent infringement, horse racing, merging hospitals, and seeking FDA approval for a generic drug.
Most successful cases have been in the securities or commodities context. The current test for implied immunity comes from Credit Suisse Securities (USA) LLC v. Billing, a 2007 Supreme Court decision that dismissed claims that underwriters colluded to drive up prices for initial public offerings (IPOs). Specifically, the plaintiffs complained about underwriting contracts that required them to buy shares at prearranged escalating prices in the aftermarket in order to get access to an IPO, a practice called “laddering.” Laddering isn’t currently permitted under Regulation M (and was at best disfavored in 2007 when the Court decided Credit Suisse); however, the Supreme Court held that it can only be addressed by the SEC and not by those harmed by inflated share prices under the Sherman Act.
Tim Wu (recently named to the National Economic Council)
[They] are books, articles and study that make up the antitrust revival. I include here work both belonging to the so-called New Brandeis school, and also the Neo-Arnoldian, or Post-Chicago schools.
Law is complex and antitrust law is even more so. Nonetheless, the business and the tech press keeps making […] repeated errors in their coverage of the Facebook antitrust case.
Lina Khan
President Biden announced on Monday that he intends to nominate Lina Khan, an associate professor of law at Colombia Law School, as the new Federal Trade Commission (FTC) chair. Khan specializes in antitrust and anti-monopoly tradition. Khan previously served on the House Judiciary Committee’s subcommittee on antitrust during an investigation into the monopolistic behavior of the tech industry. The subcommittee’s report explained that Amazon, Apple, Facebook, and Google "have captured control over key channels of distribution and have come to function as gatekeepers. Just a decade into the future, 30% of the world’s gross economic output may lie with these firms, and just a handful of others.”
New York Times
Ms. Khan first shot to fame with a paper she wrote in law school, accusing Amazon of abusing its monopoly power.
We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.