Table of Contents

Behavioral Economics, Internet Search, and Antitrust

Adam Candeub, Michigan State University College of Law

The Beneficent Monopolist

Allen P. Grunes, GeyerGorey LLP
Maurice E. Stucke, University of Tennessee College of Law

The Proposed Damages Directive: The Real Lessons from the United States

Robert H. Lande, University of Baltimore - School of Law

Beyond Ownership: State Capitalism and the Chinese Firm

Curtis J. Milhaupt, Columbia Law School
Wentong Zheng, University of Florida Levin College of Law

REMS: The Next Pharmaceutical Enforcement Priority?

Darren S. Tucker, Bingham McCutchen LLP
Gregory F. Wells, Bingham McCutchen, LLP
Margaret E. Sheer, Bingham McCutchen, LLP

Putting the Right to Data Portability into a Competition Law Perspective

Inge Graef, PhD fellow Research Foundation - Flanders (FWO), KU Leuven - Interdisciplinary Centre for Law and ICT (ICRI) - iMinds
Jeroen Verschakelen, KU Leuven - Interdisciplinary Centre for Law and ICT (ICRI)
Peggy Valcke, KU Leuven - Faculty of Law, KU Leuven - Interdisciplinary Centre for Law and ICT (ICRI), European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Learned Hand, Alcoa, and the Reluctant Application of the Sherman Act

Marc Winerman, Independent
William E. Kovacic, George Washington University - Law School

The Role of Consumer Sovereignty in the Digital Information Age: The Intersection of Copyright, Communications and Antitrust Law

Mark Cooper, Fordham University


"Behavioral Economics, Internet Search, and Antitrust" Free Download
I/S: A Journal of Law and Policy for the Information Society, Vol. 9 (2014)
MSU Legal Studies Research Paper No. 12-03

ADAM CANDEUB, Michigan State University College of Law

Google dominates on-line search in Europe and the United States. The search engine has faced a continuing inquiry by the European Commission for anticompetitive conduct, and the Federal Trade Commission (FTC) has recently concluded an investigation that left key questions unanswered.

Drawing on behavioral economics, the Article proposes that internet search services with dominant positions can strategically select and promote co-owned services to increase consumers’ costs of switching to alternative services, i.e., Google’s placement of popular links, such as YouTube and Google Maps, on its launch page. Relying on Daniel Kahneman’s division of the control mechanisms of human action between the automatic, intuitive, and habitual (“System One?) and the effortful, deliberate, conscious (“System Two?), the Article suggests that consumers can reduce online navigation costs by placing their most frequently used services on their launch place. This effect might have greatest impact if the linked sites are frequently used internet services — like YouTube or Google books. The Article concludes by suggesting possible remedies and analyzing First Amendment concerns.

"The Beneficent Monopolist" Free Download
Competition Policy International, April 2014, Forthcoming
University of Tennessee Legal Studies Research Paper No. 239

MAURICE E. STUCKE, University of Tennessee College of Law

In examining Comcast's proposed acquisition of Time Warner Cable (TWC), we assess three of the arguments Comcast likely will make to the Department of Justice and FCC. Comcast will likely argue that its acquisition of TWC is unlikely to lessen competition because: (a) the broadband market is becoming more competitive: Google has introduced Google Fiber in a number of markets, and mobile broadband offered by wireless providers like AT&T and Sprint is competitive with fixed broadband; (b) Netflix and traditional media companies have sufficient clout to negotiate with Comcast and the government should not intervene on their behalf; and (c) the “wide array of FCC and antitrust rules and conditions from the NBCUniversal transaction in place . . . more than adequately address any potential vertical foreclosure concerns in the area of video programming.?

We argue that notwithstanding Comcast’s and TWC’s assertions, combining two monopolies does not yield better service, lower retail prices, more innovation, and greater choices for consumers. Nor should the DOJ and FCC simply extend the prior behavioral remedies to this merger. Behavioral remedies are a poor substitute for market competition. Comcast and TWC have not overcome the presumption of illegality for this merger and are unlikely to do so. As was the case with AT&T/T-Mobile, DOJ should just say no.

"The Proposed Damages Directive: The Real Lessons from the United States" Free Download
CPI Antitrust Chronicle, March 2014 (2), pp. 2-12.

ROBERT H. LANDE, University of Baltimore - School of Law

Europeans should be doubly cautious when they study the U.S. experience with private antitrust enforcement. Nevertheless, there are ten specific lessons they can learn. None, however, is consistent with the conventional wisdom in the international competition community that U.S.-style private enforcement has been a disaster. Each should help Europe objectively consider the Commission's proposed Directive concerning private enforcement of Competition law.

"Beyond Ownership: State Capitalism and the Chinese Firm" Free Download
103 Georgetown Law Journal (2015 Forthcoming)
European Corporate Governance Institute (ECGI) - Law Working Paper No. 251/2014

CURTIS J. MILHAUPT, Columbia Law School
WENTONG ZHENG, University of Florida Levin College of Law

Chinese state capitalism has been treated as essentially synonymous with state-owned enterprises (“SOEs?). But drawing a stark distinction between SOEs and privately owned enterprises (“POEs?) misperceives the reality of China’s institutional environment and its impact on the formation and operation of large enterprises of all types. We challenge the “ownership bias? of prevailing analyses of Chinese firms by exploring the blurred boundary between SOEs and POEs in China. We argue that the Chinese state has less control over SOEs, and more control over POEs, than its ownership interest in the firms suggests. Our analysis indicates that Chinese state capitalism can be better explained by capture of the state than by ownership of enterprise. We explain the mechanisms of capture in China and argue that due to China’s institutional environment, large, successful firms — regardless of ownership — exhibit substantial similarities in areas commonly thought to distinguish SOEs from POEs: market dominance, receipt of state subsidies, proximity to state power, and execution of the state’s policy objectives. We explore the significant implications of this argument for theory, policy, and law.

"REMS: The Next Pharmaceutical Enforcement Priority?" Free Download
Antitrust Magazine, Vol. 28, No. 2, 2014

DARREN S. TUCKER, Bingham McCutchen LLP
GREGORY F. WELLS, Bingham McCutchen, LLP
MARGARET E. SHEER, Bingham McCutchen, LLP

Under the Food and Drug Administration Amendments Act of 2007, the FDA can require the use of risk evaluation and mitigation strategies (REMS) over and above professional labeling, to ensure that a drug’s benefits outweigh its risks. The FTC and the generic drug industry have raised concerns that branded drug companies are using REMS-mandated distribution restrictions to inappropriately limit access to product samples that generic drug developers need for bioequivalence testing, a predicate for FDA approval of generic drugs.

Though the FTC has not yet brought an enforcement action, the agency has identified REMS misuse as an enforcement priority, has opened several investigations, and has filed an amicus brief in private litigation explaining its concerns. For their part, generic drug companies have filed several antitrust claims against branded drug companies and raised their concerns with the FDA. Two district courts have permitted these claims to proceed, but the extent to which the antitrust laws require branded drug companies to provide generic firms access to product samples for REMS-restricted drugs remains unclear.

In this article, we discuss whether a refusal to supply a REMS-restricted drug to a generic drug developer is a form of exclusionary conduct under Section 2 of the Sherman Act, as well as potential justifications for a branded company’s refusal to deal. Given the FTC’s interest in this issue, we also address whether a refusal to provide REMS-restricted product samples to a generic drug company could raise concerns under Section 5 of the FTC Act.

"Putting the Right to Data Portability into a Competition Law Perspective" Free Download
Law: The Journal of the Higher School of Economics, Annual Review, 2013, pp. 53-63

INGE GRAEF, PhD fellow Research Foundation - Flanders (FWO), KU Leuven - Interdisciplinary Centre for Law and ICT (ICRI) - iMinds
JEROEN VERSCHAKELEN, KU Leuven - Interdisciplinary Centre for Law and ICT (ICRI)
PEGGY VALCKE, KU Leuven - Faculty of Law, KU Leuven - Interdisciplinary Centre for Law and ICT (ICRI), European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

This article explores the scope of application and possible implementation of the right to data portability as introduced in the proposal for a General Data Protection Regulation. In March 2014, the European Parliament adopted amendments to the proposal that was introduced by the European Commission in January 2012. Although some of these amendments also target the right to data portability, the principles underlying this right as proposed by the Commission are still intact. The right to data portability consists of two aspects: the right to obtain a copy of personal data that has been provided by the data subject and the right to transfer this data directly from controller to controller. Attention is particularly paid to the second aspect that entitles data subjects to ask their controller to transmit their data directly to another controller without any additional action on their part. Furthermore, the potential effect of the right to data portability is analyzed from a competition law perspective. In this regard, attention is paid to the question whether the proposed right could remedy user lock-in in online services, such as social networks. A comparison will be made between competition enforcement and the imposition of regulation for facilitating data portability. Data protection regulation applies generally, while competition enforcement is more flexible and only takes place in specific situations. Depending on the factual circumstances, restrictions on data portability may qualify as abuse of a dominant position under Article 102 of the Treaty on the Functioning of the European Union.

"Learned Hand, Alcoa, and the Reluctant Application of the Sherman Act" Free Download
Antitrust Law Journal, Vol. 79, No. 1, 2013

MARC WINERMAN, Independent
WILLIAM E. KOVACIC, George Washington University - Law School

As Gerald Gunther discusses in his monumental biography of Learned Hand, Hand was active in Theodore Roosevelt’s attempt to return to the White House in 1912. During those years, Roosevelt denounced antitrust as "rural toryism," and Hand shared Roosevelt’s skepticism. How, then, did Hand write the decision three decades later in United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945), with, among other passages, its tributes to small business and to non-economic values of antitrust? The text itself contains an (overlooked) clue – the discussions of antitrust's goals are couched either in the third person or the passive voice. Further, the pre-conference memos that the three judges on the panel wrote to each other show that Hand (along with his colleagues) did not seek to implement his own policy views; indeed, Hand "despise[d] this whole method of dealing with a very real and very serious problem in our industrial life;..." Rather, consistent with Hand’s philosophy of legislative interpretation, the decision sought to implement Congressional intent as Hand perceived it – and that intent was sufficiently clear, Hand believed, that the public would "quite rightly, write us down as asses" unless the panel found a Section 2 violation.

"The Role of Consumer Sovereignty in the Digital Information Age: The Intersection of Copyright, Communications and Antitrust Law" 

MARK COOPER, Fordham University

In the digital age, the information sector resides at the intersection of three important areas of law, copyright, communications and antitrust. A recent analysis from the National Research Council entitled Copyright In the Digital Era: Building Evidence For Policy recognizes that the private incentive that copyright is intended to afford to creators and artists must be balanced by broad public interest benefits, identifying three areas of concern that correspond to these three areas of law.

• Copyright: Creativity – innovation and fair use to reflect the principle that copyrighted materials should be available not only for personal use, but as the building blocks on which creativity rests.

• Communications: Efficiency – optimal economics, network effects, transaction costs, technological change.

• Antitrust: Control of market power – consumer surplus, artist income, supra-competitive profits.

The NRC concluded that the knowledge base for policymaking in the copyright area is “poorly informed by objective data and empirical research? but that has not stopped the flood of court cases (and bills introduced in congress) to “fix? the problems that cut across all three areas of law.

This paper reviews the arguments and outcomes in a number of prominent cases,some of which fall into several areas of the law, to develop key themes

Communications Act
Open Internet Order
Cabelvision v. Viacom
ABC v. Aereo
Fox v. Dish

Pandora v. ASCAP, BMI
Alice Bank
ABC v. Aereo
Fox v. Dish

E-book Price Fixing
Pandora v. ASCAP, BMI
Cabelvision v. Viacom

The paper argues that a dramatic increase in consumer sovereignty is the key to the effectiveness of the digital revolution in generating benefits for the public. Evidence on usage patterns is provided to demonstrate dramatic changes, changes that threaten dominant incumbents (music labels and publishers, book publishers, broadcast networks).

Second, while it is frequently asserted that old law is standing in the way of new technology, these cases demonstrate that traditional principles that have withstood the test of time remain vitally important to promote competition, innovation, economic growth and public welfare.

The value of three principles is described in terms of the court materials -- access in communications, balance in copyright, and fair competition in antitrust.


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Antitrust: Antitrust Law & Policy eJournal

Covington & Burling

Professor of Law, American University - Washington College of Law

Attorney at Law, Blecher and Collins

Professor, University of Chicago - Booth School of Business, National Bureau of Economic Research (NBER)

Senior Lecturer, University of Chicago Law School

Executive Director, Networks, Electronic Commerce, and Telecommunications Institute, Professor of Economics, New York University - Leonard N. Stern School of Business - Department of Economics

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