Table of Contents

A Rapid Reaction to O'Bannon: The Need for Analytics in Applying the Sherman Act to Overly Restrictive Joint Venture Schemes

Stephen F. Ross, Pennsylvania State University, Penn State Law
Wayne S. DeSarbo, Pennsylvania State University

Imagining a Counterfactual Section 36: Rebalancing New Zealand's Competition Law Framework

Andrew I. Gavil, Howard University School of Law

Standard Essential Patents and Their Competition Law Regulation - Discovering the Law, in the Realm of Inventions

Ravin Kapur, Independent

The Move to Smart Mobile and Its Implications for Antitrust Analysis of Online Markets

Hemant K. Bhargava, University of California, Davis
David S. Evans, Global Economics Group, University of Chicago Law School, University College London
Deepa Mani, Indian School of Business (ISB), Hyderabad

AC-Treuhand, the Scope of Article 101 TFEU, and the Future of Actions for Antitrust Damages

Conor C. Talbot, European University Institute - Department of Law (LAW), Trinity College (Dublin) - Department of Economics, LK Shields Solicitors

Mergers and Product Quality: The Impact of De-Hubbing in the U.S. Airline Industry

Nicholas G. Rupp, East Carolina University - Department of Economics
Kerry M. Tan, Loyola University Maryland


ANTITRUST: ANTITRUST LAW & POLICY eJOURNAL

"A Rapid Reaction to O'Bannon: The Need for Analytics in Applying the Sherman Act to Overly Restrictive Joint Venture Schemes" Free Download
119 Penn State Law Review, Penn Statim 43 (2015)
Penn State Law Research Paper No. 15-2015

STEPHEN F. ROSS, Pennsylvania State University, Penn State Law
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WAYNE S. DESARBO, Pennsylvania State University
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This Article reviews the recent and highly publicized district court decision holding that NCAA rules, which bar student-athletes from any compensation for image rights, violated the Sherman Act, and that big-time athletic programs could lawfully agree among themselves to limit compensation to $5,000 annually in trust for each athlete upon leaving school. This Article briefly discusses why the decision correctly found the current rule to be illegal, but also details why, under settled antitrust law, the critical question of how much compensation would significantly harm consumer appeal for college football and basketball is a question better left to marketing science experts. This Article then explains why neither the flawed survey offered in evidence by the NCAA, nor the anecdotal testimony of NCAA officials, should have been credited. Rather, this Article proposes, as a superior alternative, the use of conjoint analysis, a well-recognized technique of marketing science analytics employed to answer the critical legal question that the antitrust doctrine asks in cases like this.

"Imagining a Counterfactual Section 36: Rebalancing New Zealand's Competition Law Framework" Free Download
46 Victoria University of Wellington Law Review 1043 (2015)
Howard Law Research Paper No. 16-3

ANDREW I. GAVIL, Howard University School of Law
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Like the competition-related laws of most other nations, Section 36 of New Zealand's Commerce Act 1986 includes a prohibition of some unilateral acts by firms with substantial market power. Such prohibitions reflect the consensus view of many jurisdictions, courts and commentators that the anticompetitive potential of unilateral conduct largely depends on the market power of the firm undertaking it. In lieu of an inquiry into the actual or probable effects of challenged conduct, however, Section 36 has been interpreted to rely on a "counterfactual" test, seemingly unique in the world. Under that approach, courts have been directed to ask whether a firm lacking substantial market power would have engaged in the same conduct, and from the answer to that question to infer the likely effects of the conduct by the firm with market power. This article argues that the counterfactual test will frequently be an unreliable method for implementing the language and underlying purposes of s 36. In many common circumstances it will likely fail to proscribe conduct that may well be harmful to competition and consumers, and result in systematic under-deterrence. In other cases, it may fail to recognize and credit efficiencies that might be unique to the firm with market power, and hence over-deter procompetitive conduct. The article concludes by considering several options for reform.

"Standard Essential Patents and Their Competition Law Regulation - Discovering the Law, in the Realm of Inventions" Free Download

RAVIN KAPUR, Independent
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Patent protection is the fruit of invention. Its commercial monetization drives the research and development machinery of various industrial establishments. Notwithstanding the monetary gain, an ‘invention’, serves a great social purpose by adding to the existing pool of technical knowledge.

In a highly technical industry, such as the telecommunications industry, the commercial viability of various technical products depends on their inter-operability across various platforms. In order to enable such inter-operability, common standards are developed through the process of ‘Standardisation’. Such technological standards are termed as ‘Standard Essential Patent’ (SEP) when they are given patent protection, for which there are no non-infringing alternatives. The terms of licensing of such patents are sought on principles which are Fair, Reasonable and Non-Discriminatory (FRAND Principles).

Once a patent is declared as Standard Essential Patent, it faces no competition from other patents until that patent becomes obsolete due to new inventions. Therefore, the only alternative is another Standard Essential Patent. Consequently, the Patent holder is a monopolist in its domain, holding absolute power. As power corrupts and absolute power corrupts absolutely, this absolute power of the Patentee needs to be regulated by effective regulatory machinery.

The legal discourse at present is centered on, as to which regulatory body would be the appropriate forum to regulate the conduct of such patentees. The jurisprudence regarding the appropriate forum is yet to be discovered and developed. The scope of this paper is circumscribed around the regulatory powers of the competition commission qua the Standard Essential Patent holders and how it can foster competition and curtail any abuse of dominance by such class of patentees.

"The Move to Smart Mobile and Its Implications for Antitrust Analysis of Online Markets" Free Download

HEMANT K. BHARGAVA, University of California, Davis
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DAVID S. EVANS, Global Economics Group, University of Chicago Law School, University College London
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DEEPA MANI, Indian School of Business (ISB), Hyderabad
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Online markets have changed as a result of people shifting massively from using personal computers and browsers to using technologically powerful mobile devices and apps. These changes cover leading online players, consumer behavior, and products. The use of smartphones and mobile apps, and the speed of change, vary between countries and in particular between countries based on their stage of development. Mobile app use is lower in fast-growing countries, such as India, than in developed ones, such as the United States. However, as smart mobile phones with mobile broadband connections become ubiquitous among consumers in developing countries, mobile app use in these countries is likely to leapfrog the use of personal computers and browsers. As a result of the movement to smart mobile, the analysis of markets that might have made sense several years ago, does not today, and will make even less sense several years hence. The widespread adoption of smart mobile has caused, and continues to result in, significant market disruption, including for incumbent Internet-based companies, which are themselves young compared to the traditional companies they disrupted. These dramatic and unpredictable changes pose several issues for antitrust. They show that antitrust analysis that focuses on static markets is highly prone to error when it comes to dynamic online industries, that authorities risk making assumptions during investigations that are disproven by the markets soon after they have brought charges or decided a case, and antitrust remedies are prone to be ineffective or harmful because they are developed for markets during the investigation but are radically different by the time the remedies are implemented.

"AC-Treuhand, the Scope of Article 101 TFEU, and the Future of Actions for Antitrust Damages" Free Download
Commercial Law Practitioner 2016, 23(1), 9-14

CONOR C. TALBOT, European University Institute - Department of Law (LAW), Trinity College (Dublin) - Department of Economics, LK Shields Solicitors
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The Court of Justice of the European Union recently handed down a decision on a novel question which, when combined with other developments relating to reforms of antitrust damages claims, could have serious consequences for the future of antitrust damages claims in Ireland and the European Union.

In AC-Treuhand, the CJEU heard an appeal against a fine levied on a consultancy firm for its role as a “cartel facilitator?. The CJEU confirmed that the service agreement between AC-Treuhand and suppliers of heat stabilisers constituted an illegal agreement under EU competition rules. As such, the CJEU held that agreements that distort competition in the EU are caught by art.101 of the Treaty on the Functioning of the European Union (TFEU), irrespective of whether the parties operate in the same market. Interestingly, part of the CJEU's reasoning was based on a view that the effectiveness of art.101 TFEU would be endangered if facilitators, such as AC-Treuhand, could escape liability.

The aim of this article is to put the recent AC-Treuhand decision into context and explore some of its potential ramifications given other developments in the sphere of actions for antitrust damages.

"Mergers and Product Quality: The Impact of De-Hubbing in the U.S. Airline Industry" Free Download

NICHOLAS G. RUPP, East Carolina University - Department of Economics
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KERRY M. TAN, Loyola University Maryland
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This paper studies how de-hubbing, which occurs when an airline ceases hub operations at an airport, impacts product quality. Using an event study of five cases of de-hubbing after a U.S. airline merger between 1998 and 2015, we analyze how three measures of on-time performance change following de-hubbing: on-time performance, travel time, and cancellations. The empirical results suggest that mergers improve product quality as travelers at de-hubbed airports experience more reliable flight schedules and shorter travel times. However, we find no clear link between flight cancellations and the performance of the de-hubbed airline operations. Nevertheless, policymakers should consider the efficiency gains from more reliable flight schedules when calculating the costs and benefits from a proposed airline merger.

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About this eJournal

This eJournal distributes working and accepted paper abstracts dealing with all aspects of antitrust and competition policy, including mergers, cartels, monopolies, and price discrimination.

Editor: John Shepard Wiley, Independent

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Directors

ANTITRUST & REGULATED INDUSTRIES EJOURNALS

BERNARD S. BLACK
Northwestern University - School of Law, Northwestern University - Kellogg School of Management, European Corporate Governance Institute (ECGI)
Email: bblack@northwestern.edu

RONALD J. GILSON
Stanford Law School, Columbia Law School, European Corporate Governance Institute (ECGI)
Email: rgilson@leland.stanford.edu

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Advisory Board

Antitrust: Antitrust Law & Policy eJournal

JAMES R. ATWOOD
Covington & Burling

JONATHAN B. BAKER
Professor of Law, American University - Washington College of Law

MAXWELL M. BLECHER
Attorney at Law, Blecher and Collins

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

FRANK H. EASTERBROOK
Senior Lecturer, University of Chicago Law School

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

EINER R. ELHAUGE
Professor of Law, Harvard Law School

ELEANOR M. FOX
Professor of Law, New York University School of Law

HERBERT J. HOVENKAMP
Professor, University of Iowa - College of Law

LOUIS KAPLOW
Professor of Law, Harvard Law School, National Bureau of Economic Research (NBER)

DANIEL L. RUBINFELD
Professor, University of California at Berkeley - School of Law, National Bureau of Economic Research (NBER), NYU Law School

CARL SHAPIRO
University of California, Berkeley - Haas School of Business