ANTITRUST: ANTITRUST LAW & POLICY eJOURNAL
"Containing Corporatism: EU Competition Law and Private Interest Government"
TILEC Discussion Paper No. 2015-001
WOLF SAUTER, Tilburg Law and Economics Center (TILEC), Dutch Healthcare Authority, Tilburg Law School
Corporatism, or private interest government, raises objections both from a democratic and from an economic perspective. This paper examines the application of EU competition law to private rule making that is purportedly in the public interest. Earlier case law holding Member States responsible for anticompetitive delegation (Van Eycke) can be contrasted with case law that focuses on the inherent restrictions of the pursuit of public policy aims and keeps some private arrangements outside the scope of the cartel prohibition altogether (Wouters). More recently we can identify an approach where the public and private activities of entities are considered separately (SELEX). The 2014 ONP Case is an example where the General Court distinguishes private and public interests, and takes a tough line where the limits of the latter are exceeded. Corporatism is therefore, to some extent, contained by EU competition law. However, there is a related trend toward taking account of public interest requirements in antitrust under the directly applicable exemption provision of Article 101(3) TFEU. Alongside the abovementioned Wouters approach that requires balancing under Article 101(1) TFEU, and given the context of the decentralisation of EU antitrust law, this raises a risk of fragmentation that remains to be addressed.
"Big Mistakes Regarding Big Data"
Antitrust Source, American Bar Association, December 2014
DARREN S. TUCKER, Morgan Lewis & Bockius LLP
HILL B. WELLFORD, Morgan Lewis & Bockius LLP
Recently, there have been calls for antitrust intervention to address concerns related to big data, particularly big data consisting of personal information. According to these advocates, big data presents a significant entry barrier for online services that has led to entrenchment of large firms. They argue that large online firms should face antitrust liability for refusing to provide user data in their possession to rivals. Some also have urged the competition agencies to expand the concept of a relevant antitrust market to include data markets, even when those data are not marketed to customers.
We contend that, contrary to the views of these advocates, the acquisition and use of big data by online firms will rarely be captured by the antitrust laws. Online markets are notable for their low entry barriers and typically do not require big data for entry. Instead, most online service providers, including social media, search, and retail, use big data to improve their services once a customer base is established. As a result, the collection and analysis of big data have enhanced competition and improved product offerings. The notion that a company could monopolize or even have â€œmarket powerâ€? with respect to user data is implausible, given the ubiquitous and non-rivalrous nature of such information. In addition, proposals for relevant markets consisting of internally used data are inconsistent with longstanding and sensible precedent. Remedies that have been proposed to limit incumbentsâ€™ collection or use of big data or to require forced sharing with rivals are likely to harm competition and raise privacy concerns.
"Competition Law as the Limit to Standard-Setting"
to be published in Josef Drexl and Fabiana Di Porto (ed) â€˜Competition Law as Regulationâ€™, Edward Elgar, 2015
BJORN LUNDQVIST, Copenhagen Business School, Stockholm University - Faculty of Law
The aim of this paper is to provide an analysis of the application of EU competition law to standard-setting, by looking at case law under both Articles 101 and 102 TFEU. I will try to show that there is, and should be, a difference in competition law treatment of standards and standard-setting conduct depending on whether the market exposed to the standard is plagued with network effects or not. For markets with network effects, collaboration to create standards is benign, even pro-competitive, while access to such standards, if covered by intellectual property rights, may, in exceptional circumstances, be granted under competition law. On the other hand, agreements to decide standards for markets which do not display network effects should benefit from a heightened antitrust scrutiny, because these standard agreements may cause exclusionary anticompetitive effects.
"Antitrust, Regulatory Harm and Economic Liberty"
99 Iowa Law Review Bulletin 115 (2014)
ALAN J. MEESE, William & Mary Law School
This essay responds to a recent article by Thomas Nachbar advocating a "constitutional" approach to antitrust law. Nachbar contends that the Sherman Act mirrors the Constitution's own prohibition on legislative delegation of coercive regulatory authority to private parties. As a result, Nachbar says, courts should ban contracts and other conduct that restrain liberty and produce what he calls "regulatory harm," just as courts invalidate such legislative delegations as deprivations of liberty without due process of law. To implement this "constitutional" approach, Nachbar offers a common sense distinction between economic conduct that is "proprietary," on the one hand, and that which is "regulatory," on the other. The former, he says, entails a firm's disposition of its own property, including price-setting, while the latter entails tying contracts and other agreements that by their terms restrict the manner in which trading partners deal with their own property. While some conduct falls clearly into one category or the other, much lies somewhere on a spectrum between the two. Nachbar advises courts to identify conduct that is unduly regulatory by measuring the distance between the ownership of a defendant's property, on the one hand, and the control exercised by the restraint, on the other.
There is some rhetorical support in the Sherman Act's legislative history and subsequent case law for Nachbar's creative, constitutional approach. Nonetheless, this essay contends that such an approach would not improve upon an efficiency interpretation of antitrust as a normative or descriptive matter. The Due Process Clause protects liberty from coercive restraint. However, the "constitutional" approach would ban any number of voluntary agreements, thus protecting parties' "liberty from contract" and thwarting economic liberty. While some voluntary agreements are harmful and thus properly condemned under an efficiency approach, many produce benefits and improve social welfare. An enforcement policy that condemned such agreements would reduce both liberty and welfare.
As a descriptive matter, Nachbar's constitutional approach does not improve upon the efficiency norm's explanation of any major facet of modern antitrust law. Moreover, the constitutional approach does not explain certain facets of antitrust law that are consistent with an efficiency norm. In addition to its normative shortcomings, then, the constitutional approach provides a less satisfying explanation of current law than the main alternative approach.
"Detecting Collusion in Spatially Differentiated Markets"
WIFO Working Papers No. 479
MATTHIAS FIRGO, Austrian Institute of Economic Research (WIFO)
AGNES KUEGLER, Vienna University of Economics and Business Administration - Department of Economics
The empirical literature on mergers, market power and collusion in differentiated markets has mainly focused on methods relying on output and/or panel data. In contrast to this literature we suggest a novel approach that allows for the detection of collusive behaviour among a group of firms making use of information on the spatial structure of horizontally differentiated products. By estimating best response functions using a spatial econometrics approach, we focus on differences in the strategic interaction in pricing between different groups of firms as well as on differences in price levels. We apply our method to the market for ski lift tickets using a unique data set on ticket prices and detailed resort-specific characteristics covering all ski resorts in Austria. We show that prices of ski resorts forming alliances are higher and increase with the size and towards the spatial center of an alliance. Strategic interaction in pricing is higher within than outside alliances. All results are in line with the findings of theoretical models on collusion in horizontally differentiated markets.
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ANTITRUST & REGULATED INDUSTRIES EJOURNALS
BERNARD S. BLACK
Northwestern University - School of Law, Northwestern University - Kellogg School of Management, European Corporate Governance Institute (ECGI)
RONALD J. GILSON
Stanford Law School, Columbia Law School, European Corporate Governance Institute (ECGI)
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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
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
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
University of California, Berkeley - Haas School of Business