A Bargaining Model v. Reality in FTC v. Qualcomm: A Reply to Kattan & Muris

15 Pages Posted: 5 Jun 2019

See all articles by Douglas H. Ginsburg

Douglas H. Ginsburg

U.S. Court of Appeals for the District of Columbia Circuit; George Mason University - Antonin Scalia Law School, Faculty

Joshua D. Wright

George Mason University - Antonin Scalia Law School, Faculty

Date Written: May 15, 2019

Abstract

In a recent article Joe Kattan and Tim Muris (K&M) criticize our article on the predictive power of bargaining models in antitrust, in which we used two recent applications to explore implications for uses of bargaining models in courts and antitrust agencies moving forward. K&M focus exclusively upon one aspect of our prior article: We argued that, as in AT&T/Time Warner, the market realities at issue in FTC v. Qualcomm are inconsistent with the use of Dr. Carl Shapiro’s bargaining model to predict competitive effects in the relevant market. K&M criticize our analysis and invite us to delve more deeply into the record evidence presented at trial, which they argue support the FTC’s case and Dr. Shapiro’s economic analysis. We accept their invitation. We demonstrate K&M’s position that the evidence “supports Shapiro’s testimony overwhelmingly” ignores the sound empirical evidence employed by Dr. Aviv Nevo during trial and has not aged well in light of the internal Apple documents made public in Qualcomm’s Opening Statement following the companies’ decision to settle the case. The documents undermine Apple’s public complaints about Qualcomm, call into question the validity of the underlying theory of harm in the FTC’s case, and directly refute some of the arguments K&M put forth in their critique of our prior article. We also discuss the implications of the newly-public internal Apple documents for the FTC’s case.

Keywords: Qualcomm, Federal Trade Commission, bargaining model, antitrust, monopolization, Section 5, refusal to deal, intellectual property

JEL Classification: L4, L5, K21

Suggested Citation

Ginsburg, Douglas H. and Wright, Joshua D., A Bargaining Model v. Reality in FTC v. Qualcomm: A Reply to Kattan & Muris (May 15, 2019). Available at SSRN: https://ssrn.com/abstract=3389476 or http://dx.doi.org/10.2139/ssrn.3389476

Douglas H. Ginsburg

U.S. Court of Appeals for the District of Columbia Circuit ( email )

333 Constitution Ave NW
Room 5523
Washington, DC 20001
United States

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

Joshua D. Wright (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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