Table of Contents

Antitrust Policy and Inequality of Wealth

Herbert J. Hovenkamp, University of Pennsylvania

Antitrust for Institutional Investors

Edward B. Rock, New York University School of Law
Daniel L. Rubinfeld, University of California at Berkeley - School of Law, National Bureau of Economic Research (NBER), NYU Law School

The Roots of the Sherman Act: Farmer-Labor Republicanism and Cooperation Among Workers

Sanjukta Paul, Wayne State University

Collusion, Managerial Incentives and Antitrust Fines

Florence Thépot, University of Glasgow, Droit & Croissance (Rules for Growth)
Jacques Thépot, University of Strasbourg

Why Sports Law?

Sherman J. Clark, University of Michigan Law School


ANTITRUST: ANTITRUST LAW & POLICY eJOURNAL

"Antitrust Policy and Inequality of Wealth" Free Download
CPI Antitrust Chronicle, 2017 Forthcoming
U of Penn, Inst for Law & Econ Research Paper No. 17-26

HERBERT J. HOVENKAMP, University of Pennsylvania
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Why would anyone want to use antitrust law as a wealth distribution device when far more explicit statutory tools are available for that purpose? One feature of antitrust is its open-textured, nonspecific statutes that are interpreted by judges. As a result, using antitrust to redistribute wealth may be a way of invoking the judicial process without having to go to Congress or a state legislature that is likely to be unsympathetic. Of course, a corollary is that someone attempting to use antitrust law to redistribute wealth will have to rely on the existing antitrust statutes rather than obtaining a new antitrust provision that is more explicitly distributive.

One possible lever for redistributive antitrust is a link between market competitiveness and wealth equality. A good deal of literature suggests that competitive markets are conducive to the more even distribution of wealth. Of course, the antitrust laws already have an agreed upon goal of making markets more competitive. The most defensible goal for the antitrust laws is prohibition of practices that serve to reduce output anticompetitively, which is simply a statement of the consumer welfare principle.

The arguments for an antitrust consumer welfare approach are of three general kinds – those derived from legislative history, those derived from principle, and those derived from administrative concerns. The legislative history makes a weak case for consumer welfare, but as between consumer welfare and general welfare the former is a clear winner. Second, arguments from principle do not get us anywhere because they are very sensitive to assumptions. Third, the arguments from administrability strongly favor a consumer welfare approach.

That then leaves one question pertaining to wealth inequality. Suppose we start out with the premise that antitrust harm consists in a market-power-driven output reduction. Accepting that competitive markets are conducive to greater wealth equality, hasn’t antitrust already done all it can do? To ask that question differently, are there any circumstances in which antitrust should favor practices that reduce output simply because these practices also yield a more appealing distribution of wealth?

"Antitrust for Institutional Investors" Free Download
NYU Law and Economics Research Paper No. 17-23
UC Berkeley Public Law Research Paper

EDWARD B. ROCK, New York University School of Law
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DANIEL L. RUBINFELD, University of California at Berkeley - School of Law, National Bureau of Economic Research (NBER), NYU Law School
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With the increasing concentration of shares in the hands of large institutional investors, combined with greater involvement in corporate governance, the antitrust risk of common ownership has moved to center stage. Through an excess of enthusiasm, portfolio managers could end up exposing their firms and the portfolio companies to huge antitrust liability. In this Article, we start from basic antitrust principles to sketch out an antitrust compliance program for institutional investors and for the investor relations groups in portfolio companies. In doing so, we address the fundamental antitrust issues (explicit and tacit coordination) raised by the presence of common ownership by large, diversified investors.

We then turn to more speculative concerns that have garnered a great deal of attention and that, to our eyes, threaten to divert attention from the core antitrust issues. We critically examine the claims of this newer literature, as illustrated by Azar, Schmaltz and Tecu (2017), that existing ownership patterns in the airline industry results in substantially higher prices. We then turn to the argument in Elhauge (2016) that existing ownership patterns violate Section 7 of the Clayton Act. Finally, we find the policy recommendations of Posner, Scott Morton, and Weyl (2017) to limit the ownership shares of multiple firms in oligopolistic industries to be overly stringent. To limit the chilling effect of antitrust on the valuable role of institutional investors in corporate governance, we propose a quasi “safe harbor? that protects investors from antitrust liability when their ownership share is less than 15 percent, the investors have no board representation, and they only engage in “normal? corporate governance activities.

"The Roots of the Sherman Act: Farmer-Labor Republicanism and Cooperation Among Workers" Free Download
Chapter in Solidarity in the Shadow of Antitrust (Cambridge University Press, 2018 Forthcoming)

SANJUKTA PAUL, Wayne State University
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This is a draft chapter in an in-progress volume entitled Solidarity in the Shadow of Antitrust, forthcoming from Cambridge University Press in 2018. The book argues that antitrust law ought to support rather than undermine economic cooperation among working people, as it has historically done and as it threatens to do again in today's so-called "gig economy." The Sherman Act was essentially the result of a popular movement from below, not of professional deliberation by lawyers and technical experts. Historians have shown that this movement was ignited by newly politicized farmers’ groups, animated by a farmer-labor coalition as it grew in strength, and eventually won public approval across most social sectors and both major political parties. This history ought to inform our reading of the legislative history and thus of the legislative intent. The popular movement that brought about the Act advocated two means of addressing the new concentrations of economic power: 1) cooperation among working people in order to bargain more effectively with the new “trusts,? whether as sellers, buyers, or both; and 2) direct containment of monopoly through federal legislation. Legislators considering what became the Sherman Act adopted both these elements of the farmer-labor republican program, as well as that movement's implicit account of monopoly, which unified the two. The notion of monopoly that is evident in legislators' discussions focuses on both wealth and market power, and has moral and political elements as well. On this account, economic cooperation among working people is perfectly consistent with the regulation of monopoly, to which it serves as a corrective. This understanding gives additional force to the well-known point that legislators never intended to curtail labor organizing by means of the Sherman Act. Of especial relevance today, it also shows that this legislative intent was not bounded in any way by the concept of the employment relationship, which became the keystone of the labor exemption to antitrust law later on.

"Collusion, Managerial Incentives and Antitrust Fines" Free Download
Laboratoire de Recherche en Gestion & Economie Working Paper 2017-06

FLORENCE THÉPOT, University of Glasgow, Droit & Croissance (Rules for Growth)
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JACQUES THÉPOT, University of Strasbourg
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Based on a price setting duopoly model, this paper argues that collusion on managerial incentive compensation may have the equivalent effect to collusion on prices. This paper also provides an analysis of the effect of different antitrust fines regimes in the context of a game between two companies each composed of two-level of decision making (the board of directors and the sales manager). The contribution of this paper is two-fold: it identifies "backstage arrangements" that may be used by companies in order to achieve monopoly outcome without entering into explicit price-fixing practices. It also highlights the inefficiency of fining regimes based on sales when companies have a multi-layer decision-making structure.

"Why Sports Law?" Free Download
Stanford Law & Policy Review, Vol. 28, No. 2, 2017
U of Michigan Public Law Research Paper No. 562

SHERMAN J. CLARK, University of Michigan Law School
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This essay argues that sports law can be more than just a fascinating and topical subject with great appeal to those who work or hope to work in the field. It can also be a valuable intellectual and pedagogical enterprise—even for those who do not or will not work in sports. In particular, sports law can be a useful and clarifying lens through which to study the law more broadly. This is because sports enterprises and issues tend to put unique and potentially illuminating pressures on the law. Ordinary or unexamined assumptions often break down or prove inadequate when confronted with the relatively unique world of sports. This in turn forces scholars, students, and courts to think more deeply about the law—and in the process facilitates that deeper thought. This essay first describes some of the things that make sports relatively unique and therefore challenging to the law. The bulk of this essay then addresses three specific areas of law: antitrust; trademark; and sex discrimination. These three contexts are used to highlight and illustrate the ways in which sports law can call upon us to rethink what we think we know—and thus can help deepen and clarify our thinking. This essay concludes by suggesting that teachers and scholars of sports law should try to tap the intellectual and pedagogical potential the subject offers.

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ANTITRUST & REGULATED INDUSTRIES EJOURNALS

BERNARD S. BLACK
Northwestern University - Pritzker 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)
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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
James G. Dinan University Professor, University of Pennsylvania

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