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Showing 9 of 175 Results in Vertical Restraints & Self-Preferencing
TOTM As Judge (and Professor) Frank Easterbrook famously explained over three decades ago (in his seminal article The Limits of Antitrust), antitrust is an inherently limited body . . .
As Judge (and Professor) Frank Easterbrook famously explained over three decades ago (in his seminal article The Limits of Antitrust), antitrust is an inherently limited body of law. In crafting and enforcing liability rules to combat market power and encourage competition, courts and regulators may err in two directions: they may wrongly forbid output-enhancing behavior or wrongly fail to condemn output-reducing conduct. The social losses from false convictions and false acquittals, taken together, comprise antitrust’s “error costs.” While it may be possible to reduce error costs by making liability rules more nuanced, added complexity raises the “decision costs” incurred by business planners (ex ante) and adjudicators (ex post). In light of all these costs, Easterbrook advocated an approach that would optimize antitrust’s effectiveness: interpret and enforce the antitrust laws so as to minimize the sum of error and decision costs.
Read the full piece here.
TOTM The “magic” of Washington can only go so far. Whether it is political consultants trying to create controversy where there is basic consensus, such as . . .
The “magic” of Washington can only go so far. Whether it is political consultants trying to create controversy where there is basic consensus, such as in parts of the political campaign, or the earnest effort to create a controversy over the Apple decision, there may be lots of words exchanged and animated discussion by political and antitrust pundits, but at the end of the day it’s much ado about not much. For the Apple case, even though this blog has attracted some of the keenest creative antitrust thinkers, a simple truth remains – there was overwhelming evidence that there was a horizontal agreement among suppliers and that Apple participated or even led the agreement as a seller. This is, by definition, a hub-and-spoke conspiracy that resulted in horizontal price fixing among ebook suppliers – an activity worthy of per se treatment.
TOTM In my view, the Second Circuit’s decision in Apple e-Books, if not reversed by the Supreme Court, threatens to undo a half century of progress in reforming antitrust . . .
In my view, the Second Circuit’s decision in Apple e-Books, if not reversed by the Supreme Court, threatens to undo a half century of progress in reforming antitrust doctrine. In decision after decision, from White Motors through Leegin and Actavis, the Supreme Court has repeatedly held—in cases involving both horizontal and vertical restraints—that the only test for whether an agreement can be found per se unlawful under Section 1 is whether it is “a naked [restraint] of trade with no purpose except stifling competition,” or whether it is instead “ancillary to the legitimate and competitive purposes” of a business association. Dagher. The cases in which the Court has consistently applied this test read like a litany of antitrust decisions we all now study in law school: White Motors, Topco, GTE Sylvania, Professional Engineers, BMI, Maricopa, NCAA, Business Electronics, ARCO, California Dental, Dagher, Leegin, American Needle, and, most recently, Actavis. Significantly, more than two-thirds of these cases involved horizontal, not vertical restraints.
TOTM As ICLE argued in its amicus brief, the Second Circuit’s ruling in United States v. Apple Inc. is in direct conflict with the Supreme Court’s 2007 Leegin decision, and creates . . .
As ICLE argued in its amicus brief, the Second Circuit’s ruling in United States v. Apple Inc. is in direct conflict with the Supreme Court’s 2007 Leegin decision, and creates a circuit split with the Third Circuit based on that court’s Toledo Mack ruling. Moreover, the negative consequences of the court’s ruling will be particularly acute for modern, high-technology sectors of the economy, where entrepreneurs planning to deploy new business models will now face exactly the sort of artificial deterrents that the Court condemned in Trinko…
The Apple E-Books Antitrust Case: Implications for Antitrust Law and for the Economy February 15, 2016 truthonthemarket.com The appellate court’s 2015 decision affirming the district . . .
The appellate court’s 2015 decision affirming the district court’s finding of per se liability in United States v. Apple provoked controversy over the legal and economic merits of the case, its significance for antitrust jurisprudence, and its implications for entrepreneurs, startups, and other economic actors throughout the economy. Apple has filed a cert petition with the Supreme Court, which will decide on February 19th whether to hear the case.
On Monday, February 15 and Tuesday February 16, Truth on the Market and the International Center for Law and Economics will present a blog symposium discussing the case and its implications.
We’ve lined up an outstanding and diverse group of scholars, practitioners and other experts to participate in the symposium. The full archive of symposium posts can be found at this link, and individual posts can be accessed by clicking on the author’s name below.
Also see our previous posts at Truth on the Market discussing the Apple e-books case for a preview of many of the issues to be discussed.
TOTM On balance the Second Circuit was right to apply the antitrust laws to Apple. Right now the Supreme Court has before it a petition for . . .
On balance the Second Circuit was right to apply the antitrust laws to Apple.
Right now the Supreme Court has before it a petition for Certiorari, brought by Apple, Inc., which asks the Court to reverse the decision of the Second Circuit. That decision found per se illegality under the Sherman Act, for Apple’s efforts to promote cooperation among a group of six major publishers, who desperately sought to break Amazon’s dominant position in the ebook market. At that time, Amazon employed a wholesale model for ebooks under which it bought them for a fixed price, but could sell them for whatever price it wanted, including sales at below cost of popular books treated as loss leaders. These sales particularly frustrated publishers because of the extra pressure they placed on the sale of hard cover and paper back books. That problem disappeared under the agency relationship model that Apple pioneered. Now the publishers would set the prices for the sale of their own volumes, and then pay Apple a fixed commission for its services in selling the ebooks.
TOTM For a few months I have thought that the Apple eBooks case would find an easy fit within the Supreme Court’s antitrust decisions. The case . . .
For a few months I have thought that the Apple eBooks case would find an easy fit within the Supreme Court’s antitrust decisions. The case that seems closest to me is Business Electronics v. Sharp Electronics, an unfortunately under-appreciated piece of antitrust precedent. One sign of its under-appreciation is its absence in some recent editions of antitrust casebooks.
TOTM The appellate court’s 2015 decision affirming the district court’s finding of per se liability in United States v. Apple provoked controversy over the legal and . . .
Popular Media Futurists say that the total sum of human knowledge doubles every year or two—and that the rate is increasing.
Excerpt Futurists say that the total sum of human knowledge doubles every year or two—and that the rate is increasing. “There were five exabytes of information created by the entire world between the dawn of civilization and 2003,” Google CEO Eric Schmidt said at a conference in 2010. “Now that same amount is created every two days.” That’s part of the reason why “general search”—searching of all of the world’s accessible information and delivering results without differentiation—is fast becoming hopelessly outdated. In an era of exploding data, it is more efficient and more effective to presort information into categories. So it is hardly surprising that Google searches have evolved to emphasize specialized results better targeted to users’ queries. Yet regulators seem perplexed. Consider what European Commissioner for Competition Margrethe Vestager said recently about the EU’s formal complaint against Google: “We find the conduct in one area where it has a very dominant position in one market, which is general search, has led to favorable treatment not based on the merits in another related market.” This reflects a deep misunderstanding. It’s a mistake to consider “general search” and “comparison shopping” or “product search” to be distinct markets.
Futurists say that the total sum of human knowledge doubles every year or two—and that the rate is increasing. “There were five exabytes of information created by the entire world between the dawn of civilization and 2003,” Google CEO Eric Schmidt said at a conference in 2010. “Now that same amount is created every two days.”
That’s part of the reason why “general search”—searching of all of the world’s accessible information and delivering results without differentiation—is fast becoming hopelessly outdated. In an era of exploding data, it is more efficient and more effective to presort information into categories. So it is hardly surprising that Google searches have evolved to emphasize specialized results better targeted to users’ queries.
Yet regulators seem perplexed. Consider what European Commissioner for Competition Margrethe Vestager said recently about the EU’s formal complaint against Google: “We find the conduct in one area where it has a very dominant position in one market, which is general search, has led to favorable treatment not based on the merits in another related market.”
This reflects a deep misunderstanding. It’s a mistake to consider “general search” and “comparison shopping” or “product search” to be distinct markets.
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