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TOTM Intel Chairman and CEO Paul Otellini recently gave the keynote address at the Technology Policy Institute’s Aspen Forum on the US regulation environment and its . . .
Intel Chairman and CEO Paul Otellini recently gave the keynote address at the Technology Policy Institute’s Aspen Forum on the US regulation environment and its effect of innovation and economic growth (HT: CNET, WSJ). The speech got some play in the media because of its overall depressing tone for the US, and its frank criticism of the current state of US regulatory affairs.
Read the full piece here.
Scholarship Abstract Antitrust observers and football fans alike awaited the Supreme Court’s decision in American Needle v. National Football League for months – inspiring over a . . .
Antitrust observers and football fans alike awaited the Supreme Court’s decision in American Needle v. National Football League for months – inspiring over a dozen articles, and even one from the quarterback of the defending champion New Orleans Saints. Yet the implications of the Court’s decision, effectively narrowing the scope of the “intra-enterprise immunity” doctrine to firms with a complete “unity of interests,” are unclear. While some depict the decision as a schism from the last several decades of antitrust law, we explain why this interpretation is meritless and discuss the practical impact of the Court’s holding. The Court’s antitrust jurisprudence over the past several decades, including that of the Roberts Court and American Needle, has broadly embraced rules that are both relatively easy to administer as well as conscious of the error costs of deterring pro-competitive conduct. Intra-enterprise immunity potentially provided such a “filter” that enabled judges to dismiss a non-trivial subset of meritless claims prior to costly discovery. The doctrine, however, proved notoriously difficult to consistently apply in situations involving common organizational structures. Consistent with error-cost principles that have been the lodestar of the Court’s recent antitrust output, American Needle gave the Court an opportunity to effectively abandon intra-enterprise immunity in favor of the Twombly “plausibility” standard. Rather than marking a drastic change in antitrust jurisprudence, therefore, American Needle should be viewed as the Supreme Court substituting an unreliable screening mechanism in favor of a more cost-effective alternative.
TOTM One of the primary concerns with the Proposed HMGs was that the new approach would lead to small relevant markets in order to better reflect . . .
One of the primary concerns with the Proposed HMGs was that the new approach would lead to small relevant markets in order to better reflect the Agencies’ views that the traditional approach understated the importance of competition between close substitutes. I highlighted one analytical concern with this approach in a previous blog post…
TOTM Commissioner Rosch has offered an interesting separate statement on the new HMGs. While favoring the new guidelines generally, Commissioner Rosch offers several criticisms. I concur . . .
Commissioner Rosch has offered an interesting separate statement on the new HMGs. While favoring the new guidelines generally, Commissioner Rosch offers several criticisms. I concur with a few of these criticisms, for example, Commissioner Rosch also argues for a more empirical approach to merger analysis. I agree with that general proposition despite, as we shall see below, the fact that the Commissioner offers it along with the peculiar distinction between “economic evidence” which he rejects and “empirical evidence”. The Commissioner should be applauded for putting these criticisms, as well as those with which I disagree of course, on the record.
TOTM In what has become an annual affair, around this time of the year, I like to make the case for law students to take antitrust. . . .
In what has become an annual affair, around this time of the year, I like to make the case for law students to take antitrust. Each year, the post is edited and tweaked a little bit. So, without further ado, here is this year’s edition of “Why Take Antitrust?”
TOTM A predatory pricing case in California under Section 17043 results in a $21 million fine awarded to one newspaper, the Bay Guardian, in a suit . . .
A predatory pricing case in California under Section 17043 results in a $21 million fine awarded to one newspaper, the Bay Guardian, in a suit against a competitor, San Francisco Weekly (HT: Reason). The suit alleged that the SF Weekly was selling advertising below cost for the purpose of harming a competitor. A summary of the appellate decision (available here): No recoupment, no market power, no harm to competition, no problem. One of the benefits of those requirements for predatory pricing claims under the Sherman Act is to minimize the use of litigation to subvert the competitive process. No such luck under California law. To get a sense of how different operation of 17043 from conventional federal antitrust analysis, consider the following excerpt from the opinion…
TOTM In an earlier post on the CARE Act, I highlighted the fact that the law would essentially immunize state laws regulating the distribution and sale . . .
In an earlier post on the CARE Act, I highlighted the fact that the law would essentially immunize state laws regulating the distribution and sale of beer, wine and liquor wholesalers from challenge under the Commerce clause and the Sherman Act. For more details on the CARE Act, see the earlier post, but the bottom line is that the CARE Act will put an end to successful challenges to anticompetitive state regulation protecting alcohol wholesalers such as the Costco v. Maleng or Granholm v. Heald. In this post, I want to focus on a recent empirical research project that I undertook with FTC lawyer and economist James Cooper evaluating both the competitive effects and social harms from these state regulations of alcohol distribution. For those who want to skip the background and get straight to the paper, here is the SSRN link to “State Regulation of Alcohol Distribution: The Effects of Post and Hold Laws on Output and Social Harms.” The paper has also been released as part of the FTC Bureau of Economics working paper series.
Scholarship Abstract The market definition analysis endorsed by the 2010 Proposed Horizontal Merger Guidelines (“new HMGs”) tends toward narrower relevant markets. Because the merging parties cannot . . .
The market definition analysis endorsed by the 2010 Proposed Horizontal Merger Guidelines (“new HMGs”) tends toward narrower relevant markets. Because the merging parties cannot point to the consumer gains outside of the narrowly defined product market, the new approach could lead to Section 7 liability for mergers that result in net increases in consumer welfare. This “out of market” efficiency problem obviously does not originate with the new HMGs, nor with the HMGs at all. However, the value of diversion approach to market definition is likely to dramatically increase its practical significance. Failure to incorporate “out of market” efficiencies into merger analysis flies in the face of the modern trend in favor of analyzing actual competitive effects rather than adopting simplifying and potentially misleading proxies. Further, the value of diversion approach adopted by the new HMGs is likely to increase the need for guidance on this score. This comment proposed that the new HMGs amend note 11 to make clear that they would not bring enforcement actions where the Agencies can prove anticompetitive effects in a narrower market, but where the evidence also supports the conclusion that out of market efficiencies are sufficient to eliminate consumer harm in the aggregate. A commitment to forbear from challenging mergers where out of market efficiencies outweigh anticompetitive effects merely updates the new HMGs in a manner consistent with the modern intellectual foundation of merger analysis.
TOTM One of the first reactions I had when reading the settlement is that it is quite striking how much and at what level of detail . . .
One of the first reactions I had when reading the settlement is that it is quite striking how much and at what level of detail the settlement micro-manages Intel’s business decisions. Lets consider a just a handful of provisions and look at the language in the settlement. Again, I think these provisions should be read with the benefit of some perspective in market performance during the relevant time period.
