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TOTM A few quick reactions to the repudiation of the Section 2 Report, and more importantly, what it means for the future of monopolization enforcement… Read . . .
A few quick reactions to the repudiation of the Section 2 Report, and more importantly, what it means for the future of monopolization enforcement…
Read the full piece here.
TOTM Dan Crane has an excellent essay (“Chicago, Post-Chicago and Neo-Chicago“) reviewing Bob Pitofsky’s Overshot the Mark volume. Here’s Dan’s brief abstract… Read the full piece . . .
Dan Crane has an excellent essay (“Chicago, Post-Chicago and Neo-Chicago“) reviewing Bob Pitofsky’s Overshot the Mark volume. Here’s Dan’s brief abstract…
TOTM Expanding on the themes in this post from the TOTM symposium book review of Professor Carrier’s new book on “Harnessing the Power of Intellectual Property . . .
Expanding on the themes in this post from the TOTM symposium book review of Professor Carrier’s new book on “Harnessing the Power of Intellectual Property and Antitrust Law” to encourage innovation, I’ve posted an essay co-authored with a very talented former student and research assistant, Aubrey Stuempfle. The essay expands on some of the themes we touched upon in reviewing Carrier’s analysis of standard setting issues, including the potential threat to innovation posed by invoking antitrust remedies to govern the SSO contracting process (whether under Section 2 of the Sherman Act of Section 5 of the FTC Act) in patent holdup cases. The review (along with the others from the symposium on Carrier’s book) will be published in the Alabama Law Review.
TOTM I guess it comes as little surprise that Christine Varney has withdrawn the Section 2 Report. The comments made in the statement withdrawing the Report . . .
I guess it comes as little surprise that Christine Varney has withdrawn the Section 2 Report. The comments made in the statement withdrawing the Report indicate . . . well, that Varney isn’t convinced by reading this blog, among other things. Coming on the heels of our Section 2 Symposium, the news is jarring, although not unexpected. Moreover, as predicted in Howard Marvel’s first post here, Varney is using “recent events” in the economy as a lever…
TOTM I’d like to propose a contest for the greatest intellectual embarrassment of antitrust. Let me name the first contestant—tying, which some of you know has . . .
I’d like to propose a contest for the greatest intellectual embarrassment of antitrust. Let me name the first contestant—tying, which some of you know has been one of my favorite for years. Here’s why. First, there is no persuasive theoretical or empirical evidence that tying is a business practice that is likely to harm consumers. (This is not the blog to deal with Professor Elhauge’s provocative paper except to say that it does not alter this view.) There is work that says it could be, under stringent conditions, and one can point to cases where maybe the practice has been used in a harmful way. Yet the courts have put tying in the same antitrust category as price fixing when done by a firm with some market power. Second, the courts, lacking any analytical framework for detecting bad behavior, have developed a mechanical test for tying that doesn’t have any connection whatsoever to any of the plausible theories of when and why tying might be bad. The test leads to false positives almost by design. Third, tying has led to one of the most ridiculous antitrust remedies of all time—namely the European Commission’s insistence that Microsoft expend effort creating and offering a product–a version of Windows that didn’t include Microsoft’s media player technology—that no one wants. Now, I understand that others will have their own candidates. But to beat mine your challenge is you must show a complete lack of theoretical or empirical support; a really bad legal test; and a remedy that better demonstrates the bankruptcy of the law. The challenge is on.
TOTM The DOJ’s Section 2 Report speaks in general terms about the costs and benefits of various remedies for monopolization. It prefers “prohibitory” remedies, but holds . . .
The DOJ’s Section 2 Report speaks in general terms about the costs and benefits of various remedies for monopolization. It prefers “prohibitory” remedies, but holds open the possibility of “additional relief,” including “affirmative-obligation remedies. The Report specifically mentions the protocol-licensing requirement of the Microsoft final judgments (§ III.E, entered in November 2002) as an example of a challenging and controversial affirmative-obligation remedy. In this post, I’d like to comment on the protocol-licensing program and its implementation. In doing so, I draw on my previous work with Jeff Childers, particularly Software Development as an Antitrust Remedy: Lessons from the Enforcement of the Microsoft Communications Protocol Licensing Requirement, and Measuring Compliance with Compulsory Licensing Remedies in the American Microsoft Case.
TOTM The primary anticompetitive concern with exclusive dealing contracts is that a monopolist might be able to utilize exclusivity to fortify its market position, raise rivals’ . . .
The primary anticompetitive concern with exclusive dealing contracts is that a monopolist might be able to utilize exclusivity to fortify its market position, raise rivals’ costs of distribution, and ultimately harm consumers. The unifying economic logic of these anticompetitive models of exclusivity is that the potential entrant (or current rival) must attract a sufficient mass of retailers to cover its fixed costs of entry, but that the monopolist’s exclusive contracts with retailers prevent the potential entrant from doing so. However, the exclusionary equilibrium in these models are relatively fragile, and the models also often generate multiple equilibria in which buyers reject exclusivity. At the exclusive dealing hearings where I testified, a sensible consensus view emerged that a necessary condition for exclusive dealing or de facto exclusive contracts such as market-share discounts or loyalty discounts to cause competitive harm is that they deprive rivals of the opportunity to compete for access to distribution sufficient to achieve minimum efficient scale.
TOTM A bundled discount occurs when a seller offers to sell a collection of different goods for a lower price than the aggregate price for which . . .
A bundled discount occurs when a seller offers to sell a collection of different goods for a lower price than the aggregate price for which it would sell the constituent products individually. Such discounts pose different competitive risks than single-product discounts because, as I explained in this post, they may have an exclusionary effect even if they result in a price that exceeds the cost of producing the bundle. In particular, even an “above-cost” bundled discount may have the effect of excluding rivals that (1) are more efficient at producing the products that compete with the discounter’s but (2) produce a less extensive product line than the discounter. In other words, bundled discounts may drive equally efficient but less diversified rivals from the market.
TOTM The market power section of the Department’s Single Firm Conduct report is one of the strongest sections of the report. It provides an exceptionally clear discussion of . . .
The market power section of the Department’s Single Firm Conduct report is one of the strongest sections of the report. It provides an exceptionally clear discussion of the market power element under Section 2. It recognizes, in particular, that a violation of Section 2 requires more than mere market power, but rather a finding of substantial and durable market power – “an extreme degree of market power” as the Fifth Circuit expressed it in Beauville v. Federated Dep’t Stores.
