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Inter-Agency Scuffling Over Section 2: What Role for Economists and Economics at the FTC and DOJ?

TOTM Much has already been written about the strained relationship between the FTC and DOJ in antitrust matters.  There is no more entertaining description of these . . .

Much has already been written about the strained relationship between the FTC and DOJ in antitrust matters.  There is no more entertaining description of these strains than Chairman Kovacic’s description of the sister agencies as “an archipelago of policy makers with very inadequate ferry service between the islands” and “too many instances when you go to visit those islands the inhabitants come out with sticks and torches and try to chase you away.” It looks like the recent dust-up over the Section 2 Report is going to be the latest front in that matter.  Here’s the DOJ Report, the Statement from Commissioners Rosch, Leibowitz and Harbour, and from Chairman Kovacic.

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Antitrust & Consumer Protection

Antitrust Fallacies of Fact and Theory

TOTM Steve Hurwitz as a characteristically thoughtful and provocative post over at Austrian Economists on identifying the most dangerous fallacies of fact and theory in economics . . .

Steve Hurwitz as a characteristically thoughtful and provocative post over at Austrian Economists on identifying the most dangerous fallacies of fact and theory in economics that a reasonably informed layperson would believe. Steve’s nominations are that the average person believes that the “economic well-being of the average American is on the decline” (fallacy of fact) and (for the fallacy of theory) “that consumption (rather than savings/investment) is the key to economic growth.” The comments are definitely worth a read if you find the topic interesting and include lots of good nominations.

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Antitrust & Consumer Protection

What is the Worst Antitrust Decision That is Good Law?

TOTM There’s been a bit of discussion about the “most destructive” decision that is good law around the blogs, e.g. here and here, in response to . . .

There’s been a bit of discussion about the “most destructive” decision that is good law around the blogs, e.g. here and here, in response to John McCain’s criticism of Boumedine calling it “one of the worst decisions in the history of this country.” The line of discussion led me to think about the titular question. Antitrust law has the fairly odd feature that lower court decisions are overturned at a fairly low rate. There are a handful of SCOTUS reversals of old, “bad” precedent, e.g. Leegin overturned Dr. Miles, State Oil overturned Albrecht, Independent Ink overturned the rule that a patent holder was presumed to have market power in tying cases (my analysis here). In fact, prior to Leegin, the SCOTUS had been routinely reversing some bad prior precedent with little discussion (compare the reaction to Leegin to the unanimous State Oil decision on Max RPM in 1997 in which there was zero talk of stare decisis!).

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Antitrust & Consumer Protection

Kobayashi on the Law and Economics of Predatory Pricing

TOTM My colleague and co-author Bruce Kobayashi has posted The Law and Economics of Predatory Pricing to SSRN and is forthcoming in Keith Hylton’s Antitrust Law . . .

My colleague and co-author Bruce Kobayashi has posted The Law and Economics of Predatory Pricing to SSRN and is forthcoming in Keith Hylton’s Antitrust Law and Economics volume (Edward Elgar Publishing).  It is a comprehensive and insightful review of the expansive legal and economic literatures on this topic.

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Antitrust & Consumer Protection

Antitrust Analysis of Tying Arrangements and Exclusive Dealing

Scholarship Abstract This chapter surveys the legal and economic literatures on the antitrust analysis of tying arrangements and exclusive dealing contracts. We review the analytical framework . . .

Abstract

This chapter surveys the legal and economic literatures on the antitrust analysis of tying arrangements and exclusive dealing contracts. We review the analytical framework applied under U.S. antitrust law to tying, bundling and exclusive dealing arrangements as well as the existing theoretical and empirical literatures.

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Antitrust & Consumer Protection

Pioneers in Law and Economics: Benjamin Klein

TOTM I’ve mentioned previously that my colleague Lloyd Cohen and I are editing a volume for Edward Elgar Publishing on Pioneers in Law and Economics.   Look . . .

I’ve mentioned previously that my colleague Lloyd Cohen and I are editing a volume for Edward Elgar Publishing on Pioneers in Law and Economics.   Look for details in this space soon on a full list of contributing authors and subjects as well as where to buy the book!  One of the perks of co-editing a volume like this was that I was able to assign myself the chapter on my dissertation advisor and co-author Benjamin Klein.

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Antitrust & Consumer Protection

Are Loyalty Discounts Really Anticompetitive?

TOTM I promised that I would write about why I think that Professor Elhauge’s claim in his new working paper, “Loyalty Discounts and Naked Exclusion,” that . . .

I promised that I would write about why I think that Professor Elhauge’s claim in his new working paper, “Loyalty Discounts and Naked Exclusion,” that he has proven that loyalty discounts generally involve anticompetitive effects is mistaken. Let me begin by saying that this is a very provocative claim from a very serious antitrust analyst and deserves careful attention. Loyalty discounts are an important and highly controversial issue in antitrust at the moment and so economic analysis that enlightens us to their effects in the marketplace should be applauded. I should also note, as I made clear in the first post, that I admire Elhauge’s work and have a great deal of respect for him. Obviously, with that many caveats, you know what is coming next. I strongly disagree that Elhauge’s economic analysis lives up to his claims.

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Antitrust & Consumer Protection

All We Are Saying Is Give PeaceHealth a Chance.

TOTM Josh had a characteristically thoughtful post last week on safe harbors for loyalty and bundled discounts. I didn’t comment on the post, with which I . . .

Josh had a characteristically thoughtful post last week on safe harbors for loyalty and bundled discounts. I didn’t comment on the post, with which I generally agree, because I was busy writing an amicus brief (also signed by Dan Crane, Richard Epstein, Tom Morgan, and Danny Sokol) in an attempt to preserve a different safe harbor for bundled discounts. That’s the safe harbor created by the Ninth Circuit’s recent PeaceHealth decision (discussed here). PeaceHealth held that…

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Antitrust & Consumer Protection

Thoughts on Safe Harbors for Quantity Discounts (and Bundling)

TOTM Dennis Carlton and Michael Waldman have posted an insightful DOJ working paper on antitrust safe harbors for unilateral conduct involving quantity discounts and bundling. The . . .

Dennis Carlton and Michael Waldman have posted an insightful DOJ working paper on antitrust safe harbors for unilateral conduct involving quantity discounts and bundling. The discussion is very timely in light of the Microsoft CFI decision, AMC Report, Section 2 Hearings, and various monopolization cases in the United States, EU, and other antitrust jurisdictions. The Carlton & Waldman paper is short, very accessible, and makes several very important points about the benefits of safe harbors to guide antitrust policy in this area generally and some weaknesses in the proposed AMC approach to bundling. Anybody interested in single firm conduct issues in antitrust should read this paper.

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Antitrust & Consumer Protection