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An Antitrust Modernization Committee Update

TOTM For those of you who are not familiar with work of the Antitrust Modernization Committee, and I suspect that this includes most of our readers, . . .

For those of you who are not familiar with work of the Antitrust Modernization Committee, and I suspect that this includes most of our readers, the AMC was created by the Antitrust Modernization Committee Act of 2002, and is charged with the following tasks:

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Antitrust & Consumer Protection

Coase and Smoking: Who’s the Victim Here?

TOTM Today’s New York Times reports on a new cigarette bar in Chicago, where the city council has just imposed a sweeping smoking ban. (I recently . . .

Today’s New York Times reports on a new cigarette bar in Chicago, where the city council has just imposed a sweeping smoking ban. (I recently criticized the ban at Ideoblog.) The proprietors of the Marshall McGearty Tobacco Lounge insist that the lounge is permitted because of a loophole allowing smoking in retail tobacco shops. Not surprisingly, Chicago’s anti-smoking zealots are seeking to shut down the business, which they say violates the intent of the anti-smoking ordinance.

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Antitrust & Consumer Protection

Of Prices and Price Gouging

TOTM Price gouging regulations (PGRs) have been a popular topic of late in the blogosphere, particularly in the wake of increased post-Katrina (and Rita) gasoline prices. . . .

Price gouging regulations (PGRs) have been a popular topic of late in the blogosphere, particularly in the wake of increased post-Katrina (and Rita) gasoline prices. Becker and Posner make the now familiar economic case against PGRs here and here. The basic economic argument against PGRs is well tread ground which I will not repeat here. Suffice it to say, however, that the economic logic has not been sufficient to win the day with state legislatures for one reason or another. According to Federal Trade Commission Chairman Majoras’ Statement to Congress, at least 28 states currently have statutes that provide remedies for short term price spikes in the aftermath of a disaster. For example, Eliot Spitzer recently penned a new bill updating NY’s PGR to trigger upon a 25% markup rather than a “gross disparity” between cost and price. Some of the failure is for obvious reasons.

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Antitrust & Consumer Protection

Alito and Antitrust (Part II)

TOTM A few weeks back, Josh had a nice post (on Ideoblog) regarding Judge Alito’s antitrust record. He was pretty optimistic, dismissing Judge Alito’s antitrust critics . . .

A few weeks back, Josh had a nice post (on Ideoblog) regarding Judge Alito’s antitrust record. He was pretty optimistic, dismissing Judge Alito’s antitrust critics and concluding that “what little Judge Alito has written on antitrust issues is properly described as fastidious analysis complemented by strict application of doctrine.”

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Antitrust & Consumer Protection

Will SCOTUS Tame the Exotic Beast?

TOTM It is a pretty exciting time in the antitrust world. This, of course, is bad news for firms. SCOTUS will decide three antitrust cases this . . .

It is a pretty exciting time in the antitrust world. This, of course, is bad news for firms. SCOTUS will decide three antitrust cases this term, each offering a promising opportunity to clarify murky doctrine or undo an erroneous application of relatively clear antitrust principles. Texaco v Dagher falls into the latter category. The bulk of the commentary I’ve seen has been critical. For example, Christine Hurt at the Glom describes the plaintiff’s theory “somewhat strained.” Ron Davis goes a bit further, describing Dagher as “The Worst Antitrust Case of the 21st Century.” That is saying something. Yet, given the impact of the decision on integrative activity if affirmed, I’m inclined to agree.

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Antitrust & Consumer Protection

Vertical Antitrust Policy as a Problem of Inference

Scholarship Abstract The legality of nonprice vertical practices in the U.S. is determined by their likely competitive effects. An optimal enforcement rule combines evidence with theory . . .

Abstract

The legality of nonprice vertical practices in the U.S. is determined by their likely competitive effects. An optimal enforcement rule combines evidence with theory to update prior beliefs, and specifies a decision that minimizes the expected loss. Because the welfare effects of vertical practices are theoretically ambiguous, optimal decisions depend heavily on prior beliefs, which should be guided by empirical evidence. Empirically, vertical restraints appear to reduce price and/or increase output. Thus, absent a good natural experiment to evaluate a particular restraint’s effect, an optimal policy places a heavy burden on plaintiffs to show that a restraint is anticompetitive

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Antitrust & Consumer Protection

Use and Misuse of Business Documents in Antitrust Enforcement & Adjudication

Scholarship In this article we examine the use of business documents to prove antitrust violations. Such usage has long occurred in the courts and regulatory agencies. More recently, there has been a scholarly effort to justify the use of such documents and the rhetoric they contain in antitrust analysis.

Summary

This Article considers the implications for antitrust law and policy of the relationship between business rhetoric and economic analysis. We maintain that antitrust analysis should remain firmly rooted in economics and that courts must be wary of the role of business rhetoric in antitrust analysis and adjudication. This is not to say that “market realities” reflected in business documents and testimony should not be considered in antitrust cases. Rather, courts and policy makers should recognize the distinction between the market realities themselves and expressions or characterizations of those realities for legally irrelevant business purposes. An important implication is that regulators’ and courts’ reliance on business documents is misplaced, and much of this material should be excluded from consideration by courts.

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Antitrust & Consumer Protection