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Reacting to the EU fines imposed on Intel, Geoff raises a nice point about the difficulty of constructing the but-for world in antitrust cases generally, but particularly in cases where prices are falling.   This discussion reminded me of Thom’s excellent post responding to the NYT editorial and an AAI working paper and putting theoretical anticompetitive concerns to an empirical test and discussing evidence of falling prices for both Intel and AMD products and increased operating margins for AMD.  So how are we to sensibly evaluate the EU decision?

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I am curious about something.  AMD and Intel have been competing head to head for more than 15 years, at least since AMD released its Intel 386 clone in the early 90s.  In that time, inarguably, microprocessor prices have plumeted and  processing power and other features have increased dramatically (I’m aware that we don’t know what the but-for world would look like, but these effects have been enormous).

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As evidenced by this on-line symposium, the handling of cases under the rubrics “monopolization,” “single firm conduct”, or “abuse of dominance” continues to be debated by the competition policy community. This debate, as evidenced by the Antitrust Division’s Sept. 2008 single firm conduct report and the FTC responses, is not restricted within the U.S. The European Union has published “Guidance Papers” on standards for exclusionary conduct under Article 82, and the Canadian Competition Bureau recently issued draft guidelines for prosecuting conduct under the abuse of dominance provisions of Sec. 79 of its Competition Act.

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In the wake of Bork and Posner, and Baxter and the Reagan Revolution, a consensus emerged that big could be bad, but the harm that dominant firms could do needed to be demonstrated, not simply assumed in consequence of their sheer size. Moreover, the demonstration required harm to competition. The consensus held through the Clinton Administration, buoyed by the talented economists that it attracted. The Section 2 Report is controversial in drawing lines about where harm to competition begins, but it is not hard to imagine all sides of the debate agreeing with this from the report: “Competition is ill-served by insisting that firms pull their competitive punches so as to avoid the degree of marketplace success that gives them monopoly power or by demanding that winning firms, once they achieve such power, ‘lie down and play dead.’ ” (Report, p.8)

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Much ink has been spilled concerning the policy split revealed by the Justice Department’s September 2008 Report on Single Firm Conduct (“SFC”) and the Federal Trade Commission’s swift and rather critical rejoinder (issued by three of the four FTC Commissioners). (By “SFC” I refer to actions taken by a “dominant” firm or by an actual or aspiring monopolist.) Among the concerns raised is that the lack of U.S. interagency consensus on SFC enforcement standards may undermine the ability of the United States to influence the development of international norms in this area, and, in particular, to promote convergence toward desirable best practices. These concerns, while understandable, are greatly overblown, in my opinion. As I will explain, work on SFC by leading scholars and agencies world-wide has greatly enhanced understanding of SFC practices in recent years. The September 2008 FTC-DOJ contretemps is a mere “bump in the road” and will not seriously detract from enforcers’ efforts to promote convergence in the SFC area. (However, the pace and direction of convergence efforts, and the desirability of particular SFC enforcements standards, are questions beyond the scope of this blog entry.)

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When I came onto the job market in 2004, a number of advisers told me that I should not market myself as an “antitrust guy.”  The prevailing view on the job market was that “antitrust was dead.”  This perception was conveyed one way or another in interviews or conversations with folks in the legal academy.  The conventional wisdom was that nothing exciting had happened in the antitrust world since the Reagan era.  On top of that, the story goes, there were few important questions that remained to be answered and not only minor contributions left around the margins.  I ignored the advice at the time thanks to an uncle (and antitrust lawyer) who had turned me on to economics and antitrust in high school.  Truth be told I really didn’t want to study or write about anything else at the time and really wasn’t interested in saying otherwise.

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I, too, join the rest of the participants in congratulating Michael Carrier on this great book about this great topic.  I have enjoyed reading Michael’s work in the past and I enjoyed meeting him at a conference last year.  He is a wonderfully warm, bright, and engaging person.  Although I wish that I had more of an opportunity to fully read his impressive text before the date of this on-line symposium, I am grateful for the opportunity to read a great deal of the book and to at least skim the remainder.  The wonderful conference that Damien Geradin and his colleagues hosted on these same issues in Amsterdam these past few days was a pleasant distraction.  (For Damien’s conference click here).

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Damien Geradin has posted an interesting paper on “Separating Pro-competitive from Anti-competitive Loyalty Rebates: A Conceptual Framework.”  Here’s the (long) abstract…

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The Irish Competition Authority releases a report offering the stunning finding that “The retail planning system limits competition among grocery retailers and as a result consumers are not getting the best possible choice or value for money.”

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