From Competition Policy International (via The Blog of Legal Times):

Matt Reilly, former Assistant Director of the Federal Trade Commission, is joining Simpson Thacher & Bartlett. Reilly will partner the firm’s Antitrust Practice and be based in its D.C. office. His move comes after 13 years at the FTC, where he was the lead litigator in high-profile cases like the agency’s challenge to the Whole Foods-Wild Oats merger. From 2007, Reilly served as head of the Mergers IV decision.

Congratulations to Matt — formerly head of Mergers IV — and to Simpson Thacher.

Filed under: antitrust, federal trade commission, mergers & acquisitions

An interesting new joint venture between Oxford University Press, Ariel Ezrachi, and Bill Kovacic (GW).  Sounds like a fantastic idea and with top notch management and might be of interest to many of our readers.

The Journal of Antitrust Enforcement 

Call for Papers – The Journal of Antitrust Enforcement (OUP) Oxford University Press is delighted to announce the launch of a new competition law journal dedicated to antitrust enforcement. The Journal of Antitrust Enforcement forms a joint collaboration between OUP, the Oxford University Centre for Competition Law and Policy and the George Washington University Competition Law Center.

The Journal of Antitrust Enforcement will provide a platform for cutting edge scholarship relating to public and private competition law enforcement, both at the international and domestic levels.

The journal covers a wide range of enforcement related topics, including: public and private competition law enforcement, cooperation between competition agencies, the promotion of worldwide competition law enforcement, optimal design of enforcement policies, performance measurement, empirical analysis of enforcement policies, combination of functions in the mandate of the competition agency, competition agency governance, procedural fairness, competition enforcement and human rights, the role of the judiciary in competition enforcement, leniency, cartel prosecution, effective merger enforcement and the regulation of sectors.

Submission of papers: Original articles that advance the field are published following a peer and editorial review process. The editors welcome submission of papers on all subjects related to antitrust enforcement. Papers should range from 8,000 to 15,000 words (including footnotes) and should be prefaced by an abstract of less than 200 words.

General inquiries may be directed to the editors: Ariel Ezrachi at the Oxford CCLP or William Kovacic at George Washington University. Submission, by email, should be directed to the Managing Editor, Hugh Hollman.

Further information about the journal may be found online: http://www.oxfordjournals.org/our_journals/antitrust/

Filed under: antitrust, legal scholarship, scholarship

Apple has filed its response to the DOJ Complaint in the e-books case.  Here is the first paragraph of the Answer:

The Government’s Complaint against Apple is fundamentally flawed as a matter of fact and law. Apple has not “conspired” with anyone, was not aware of any alleged “conspiracy” by others, and never “fixed prices.” Apple individually negotiated bilateral agreements with book publishers that allowed it to enter and compete in a new market segment – eBooks. The iBookstore offered its customers a new outstanding, innovative eBook reading experience, an expansion of categories and titles of eBooks, and competitive prices.

And the last paragraph of the Answer’s introduction:

The Supreme Court has made clear that the antitrust laws are not a vehicle for Government intervention in the economy to impose its view of the “best” competitive outcome, or the “optimal” means of competition, but rather to address anticompetitive conduct. Apple’s entry into eBook distribution is classic procompetitive conduct, and for Apple to be subject to hindsight legal attack for a business strategy well-recognized as perfectly proper sends the wrong message to the market, and will discourage competitive entry and innovation and harm consumers.

A theme that runs throughout the Answer is that the “pre-Apple” world of e-books was characterized by little or no competition and that the agency agreements were necessary for its entry, which in turn has resulted in a dramatic increase in output.  The Answer is available here.  While commentary has focused primarily upon the important question of the competitive effects of the move to the agency model, including Geoff’s post here, my hunch is that if the case is litigated its legacy will be as an “agreement” case rather than what it contributes to rule of reason analysis.  In other words, if Apple gets to the rule of reason, the DOJ (like most plaintiffs in rule of reason cases) are likely to lose — especially in light of at least preliminary evidence of dramatic increases in output.  The critical question — I suspect — will be about proof of an actual naked price fixing agreement among publishers and Apple, and as a legal matter, what evidence is sufficient to establish that agreement for the purposes of Section 1 of the Sherman Act.  The Complaint sets forth the evidence the DOJ purports to have on this score.  But my hunch — and it is no more than that — is that this portion of the case will prove more important than any battle between economic experts on the relevant competitive effects.

Filed under: antitrust, business, cartels, contracts, doj, e-books, economics, error costs, law and economics, litigation, MFNs, monopolization, resale price maintenance, settlements, technology, vertical restraints Tagged: agency model, Amazon, antitrust, Apple, doj, e-books, iBookstore, major publishers, MFN, most favored nations clause, per se, price-fixing, publishing industry, Rule of reason, vertical restraints

Call for Papers

AALS Section on Insurance Law

“Insurance and Consumer Protection”

2013 AALS Annual Meeting
January 4-7, 2013
New Orleans, Louisiana

The AALS Section on Insurance Law will hold a program on Insurance and Consumer Protection during the AALS 2013 Annual Meeting in New Orleans. The program is scheduled for Sunday, January 6, 2013, from 10:30 AM to 12:15 PM. The program will feature a panel of leading research on consumer protection and insurance markets. Panelists scheduled to participate include: Shawn Cole (Harvard Business School), Kyle Logue (University of Michigan Law School), and Lauren Willis (Loyola Law School Los Angeles). We are looking to add one additional panelist through this Call for Papers.

Submissions: To be considered, a draft paper or proposal must be submitted by email to Joshua C. Teitelbaum, Program Chair, at [email protected]. A proposal must be comprehensive enough to allow for a meaningful evaluation of the proposed paper. Submissions must be in PDF format.

Deadline: The deadline for submissions is Tuesday, September 4, 2012. Decisions will be announced by Friday, September 28, 2012.

Eligibility: Full-time faculty members of AALS member law schools are eligible to submit. Faculty at fee-paid law schools; foreign, visiting and adjunct faculty members; graduate students; fellows; and non-law school faculty are not eligible to submit. Papers may already be accepted for publication, provided that the paper will not be published before the AALS meeting.

Expenses: The panelist selected through this Call for Papers will be responsible for paying his or her own annual meeting registration fee and travel expenses.

Inquiries: Inquiries about this Call for Papers may be submitted to Joshua C. Teitelbaum, Georgetown University Law Center, [email protected], (202) 661-6589.

Filed under: consumer protection

The AALS Section on Antitrust and Economic Regulation call for papers features a topic near and dear to my heart this year: Google and Antitrust.   Here is the announcement:

Call for Papers Announcement

AALS Section on Antitrust and Economic Regulation

Google and Antitrust

2013 AALS Annual Meeting

January 4-7, 2013

New Orleans, Louisiana

The AALS Section on Antitrust and Economic Regulation will hold a program on Google and Antitrust during the AALS 2013 Annual Meeting in New Orleans. The program will explore the Federal Trade Commission’s potential antitrust case against Google and the Google Book Search settlement. The program will feature a roundtable panel involving leading scholars who have addressed these issues: Dan Crane (Michigan), Marina Lao (Seton Hall), Frank Pasquale (Seton Hall), and Pam Samuelson (Berkeley). We are looking to add one additional panelist through this Call for Papers.

Submission procedure:

Anyone interested in participating is encouraged to submit a draft paper (preferred, and roughly in the range of 20-40 pages) or proposal by e-mail to Michael A. Carrier, at [email protected] by September 4, 2012.

Eligibility:

Full-time faculty members of AALS member law schools are eligible to submit papers. Faculty at fee-paid law schools; foreign, visiting and adjunct faculty members; graduate students; fellows; and non-law school faculty are not eligible to submit. Papers may already be accepted for publication, as long as the paper will not be published before the AALS meeting.

Registration fee and expenses:

Call-for-Paper participants will be responsible for paying their annual meeting registration fee and travel expenses.

How will papers be reviewed?

Papers will be reviewed and selected by members of the Executive Committee of the AALS Section on Antirust and Economic Regulation: Darren Bush (Houston), Michael Carrier (Rutgers-Camden), Daniel Crane (Michigan), Hillary Greene (Connecticut), Scott Hemphill (Columbia), and D. Daniel Sokol (Florida).

Will the program be published in a journal?

Yes, as a symposium in the Harvard Journal of Law & Technology Digest.

Deadline date for submission:

September 4, 2012. Decisions will be announced by September 28, 2012.

Program date and time:

Saturday, January 5, 2013, 10:30am – 12:15pm.

Contact for submission and inquires:

Michael A. Carrier

Chair, AALS Section on Antitrust and Economic Regulation

Rutgers Law School – Camden
217 North Fifth Street
Camden, NJ 08102
(856) 225-6380
[email protected]

Filed under: antitrust, copyright, economics, federal trade commission, google, monopolization, settlements

The FTC is having a conference in the economics of drip pricing:

Drip pricing is a pricing technique in which firms advertise only part of a product’s price and reveal other charges later as the customer goes through the buying process. The additional charges can be mandatory charges, such as hotel resort fees, or fees for optional upgrades and add-ons. Drip pricing is used by many types of firms, including internet sellers, automobile dealers, financial institutions, and rental car companies.

Economists and marketing academics will be brought together to examine the theoretical motivation for drip pricing and its impact on consumers, empirical studies, and policy issues pertaining to drip pricing. The sessions will address the following questions: Why do firms engage in drip pricing? How does drip pricing affect consumer search? Where does drip pricing occur? When is drip pricing harmful? Are there efficiency justifications for the practice in some situations? Can competition prevent firms from harming consumers through drip pricing? Can consumer experience or firm reputation limit harm from drip pricing? What types of policies could lead to improved consumer decision making and under what circumstances should such policies be applied?

The workshop, which will be free and open to the public, will be held at the FTC’s Conference Center, located at 601 New Jersey Avenue, N.W., Washington, DC. A government-issued photo ID is required for entry. Pre-registration for this workshop is not necessary, but is encouraged, so that we may better plan for the event.

Here is the conference agenda:

Filed under: antitrust, behavioral economics, economics, federal trade commission, price discrimination, truth on the market

I’ve posted to SSRN an article written for the Antitrust Law Journal symposium on the Neo-Chicago School of Antitrust.  The article is entitled “Abandoning Chicago’s Antitrust Obsession: The Case for Evidence-Based Antitrust,” and focuses upon what I believe to be a central obstacle to the continued evolution of sensible antitrust rules in the courts and agencies: the dramatic proliferation of economic theories which could be used to explain antitrust-relevant business conduct. That proliferation has given rise to a need for a commitment to develop sensible criteria for selecting among these theories; a commitment not present in modern antitrust institutions.  I refer to this as the “model selection problem,” describe how reliance upon shorthand labels and descriptions of the various “Chicago Schools” have distracted from the development of solutions to this problem, and raise a number of promising approaches to embedding a more serious commitment to empirical testing within modern antitrust.

Here is the abstract.

The antitrust community retains something of an inconsistent attitude towards evidence-based antitrust.  Commentators, judges, and scholars remain supportive of evidence-based antitrust, even vocally so; nevertheless, antitrust scholarship and policy discourse continues to press forward advocating the use of one theory over another as applied in a specific case, or one school over another with respect to the class of models that should inform the structure of antitrust’s rules and presumptions, without tethering those questions to an empirical benchmark.  This is a fundamental challenge facing modern antitrust institutions, one that I call the “model selection problem.”  The three goals of this article are to describe the model selection problem, to demonstrate that the intense focus upon so-called schools within the antitrust community has exacerbated the problem, and to offer a modest proposal to help solve the model selection problem.  This proposal has two major components: abandonment of terms like “Chicago School,” “Neo-Chicago School,” and “Post-Chicago School,” and replacement of those terms with a commitment to testing economic theories with economic knowledge and empirical data to support those theories with the best predictive power.  I call this approach “evidence-based antitrust.”  I conclude by discussing several promising approaches to embedding an appreciation for empirical testing more deeply within antitrust institutions.

I would refer interested readers to the work of my colleagues Tim Muris and Bruce Kobayashi (also prepared for the Antitrust L.J. symposium) Chicago, Post-Chicago, and Beyond: Time to Let Go of the 20th Century, which also focuses upon similar themes.

Filed under: antitrust, barriers to entry, behavioral economics, economics, legal scholarship, scholarship

My work (with GMU 3L Angela Diveley) featured on the University of Pennsylvania’s RegBlog.  An excerpt:

The comparison we conducted is one between institutions – the FTC and the federal judicial system – and not individual judges and commissioners. There is no doubt the antitrust and economic experts at the FTC are well equipped to analyze all modes of business dealings; in this sense, agencies certainly have greater economic expertise than courts as a general rule. However, like the FTC, courts incorporate economic expertise into their decision-making. While the FTC seeks to incorporate its staff’s expertise, courts seek to incorporate the expertise of expert witnesses. Both institutions are organizations with complex internal structures with different modes of transmitting economic expertise into decision-making outputs and different constraints and incentives.

We sought to determine whether the FTC’s institutional structure facilitates the transmission of economic inputs into its adjudicatory decisions more effectively than Article III judges in similar cases. The implicit assumption underlying the expertise hypothesis, and many of the calls for increased delegation to the agencies, is that they are better equipped to convert that expertise to litigation outcomes. If agencies do not hold such an advantage in converting expertise to outputs, interesting and important questions are raised concerning the optimal institutional design of the FTC and of administrative agencies generally. Our preliminary evidence suggests precisely this outcome as we find no advantage for administrative agencies.

Filed under: antitrust, economics, federal trade commission

WSJ has an interesting story about the growing number of employer efforts to import “game” like competitions in the workplace to provide incentives for employees to engage in various healthy activities.  Some of these ideas sound in the behavioral economics literature, e.g. choice architecture or otherwise harnessing the power of non-standard preferences with a variety of nudges; others are just straightforward applications of providing incentives to engage in a desired activity.

A growing number of workplace programs are borrowing techniques from digital games in an effort to encourage regular exercise and foster healthy eating habits. The idea is that competitive drive—sparked by online leader boards, peer pressure, digital rewards and real-world prizes—can get people to improve their overall health.

A survey of employers released in March by the consulting firm Towers Watson and the National Business Group on Health found that about 9% expected to use online games in their wellness programs by the end of this year, with another 7% planning to add them in 2013. By the end of next year, 60% said their health initiatives would include online games as well as other types of competitions between business locations or employee groups.

How well do these programs work in practice?  The story reports mixed evidence of the efficacy of the various game-style competitions; this is not too surprising given the complexity of individual incentives within organizations and teams.

Researchers say using videogame-style techniques to motivate people has grounding in psychological studies and behavioral economics. But, they say, the current data backing the effectiveness of workplace “gamification” wellness programs is thin, though companies including WellPoint Inc. and ShapeUp Inc. have early evidence of weight loss and other improvements in some tests.

So far, “there’s not a lot of peer-reviewed evidence that it achieves sustained improvements in health behavior and health outcomes,” says Kevin Volpp, director of the University of Pennsylvania’s Center for Health Incentives and Behavioral Economics.

Moreover, some employees may feel unwanted pressure from colleague-teammates or bosses when workplace competitions become heated, though participation is typically voluntary.

Incentives are powerful; but when and how they matter depends upon institutions.  Gneezy et al have an excellent survey of the literature in the Journal of Economic Perspectives, where they conclude:

When explicit incentives seek to change behavior in areas like education, contributions to public goods, and forming habits, a potential conflict arises between
the direct extrinsic effect of the incentives and how these incentives can crowd out intrinsic motivations in the short run and the long run. In education, such incentives seem to have moderate success when the incentives are well-specifified and well-targeted (“read these books” rather than “read books”), although the jury is still out regarding the long-term success of these incentive programs. In encouraging contributions to public goods, one must be very careful when designing the incentives to prevent adverse changes in social norms, image concerns, or trust. In the emerging literature on the use of incentives for lifestyle changes, large enough incentives clearly work in the short run and even in the middle run, but in the longer run the desired change in habits can again disappear.

HT: Salop.

Filed under: behavioral economics, behavioral economics, economics, health care