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Should the Supreme Court Grant Cert in Rambus?

TOTM As noted, the FTC has exercised its right under 15 USC 56(a)(3) to petition for a writ of certiorari to review the judgment of the . . .

As noted, the FTC has exercised its right under 15 USC 56(a)(3) to petition for a writ of certiorari to review the judgment of the D.C. Circuit in its FTC v. Rambus. The FTC press release is here. The petition is here. The questions presented, as framed by the Commission are…

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Intellectual Property & Licensing

Price Discrimination is Good, Part 2

TOTM Yesterday I started a new TOTM feature on why price discrimination is good in light of the bad rap that the practice gets in public . . .

Yesterday I started a new TOTM feature on why price discrimination is good in light of the bad rap that the practice gets in public policy circles and with the public generally. Lest one believe that the examples of regulatory scrutiny of price discrimination in antitrust and regulated industries are special cases, a reader points me to this perfectly timed column from NY Times “Ethicist” Randy Cohen arguing that price discrimination is unethical.

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Price Discrimination Is Good, Part I

TOTM Price discrimination involves a firm taking advantage of different elasticities of demand for the same goods by charging different prices relative to marginal cost. Price . . .

Price discrimination involves a firm taking advantage of different elasticities of demand for the same goods by charging different prices relative to marginal cost. Price discrimination is ubiquitous in our economy but remains a four letter word in policy and regulation circles. We observe price discrimination in all sorts of product markets, from small and large firms, and in marketing strategies from brick and mortar to Web 2.0. Its economic definition is relatively straightforward and it is a concept, unlike the complex models and explanations for some business practices in the modern economics literature, that is intuitive for everyday consumers. Airlines charge reduced fares for children or require Saturday stayovers in order to exclude business purchasers. We see this type of price discrimination every day in grocery stores, gas stations, movie theaters, online retail websites, and bookstores. It also exists in markets with which every day consumers might be less familiar, e.g. the tying of ink and printers.

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Antitrust & Consumer Protection

The Butcher, the Baker and the Candlestick Maker (2.0)

TOTM My colleague Tom Hazlett strikes again in Barron’s on Google’s transformation from its initial reluctance to advertise and its desire to stick to the non-profit . . .

My colleague Tom Hazlett strikes again in Barron’s on Google’s transformation from its initial reluctance to advertise and its desire to stick to the non-profit sector to an unrelenting market driven approach to its discovery that search-term clicks were … well … profitable.

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NY Times Endorses Pre-Chicago Antitrust

TOTM The NY Times (HT: Danny Sokol) decided to run an editorial blasts the DOJ’s Section 2 Report, asserting that the “antitrust division is supposed to . . .

The NY Times (HT: Danny Sokol) decided to run an editorial blasts the DOJ’s Section 2 Report, asserting that the “antitrust division is supposed to be the agency looking out for the interests of American consumers, not big companies — a role it has clearly forgotten over the last eight years” citing the familiar bullet points (e.g. “Throughout the entire Bush administration, it has not brought a single case against a dominant firm for anticompetitive behavior and “it has argued enthusiastically on behalf of monopolists before the Supreme Court”).  Its a superficial treatment of the issues at best (see here or here for my views and some links to others).

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Antitrust & Consumer Protection

Speaking of Resale Price Maintenance …

TOTM It looks like the FTC is interested in doing more than just investigating RPM (see Thom’s excellent post), as the agency just announced a series . . .

It looks like the FTC is interested in doing more than just investigating RPM (see Thom’s excellent post), as the agency just announced a series of public workshops on the question of how best to distinguish pro-competitive uses of RPM from those that raise competitive concerns.

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Antitrust & Consumer Protection

FTC’s Latest RPM Investigation: Sound and Fury Signifying Nothing?

TOTM Once again displaying its tenacious devotion to old Dr. Miles, the FTC is investigating whether makers of musical instruments and audio equipment have engaged in . . .

Once again displaying its tenacious devotion to old Dr. Miles, the FTC is investigating whether makers of musical instruments and audio equipment have engaged in illegal resale price maintenance (RPM). Yesterday’s WSJ reported that the Commission has issued subpoenas to a number of prominent musical instrument manufacturers, including Fender, Yamaha, and Gibson, as well as to the retailer, Guitar Center, Inc. The Commission is apparently seeking to determine whether the manufacturers’ minimum advertised price (MAP) programs, which forbid retailers from advertising prices below some minimum level, amount to unreasonable vertical restraints of trade. In the post-Leegin world, even those MAP programs that amount to agreements to set retail prices are not automatically illegal. Instead, a challenger must establish their anticompetitive effect.

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Antitrust & Consumer Protection

Abuse of Plaintiff Win Rates as Evidence that Antitrust Law Is Too Lenient

TOTM I was recently reading Dean Chemerinsky (Irvine Law) on the Roberts Court at Age 3. One of Chemerinsky’s standard takes when he talks about the . . .

I was recently reading Dean Chemerinsky (Irvine Law) on the Roberts Court at Age 3. One of Chemerinsky’s standard takes when he talks about the Roberts Court is that the Court’s pro-business stance is one of its defining characteristics. Readers of the blog will know that I’ve been critical of Chemerinsky for his superficial antitrust commentary. For example, in this California Bar Journal piece, under the heading “Favoring Businesses over Consumers and Employees,” Chemerinsky argues that the Roberts Court antitrust decisions favored businesses over consumers by overturning Dr. Miles, “make it more difficult to sue business for antitrust violations” in Credit Suisse, and, in Twombly, made it “harder for plaintiff to get into court.”

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Antitrust & Consumer Protection

Commissioner Rosch v. Economics, Again

TOTM I’ve been critical of the Federal Trade Commission, and particularly Commissioner Rosch, for embracing what I think is a dangerously obsolete view of the role . . .

I’ve been critical of the Federal Trade Commission, and particularly Commissioner Rosch, for embracing what I think is a dangerously obsolete view of the role of economics in antitrust. First, it was the Section 2 Report response and before that, it was Commissioner Rosch’s observation that “any kind of economic analyses that require the use of mathematical formulae are of little persuasive value in the courtroom setting” and that “when I see an economic formula my eyes start to glaze over.” To be fair, Commissioner Rosch’s point is that sophisticated economic evidence is not persuasive to courts and that the FTC ought to focus on non-economic evidence that is, we are told, more effective.

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Antitrust & Consumer Protection