News
Archive

The International Center for Law & Economics and TechFreedom filed comments yesterday urging ICANN to approve applications for closed generic Top Level Domains (gTLD) like .BOOK and .BLOG. Closed gTLD registry operators would not be required to allow all applicants to register domain names within the TLD, as .COM is, but could instead manage the entire TLD as their own platforms. We urged ICANN to refer competition concerns to national antitrust authorities, consistent with ICANN’s proper role as a global coordinator rather than a regulator. The following statement can be attributed to Geoffrey Manne, Executive Director of the International Center for Law & Economics and Berin Szoka, President of TechFreedom:

Critics are decrying ICANN’s authorization of closed gTLDs, claiming they could be anticompetitive. But closed gTLDs would provide the most innovative alternatives ” and strongest competition ” to .COM and today’s most popular domain names. Today’s market leaders won’t be beat by simply copying them, no matter how much money is spent on ads. New entrants must offer consumers something new and different. Closing the TLD may sound nefarious, but it gives the registry operator the incentive to invest not only in marketing the TLD, but also in innovative new business models that may change the paradigm of how TLDs function. The operator of .HOTELS would no more “monopolize” the hotel booking market than the owner of hotels.com does today. But it could turn the domain name system into a more useful and accessible form of navigation, while offering new features like added security or thematic consistency consistent across the TLD. That’s just Marketing 101.

The future of the domain space will inevitably be messy and unpredictable in the best sense. But it is precisely that messiness ” that unpredictability, that constant shifting of basic paradigms ” that will most benefit consumers. Forcing new gTLDs to replicate the paradigm of .COM will not.

There may end up being legitimate concerns about a registry’s abuse of market power, but such concerns should be handled by those best positioned to evaluate them: national competition authorities. ICANN should be a coordinator of the domain name space, not the global regulator of the Internet.

Manne and Szoka are available for comment at [email protected].

The suit against Google was to be this century’s first major antitrust case and a model for high technology industries in the future. Now that we have passed the investigative hangover, the mood has turned reflective, and antitrust experts are now looking to place this case into its proper context. If it were brought, would the case have been on sure legal footing? Was this a prudent move for consumers? Was the FTC’s disposition of the case appropriate?

http://truthonthemarket.com/2013/01/09/powerhouse-aba-webinar-on-the-ftcs-investigation-of-google-this-friday/

Geoffrey Manne, Executive Director of the International Center for Law and Economics, along with ICLE Board Member Richard Epstein and ICLE Affiliates M. Todd Henderson and Todd Zywicki have signed onto an brief for American Express Company v. Italian Colors Restaurant, et al.

History:

The case arises from a putative class action antitrust challenge to American Express’s Honor All Cards policy, which requires merchants that wish to accept American Express cards to accept charge cards as well as credit cards. In district court, American Express won a motion to compel arbitration, which it brought to enforce an arbitration clause in its Card Acceptance Agreement. On appeal, the Second Circuit reversed, finding a class action waiver provision in the agreement was invalid. The Supreme Court granted certiorari, vacated the Second Circuit’s decision, and remanded for further consideration in light of Stolt-Nielsen. On remand, the Second Circuit still refused to enforce the arbitration agreement. Shortly thereafter, the Supreme Court decided Concepcion, and the Second Circuit sua sponte considered rehearing.

While the FCC didn’t ask for any additional commitments in this case, beyond what the DOJ asked for, they’ve laid down the marker, and they can in the future, said Geoffrey Manne, the executive director of the International Center for Law and Economics and lecturer at the Lewis and Clark Law School, to Bloomberg BNA Aug. 27. Now they could potentially demand concessions or even stop the transaction on the basis of an ancillary commercial agreement. They are asserting that they have more control over the economic value of the deal.

Find the entire article on BNA.

Today, the Department of Justice approved Verizon’s purchase of radio spectrum from cable companies that had considered using it to build their own wireless network but ultimately decided not to do so.  The deal went through only after the parties agreed to a number of conditions, including a restriction of several commercial agreements that accompanied the deal.

“This deal is great news for consumers,” said Berin Szoka, President of TechFreedom.  “The more spectrum is put to use, the more we’ll ease the coming ‘spectrum crunch.’  The DOJ seems to have agreed that, because of the under-utilization of the spectrum in its current hands, and, with its imposed conditions, the lack of incentive or ability of the parties to raise prices, consumers will benefit from this transfer.

“It seems,” noted Geoffrey Manne, Executive Director of the International Center for Law & Economics, “that the DOJ and FCC have appropriately divided their review of the deal, with the DOJ considering the competitive effects of the commercial agreements and the FCC assessing whether the spectrum license transfers are in the public interest.  Congressional leaders and many self-appointed consumer advocates had demanded that the FCC evaluate the commercial agreements.  But doing so would violate Section 310(d), which authorizes the agency to evaluate only license transfers.”

TechFreedom and ICLE raised this concern about the FCC’s authority in joint comments on the FCC’s review in March.  The FCC was strongly and repeatedly pressured to violate Section 310(d)  by Verizon’s competitors, most notably T-Mobile and Sprint, as well as by regulatory activist groups like Public Knowledge and Free Press.  In May, Sen. Herb Kohl sent a letter asking the FCC to evaluate the commercial agreements, and similar letters followed in July from Senator Franken and thirty-two Congressional Democrats.

Manne raised another concern: “I’m troubled by the DOJ’s imposition of conditions on the merger based on speculative, future harms,” referring to the DOJ’s assertion that the “the Commercial Agreements also unreasonably restrain future competition for the sale of broadband, video, and wireless services to the extent that the availability of these services as part of a bundle, including a quad-play bundle, becomes more competitively significant.  The DOJ has ample authority to address such concerns if they ever become non-conjectural.  Merger review conditions should be narrowly targeted at real, identifiable problems.  Otherwise, government risks hamstringing companies today in ways that can unintentionally hamper future innovation and thus harm consumers.”

Szoka and Manne are available for comment at [email protected].

PORTLAND, OR – Today, the Department of Justice approved Verizon’s purchase of radio spectrum from cable companies that had considered using it to build their own wireless network but ultimately decided not to do so.  The deal went through only after the parties agreed to a number of conditions, including a restriction of several commercial agreements that accompanied the deal. Geoffrey Manne, Executive Director of the International Center for Law & Economics and Berin Szoka, President of TechFreedom issued the following statement:

This deal is great news for consumers. The more spectrum is put to use, the more we’ll ease the coming ‘spectrum crunch.’  The DOJ seems to have agreed that, because of the under-utilization of the spectrum in its current hands, and, with its imposed conditions, the lack of incentive or ability of the parties to raise prices, consumers will benefit from this transfer.

The DOJ and FCC also seem to have appropriately divided their review of the deal, with the DOJ considering the competitive effects of the commercial agreements and the FCC assessing whether the spectrum license transfers are in the public interest.  Congressional leaders and many self-appointed consumer advocates had demanded that the FCC evaluate the commercial agreements.  But doing so would violate Section 310(d), which authorizes the agency to evaluate only license transfers.

TechFreedom and ICLE raised this concern about the FCC’s authority in joint comments on the FCC’s review in March.  The FCC was strongly and repeatedly pressured to violate Section 310(d) by Verizon’s competitors, most notably T-Mobile and Sprint, as well as by regulatory activist groups like Public Knowledge and Free Press.  In May, Sen. Herb Kohl sent a letter asking the FCC to evaluate the commercial agreements, and similar letters followed in July from Senator Franken and thirty-two Congressional Democrats.

Manne raised another concern:

I’m troubled by the DOJ’s imposition of conditions on the merger based on speculative, future harms,” referring to the DOJ’s assertion that the “the Commercial Agreements also unreasonably restrain future competition for the sale of broadband, video, and wireless services to the extent that the availability of these services as part of a bundle, including a quad-play bundle, becomes more competitively significant.

The DOJ has ample authority to address such concerns if they ever become non-conjectural.  Merger review conditions should be narrowly targeted at real, identifiable problems.  Otherwise, government risks hamstringing companies today in ways that can unintentionally hamper future innovation and thus harm consumers.

Manne and Szoka are available for comment at [email protected].

International Center for Law and Economics Executive Director Geoffrey Manne will be a participant tomorrow, April 6, on the live webcast This Week in Law along with TechFreedom Senior Adjunct Fellow Larry Downes. Denise Howell will be hosting and they will also be joined by fellow participant Evan Brown. This week they will be discussing various topics in tech policy including Senator Al Franken’s lambast of Facebook and Google, the newly opened antitrust investigation of Motorola Mobility by the European Commission, and the continued problem of spectrum crunch.

This Week in Law is recorded live every Friday at 11:00am PT/2:00pm ET and covers topics primarily in law, technology, and public policy. You do not have to register, just follow this link at 11:00am PT/2:00pm ET to watch.

Yesterday, the International Center for Law and Economics and TechFreedom jointly filed comments [pdf] with the FCC on the Verizon SpectrumCo deal.  In the comments, ICLE Executive Director Geoffrey Manne and TechFreedom President Berin Szoka counter the primary arguments against the deal:

Critics lament the concentration of spectrum in the hands of one of the industry’s biggest players, but the assumption that concentration will harm to consumers is unsupported and misplaced.  Concentration of spectrum has not slowed the growth of the market; rather, the problem is that growth in demand has dramatically outpaced capacity.  What’s more: prices have plummeted even as the industry has become more concentrated.

While the FCC undeniably has authority to review the license transfers, the argument that the separate but related commercial agreements would reduce competition is properly the province of the Department of Justice.  That argument is best measured under the antitrust laws, not by the FCC under its vague “public interest” standard.  Indeed, if the FCC can assert jurisdiction over the commercial agreements as part of its public interest review, its authority over license transfers will become a license to regulate all aspects of business.  This is a recipe for certain mischief.

The need for all competitors, including Verizon, to obtain sufficient spectrum to meet increasing demand demonstrates that the deal is in the public interest and should be approved.

The authors are available for comment at [email protected].

Updated Report with Appendix
Appendix only

Late last year the International Center for Law and Economics published a study finding that Philadelphia civil courts, and the Philadelphia Complex Litigation Center (PCLC) in particular, are marked by structural biases that likely attract plaintiffs with little or no connection to the city, leading to relatively disproportionate litigation and verdicts. Today we release a supplemental appendix to the study, also authored by Professor of Law and Economics at George Mason University School of Law, Joshua D. Wright, presenting further research demonstrating that, indeed, a substantial fraction of plaintiffs with cases pending at the Philadelphia Complex Litigation Center seem to have have no discernible or relevant connection to Philadelphia or to Pennsylvania.

Removing cases that were identified as lacking sufficient data, 1,370 cases were analyzed and coded. From this sample the plaintiff’s home address was identified in 1,355 cases. Of these, 638 cases had electronically filed complaints yielding the alleged location of injury in 369 cases.

In total, it was found that:

• Of the 1,357 cases, 913 (67.2%) were brought by plaintiffs who live out-of-state without any apparent connection to Pennsylvania or Philadelphia.
• Only 180 cases (13.3%) reveal plaintiffs who live in or allege injury in Philadelphia.
• The most substantial case types where the plaintiffs were overwhelmingly out-of-state are hormone therapy, denture adhesive cream, and Paxil birth defect cases.
• Although most or all of the companies involved in these cases do business in Philadelphia and a few have some sort of administrative offices there, the vast majority of defendants do not have their principal place of business in Philadelphia or even in Pennsylvania. It is unlikely that venue was moved to the PCLC in most or any of the cases.

This preliminary analysis supports the conclusion that Philadelphia courts demonstrate a meaningful preference for plaintiffs by coaxing business from other courts and providing a unique combination of advantages for plaintiffs.

Here is the full report with the new appendix attached; the Appendix by itself is available here. Please contact us if you are interested in speaking with Professor Wright about the report or would like a comment on the report or the pending legislation.