Much has been made of Judge Sullivan’s recent decision in City of New York v. Group Health Incorporated and its implications for the UPP test and market definition in merger cases under Section 7 of the Clayton Act.  Given the 2010 Proposed Horizontal Merger Guidelines’ (2010 HMGs) shift toward diversion ratios and margins and away from market shares, the blogosphere has sold Judge Sullivan’s decision as sign that the agencies might have a tough time selling the UPP to federal courts in the post-2010 HMG world.

Read the full piece here.

Here (HT: Danny Sokol).   The post by Andreas Stephan implies that the OFT’s mistakes in the BA prosecution threaten to undermine the effectiveness of cartel enforcement in the UK generally and predicts that the OFT will not bring more criminal prosecutions in the near future.   Stephan also provides some more detail on what apparently went wrong…

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Abstract

State Consumer Protection Acts (CPAs) were designed to supplement the Federal Trade Commission’s mission of protecting consumers and are often referred to as “little-FTC Acts.” There is growing concern that enforcement under these acts is not only qualitatively different than FTC enforcement, but may be counterproductive for consumers. This article examines a sample of CPA claims and compares them to the FTC standard. It identifies qualitative differences between CPA and FTC claims by commissioning a “Shadow Federal Trade Commission” of experts in consumer protection. The study finds that many CPA claims include conduct that would not be illegal under the FTC standards and that most of the cases with illegal conduct would not warrant FTC enforcement. Even among CPA cases where the plaintiff prevailed, nearly half do not include illegal conduct under the FTC standard and most of the cases with illegal conduct would not invoke FTC enforcement. The results clearly suggest private litigation under little-FTC Acts tends to pursue a different consumer protection mission than the Bureau of Consumer Protection at the Federal Trade Commission.

Abstract

There are very few industries that can attract the attention of Congress, multiple federal and state agencies, consumer groups, economists, antitrust lawyers, the business community, farmers, ranchers, and academics as the agriculture workshops have. Of course, with intense interest from stakeholders comes intense pressure from potential winners and losers in the political process, heated disagreement over how gains from trade should be distributed among various stakeholders, and certainly a variety of competing views over the correct approach to competition policy in agriculture markets. These pressures have the potential to distract antitrust analysis from its core mission: protecting competition and consumer welfare. While imperfect, the economic approach to antitrust that has generated remarkable improvements in outcomes over the last fifty years has rejected simplistic and misleading notions that antitrust is meant to protect “small dealers and worthy men” or to fulfill non-economic objectives; that market concentration is a predictor of market performance; or that competition policy and intellectual property cannot peacefully co-exist. Unfortunately, in the run-up to and during the workshops much of the policy rhetoric encouraged adopting these outdated antitrust approaches, especially ones that would favor one group of stakeholders over another rather than protecting the competitive process. In this essay, we argue that a first principles approach to antitrust analysis is required to guarantee the benefits of competition in the agricultural sector, and discuss three fundamental principles of modern antitrust that, at times, appear to be given short-shrift in the recent debate.

Abstract

Consolidation and increased concentration in the agrifood sector over the past two decades, combined with an increased use of alternative marketing agreements in the poultry and livestock industries, have fueled concerns of anti-competitive behavior among large agribusinesses such as the major meat packing companies. The DOJ and USDA have partnered together in a pledge to strengthen enforcement both of antitrust restrictions and of the Packers and Stockyards Act of 1921 (“PSA”). This paper provides a brief overview of the ongoing changes in the meat and livestock industries and the role of the PSA. The paper then outlines several challenges facing the successful and efficient use of the PSA as a competition policy from both theoretical and empirical economic perspectives. I argue that regulators need to tread carefully into their newly launched enforcement partnership given how little is well understood of the factors leading to the existing system and, therefore, the likely consequences associated with more aggressive enforcement in the name of competition.

Judge Frank Easterbrook once opined that observing predatory pricing was a bit like seeing a unicorn —  in the sense that it was a phenomena around which there was much lore but not much empirical evidence.  The debate over the current expansion of Section 5 liability increasingly has become about the search for a different sort of “unicorn” — follow-on actions. The conventional wisdom is that private rights of action in the US, ceteris paribus, militate in favor of less aggressive enforcement of Section 2 relative to other countries.  It follows, some have argued, that an expansive view of Section 5 is appropriate because it avoids the social costs —  and in particular the chilling effects on efficient behavior associated with potential antitrust liability — associated with false positives.

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I’m still working through the 2010 Horizontal Merger Guidelines, and like Dan, I find myself puzzling over some of the revisions, and in favor of others.  I wanted to start with some first impressions.  The big movement here, is that the new HMGs repudiate the market definition requirement in the new Section 4 and in Section 6 on Unilateral Effects.  Consider the language in Section 4 on market definition…

Read the full piece here. 

David Balto has penned a short apologia of the FTC’s Intel case (HT: Danny Sokol).  Unfortunately his defense (and, unfortunately, the FTC’s case) is woefully misguided.

Balto writes…

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Will someone remind me just why the USDA and DOJ are hosting their little Antitrust in Ag roadshow this year?

The Associated Press reports today that the USDA is set to release a new set of regulations on the livestock and poultry industries. Reporter Christopher Leonard describes the new regulations as “the most sweeping antitrust rules covering the meat industry in decades, potentially altering the balance of power between meat companies and the farmers who raise their animals.”

Read the full piece here.