3. The goals and scope of competition and antitrust laws

This monograph is the definitive work on the application of antitrust and competition law in blockchain, decentralized finance, and virtual asset markets. It covers all aspects of antitrust and competition law, including market definition, market power, abuse of dominance and monopolization, and anticompetitive agreements and restraints of trade. Completely up to date with all recent literature and case law, this monograph is a key companion to academics, practitioners, competition authorities, and anyone with an interest in competition law and policy in the decentralized economy. Both EU competition law and US antitrust law are covered, and the legal analysis is complemented by extensive economics and computer science literature. Keeping in pace with recent industry developments, this monograph not only systematizes extant scholarship but also breaks new ground, introduces new concepts of the decentralized economy, and integrates them in the analytical framework of competition and antitrust law, making it readily usable by academics, practitioners, and regulators.

Rapid technological innovations have challenged the conventional application of antitrust and competition law across the globe. Acknowledging these challenges, this original work analyses the roles of innovation in competition law analysis and reflects on how competition and antitrust law can be refined and tailored to innovation. With chapters from well-established and up-and-coming competition law and economics scholars – from the Academic Society for Competition Law (ASCOLA) – this book reflects on the role innovation has played, and can continue to play, within competition and antitrust law. In addition to uncovering innovation concerns within their analysis, the authors also make important contributions to academic and policy debates on the relationship between these areas of law and other instruments of innovation regulation, such as data protection regulation, intellectual property law, the regulation of big data, platforms and artificial intelligence. Academics in competition and intellectual property law, economics and political science working on data protection or innovation more generally will find this book a useful insight into future challenges for constructing meaningful and effective laws within the area of innovation. Policymakers and practising lawyers will also find the example cases useful, especially for refining and restructuring perception about innovation in competition law.

Unlike many other crimes involving wealth transfers, such as theft or fraud, there is no consensus on the morality of antitrust offenses. Some opine that antitrust offenses are: (i) immoral, (ii) amoral (being mala prohibitum rather than mala in se), or (iii) moral and consistent with natural human behavior so it is the federal antitrust laws that are immoral. But these differing viewpoints have not sparked any debate over the morality of antitrust violations. Under the continued influence of the Chicago-school’s neoclassical economic theories, antitrust analysis is primarily concerned with economic efficiency. Since terms like “morality” and “evil” are judgmental, not descriptive, they are deemed outside the discourse of economic theory’s self-described positivism. Reducing antitrust to normative morality judgments would represent, for Richard Posner and others, antitrust’s descent into “a weak field, a field in disarray, a field in which consensus is impossible to achieve in our society.” But antitrust analysis is not beyond the judgmental. One may question the need to address these moral issues. But over the past thirty years, while antitrust’s civil remedies have remained relatively unchanged, the criminal penalties for price fixing, bid rigging, and other Sherman Act antitrust violations have soared–from a misdemeanor to a felony punishable by up to ten years imprisonment. If the criminal laws reflect society’s moral judgments, then antitrust and morality ultimately are intertwined. Even if a utilitarian sought to divorce morality from antitrust, in asserting that antitrust’s criminal penalties have increased to ensure optimal deterrence, morality resurfaces in addressing the means of deterring such behavior and the degree to which criminal sanctions are employed. Inevitably moral issues will surface as the Sherman Act’s criminal penalties continue to escalate. A broader implication is that antitrust policy, to borrow Robert Bork’s phrase, may be at war with itself. If policy makers assume that the federal antitrust laws are concerned solely with allocative efficiency and are essentially amoral, then efforts to deter such conduct through criminal sanctions may be self-defeating. Criminal law, as many legal scholars have argued, reveals society’s moral opprobrium to certain conduct. That moral component (through internalizing the standard of conduct and the attendant guilt or fear of shame) can be effective in deterring socially unacceptable conduct. But to harness that moral component, antitrust policy makers should re-examine certain policies underlying antitrust law. To date, antitrust policymakers, enforcers, and scholars have largely encamped in utilitarianism and the economic theory of optimal deterrence, whereby general deterrence is achieved through the right mixture of financial penalty and incarceration to offset the profit-maximizer’s expected cartel gains. But it is unclear whether that alone will effectively deter cartel behavior. Instead, fostering a moral component to antitrust crimes may more effectively deter these violations at a lower social cost, encourage other nations to increase their prosecution of cartel behavior, and prevent antitrust from slipping into irrelevancy.

Contents: Preface PART I: ECONOMIC FOUNDATIONS OF COMPETITION LAW 1. Are People Self-interested? The Implications of Behavioral Economics on Competition Policy Maurice E. Stucke 2. Consumer Choice as the Best Way to Recenter the Mission of Competition Law Robert H. Lande 3. Protecting Consumer Choice: Competition and Consumer Protection Law Together Neil W. Averitt 4. Is Competition Law Part of Consumer Law? Paul L. Nihoul PART II: INDIVIDUAL JURISDICTIONS AND INTERNATIONAL PERSPECTIVES 5. Resale Price Maintenance: A Reassessment of its Competitive Harms and Benefits Marina Lao 6. The Leegin Case: A US Antitrust Chief Event versus a Storm in a European Teacup? Josef Bejcek 7. Competition Law Issues Concerning Related Markets and their Treatment under EU Competition Law Thomas Eilmansberger 8. A Comparative Look at the Competition Law Control of State-owned Enterprises and Government in China Deborah Healey 9. Australia's Criminalization of Cartels: Will it be Contagious? Caron Beaton-Wells PART III: INTELLECTUAL PROPERTY AND COMPETITION LAW 10. Patent Ambush Strategies and Article 102 TFEU Andreas Fuchs 11. Three Statutory Regimes at Impasse: Reverse Payments in Pay-for-Delay Settlement Agreements between Brand-name and Generic Drug Companies Rudolph J.R. Peritz 12. Patent Ambush and Reverse Payments: Comments Gustavo Ghidini 13. Intellectual Property in Competition: How to Promote Dynamic Competition as a Goal Josef Drexl 14. Industrial Standards and Technology Pools: A Regulatory Challenge for EU Competition Law Steven Anderman PART IV: PROMOTING COMPETITION POLICY NATIONALLY AND ACROSS BORDERS 15. International Antitrust Solutions: Discrete Steps or Causally Linked? Michal S. Gal 16. Penumbras of European Union Competition Law: External Governance, Extraterritoriality, and the Shifting Borderlands of the Internal Market Clifford A. Jones 17. The Role of Non-governmental Organizations in the Development of Competition Law Albert A. Foer Index

Private enforcement has long been a central part of US antitrust law experience, while it has played minor roles or none at all in European competition law systems. This contrast is fundamental to understanding differences between European and US competition law and to assessing the potential consequences of increasing the role of private enforcement of competition law in Europe. It is also central to decisions about competition law development in much of the world, because in this respect most competition law systems in the world resemble European competition laws rather than US antitrust law.In this essay, I examine the private enforcement of competition law in the US and Europe against the backdrop of efforts in Europe to rely more heavily on private enforcement in the enforcement of its competition law. As part of its so-called ‘modernization’ efforts, which went into effect on May 1, 2004, the European Commission seeks to reduce reliance on administrative authorities and to encourage those harmed by restraints on competition to bring private law suits in national courts. There is, however, widespread uncertainty about the prospects for successfully incorporating private litigation into European competition law systems. There is also uncertainty about which, if any, measures should be taken to enhance acceptance of private enforcement.This article provides a comparative perspective on these issues that can provide a more solid basis for making informed decisions in the area.

I. INTRODUCTIONThe proper role of private enforcement in antitrust law has long been debated. One of the most significant judicial reforms of antitrust law associated with the Chicago School was the Supreme Court's decision to limit standing to direct purchasers in Illinois Brick Co. v. Illinois.1 Although that decision has proven controversial, the Illinois Brick doctrine has endured as a principle of federal antitrust law for nearly 40 years.Whatever the merits of the Illinois Brick decision in 1977, subsequent developments have undermined its rationale. In particular, the Supreme Court's 2013 decision in American Express Co. v. Italian Colors Restaurant2 undercuts the fundamental premises of the Illinois Brick doctrine. The Illinois Brick majority assumed that direct purchasers were the most motivated and the best situated to enforce antitrust laws that resulted in supracompetitive prices. But Italian Colors makes it very difficult for direct purchasers to enforce antitrust laws in a wide variety of circumstances, because the decision allows potential antitrust defendants to use arbitration clauses in standard-form contracts to ban antitrust class actions and require individual arbitration of antitrust disputes. The result is to deprive overcharged direct purchasers of the tools antitrust law offers for effective enforcement-class action status, a lengthy statute of limitations, treble damages, and, if successful, attorneys' fees.3 Without effective opportunities for enforcement by direct purchasers, the rationale for excluding indirect purchasers from bringing antitrust claims collapses.Antitrust law is common law and is often based on policy arguments. The decision in Illinois Brick is no exception. The Court based its reasoning on its assessment of the ability of direct purchasers to enforce antitrust laws effectively. After Italian Colors, that is no longer the case. Old doctrines must give way in light of legal developments (including later judicial opinions) that change the underlying environments and undermine the original policy arguments upon which the old common law is based. By eliminating most antitrust enforcement by direct purchasers, Italian Colors has paved the way for reconsideration of Illinois Brick.4II. ILLINOIS BRICK: ITS HOLDING AND RATIONALECourts have long been suspicious of competitors as antitrust plaintiffs,5 in part because competitor interests do not necessarily align well with consumer interests. For example, competitors might object to conduct that benefits consumers, such as aggressive price competition.6 Beginning in the 1970s, courts began creating limits on competitor standing in an effort to tackle that disconnect.7Consumers, by contrast, are, in some sense, the perfect antitrust plaintiffs. They are the intended beneficiaries of the competitive markets that antitrust policy seeks to encourage; consumers are injured by cartels and other anticompetitive conduct, but benefit from aggressive competition on the merits. Accordingly, courts have long permitted purchasers to sue to recover overcharges that result from cartels,8 though some courts have (incorrectly) questioned customers' standing to enforce the antitrust laws.9In Illinois Brick, the plaintiffs were state and local governments who sought recovery for overcharges that resulted from a cartel that fixed the prices of concrete blocks. But the governments did not buy the blocks directly from the defendants. Rather, construction contractors bought the blocks and used them to build buildings, which the governments later bought.10 The governments were indirect purchasers; their injury came from the fact that the contractors, who paid an artificially high price, passed that higher price on to them.11The Supreme Court held that indirect purchasers could not recover the overcharges that direct purchasers passed on to them.12 Illinois Brick was decided on two basic policy considerations. …

It is a well-established principle of EU competition law that parent companies can be fined for antitrust infringements by their subsidiaries. Under the new EU Directive on Antitrust Damages Actions, parent company liability is likely to be extended to private antitrust litigation. In the United States, in contrast, no fines are imposed on parent companies unless they are directly involved in an antitrust infringement. Moreover, US courts are reluctant to hold parent companies directly or indirectly liable in private damages suits. Against this background, I explore in this article the striking difference between EU and US competition law with regard to parent company liability. I show that one of the main purposes of holding parent companies liable in EU competition law is to solve an underdeterrence problem that occurs when subsidiaries lack sufficient assets to pay for fines or damages. I argue that the same function is fulfilled in US antitrust law by other enforcement instruments, in particular, the individual liability of managers and employees. On this basis, I conclude that primarily the existence of these functional substitutes explains why a need for parent company liability has not arisen in US antitrust law.

Rationale and Benefits of Leniency Programs Under EU Competition Law and US Federal Anti-Trust Law

Patent hold-up is currently one of the most discussed antitrust topics on both sides of the Atlantic. Competition authorities in the European Union and in the United States have expressed strong concerns about the standard essential patent (SEP) owner's ability to holdup manufacturers and impose unfair and unreasonable licensing conditions. The reach competition law has in addressing cases of patent hold-up remains nonetheless unclear. By analysing the applicability of the antitrust doctrines, the article tries to identify the circumstances in which SEP owners might face a liability under EU competition law and US antitrust law. The analysis shows that the SEP owner's conduct is subject to a different legal evaluation under EU competition law and US antitrust law. The divergences however do not reflect a conflicting perspective of the competition authorities, or to the application of different legal standards, but rather to the differences in the legal provisions on undertakings' unilateral conduct. The analysis also shows that competition law does not provide a definitive solution to the problem of patent hold-up in either system. This suggests that the limitation competition law faces in addressing cases of patent hold-up are not attributable to narrow formulation of the antitrust provision, but rather to the fact that competition law generally does not have the adequate tools to provide a definitive answer to the SEP owners' opportunism.

The development of a wide-reaching collective representation for (genuine) self-employment and the collective negotiation of fair fees for independent contractors might often be more dissuasive vis-à-vis scam self-employment than the threat of reclassification. However, case law in both civil and common law jurisdictions showcases how antitrust law can hamper the collective negotiation of workers’ minimum fees. The premise of such a view, which has its roots in the early stage of development of collective bargaining, is that the agreements setting the rates of pay for non-subordinate labour stand as restraints of trade. The author contends that this narrow interpretation of the scope of collective labour law - or rather this extensive view of the scope of antitrust law - is unacceptable. On the one hand, workers who personally carry out their activity cannot be treated as businesses operating on a free market, because they are - akin to the employees - individuals who lack the power to tangibly affect the terms and conditions of their work. For those persons, as the author recalls, collective bargaining have always stood for, even before the binary legal divide between employment and self-employment was drawn. On the other hand, it appears incongruous that a major challenge to the perimeters of collective labour law stems from a formalistic approach to a field of law (antitrust or competition law) which seeks to correct the market asymmetries in the interest of weaker parties, such as smaller businesses, communities and consumers. Ultimately, the author contends that a solution to overcome this legal hurdle cannot be found through a mere change in the interpretation of the existing US and EU competition and labour law rules, which have to be amended by the legislators in accordance with the current social needs.

While company law makes great efforts to maintain the separation of different legal entities, other areas of law increasingly emphasise the common responsibility of corporate groups. One of the fields shaping this emerging principle is competition law, where focusing on the whole group rather than its individual members is increasingly becoming the norm. But this approach is still far from being uniformly accepted. While EU competition law is pushing ahead, US antitrust law is said to take a rather critical stance. Against this background, this chapter examines the functions performed by a unitary perspective on corporate groups. The main goal is to show that at least three important functions must be distinguished in EU competition law, each of which has its own implications. Only when these are properly understood can it be determined where the group perspective is appropriate and where it is not. This is shown by the example of current discussions, for example, on the liability of sister companies and on possible applications in the area of liability for damages. Finally, the analysis in this chapter also aims to contribute to a better understanding of the different approaches in EU and US competition law.

The Quest for Appropriate Remedies in the Microsoft Antitrust EU Cases: A Comparative Appraisal

Chapter 1 - Introduction to Competition Law 1.1 The economic background to competition law 1.2 The function of competition law 1.3 The market 1.4 Competition law and the economic theory of regulation 1.5 Various systems of competition law Literature Chapter 2 - The basic structure of competition law 2.1 Some key concepts in the application of competition law 2.2 The combined system of UK and European competition law 2.3 The scope of application of competition law Chapter 3 - The prohibition of anti-competitive agreements 3.1 Introduction 3.2 The prohibition of cartels 3.3 Voidness 3.4 Block exemptions 3.5 Other exceptions from the prohibition of cartels 3.6 Some important types of anti-competitive agreements Chapter 4 - The prohibition of the abuse of positions of economic power 4.1 Introduction 4.2 The prohibition of the abuse of a position of economic power 4.3 Postscript: the Commission's Discussion Paper on Exclusionary Abuses under Article 82 EC Chapter 5 - Control of concentrations 5.1 Introduction 5.2 The key elements of the EC Merger Regulation 5.3 Merger control in the UK system: the Office of Fair Trading and the Competition Commission Chapter 6 - The Application and Enforcement of Competition Law 6.1 Introduction 6.2 The application of competition law by the courts 6.3 Competition procedure and enforcement under UK law 6.4 Enforcement of EC competition law 6.5 Leniency policy 6.6 Judicial protection in EC competition law 6.7 Division of competence and co-operation between the Commission and the UK authorities (OFT and CC) Chapter 7 - Competition Law and the State 7.1 Introduction 7.2 The rules for public undertakings and undertakings with exclusive or special rights 7.3 The norm of Articles 3(1)(g), 10, 81 and 82 EC 7.4 How to assess conduct in mixed situations? 7.5 EC state aids law: a general introduction Chapter 8 - The international dimensions of competition law 8.1 Introduction 8.2 The geographic scope of application of EC and UK competition law 8.3 International agreements 8.4 Relevant concepts Chapter 9 - Epilogue 9.1. Introduction 9.2. Themes in competition law 9.3. Objectives of EC Competition law and policy 9.4. Does competition law do the job? 9.5. Antitrust procedure 9.6. Fundamental rights 9.7. Block exemptions 9.8. Fostering general Community policies? 9.9. Remedies 9.10. Liberalisation of the closed 9.11. Public service obligations 9.12. Extraterritorial application of EC competition law and international co-operation in the competition law field 9.13. Merger Control 9.14. Article 82 EC 9.15. Articles 3(1)(g) and 10 EC 9.16. Article 86 EC 9.17. Role of national courts 9.18. Harmonisation 9.19. Centralisation & Decentralisation of EC competition law 9.20. Regulation 1/2003/EC 9.21. Competition between Legal Orders 9.22. Targeted sectors and/or issues 9.23. Accession 9.24. Conclusion

Some amount of conflict is inevitable between federal antitrust laws and state economic regulation. Written in broad strokes, federal antitrust prohibits combinations in restraint of trade or monopolization of markets, and thus confirms competition in free markets as the fundamental principle governing the national economy.' In the eloquent words of the Supreme Court, [federal antitrust law] rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time providing an environment conducive to the preservation of our democratic political and social institutions.2 State economic regulation, on the other hand, usually supplants competition and free markets. For example, states commonly regulate utilities, license professions, zone property, limit taxicab permits, or place other price or entry controls upon selected businesses. Although state regulation is often designed to correct perceived market failures,3 much of it is economically inefficient and thus in conflict with federal antitrust policy.4 If strict preemption standards were applied to this conflict betweeen federal antitrust laws and state economic regulation, the supremacy clause of the Constitution would require the wholesale invalidation of

Antitrust and the Patent System: A Reexamination