Anticompetitive Effects Research Articles

Symbioses between Green Marketing Sustainability and Competition Law in Malaysia

Purpose: The urgency to control and reduce environmental disasters to the air and water as well as plastic pollution, acute deforestation, industrial waste, chemical spills, climate change and global warming calamity has triggered the universal Sustainable Development Goals (SDG) policy. Thus, diverting the attention of every level of human activity towards attaining a ‘sustainable’ environment. This universal war against such environmental disasters has developed a reason to incorporate SDG policy goals into the Competition Law and Policy (CLP) globally. This exploratory study aimed to determine the symbiosis between the competition law and United Nations (UN), SDG policy application under Competition Act 2010 for promoting and enhancing Green Marketing (GM) in Malaysia. 
 Methodology: The study examines viable options for competition regulators to address sustainability policy for green marketing (GM) benefits under the scope of CLP. The study applies qualitative analysis by way of comparative study to the European Union (EU) approach to determine GM marketing legitimacy for acclaiming SDG policy as a criterion within the exemption proviso in the Competition Act 2010, Malaysia.
 Findings: Competition Law can support GM sustainability initiatives to improve the environment since GM is not just about producing and marketing environmentally sustainable products but from a broader perspective contributes to innovation and consumer welfare. Hence, GM's social market and societal benefits towards sustainability objectives are arguably considered to outweigh its countervailing anticompetitive effects for sustainable exemption policy under the CLP. However, GM can only substantially contribute to addressing global warming and the environment under the SDG if applied legitimately. In addition, the GM must be also endorsed to incorporate broader environmental-related benefit policy within its competition law prohibition and exemption framework to resonate with the UN’s SDG.
 Implications/Originality/Value: The endorsement of GM sustainable benefits by way of exemption, exception or being pro-competitive allows a fair competitive advantage for GM industry growth. The research examines and proposes the exemption options for GM-related mergers, a collaboration by way of agreement and government exception policies under CA2010.

Symbioses between Green Marketing Sustainability and Competition Law in Malaysia

Purpose: The urgency to control and reduce environmental disasters to the air and water as well as plastic pollution, acute deforestation, industrial waste, chemical spills, climate change and global warming calamity has triggered the universal Sustainable Development Goals (SDG) policy. Thus, diverting the attention of every level of human activity towards attaining a ‘sustainable’ environment. This universal war against such environmental disasters has developed a reason to incorporate SDG policy goals into the Competition Law and Policy (CLP) globally. This exploratory study aimed to determine the symbiosis between the competition law and United Nations (UN), SDG policy application under Competition Act 2010 for promoting and enhancing Green Marketing (GM) in Malaysia. 
 Methodology: The study examines viable options for competition regulators to address sustainability policy for green marketing (GM) benefits under the scope of CLP. The study applies qualitative analysis by way of comparative study to the European Union (EU) approach to determine GM marketing legitimacy for acclaiming SDG policy as a criterion within the exemption proviso in the Competition Act 2010, Malaysia.
 Findings: Competition Law can support GM sustainability initiatives to improve the environment since GM is not just about producing and marketing environmentally sustainable products but from a broader perspective contributes to innovation and consumer welfare. Hence, GM's social market and societal benefits towards sustainability objectives are arguably considered to outweigh its countervailing anticompetitive effects for sustainable exemption policy under the CLP. However, GM can only substantially contribute to addressing global warming and the environment under the SDG if applied legitimately. In addition, the GM must be also endorsed to incorporate broader environmental-related benefit policy within its competition law prohibition and exemption framework to resonate with the UN’s SDG.
 Implications/Originality/Value: The endorsement of GM sustainable benefits by way of exemption, exception or being pro-competitive allows a fair competitive advantage for GM industry growth. The research examines and proposes the exemption options for GM-related mergers, a collaboration by way of agreement and government exception policies under CA2010.

The Law and Economics of Tying in Digital Platforms: Comparing Tencent and Android

Abstract Tying has become a common practice in digital platforms. It may generate both pro-competitive effects and anti-competitive effects, which makes it difficult to distinguish between lawful and unlawful tying practices. The cases of Tencent and Android both involve tying conducts, but interestingly, the cases have different outcomes. This article explores reasons for these different case outcomes from a comparative law and economics perspective. By assessing the facts and legal rulings in Tencent and Android, we find that the different case outcomes result, on the one hand, from the different case facts, and on the other hand, from the different approaches used by the EU Commission and the Chinese Supreme People’s Court. The Court scores better in terms of ensuring legal certainty; nevertheless, it may face difficulties when it has to apply economic analysis. The Commission seemingly uses more economics, but the application is not full-fledged, as it disregards important case facts when assessing competition foreclosure, and employs asymmetric legal tests and evidence standards for anti/pro-competitive effects of tying. From a law and economics perspective, we provide suggestions for China and the EU, taking the recent Anti-Monopoly Guidelines on Platforms in China and the forthcoming Digital Markets Act in the EU into account.

Corporate social responsibility and market entry

AbstractIs the decision of firms to pursue social interest and promote social progress philanthropic or motivated by strategic reasons? Using a simple Spence–Dixit entry model game with homogeneous goods, this paper studies the possible anticompetitive effect of the adoption of corporate social responsibility (CSR) in the form of “consumer friendliness” (i.e., firms’ attention to the welfare of consumers). It is shown that, when the market becomes contestable, the incumbent can select to adopt CSR to hamper to a greater extent the potential entrant, regardless of its choice to engage in CSR activities. In other words, CSR can become a strategic barrier to entry.

Symbioses between Green Marketing and Sustainability Exemption Policy in the Competition Law Application in Malaysia

Objective: The Malaysian Competition Act 2010 (MCA 2010) strictly prohibits anti-competitive practices in the absence of any redeeming virtue that promotes economic efficiency or social benefits whereas its detrimental effect on competition is proportionate to the benefits provided. The ‘green marketing’ (GM) is about product indorses environmental sustainability policy. Our planet today is confronted with various environmental disasters such as air and water pollution, food shortage, plastic pollution, and deforestation. Furthermore, industrial waste and chemicals are found everywhere. Therefore, it’s extremely pertinent to divert all attention to focus at every level on attaining sustainable environmental policy. The corporations have considered producing and marketing in a more environmentally friendly manner and the consumers are also aware of its importance. The resulting universal war against global warming and environmental protection has developed a reason to incorporate broader non-economic environmental-related policy i.e., the sustainable environmental benefits goals into the anti-competitive exemption policy to resonate with the United Nations (UN) Sustainable Development Goals (SDGs) within the Competition Law and Policy CLP). Hence it is considered arguable, that GM's societal benefits and sustainability objective outweigh its countervailing anticompetitive effects. Methodology: Therefore, the author is resolute that an endorsement for GM as for exclusion as a ‘sustainable benefit’ exemption is relevant to obtain a fair competitive advantage for GM in Malaysia. However, in the endorsement of the GM concepts the discussion will firstly address greenwashing issues before proceeding to the study on inroad of the ‘sustainability exemption policy’ within the CLP generally and specifically in Malaysia.
 Findings: The research concludes with exemption options concerning specific mergers, horizontal agreements, and state aid exclusion policy under CA2010.

Common Ownership Does Not Have Anticompetitive Effects in the Airline Industry

ABSTRACTInstitutions often own equity in multiple firms that compete in the same product market. Prior research has shown that these institutional “common owners” induce anticompetitive pricing behavior in the airline industry. This paper reevaluates this evidence and shows that the documented positive correlation between common ownership and airline ticket prices stems from the market share component of the common ownership measure, and not the ownership and control components. We further show that the results are sensitive to measures of investor control and to assumptions about equity holders' ownership and control during bankruptcy.

Competition Law and Sports Governance: Disentangling a Complex Relationship

Cases like International Skating Union and Super League show that the application of EU competition law to rules adopted by sports governing bodies is complex and occasionally controversial. This article discusses the peculiarities of sports as an activity and addresses the implications for Articles 101 and 102 TFEU. It shows, first, that the relationship between individual participants in a tournament is best described as co-opetitive, in the sense that their viability and success depend on sustained cooperation. Second, the emergence of a regulatory structure is inevitable. Third, tensions – of a horizontal and a vertical nature – are bound to emerge within an association. These tensions are explained, inter alia, by the opportunistic behaviour of individual participants (which may seek to benefit from the joint venture while simultaneously undermining it). The case law accounts for the peculiarities of sports. Measures aimed at addressing opportunistic conduct within a cooperative structure (such as the non-compete obligations imposed by governing bodies) do not have, as their object, the restriction of competition and do not invariably have anticompetitive effects, which are to be established case-by-case. Absent exclusive or special rights, moreover, governing bodies are not subject to a general duty of non-discrimination vis-à-vis competing organizations.

Strengthening Enforcement and Redress Under the Australian Privacy Act

The regulatory regime provided by the Privacy Act 1988 (Cth) has long been criticized for its limited effectiveness in providing both remedies for individuals and guidance and deterrence for entities obliged to comply with the statute. Key concerns include the restricted rights of redress for individuals, and the inadequate powers and funding of the federal privacy regulator, the Australian Information Commissioner. In the last three years, the Australian Competition & Consumer Commission (ACCC) has begun to take on an important role in advocating for reform of Australia’s privacy law, assessing the potential anticompetitive effects of the data practices of digital platforms, and actively litigating privacyrelated misleading conduct matters under the Australian Consumer Law (ACL). This article describes the contrast in the roles, powers and funding of these two regulators and makes proposals for reform which would assist in providing Australians with appropriate access to justice in directly redressing privacy wrongs beyond organizations’ misleading representations about data practices. Australia, Data Privacy, Privacy Regulators, Enforcement, Redress

When Do Agreements Restrict Competition in EU Competition Law?

Under EU competition law, it is prohibited to conclude agreements distorting competition, but little guidance is available on what to consider anti-competitive. However, case law has given rise to patterns holding some practices anti-competitive by object while others must be assessed in detail and against their effect without providing a workable definition on the lines between these two approaches. Other issues remain equally open-ended, e.g., when the anti-competitive effect is appreciable. In this paper, a possible roadmap for the appraising of restrictive agreements in EU competition law will be provided.

What can be Expected from Mergers After Deregulation? The Case of the Long-Distance Bus Industry in France.

This study estimates the competitive effects of horizontal mergers in the French long-distance bus industry. We examine the two mergers that followed the 2015 Deregulation Act (the Macron Law); we use an exclusive and exhaustive dataset that covers eight consecutive quarters. We analyze the merger effects by comparing bus links that were affected by mergers with those that were unaffected; we use difference-in-differences estimations. We find that the two mergers are associated with price increases of about 13.5% immediately that then moderate to 5.3%; and with the frequency decreases from − 21.5 to − 25.7%; we observe no effects on load factors. These findings show evidence of short-run anticompetitive effects, while the mergers under study were not scrutinized by the French competition agency, as they were below the notification thresholds.

Competition Law and Artificial Intelligence – Challenges and Opportunities

The dynamic development and expansion of artificial intelligence (AI), one of the most important technologies currently being developed in the world, which may herald the fourth technological revolution, brings not only numerous benefits, but also threats in many spheres of socio-economic life, including law. This breakthrough technology also creates a number of challenges and opportunities for the science and practice of competition law (or antitrust law). The aim of this study is to show the pro- and anticompetitive effects of AI implementation, as well as to identify and outline the key challenges and opportunities that these effects have on competition law. This paper is intended to serve as an introduction to the subject matter. It does not claim to examine it exhaustively, but rather to inspire its further, more extensive and in-depth analysis.

The Anti-Competitive Effect of Mergers on Competition in Tanzania and India

The Anti-Competitive Effect of Mergers on Competition in Tanzania and India

Hybrid Platform Operation Decision of Retail Enterprises

The development of e-commerce has formulated the hybrid platform mode for retail enterprises. We studied how the differences in product distribution cost, unit retail price, and competition conflict affect the business model decision making. The theoretical model shows the following results: (1) When the hybrid platform sells complementary products with third-party sellers, the profit of choosing the hybrid mode is always the best. (2) When the hybrid platform competes with third-party sellers, if the unit retail price is in a higher range, the merchant mode is the best choice; when the unit retail price is in the lower range, the hybrid platform mode is the best choice. (3) Competition between the hybrid platform and third-party sellers determines the profit level of the operating enterprise. The excessive price competition between the self-operated business and the third-party sellers is magnified by the existence of cross-network externalities, resulting in a strong anti-competitive effect, and affecting the profits of the hybrid platform’s two businesses. These findings guide retail enterprises to design their business model as well as address competition conflict.

Antitrust Limits on Patent Settlements: A New Approach*

AbstractPatent settlements between rivals restrain competition in many different ways. Antitrust requires that their anticompetitive effects are reasonably commensurate with the firms' expectations about (counterfactual) patent litigation. Because these expectations are private and non‐verifiable, this standard is hard to administer; to date, it has been successfully applied only within a very narrow class of agreements. We show that it can be applied universally by policing the economic structure of the firms' contract. This approach determines whether settlement outcomes will be antitrust‐compliant for any private beliefs the firms might have, thus avoiding the need to speculate about such beliefs.

Formalism in Competition Law

Abstract This article analyzes the meaning and role of formalism in competition law. Drawing on general legal theory and philosophy, this article conceives of formalism as decision-making constrained by rules, whereby rules exclude considerations from the decision-making process. It analyzes the degree to which per se rules and the rule of reason in U.S. antitrust law and the category of “by object” restrictions in EU competition law involve formalistic reasoning. It subsequently discusses the relationship between “legal form” and “anticompetitive effects” and the debate on “form-based” versus “effects-based” approaches to competition law. It concludes that “effects-based” approaches to competition law typically involve formalistic legal rules, thus deconstructing the well-known form–effect dichotomy. Finally, this article analyzes the normative relationship between formalism, type 1 and 2 errors, and legal certainty, and argues that this relationship is fundamentally shaped by beliefs about institutional competence and the allocation of decisional jurisdiction. The article concludes by arguing against pejorative conceptions of “formalistic” and “form-based” competition law. Competition law, like law in general, is inherently formalistic, albeit to a limited degree. Rather than the empty dichotomy of “form” versus “effect,” the central question in competition law is to which formalism it ought to be committed.

Vertical Integration and Foreclosure: Evidence from Production Network Data

This paper studies the prevalence of potential anticompetitive effects of vertical mergers using a novel data set on U.S. and international buyer-seller relationships and across a large range of industries. We find that relationships are more likely to break when suppliers vertically integrate with one of the buyers’ competitors than when they vertically integrate with an unrelated firm. This relationship holds for both domestic and cross-border mergers and for domestic and international relationships. It also holds when instrumenting mergers using exogenous downward pressure on the supplier’s stock prices, suggesting that reverse causality is unlikely to explain the result. In contrast, the relationship vanishes when using rumored or announced but not completed integration events. Firms experience a substantial drop in sales when one of their suppliers integrates with one of their competitors. This sales drop is mitigated if the firm has alternative suppliers in place. These findings are consistent with anticompetitive effects of vertical mergers, such as vertical foreclosure, rising input costs for rivals, or self-foreclosure. This paper was accepted by Joshua Gans, business strategy. Funding: This work was supported by a Banque de France/Sciences Po Partnership. Supplemental Material: The data files and online appendices are available at https://doi.org/10.1287/mnsc.2022.4363 .

Anticompetitive Effects and Allocation of the Burden of Proof in Article 102 Cases: Lessons from the Google Shopping Case

Anticompetitive Effects and Allocation of the Burden of Proof in Article 102 Cases: Lessons from the <i>Google Shopping</i> Case

Introduction to Special Issue on Common Ownership and Interlocking Directorates

Common ownership by institutional investors—of minority stakes across multiple competing firms—has become a subject of heated debate in the antitrust community. Although often driven by portfolio diversification strategies, rather than anticompetitive intent, common ownership can result, in some sectors, in the concentration of financial ownership, with possible anticompetitive effects. Over the years, competition authorities on both sides of the Atlantic have taken note. For example, in 2018, the U.S. Federal Trade Commission held a hearing on common ownership.1 In the same year, Margaret Vestager, at that time the Competition Commissioner at the European Commission, stated that the Commission is “looking carefully” at common ownership given indications of its increase and potential for anticompetitive effects.2 In 2017, the Competition and Markets Authority (CMA) examined the extent of common ownership in the banking, insurance, and grocery retailing industries in the United Kingdom.3 Closely related, but currently less discussed, is the question of interlocking directorates among competing companies (companies sharing corporate board members). One key issue is whether these can soften competition, either on their own or in combination with financial links. Although in the United States, Section 8 of the Clayton Act expressly prohibits interlocking directorates between competitors, there is no such prohibition in the EU (apart from Italy in the financial sector). In spite of the prohibition in the United States, the FTC recently stated that interlocks still raise competitive concerns.

The Anticompetitive Effect of Minority Share Acquisitions: Evidence from the Introduction of National Leniency Programs

We address the growing concern that minority shareholding (MS) in rival firms may lessen competition, using the introduction of national leniency programs (LPs) as a shock that destabilizes collusive agreements. Based on data from 63 countries, we find a large and significant immediate increase in domestic horizontal MS acquisitions once an LP is introduced but only in countries where the LP is deemed to be effective. There is no effect on non-horizontal or cross-border MS acquisitions. Our findings suggest that firms may use MS acquisitions to either stabilize collusive agreements or soften competition in the event that collusion breaks down. (JEL G34, K21, L12, L41)

A Refutation of "Common Ownership Does Not Have Anti-Competitive Effects in the Airline Industry"

A Refutation of "Common Ownership Does Not Have Anti-Competitive Effects in the Airline Industry"