Antitrust Guidelines Research Articles

Discussing the Prudence Application of “Essential Facilities Doctrine” in Anti-Data Monopoly Strategies in the Digital Economy Era

As one of the most fundamental production elements of the digital economy, data has become a critical factor in determining enterprises’ competitiveness. Consequently, it is highly problematic that data monopolies frequently form in the market. Recognizing the issue, principle fourteen in “Anti-trust Guidelines on Platform Economy (Draft for Comments)” establishes a methodology for regulating data access restrictions. In addition, it reflects on the viral and debatable data monopoly problem by clearly stating that data can be perceived as an “essential facility”. In the study, it is argued that the “Essential Facilities Doctrine” has a high practical significance for regulating vertical monopoly in the traditional economy; however, it should be applied with caution under certain restrictions when dealing with data monopoly.

Platform antitrust in China

ABSTRACT This article reviews the recent developments in digital platform antitrust in China. I first introduce the key players in China’s platform industry, particularly those that have been frequently affected by recent antitrust events. I then provide a brief overview of economic theories that are often cited in think tank reports and official documents, including network externalities, hub-and-spoke collusion, and contestable markets. Finally, recent platform antitrust events in China are reviewed, including the introduction of platform antitrust guidelines and major antitrust cases.

Review of monopoly models and implications for antitrust

In February 2021, the Ministry of Commerce Anti-monopoly Bureau of the People’s Republic of China released the Antitrust Guidelines for the Platform Economy Industry. This announcement signaled more governmental supervision and governance with Internet-related business. In practice, tech giants have been suffering administrative penalties one after another. This study presents a review and analysis of the research literature on the monopoly quantitative models, outlining the components and concluding the implications for anti-monopoly. This paper delineates three main research topics relating to the monopoly models within the literature: the oligopoly, monopolistic competition, and Internet platform monopoly. The Cournot model, Bertrand model, Stackelberg model, and Innovational model represent the oligopoly studies when a small group of large sellers dominates the market. We then discuss the monopolistic competition models as the Krugman model, D-S Model, and Lancaster Model. We pay particular attention to the platform economy to reflect the new era of monopoly with Marshall’s Dilemma. After the summary and comparison of the literature research trajectory, our analysis culminates in implications for antitrust: why Internet corporations and government meet this monopoly predicament, who are involved by monopoly policy, how consumers and market got impacted, and what countermeasures could be taken to improve the antitrust. This study contributes to overview the development of monopoly models and critically analyze based on the current antitrust situation and trend of platform economy integration. We should scrutinize the feasibility to adopt engrain view of monopoly mechanisms as benefit loss on the information technology economy. Therefore, this research raises the novel question and synergistic effects of monopoly.

Regulating Hospital Prices Based On Market Concentration Is Likely To Leave High-Price Hospitals Unaffected.

Concern about high hospital prices for commercially insured patients has motivated several proposals to regulate these prices. Such proposals often limit regulations to highly concentrated hospital markets. Using a large sample of 2017 US commercial insurance claims, we demonstrate that under the market definition commonly used in these proposals, most high-price hospitals are in markets that would be deemed competitive or "moderately concentrated," using antitrust guidelines. Limiting policy actions to concentrated hospital markets, particularly when those markets are defined broadly, would likely result in poor targeting of high-price hospitals. Policies that target the undesired outcome of high price directly, whether as a trigger or as a screen for action, are likely to be more effective than those that limit action based on market concentration.

Antitrust Guidelines of the Antitrust Committee of the State Council on the Field of Intellectual Property (Issued by the Antitrust Committee of the State Council on 4 January 2019)

Journal Article Antitrust Guidelines of the Antitrust Committee of the State Council on the Field of Intellectual Property (Issued by the Antitrust Committee of the State Council on 4 January 2019) Get access GRUR International, Volume 70, Issue 8, August 2021, Pages 776–781, https://doi.org/10.1093/grurint/ikab052 Published: 13 May 2021

The Draft Fining Guidelines and the future of antitrust fines in China

Abstract Fines are a major part of the punishment and deterrence in China’s enforcement of its Antimonopoly Law. China has been drafting antitrust fining guidelines in the past several years and the current version is believed to be close to final. One natural question is: will the antitrust fining guidelines lead to harsher antitrust fines in China’s future enforcement? We attempt to answer this question by assessing whether fine recipients in China’s historical antitrust investigations would have received higher fines according to the Draft Fining Guidelines. Based on a large number of historical non-merger case decisions issued by China’s antitrust agencies through September 2019, our quantitative analysis shows that higher future fines should be expected in the future. We also explore several factors that might explain why historical fines were below the level predicted by the Draft Fining Guidelines.

Designing an EU Intervention Standard for Digital Platforms

A consensus is emerging around the world about the need for policymakers to address certain characteristics and competitive tendencies that are generated by digital platforms or digital ecosystems, with a view to reforming the public policy instruments currently in place so that they are fit for the digital age. The paper starts by reviewing the relevant precedents under EU competition law and economic regulation upon which this reform could be based. The paper then puts forward recommendations to adapt competition rules, in particular as regards the determination of market power (e.g., by better taking into account the effects of ecosystems, the impact of potential competition and the role of innovation) and the application of theories of harm (i.e. by focusing on leveraging and envelopment behaviour, access to key innovation capabilities, discrimination and self-preferencing and the violation of normative regulatory principles). The paper then proceeds to propose a cumulative 'three criteria test' to determine the types of digital platforms upon which competition rules, and possibly complementary regulation, should focus. These three criteria require an assessment of: (i) the existence of market structures which are highly concentrated and non-contestable; (ii) the presence of digital gatekeepers which act as unavoidable trading partners; (iii) and, for the purposes of ex ante regulation, the lack of effectiveness of competition rules to address the identified problems in the market. The paper also considers the types of remedies that could be imposed on those identified digital platforms, including: interoperability and access to key innovation capabilities such as data; the prohibition of anti-competitive discrimination; and the facilitation of consumer switching. Given the rapid evolution of technology and market uncertainty, consideration should be given as to whether these remedies should be imposed in a participatory manner with the industry stakeholders directly affected by the measures. Finally, the paper deals with a number of procedural and institutional issues raised by the adoption of such a legal standard, proposing to adapt existing antitrust guidelines, to extend the power of DG Competition to conduct fully fledged market investigations (as is the case in the UK and Australia) and possibly to work closely with National Regulatory Agencies, coordination with whom at EU level arguably needs to be strengthened.

Intellectual Property Pools and Aggregation

This chapter in the forthcoming case book Intellectual Property Licensing and Transactions: Theory and Practice covers IP pooling, with an emphasis on patents. It begins with a discussion of the theoretical benefit of pooling, including efficiency gains and the avoidance of blocking positions, thickets and anti-commons. It then addresses antitrust analysis of pooling transactions from Standard Oil (Indiana) v. United States (U.S. 1931) through the 2017 DOJ-FTC Antitrust Guidelines. The chapter then turns to pools created to facilitate standard-setting, including the MPEG-2 and 3GPP Pools, and discusses the concept of complementarity and essentiality of pooled assets. It concludes with brief discussions of Princo v. ITC (Fed. Cir. 2010) and the rise of patent aggregators such as RPX Corp.

Designing an EU Intervention Standard for Digital Platforms

A consensus is emerging around the world about the need for policymakers to address certain characteristics and competitive tendencies that are generated by digital platforms or digital ecosystems, with a view to reforming the public policy instruments currently in place so that they are fit for the digital age. The paper starts by reviewing the relevant precedents under EU competition law and economic regulation upon which this reform could be based. The paper then puts forward recommendations to adapt competition rules, in particular as regards the determination of market power (e.g., by better taking into account the effects of ecosystems, the impact of potential competition and the role of innovation) and the application of theories of harm (i.e. by focusing on leveraging and envelopment behaviour, access to key innovation capabilities, discrimination and self-preferencing and the violation of normative regulatory principles). The paper then proceeds to propose a cumulative 'three criteria test' to determine the types of digital platforms upon which competition rules, and possibly complementary regulation, should focus. These three criteria require an assessment of: (i) the existence of market structures which are highly concentrated and non-contestable; (ii) the presence of digital gatekeepers which act as unavoidable trading partners; (iii) and, for the purposes of ex ante regulation, the lack of effectiveness of competition rules to address the identified problems in the market. The paper also considers the types of remedies that could be imposed on those identified digital platforms, including: interoperability and access to key innovation capabilities such as data; the prohibition of anti-competitive discrimination; and the facilitation of consumer switching. Given the rapid evolution of technology and market uncertainty, consideration should be given as to whether these remedies should be imposed in a participatory manner with the industry stakeholders directly affected by the measures. Finally, the paper deals with a number of procedural and institutional issues raised by the adoption of such a legal standard, proposing to adapt existing antitrust guidelines, to extend the power of DG Competition to conduct fully fledged market investigations (as is the case in the UK and Australia) and possibly to work closely with National Regulatory Agencies, coordination with whom at EU level arguably needs to be strengthened.

Do All Hospital Systems Have Market Power? Association Between Hospital System Types and Cardiac Surgery Prices.

Objective:This study explores the price implications of hospital systems by analyzing the association of system characteristics with selected cardiac surgery pricing.Data Source:Using a large private insurance claim database, the authors identified 11 282 coronary artery bypass graft (CABG) cases and 49 866 percutaneous coronary intervention (PCI) cases from 2002 to 2007.Study Design:We conducted a retrospective observational study using generalized linear models.Principal Findings:We found that the CABG and PCI prices in centralized health and physician insurance systems were significantly lower than the prices in stand-alone hospitals by 4.4% and 6.4%, respectively. In addition, the CABG and PCI prices in independent health systems were significantly lower than in stand-alone hospitals, by 15.4% and 14.5%, respectively.Conclusion:The current antitrust guidelines tend to focus on the market share of merging parties and pay less attention to the characteristics of merging parties. The results of this study suggest that antitrust analysis could be more effective by considering characteristics of hospital systems.

Regional Competition Center for Latin America: Antitrust Guidelines for Exchanges of Information Among Competitors

There are a variety of legitimate reasons why competitors may need or simply wish to collaborate. Firms may collaborate in order to finance innovation and improve the quality or variety of their existing products, to develop new and superior products, to expand to new markets, or to improve efficiency and lower costs. The benefits to consumers from these collaborations can be significant, in particular if they are complementary across the parties. But such benefits notwithstanding, these agreements may also lead to competitive harm. The new proposed “Regional Competition Center for Latin America: Antitrust Guidelines for Horizontal Collaborations Among Competitors,” (“Guidelines”), provide general recommendations on how Antitrust Agencies (“Agencies”) in the respective countries may wish to analyze collaborations among competitors under their respective Antitrust Laws. The Guidelines follow best international practices particularly those by the U.S. Federal Trade Commission and the U.S. Department of Justice, as well as those by the European Commission. They advise on a possible analytical framework for businesses to assess the likelihood of an antitrust challenge to a particular collaboration among competitors. The proposed framework is primarily based on legal and economic criteria for analyzing an agreement and the context in which it is established, and it is in no way binding on any of the Agencies. By providing guidance on a general framework that the various jurisdictions may consider in their analyses of these collaborations, these Guidelines hope to contribute to higher transparency and predictability of antitrust assessment of collaborations among competitors. Hence, this report hopes to encourage procompetitive collaborations while deterring anticompetitive ones.

Defusing the Antitrust Threat to Institutional Investor Involvement in Corporate Governance

Thirty years of regulatory reform has focused on encouraging diversified institutional investor involvement in corporate governance. Recently, some intriguing recent economic research by Azar, Schmalz and Tecu (working paper 2015) and Azar, Raina and Schmalz (working paper 2016) purports to show that concentration among shareholdings has led to higher prices in the airline and banking industries, two concentrated industries. Based on this research, Einer Elhauge (2016) has argued that current ownership patterns by diversified institutional investors violate Section 7 of the Clayton Act. Following on Elhauge, Posner, Weyl and Scott Morton (working paper 2016) propose a “solution” in which diversified investors would be limited to acquiring one firm in any oligopoly. In this article, we critique the economic evidence, focusing on the airline industry. We then challenge Elhauge’s legal analysis and critically examine Posner et al’s proposals. Although we are unconvinced by the rather broad claims of the existing literature, we agree that an open discussion of the antitrust implications of common ownership by large institutional investors is appropriate. Thus, in the final section, we sketch out proposed “Antitrust Guidelines,” including a safe harbor, in an effort to prevent anticompetitive effects, while continuing to encourage institutional investors’ involvement in corporate governance.

Comments of Law and Business Scholars Submitted to the U.S. Department of Justice and Federal Trade Commission Regarding a Proposed Update to the Antitrust Guidelines for the Licensing of Intellectual Property

The authors express concern that the proposed DOJ-FTC Update to their 1995 Antitrust Guidelines for the License of Intellectual Property fail to address the substantial body of agency guidance and law that has emerged in recent years regarding the licensing of standards-essential patents (SEPs) on terms that are “fair, reasonable and non-discriminatory” (FRAND).

Comment of the Global Antitrust Institute, Antonin Scalia Law School, George Mason University, on the U.S. Antitrust Agenciess Proposed Update of the Antitrust Guidelines for the Licensing of Intellectual Property

This comment is submitted to the U.S. Antitrust Agencies by the Global Antitrust Institute (GAI) at Scalia Law School, George Mason University on the Agencies' Proposed Update of the Antitrust Guidelines for the Licensing of Intellectual Property. The GAI Competition Advocacy Program provides a wide-range of recommendations to facilitate adoption of economically sound competition policy, including how to analyze conduct involving standard-essential patents.

Comments to the U.S. Sentencing Commission Concerning Antitrust Fines

This Comment was submitted to the US Sentencing Commission on behalf of the American Antitrust Institute. It makes three important points, all of which concern the US Sentencing Commission's Antitrust Guidelines' cartel overcharge presumption. First, the evidence demonstrates there currently is significant underdeterrence of price fixing and other anticompetitive forms of collusion. Second, the general approach to calculating cartel fines embodied in the US Sentencing Commission Guidelines, under which the enforcers and ultimately the courts calculate antitrust fines based upon a very specific presumed overcharge, is sound and in the public interest. Third, the 10% cartel overcharge presumption in the Guidelines is much too low. The best evidence demonstrates that the Commission should double it, to 20%. This would conform it more closely to the median or average overcharge likely to result from collusion, yet still be a conservative resolution of the issues. Raising the 10% presumption should increase the overall level of cartel deterrence which will benefit consumers greatly.

Comment of the Global Antitrust Institute, George Mason University School of Law, on the National Development and Reform Commission's Draft Anti-Monopoly Guideline on Intellectual Property Abuse

This comment is submitted to China's National Development and Reform Commission (NDRC) by the Global Antitrust Institute (GAI) at George Mason University School of Law in response to the NDRC's Draft Anti-Monopoly Guideline on Intellectual Property Abuse. This is the third comment submitted by the GAI to the NDRC on its Draft AML-IP Guidelines. All three of China’s AML agencies are drafting separate guidelines to submit to the State Council of the PRC for consideration. The final guidelines will reportedly apply to all three AML agencies. Overall, we suggested that the NDRC adopt a more compliance-based approach that sets forth basic principles that would allow parties to self-advise. The current Draft Guideline instead sets forth a list of factors that the NDRC will consider when analyzing specific conduct. The Draft Guidelines do not explain the significance of each of the factors or how they will be weighed in the Anti-Monopoly Law (AML) agencies’ overall decision-making process. This approach allows the AML agencies broad discretion in enforcement decision-making without providing the guidance stakeholders need to protect incentives to innovate and transfer technology that could be subject to AML jurisdiction. Lastly, we recommend that the NDRC include throughout the Guidelines examples similar to those found in the U.S. antitrust agencies’ 1995 Antitrust Guidelines for the Licensing of Intellectual Property to illustrate how the AML agencies will apply the basic principles. We also provide specific line-edit proposed edits on four provisions: general analysis, charging “unfairly high” royalties, discriminatory treatment, and injunctive relief.

Comment of the Global Antitrust Institute, George Mason University School of Law, on the National Development and Reform Commission's Questionnaire on Intellectual Property Misuse Antitrust Guidelines

This comment is submitted to China's National Development and Reform Commission (NDRC) by the Global Antitrust Institute (GAI) at George Mason University School of Law in response to the NDRC's Questionnaire on Intellectual Property Misuse Antitrust Guidelines. The GAI Competition Advocacy Program provides a wide-range of recommendations to facilitate adoption of economically sound competition policy, including how to analyze conduct involving standard-essential patents and non-practicing entities.

Antitrust Guidelines in Health Care Markets—Reply

Antitrust Guidelines in Health Care Markets—Reply

Collusion in experimental Bertrand duopolies with convex costs: The role of cost asymmetry

Theory, experimental studies, as well as antitrust guidelines suggest that symmetry among firms is conducive to more collusive outcomes. We test this perception in a series of experimental repeated Bertrand duopolies where firms have convex costs. We implement symmetric as well as asymmetric markets that vary in their degree of cost asymmetry among firms. We find no evidence of symmetric markets being more prone to collusion than asymmetric markets. If anything, asymmetry helps firms coordinate on higher prices and achieve higher profits.

Relevance of License of Intellectual Property Rights with Special Reference to Indian Competition Perspectives

The Licensing of Intellectual Property Rights constitutes an effective business strategy to permit third parties to exploit the IPR products. Eventually, there are both positive and negative implications of the aspects of licensing. There are various forms of restraints or anti-competitive practices in licensing. Two best devices can be sought out in preventing such practices which are compulsory licenses and parallel importing. In both United States and European Community, there have been well defined Antitrust Guidelines and Block Exemption Rules regarding up to what licensing will be permitted not prejudicially affect the relevant market shares. A developing country like India lacks proper Research and Development Facilities and high market barriers create adversial impact upon the market entrants to access the technology or products from Indian dominant firms or those who having Joint Ventures with overseas companies. The enactment of new Indian Competition Act of 2002 on basis of the Raghavan Committee Report (2000) repealed the Monopolies Restrictive Trade Practices Act of 1969. The provisions of compulsory licensing incorporated in the Patents Act Copyright Act etc have been a welcoming approach. Being the main regulatory body, the Competition Commission of India have the authority to supervise for better coordination between competitive aspects of various forms of IPRs by laying down regulations for curbing any kind of abuse aspired from foreign jurisdictions. This paper, thus, attempts to focus into following issues - To find how far the licensing requirement is needed to curtail anti-competition of IPR by dominant firms. Analyzing US & EC Licensing Rules. How to better provide licensing arrangements in Indian Competition Regime at par with US & EC.