Antitrust Law Research Articles

Testimony of Dalie Jimenez before the Subcommittee on Antitrust, Commercial, and Administrative Law of the House Committee on the Judiciary

Testimony of Dalie Jimenez before the Subcommittee on Antitrust, Commercial, and Administrative Law of the House Committee on the Judiciary

Content and Methods of Balancing the Interests of Antitrust Law in Regulating the Abuse of Standard-Essential Patents

Content and Methods of Balancing the Interests of Antitrust Law in Regulating the Abuse of Standard-Essential Patents

FRAND Arbitration Will Destroy FRAND

Standard essential patent-licensing disputes have been raising the costs of business in the telecommunications industry for over a decade. As technology and interconnectivity extend beyond mobile phones into the Internet of Things (“IoT”), the number of these disputes will only increase. While many academics, policymakers, and stakeholders support arbitration to resolve these disputes, this article warns of the potential long-term consequences of doing so on a large scale. Standard Setting Organizations usually require the owners of patented technology included in industry standards to commit to licensing on Fair, Reasonable, and Non-discriminatory (“FRAND”) terms to avoid potential abuse of their market power. Standards are global and patents are national, however; disputes between owners and implementers over FRAND rates have led to complicated jurisdictional problems. Some national courts have even set global FRAND licensing rates, leading to cross-border anti-suit, and even anti-anti-suit, injunctions. International commercial arbitration of FRAND disputes may appear to be an efficient solution to the jurisdictional dilemma, but it would also reduce transparency, lead to increasingly inaccurate calculations of FRAND rates over time, cause information imbalances between the parties, create new conflict of laws problems, lead to underenforcement of national antitrust laws, and harm the integrity of the broader patent system. Without significant change from current international commercial arbitration norms and practice, widespread FRAND arbitration would nullify the very purpose for which the FRAND commitment was created—thus, FRAND arbitration will destroy FRAND.

Gatekeeper Competition Policy

Antitrust policy in the United States has always had special rules for dominant firms. As Justice Scalia once observed: Where a defendant maintains substantial market power, his activities are examined through a special lens: Behavior that might otherwise not be of concern to the antitrust laws—or that might even be viewed as procompetitive—can take on exclusionary connotations when practiced by a monopolist.

Illegal interlocks among life science company boards of directors.

Competition between life science companies is critical to ensure innovative therapies are efficiently developed. Anticompetitive behavior may harm scientific progress and, ultimately, patients. One well-established category of anticompetitive behavior is the 'interlocking directorate'. It is illegal for companies' directors to 'interlock' by also serving on the boards of competitors. We evaluated overlaps in the board membership of 2,241 public life science companies since 2000. We show that a robust network of interlocking companies is present among these firms. At any given time, 10-20 percent of board members are interlocked; the number of interlocks has more than doubled in the last two decades. Over half of these interlocked firms report over $5 million in historical revenue, exceeding a legal threshold that makes an interlocking directorate a violation of antitrust law. Those interlocks are only illegal if the companies compete, even in part. Using the disease categories for which companies have sponsored clinical trials, we discover that a few markets are responsible for a large fraction of interlocks. We show that in dozens of cases, companies share directors with the very firms they identify as their biggest competitive threats. We provide a data-driven roadmap for policymakers, regulators, and companies to further investigate the contribution of anticompetitive behavior to increased healthcare costs and to enforce the law against illegal interlocks between firms.

Formation of an effective management team in a Russian medical organization

In today’s unstable business environment, there is active development in the medical services market. Competition, as one of the main features of market relations, has a significant impact on medical organizations. The healthcare market has its specific characteristics, as the outcomes of medical organizations’ activities include not only economic but also certain medical effects. The state, in turn, engages in creating and maintaining a competitive environment in the medical services sector through the enforcement of antitrust legislation. Consequently, the management of the organization needs to constantly monitor and maintain competitiveness in the healthcare market to ensure its development and successful functioning. The managerial team of a medical organization plays a crucial role in accomplishing this task. This article explores the problem of forming an effective management team that, despite changes in external environmental factors and the internal state of the medical organization, organizes the work of the team aimed at the successful implementation of both general and key competencies of the organization and its individual specialists, thereby enhancing the competitiveness and stability of the organization in its market segments. Methodological approaches to forming an effective management team are presented. Field research on the stages and results of forming a management team in a Russian medical organization is provided. Directions and recommendations for forming an effective management team are developed. The conclusion emphasizes the necessity of using technologies for forming an effective management team in the practice of Russian medical organizations.

The LIV Golf v. PGA Tour Antitrust Case as a Case Study in Federal Civil Procedure

The LIV Golf v. PGA Tour Antitrust Case as a Case Study in Federal Civil Procedure

AN ANALYSIS OF INTERPLAY BETWEEN ANTIDUMPING AND COMPETITION LAW

This paper has endeavoured to explore the connection between Competition laws and Anti-dumping, as well as the impact on consumers and policy implications. It aims to delve into the overlaps between the objectives of anti-dumping and competition, particularly in relation to price discrimination, predatory pricing, and other issues arising from unfair trade practices under antitrust laws. The conflict and coordination between these two legal domains in regulating behaviour are also carefully examined. . The regulation of trade is posited to be more effectively achieved through antitrust as opposed to antidumping. The author argues that applying antitrust criteria to anti-dumping will help mitigate the potential misuse of anti-dumping laws. While both legal frameworks stem from unfair trade practices, they diverge in their ultimate goals. . Antitrust is geared towards consumer welfare, while anti-dumping aims to safeguard producers. The author suggests that reforming antidumping in line with antitrust principles will ensure the continued relevance of anti-dumping measures.

Reporting Tax Schemes Violates Legal Professional Privilege

In this article, the author discusses the judgment of the CJEU in the case C-694/20 Orde van Vlaamse Balies and Others, which extends the protection of professional secrecy for lawyers. In the context of combating aggressive tax planning, the CJEU ruled that requiring licensed lawyers to inform other intermediaries involved in a tax scheme is unnecessary and violates the right to respectful communication with the client. The CJEU’s view that legal professional privilege takes precedence over tax objectives and obligations is the main novelty of the judgment under review. Individuals who consult a lawyer, as well as a tax advisor, have a reasonable expectation that their communications will remain private and confidential. Therefore, except in exceptional circumstances, they have a legitimate expectation that their lawyer will not, without their consent, disclose to anyone the fact that they are the subject of his or her advice. Following the judgment, the European Commission will legislate to amend the DAC6 Directive so that it meets the requirements of EU primary law as identified by the Court.
 The judgment is also important because it recognises that legal professional privilege is not limited to advice given in the context of litigation, which has been a restrictive view in antitrust cases.
 In Orde van Vlaamse Balies and Others, in which the Court held that the duty to inform other intermediaries imposed by Article 8ab(5) DAC 6 interfered with the right to respect for communications between lawyers and their clients guaranteed by Article 7 of the Charter of Fundamental Rights, the Court gave primacy to primary law (the Charter of Fundamental Rights) over secondary law (DAC 6). In this context, a new jurisprudential trend can be observed in which a substantive review of the Tax Directive was carried out on the basis of the Charter of Fundamental Rights. In general, the CJEU has been reluctant to get involved in substantively reviewing EU secondary legislation. More recently, however, the CJEU seems to be carefully analysing provisions of EU directives that are not in line with fundamental rights.

New Trend in China’s RPM Policies in the Aftermath of Amended Anti-Monopoly Law

Before the Amended Anti-Monopoly Law (“Amended AML”) was implemented in 2022, the divergence on resale price maintenance (“RPM”) between the AML public enforcement agencies and the courts had been noticeable and attracted heated debates. The AML administrative agencies responsible for public enforcement against RPM in China firmly adopt the principle of “prohibition + exemption” by imposing the burden of proof on the enterprises who are alleged to engage in RPM acts: enterprises have to apply for exemption once the agencies prove and prohibit the RPM acts. AML agencies do not need to prove the “restricting or excluding competition” effect under this approach. On the contrary, the courts had required the plaintiff in private enforcement cases to prove the “restricting or excluding competition” effects in addition to the RPM acts. In the Amended AML, such disagreement between public and private enforcement was formally addressed by explicitly adding the precondition of “restricting or excluding competition” and allocating such burden of proof to enterprises/defendants. Prior to the Amended AML, such a new trend was already seen in the landmark Supreme Court Yutai case, where the courts’ standards for determining the illegality of RPM started to move towards the approach of the AML public enforcement agencies. The new Supreme Court Judicial Interpretations on AML for comments issued in 2022 further confirmed the new trend and clarified that enterprises/ defendants shall prove that there is no “effect of excluding or restricting competition” in RPM cases. Nonetheless, how such a reformed RPM policy will be applied in practice remains blurred. The Old AML was applied in all the RPM cases after the Amended AML took effect. It is unclear how to apply the “exemption” rule and in particular “safe harbor” rule once an RPM act is identified and presumed to be anti-competitive. No case has ever touched such issues. EU’s overall RPM practice on RPM appears similar to China’s RPM policy with differences on safe harbor and exemption. It is useful to take reference to EU policy and practice along the reform road with China’s post-pandemic economy conditions taken into consideration. This paper first introduces the previous RPM policy and the new trend in China and then takes the reference to EU policies on RPM. This paper finally concludes that the elements of competitive effects, the new safe harbor rule, and the exemption rule should be further clarified in the coming implementation regulations and judicial interpretations to avoid antitrust law Type I errors, i.e., over-regulation.

Conflict between consumer and worker surpluses under monopoly power

Using a simple model of monopoly and monopsony, I examine the effect of a labor-augmenting productivity gain on workers. I show that, although such a productivity gain always increases the output and consumer welfare, a firm with monopoly power may lower the labor demand and worker welfare because of the discrepancy between the marginal product and marginal revenue product of workers. The misalignment between consumer and worker welfare suggests that competition authorities need to be cautious about the potential harm of consumer-benefiting productivity gains on workers when assessing antitrust cases such as mergers.

American Merger Enforcement: A Progress Report on The Biden’s Administration’s Agenda

Abstract This Article seeks to cast a critical but balanced eye on the record of the Biden administration’s antitrust agenda. Part II offers a brief history of United States antitrust policy to couch the administration’s philosophy in its appropriate historical context. Part III examines the economic evidence, both broadly and focusing on technology – an industry of intense focus for the current administration – as a case study to answer whether radical change is really necessary or whether the landscape is too complicated and the evidence too thin to insist on sweeping reform to competition law. Finally, Part IV surveys the actions taken thus far by the Biden administration. It details the administration’s current track record in court, looks to merger enforcement statistics for guidance, and canvasses the commentary around the FTC’s proposed HSR (Hart-Scott-Rodino) Rule change and the joint FTC and Department of Justice Draft Merger Guidelines.

Ordoliberalism – A Research Approach for Today?

Abstract Research background: To a limited extent, modern researchers are interested in ordoliberalism, as a theory of the socio-economic system, which is confirmed by the results of the bibliometric analysis. In conducted studies, the assumptions of ordoliberalism are used partially, for example, for research on: the role of the state in the economy, the antitrust law, the theoretical assumptions of the SME, the determinants of German economic policy after World War II. Purpose of the article: The aim of this article is to present the possibilities offered by the ordoliberal theory that predispose it to determine a socio-economic order which makes it possible to tackle the dysfunctions and crises that afflict today’s economy. Methods: The research methodology involves a critical analysis of the works of the most essential representatives of ordoliberal thought, particularly Walter Eucken and others, from the perspective of the above-mentioned purpose of the study. This requires examining German-, Polish- and English-language publications by authors recognised as representatives of mainstream ordoliberalism. Findings & Value added: As a result of the conducted analysis, the hypothesis about the existence of the elements of ordoliberal theory that allow it to respond to the challenges of the modern world, including economic, social, environmental and climate crises and pandemic threats has been confirmed. Research of this kind implies a return of thinking in terms of economic order, and thus contributes to the theories that seek to overcome the crisis in both the real economy and the theory of economics.

Recent Developments at the Intersection of Pharma, Patents, and Antitrust Law

Recent Developments at the Intersection of Pharma, Patents, and Antitrust Law

Sustainability and Net Zero climate agreements – a transatlantic antitrust perspective

The climate crisis requires a transition to a Net Zero economy. Such a transition is possible only through concerted public and private action. While a number of financial institutions and insurance companies had agreed to align their activities with Net Zero targets, reconsidering support for new coal and fossil fuel projects, these initiatives have come under attack from political groups in the US, who have labelled such agreements ‘collective boycotts’. Such accusations feed a collective action problem, and thus hinder private sector cooperation. This article discusses the background to Net Zero Agreements, and the recent antitrust criticisms, under US, EU and UK antitrust law and precedent. Net Zero Agreements can alleviate market failures, resolve collective action problems, and improve consumer welfare by lowering the potentially huge costs to consumers of an unmitigated climate crisis. Under a rule of reason, antitrust authorities and courts in the US, EU, and UK can and should give room for private sector cooperation between companies pursuing an effective transition to a clean economy, where these agreements correct market failures and resolve collective action problems.

Legal Design in Sustainable Antitrust

Abstract We lay out a roadmap for how the legislator could create a framework of ‘sustainability corridors’ that would allow relying on the ancillary restraints/Wouters doctrine to make antitrust law more accommodating of sustainability considerations. Our analysis goes beyond the general feasibility of such corridors. It discusses different use-cases for such exemptions and methods for assessing the necessity of competitive restraints to achieve a legislatively defined sustainability goal. We show how this avoids the pitfalls of a multigoals approach, under which it would be left to antitrust authorities and courts to reconcile sustainability and competition objectives independent of a legislative specification, whereas out-of-market benefits (externalities) that would escape even a broad consumer welfare approach can still be accounted for. Our proposal sets out specific requirements for such sustainability corridors that ensure that the ensuing antitrust assessment is governed by a strict and quantifiable indispensability test. Specifically, we discuss three such instances: specific sustainability obligations placed on individual firms, which may however require collective actions; specific mandates that are targeted at the respective industry rather than individual firms; and policy objectives that are not targeted at individual firms or industries but provide a metric for the measurement of sustainability benefits (for example, by way of conducting an abatement cost analysis).

The Implementation of Pre Merger Notification in the Law Concerning the Prohibition of Monopolistic Practices and Unfair Business Competition

This paper examines the consequences of the post-merger regime in Law No. 5/1999 concerning the Prohibition of Monopolistic Practices and Business Competition. This research uses the normative juridical method and comparative approach, comparing the American Antitrust Law which has successfully implemented the pre-merger notification with the Indonesian Business Competition Law which implements the post-merger notification. The results of this study indicate that the importance of implementing the Pre Merger Notification in the Law Concerning Prohibition of Monopolistic Practices and Unfair Business Competition is viewed in a comparison with the success of the Antitrust Law America and supported by the dynamics of globalization of the Industrial Revolution 4.0 which became a challenge for the Business Association Supervisory Commission. Thus, the regime change from Post Merger Notification to Pre Merger Notification is the right step in implementing a merger in Indonesia because Pre Merger Notification provides legal certainty and is also more efficient for business actors and KPPU as a preventive effort with the aim that the implementation of Pre Merger Notification will be carried out optimally in achieving the goal of fair business competition.
 

Antitrust under the popular economy: the birth of the antitrust law in Brazil

Abstract This article analyses the context of the first Brazilian antitrust law, between 1930 and 1945. Its goal is to clarify how the ‘popular economy’—a constitutional and legal concept of the time—functioned as a protective instrument for the internal market. The study explores the hypothesis that the legislation was directed at foreign economic power, already embedded in national economic structures at the time. The research demonstrates that the antitrust legislation arose not only to control prevailing economic power but also to provide meaning to it within the framework of the Estado Novo and its intent to reformulate the internal market. Furthermore, this article highlights the influence of constitutional and administrative doctrines in this movement, indicating how the antitrust system was modulated on liberal bases, assuming the curious figure of a strong State subsidiary to the private sector. The work demonstrates that, aside from the question of supply, a crisis in the insurance policy market throughout 1938 was crucial to drafting the first antitrust law.

Energy Sovereignty and Security

In 21 century Energy security tuned to be a source of global wellbeing and security. Nowadays Human beings are using much more energy resources than ever. On the one hand it ensures global economic developments on the other it challenges energy consumer’s national security. So, natural resources are either source of geopolitical challenges or opportunities for countries. For producers gas and oil became not the source of ‘’short energy war’’ as it once happened in 1970s, but the tool for well-coordinated, long-term political goals. That’s why for producers’ energy security became source of gaining high, expensive economic and political value on International level. As energy producers perceived their legal and natural right to consider energy resources partof their sovereignty consumers were left only with getting supply at ‘’reasonable price ‘’. Despite differences consumers and producersturned to share one common character - energy security became part of their natural security. But still there is difference as producers more politicized the subject than consumers (for example Russia). It is obvious European failure to establish common energy policy and effective competitive Single Energy Market may lead to energy dependence on single supplier and creation of Gas OPEC with strong market division and intention to monopolize. The abovementioned threats can be responded with strong anti-trust law and diversification of suppliers. antitrust law (competition law) should disband production and distribution by the same company which will lead to healthy competition. Besides it is necessary to diversify energy resources and eliminate Isolation of Iran. Otherwise Europe’s dependence on Russian energy will acquire growing character and intensify International environment.

Bad faith litigation of intellectual property as a violation of China’s anti-monopoly law: How should the current approach be improved?

ABSTRACT Despite that access to justice is a universally recognized human right, comparative antitrust experience from both sides of the Atlantic demonstrates that bad faith litigation of intellectual property may constitute the abuse of dominance under the competition law. There has been an anti-monopoly case in China where bad faith litigation of intellectual property raised competition concerns, yet the Chinese anti-monopoly authority does not have sufficient experience in addressing these concerns, leaving some problems to be solved. Arguably, the Chinese authority neither provided a clear test for the assessment of bad faith litigation of intellectual property nor considered the interest balance in the case. This paper critically examines the US and EU approaches to analysing the bad faith litigation of intellectual property under antitrust law, and argues they in nature share a similar approach. In this regard, by learning from comparative experience, this paper suggests that China should establish an antitrust counterclaim in an infringement lawsuit of intellectual property and adopt a clear-up test for the bad faith litigation of intellectual property under the anti-monopoly law. Additionally, China should specify two specific circumstances: the first is related to a circumstance where the intellectual property holder has known that it was not entitled to any kind of legal intellectual property rights, and the second is related to another circumstance where the intellectual property in question becomes a standard.