Antitrust Research Articles

Double-checking mergers: Ex-ante and ex-post competition law enforcement and its implications for third parties

Double-checking mergers: <i>Ex-ante</i> and <i>ex-post</i> competition law enforcement and its implications for third parties

The Dilemma and Relief of Anti-monopoly Regulation in Personalized Pricing Algorithms

In the era of big data, online platforms utilizing algorithms for personalized pricing pose monopoly risks that harm competition, and contradict the economic market concepts of consumer protection and encouraging innovation. China's anti-monopoly laws face difficulties in defining relevant markets, and law enforcement agencies are at a loss when identifying abuse of market dominance. The defense rights originally granted to platforms by the law have been abused. In view of this, this paper proposes to establish an evaluation system for competition damage based on consumer protection, specifying the considerations for justifying damage, and suggests using user engagement intensity and activity level as statistical indicators, incorporating the influence of algorithmic computing power, and employing a relative market share assessment method as a determinant factor for judging market dominance.

Intensified law enforcement and firm innovation: Evidence from China's antitrust consolidation

This paper examines the significant transformation in China's antitrust regulatory framework following the consolidation of its three primary antitrust agencies the Ministry of Commerce (MOFCOM), the National Development and Reform Commission (NDRC), and the State Administration for Industry & Commerce (SAIC) into the State Administration for Market Supervision (SAMR). Utilizing data from publicly listed firms across various industries, we analyze how firms in highly concentrated industries have adapted to this consolidation, by increasing the R&D investment, patent filing, and total factor productivity (TFP). Our mechanism channel indicates that stricter enforcement actions and fines by SAMR have spurred competition and innovation, with effects that are comparably significant across both state-owned enterprises (SOEs) and private firms. The paper contributes to the literature by providing an empirical assessment of the effects of this major restructuring within China's Anti-Monopoly Law (AML) enforcement. Our findings shed light on the broader implications of regulatory consolidations on firm innovation, offering insights into the efficacy of such transformations in antitrust policy.

The problems of adapting Antitrust Law to the digital economy

In connection with the Fifth Antimonopoly Package, the author analyzes the effectiveness of new competition law. The aim of the research is to identify the legal and economic consequences of including the term “network effect” and special legal structures for abuse of a dominant position in digital markets in Russian legislation. The study is based on Russian and foreign legislation, materials from judicial practice, and scientific research. The new rules make it possible for the existing legal regulation on the protection of competition to be applied to the phenomena of the digital economy. However, in the digital sectors, prohibiting the abuse of a dominant position contributes to strengthening the dominance of platform operators and the formation of a digital monopoly. This is not entirely consistent with the goals of antitrust regulation. With the consolidation in the provisions of Russian law of the principle of technological neutrality, as well as the design of a public contract, the strengthening of the dominance of platform operators may be restricted. A consequence of the lack of unified terminology in the Fifth Antimonopoly Package and legislation on digital platforms is the unreasonable limitation of the subject composition of the prohibition of abuse of a dominant position in digital markets. The Fifth Antimonopoly package applies to the activities of marketplaces and aggregators, but does not extend to digital ecosystems and digital services in the format of applications, cloud storage, social networks, search engines, streaming services, among others. This limitation will be overcome by applying the general rules on the prohibition of monopolistic activities and unfair competition to digital ecosystems and digital services. The author draws attention to a number of practical problems in applying dominance criteria to the activities of digital intermediaries, focusing on their business model. Conclusions are drawn about the advisability of expanding the subject composition of relations regulated by the new special rules of the Fifth Antimonopoly Package. Legal means are also proposed aimed at ensuring a balance of interests of the dominant digital platform operators and users.

Is the Korea Fair Trade Commission Abusing the Provision for Abuse of Superior Trading Position?: A Critical Analysis of the Act on Fair Intermediary Trade of Online Platforms

Abstract This paper examines the economic impact of the abuse of superior trading position (ASTP) provision within Korea’s draft Act on Fair Intermediary Trade of Online Platforms (AFITOP). The AFITOP, proposed as part of competition law reform in the digital era, applies to large online platform operators providing intermediary services. While derived from the Monopoly Regulation and Fair Trade Act (MRFTA), the ASTP provision’s goal to protect the economically weak is secondary to the MRFTA’s primary goal of efficiency. Furthermore, the provision’s interpretative uncertainties burden enterprises, especially large ones and those exploring new business models. Including this provision in the AFITOP is likely to reduce innovation incentives among large online platform operators, and to foster enforcement bias toward the ASTP provision by the Korea Fair Trade Commission, thereby increasing inefficiency in competition law enforcement. Therefore, the ASTP provision in the AFITOP should not be introduced.

Повышение эффективности выявления антиконкурентных соглашений в государственных закупках: анализ цифровых инструментов и международных лучших практик / Enhancing Efficiency in Detecting Anti-Competitive Agreements in State Procurement: An Analysis of Digital Tools and International Best Practices

Detection of violations of competition law in public procurement processes under existing electronic systems requires significant resources. This article examines the effectiveness of various international digital tools and platforms in simplifying data analysis of procurement processes and uncovering anti-competitive agreements. Within the framework of the article, a study of international experience was carried out, and innovative solutions in the field were highlighted. The study suggests integrating advanced digital tools into a new e-procurement system. The main recommendations are related to the introduction of an automated tool for detecting and proving possible anti-competitive agreements in the e-procurement system, which will enable the revelation of interconnections between economic entities by identifying the characteristics of agreements restricting competition, as well as calculating and managing possible risks. The proposed changes aim to improve the identification of connections between business entities, highlight suspicious activities by the latter, and provide a flexible and interoperable system for comprehensive data analysis. These changes are expected to promote competition and transparency in public procurement.

Can competition law save democracy? Reflections on democracy’s tech-driven decline and how to stop it

Can competition law save democracy? Reflections on democracy’s tech-driven decline and how to stop it

Civil Implications of Monopoly Practices in Business Competition Law in Indonesia

Monopoly practices present substantial challenges to both civil rights and economic equity in Indonesia. This article provides a comprehensive analysis of the civil implications of monopolistic behavior within the context of Indonesian business competition law. The study delves into the multifaceted impacts of monopolies on market dynamics, consumer rights, and overall economic health. It is evident that monopolistic practices distort market fairness by limiting consumer choices, inflating prices, and diminishing the quality of goods and services. These adverse outcomes highlight significant violations of civil rights, particularly in restricting individuals' freedom to make informed and free choices in the marketplace. The legal framework in Indonesia, while foundational, often lacks the robustness required to effectively address the sophisticated nature of modern monopolistic strategies. The effectiveness of these laws is crucial in curbing monopolistic behavior and ensuring fair market conditions. Through a detailed examination of existing regulations and their enforcement, this article identifies key areas where legal improvements are necessary. It advocates for a more comprehensive policy approach and enhanced regulatory mechanisms to safeguard against the civil and economic repercussions of monopoly practices. Furthermore, the economic implications of monopolistic practices are discussed, emphasizing how they contribute to market inefficiencies and economic disparities. By concentrating market power, monopolies not only stifle competition but also create barriers to entry for smaller businesses, thereby hindering innovation and economic growth. The article concludes with recommendations aimed at strengthening Indonesia's legal and regulatory framework to better protect consumer rights and promote a more equitable economic environment.

Competition policy and labor income share: Evidence from the antitrust policy in China

This study examines the impact of increased market competition on labor income share. We use the enactment of China's Anti-Monopoly Law as a quasi-natural experiment. The results reveal that the Anti-Monopoly Law has a significant positive effect on the labor income share of firms with higher market power. This is because the rising market competition, effected by the Anti-Monopoly Law, inhibits market power and increases average labor wages. Our findings are relevant for firms in provinces with higher administrative monopolies, with less competition, and under industries with less competition.

A Jurisprudential Review of Business Competition Practices on the Shopee Platform

The rapid development of technology has transformed conventional business practices, with digital platforms such as Shopee providing innovative features, such as live streaming and flash sales. However, these features have the potential to enable unfair business competition. This study examines the impact of live streaming on Shopee Live and Toko Saya flash sales on a Shopee platform from the perspective of business competition. Using a qualitative approach, this study focuses on the policies and practices surrounding these features. The findings reveal that while certain promotional practices are legitimate, the ongoing practice of providing conditional discounts and low prices may violate business competition laws and principles of business competition jurisprudence in Islam. Sellers and buyers have indicated that these practices are not based on the principles of honesty and balance and can be detrimental to smaller businesses with limited capital. This study highlights the need for businesses to prioritize moral ethics and adhere to religious and state rules to create a fair and competitive market that protects consumer rights. As digital platforms continue to grow, it is crucial to address the potential for unhealthy business competition and to ensure that all parties, including conventional business actors, can participate fairly in the market.

Solving Investors’ Problems with Access to Evidence in Damages Litigation: Suggestions for a Future Issuer Liability Regime

AbstractPrivate enforcement’s role in the European secondary securities market is narrow. Issuer companies’ civil liability for violations of the inside information disclosure obligation is no exception. While trying to avoid the shadow of the US class action institution, European scholarship has long explored ways to increase the role of private enforcement in the securities market. Harmonising issuer liability is one of the suggestions to create a more prominent role for private enforcement. Even though harmonising issuer liability would be a welcome option for legal certainty and investor protection, it seems unlikely to happen in the near future. As an initial step towards potential harmonisation, this article analyses credit rating agencies’ (CRAs) liability and liability for competition law violations from the viewpoint of information asymmetry in litigation. It evaluates whether the legislative solutions in the CRA III Regulation and the Competition Damages Directive regarding plaintiffs’ access to evidence could be used as models for a potential issuer liability regime. The article finds that the choices made in the Competition Damages Directive could serve as viable models for issuer liability. The provisions in that Directive solve the information asymmetry between the plaintiff and the defendant by granting the plaintiff access to evidence in litigation through a court order.

Does DMA interoperability promote innovation: a comparative study from EU competition law to the DMA

ABSTRACT The paper explores the balance between interoperability and innovation within the context of the Digital Markets Act (DMA) and competition law. It discerns vertical interoperability obligations (Article 6(4) and 6(7)) from the horizontal interoperability obligation (Article 7) and highlights the following. First, the EU competition law is more experienced in dealing with vertical interoperability which favours innovation incentives for SMEs and new entrants over those for established incumbents (the incentive-balance test). This approach may encourage sustaining innovation at the downstream level by fostering competition and could eventually lead to disruptive innovations as new entrants gain experience and resources. Secondly, EU competition law is not well-versed in horizontal interoperability obligations. While Article 7 may boost innovation through increased competition, considerations related to privacy and standardization make its (potentially benign and adverse) effects on innovation uncertain.

The integrative analysis of pharmaceutical sector and its market with a competition law lens

The pharmaceutical industry is widely recognized as a crucial sector that contributes significantly to the country's economic growth, and the importance of Competition Law in this industry is widely acknowledged. However, this market is also susceptible to various unlawful transactions and monopolistic competition, given that medicine is an essential item that every consumer needs, and market players often take advantage of this to trade their products and achieve monopolies or control product prices. To address these issues, the Competition Act, 2002 was instituted, and various regulations were implemented to regulate market competition across different sectors. The importance of public health is a major consideration in the pharmaceutical industry, and it is crucial to understand how competition law is applied in this sector. This article aims to shed light on the interplay between IP rights and competition law in the pharmaceutical sector and provide insight into how the development of the industry has spurred competition in the market. Additionally, the article will offer some suggestions.

Proposal for a General Outcome-Based Value Attribution Framework for Combination Therapies

ObjectivesValuing and pricing the components of combination therapies can be difficult because of competition law issues, difficulty implementing different prices for the same product in alternative uses, and attributing value to each component of the combination. We propose a value attribution solution that allows all combination components to be priced according to their relative value in the combination. MethodsWe developed a value attribution solution that is universal, symmetrical, and neutral to each combination constituent, regardless of whether it is the backbone or the add-on, and complete, meaning that it will always attribute the full value of the combination between the component parts. Moreover, it can be applied to any number of components in the combination (eg, triplets or quadruplets). We compared this solution with 2 other existing approaches. ResultsThe results of the proposed value attribution solution sit between those of the 2 other value attribution approaches as it combines elements of each. As the degree of additivity moves further away from one in either direction, then our general approach ratios also move, reflecting the impact of the incremental value. ConclusionsThe proposed value attribution solution for combination therapies differs from 2 existing approaches by being universally applicable and allowing for symmetry when neutral to the constituent components of the combination. To optimally contribute to policy debate and practice, various requirements for its implementation need to be well understood, including how to overcome (1) partial information, (2) whether its assumptions can be relaxed, and (3) implementation issues.

Sustainability agreements and competition law: a comparative perspective

ABSTRACT Sustainability agreements are at the centre of the debate on the relationship between sustainability and competition law. The European Commission has intervened on the issue by inserting in the new Horizontal Guidelines a specific chapter devoted to them. This paper aims at analyzing the approach adopted by the Commission, with a particular focus on the controversial competitive assessment of sustainability agreements under Article 101(3) TFEU and the “fair share” criterion. The analysis is conducted in consideration of the main relevant insights deriving from a comparison with the initiatives taken at national level by some competition authorities and also provides a quick look at the global scenario, in particular with reference to the US, in order to show some of the divergence among jurisdictions with regard to the antitrust treatment of sustainability agreements between competitors.

Has the European Union (tacitly) adopted a Trinko doctrine, giving priority to sector regulation?

In U.S. antitrust, a level of implied immunity is afforded to matters governed by sector regulation, often referred to as the “Trinko-doctrine.” In contrast, no such immunity is assumed in European Union competition law, where by contrast, there is only a very narrow regulatory defence if laws mandate a specific (anti-competitive) course of action. As always, matters are more nuanced in practice. Not only did the Court of Justice of the European Union, the European Union’s highest legal authority, recently suggest an obligation to halt competition law investigation if sector regulations are available, this has tacitly been practiced for years, indicating a more complex relationship and a possible European Union Trinko-doctrine. Following the adoption of the EU’s Digital Market Act, this has relevance beyond the traditional regulated sector, warranting some considerations.

Competition Law and Artificial Intelligence: Solution or Threat

This article discusses the solutions and threats posed by artificial intelligence in the context of business competition law. The findings of this article indicate that artificial intelligence presents both challenges and opportunities in this field. While artificial intelligence can enhance competition by increasing efficiency and fostering innovation, it raises concerns about market dominance and collusion. Consequently, the KPPU must adapt to these complexities to ensure fair competition and protect consumers. Balancing innovation with competitive enforcement is essential to leveraging the benefits of artificial intelligence while mitigating potential threats as artificial intelligence becomes more prevalent in the market. Based on these findings, the authors recommend that the KPPU increase its oversight of artificial intelligence-related activities to ensure compliance with business competition laws. The KPPU should look for evidence of anti-competitive behavior driven by artificial intelligence, such as price collusion through price monitoring and algorithmic matching software, by amending Law No. 5 of 1999. The KPPU enforces laws and regulations to address the impact of artificial intelligence on business competition law. For instance, the European Union’s Digital Markets Act empowers the European Commission to request algorithms, data about their testing, and explanations about their use from companies designated as competition gatekeepers.

When Monopsony Power Wanes

Abstract In this Part 2, Subjective Agency, I delve into the evolving power and agency of workers as structural conditions undergo transformation. Part 1 described how the law of competition propels firms towards centralisation, gradually diminishing the monopsony power wielded by global buyers in labour-intensive sectors. While manufacturers gain more power and significance, capable of undermining workers’ power, they also become susceptible to disruption. This section introduces the concept of Degree of Spatial Inflexibility (dsi). It posits that as a manufacturer’s monopoly power increases, the monopsony power in the supply chain decreases. However, this elevated monopoly power simultaneously establishes a higher dsi, amplifying the potential for worker disruption. It is essential to recognise that structural power shifts do not guarantee automatic benefits for workers; instead, they necessitate workers to capitalise on these vulnerabilities. This establishes a dialectical relationship between the evolving conditions of capital outlined in Part 1 and the subjective agency of workers, as detailed in Part 2 below.

Procurement Tender Fairness: MSME, Business Competition Law, and SIKaP Application

This study analyzes the right to justice in tenders for the procurement of goods and services for small business actors from the perspective of business competition law through the application of the SIKaP application. The research method used is qualitative analysis based on the available empirical analysis of the literature. The results of the literature analysis show that small business actors face challenges such as the non-transparency of the selection process, unfairness in evaluating proposals, non-neutral procurement, unfair competition, and constraints on access to information. SIKaP application is considered as a potential solution to increase fairness in procurement tenders, but challenges such as lack of understanding and awareness as well as technical obstacles still need to be overcome. The importance of the role of business competition law is also recognized in protecting the rights of small business actors. This study concludes that additional efforts are needed, including training and awareness, technological infrastructure improvements, and effective law enforcement, to ensure the successful implementation of the SIKaP application and the protection of small business actors' rights in procurement tenders. The results of this study make an important contribution in understanding the challenges and opportunities for small business actors in obtaining fairness in procurement tenders. The implications can be used as a basis for developing policies and actions that support fair participation and equal opportunities for small business actors.

Designing (restorative) remedies for abuses of dominance by online platforms

Abstract The debate surrounding the application of European Union competition law to online platforms so far has predominantly focused on identifying anti-competitive practices. The design of corresponding remedies has been far less explored, although it is of equal importance to practice. In the absence of effective remedies, the mere identification of anti-competitive practices can do little to protect competition. Given the difficulties associated with identifying competition law infringements by online platforms, there is no reason to assume that the design of remedies intended to tackle the effects of such infringements will be straightforward. Therefore, this article aims to show the intricacies of designing effective remedies for Article 102 TFEU infringements by online platforms based on the case study of tying and bundling practices. In this process, the article clarifies the importance of incorporating restorative measures in competition law remedies that may require opting for structural interventions, which are difficult to impose under the scope of Regulation 1/2003. The article offers three potential options to overcome such difficulties within the ambit of this regulation, namely through the strategic use of interim measures, the introduction of flexible remedies, and the incorporation of the regulatory restraints of the Digital Markets Act.