Monopolization Cases Research Articles

Horizontal Merger Antitrust Enforcement: Some Historical Perspectives, Some Current Observations

The DOJ-FTC Merger Guidelines were developed for and best deal with horizontal mergers where the theory of harm is coordinated effects. The Guidelines deal awkwardly, at best, with mergers where the theory of harm is unilateral effects. The broad body of evidence - from profitability studies, from pricing studies, and from auction studies - indicates that seller concentration matters. But these studies do not provide adequate guidance as to whether current antitrust enforcement is too strict or too lenient with respect to mergers. Research on the consequences of the close call mergers that were not challenged might well provide such guidance, as might a meta analysis of the extant price-concentration studies. New procedures are needed for inquiry and enforcement where the theory of harm is unilateral effects, as is a market definition paradigm for monopolization cases.

Market Definition in Monopoly Cases: A Paradigm is Missing

The question of market definition for monopolization cases - and thus the issue of the possession of market power by the defendant - is crucial for the outcome of these cases. However, unlike antitrust merger analysis, where the DOJ-FTC Horizontal Merger Guidelines has provided a successful paradigm for market definition, monopolization cases lack a guiding market definition paradigm. This chapter addresses this issue, shows the problems that arise when a market definition paradigm is absent, and offers some partial remedies. The best remedy, though, would be the development of a suitable market definition paradigm for these cases.

The Role of Patents in two US Monopolization Cases

The histories of two ‘great’ US monopolization cases involving high‐technology monopolies are summarized in this article. Its foci are the practices that led to antitrust intervention, the timeliness of antitrust challenges, how the relevant authorities evaluated the role that innovation played as a possible explanation for monopoly, the remedies applied, and how those remedies affected incentives for continuing technological progress.

Class Certification in the Microsoft Indirect Purchaser Litigation

The government's monopolization case against Microsoft has spawned a myriad of private lawsuits seeking treble damages. This study examines an important subset of those lawsuits, the class actions brought under state law on behalf of indirect purchasers of Microsoft's software, mostly consumers and businesses who bought the software along with new computers from Original Equipment Manufacturers (OEMs) like Compaq, Gateway, and Dell. Although the Illinois Brick rule denies indirect purchasers the right to sue under the federal antitrust laws, many states have authorized these suits under state antitrust or consumer protection law. Before the Microsoft cases, however, courts in the Illinois Brick repealer states had refused, more often than not, to certify indirect purchaser suits as class actions on the grounds that issues specific to the individual plaintiffs, particularly the issue of impact, predominated over the issues common to the class. In these courts' skeptical view, the complexities of proving whether and by how much the direct purchasers had passed on the overcharge to the plaintiffs would likely overwhelm any common issues, like questions of liability, and thus make the cases unsuitable for trial as class actions. The courts in the Microsoft indirect purchaser cases, however, have certified them as class actions much more frequently. Of the fourteen opinions in these cases, three (two in Michigan and one in Maine) denied certification, while eleven granted it. This rate of certification is significantly higher than the rate in other indirect purchaser cases during the same period. In this study, I explore possible explanations for this disparity in the rate of certification, including the application of lenient standards of certification; the existence of favorable factual characteristics in the cases; and the preclusive effect of the government case. In the conclusion, I consider whether the certification of these cases has been in the public interest.

Energy radiated by a point acoustic dipole that reverses its uniform velocity along its rectilinear path.

This work extends a mathematical approach developed recently for monopoles to describe the sound energy radiated by a rectilinearly moving dipole that changes direction along its trajectory. Although the dipole travels with constant speed, it undergoes acceleration by reversing its direction during a finite time interval along its path. This work determines the joint angular and frequency distribution of the radiated energy, its angular distribution, and the total radiated energy output. Results for the radiated energy are systematized by expressing the radiation integrals in terms of hypergeometric functions. This procedure simplifies the evaluations, particularly at low Mach numbers, and permits the comparison of results to the earlier monopole case.

The Antitrust Emperor's Clothes

Antitrust policy over the last 25 years can claim substantial achievements: the stated terms of the debate have shifted to consumer welfare and efficiency; the 1982 and subsequent Merger Guidelines and the Hart-Scott-Rodino review process provide safe havens, comparative predictability, and effective protection against suits filed after a deal is done; and large-firm monopolization cases have become less frequent, though the Microsoft case represents a notable exception. However, antitrust policy is still not founded on a solid empirical understanding of its effects in practice, and the bipartisan consensus under the Clinton and Bush administrations has allowed a partial return to the policies of the 1970s with benefits that are speculative at best.

The Failure of Structural Remedies in Sherman Act Monopolization Cases

Considerable controversy has arisen around the recent U.S. District Court decision that ordered vertical divestiture of Microsoft as a remedy for its violation of Section 2 of the Sherman Act. In this paper, I look back over more than a century of Sherman Act case law to see how frequently structural relief has been imposed in monopolization cases that involve a single firm that has not attained its market position through merger or from conspiring with other firms. I conclude that there are only four or five such cases in the history of Sherman Act enforcement. I then examine intensively the effectiveness of structural relief-vertical or horizontal divestiture-in seven of the most important Section 2 cases and two others. I conclude that with one exception, the break up of AT&T in 1984, there is very little evidence that such relief is successful in increasing competition, raising industry output, and reducing prices to consumers. The exception turns out to be a case of overkill because the same results could have been obtained through a simple regulatory rule, obviating the need for vertical divestiture of AT&T.

ASYMPTOTIC VALUES OF HYPERBOLIC MONOPOLES

It is shown that many hyperbolic monopoles can be distinguished from each other via their asymptotic values in contrast to the case of Euclidean monopoles.

The Problem of Remedy in Monopolization Cases: The Microsoft Case as an Example

The Problem of Remedy in Monopolization Cases: The <i>Microsoft</i> Case as an Example

Antitrust Divestiture in Network Industries

The landmark Microsoft case raises challenging questions concerning antitrust remedies. In this Article, we propose a framework for assessing the costs and benefits of different remedies, particularly divestiture, in monopolization cases involving network industries. Our approach can assist a court or enforcement agency not only in analyzing the welfare effects of divestiture, but also in choosing more generally among alternative kinds of remedies. The framework would, for example, apply to a court's choice between damages and injunctive remedies or between behavioral injunctions and structural injunctions. After developing our framework, we apply it to the divestiture proposals made by the government and others in the Microsoft case. We argue that those proposals leave open important questions that must be answered before divestiture can be shown to be either the best remedial alternative or to create likely net gains in economic welfare.

Remedies Brief of Amici Curiae

Now that it has found Microsoft in violation of the Sherman Act, the Court faces its most important challenge. It must fashion a decree that promises to introduce effective competition in the market that Microsoft has monopolized ? Intel-compatible operating systems ? and to restrain Microsoft from projecting its current monopoly into adjacent markets. That monopoly has proved of enormous value to Microsoft: as shown below, in 1999 Microsoft's rate of return was 88 percent on its investments in capital and research and development ? a record of profitability exceeding the average return of other major corporations by a factor of more than thirteen. Achieving the required remedy objectives is a heavy responsibility. Too often in the past, the government plaintiffs and the courts have devoted most of their attention to the liability phase of antitrust cases and have tended to breeze through the remedy phase. This case is too important and the stakes for the nation are too high to allow such a course of action to be followed here. The Court has a unique opportunity not only to establish a clear record for appellate review of the remedy, but also to set an important precedent for the way in which remedy determinations are made in future antitrust actions. In particular, this Court will establish in the process of setting a remedy in this matter the contours of relief in monopolization cases where the defendant's value arises primarily from intangible assets in the form of intellectual property rather than the tangible capital assets characteristic of such prior major monopolization cases as Standard Oil, Alcoa, and ATT dissolution here is the logical extension of physical or regional divestiture for companies based largely on tangible assets to a company whose value is based largely on intellectual and informational assets. We submit this brief without the benefit of knowing what relief the government plaintiffs will seek. However, our understanding of the relevant legal standard is that this Court has broad discretion in fashioning an appropriate remedy. It need not be limited to the remedies the government plaintiffs may propose. Now that the Court has issued a broad legal Conclusions of Law, it has the authority ? indeed the responsibility within the contours of existing law ? to impose whatever remedy it finds most appropriate to address the violations it has found, regardless of what the government plaintiffs may propose. For this reason, we urge the Court, following its scheduled May 24 hearing, to establish procedures (including evidentiary hearings on the risks and benefits of alternative courses of action) for developing a record that will enable the Court to develop a remedy that will provide a reasonable chance for competition to work without the monopolistic distortions outlined in the Court's Findings of Fact and Conclusions of Law. The Court has recognized the time-urgency of deciding this matter by suggesting that it may ask for immediate review of its Conclusions of Law and remedy order by the Supreme Court. There is certainly merit to this concept, especially in light of Microsoft's announced plans to extend Windows to the server and Internet access provider markets. Nonetheless, we believe that, because the underlying remedy issues are so complex, the key concern is the quality of the assessment rather than the speed of the resolution. Hence, a careful study and assessment of alternatives should not be sacrificed in the rush to resolve uncertainties surrounding the outcome of this case. The need for a careful and thorough study of remedies is underlined if the Court contemplates a structural remedy with respect to the monopolized markets. We will argue that conduct and licensing remedies are unlikely to introduce workably competitive conditions into the market monopolized by Windows and that it will be necessary to impose a structural remedy if demonopolization is the goal. At the same time, however, the complexity and potential risks of a structural remedy along with the history of past structural cases underline the need to ensure a careful and thorough study and assessment of alternative approaches before a final remedy is ordered.

The FTC and the Law of Monopolization

Although Microsoft has attracted much more attention, recent developments at the FTC may have a greater impact on the law of monopolization. From recent pronouncements, the agency appears to believe that in monopolization cases government proof of anticompetitive effect is unnecessary. In one case, the Commission staff argued that defendants should not even be permitted to argue that its conduct lacks an anticompetitive impact. This article argues that the FTC's position is wrong on the law, on policy, and on the facts. Courts have traditionally required full analysis, including consideration of whether the practice in fact has an anticompetitive impact. Even with such analysis, the courts have condemned practices that in retrospect appear not to have been anticompetitive. Given our ignorance about the sources of a firm's success, monopolization cases must necessarily be wide-ranging in their search for whether the conduct at issue in fact created, enhanced, or preserved monopoly power, whether efficiency justifications explain such behavior, and all other relevant issues.

Analytical results for string propagation near a Kaluza-Klein black hole

This brief report presents analytical solutions to the equations of motion of a null string. The background spacetime is a magnetically charged Kaluza-Klein black hole. The string coordinates are expanded with the world-sheet velocity of light as an expansion parameter. It is shown that the zeroth order solutions can be expressed in terms of elementary functions in an appropriate large distance approximation. In addition, a class of exact solutions corresponding to the Pollard-Gross-Perry-Sorkin monopole case is also obtained.

Preserving Competition: Economic Analysis, Legal Standards and Microsoft

In a recent symposium issue of the George Mason Law Review, Steven Salop and R. Craig Romaine use the Microsoft litigation as a focus for discussion of antitrust law. Salop and Romaine argue that each of the allegations against Microsoft could constitute evidence of a design by Microsoft to reduce competition and to preserve or extend monopoly power. They argue as well that the right legal standard to apply in monopolization cases is a competitive effects test that balances the benefits and harms of the monopolist's conduct. This article exposes problems with their approach, explains why it departs from current antitrust standards, and urges an approach consistent with current standards.

Polarization and human body effects on the microwave absorption in a human head exposed to radiation from handheld devices

A multigrid finite-difference time-domain code was used to calculate specific absorption rate (SAR) distribution in a human head exposed to microwave radiation from handheld antennas. The effect of the human body was taken into account and different antennas and polarization conditions were considered, The distance between the antenna and human head were varied to examine the effect of the human body on the SAR distribution, From the numerical results, it is shown that the human body plays a significant role on the SAR value and its distribution in the head [as high as 53% monopole, 41% planar inverted F antenna (PIFA)]. It is also shown that the effect of the body is more dominant at lower frequencies (monopole 900 MHz versus 1.9 GHz). For the monopole case, effect of body is particularly important at larger separation distances from the head, e.g., at d=4 cm versus d=0.5 cm. Effect of body is particularly important for the vertical orientation cases for both the monopole and PIFA.

Wanted: A Market Definition Paradigm for Monopolization Cases

For the wide range of antitrust cases involving allegations of monopoly or monopolization (or variations on that theme), the presence of market power is a necessary prerequisite for finding liability. In turn, the definition or delineation of a relevant market is essential for measuring a defendant's market share -- a key determinant of the presence or absence of market power. Unfortunately, there are few or no intellectual underpinnings for the market definition process in monopolization cases. This void contrasts sharply with the substantial conceptual developments of the past two decades with respect to the market definition process in antitrust merger analysis, as embodied in the Merger Guidelines of the U.S. Department of Justice. This article contrasts the achievements in the merger analysis area with the continuing dilemmas and conundrums in the monopolization area with respect to market definition. In the latter area the cellophane fallacy (which is explained), combined with the frequently cloudy state of firm-level profit data, continues to create confusion as to when the presence of competitors is an indication of the absence of market power and when their presence is the consequence of the exercise of market power. Underlying this confusion is the absence of a clear market definition paradigm for these monopolization cases. Until such a paradigm is developed, the confusion will persist, as will a pattern of erratic and inconsistent outcomes in alleged monopolization cases.

Monopole and electrically charged dust thin shells in general relativity: Classical and quantum comparison of hollow and atomlike configurations

We give a comparative description of monopole and electrically charged spherically symmetric dust thin shells. Herewith we consider two of the most interesting configurations: the hollow shell and shell, surrounding a body with opposite charge. The classification of shells in accordance with the types of black holes and traversable wormholes is constructed. The theorems for the parameters of turning points are proved. Also for atomlike configurations the effects of screening (electrical case) and amplification (monopole case) of the internal mass by shell charge are studied. Finally, one considers the quantum aspects; herewith, exact solutions of wave equations and bound states spectra are found.

Space-frequency analysis and reduction of potential field ambiguity

Ambiguity of depth estimation of magnetic sources via spectral analysis can be reduced representing its field via a set of space-frequency atoms. This is obtained throughout a continuous wavelet transform using a Morlet analyzing wavelet. In the phase-plane representation even a weak contribution related to deep-seated sources is clearly distinguished with respect a more intense effect of a shallow source, also in the presence of a strong noise. Furthermore, a new concept of local power spectrum allows the depth to both the sources to be correctly interpreted. Neither result can be provided by standard Fourier analysis. Another method is proposed to reduce ambiguity by inversion of potential field data lying along the vertical axis. This method allows a depth resolution to gravity or the magnetic methods and below some conditions helps to reduce their inherent ambiguity. Unlike the case of monopoles, inversion of a vertical profile of gravity data above a cubic source gives correct results for the cube side and density.

Market share and market power in merger and monopolization cases

In light of the growing sophistication of the tools of industrial organization economics and reliance on the federal courts to resolve complicated competitive issues, it may be time for the courts to make greater use of economists in analyzing antitrust cases. While the costs of such an endeavor remain unexplored, we argue below that the benefits may be significant. In particular, we assert that the legal precedent requiring the courts to draw inferences about market power based primarily or exclusively on market shares and/or market concentration1 can often be misleading. However, the only alternative to such judge-made bright-line rules is to utilize modern economic tools to undertake more extensive competitive analyses. The latter choice is essentially the course that the antitrust enforcement agencies are following. This article explores some of the arguments in favor of such an approach.

Statistical Mechanics of a Multipolar Gas: A Lattice Field Theory Approach

A recently proposed lattice field theory approach to the statistical mechanics of a classical Coulomb gas (J. Chem. Phys. 1992, 97, 5653) is generalized to treat particles with arbitrary electric multipole moments. Explicit development of the mean-field approximation is given for the case of mobile dipoles and monopoles (ions) surrounding an arbitrary collection of fixed charges embedded in macroions. In particular, a modified Poisson−Boltzmann (PB) equation is derived in which the mobile dipoles provide an effective spatially dependent dielectric constant. This equation implies a self-consistent iteration procedure by which the monopole and dipole densities are simultaneously determined in terms of single scalar (PB) field. Moreover, this equation can be derived from a minimum principle; an annealing strategy for computing the PB field is thereby suggested. In addition, explicit mean-field expressions for thermodynamic free energies are obtained as simple functionals of the PB field. Connection to the well-known Langevin dipole model is made. A numerical application to a system consisting of two parallel plates is presented in order to illustrate the utility of the formulation.