Role Of Antitrust Research Articles

The Role of Antitrust and Pole-Attachment Oversight in TVA Broadband Deployment

The Role of Antitrust and Pole-Attachment Oversight in TVA Broadband Deployment

The Role of Antitrust in Preventing Patent Holdup

Patent holdup has proven one of the most controversial topics in innovation policy, in part because companies with a vested interest in denying its existence have spent tens of millions of dollars trying to debunk it. Notwithstanding a barrage of political and academic attacks, both the general theory of holdup and its practical application in patent law remain valid and pose significant concerns for patent policy. Patent and antitrust law have made significant strides in the past fifteen years in limiting the problem of patent holdup. But those advances are currently under threat from the Antitrust Division of the Department of Justice, which has reversed prior policies and broken with the Federal Trade Commission to downplay the significance of patent holdup while undermining private efforts to prevent it. Ironically, the effect of the Antitrust Division’s actions is to create a greater role for antitrust law in stopping patent holdup. We offer some suggestions for moving in the right direction.

Rescuing Antitrust’s Role in Patent Holdup

Standards, common platforms allowing products to work together, are ubiquitous in our economy. But imagine that a company: (1) has a patent needed to use a standard, (2) promises to license the patent on reasonable terms, and then (3) says it was just kidding as it seeks to block the product or charge an exorbitant price. In such a case, the users of the standard are stuck. They have invested in technologies based on the standard. And they may be forced to pay a price reflecting not the added value of the technology but the costs of switching to a new technology. In other words, they are subject to “patent holdup.” The concerns threatened by patent holdup have consistently been acknowledged by officials in Republican and Democratic administrations. These concerns are front and center in Carl Shapiro and Mark Lemley’s excellent article, The Role of Antitrust in Preventing Patent Holdup. In contrast, they are neglected by the current Assistant Attorney General of the Department of Justice’s Antitrust Division, Makan Delrahim. This Essay does four things. First, it explains why the Shapiro/Lemley article is important, particularly to situate today’s patent holdup debates in the larger context of transaction cost economics. Second, it raises questions related to standards organizations’ rules and antitrust law that the authors could more fully consider. Third, it offers additional support showing the radical nature of Delrahim’s position. And fourth, it opines on the nature of academic debate and its effect on antitrust enforcement.

What role for antitrust in regulating platforms?

Using regulation to protect competition and innovation.

From Digital to Blockchain Markets: What Role for Antitrust and Regulation

In the context of antitrust, technology is not the driver of anticompetitive conduct in digital markets, nor is punishing big companies the solution. It is most likely that markets will shift from centralized closed platforms into decentralized, open networks based on blockchain technologies. Blockchain technology built on a consensus mechanism can make intermediaries [or third parties] unnecessary. Antitrust enforcers should encourage the innovation process simply by deterring those intermediaries from engaging in anticompetitive conduct that might slow the innovation process down while providing support to those companies as they often have the best resources and knowledge to increase innovation. On the other hand, although blockchain technology presents the potential for future opportunities, it is far from being perfect; the risk of collusion, for example, is particularly high in private blockchains. Therefore, the success of blockchain relies on the trust of people in this new technology, which if not used appropriately can damage instead of benefit markets and consumers. Similar to the Internet, antitrust enforcers and regulators are essential in developing trust in blockchain and to make decentralized system of democratic markets based on blockchain technology viable.

The Blockchain (R)evolution and the Role of Antitrust

Blockchain is a technology that enables a secure, transparent, distributed, permanent, robust ledger that can be used to transact and record transactions over the internet. This article explores the role that antitrust can play in the blockchain environment. It examines the antitrust issues that may arise in the phase of development of blockchain projects, especially by joint ventures and consortia involved in R&D and standardisation projects. It them looks at problems that may arise when blockchains are fully operational, discussing whether denial of access to a private blockchain can be anti-competitive and, if so, in what circumstances and whether blockchain can facilitate collusion or even cartel-like behaviour. The role of antitrust is to ensure that the process of development and adoption of this new technology and its applications are driven by market forces and competition on the merits and not by restrictive behaviour aimed at excluding efficient undertakings from the competitive process. It is also to ensure that the new technology is not used to anticompetitive ends by enabling or facilitating collusive conduct or allowing individual firms to preserve or strengthen their market power to the detriment of competitors and consumers and, ultimately, of the society as a whole. To this end, classic antitrust analysis must itself evolve and develop a stronger focus on dynamic competition, market effects, and efficiencies than has traditionally been the case, especially in the European Union.

Antitrust Analysis of Big Data

The term big data evokes a variety of contexts, encompassing many of the most frequently encountered in the modern economy. With its unrelentingly expansive scope, it seems perhaps inevitable that big data would enter as an important component in antitrust discussions. While big data can certainly present interesting antitrust issues, these issues are by no means unique. Indeed, as developed in this paper, the existing antitrust framework is well equipped with sophisticated tools and methods for analyzing just the kinds of issues big data presents. To accurately frame the inquiry, Part 2 provides background as to the characteristics defining big data. Part 3 then analyzes the proper role for antitrust in the big data revolution, focusing upon three popularly targeted areas of change: (3.1) market definition, (3.2) merger analysis, and (3.3) exclusionary conduct. Part 4 concludes.

Health Policy Analysis: Antitrust Law and Regulation on Health Care Providers

The purpose of this theoretical policy analysis report was to determine if antitrust laws should be based upon concrete wrongful conduct and should not force the health care industry to adopt defensive, cumbersome business practices that actually impede their ability to compete. The role of antitrust is to ensure that competition is preserved and protected so that it can be harnessed. It is in the government interest to supports efforts that bring more competition to the health insurance marketplace that lowers costs, expand choice, improve quality; with the role of antitrust to ensure that competition is preserved and protected to help improving the U.S. health care system, together with regulation to expand coverage and control cost of health care for general population. Therefore, antitrust cases and sanctions need to be tightly tied to defensible theories of wrongful conduct in order to properly reflect what society thinks is wrong and clarify what is punishable conduct.

On Vaccines, Pharmaceutical Markets, and a Role for Competition Law in Protecting (Also) Human Rights

Following a sector inquiry issued by the Italian Competition Authority, the article analyzes the main features of the vaccine industry and related markets, both at a national and supranational level. Final considerations are made with respect to the role of antitrust in supporting human rights by enhancing access to essential medicines.

Crowding the Market: Is There Room for Antitrust in Market Manipulation Cases?

This article analyses the current debate surrounding the role of antitrust in recent market manipulation matters domestically. Despite the anti-competitive nature of this activity, there are several difficulties and inconsistencies that must be addressed. In particular, a stronger definition for market manipulation that captures a wide array of activity must be adopted. Next, it is also important to have a general understanding of the different laws and regulations used to combat market manipulation and how they have been applied in recent cases. This article also recommends an antitrust-based framework for analyzing current market manipulation cases like LIBOR and FX. Finally, this article addresses some of the difficulties with applying antitrust law, including regulatory overlap and the pushback against private enforcement efforts.

FRAND in India

This paper examines FRAND issues in India. From an institutional perspective, India's FRAND cases do not effectively establish the appropriate role for antitrust in FRAND. On the one hand, there is the potential for hold-up and anti-competitive conduct in the FRAND setting. Such situations would be very fact specific but the CCI orders to date use sweeping language and analysis based on per se like rules of illegality. On the other hand, the creation of per se like rules of illegality create the possibility that CCI will act as a price regulator rather than antitrust enforcer. Over time and with greater use of economic analysis (and greater reliance on the economic staff at CCI), CCI may improve its institutional capabilities. However, the role of jurisdiction as between CCI and the judiciary remains unclear. How best to treat FRAND disputes will take time but the hope is that through greater experience and learning by doing, the Indian competition system will set out a set of economically informed principles for sound FRAND enforcement.On the issue of institutional design and deference, one question that has not yet been reached (and may not for some time) is how the courts should handle deference when CCI has developed the necessary economic skills to undertake complex cases of antitrust and technology. Should the judiciary defer to agency as expert once expertise developed? This is potentially a chicken and egg problem on developing expertise and rules of deference in need of further study. Complicating matters further is that the economics on competition and patents is complex. Creating an administrable economic model that is coherent remains a work in progress.Overall the Indian FRAND cases suggest that the current mix of Indian institutions may not yet be well suited to address complex issues of antitrust enforcement. Consequently, such cases should be approached cautiously with a mind on how to think through the economics of innovation, and the implications of enforcement on technology, IP and competition to yield optimal results and the right institutional structure for improved enforcement.

Addressing Pricing Power in Integrated Delivery: The Limits of Antitrust.

Prices are the major driver of why the United States spends so much more on health care than other countries do. The pricing power that hospitals have garnered recently has resulted from consolidated delivery systems and concentrated markets, leading to enhanced negotiating leverage. But consolidation may be the wrong frame for viewing the problem of high and highly variable prices; many "must-have" hospitals achieve their pricing power from sources other than consolidation, for example, reputation. Further, the frame of consolidation leads to unrealistic expectations for what antitrust's role in addressing pricing power should be, especially because in the wake of two periods of merger "manias" and "frenzies" many markets already lack effective competition. It is particularly challenging for antitrust to address extant monopolies lawfully attained. New payment and delivery models being pioneered in Medicare, especially those built around accountable care organizations (ACOs), offer an opportunity to reduce pricing power, but only if they are implemented with a clear eye on the impact on prices in commercial insurance markets. This article proposes approaches that public and private payers should consider to complement the role of antitrust to assure that ACOs will actually help control costs in commercial markets as well as in Medicare and Medicaid.

Monopoly Pricing of Social Goods

We analyse the roles of network connectivity and topology on the monopoly pricing of network goods which enable social interaction between consumers. Connectivity between network members induces the well-known network externalities effect, while the topological effect is caused by the incompleteness of the social network’s linkage, and it has not been previously recognised in this context. We find that the topological effect counteracts, and dominates, the connectivity effect by reducing the monopoly’s capacity to extract consumer surplus. Our results are seen to hold in real cases of social network businesses. The monopolist benefits from price discrimination based on consumers’ social connections, but this has a social cost as consumer surplus loss is higher than the increase in profits, with the highly connected consumers being the primary losers. Therefore, privacy policies restricting excessive social profiling and tracking can have an antitrust role too. Our approach also extends the theory of multi-sided markets in relation to the underlying relations graph of different market sides.

The Antitrust Activism of the European Commission in the Telecommunications Sector

This paper analyses the role of the European Commission in taking cases of abuse of dominance in the telecommunications sector since its liberalisation in 1998. The argument is that the Commission has played a very active antitrust role, in particular at the beginning of the liberalisation, and that its activism was blessed by the EU Courts. Indeed, the Courts see competition law as a complement, and not a substitute, to regulation. They have set a relatively low threshold for proving margin squeeze, the most common form of abuse in telecommunications; and they have allowed wide discretion to the Commission to deal with the inaction or failures of national regulatory authorities (NRAs). It is further submitted that such activism was justified in the early days of liberalisation when the telecommunications markets were still very concentrated, and when the NRAs were in their infancy and sometimes captured. However, this activism is less justified today because, on the one hand, competition in the sector has increased, and on the other hand most anticompetitive practices can be, and should be, addressed by the NRAs. Today, the Commission should instead concentrate on consolidating the expertise and the independence of the NRAs, and it should rely on its extensive oversight of NRA decisions to prevent violations of the competition law. The paper is divided into five sections. The first section reviews the main EU cases of abuse of dominance in the various telecoms segments. The next three sections deal with the main substantive and institutional issues raised by those cases. The second section describes the approaches of the Commission and the EU Courts on the relationship between competition law and sector-specific regulation. The third section analyses the tests established by EU Courts to control margin squeeze and refusal to deal in post-liberalised markets. It also compares them with the tests proposed by the Commission in its Guidance Paper on exclusionary abuses. The fourth section analyses the different uses made by the Commission of its antitrust powers in the telecoms sector, and their institutional implications. The fifth section concludes the paper.

Chevron Deference and the FTC: How and Why the FTC Should Use Chevron to Improve Antitrust Enforcement

The FTC does not promulgate antitrust rules and has never asked a court for Chevron deference in antitrust litigation. This Note addresses these omissions and argues that the FTC should undertake notice-and-comment rulemaking for the express purpose of attaining Chevron deference. More than a pragmatic litigation strategy, this approach will allow the FTC to properly express its expert opinions to generalist courts and, in this way, form an optimal antirust regime. The central step in this argument is to prove that Chevron deference is available to the FTC in its antitrust role. This question, while occasionally raised, has never been fully examined. Does the common law nature of antitrust undermine the FTC’s claim? How does DOJ enforcement change the scope of section 5 delegation? This Note provides the first in-depth assessment of these questions and finds that the statutory text, judicial precedent, legislative history, and normative antitrust goals all confirm the suitability of Chevron deference to formal FTC interpretations. Many thanks to Professor Peter Strauss for his interest and insight, and to Professor Scott Hemphill for his antitrust advice. The author would also like to thank Bettina Liverant, Ni Qian, and Ravi Bhagat for their support, and the staff members and editorial board of the Columbia Business Law Review for their diligence and attention to detail.

The Role of Antitrust in Protecting Competition, Innovation, and ConsumerssAs the Digital Revolution Matures: The Case Against the Universal-EMI Merger and E-Book Price Fixing

This paper presents a detailed analysis of the proposed merger between Universal Music Group (UMG) and EMI by applying the standards and methods outlined in the recently revised Department of Justice/Federal Trade Commission Merger Guidelines. It shows that the UMG-EMI merger is “an unfair method of competition” that constitutes “an unreasonable restraint of trade” because it will “substantially lessen competition” and is “likely to enhance market power.” Simply put, the post-merger firm will have a strong incentive and increased ability to exercise market power, particularly in undermining, delaying, or distorting new digital distribution business models, in a market that has been a tight oligopoly for over a decade.The merger creates a highly concentrated market by eliminating one of only four major record labels and results in an increase in concentration that is five times the level that the DOJ/FTC identify as a cause of concern. The recent history of anticompetitive, anti-consumer conduct by this tight oligopoly and the role of EMI as a maverick in the digital era compound the anticompetitive effects of the merger and significantly increase the likelihood that the merger will not only result in higher prices but also undermine incipient competition.Claims that piracy will prevent the abuse of market power are directly refuted by evidence on consumer purchasing behavior, estimates of elasticities of demand by academics, and marketing research conducted by the music industry. The analysis demonstrates that the industry has chronically and grossly overestimated the role of copyright infringement in the development of digital distribution. Correcting this misrepresentation of the extent of infringement is necessary to ensure that policymakers have a proper understanding of the full benefits of digital technologies.The strong parallels between the impact of the merger on the development of digital disintermediation in the music sector and the recent case brought by the Department of Justice against e-book publishers highlight the economic efficiency and consumer benefit from the digital distribution of goods and services. The anticompetitive tactics of the dominant, incumbent, physical space firms remind us that these firms will stop at nothing to delay change and preserve their dominance. Antitrust authorities and others must use the full range of tools available to protect competition, innovation, and consumers and ensure that consumers and the economy enjoy the full benefits of the development of digital technologies.

Trolling around the Patent-Antitrust Interface: The Roots of the NPE Challenge and the Role of Antitrust in Patent Reform

Over the past few years, a growing number of critics have complained that nonpracticing “patent trolls” threaten the American economy. These entities and their patent monetization practices have begun to generate inquiries from sources both scholarly and political. This article sets the stage for the nascent antitrust inquiry into patent trolls by reviewing the history of the patent-antitrust interface, showing the relationship between these two bodies of law and broader economic thought, and demonstrating the ways in which the—generally positive—recalibration of their interface in recent decades has created many of our current challenges. In particular, it focuses on the creation of our contemporary system of very strong patent rights beginning in the early 1980s and on the ways in which these rights have proven to be so strong that they may be invite anticompetitive abuse.

There’s an App for That: Tying and Bundling in the Smartphone Industry

As smart technologies become more prevalent and mobile devices become the digital platform of choice, how will antitrust law adapt? While current tying law has been criticized for its reliance on dated physical product precedents, the principles of tying and bundling doctrines are well-suited to address the next technology-based product combinations and integrations. Smartphones are an ideal foil for emerging antitrust issues, as these devices stand at the crossroads of tying and bundling inquiries. Integration of a smartphone mobile operating system (“mOS”) with an application clearinghouse exemplifies the types of challenges that will test current tying and bundling doctrines. These dynamic high technology products exhibit a dual nature, as they are easily cognizable as separate products, yet they can also be characterized as a single product. This Note examines several permutations of tying tests to draw out the consequences of treating smartphone technologies as single or multiple products under the law.To ensure the viability and increase the efficacy of current tying and bundling applications by courts, this Note recommends that (1) non-equilibrium-based assertions by either plaintiffs or defendants should be recognized as the exception, not the norm; (2) flexible rule of reason analyses should be utilized in high-technology industries; and (3) evidentiary tools, such as natural experiments and price-indexes, should be considered a permissible inference of anticompetitive arrangements. Although it is unorthodox to suggest that current tying and bundling law does not need to be significantly altered in order to address the issues raised by dynamic high technology industries, effective integration of evidentiary and econometric analyses rises to the challenge — while maintaining a modest role for antitrust in the economy.

Too Big to Fail: The Role for Antitrust and Bankruptcy Law in Financial Regulation Reform, Part II

Chris Sagers presented the following written testimony before the House Judiciary Subcommittee on Courts and Competition Policy on November 17, 2009. His testimony concerns the antitrust consequences and the risks to competition posed by the proposed financial regulatory reform package current pending in the House of Representatives - specifically, the package proposed by the Treasury and Financial Services Chairman Barney Frank. The testimony concludes that the package introduces certain serious antitrust risks, both by triggering the implied repeal doctrine, and by giving the FDIC certain powers to cause the resolution of failing financial holding companies with very little antitrust constraint on its disposition of the FHCs' assets. More generally, it concludes that there is a distressing lack of concern throughout the legislation with antitrust or competition, and a failure to see competition as any part of any solution to anything. Note: Submitted before the Subcommittee on Courts and Competition Policy of the Committee on the Judiciary, United States House of Representatives, November 17, 2009.

Who Determines the Optimal Trade-Off between Quality and Price?

The question of the optimal trade-off between quality and price has become increasingly important as well as complex in recent times, as the advances of modern technology permit a far more refined range of choices. These subtleties among choices allow an individual, a group, or a society to titrate more precisely degrees of quality with almost any product or service, coupled, of course, with counterbalancing price consequences. In 2002, as Program Chair of the Antitrust Section of the Association of American Law Schools, I organized a panel entitled “Guilds at the Millennium: Antitrust and the Professions” and served as one of its commentators. The focus of this comment is not on the typical antitrust questions regarding regulating professionals in the face of asymmetric information or, in particular, how to cope with the potential anticompetitive effects of allowing the professions to regulate themselves. That issue is explicated quite cogently and extensively by the other commentator on this panel. Rather, the purpose here is to draw attention to another problem submerged within and yet intertwined with these discussions — the determination of the socially optimal trade-off between quality and price in the context of professional regulation. Co-extensively, this comment raises the question as to what antitrust's role should be in making such important price-quality trade-off decisions.