Role Of Antitrust Research Articles

Payment Cards Pricing Patterns: The Role of Antitrust and Regulatory Authorities

Antitrust enforcers and regulators are increasingly worried that interchange fees in four-party systems, more than being an instrument for addressing usage externality, had become a collusionary device, setting a floor under which the charges could not go. Competition is not working effectively in card payment systems. The reason is that with the non discrimination rule in place, the cost of payment services is transferred by merchants to all buyers, not just to cardholders. As a result, cardholders (that do not pay for the cost of their choice) tend to use the payment instrument that offers the highest private benefits to them (the one with the better reward system), often the most costly. In turn, issuers tend to offer to consumers the cards that provide the highest interchange fee. This paper shows that eliminating the interchange fee and allowing for both issuers and acquirers to charge cardholders and merchants respectively may lead to the internalization of usage externalities and to markets for payment services to operate more effectively. Furthermore the elimination of the no-discrimination rule may also discipline three party systems, as the Australian example shows.

The European Union, the United States, and Microsoft: A Comparative Review of Antitrust Doctrine

When a seller bundles together two products that have previously been sold separately, the arrangement is sometimes referred to as a tie. If the two products are bound together physically, it is often referred to as a technological tie. In the 1970s, IBM physically integrated so-called peripheral products, such as disk drives and printers which previously had been sold separately, into its central processing units. This integration was then attacked (largely unsuccessfully) by independent manufacturers of peripheral equipment as unlawful tying and as monopolization through tying. More recently, Microsoft has incorporated products, such as browsers and media players, into its operating system, behavior that again amounts to technological tying. It has also improved its server software by heightening the degree to which servers employing that software can interact. By raising the level of interaction among servers equipped with its software, Microsoft has so integrated work group servers as to enable groups of small servers to approach the capacities of mainframe computers. The European competition-law authorities see both matters as problematic. The integration of the media player has been condemned as tying; and the heightened server interaction has been faulted for failing to provide the interoperability that rival server software requires in order to participate on an equal footing with Microsoft server software in Windows work groups. Microsoft’s integration (at least in the view of the European antitrust authorities) also raises issues of essential facilities, and of the role of antitrust in achieving interoperability. Integration of these sorts - e.g., the hardware integrations of IBM and the software integrations of Microsoft - raise antitrust issues, as the extensive litigation in the United States and Europe over Microsoft’s behavior has revealed. We have now reached a moment in time in which both the American and European laws are sufficiently developed to warrant reflection and comparison. That is the task approached in this article. Part I, below, examines the European approach, exemplified in the decisions of the European Commission and the Court of First Instance about the interoperability of Microsoft’s server software. That part also examines the integration of the Windows Media Player into the Windows operating system. Part II reviews the U.S. decisions dealing with Microsoft’s integration of its Internet Explorer browser into its operating system. Since most readers will be familiar with the U.S. litigation at least in its main routlines, that review can be brief. Part III contains an initial comparison of the U.S. and European approaches to product integration. The conclusion in Part IV identifies the major differences and the doctrinal bases on which they rest.

GUEST EDITORS’ INTRODUCTION: SPORT AND PUBLIC POLICY

The world of sport, ranging from professional and amateur athletics to individual participation in active recreation, contains a surprisingly broad and rich array of public policy issues. Towns, school districts, states, and nations invest in facilities small and large, from walking paths and tennis courts to the proverbial white elephant, the Olympic stadium. Cities tax the incomes of visiting players, and government agents test athletes for performance-enhancing drugs. Courts in America and the European Union (EU) face a stream of challenging cases, generated by the clash of the joint nature of sports competition with antitrust concerns. In this special issue of Contemporary Economic Policy, we bring together a selection of contemporary sports economics research that addresses these policy issues. Our aim is to provide researchers with a clear picture of the state of economic policy research in sport and to stimulate further research in this area. The approach to sports policy varies considerably across countries. In America, the links between policy and sport are generally viewed as weak at the national level even though profound differences in the organizational structure of sport in the United States relative to the rest of the world are rooted in the infamous 1922 Supreme Court decision in the Federal League case. In contrast, sport and public policy in Europe are matters of direct government interest at the national level. UK Sport, a unit of the British government's Department of Media, Culture, and Sport, has counterparts in many European countries, and the interest extends to the EU itself. Earlier this year, a special EU commission issued a white paper outlining a Pierre de Coubertin Action Plan for EU policy toward sport (de Coubertin is the architect of the modei n Olympic games). The policy issues dealt with by UK Sport--drug testing, funding of youth programs, and facility finance--are among the issues examined in this volume. These same issues are faced in the United States as well, of course, although the American approach is relatively decentralized. Indeed, this characteristic is one of the key factors responsible for the most well-known public policy issue in U.S. sport. The stadium subsidy game, in which the major professional sports auction off team locations to the highest bidder, is fundamentally shaped by the autonomous and competitive approach to sports policy among U.S. states and cities. Antitrust and sport represent a nettlesome policy issue on both sides of the Atlantic. The inherently cooperative nature of key elements in sporting competition--agreements on rules, schedules, and prizes among competitors are essential--creates a challenge for economists and the courts in handling antitrust claims. The antitrust decisions in the Federal League case in the United States, and the Bosman case in the EU, had far-reaching consequences on the organization of sport in their respective jurisdictions. Two leading scholars on the organization of sport and the role of antitrust, Stefan Szymanski and Stephen Ross, take a new tack in their paper here. Whereas discussion of the critical antitrust cases in sport has focused on horizontal agreements between competing entities, little attention has been given to vertical restrictions in the chain of production in professional sport. Szymanski and Ross argue that the network of contracts between teams and leagues is more complex than is traditionally considered and that vertical aspects of these contracts are critical elements for the organization and governance of sporting competition. Research on the role that sports can play in local economic development, and especially public subsidies for the construction and operation of professional sport facilities, constitutes a large, contentious, and important topic in sport-related public policy. Dennis Coates provides a thorough, up to date, and critical survey of this rapidly evolving literature. …

Interoperability and Foreclosure in the European Microsoft Case

Introduction The cases in the US and Europe against Microsoft have been perhaps the most high-profile antitrust cases in the last twenty years. In the various Microsoft cases, antitrust authorities in the US and Europe took on what was at some points the most valuable company in the world and its CEO Bill Gates, the world's richest man. After five years of investigation, on 24 March 2004, the European Commission held Microsoft guilty of an abuse of a dominant position under Article 82 and imposed the largest fine ever for such an antitrust violation in Europe – €497 million. The Commission also demanded major forward-looking behavioural remedies including compulsory licensing of intellectual property and forced unbundling. This degree of behavioural intervention is highly unusual and led to continued conflict about the implementation of the remedies. The Decision found that Microsoft had abused its dominant position in the PC operating system market in two ways: ‘deliberately restricting interoperability between Windows PCs and non-Microsoft workgroup servers, and by tying its Windows Media Player (WMP), a product where it faced competition, with its ubiquitous Windows operating system.' As remedies for these violations the European Commission ordered Microsoft: ‘within 120 days, to disclose complete and accurate interface documentation which would allow non-Microsoft workgroup servers to achieve full interoperability with Windows PCs and servers’; ‘within 90 days, to offer to PC manufacturers a version of its Windows client PC operating system without Windows Media Player’. The case is fascinating as it touches on one of the key issues concerning the conduct of modern competition policy': how should we think about the role of antitrust in high-tech industries dominated by rapid innovation?

The Evolvability of Business and the Role of Antitrust

In this paper, based on theories of complex adaptive systems, I argue that the main case for antitrust policy should be extended to include the criteria of evolvability. To date, the main case focuses on economizing, including market power as a key filter for identifying suspect cases. Both production and transaction costs are considered as part of economizing and other factors are use to consider the benefits of different industry structures. CAS analysis focuses attention on dynamics, evolution and networks. As I will show, the criteria of evolvability requires us to consider various types of direct and indirect network impacts in business that go beyond the traditional focus on production and transaction costs. These network impacts stem from the connections between transactions and relations over time and place, including how business arrangements at one time, limit or enable arrangements in the future. An assessment of the impacts, I argue, can and should be included in the rules of antitrust and in the processes of antitrust case analysis and decision making.

Avoiding the Tragedy of the Anticommons: Collective Rights Organizations, Patent Pools and the Role of Antitrust

The growing importance of intangible property and the development of new technologies come together with the current trend of covering by intellectual property rights (IPRs) an increasingly broader area of resources. Heller showed up that the transition from commons to privatization generates a situation in which too many property rights are owned by too many parties, a spiral of overlapping IPRs in the hands of different owners, with the consequence to obstacle future innovation. The need to coordinate various owners, overcoming transaction costs, strategic behaviours and cognitive biases, supports the rising diffusion of collective rights organizations, a myriad of formal and informal institutions designed to regularize technology transactions and break relational bottlenecks: they include the patent pooling, that is the arrangement among multiple patent holders to aggregate their patents making them available to each member. Antitrust authorities have come closer to a rule of reason analysis towards patent pools, namely a balanced approach able to weigh procompetitive benefits and anticompetitive effects: even if pooling may enhance static and dynamic efficiency by integrating complementary technologies, reducing transaction costs, clearing blocking positions and avoiding costly infringement litigation, at the same time it may be a way to conspire to suppress competition.

Creating Competition in the Market for Operating Systems: A Structural Remedy for Microsoft

case against raises fundamental questions about the role of antitrust in the digital economy. government has presented testimony showing that guilty of serious antitrust violations. district court has now issued comprehensive Findings of Fact that leave little doubt that the government has proved its case. evidence convincingly establishes that possesses monopoly power in the market for Personal Computer (PC) operating systems and that it has engaged in a broad campaign to protect and extend this monopoly through anticompetitive acts in violation of Section 2 of the Sherman Act. Microsoft's behavior not just a case of a business practice or two that strays over the line. district court found that engaged in a wide-ranging effort to protect its operating system monopoly, utilizing a full array of exclusionary practices, including exclusive contracts, tying, market-division proposals, and other forms of predatory conduct. aimed its artillery at any product or firm that presented even a remote threat to its monopoly power. Given the court's Findings, it a virtual certainty that will be subject to remedial action of some form. range of anticompetitive behavior documented by the court, the importance of to the computer industry, and the importance of the computer industry to the economy all argue for a serious remedy that will be effective in promoting competition. remedy should not only address the illegitimate practices employed to maintain its operating system monopoly. It should also try to create conditions where not able to leverage its monopoly beyond the desktop into new phases of computing. Whether the chosen remedy effective in promoting competition in the software industry will have much to say about whether antitrust viewed as having a constructive role to play in the digital economy. parties and the court have an extensive array of potential remedial options at their disposal. These options can be grouped into two general categories - conduct remedies and structural remedies, with intellectual property remedies straddling both these categories. Conduct remedies would leave intact and attempt to constrain its anticompetitive behavior by imposing what would likely be a very detailed set of behavioral requirements - essentially, a regulatory regime tailor-made for one firm. Microsoft's structure - and, importantly, its incentives - would remain the same. Given those incentives, the challenge for the decree court would be to develop rules that deter Microsoft's anticompetitive behavior and, at the same time, permit to be an innovative, aggressive, value-creating competitor in the software industry. Structural relief takes a different approach, and there are several different ways this could be done in the case. In contrast to behavioral rules, a structural solution can change the incentive structure facing the firm, and thereby be much more effective in promoting competition, which, as Richard Posner as written, is the proper purpose of the antitrust laws. There no perfect solution, and choosing among the available alternatives requires a careful weighing of their benefits and costs. Structural remedies will generally be more disruptive and impose greater initial costs than behavioral relief. However, the ongoing costs of regulatory oversight associated with detailed behavioral relief can be very large. Subjecting Microsoft's business, and even its technical decisions, to ongoing regulatory scrutiny by the court and the Department of Justice would be harmful for and for consumers as well. Other papers related to the Case: The Flawed Fragmentation Critique of Structural Remedies in the Case by Robert J. Levinson, R. Craig Romaine, and Steven C. Salop. A Fool's Paradise: World After a Forced Breakup of by Stan J. Liebowitz Windows: Estimating Some Costs of Breaking up Windows by Stan J. Liebowitz Our database includes more than 20 other papers about the case. To find them, please use an abstract body search,. and enter Microsoft as the search term.

Concorrência schumpeteriana e suas implicações políticas: o caso latino-americano

ABSTRACT Using the Schumpeterian notion of Creative Destruction, this paper discusses the role of antitrust in the process of economic reform and illustrates with the Latin American case. According to that notion, competition is a process wherein firms strive to survive under an evolving set of rules that engenders winners and losers. The main instrument that allows firms to be ahead of their competitors is the introduction of informational asymmetries that may result either from technological innovation, rent seeking or organized crime. To the public authorities this process implies two challenges. The former is to identify the situations that require intervention and the latter is to ensure that innovation will be the only available instrument for creating in- formational asymmetries.

Antitrust Enforcement and Nonenforcement as a Barrier to Imports – with Illustrations from the Japanese Film Dispute

The role of antitrust in opening foreign markets to imports is a strong yet often unpredictable undercurrent in international trade disputes. The U.S. government may seek to protect its exporters who are denied access to a foreign market either by enforcing U.S. antitrust laws or by using trade law remedies against the importing country for not enforcing its antitrust laws. Both actions raise issues of extraterritorial jurisdiction and comity.

The Role of Antitrust in Telecommunications

The Role of Antitrust in Telecommunications

The role of antitrust in a small open economy: The Commerce Act in New Zealand

This paper reviews the New Zealand antitrust regime represented by the Commerce Act 1986. The context is a rapidly liberalising, small open economy with light-handed regulation. New Zealand antitrust draws on recent US microeconomics for its underlying economic principles, but more on the Australian Trade Practices Act for its legal framework. The influences of these and other countries on the operation of New Zealand antitrust are traced through precedent and an analysis of major cases. Increasingly interpretations have differed from those in Australia, with more weight being put on the promotion of efficiency and less on traditional competition objectives.

The Bigness Complex: Industry, Labor, and Government in the American Economy

Contents List of Tables and Charts Preface Part I The Problem of Power 1. Power and Public Policy 2. Economists and Power Part II The Apologetics of Power 3. Operating Efficiency 4. Innovation Efficiency 5. Social Efficiency Part III The Political Economy of Power: A Historical Perspective 6. The Revolution of 1776: American Government 7. The Revolution of 1776: British Economic Policy Part IV Competition and the Control of Power 8. The Role of Antitrust 9. Cartels 10. Monopoly 11. The Merger Problem 12. Horizontal Mergers and Joint Ventures 13. Vertical Mergers 14. Conglomerate Mergers 15. The Limitations of Antitrust Part V Government Intervention and Private Power 16. The Regulation of Power 17. Airline Regulation 18. The Limits of Deregulation 19. The Protection of Power 20. The Bailout of Power Part VI The Coalescence of Power 21. The Labor-Industrial Complex 22. The Sports-Industrial Complex Part VII Public Policy Alternatives 23. The Neo-Darwinist Vision 24. The Neo-Liberal Vision 25. A Public Philosophy Notes Index Library of Congress Subject Headings for this publication: Big business United States, Industrial concentration United States, Industries Size United States, Industrial efficiency United States, Competition United States, Trade regulation United States

The Essential Role of Antitrust in a Competitive Market for Health Services

reform of the health care industry have never been better. Members of the new administration appear to be comfortable with relying on competitive forces to police markets, and they eschew command-and-control regulation whenever possible. Moreover, the new Republican majority in the United States Senate may significantly enhance the ability of procompetition health reformers, like Senators Robert Dole and David Durenberger, to develop and enact the necessary legislation. Whether this general orientation toward economic regulation will be applied to the health care industry remains to be seen, but it is probably safe to assume that the White House and the Ninety-Seventh Congress will be more receptive to competition proposals, particularly those that modify current methods of financing health care, than were their predecessors. The purpose of this paper is to explain why antitrust is an essential element in any serious attempt to make this market more competitive.

The Evolution of Property Rights: A Study of the American West

The Evolution of Property Rights: A Study of the American West

The Role of Antitrust during Phase II

The Role of Antitrust during Phase II