A. Douglas Melamed ‘Antitrust Law is Not That Complicated’ (2017) Harvard Law Review 130(2) 163

This paper – which can be found here – is a reaction to Louis Kaplow’s article “On the relevance of market power” which I discussed here. It provides a much better summary of Kaplow’s article than what I managed to write then, and also a very apt critique of that paper. As such, I think it would be useful if I were to provide you with a summary of this piece. While seemingly agreeing with the conceptual framework developed by Kaplow, the author (a professor at Stanford) shares some of my critiques (which makes me feel rather relieved, because it means I understood at least parts of Kaplow’s paper). Like me, he reads Kaplow’s paper as implicitly assuming that competition law is ultimately a broad standard directed at maximising economic welfare on each situation. This standard is applied as follows: conduct that reduces economic welfare is unlawful, and conduct that increases economic welfare is lawful. Hence, market power is not really…

Edward B. Rock and Daniel L. Rubinfeld ‘Defusing the Antitrust Threat to Institutional Investor Involvement in Corporate Governance’

This paper – available here – criticises arguments for increased antitrust intervention against institutional investors. The paper begins by identifying its target: “a line of new economics research that claims to show theoretically and empirically that concentration of shareholdings in the hands of diversified investors has substantial anti-competitive effects in concentrated markets”, and subsequent legal scholarship that interprets this economic research to mean that the practices of institutional investors infringe competition law, or should, in any event, be subject antitrust rules. The first half of the paper develops a number of methodological criticisms of existing theoretical and empirical analyses of the portfolio strategies adopted by institutional investors. These criticisms are said to put in doubt a number of conclusions regarding the extent to which common ownership makes a difference to competition in the market – and, by extension, the justifications for antitrust intervention against institutional investors. Part II then analyses the legal implications of the economic evidence, and concludes that holdings by diversified…

Cento Veljanovski ‘The law and economics of pass-on in price fixing cases’ European Competition Law Review (forthcoming)

This paper – which can be found here – deals with the the passing-on defence. Background A bit of context may be in order here. “Passing-on” is the passing of damage suffered by a victim of a cartel to other parties, usually by increasing the price of re-sale of the cartelised goods or of the products for which the cartelised good is an input. Passing on may be invoked by an indirect purchaser in order to claim harm suffered by himself as a result of overcharges on the purchases of products or services from direct customers of the cartelist or from companies which have incorporated goods affected by the infringement into their own products or services: this is passing-on as a “sword”. Alternatively, and more commonly, pass-on may be raised as a defence to claims for damages on the ground that the claimant has incorporated overcharges, or part of them, in its downstream prices of products or services, thus reducing its…

James Segan ‘When is an antitrust/competition claim caught by an arbitration clause? The Microsoft Mobile decision’

This is a link to a short blog post  which looks at the interpretation of arbitral clauses and their applicability to antitrust disputes. It provides a good overview of the law as it stands in Europe and the UK. Shortly: a typical arbitration clause will usually say that all disputes arising out of a contract should be subject to arbitration. Since “the parties likely intended any dispute (contractual or tortious) arising out of the relationship into which they have entered or purported to have entered to be decided by the same tribunal”, this could be interpreted as subjecting to arbitration any claims about over-pricing paid in the context of an agreement containing such a clause, even if the damage was caused by a cartel. However, the law is that competition law claims will be regarded as coming within an arbitration clause only if they are closely related factually to a viable contractual claim which has already been, or could be,…

Damien Geradin and Emilio Villano ‘Arbitrability of EU Competition Law-based Claims: Where Do We Stand After the CDC Hydrogen Peroxide Case?’ (2017) World Competition 40(1) 67

This paper – which you can find here – focuses  on the arbitrability of competition law in Europe. The paper is clearly concerned with the implications of the European courts’ decisions in the CDC Hydrogen Peroxide case, but also takes the opportunity to take a deeper look at the interface between arbitration and competition law. The paper begins by acknowledging that it is consensual that Articles 101 and 102 TFEU are fully arbitrable, but then moves on to assess whether other competition provisions of the Treaty on the Functioning of the European Union, i.e. Articles 106 to 108, as well as in secondary EU competition legislation (e.g. the EU Merger Control Regulation) are arbitrable as well. The article is divided into three parts: With a brief detour into the United States, section 2 discusses the progressive recognition by national and EU courts of the arbitrability of EU competition law, and discusses outstanding questions regarding the arbitrability of EU competition law….

Wouter Wils ‘Private Enforcement of EU Antitrust Law and Its Relationship with Public Enforcement: Past, Present and Future’ (2017) World Competition 40(1) 3

This paper – which can be found here – provides a short history of private enforcement of EU antitrust law and of its relationship with public enforcement. The paper is structured as follows: Chapter 2 looks at the situation before 2003, a period during which courts established that the Treaty’s competition provisions have direct effect and create rights for individuals, even as public enforcement predominated. Chapter 3 reviews the changes brought about by Regulation 1/2003, that allowed NCAs and national courts to fully implement competition law (up until then, the system required exceptions under Art. 101(3), which concerns efficiencies, to be approved by the European Commission). This Regulation contained a number of provisions that: (i) in line with Masterfoods, obliged NCAs and national courts to follow prior Commission decisions on antitrust infringements; and (ii) set up mechanisms for cooperation between the European Commission, NCAs and national courts concerning the private enforcement of antitrust rules. However, Regulation 1/2003 ultimately led to increased…

Alison Jones and William E. Kovacic ‘Identifying Anticompetitive Agreements in the United States and the European Union – Developing a Coherent Antitrust Analytical Framework’ (2017) Antitrust Bulletin 62(2) 254

This is a very substantial paper on the appropriate analytical framework for identifying anticompetitive agreements . It can be found here. The paper focuses on how the debate on rules and standards, and on the balance of Type I and Type II errors, affects the analytical framework for identifying infringing agreements in the US and EU. From their standpoint, these debates have been influential in discussions about how to identify anticompetitive unilateral practices and mergers, but have not been relevant for similar discussions regarding horizontal agreements. Also, from their point of view: “the question of how agreements are to be analysed under both the US and the EU jurisprudence is also unduly opaque; it is frequently difficult to ascertain whether agreements, including joint venture and other horizontal collaboration and distribution agreements, are compatible with the law. In particular, confusion about the role and scope of per se rules, the role and scope of ancillary restraint doctrines, and how competing anti- and…

Jonathan Galloway ‘Securing the Legitimacy of Individual Sanctions in UK Competition Law’ (2017) World Competition 40(1) 121

This article – which you can find here – looks at attempts to impose individual sanctions for breaches of competition law in the UK. These sanctions include the recently amended criminal cartel offence – which can lead in imprisonment of up to five years – and the NCA’s power to apply for a competition disqualification order. Famously, the UK’s record in the enforcement of these sanctions is mixed (see below). To explain this state of affairs, the author identifies a tension between the economic theory of deterrence – which underpins the regime – and regulatory theory on the effectiveness sanctions – which, the author claims, has been ignored. The author points out that traditional deterrence theory relies on a combination of probability of detection and severity of punishment to create a perception of sufficiently high costs to deter wrongdoing. Yet when this leads to the imposition of very high penalties in order to counter a low probability of detection and…

Bjorn Lundqvist ‘Joint Research and Development Collaborations Under Competition Law, with a Layman’s Economic Viewpoint’ (2017) Stockholm University Research Paper No. 3

This paper – which you can find here – looks into the antitrust treatment of joint research and development agreements (“joint R&D”) under both EU and US law. The paper begins by providing (yet another) overview of the literature on competition and innovation. The basic conclusion is that it is  uncertain whether competition promotes or detracts from innovation, but we all know this by now. Informed by these observations, the paper then looks at the EU and US treatment of joint R&D agreements. In the US, after a few old cases, joint R&D was subject to its own antitrust regime by the National Cooperation Research (and Production) Act in 1984 – which applies a rule of reason for innovation markets, and precludes treble damages if the agreement was notified to the competition agencies. In effect, the author argues, this created a safe harbour for R&D collaborations. These developments led to the adoption of the R&D Block Exemption at about the same time…

Patrick Actis Perinetto and Natalia Latronico ‘The Bitter Medicine: Competition Law and Parallel Trade in the Pharmaceutical Sector’ (2017) World Competition 40(10 93

This article – which you can find here – is a rather straightforward piece on restrictions on parallel trade of pharmaceutical products as a competition law infringement. It begins by analysing the most relevant features of parallel trade in the pharmaceutical sector. In Europe, a prohibition of restrictions on cross-border trade under EU competition law is coupled with the fact that the main purchaser of pharmaceuticals are the member states, which are free to adopt their own approach with respect to pricing and public reimbursement. Given the resulting price differentials between member states, parallel trade occurs as wholesalers take advantage of the arbitrage possibilities by exporting products from a low-price country to a high-price one and pocketing the margins. Having established this, the paper moves into reviewing the main strategies used by companies to counter such parallel trade. Such practices include refusal to deal/prohibition of exports, vertical integration, quota systems and dual pricing schemes. The paper identifies each strategy in turn,…