Eleanor Fox “China, Export Cartels and Vitamin C: America Second?”

This paper, which can be found here, seems to argue that framing the issue in this case – which was described in the post below – as a matter of international comity misunderstands the matters at stake. The question is first, one of jurisdiction under the effects’ doctrine over a cartel implemented abroad, and, following this, about whether the US rules on the foreign sovereign compulsion defence apply. The correct interpretation of Chinese law may be relevant, but only in certain circumstances and only in the course of the normal application of US rules. She begins by pointing out that this is a case of a naked cartel, and that China’s sole role in it is to intervene before US courts in order to free its manufacturers from the consequences of violating the clear and well-known rule of US law forbidding price fixing. As such, the matter is not merely whether China alone can say what Chinese law is, which is…

Danny Crane “The Chinese Vitamins Case: Who Decides Chinese Law?’

This paper – which can be read here – begins by summarising the background to the case. In short, since the 1970s, when China began its transition to a market economy, the Chinese government has maintained export controls in the Vitamin C market in order to maintain a competitive edge over producers from other countries. In part due to the regulatory activities of the Chinese government, Chinese companies control about 60% of the worldwide Vitamin C market. A class of vitamins’ purchasers alleged that the defendant Chinese vitamins companies conspired to fix the price of vitamin C sold to U.S. companies, in violation of Section 1 of the Sherman Act. Rather than contest the facts, the defendants enlisted the aid of the Ministry of Commerce of the People’s Republic of China (“MOFCOM”) which submitted an amicus curiae brief in the district court asserting that defendants’ output reduction agreements were directed by MOFCOM itself and were mandatory. Two main questions arose…

Marek Martyniszyn ‘Foreign State’s Entanglement in Anticompetitive Conduct’ (2017) 40 World Competition, Issue 2, pp. 299–321

This paper – which can be found here – argues that legal scholarship on the extraterritoriality of competition law examines this phenomenon predominantly through two lenses. The first strand of research focuses on defences and doctrines that remove a situation from competition law control due to State involvement (such as foreign State compulsion or the act of state doctrine). The second strand analyses the applicability of domestic competition laws to anticompetitive conduct by state-owned firms. The article seeks to bring these two strands together and to develop a typology of State’s entanglement in conduct causing competitive harm abroad. He holds that competitive harm arising from commercial practices should be subject to competition law regardless of the character of the party involved (i.e. be it a firm or a foreign State), unless there are overriding reasons justifying abstention such as national security or the strategic interests of the State that is exercising jurisdiction over an anticompetitive practice. The paper is structured…

David Gerber ‘Competitive Harm in Global Supply Chains’  (2018) Journal of Antitrust Enforcement 6(1) 5-24

This paper – which can be found here – focuses on the difficulties that transnational supply chains pose for competition law enforcement. ‘Transnational supply chain’ is a concept used to describe the process through which multiple firms located in multiple jurisdictions provide components for and/or assemble and manufacture end-use products. As a result of this process, anticompetitive conduct in one jurisdiction may have anticompetitive effects in other jurisdictions. However, few legal tools are available for deterring such harms. The article reviews current responses to the problem, and identifies the potential value of transnational coordination as a response. The article is structured as follows: A first section outlines the challenge posed by global supply chains. It describes their development with the deepening of globalisation, and the form that supply chains usually take. Global supply chains have major consequences for many countries, so we might expect them to have generated legal developments on the transnational level. Yet, little attention has been paid…

José Azar, Ioana Marinescu and Marshall Steinbaum ‘Labour Market Concentration’ NBER Working Paper No. 24147

The paper – which can be found here – seeks to quantify the level of labour market concentration across a wide range of occupations and for almost every commuting zone in the US. In a nutshell, it finds that labour market concentration is high, and that higher concentration is associated with significantly lower posted wages. Given current high concentration levels in labour markets, mergers have the potential to significantly increase labour market power. The authors argue that this type of analysis could be used by antitrust agencies to assess whether mergers can create anti-competitive effects in labour markets. With this, they seek to challenge how little attention antitrust regulators have devoted to labour markets, despite the labour economics literature finding that firms can have substantial market power in these markets. The paper is structured as follows: Section 2 describes the data and how the paper will go about measuring labour market concentration. They use proprietary data from CareerBuilder.com, the largest…

Ioana Marinescu and Herbert Hovenkamp ‘Anticompetitive Mergers in Labour Markets’ (forthcoming) Indiana Law Journal (2018)

The paper – which can be found here – looks at mergers that facilitate anticompetitive wage and salary suppression from an antitrust perspective. It also looks at other potentially anticompetitive practice in labour markets, so the paper’s title is misleading. The paper’s fundamental argument is that that antitrust law is under-enforced as regards mergers affecting employment markets, and that this is important for several reasons. First, the share of the gross domestic product (GDP) going to labour has been declining at an alarming rate, and this seems to be correlated with an increase in market concentration. Second, US antitrust law does not condemn unilateral price setting by dominant firms – including the setting of wages. A second best solution to the problem of suppressed wages can therefore be found in merger law, which can interdict wage-suppressing mergers before they occur. Third, antitrust law is properly directed at all output reducing practices, and there is certainly no principled reason for excluding…

Suresh Naidu, Eric A. Posner, and E. Glen Weyl ‘Antitrust Remedies for Labor Market Power’ Harvard Law Review (forthcoming)

The paper – which can be found here –  criticises the historic imbalance between product and labour market antitrust enforcement, which has no basis in economic theory: from an economic standpoint, the dangers to public welfare posed by product and labour market power are exactly the same. It is argued that antitrust agencies should take more seriously the danger that mergers may lead to labour market power as well as product market power. The paper is organised as follows: The introduction tries to explain why antitrust has traditionally ignored labour markets. Four explanations are advanced: (i) while economic theory treats product and labour markets similarly, legal theory has placed more emphasis on product markets as a result of a focus on consumer welfare; (ii) it was assumed that labour markets are reasonably competitive, and that labour market power was not an important social problem; (iii) the traditional legal approach to protecting workers, which took place “outside” antitrust law, may have…

Richard N. Langlois ‘Hunting the Big Five: Twenty-first Century Antitrust in Historical Perspective’

In this paper – available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3124356 – the author considers that proponents of the New Brandeis movement in antitrust are animated by a perception that antitrust is not fit for purpose in the digital age. He considers that this movement is arguing for a return to an earlier age of greater interventionism and greater focus on market structures – which is why he calls this movement ‘new structuralism’. Given this focus, proponents of this movement also advocate for a complete overthrow of the Chicago school paradigm, with its anti-interventionist bias. The author’s argument is that the New Brandeis School gets its History wrong, misconceives the nature of the competitive process, and deliberately refuses to confront the political economy of antitrust. He builds his argument as a rebuttal of Lisa Kahn’s article on Amazon (which I circulated and discussed on 3 March 2017). In the interest of clarity, I will ignore that part of the argument when reviewing the paper,…

Herbert Hovenkamp “Whatever Did Happen to the Antitrust Movement?”

This paper argues that recent claims to the effect that antitrust should be used to combat a variety of social ills – such as industrial concentration, the economic or political power of large firms, the maldistribution of wealth, high profits, low wages, or the absence of policies protecting small business – are not new. Such claims have appeared and reappeared periodically in the history of antitrust, and amount to a rhetorical use of antitrust for promoting various societal goals which must be distinguished from the technical enterprise of antitrust. There is between these two dimensions of antitrust an unsurmountable contradiction, as the main goal of the antitrust enterprise (lower prices, larger output, etc.) will often be at odds with the rhetorical uses of antitrust (e.g. protecting small businesses). The paper is structured as follows: A first section looks at the virtues and defects of technical antitrust. “Technical antitrust” refers to: “a set of antitrust rules that begin with a picture…