Herbert Hovenkamp ‘Platforms and the Rule of Reason: The American Express Case’ (2019) Columbia Business Law Review, 1 34

In Ohio v. American Express Co. (“Amex”), the Supreme Court had its first explicit opportunity to apply the rule of reason to an allegedly anticompetitive practice on a two-sided platform– i.e. a business that depends on relationships between two different, noncompeting groups of transaction partners (e.g. newspapers, as regards readers and advertisers). This article, available here, considers how the rule of reason should be applied to an exclusionary practice on a platform market. It considers the rule of reason’s basic burden-shifting framework, unique elements of market delineation on platform markets, and the relevance of placing production complements into the same “market.” It criticises the Supreme Court’s unjustified conclusion that a market definition is necessary in an antitrust challenge to a vertical practice; its odd treatment of free rider problems; its lack of attention to the record and to economic analysis; and its confusion of total with marginal harms and benefits. Finally, it looks at the implications of the Court’s decision for market…

Pinar Akman on ‘Online Platforms, Agency and Competition Law: Mind the Gap’ (2019) 43 Fordham International Law Journal 209

The platform business model, inasmuch as it facilitates contracts between suppliers and customers, displays the qualities of an agency relationship more than any other commercial arrangement – and many platforms do indeed claim that they are mere agents. Since EU competition law does not apply to agreements between principals and agents – even where such agreements restrict competition – the implication would be that anticompetitive agreements between a platform and suppliers would fall outside the scope of, and could not be scrutinised by EU competition law. The same principle would apply to other competition system that adopts such an approach to agency (e.g. the US and many others). As a result, there is potentially a “platform gap” in the application of competition law in digital markets. This article, available here, argues that platforms’ relationships with their suppliers can be categorised as a principal-agent arrangement falling outside the scope of competition law. Since this “immunity” from competition law can have significant implications for…

Or Brook ‘Struggling with Article 101(3) TFEU: Diverging Approaches of the Commission, EU Courts and Five Competition Authorities’ (2019) Common Market Law Review 56: 121

Since May 2004, the European Commission and national competition authorities (NCAs) have applied the EU competition provisions in parallel. Nowadays, almost 90% of antitrust investigations are carried out by NCAs. This decentralised enforcement regime builds on the assumption that the obligation to apply the same competition provisions is sufficient to ensure the uniform administration of the law. This paper, available here, argues that this assumption does not hold, as least as regards efficiency justification/defences. Since the application of the EU competition provisions involves a wide margin of discretion, national, economic and political traditions risk leading to the fragmented application of competition law. The paper presents empirical evidence that the Commission, EU courts and five national competition authorities have followed very different interpretations of Article 101(3) TFEU, which regulates efficiency justification/defences in Europe. The paper is structured as follows: Section 2 outlines the study’s empirical methodology. The paper uses a database comprising: (i) all European Commission and court decisions until 2017;…

Giuseppe Colangelo and Mariateresa Maggiolino ‘Applying Two-Sided Markets Theory: the MasterCard and American Express Decisions’ (2018) Journal of Competition Law & Economics 14(1) 115

The first judgments to apply the economic theory of multisided markets to the payment card industry have been recently adopted in the UK and in the US. This paper, available here, uses these cases to try to show that antitrust authorities should take into consideration the two-sided nature of the credit-card industry, and to explain how this can be done. Taking the multisided nature of payment systems into account is necessary to arrive at a realistic description of these markets, and to develop solid theories of harm and procompetitive justifications that can explain some business practices involving credit cards. It is structured as follows: Section II briefly describes the main economic features of multisided business models. Different authors have defined multisided markets differently, as they looked at different markets and business models. Nonetheless, the following generic traits tend to characterise all such markets: the presence of indirect network externalities that cannot be internalised through a bilateral exchange (usage and membership…

Angela Huyue Zhang ‘Strategic Comity’ (2019) Yale Journal of International Law 44(2)

The extent to which US courts should enforce antitrust laws against state-led export cartels has been the subject of intense debate among academics, courts and policymakers for decades. While defendants often invoke the state compulsion defence, which is based on comity and respect for foreign sovereigns, these doctrines have long been criticised for their ambiguity and inconsistent application. The recent Supreme Court decision regarding the Chinese state-led Vitamin C cartel – reviewed here – highlights a number of challenges with the way these doctrines have been applied in the US. The author’s argument in this paper, available here, is that the application of both comity and foreign state compulsion defences are susceptible to political considerations, and that the Supreme Court decision is a good example of this. The author argues that the Supreme Court proactively solicited the opinion of the executive branch before hearing its case, and its final ruling is exactly in line with the opinions and suggestions proposed…

Pieter J. F. Huizing ‘Comparing territorial limits to EU and US public enforcement of the LCD cartel’ (2018) Journal of Antitrust Enforcement 6 231

This article, available here, describes the US and EU positions on the territorial scope of public cartel enforcement – i.e. how far outside their territories can competition authorities reach to punish cartel conduct committed abroad by foreign undertakings – by reference to the LCD cartel. Cartelised LCD panels were manufactured by a number of Asian producers with varying levels of direct and indirect imports into the EU and the USA. Both the European Commission (Commission) and the U.S. Department of Justice (DOJ) had to determine the territorial limits to their enforcement in respect of this international cartel, and to then defend their approach in court. In both jurisdictions, it is accepted that competition authorities benefit from long territorial reach and wide discretion in determining the amount of fines. It is submitted that the legal precedents created by decisions regarding this cartel are a cause for concern in view of the increasingly crowded global cartel enforcement arena. This argument is developed…

Omar Shah, Christina Renner and Leonidas Theodosiou ‘Intel, iiyama, Power Cables: A Revolution in the Treatment of Territoriality and Jurisdiction in EU Competition Law?’ (2019) Journal of European Competition Law & Practice

Important recent decisions by the EU and national courts – in Intel, iiyama and Power Cables – have set the stage for a potential increase in public enforcement and private litigation of business conduct which has effects on competition in the EU internal market despite not being implemented there. This paper, available here, addresses the potential changes to EU and national law wrought by these decisions, and considers the extent to which limiting principles may emerge to address potential conflicts of law, multiplicity of proceedings and double jeopardy. It is structured as follows: Section 2 describes the evolution of EU law on the jurisdictional reach of its competition provisions. The EU Courts have had to delimit the jurisdictional scope of EU law, typically in the context of judicial review of decisions of the European Commission (‘Commission’) in which the Commission had exercised enforcement jurisdiction over conduct whose territorial links to the EU were susceptible to challenge. Early on, the Court…

Javier Garcia-Verdugo, Carlos Merino Troncoso and Lorena Gomez Cruz ‘An Economic Assessment of Antitrust Fines in Spain’ (2018) World Competition Law and Economics Review 41(3) 335

This article, available here, tries to quantify the deterrent power of fines imposed by the Spanish competition authority from 2011 to 2015. Despite being authored by senior staff at the Spanish competition authority, the paper concludes that most of the fines imposed by the Spanish competition authority during this period were under deterrent. The argument is structured as follows: Section II sets out how to quantify cartel gains. A deterrent optimal fine can be defined as a fine that deters a company from participating in a cartel. Such an outcome is achieved when there is no expected net gain from participating in the cartel in the first place, i.e. when the expected illicit gain of entering into a cartel is lower than the expected loss from being sanctioned for cartel participation. Therefore, the reference value for an optimal fine should be determined by reference to an estimate of the illicit gain (also known as excess profit) flowing from cartel membership. This illicit…

Dagmar Schiek and Andrea Gideon on ‘Outsmarting the gig-economy through collective bargaining – EU competition law as a barrier?’ (2018) International Review of Law, Computers & Technology 32(2-3) 275

While the use of information technology can enhance personal self-determination, its use in the context of the gig-economy also creates the risk of entrenching casual, precarious and exploitative working conditions. A crucial question that arises is how far gig-workers are able to shape their work conditions. Within the sphere of employment law, the right of workers to organise collectively provides the opportunity to achieve just that. This paper, available here, aims to analyse the barriers posed by EU competition law to collective labour rights of gig-workers. It argues that EU competition law, as currently interpreted by the Court of Justice, would hinder collective organisation of those serving the gig-economy. It also advances an interpretation of the competition provisions which would allow EU competition law to adapt to recent developments in labour markets. It is structured as follows: A first section sketches the basic features of the gig-economy. The gig-economy is mainly characterised by the extensive use of IT for the distribution, allocation,…

Douglas Ginsburg and Cecilia (Yixi) Cheng  ‘The Decline in U.S. Criminal Antitrust Cases’ George Mason University Law & Economics Research Paper Series 19-31 (Forthcoming in Liber Amicorum Albert A. Foer (2020) Nicolas Charbit et al. (eds)

Criminal cartel prosecutions are at modern lows in the U.S. The authors of this paper, available here, offer three non-exclusive hypotheses for this decline: (1) increasingly large fines in multiple jurisdictions have lessened the incentive to apply for leniency in any one jurisdiction; (2) technology has caused the substitution of lawful tacit for unlawful express collusion; and (3) competition policy has succeeded in deterring cartel formation – at least among U.S. companies. Copyright: FT While the available data is too limited to reach a definite conclusion, it seems to support the third hypothesis: since 2008, investigations have focused predominantly on foreign companies, while both the number and share of investigated U.S. companies have decreased. This is consistent with the hypothesis that U.S. competition policy has been effective in deterring anti-competitive conduct by US companies. Section II describes the recent downward trend in cartel prosecutions. The number of criminal cases filed annually by the DoJ decreased from 90 in 2011 to 18 in…