Harry First and Stephen Webber Wallace ‘Pairing Public and Private Antitrust Remedies’ in Albert A. Foer Liber Amicorum, Concurrences (Forthcoming)

Discussions on private competition remedies most often deal with questions of optimal deterrence and effectiveness. Lost in conversation is the basic idea that antitrust violations cause economic harm, and that those victimised by that harm should be entitled to damages from those who have violated the law. This is the underappreciated compensatory function of antitrust. Section 4A of the Clayton Act is a powerful, yet historically underused enforcement tool that empowers the United States to obtain treble damages for anticompetitive conduct when the government is itself the victim. The paper, which can be found here, focuses on whether the US government should not only pursue public enforcement activities, but also engage in private enforcement claims to be compensated for losses as a result of anticompetitive conduct. It examines the limited use of Section 4A, and discusses some possibilities for future cooperation between public and private plaintiffs that could advance the compensatory goal of antitrust. It is structured as follows: Section I looks…

Miriam C. Buitem ‘The Ambivalent Effect of Antitrust Damages on Deterrence’ (2019) CPI Antitrust Chronicle Ju

The possible undermining effect of damages actions on leniency programs has been hotly debated. The concern is that the prospect of damages claims may discourage colluding firms from applying for leniency, since the leniency program only shields them from public fines, not from civil damages. Civil damages may contribute to the goal of preventing cartels by increasing the expected costs of starting a cartel. However, civil damages may not enhance antitrust deterrence if colluding firms believe it to be unlikely that competition authorities will detect their cartel. For leniency programs to put cartel members in a prisoners’ dilemma, confessing must be more attractive than staying quiet. If civil damages are substantial, leniency may not sufficiently improve a colluding firms’ position as compared to their non-reporting co-conspirators, and hence their incentive to apply for leniency will decrease, together with the overall odds of cartel detection. This note, available here, discusses the ambivalent effect of antitrust damages actions on deterrence. It considers how fines…

Nicole Rosenboom and Daan in ’t Veld ‘The Interaction of Public and Private Cartel Enforcement’ (2019) World Competition 42(1) 87

Despite its broad title, this article – available here – investigates mainly the interaction between leniency programmes and civil damages claims.  Most competition authorities have adopted leniency programmes to uncover cartels. To increase the overall deterrent effect of competition law, many jurisdictions have also introduced private competition enforcement, which increases the total potential financial exposure of cartel members. The impact of private competition enforcement – and particularly the concomitant increase in the liability of potential leniency applicants – on leniency programmes has been discussed in the literature, but there is an absence of empirical studies. This article tries to fill this gap by studying the empirical impact of private competition enforcement on leniency. It uses two methods: surveys of Dutch firms and competition lawyers, and econometric conjoint analysis. The authors conclude that firms’ decisions to apply for leniency are affected by the magnitude of the personal penalty to which directors are subject and the amount of fine reduction following a successful leniency application….

OECD work on Crisis Cartels (2009)

The OECD background paper on this topic was written by Professor Simon J. Evenett in 2011, and can be found here. The purpose of this paper is to consider whether changes in policies towards cartel formation are merited during economic crises and associated recoveries. The paper is structured as follows: Sections two defines crisis cartels. The term crisis cartel is used to refer to a cartel that was formed during a severe sectoral, national, or global economic downturn. Such cartels can occur without state permission or legal sanction, which may trigger enforcement; or they may be permitted, even fostered, by a government, which may trigger advocacy. The impact of a crisis on the incentive of firms to cartelise will depend on the nature of the crisis, be it sectoral, national, or international. In thinking through the impact of each type of crisis on the behaviour of cartel members, one must identify the ways in which the crisis affects the business…

Peter Georg Picht and Gaspare Tazio Loderer on ‘Framing Algorithms: Competition Law and (Other) Regulatory Tools’ (2019) World Competition 42(3) 391

Algorithmic market conduct, and intervene where algorithms risk distorting competition. In effect, the collusive potential of algorithms and algorithm-driven resale pricing have already been the subject of enforcement. However, it is still not clear whether competition law has, in its present form, the necessary tools and techniques adequately to control algorithms. This article, available here, looks at what other areas of the law, which are more advanced in this respect, can teach competition law. Its second section looks at how financial markets regulation and data protection law deal with algorithm-based market activity. Financial markets were among the first to deploy algorithms broadly and intensely. As a result, financial market regulation developed a comparatively detailed set of rules on algorithmic trading early on. European data protection law is another area that already has in place certain elements of a legal framework for algorithmic (market) activity. This includes the General Data Protection Regulation (GDPR) and the ePrivacy Regulation. These two regulatory regimes share…

David S. Evans  ‘Basic principles for the design of antitrust analysis for multisided platforms’ (2019) Journal of Antitrust Enforcement 7 319

Competition agencies and courts have increasingly had to deal with multiplatform businesses – and have started to incorporate economic insights on their operation into their decisions. Nonetheless, many questions concerning the design of antitrust analysis involving platform businesses remain unsettled. This article, available here, develops three basic principles for conducting the antitrust analysis of multisided platforms in light of economic learning, as follows: Section II explains how multisided platforms increase welfare by reducing transactions costs and resolving externalities among economic agents. Platforms lower transaction costs by bringing potential traders to a common place for interacting, thereby solving a collective action problem. The economics literature often relies on simple indirect network effects to explain how two-sided platforms create value. Positive indirect network externalities arise because the presence of additional numbers of the right counterparties increases the likelihood of good exchanges. In practice, however, the externality issues addressed by platforms are broader and subtler. Platforms also often deal with negative network externalities…

Francesco Ducci ‘Procedural implications of market definition in platform cases’ (2019) Journal of Antitrust Enforcement 7 419

One of the most important questions raised by the economics of platforms, particularly for the adjudication of competition law disputes, is how to structure a legal framework that incorporates multi-sidedness while remaining consistent with the general principles guiding a rule of reason/effects-based analysis. Such framework becomes more complex in platform cases because the presence of multiple sides with interrelated demand coordinated by an intermediary platform raises additional questions that need to be confronted. This include: (i) How many markets should be defined, a single platform market or separate markets on each side? (ii) Should one aggregate the welfare effects on different users on the various sides of a platform, or should effects on each market side be treated in isolation? (iii) How should the burden of proof of anticompetitive and pro-competitive effects be allocated? Depending on whether the relevant market includes the platform as a whole or just one side, the boundary of the relevant market has fundamental consequences for…

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;…