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…

Peter Davies ‘Economic Evidence and Procedural Fairness’ (2018) Journal of Competition Law & Economics 14(1) 1

Economists have a large stake in the judicial and competition systems getting the scope and nature of disclosure right, both as a matter of public policy and as a practical matter. Access to information in the form of data, documents and analyses is critical to economists engaging with the substance of competition and regulatory cases. However, the extent and nature of information available to each party to a competition investigation varies widely, and is affected by important practical and legal considerations. In particular, the extent of disclosure is influence by a multiplicity of factors, such as the relevant statute, competition agency practice and the nature of judicial oversight of competition agency decision making. This paper, available here, considers the extent of disclosure required to ensure a fair process, while taking into account the practical realities of undertaking economic and econometric analyses in competition cases. It does so as follows: Section II explains why disclosure is fundamental to the application of…

Michael Carrier ‘The Four-Step Rule of Reason’ (2019) Antitrust 33(2)

US courts employ the rule of reason to assess a restraint’s effects on competition. Commentators have recently debated the predictability and appropriate structure of the analysis. However, at the same time as these nuances have been fleshed out in the literature, courts appear to have lost sight of first principles. This paper, available here, criticises recent developments in the US. It does so as follows: Section 2 looks at the background and analytical framework of the rule of reason. Some offences (like price fixing, bid rigging, and market sharing) are considered inherently anticompetitive and deemed automatically illegal without any scrutiny of actual competitive effects. In contrast, the vast majority of agreements are considered under the rule of reason. For much of the mid-20th century, antitrust courts applied mostly per se rules, even beyond hard-core cartels. That changed in the 1970s with the introduction of economic analysis, which led to the rule of reason beginning to be applied in earnest. However,…

Pablo Ibáñez Colomo ‘Legal tests in EU competition law: taxonomy and operation’ (2019) Journal of European Competition Law & Practice

EU competition law does not apply a single legal test. However, the existence of various legal tests is not commonly acknowledged, nor has it been studied systematically. This paper, available here, seeks to bridge this gap. (c) Pablo Ibanez Colomo One of the objectives of this paper is to draw a map of the existing legal tests, and to clarify where each of the practices stands along a spectrum ranging from those deemed prohibited irrespective of their effects and those deemed lawful. According to the author, legal tests in EU competition law can be grouped into four main categories. First, some practices are prima facie unlawful irrespective of their effects. Secondly, some conducts are deemed prima facie lawful. Thirdly, some behaviour is subject to a ‘standard effects’ test, which seeks to ascertain whether it has, or is likely to have, anticompetitive effects in the economic and legal context in which it is implemented. Finally, an ‘enhanced effects’ test applies in…

Angela Huyue Zhang, Jingchen Liu and Nuno Garoupa on ‘Judging in Europe: Do Legal Traditions Matter?’ (2018) Journal of Competition Law & Economics 14(1) 144

Infringement decisions adopted by the European Commission in competition procedures are subject to review by the Court of Justice of the European Union (‘CJEU’). The CJEU is an international tribunal comprising judges from countries with varying legal traditions within Europe. This empirical paper, available here, seeks to determine whether the outcome of appeals from European Commission infringement decisions are affected by the legal origins of the judge rapporteur. In particular, the authors test whether judges coming from countries with French-inspired administrative systems are more likely to decide in favour of the Commission. They find that this is indeed the case, and that the results are robust to alternative political ideology variables, including left–right politics and a preference for European integration. The paper is structured as follows: Section 2 delves into the various legal traditions of Europe, and how they may influence the judicial review of competition appeals. There is extensive literature demonstrating that preconceptions nourished by education, work experience and…

Douglas Ginsburg and John Taladay about ‘The Enduring Vitality of Comity in a Globalized World’ (2017) George Mason Law Review 24 1069

Different competition agencies apply different legal standards, procedures and approaches to identifying and redressing perceived antitrust violations. One inescapable consequence of the global proliferation of competition regimes is a much greater risk of conflict, which can take various forms and which are particularly high when an agency applies an “effects” doctrine that allows for the imposition of remedies that necessarily have an effect beyond that jurisdiction’s own borders. This article, available here,  identifies a deficit in the international coordination mechanisms that are available, and proposes an expanded use of traditional comity to ensure that international competition law enforcement produces benefits for consumers while minimising unnecessary and inappropriate interference with the legitimate interests of foreign jurisdictions. Section I looks at how the difference in the substantive standards applied by different jurisdictions can be a source of potential international conflict. A key source of tension in international competition law enforcement emanates from differences in the substantive standards applied by different jurisdictions. The…

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…

Jonathan T. Fried ‘The place of competition and development in the global trade and economic architecture’ (2017) Concurrences 1 3

The author was the Canadian ambassador to the WTO. In this piece, available here, which is the opening speech to a conference on ‘Competition and globalization in developing economies’, he argues that trade liberalisation must be accompanied by sound economic regulation that enables trade and investment to occur. Robust and effective competition law and regulation is a key element of this enabling environment, and a potential contributor to sustainable development as well. The trade and competition communities have been supporting each other’s goals, and applying similar approaches, for some time. Building on this base, there are actions that will lead to the better integration of trade and competition perspectives, while avoiding being drawn into grand debates about new forms of global governance, as has happened in the past. In a first section, the paper provides an overview of the international trade regime. From its post-war beginnings as an “interim” agreement called the General Agreement on Tariffs and Trade (‘GATT’) through…

Julien Briguet ‘The State’s Invisible Hand: Chinese SOEs Facing EU Antitrust Law‘ (2018) World Competition Law 52(5) 839

Chinese outbound merger and acquisition (M&A) activity has surged in Europe during the last decade. Chinese companies, particularly state-owned enterprises (SOEs) were the key drivers of this surge, amounting to 70% of these investments in Europe. This paper, available here, argues that the way the European Commission looks at mergers involving Chinese state-owned enterprises (SOEs) suffers from several flaws. These arise primarily from inconsistency in how the single economic entity doctrine has been applied to these companies – sometimes a single Chinese SOE is taken to be the relevant economic unit, sometimes all SOEs active in a specific industry were said to comprise the acquiring undertaking. The author argues that a more systematic application of the single economic entity doctrine is required to restore consistency to the case law, address the realities of China’s State capitalism and protect the principle of competitive neutrality at the core of EU competition law. Section two reviews how the single economic entity doctrine applies…

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…