Eckart Bueren and Florian Smuda ‘Suppliers to a sellers’ cartel and the boundaries of the right to damages in U.S. versus EU competition law’ (2018) European Journal of Law and Economics (2018) 45(3) 397

This article – which can be found here – looks at the loss that suppliers to a downstream sellers’ cartel can suffer as a result of that cartel, and asks whether they are / should be entitled to claim damages for this loss. The paper is structured as follows: It first identifies three economic effects that determine whether suppliers will suffer losses due to a cartel in which their customers participated: quantity, price and cost effects. The quantity effect is a consequence of cartelised prices, which reduce sales and, hence, the amount of supplies needed to produce the cartelised good or service. The price effect is equivalent to the lower price of input products that will result from the reduced demand by cartelists caused by the quantity effect, multiplied by the number of input units sold. And the cost effects reflect the difference in costs of producing a lower number of supply units (e.g. as a result of loss of…

Competition Appeal Tribunal – Written evidence (CMP0042) to the House of Lords in the context of the House of Lord’s inquiry concerning Brexit and competition law and policy

I am linking to this document here  because it addresses the appropriate jurisdictional scope of UK competition law, and how one of the unintended (unconsidered?) effects of Brexit is to increase the exposure of UK markets to foreign conduct with cross-border effects. This is a consequence of the different jurisdictional tests that the UK and the EU apply as regards competition law. As noted in the submission, the UK prohibition against anticompetitive collusive practices: “applies only if the agreement, decision or practice is, or is intended to be, implemented in the United Kingdom (…)There is no corresponding provision in the TFEU as regards Article 101. Moreover, [EU law adopts] a “qualified effects test” as a basis of jurisdiction to apply EU antitrust law: i.e. when it is foreseeable that the multilateral or unilateral conduct in question will have an immediate and substantial effect in the EU.  As the Court explained, this has the objective of preventing conduct which, while not…

Filomena Garcia, Jose Manuel Paz y Mino, Gustavo Torrens ‘Of Course Collusion Should be Prosecuted. But Maybe… (Or the case for international antitrust agreements)’ (2017) CPI

This paper – which can be found here – was written by a number of economists at University of Indiana, and it looks at the incentives of competition authorities to pursue international cartels. A benevolent competition authority with a mandate to maximize national welfare might prefer to delay the prosecution of domestic firms when those firms will benefit from anticompetitive conduct at the expense of foreign consumers. To demonstrate this, the paper develops a simple two-country model of collusion and antitrust policy where there is an industry comprised of two multinational firms that operate in countries with competition agencies. In a first variant of this model, the competition agency of the country where the effects of an anticompetitive practice are felt (country B) will discover this practice only if the agency of the country where the companies are based (country A) starts an investigation. The authors show that country B always prosecutes the colluding firms as soon as there is…

Pierre Huizing ‘Fining Foreign Effects: A New Frontier of Extraterritorial Cartel Enforcement in Europe?’ (2017) World Competition 40(3) 365

This paper – which can be found here – asks whether national competition agencies in Europe (NCAs) have the power to sanction anticompetitive activity taking place outside their territory. The question went unaddressed in Regulation 1/2003, which set up the system of decentralized competition enforcement currently in place in the EU. According to this paper, the members of the European Competition Network (ECN) used to proceed on the basis of a common understanding that each authority would only pursue cross-border cartels for their domestic effects – with the Commission pursuing EU-wide cartels. However, in recent cases some NCAs have departed from this practice and imposed fines that took into account the EU-wide effects of cartels. This article reviews the NCA’s practice as regards the sanctioning of extra-territorial cartel activity, and the academic and political debate about whether this practice is legitimate and appropriate. It does so as follows: Section 2 reviews the enforcement practices of a number of NCAs. It…

Doug Ginsburg and Joshua Hazan ‘Extraterritoriality and Intra-territoriality in US Antitrust Law’ Concurrences No. 3 – 2016, pp. 32

This short paper – which can be found here – looks at case law on the US Foreign Trade Antitrust Improvements Act (FTAIA), which regulates the extra-territorial effects of US antitrust law. A first section provides an overview of how US law has dealt with the issue of extraterritoriality of its antitrust law over time. It notes that: ‘The antitrust laws protect U.S. consumers from foreign and domestic conduct alike; since Judge Hand’s landmark opinion in Alcoa, the U.S. antitrust laws have applied extraterritorially when foreign conduct has a domestic effect. ’ However, effects-based jurisdictional tests are quite broad, and can catch in their net many foreign conducts with limited impact on the US. As a result: ‘In the 1970s, the exercise of jurisdiction by U.S. courts over foreign defendants in antitrust cases caused a good deal of international tension; some of the nation’s major trading partners, including Canada, France, and the United Kingdom, passed “blocking” and “clawback” statutes to…

Florian Wagner Von Papp ‘Competition Law in EU Free Trade and Cooperation Agreements (and What the UK Can Expect After Brexit)’ European Yearbook of International Economic Law, Forthcoming

This paper – which can be found here – focuses on the interplay between trade and competition from a competition perspective. Its basic argument is that the more integrated a trade area is, the more similar competition rules are likely to be, and the easier it will be for international cooperation to occur.  The focus of the paper is on demonstrating how this occurs in practice, by looking at “the concentric circles of cooperation around the EU by examining the intergovernmental and inter-agency agreements concluded by the EU to face the complexities of the transnational economy of the 21st century.” Section 2 contains a short overview of the relationship between free trade and competition law. Free trade interacts with competition law on many levels, and their relationship is mainly symbiotic and self-reinforcing. However, competition and trade law conflict at points. Free trade should increase competition, since market entry by foreign competitors undermines domestic market power. Competition law is then useful…

Lee Hyo-young ‘Applying Competition Policy to Optimise International Trade Rules’ Korea Institute for International Economic Law 17-01

This paper – which can be found here – focuses on the relationship between trade and competition, and particularly on how the (apparently deceased, now revived) Trans-Pacific Partnership (TPP) imposes new rules on State-Owned Enterprises. It is structured as follows: Part II reviews how competition policy has historically figured in trade agreements. It contains an overview of the relationship between competition and international trade rules – in the Havana Charter, GATT and the WTO. This section also discusses how both competition and international trade law share the objective of enhancing economic efficiency and consumer welfare through trade liberalization and open markets. As a result, competition law is important for successful trade liberalisation, and to prevent anticompetitive and collusive conduct between businesses and governments that, from an international trade law perspective, amount to a form of non-tariff barrier that hinders access to markets by foreign competitors. After reviewing the main international trade law treaties, the author concludes that current rules fail…

Ariel Ezrachi and Maurice Stucke ‘The fight over antitrust’s soul’ (2017) Journal of European Competition Law & Practice 9(1) 1

The piece – which can be found here – begins by describing recent trends in academic discussions in antitrust, which I think this blog has followed in some detail over the past two years. On the one hand, we have the ‘hipster antitrust/New Brandeis’ school, with its criticism of Chicago school-based enforcement and its calls for greater intervention. On the other hand, we have the reactions to this antitrust movement which: ‘warn about enforcement chilling pro-competitive behaviour, and undermining the market’s ability to self-correct […] is unconcerned about the trend toward concentration, and reject fairness or distribution concerns as part of competition policy.’ The authors trace this debate to a number of factors. While they identify a number of them, from my perspective the debate ultimately stems from different understandings about how the economy works in practice. Some differences could ultimately be settled by reference to empirical data – for example, the debate between those who believe markets necessarily self-correct…

Niamh Dunne ‘Competition Law (and its Limits) in the Sharing Economy’ Forthcoming, Nestor Davidson, Michèle Finck and John Infranca (eds.), Cambridge Handbook on Law and Regulation of the Sharing Economy (Cambridge University Press)

As the title indicates: ‘This contribution (which can be found here) considers the potential application of competition law—specifically, the ‘antitrust’ rules governing anticompetitive unilateral or coordinated conduct—within the sharing economy.’ The sharing economy is described as a sector marked by recurrent characteristics, such as: (i) its underlying economic rationale is the under-utilisation of durable goods or other assets, which generates excess capacity that can be rented out; (ii) sharing economy businesses provide classic examples of ‘disruptive’ innovation, which originates outside a value network and displaces it; (iii) the innovations that underpin the sharing economy are rooted in the internet and mobile technologies; (iv) sharing economy businesses are often platforms in multi-sided markets; (v) sharing economy firms frequently conflict with regulatory regimes that control and limit the activities of competitors, resulting in recurrent critiques that such competition is inherently ‘unfair’. The paper is structured as follows: Section II examines how prohibitions against anticompetitive unilateral conduct may apply to the sharing economy. It begins…

Carl Shapiro ‘Antitrust in Times of Populism’

This paper – which can be found here – has been surrounded by a lot of publicity, and is a potentially important piece. It begins with an observation that goes to the heart of the debate:  ‘politicians are calling on antitrust to solve an array of problems associated with the excessive power of large corporations’. The author believes that ‘concerns about corporate power, and today’s renewed interest in antitrust, represent an opportunity to strengthen competition policy.’ At the same time, he alerts that the role of antitrust in promoting competition could well be undermined if antitrust is called upon or expected to address problems not directly relating to competition, such as the political power of corporations or income inequality. The ‘central purpose of this article is to assess the relevant economic evidence regarding competition (…) and then, based on that evidence and on antitrust learning and experience, identify ways to improve and strengthen antitrust.’ The paper is structured as follows:…