Massimo Motta and Chiara Fumagalli ‘On the use of price-cost tests in loyalty discounts and exclusive dealing arrangements: Which implications from economic theory should be drawn?;

You can find this paper in (2017) Antitrust Law Journal, 81(2): 537–85. The paper looks at  loyalty rebates and the use of price cost tests. It begins by describing recent European and American case law on the matter, and highlights differences in the judicial approaches on both sides of the Atlantic (i.e. the classic distinction between European formalism and American effects-based tests). The authors then distinguish between economic tests of predation and exclusionary rebates, while noting that both include common economic mechanisms that can involve sacrificing profits.In the last and most important section, they argue that rebates and contracts containing conditions regarding how much buyers purchase from rival suppliers can raise serious anti-competitive concerns. From this point of view, a stricter treatment of exclusive contracts and some loyalty discounts might be justified – which may imply that evidence of above-cost prices may work as a safe harbour for predation, but not for exclusive dealing and loyalty rebates. Overall, I think…

Maurice E. Stucke ‘Reconsidering Antitrust’s Goals’

This is a more recent paper to the ABA one identified in the post below, which has the advantage of also being an analytical / critical piece. To be clear, I do not necessarily support or condone the criticisms set out in the paper – but I do like how his analysis makes one think about what antitrust should be about. The article can be found at http://lawdigitalcommons.bc.edu/bclr/vol53/iss2/4/. While mainly focused on the US, the paper is interesting for its (critical) description of how our current understanding of antitrust as being mainly devoted to promoting consumer welfare and efficiency came about (interesting tidbit: before 1975, the US Supreme Court had never mentioned “consumer welfare” in an antitrust case); and of how this “official” understanding conflicts with the proliferation of antitrust goals to be found in laws across the world (which leads to a useful review of such antitrust goals, mainly relying on ICN work). The critical part is also interesting for…

American Bar Association ‘Report on Antitrust Policy Objectives’

This is a fairly old paper  – available at https://www.americanbar.org/content/dam/aba/administrative/antitrust_law/report_policyobjectives.authcheckdam.pdf – that describes how, although most jurisdictions maintain that their competition laws “preserve competition”, the preservation of competition can mean different things in different places. It also discussing how these different meanings of competition can reflect the fact that antitrust laws can protect many different objectives. To my knowledge, this is one of the best description of the various goals of antitrust – it is comprehensive, to the point, and easy to read (for those interested, there is also a survey from the ICN on this). Even though jurisdictions adopt competition rules for differing reasons, each tends to describe its competition law initiatives in the same manner, as rules that aim “preserve competition.” However,  “preserving competition” is defined in different ways. Among the objectives that this paper identifies as informing the application of competition rules in different countries are: consumer welfare, total welfare, economic efficiency, protection and promotion of business rivalry,…

Maurice E Stucke ‘Reconsidering Competition’

This is a relatively old paper from 2011 by Maurice Stucke on a topic as straightforward as: “what is competition”. The paper has a fairly straightforward structure. In the first section, he reviews the concept of “competition”. It concludes that while there are multiple conceptions of competition, none prevails without qualification over the others. For example, some consider competition as an idealized end-state (such as static price competition under the economic model of perfect competition), while others view competition as a dynamic process. There is no easy way to arbitrate between these views. In the second section, he explores the reasons for this diversity of conceptions of competition, and concludes that they arise from differing  underlying assumptions regarding competitive processes. He tests this by relaxing the assumption of rationality of market participants and looking at its implications in section III. For my purposes here, the most interesting section is the first one, which  provides an overview of the various meanings…

Herbert Hovenkamp ‘The Rule of Reason’

This paper by Hovenkamp – available at https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?referer=https://www.google.fr/&httpsredir=1&article=2780&context=faculty_scholarship – on the US rule of reason. It describes the historical background for the development of the rule of reason and its procedural requirements in US litigation.  It is short, very thorough, very opinionated, and should interesting to anyone interested on the basic underpinnings of competition law analysis (even if one is not a US antitrust lawyer). The paper covers a lot of ground, including: the trade-off between consumer and general welfare as antitrust standards;  different modes of analysis of antitrust infringements (e.g. per se, rule of reason and “quick look”); how to balance pro- and anti-competitive effects;  the shifting role of the per se prohibitions and rule of reason (i.e. a trend over the last 40 years towards reducing the role for per se rules as antitrust enforcement has focused more and more on the effect of individual business practices); and the main practical difficulties in applying the concepts underpinning a rule-of-reason analysis. While…

Inara Scott ‘Antitrust and Socially Responsible Collaboration: A Chilling Combination?’

This paper, published in the American Business Law Journal and available at https://onlinelibrary.wiley.com/doi/full/10.1111/ablj.12073, argues that efforts by companies to engage in socially beneficial activities (in human rights, environmental issues, labour standards, etc.) may infringe antitrust provisions. Part I sets forth the economic and business justifications for collaborating across businesses, including those between and among competitors, and provides examples of key types of these collaborations. Part II considers the application of antitrust laws and examines the struggle to determine to what extent courts may find the collaborative practices described in Part I acceptable. Based on this analysis, Part III then examines the chilling effect of antitrust law on socially responsible collaborations and considers changes necessary to facilitate these types of transactions. While the article focuses on the Sherman Act, which language is indeed more open than that of subsequent competition acts, the problem the paper discusses is common to most jurisdictions: how is antitrust to respond to these potentially beneficial cooperative efforts,…

Giancarlo Spagnolo and Catarina Marvão ‘Cartels and Leniency: Taking stock of what we learnt’

This paper, available at https://ideas.repec.org/p/hhs/hasite/0039.html, reviews the literature on the incentives of leniency applicants.  It is a really useful piece for anyone doing leniency work, and extremely thorough. It is not possible to  provide a summary of the paper: it reviews too many papers and possible scenarios (the first section looks at economic models, the second at empirical evidence). If there is a basic argument underpinning all of this, it seems to be that incentives to increase cartel enforcement results may not be well-aligned with maximising welfare /  may lead to excessively generous leniency conditions; and that leniency reduces collusion but that the EU is too nice to cartelists and extends leniency to far too many companies.

Elisabeth de Ghellinck ‘The As-Efficient-Competitor Test

This paper, published in the Journal of European Competition Law & Practice and available at https://academic.oup.com/jeclap/article-abstract/7/8/544/2194480, looks at the as efficient competitor test (known as AEC by its acquaintances) – the economic test that refuses to come to life (and God knows that some have tried to breathe life into it). After the European Commission tried to make this test the cornerstone of its enforcement activities on abusive practices (in its Guidance on Enforcement Priorities for Exclusionary Practices), and the European Courts first dismissed the relevance of the test in virtually all scenarios (Post Danmark II) before saying that it may actually be useful under certain circumstances (Intel), we have this piece is by an economist trying to identify when the test can be useful. A number of conclusions are reached, in particular:  it is sensible to decide that an AEC test is not a prerequisite for establishing the abusive character of a retroactive rebate scheme, since such a test can only…

Frederic Jenny ‘Abuse of dominance by firms charging excessive or unfair prices: an assessment’

This is a paper by Fred Jenny  for the Israeli competition authority on excessive pricing – the competition law infraction that refuses to die, and is arguably making a comeback. The paper can be found at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2880382. It reviews the debate that has taken place among economists on what the definition of excessive prices could be and whether the control of excessive prices by competition authorities would in fact promote or discourage competition. The paper is structured as follows: Section I takes stock of the enforcement activities of competition authorities against high prices (or the lack of enforcement) in a number of countries; Section II analyses the general arguments in favour or against the enforcement of provisions sanctioning excessive pricing abuses by dominant companies or monopolies; Section III examines the risks associated with wrongful decisions by competition authorities in this area and the cost of such errors; Section IV analyses the economic screens which have been proposed by various economists to…

Michal S. Gal and Niva Elkin-Koren ‘Algorithmic Consumers’

This paper, published in the Harvard Journal of Law and Technology and available at https://jolt.law.harvard.edu/assets/articlePDFs/v30/30HarvJLTech309.pdf, focuses on the use of algorithms by consumers to orient and even take decisions regarding their purchases. The basic argument is that, with the Internet of Things, systems will move from merely making recommendations to making and executing decisions for the consumer by directly communicating with other systems through the internet. As rightly pointed out in the article, this is not unheard of: in some industries, such as stock trading, algorithms already automatically translate their results into buying decisions; there is even a washing machine that makes autonomous orders and payments (e.g., buying detergent) and updates the owner via a smartphone. The paper usefully contains a literature review on algorithmic competition (which, it must be said, is still rather limited). It also makes some valuable points, such as: algorithmic consumers may submit suppliers to increased competitive pressures and change the parameters of competition (since they will be able…