John Connor ‘Cartels Costly for Consumers’

This working paper – which can be found here – focuses on recent trends in cartels worldwide, with a special emphasis on the economic injuries generated by illegal collusion. The basic argument is that the harm caused by cartels is immense; and that global antitrust fines for discovered international cartels were less than 1% of the economic injuries sustained (my emphasis). The data is derived from his Private International Cartels (PIC) database; in particular, he examined a sample of more than 1100 private international cartels that were discovered between January 1990 and the middle of 2015. It leads to a number of findings: The number of discovered cartels across the world has consistently increased over the last 25 years. This trend is likely related to the increasing number of jurisdictions that  have adopted competition rules and created competition agencies during this period. Affected commerce (i.e. estimates of the dollar value of commerce controlled by these cartels)  are available for about…

Mark Anderson and Max Huffman, ‘The Sharing Economy Meets the Sherman Act: Is Uber a Firm, a Cartel, or Something in Between?’ (2017) Columbia Business Law Review 859

This is a rather long piece – which you can find here – that tries to understand how antitrust should be applied in the context of the sharing economy. I think the spur for this piece is the recent price-fixing case brought against Uber in New York. Regardless of the incentives for writing the paper, it tries to identify the various approaches that antitrust can adopt regarding digital platforms and to determine which one is better suited. The paper also argues that: “Unique to sharing economy enterprises is a structure that approaches a single entity while remaining a set of agreements among individual actors. This structure results in a sharing of economic risks among the participants in a sharing economy enterprise which can incentivize efficiencies in operation that ordinarily are found in a single entity. The article concludes that those efficiencies can overcome anticompetitive concerns about coordination on competitively sensitive matters.” The paper begins by observing that: “antitrust law has…

Unwired v Huawei [2017] EWHC 711 (Pat)

This judgment – which you can find here – is a recent UK court decision on FRAND terms. The factual background to this decision is convoluted (including five “technical” trials relating to the validity and infringement/essentiality of the relevant patents, which preceded the present trial regarding all competition law and FRAND issues), but the situation can be summarised shortly. Unwired Planet is a company that owns a number of worldwide patents, including many of the foundational technologies that allow mobile devices to connect to the Internet (4G, 3G and the like) – most of the relevant portfolio in this case was acquired from Ericsson. A number of these patents are essential to the relevant technical standards, and are thus deemed Standards Essential Patents (“SEPs”). The process of standardisation involves holders of patents which are essential to an international telecommunications standard declaring them to be essential to the relevant standards body –  in this case, the European  Telecommunications Standards Institute (“ETSI”). Standard…

Alison Jones ‘ Antitrust Appraisal of Vertical Agreements in the ASEAN Economic Community’ in Ong (ed.) The Regionalisation of Competition Law and Policy within the ASEAN Economic Community (2018, CUP)

This paper – which you can find here – looks at the different approaches to vertical agreements across ASEAN. The paper draws on practice and experience in the US and EU to consider whether, and if so how, the approach to vertical agreements under the competition law systems of ASEAN countries should be changed in order to ensure a more coherent policy across the region. Following an introduction, Section 2 examines how divergent national policies towards vertical agreements in ASEAN might be damaging competition, efficiency and market integration, and why greater convergence around a harmonised framework might be desirable. It begins by reviewing the outlines of the ASEAN single market and by assessing the role of competition law for its development. It devotes particular attention to the treatment of vertical agreements, which are subject to a spectrum of radically different approaches across the region – from only vertical agreements by dominant companies being subject to competition law in Singapore and…

Alison Jones and William E. Kovacic ‘Identifying Anticompetitive Agreements in the United States and the European Union – Developing a Coherent Antitrust Analytical Framework’ (2017) Antitrust Bulletin 62(2) 254

This is a very substantial paper on the appropriate analytical framework for identifying anticompetitive agreements . It can be found here. The paper focuses on how the debate on rules and standards, and on the balance of Type I and Type II errors, affects the analytical framework for identifying infringing agreements in the US and EU. From their standpoint, these debates have been influential in discussions about how to identify anticompetitive unilateral practices and mergers, but have not been relevant for similar discussions regarding horizontal agreements. Also, from their point of view: “the question of how agreements are to be analysed under both the US and the EU jurisprudence is also unduly opaque; it is frequently difficult to ascertain whether agreements, including joint venture and other horizontal collaboration and distribution agreements, are compatible with the law. In particular, confusion about the role and scope of per se rules, the role and scope of ancillary restraint doctrines, and how competing anti- and…

Jonathan Galloway ‘Securing the Legitimacy of Individual Sanctions in UK Competition Law’ (2017) World Competition 40(1) 121

This article – which you can find here – looks at attempts to impose individual sanctions for breaches of competition law in the UK. These sanctions include the recently amended criminal cartel offence – which can lead in imprisonment of up to five years – and the NCA’s power to apply for a competition disqualification order. Famously, the UK’s record in the enforcement of these sanctions is mixed (see below). To explain this state of affairs, the author identifies a tension between the economic theory of deterrence – which underpins the regime – and regulatory theory on the effectiveness sanctions – which, the author claims, has been ignored. The author points out that traditional deterrence theory relies on a combination of probability of detection and severity of punishment to create a perception of sufficiently high costs to deter wrongdoing. Yet when this leads to the imposition of very high penalties in order to counter a low probability of detection and…

Bjorn Lundqvist ‘Joint Research and Development Collaborations Under Competition Law, with a Layman’s Economic Viewpoint’ (2017) Stockholm University Research Paper No. 3

This paper – which you can find here – looks into the antitrust treatment of joint research and development agreements (“joint R&D”) under both EU and US law. The paper begins by providing (yet another) overview of the literature on competition and innovation. The basic conclusion is that it is  uncertain whether competition promotes or detracts from innovation, but we all know this by now. Informed by these observations, the paper then looks at the EU and US treatment of joint R&D agreements. In the US, after a few old cases, joint R&D was subject to its own antitrust regime by the National Cooperation Research (and Production) Act in 1984 – which applies a rule of reason for innovation markets, and precludes treble damages if the agreement was notified to the competition agencies. In effect, the author argues, this created a safe harbour for R&D collaborations. These developments led to the adoption of the R&D Block Exemption at about the same time…

Jens-Uwe Franck and Martin Peitz ‘Toward a Coherent Policy on Cartel Damages’ (2017) ZEW Discussion Paper No. 17-009

This paper – which can be found here – looks at who should have standing in private cartel damages claims. It is an economics paper, so it engages in a normative / most-efficient analysis of who should have standing to claim damages for antitrust infringements. It also looks into both the US and EU’s legal system in detail, to see whether / how their proposal could work. Their main argument is that cartelists should also be liable for damages caused to firms that supply the cartel or the cartel’s customers with complementary product components. What connects these classes of firms is that they may suffer a loss due to cartel‐induced underpayment. In response to the cartel’s output reduction, they may find it a profit‐maximizing strategy to lower their prices to mitigate the decline in demand, thereby effectively reducing the damage to the cartel’s purchasers. In particular, the authors develop a model which purports to demonstrate that the allocation and distribution of…

Ariel Ezrachi ‘The Ripple Effects of Online Marketplace Bans’ (2017) World Competition 40(1) 47

This paper – which you can find here – assesses the economic and legal implications of online marketplace bans in order to determine what treatment they should be subject to under competition law. The discussion opens in Chapter 2 with a review of different types of online marketplaces. Online marketplaces bring together large numbers of sellers and buyers, and in doing so facilitate dynamic competition, both in relation to greater inter-brand competition and in relation to intra-brand competition. Nonetheless, there are various types of such marketplaces, which could be distinguished on the basis of their particular characteristics. These include: (a) whether online marketplaces are pure or hybrid intermediaries (pure intermediaries are merely platforms for buyers and sellers, while hybrid intermediaries provide a sales platform but also act as retailers on their own platform); (b) open or closed marketplaces (any seller can gain access to an open marketplace, while closed marketplaces impose access restrictions); (iii) the type and quality of the interface on…

Asda Stores Ld & Ors v MasterCard 2017 EWHC 93 (Comm)

This decision – available here – concerns a standalone claim for damages against MasterCard brought before the English courts. As some of you will know, disputes over the legality of Multilateral Interchange Fees (MIFs) and various payment card-schemes has been ongoing for well over a decade.  In the US, it included a decision on the legality of the American Express System which has found its way to the Supreme Court docket. In this case, which follows a decision by the European Commission – but is not a follow on claim since the practices in question, while similar, are not the same ones that were subject to the Commission’s decision – the English courts had to decide whether the level at which MasterCard set its MIFs was illegal, and hence whether damages are due. You may be pleased to hear that the decision is long and complicated – if nothing else, because it conducts an in-depth effects based assessment that hinges…