Jay Matthew Strader ‘Google, Monopolization, Refusing to Deal and the Duty to Promote Economic Activity’ (2019) International Review of Intellectual Property and Competition Law 50(5) 559

Almost no consumers have the resources to assess the quality of information online. Search engines seek to remedy asymmetries in information, effectively providing a quality certification service to consumers. Google claims to rank organic results ‘‘scientifically’,’ based strictly on relevance and the quality of the listings. Ninety two percent of all Google search traffic occurs on the first page, encompassing the top ten organic results and paid ads, which reflects high levels of consumer trust.   This paper, available here, argues that Google’s search engine is indispensable for innumerable companies, which cannot compete effectively when Google fails to rank organic results according to relevance. However, Google’s ad-based business model creates incentives for it to promote paying advertisers or its own business, in particular by lowering the rank of more relevant results. This leads to lower quality in the search market, to lower output in downstream markets and, ultimately, to lower consumer welfare – independently of whether Google operates downstream or…

Yannis Katsoulacos ‘Substantive Criteria and Legal Standards in Recent Abuse of Dominance Cases across the Atlantic’ (2019) CPI Antitrust Chronicle March

Legal standards in competition law fall across an analytical continuum whose boundaries are set, respectively, by categorical rules of condemnation (per se illegality) or acquittal (per se legality) on the one end, and an elaborate, fact-intensive assessment of reasonableness (Rule of Reason) on the other. These poles are connected by a range of intermediate tests that seek to combine some of the clarity and economy of bright-line rules with the greater analytical accuracy that a fuller examination of evidence can produce – e.g. in the US, the modified per se and the truncated effects based tests. This paper, available here, reviews a number of recent cases in high technology markets on both sides of the Atlantic (Intel, Google, QUALCOMM), to compare how abusive practices are treated in Europe and the US. Section II compares legal tests in the EU and the US. In the EU, there are multiple goals guiding antitrust enforcement. Under the influence of a strong Ordo-Liberal tradition, the…

Michael Funk and Christian Jaag ‘The More Economic Approach to Predatory Pricing’ (2018) Journal of Competition Law & Economics 14(2) 292

This paper, available here, argues that legal requirements and economic reasoning are not aligned as regards predatory pricing. Predation is not a strategy predominately used by ex ante dominant firms, but rather a strategy to gain ex post dominance. Consequently, the current legal practice in Europe and other jurisdictions, which requires ex ante dominance to pursue predatory pricing, makes the prosecution of predatory pricing virtually impossible because it overlooks the basic economic rationale for predatory pricing. This inconsistency has become even more severe because the adoption of a “more economic approach”: in fact, the more accurate the economic assessment is, the less probable is a conviction of harmful predation under the current legal framework. The authors suggest prohibiting predatory pricing independently from other exclusionary abuses. Instead, predatory pricing should be subject to the same analytical framework as mergers, where a similar economic and business logic applies. Since recoupment of predation is akin to the unilateral effects arising from the merger…

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…

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,…

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…

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…

Carsten Koenig ‘Comparing Parent Company Liability in EU and US Competition Law’ (2018) World Competition 41(1) 69

This paper, available here , contrasts how law parent companies can be fined for antitrust infringements by their subsidiaries under EU competition law, while courts in the US are reluctant to hold parent companies directly or indirectly liable in private damages suits. The author argues that one of the main reasons why EU competition law holds parent companies liable is to solve an under-deterrence problem that occurs when subsidiaries lack sufficient assets to pay fines or damages. US antitrust law uses other enforcement instruments to address under-deterrence by, in particular the individual liability of managers and employees. The article consists of four substantive parts: In section 2, the paper reviews the case law and literature on parent company liability for antitrust infringements by subsidiaries in the European Union and the United States. In the EU, the single economic entity doctrine is deeply ingrained in competition law. The European court interprets the concept of ‘undertaking’ in a functional way: it is the economic entity…