Rob Nicholls on ‘Regtech as an antitrust enforcement tool’ (2021) Journal of Antitrust Enforcement 9 135

In its simplest form, Regtech can be described as ‘the use of technology, particularly information technology, in the context of regulatory monitoring, reporting and compliance’ enabling it to provide ‘technological solutions to regulatory processes’. Regulatory technology (Regtech) has emerged mainly in financial services as a tool for regulatory compliance. However, to define Regtech as a sub-set of Fintech fails to properly explain its capabilities. Since Regtech has the potential for continuous monitoring capacity with close to real-time insights of domestic and global markets through artificial intelligence filters, it can be proactive rather than reactive, looking to identify problems in advance rather than after the fact. Research on Regtech and competition law has thus far considered how Regtech could be used by competition authorities to monitor compliance with relevant laws and regulations has been explored using statistical approaches (particularly in respect of cartels) and—to a more limited extent—using machine learning. This article, available here, explores an approach to applying Regtech techniques…

Thibault Schrephel ‘Computational Antitrust: An Introduction and Research Agenda Stanford Computational Antitrust’(2021)

In the last decade, antitrust agencies have shifted their focus to deal with issues arising in the digital economy. While there are passionate discussions about the competitive effects of business practices implemented by digital players, the use of technological tools to address such practices remains very little debated. This disconnect between diagnosis and treatment is becoming problematic, as antitrust agencies struggle to remedy anticompetitive practices in increasingly complex and fast-paced markets. The present article, available here, pursues three goals. First, it introduces computational antitrust – a new domain of legal informatics which seeks to develop computational methods for the automation of antitrust procedures and the improvement of antitrust analysis. Second, it explores how agencies, policymakers, and market participants can benefit from computational antitrust. Lastly, it sets out a research agenda for the years ahead Section I explains what is computational antitrust. Computational law is a “branch of legal informatics concerned with the mechanisation of legal analysis (whether done by humans…

Antitrust Writing Awards (and a bit of self promotion)

This week, due to technical issues (and a bank holiday in France), I am unable to circulate any reviews. However, I would like to refer you to the papers selected by Concurrences for the Antitrust Writing Awards 2021 – they cover virtually all of current antitrust debates, and are typically very good. I say typically because I have a paper of my own nominated, and that may lower the level a bit – ‘The three body problem – Extraterritoriality, comity and cooperation in competition law‘, to be published in a coming book. I would of course appreciate it if you could vote for it, but, more importantly, this is a good occasion to suggest you may want to read it. All comments are welcome. And if anyone detects the science fiction reference, you have my respect. You can find the paper here. The abstract is as follows: Understanding the extraterritorial effect of competition law raises challenges akin to the three…

Rachel Scheele ‘Facebook: From Data Privacy to a Concept of Abuse by Restriction of Choice’ (2021) Journal of European Competition Law & Practice 12(1) 34

On 23 June 2020, the German Federal Supreme Court found that Facebook violated German competition law by abusing its dominance in the market for social networks. The ruling, upholding the decision by the competition authority, is a major victory for advocates of addressing data-related competition concerns under Article 102 TFEU and its national equivalents. However, instead of focusing on the intersection between competition and data protection law in its reasoning, as the competition authority had, the Federal Supreme Court relied on the concept of restriction of consumer choice. This article, available here, casts light on the Facebook case and its practical relevance. Section 2 reviews the Facebook infringement decision. In 2019, the German Bundeskartellamt found that Facebook had abused its dominant position on the German market for personal social networks by imposing unfair terms and conditions on its users. The Bundeskartellamt’s case linked antitrust violations with data protection law, and relied on alleged infringements of the EU’s General Data Protection…

Eric Posner ‘Policy Implications of the Common Ownership Debate’ (2021) University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 922

The debate over common ownership has raised questions about what, if any, policy responses are appropriate when common owners reduce competition in product markets. This paper, available here, reviews the literature on policy responses and evaluates various reform proposals in light of recent empirical and theoretical developments. A first section frames the discussion. Common ownership theories of harm have attracted their fair share of criticisms. One group of criticisms centred around the question of “mechanism”: what was the mechanism with which institutional investors compelled portfolio firms to raise prices and reduce output? Moreover, some researchers have found statistical or anecdotal evidence that common ownership produces social benefits by internalising positive externalities across firms, like those that are due to research. Policymakers must therefore confront three questions. First, is the time ripe for intervention or should they wait for more academic work to create a larger consensus among independent academics about the empirical effects of common ownership? Second, if or when…

Massimo Motta and Martin Peitz ‘Removal of Potential Competitors – A Blind Spot of Merger Policy?’ (2020) Competition Law and Policy Debate (6)2 19

Mergers that may look conglomerate or vertical at first glance may in essence be horizontal, inasmuch as they involve the removal of a potential competitor. Indeed, many conglomerate and vertical mergers can be addressed from the perspective of potential competition. Economists have started to look into vertical and conglomerate mergers which can be analysed from this perspective in the pharma and digital sectors; however, the issue is not restricted to these sectors. Merger policy must deal with two issues as regards such mergers: (1) how to make sure that potentially problematic mergers are notified and investigated; and (2) how to assess the social costs and benefits of such mergers. This paper, available here, looks at both these issues. Second II looks at the theory and evidence of mergers to remove potential competitors. Large firms have been taking over dozens of small technology firms which have not yet marketed their products, or that were at an initial phase of rollout. Such…

Nicolas Petit and Dirk Auer ‘CK Telecoms v Commission: The Maturation of the Economic Approach in Competition Case Law’ (2020) Journal of European Competition Law & Practice 11(5–6) 225

Over the last few years, the EU courts have produced several rulings that envision a symbiotic relation between competition law and economics. The judgment of the General Court (‘GC’) in CK Telecoms UK Investments v Commission (‘CK Telecoms v Commission’) is the latest illustration of this judicial trend. The present paper, available here, argues that the concrete message of CK Telecoms v Commission is simple. The Court stresses that not all market power effects from mergers come under legal scrutiny. Only mergers leading to substantial market power effects deserve remediation. CK Telecoms v Commission also sits broadly within the European tradition of competition law. The case formulates a structured rule for the assessment of unilateral effects in merger cases, in line with the usual approach of European case-law. Section II looks at the requirement that anticompetitive effects must be substantial. Economic theory is chiefly concerned with a specific class of market power that cannot be dissipated by competitive forces in…

Jorge Padilla on ‘Should Profit Margins Play a More Decisive Role in Horizontal Merger Control?’ (2018) Journal of European Competition Law & Practice 9(4) 260

This paper, availabl, here, argues that, while profit margins should (and do) play a role in the assessment of the potential price effect of a horizontal merger, there is no justification for the adoption of a policy that targets high-margin markets. Such a policy is bound to produce false negatives (Type II errors) and false positives (Type I errors) because: (i) accounting profits are not necessarily in line with economic profits, (ii) comparing accounting profits across firms, industries and countries is a notoriously complex exercise, bound to produce misleading conclusions, and (iii) mergers between profitable and not so profitable firms facilitate the efficient reallocation of resources and are, therefore, likely to have positive microeconomic and macroeconomic implications. Section II looks at the relationship between profit margins and market concentration. Economists have debated the relationship between profit margins and market concentration for years. Based on some cross-section industry studies in the USA, industrial organisation economists believed for a long period of…

Julian Nowag and Liisa Tarkkila on ‘How much effectiveness for the EU Damages Directive? Contractual clauses and antitrust damages’ (2020) Common Market Law Review 57 433

Market actors often include clauses in contracts which determine the jurisdiction, and/or forum in which any claim arising from the contract may be heard; or clauses which prohibit reassigning a claim or joining a class action. In some situations, these clauses may make it more difficult to obtain full compensation for a competition law infringement. Antitrust victims can be forced to bring damages actions in jurisdictions or before arbitrational tribunals that have less favourable cost and evidential rules; they may also encounter language-related problems. Similarly, preventing forms of collective redress has obvious benefits for defendants whenever a large number of victims only suffered very small individual harm. This paper, available here, explores the extent to which the aims of the Damages Directive and development of a strong EU private enforcement system in Member States’ courts might be undercut by such contractual arrangements. It argues that EU law protects consumers against clauses that could hinder the full effectiveness of the right to compensation…

Michal Gal ‘The Case for Limiting Private Litigation of Excessive Pricing’ (2020) Journal of Competition Law and Economics 15(2-3) 298

Excessive pricing raises strong concerns for private competition litigation, for three reasons: (1) the inherent difficulty of defining what constitutes an unfair price; (2) additional challenges inherent to private excessive pricing litigation, such as the need to pinpoint when exactly a price becomes unfair in order to calculate damages; and (3) the institutional features of general courts in EU member states. Given that private litigation of competition law violations is only beginning to develop in the EU, and collective redress mechanisms are still viewed with caution by many member states, this is exactly the time to ensure that, as private litigation expands, it will increase welfare. This is the purpose of this paper, which is available here. Section 2 addresses the inherent difficulty of determining when a price becomes unfair. The excessive pricing prohibition, though longstanding, suffers from serious and inherent difficulties in its implementation. In particular, it lacks clear and workable criteria. The challenges can be summarised as follows: to decide…