Monday, October 17, 2016
Dae Sik Hong, Sogang University offers A Review of Korean Competition Law and Guidelines for Exercise of Standard-Related Patents.
ABSTRACT: The purpose and main scope of this paper is to focus on the types of specific conduct with potential issues, the standards for them, and the applicable factors to be considered that were provided with respect to the exercise of patent rights-related technology standards in the Review Guidelines on the Unfair Exercise of Intellectual Property Right (IPR Guidelines), review the methods to identify the types of such conduct and relevance of such proposed standards, and propose alternatives thereto.
This paper concludes with suggestions as follows: Firstly, the Korea Fair Trade Commission (KFTC) will use its guidelines as a primary framework to enforce the Monopoly Regulation and Fair Trade Act (MRFTA) by the KFTC officials even though it has no legislative basis; therefore, it is very important to carefully review its contents. Secondly, in order to regulate non-disclosure of relevant patent technology under the MRFTA, the IPR Guidelines needs to specifically provide that both the intent and effect of the non-disclosure on the standard setting process are required. Thirdly, provisions on imposing unreasonable or discriminatory royalties should be improved to take necessary considerations into account, provide specific factors or standards under the special circumstances where the patented technology is included in a standard. Fourthly, whether procedures for the disclosure of patent information and the ex ante negotiation for licensing terms have been complied with, which are provided as important factors to be considered in judging illegality, does not bear causation or close relationship with the violation of the MRFTA and failure to comply with such procedures should not be considered more seriously than other factors. Lastly, the standard for determining whether an FRAND-encumbered SEP holder’s filing for injunctive relief may be anti-competitive can be considered acceptable compared with the recent practical developments in other jurisdictions.
Germain Gaudin, Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE) models Vertical Relations, Opportunism, and Welfare.
ABSTRACT: This paper revisits the opportunism problem faced by an upstream monopolist contracting with several retailers over secret agreements, when contracts are linear. We characterize the equilibrium under secret contracts and compare it to that under public ones in a setting which allows for general forms of demand and retail competition. We find that market distortions are more severe under secret contracts than public ones if and only if retailers' actions are strategic complements. We also investigate the effect of opportunism on firms' profits. Our main results remain robust whether retailers hold passive or wary beliefs. Finally, we discuss the implications of our results for the antitrust analysis of information exchange between competing retailers, and for the empirical analysis of 'Nash-in-Nash' models.
Sunday, October 16, 2016
Pinar Akman, University of Leeds and D. Daniel Sokol, University of Florida - Levin College of Law discuss Online RPM and MFN Under Antitrust Law and Economics.
ABSTRACT: Depending on the legal framing, behavior that might in some circumstances resemble online resale price maintenance (RPM) agreements in other circumstances may instead resemble online most favored nation (MFN) agreements. Together, the cases that involve online RPM and MFN can be viewed as a natural experiment of how antitrust economics and law can adapt to an online world. Thus far, enforcement across jurisdictions has been based on economic theories that do not always match up with legal doctrine. Doctrinal confusion can thwart business practices that may be efficient.
This paper makes a number of contributions. We distinguish issues of online RPM from traditional RPM and online RPM from online MFN. Then, we apply the economic learning on RPM and analyze the antitrust cases of online RPM and MFN to date across the United States, Europe and Australia. The last part of this paper offers policy recommendations that reduce the confusion in current legal doctrine.
Saturday, October 15, 2016
Call for Papers: The Competition Law Scholars Forum (CLaSF) and the Centre for Antitrust and Regulatory Studies, University of Warsaw Friday 28th April 2017
Call for Papers
The Competition Law Scholars Forum (CLaSF) and
the Centre for Antitrust and Regulatory Studies, University of Warsaw
invite contributions to a workshop
“Reform of Regulation 1/2003 –Effectiveness of the NCAs and Beyond”
At the University of Warsaw, on Friday 28th April 2017
The Competition Law Scholars Forum (CLaSF) will be running a workshop on Friday 28th April 2017 at the University of Warsaw, Faculty of Management, Warsaw, Poland. The subject of the workshop will be the broad theme of ‘Reform of Regulation 1/2003 – Effectiveness of NCAs and Beyond’.
We invite abstract paper proposals from researchers, scholars, practitioners and policy-makers in relation to any issue within this broad theme. We welcome theoretical, economics-driven, practice-based or policy focused papers, and we are interested in receiving abstracts for papers which may be focused on perspectives or experience at national, regional (eg EU), or international levels, or a combination.
Contributions are invited particularly in the field of the following matters:
- Reform of Regulation 1/2003 – reactions to the EU Commission’s envisaged actions
- Independence of the NCAs
- Weaknesses of the NCAs: effective sanctions, leniency and inspections?
- The NCAs financial and expert resources
- Balancing effectiveness of the NCAs with respect to due process rights and transparency
- Effectiveness of the NCAs and judicial review by national courts (scope, intensity, level of expertness, structure)
- Functioning and effectiveness of the ECN
- Application of EU competition law by NCAs – divergence or convergence?
- The role of the EU Commission
- Local context and culture and the NCAs
The conference will consist of a mix of invited speakers and contributions chosen following this call for papers.
- Any person interested in being considered on the basis of the call for papers at the conference is asked to contact Professor Barry Rodger at email@example.com. An abstract is required of approximately 500-1000 words, to be submitted by no later than December 15, 2016, and decisions on successful submissions will be taken by January 15, 2017. Submission of presentation/draft paper is also required a week prior to the workshop.
Papers presented at the conference can be submitted to the Competition Law Review editorial board with a view to being published in the Review. Note that the Review is a fully refereed scholarly law journal: submission does not guarantee publication.
Friday, October 14, 2016
Alexander (Alexi) Maltas, Tony Lin, and Robert F. Baldwin III (all Hogan) offer A Comparison of the DOJ and FCC Merger Review Processes: A Practitioner’s Perspective.
ABSTRACT: Many headline-grabbing transactions in recent years have involved communications companies, such as Charter’s acquisition of Time Warner Cable and Bright House Networks (2016), AT&T’s acquisition of DIRECTV (2015), Comcast’s abandoned attempt to acquire Time Warner Cable (2015), AT&T’s abandoned attempt to acquire T-Mobile (2011), or Sirius’s merger with XM Radio (2008). These transactions, both successful and unsuccessful, have drawn attention to the process by which the U.S. government approves or blocks mergers and acquisitions in the communications and broadband Internet industries. Typically, before a transaction in those sectors may proceed, at least two federal agencies must clear it: the Federal Communications Commission and an antitrust agency, commonly the Department of Justice. 1 Review by these agencies differs in several key categories: (1) their standards for evaluating transactions, including who bears the burden of proof; (2) their procedures; and (3) the types of remedies that each agency is likely to pursue as a condition to approval. In addition, many other subtle differences can affect the merger review process, such as the methods of discovery employed by each agency. Understanding the similarities and differences between the agencies can help practitioners representing communications companies better navigate the review process and guide clients to a favorable outcome.
* Maureen Ohlhausen, Commissioner, Federal Trade Commission
* Xin Roger Zhang, East Concord Law
* Fay Zhou, Linklaters LLP
Stuart J. H. Graham, Georgia Institute of Technology - Scheller College of Business, Peter S. Menell, University of California, Berkeley - School of Law, Carl Shapiro, University of California, Berkeley - Haas School of Business, and Timothy Simcoe, Boston University - Questrom School of Business have put out Final Report of the Berkeley Center for Law & Technology Patent Damages Workshop.
ABSTRACT: The determination of patent damages lies at the heart of patent law and policy, yet it remains one of the most contentious topics in this field, particularly as regards the calculation of a reasonable royalty. In March 2016, the Berkeley Center for Law & Technology convened a workshop of leading “insiders” (in-house counsel, litigators (from both the assertion and defense sides), patent licensing professionals, and testifying expert witnesses) and academics (both law professors and economists) to clarify areas of consensus and disagreement regarding the treatment of patent damages. This report summarizes the discussion, key findings, and ramifications for patent case management.
Online Booking Platforms and EU Competition Law in the Wake of the German Bundeskartellamt's Booking.com Infringement Decision
Silke Heinz is a partner at law firm Heinz & Zagrosek Partnerschaft von Rechtsanwalten discusses Online Booking Platforms and EU Competition Law in the Wake of the German Bundeskartellamt's Booking.com Infringement Decision.
ABSTRACT: In price-parity or most-favoured-nation (‘MFN’) clauses, a party (supplier) agrees to grant the counterparty (customer) the best terms and conditions that it makes available to any third party. This may raise competition concerns if one party has market power because of the potential to create or increase barriers to entry for new or smaller players and because MFN clauses may reduce the supplier's incentive to lower prices, as it would have to offer the same to the MFN customer. This article examines the approach of the Federal Cartel Office (FCO) on price-parity or MFN clauses in the hotel platform sector as illustrated in its recent booking.com decision. General or ‘wide’ MFN clauses oblige hotels not to offer better terms and conditions than on the platform via any other sales channel.
Thursday, October 13, 2016
Daniel Hosken, FTC Nathan Miller, Georgetown and Matthew Weinberg, Drexel ask Ex Post Merger Evaluation: How Does it Help Ex Ante?
ABSTRACT: Economists have long understood that mergers can diminish competition. Mergers in concentrated markets can facilitate either tacit or explicit collusion by removing a competitor. The merger of competing firms selling differentiated products also can create a unilateral incentive to increase price. This happens when some of the sales that would have been lost as the result of a price increase by the acquiring firm pre-merger are now recaptured by the acquired firm post-merger. While these possibilities provide an economic rationale for merger enforcement, mergers may occur for many other reasons that could improve how markets function—they may reduce firms’ costs or improve corporate governance by disciplining bad management.
Competition Policy and the Digital Single Market in the Wake of Brexit: Is Geoblocking Always as Evil as Most Consumers Believe?
ABSTRACT: In the wake of the Brexit referendum, it is worth remembering and focusing on the Single Market as one of the European Union's major achievements. The European Commission's Digital Single Market Strategy is set out to do exactly that. It promises to unlock the full potential of the Single Market by creating better online access to digital goods and services and prohibiting geoblocking which prevents European users from shopping online cross-border or accessing digital content online across the European Union. However, will a broad prohibition of geoblocking foster competition in the Single Market?
Liyang Hou, KoGuan Law School, Shanghai Jiao Tong University explains Qualcomm: How China has Invalidated Traditional Business Models on Standard Essential Patents.
ABSTRACT: The decision adopted, last year, in China, in the Qualcomm case, by the National Development and Reform Commission has not always been interpreted correctly by commentators. For the author, that decision invalidates long-standing business models used by international firms in relation to licensing standard essential patents. It is so important that several of its aspects are likely to be taken over in guidelines currently in preparation, in that country, on antitrust regulation of IPRs.
Wednesday, October 12, 2016
Jaime Barahona, Guerrero Olivos describes Confidentiality of Leniency Material vis-a-vis Criminal Prosecution (Chile).
ABSTRACT: This article describes the institutional setting and the legal arguments that were confronted by the interested parties before the Constitutional Tribunal of Chile (‘Constitutional Tribunal’ or ‘the tribunal’) in the 2016 decision that rejected a request for criminal prosecutors to have full access to leniency material and confidential information
Daniel Sokol, University of Florida examines Competition Law Compliance in India.
ABSTRACT: Although competition law compliance activities take many forms, this article focuses on the compliance function specific to cartel-related enforcement, as cartels and information exchanges between competitors have become perhaps the area of most significant emphasis in recent years in terms of detection of illegal (or potentially illegal) activity and its prosecution worldwide, including India.
Allan Shampine, Compass Lexecon is Applying the Non-Discrimination Requirement of FRAND When Rates Change.
ABSTRACT: Standard-setting organizations (SSOs) incorporate patented technology into standards, such as those enabling cellular telephony. While there may have been alternatives to the patented technology prior to being included in a standard, once it is included in the standard, firms using the standard must then use the patented technology—it becomes standard essential. Holders of standard essential patents (SEPs) may be able to engage in strategic action, discriminate against some licensors, or hold up licensors by demanding payments related to access to the standard itself rather than the value of the patents. SSOs address these concerns by requiring firms whose patented technology may be included to agree to license those patents on fair, reasonable, and non-discriminatory (FRAND) terms. 1 This article will focus on the last of these requirements––that the license terms be non-discriminatory—more specifically, where license terms differ from previously negotiated arrangements. There is general agreement today that the non-discrimination requirement of FRAND means that similarly situated firms should receive similar terms and conditions (or have access to the same range of terms and conditions). 2 When a new license is being negotiated, this provides clear guidance for the course of that negotiation. The terms and conditions should be non-discriminatory relative to existing licenses. However, that does not settle all possible questions. Are there any circumstances where rates might change? If so, that change creates discrimination relative to existing licensees. When is this permissible, and how should existing licensees be treated under the non-discrimination requirement of FRAND in such circumstances?
Tuesday, October 11, 2016
Ying Fan, University of Michigan, and Chenyu Yang, University of Rochester - Simon Business School offer Competition, Product Proliferation and Welfare: A Study of the U.S. Smartphone Market.
ABSTRACT: This paper studies (1) whether, from a welfare point of view, oligopolistic competition leads to too few or too many products in a market, and (2) how a change in competition affects the number and the composition of product offerings. We address these two questions in the context of the U.S. smartphone market. Our findings show the market contains too few products and that a reduction in competition decreases both product number and product variety. These results suggest that merger policies should be stricter when we take into account the effects of a merger on product choice in addition to those on pricing.
Thomas Cheng, Hong Kong University explores Antitrust Treatment of No Challenge Clauses.
ABSTRACT: This Article examines a patent licensing practice that has hitherto escaped the attention of U.S. antitrust law: the no challenge clauses. Under these clauses, a patent licensee is prohibited from challenging the validity of the licensed patent. These clauses have so far only been examined under patent law in terms of enforceability. This oversight by antitrust law is unfortunate, as no challenge clauses can create consumer harm by protecting an otherwise invalid patent from challenges and artificially extending the exclusive period granted by the patent law. This means that consumers have to bear supra-competitive prices for longer than necessary. A number of factors are relevant to the analysis of the legality of no challenge clauses, such as market power, patent validity, and market structure at the licensee level. This Article proposes a framework based on the Rule of Reason that incorporates all of these relevant factors and structures them in a way that renders the framework easy to apply. Lastly, the Article rejects a number of justifications that have been offered to argue for the legality of these clauses across the board.
Monday, October 10, 2016
Renato Nazzini, King's College London – The Dickson Poon School of Law discusses Unequal Treatment by Online Platforms: A Structured Approach to the Abuse Test in Google.
ABSTRACT: This paper discusses the requirement for legal certainty in the enforcement of the abuse of dominance prohibition in the Treaty on the Functioning of the European Union (TFEU) and the approach that should be taken, under the current legal framework, to the assessment of the alleged conduct by Google consisting in displaying links to specialised results from its own comparison shopping services differently to links to competing vertical comparison shopping services. The author challenges the view that concepts such as "competition on the merits" or "special responsibility" can be a sufficiently certain legal basis for imposing liability on dominant undertakings. The idea of "unequal treatment" or "discrimination" is also inapt to the analysis of the alleged anti-competitive strategy. Having examined the tests that, under Article 102, could apply to the alleged conduct, the paper concludes that the refusal to supply test appears to provide the closest analogy for its assessment under Article 102 TFEU.
Impact of Innovation on Competition Law: From an Outcome-Oriented Approach to a Process-Oriented Approach
Liyang Hou, Shanghai Jiao Tong University (SJTU) - KoGuan Law School examines Impact of Innovation on Competition Law: From an Outcome-Oriented Approach to a Process-Oriented Approach.
ABSTRACT: Innovation was traditionally protected from its outcome under property law, in particular intellectual property law. However, this approach has gradually reached its limit when more innovation needs to be stimulated. One branch of competition law, namely antitrust law, has thus developed a process-oriented protection in order to open up the process to more innovation, though such a new approach slightly intrudes on the exclusivity of property rights. However, less has been discussed so far on how this new approach affects the other equally important branch of competition law, namely anti-unfair competition law. Anti-unfair competition law targets conduct that dishonestly takes advantage of other competitors, thus traditionally having its core analytical framework built upon the evaluation of individual loss. While anti-unfair competition law can still fulfill most of its purpose by resting on the outcome-oriented approach, the drawbacks have been extensively revealed with the recent challenge of ad-blocking applications. At first sight, the traditional approach may be justified to hold developers of these applications liable for the revenue loss of online media operators. However, a second thinking suggests that the traditional approach may stifle innovation. Therefore, this article advances a new economic interpretation on the business model of online media operation, the target of ad-blocking applications, namely the combined sale model vis-à-vis the traditional single product model. This article finally concludes that the process-oriented approach should prevail the traditional outcome oriented approach where the combined sale model is involved.
The Raising Rivals’ Cost Foreclosure Paradigm, Conditional Pricing Practices and the Flawed Incremental Price-Cost Test
Steve Salop, Georgetown addresses The Raising Rivals’ Cost Foreclosure Paradigm, Conditional Pricing Practices and the Flawed Incremental Price-Cost Test.
ABSTRACT: There are two overarching legal paradigms for analyzing exclusionary conduct in antitrust – predatory pricing and the raising rivals’ costs characterization of foreclosure. Sometimes the choice of paradigm is obvious. Other times, it may depend on the structure of the plaintiff’s allegations. Some types of conduct, notably conditional pricing practices (CPPs), might appear by analogy to fit into both paradigms. CPPs involve pricing that is conditioned on exclusivity or some other type of favoritism in a customer’s purchases or input supplier’s sales. The predatory pricing paradigm would attack the low prices of CPPs. By contrast, the RRC foreclosure paradigm would attack the condition. The analysis in this article concludes that CPPs are better characterized as belonging to the RRC foreclosure paradigm and evaluated under a rule of reason standard that focuses directly on harm to competition and consumers. The impact of foreclosure should not be measured mainly by the fraction of customers or suppliers affected. Rules that artificially narrow concerns to whether the competitors are able to reach minimum viable scale or minimum efficient also are flawed. Foreclosure instead should be gauged primarily by the impact on the competitors’ costs, output, capacity, and ability to enter and expand. The analysis also explains that the fundamental focus of analysis is the impact of consumers in the output market, not the impact on competitors. The article also explains in detail why concerns about conditional discounts should not be screened with an incremental price-cost test. That test is not reliably administrable and it leads to substantial false negative and false positive errors that will harm consumers and competition. It also is not required for counseling purposes.
Christoph Engel, Max Planck Institute for Research on Collective Goods , Sebastian J. Goerg, Florida State University, and Gaoneng Yu Northwest University, and Gaoneng Yu, experimentt on Symmetric vs. Asymmetric Punishment Regimes for Collusive Bribery.
ABSTRACT: In major legal orders such as the United Kingdom, the United States, and France, bribers and recipients face equally severe criminal sanctions. In contrast, countries like China, Russia, and Japan treat the briber more mildly. Asymmetric punishment has been shown to help deter harassment bribery. However, we conjecture that asymmetry is ineffective when applied to collusive bribes. Instead of deterring bribes, asymmetry might enable the briber to enforce the corrupt deal. To test this hypothesis, we design and run a lab experiment in Bonn (Germany) and Shanghai (China) with exactly the same design. The results show that, in both countries, with symmetric punishment bribers are less likely to report to the authorities. Officials are less likely to grant the favor. In Shanghai, corrupt offers are then also less likely. If we frame the experiment as collusive corruption, effects are less pronounced, but we can replicate all of them.