Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Monday, November 24, 2014

Efficient Competition through Cheap Talk: Competing Auctions and Competitive Search without Ex Ante Price

Philipp Kircher, University of Edinburgh and Kyungmin Kim, University of Iowa discuss Efficient Competition through Cheap Talk: Competing Auctions and Competitive Search without Ex Ante Price.

ABSTRACT: We consider a frictional two-sided matching market in which one side uses public cheap talk announcements so as to attract the other side. We show that if the first-price auction is adopted as the trading protocol, then cheap talk can be perfectly informative, and the resulting market outcome is efficient, constrained only by search frictions. We also show that the performance of an alternative trading protocol in the cheap-talk environment depends on the level of price dispersion generated by the protocol: If a trading protocol compresses (spreads) the distribution of prices relative to the first-price auction, then an efficient fully revealing equilibrium always (never) exists. Our results identify the settings in which cheap talk can serve as an efficient competitive instrument, in the sense that the central insights from the literature on competing auctions and competitive search continue to hold unaltered even without ex ante price commitment.

November 24, 2014 | Permalink | Comments (0) | TrackBack (0)

Friday, November 21, 2014

Strategic Disclosure of Demand Information by Duopolists: Theory and Experiment

Jos Jansen and Andreas Pollak explore Strategic Disclosure of Demand Information by Duopolists: Theory and Experiment.

ABSTRACT: We study the strategic disclosure of demand information and product-market strategies of duopolists. In a setting where firms may fail to receive information, we show that firms selectively disclose information in equilibrium in order to influence their competitor's product-market strategy. Subsequently, we analyze the firms' behavior in a laboratory experiment. We find that subjects often use selective disclosure strategies, and this finding appears to be robust to changes in the information structure, the mode of competition, and the degree of product differentiation. Moreover, subjects in our experiment display product-market conduct that is largely consistent with theoretical predictions.

November 21, 2014 | Permalink | Comments (0) | TrackBack (0)

Brief of Amici Curiae Antitrust Law Professors in O'Bannon v. NCAA

Thomas C. Arthur, Emory University School of Law, Amitai Aviram, University of Illinois College of Law, Edward D. Cavanagh, St. John's University - School of Law, Jorge L. Contreras, University of Utah - S.J. Quinney College of Law, Daniel A. Crane, University of Michigan Law School, Susan Beth Farmer, The Pennsylvania State University Dickinson School of Law, Herbert J. Hovenkamp, University of Iowa - College of Law, Keith N. Hylton, William Fairfield Warren Distinguished Professor, Boston University; Professor of Law, Boston University School of Law, Michael S. Jacobs, DePaul University - College of Law, Alan J. Meese, William & Mary Law School, Salil K. Mehra, Temple University - James E. Beasley School of Law, William H. Page, University of Florida - Fredric G. Levin College of Law, Gary R. Roberts, Indiana Univ. Robert H. McKinney School of Law, D. Daniel Sokol, University of Florida - Levin College of Law; George Washington University Law School Competition Law Center, and Alexander Volokh, Emory University School of Law today filed a Brief of Amici Curiae Antitrust Law Professors in O'Bannon v. NCAA

ABSTRACT:  On November 21, 2014, 15 professors of antitrust law at leading U.S. universities submitted an amicus brief in the O'Bannon v. NCAA 9th Circuit appeal in support of the NCAA. They have an interest in the proper development of antitrust jurisprudence, and they agree that the court below misapplied the “less restrictive alternative” prong of the rule of reason inquiry for assessing the legality of restraints of trade under Section 1 of the Sherman Act, 15 U.S.C. § 1. They are concerned that the district court’s approach to the antitrust rule of reason, if affirmed, would grant undue authority to antitrust courts to regulate the details of organizational rules, and would also undermine the NCAA’s goal of amateurism in collegiate athletics, a goal that courts have recognized universally as valid and important—and in which the undersigned, as academics themselves, are deeply interested.

November 21, 2014 | Permalink | Comments (0) | TrackBack (0)

My Tribute to Bert Foer

Bert Foer is retiring from AAI.  Presumably spending more time with the grandchildren and Esther will keep him busy.  Maybe he will write a book.  I hope he remains engaged with antitrust.

I have thought quite a bit about Bert's retirement.  It comes at a time of change within the antitrust community.  Many of the leaders of the field from when I graduated from law school in 2001 are now at a point in their careers similar to Bert - retired, retiring or at least thinking about retirement.  When I think of what separates that generation from the current one driven by economic analysis (and I do not lament at all that we have moved in the direction of economics driving antitrust) is the deep moral conviction of what antitrust should be. 

Sometimes Bert convinced me of his views, though often he did not. While I may not always have agreed with Bert, I always valued his thoughts.  In challenging prevailing views and making people think hard about various issues, he made me and everyone else more analytically careful and intellectually honest.  Bert has made a tremendous difference to debates in antitrust in the United States and abroad.  He has been the living persona of AAI, an organization that has many wonderful and gifted like minded individuals.  I wish Diane Moss and the rest of the AAI Board the best as they continue Bert's tradition. 

 

November 21, 2014 | Permalink | Comments (0) | TrackBack (0)

A note on the effects of downstream free entry on wholesale pricing

Ioannis N. Pinopoulos (Department of Economics, University of Macedonia, Greece) provides A note on the effects of downstream free entry on wholesale pricing.

ABSTRACT: We consider a simple model where downstream firms (retailers) carry the product of an upstream supplier (manufacturer). Under very general demand conditions, we show that, when downstream entry is endogenously dependent on profitability conditions, the optimal wholesale price charged by the manufacturer is higher under competitive conditions than under monopolistic conditions in the downstream market. The well-known result of the upstream supplier’s pricing policy being invariant to downstream market structure is reversed when free entry in the downstream market is taken into account.

November 21, 2014 | Permalink | Comments (0) | TrackBack (0)

A Model of Advance Selling with Consumer Heterogeneity and Limited Capacity

X. Henry Wang (Department of Economics, University of Missouri-Columbia) and Chenhang Zeng (Research Center for Games and Economic Behavior, Shandong University) provide A Model of Advance Selling with Consumer Heterogeneity and Limited Capacity.

ABSTRACT: We study advance selling in a model with a capacity constraint for the seller and in the presence of both consumer heterogeneity and demand uncertainty. Buyers face different levels of uncertainty about their valuations in the advance selling period: one group (called informed buyers) now their individual valuations while the other group (called uninformed buyers) only know the distribution of their valuations. We find that the seller's optimal pricing strategy depends on his capacity size as well as the size of informed buyers. For a small capacity size, the Constant Price strategy with the highest possible price is adopted. For sufficiently large capacity sizes, both Advance Purchase Discount and Advance Purchase Premium strategies may be optimal. In general, the larger the size of informed buyers the more likely an Advance Purchase Premium strategy is adopted.

November 21, 2014 | Permalink | Comments (0) | TrackBack (0)

Thursday, November 20, 2014

17th International Conference on Competition, Berlin, 25 – 27 March 2015

17th International Conference on Competition, Berlin,
25 – 27 March 2015

The International Conference on Competition is one of the most renowned international events dealing with competition law issues. At this conference, the heads of competition authorities, antitrust lawyers, academics, politicians, prominent representatives of international companies and other high-ranking participants discuss current internationally relevant issues of competition policy and competition law.

The Bundeskartellamt is proud to announce that it will host its 17th International Conference on Competition in Berlin on 25 - 27 March 2015.

Keynote speeches will be given by Sigmar Gabriel,Federal Minister for Economic Affairs and Energy, Margrethe Vestager, European Commissioner for Competition and Timotheus Höttges, CEO, Deutsche Telekom AG.

The Opening Session will be followed by speeches and a panel discussion on “Big data, media and competition”,featuring Edith Ramirez, Chairwoman of the US Federal Trade Commission, Mathias Döpfner, Chairman and Chief Executive Officer, Axel Springer SE, Professor Justus Haucap, Director of the Düsseldorf Institute for Competition Economics, Alex Chisholm, Chief Executive of the UK Competition and Markets Authority, and Kent Walker, Senior Vice President & General Counsel, Google Inc.

Three subsequent panel discussions willdeal with the international application of merger control, the role of state-owned enterprises between state and economy and the design of effective investigation procedures and sanctions in cartel cases.

Further conference speakers and panelists will include Professor Carl Baudenbacher (EFTA Court), Ashok Chawla (Competition Commission of India), Chris Fonteijn (Netherlands Authority for Consumers and Markets), Ian S. Forrester (White & Case LLP), Agnete Gersing (Danish Competition and Consumer Authority), Isolde Goggin (Irish Competition and Consumer Protection Commission),Felipe Irarrázabal (National Economic Prosecutor, Chile), Alexander Italianer (DG Competition, European Commission), Donatus Kaufmann (ThyssenKrupp AG), Bruno Lasserre (Autorité de la concurrence, France), Frank Montag (Competition Lawyers’ Association), Dae-lae Noh (Korea Fair Trade Commission), Jorge Padilla (Compass Lexecon Europe), Andreas Schwab (European Parliament), Han Li Toh (Competition Commission, Singapore), Professor Marc van der Woude (General Court, Luxembourg) and Mark D. Whitener (Competition Law & Policy, General Electric Company).

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The event will start with a welcome reception on the evening of Wednesday, 25 March. The conference will begin in the morning of Thursday, 26 March and will end in the early afternoon of Friday, 27 March.

The working languages of the conference will be German and English (simultaneous translation services will be provided).

For more information about the conference, please visit our website www.ikk2015.de which will go online soon.

November 20, 2014 | Permalink | Comments (0) | TrackBack (0)

The Optimal Sequence of Costly Mechanisms

Hanzhe Zhang (Department of Economics, University of Chicago) lays out The Optimal Sequence of Costly Mechanisms.

ABSTRACT: An impatient, risk-neutral monopolist must sell one unit of an indivisible good within a fixed number of periods and privately informed myopic buyers with independent values enter the market over time. In each period, the seller can either run a reserve price auction incurring a cost or post a price without the cost. We characterize the optimal sequence of mechanisms that maximizes the seller's expected profits. When there is an infinite number of periods, repeatedly running auctions with the same reserve price or posting a constant price is optimal. When there is a finite number of periods, the optimal sequence is a sequence of declining prices, a sequence of auctions with declining reserve prices converging to the static optimal monopoly reserve price, or the combination of the two. Most interestingly, a sequence of auctions before a sequence of posted prices is never optimal. The mechanism sequence of posted prices followed by auctions remains optimal under various extensions of the basic setting and resembles a Buy-It-Now option.

November 20, 2014 | Permalink | Comments (0) | TrackBack (0)

One-Leader and Multiple-Follower Stackelberg Games with Private Information

Tomoya Nakamura, Osaka University describes One-Leader and Multiple-Follower Stackelberg Games with Private Information.

ABSTRACT: This study analyzes one-leader and multiple-follower Stackelberg games with demand uncertainty. We demonstrate that the weight on public information regarding a follower's estimation of demand uncertainty determines the strategic relationship between the leader and each follower. When the relationship is strategic complement, the leader can exit from a market. The threshold is determined by the intensity of Cournot competition among the followers.

November 20, 2014 | Permalink | Comments (0) | TrackBack (0)

Correlated equilibria in homogenous good Bertrand competition

Ole Jann (Department of Economics, Copenhagen University) and Christoph Schottmuller (Department of Economics, Copenhagen University) offer Correlated equilibria in homogenous good Bertrand competition.

ABSTRACT: We show that there is a unique correlated equilibrium, identical to the unique Nash equilibrium, in the classic Bertrand oligopoly model with homogenous goods. This provides a theoretical underpinning for the so-called "Bertrand paradox" and also generalizes earlier results on mixed-strategy Nash equilibria. Our proof generalizes to asymmetric marginal costs and arbitrarily many players.

November 20, 2014 | Permalink | Comments (0) | TrackBack (0)

Health care demand in the presence of discrete price changes

Michael Gerfin, Boris Kaiser & Christian Schmid analyze Health care demand in the presence of discrete price changes.

ABSTRACT: Deductibles in health insurance generate nonlinear budget sets and dynamic incentives. This paper uses detailed individual claims data from a large Swiss insurance company to estimate the response in health care demand to the discrete price increase that is generated by resetting the deductible at the start of each calendar year. We use a regression discontinuity type framework based on daily data to estimate the change in health care demand right before and right after the turn of the year. We find that for individuals with high deductibles health care demand drops by 27%, which translates into an elasticity of −.21. The decrease is most pronounced for inpatient care and prescription drugs. By contrast, for individuals with low deductibles there is no significant change in health care demand (except for prescription drugs). A remaining open question is whether the observed behavioral responses can be attributed to intertemporal substitution or whether they constitute a classic moral hazard effect.

November 20, 2014 | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 19, 2014

CALL FOR PAPERS: Patent Pledges (Patent Pledges Symposium: June 15, 2015 at American University)

CALL FOR PAPERS: Patent Pledges

 

 

Abstract Submission Deadline: January 20, 2015 Final Paper Deadline: June 1, 2015 Patent Pledges Symposium:  June 15, 2015

Patent holders are increasingly making voluntary, public commitments to limit the enforcement and other exploitation of their patents. The best-known form of patent pledge is the so-called FRAND commitment, in which a patent holder commits to license patents to manufacturers of standardized products on terms that are “fair, reasonable and non-discriminatory.” But patent pledges have been appearing in fields and environments well beyond technical standard-setting, including open source software, green technology and the biosciences. Pledges include FRAND commitments, as well as commitments not to assert patents against specified technologies or entities, and not to transfer patents to non-practicing entities.

A one-day public symposium that explores the legal, economic and policy implications of patent pledges will be held on June 12, 2015 at American University Washington College of Law in Washington, DC. Research papers are solicited on all aspects of patent pledges, including:

  • Historical Comparisons
  • Empirical Studies
  • Economic Theories
  • Antitrust/Competition Theories
  • Contract Theories
  • Patent Law Theories
  • Equitable Theories
  • Property Law Theories
  • Remedies
  • Organizational/Institutional Theory
  • Comparative/International
  • Regulatory Approaches
  • Legislative Approaches
  • Administrative Approaches

For additional background on patent pledges, see Jorge Contreras, Patent Pledges (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2525947), and the database of non-SDO pledges contained at http://www.pijip.org/non-sdo-patent-commitments/

A limited number of papers will be selected for presentation at the symposium. Papers will be selected by an expert committee on the basis of originality, methodology, diversity of viewpoints, and contribution to the field. We invite papers from experienced scholars as well as graduate students and junior scholars.

The authors of selected papers will receive an honorarium of US$1,500 plus travel expenses to attend the symposium (to be split among multiple authors). Payment will be contingent upon delivery of the accepted final paper by the stated deadline and presentation of the paper at the symposium.

Details:

Jan. 20, 2015   Deadline for submission of abstract (500 words maximum) together with CV or biographical summary

Feb. 15, 2015  Notification of acceptance/rejection

June 1, 2015   Completed papers (5,000 word minimum) must be submitted

June 12, 2015 Patent Pledges Symposium in Washington, DC

All submissions should be in Microsoft Word format and sent via email to: mjacob@wcl.american.edu.

There is no publication commitment associated with the symposium, but we may arrange for a law review special issue or edited volume to include the accepted papers.

November 19, 2014 | Permalink | Comments (0) | TrackBack (0)

Classical Competition and Freedom of Contract in American Laissez Faire Constitutionalism

Nicola Giocoli, University of Pisa surveys Classical Competition and Freedom of Contract in American Laissez Faire Constitutionalism.

ABSTRACT: It is impossible to tell the history of American antitrust law and economics during the so-called formative era (1890-1915) without a preliminary understanding of the economic rationale underlying that major phase of American constitutional law commonly called laissez faire constitutionalism, or Lochner era. The essay is a preliminary effort to locate such a rationale in the almost perfect overlap between classical political economy, especially the notion of competition as the supreme organizing principle of thriving societies, and classical liberalism, in particular the notion of liberty of contract. It is argued that the well-known Progressive interpretation of the Lochner era fails to recognize the true meaning and extent of this overlap. The protagonists of our story are economists Adam Smith, John Stuart Mill and Francis Wayland, and Supreme Court Justices James Wilson, Oliver Wendell Holmes and Rufus Peckham.

November 19, 2014 | Permalink | Comments (0) | TrackBack (0)

Should Auctions be Transparent?

Dirk Bergemann (Cowles Foundation, Yale University) and Johannes Horner (Cowles Foundation, Yale University) ask Should Auctions be Transparent?

ABSTRACT: We investigate the role of market transparency in repeated first-price auctions. We consider a setting with independent private and persistent values. We analyze three distinct disclosure regimes regarding the bid and award history. In the minimal disclosure regime each bidder only learns privately whether he won or lost the auction. In equilibrium the allocation is efficient and the minimal disclosure regime does not give rise to pooling equilibria. In contrast, in disclosure settings where either all or only the winner’s bids are public, an inefficient pooling equilibrium with low revenues exists.

November 19, 2014 | Permalink | Comments (0) | TrackBack (0)

Equilibrium downstream mark-up and upstream free entry

Ioannis N. Pinopoulos (Department of Economics, University of Macedonia, Greece) theorizes on Equilibrium downstream mark-up and upstream free entry.

ABSTRACT: We consider a successive Cournot oligopoly model where firms freely enter into the upstream market. We show that, under specific conditions, a higher number of downstream firms can lead to a higher mark-up in the downstream market. Although downstream market power may increase, consumer prices still decrease with the number of downstream firms implying that higher market power does not necessarily imply lower consumer surplus.

November 19, 2014 | Permalink | Comments (0) | TrackBack (0)

Procedural Rights in EU Administrative Competition Proceedings: Ex Ante Mergers

Anca Daniela Chirita, Durham University - Department of Law explores Procedural Rights in EU Administrative Competition Proceedings: Ex Ante Mergers.

ABSTRACT: The present contribution has two inter-related purposes: first, to analyse the context and legal framework of procedural rights in EU competition law, in particular, the administrative notification of mergers, and second, to critically review any perceived flaws in the substantive, institutional design or exercise of these procedural rights in practice, thereby offering proposals for institutional reform. The first and second sections provide an overview of the purpose and scope of application of the EU Merger Control Regulation 139/2004, including its Implementing Regulation 1269/2013, highlighting the major principles underpinning the informal stage, Phase I and II investigations, and procedural deadlines. The third section goes on to question why procedural rights in mergers are contestable and offers constructive reviews of the criticism of the current system. This section questions primarily whether there should be social responsibility for corporations’ procedural rights as is the case under the ECHR regime. Since the administrative procedure of notification of mergers aims to protect the public choice of individual consumers before the corporatist intentions to merge and expand, the EU Merger Regulation produces a contrasting ‘vertical’ rather than ‘horizontal’ effect (supra-national competition law protecting the public, not the individual citizen). The section also prepares the ground for the fourth section, which thoroughly examines whether a human rights inspired catalogue is also feasible for corporations in merger proceedings. The fourth section offers a comparative analysis of the ECHR system to distinguish ‘original’ or ‘express’ procedural rights in mergers, such as the right to good administration of justice, namely, the right to a fair hearing, within a reasonable time, and before an independent and impartial tribunal; ‘implied’ rights, such as the right to due process, including the right to a fair presentation of evidence through the sending of the statement of objections, the right to an adversarial hearing by replying to the statement of objections, the right to have access to one’s file, and the right to a reasoned decision; and ‘derived’ rights, such as the right not to give evidence against oneself. The most heated debate concerns the independence of the European Commission as public administration and the decision-making process in merger cases, which demands institutional reform, both from inside because of a strongly hierarchical administration of justice, thus combining both investigative and prosecutorial functions, and from outside because of the perception of politicisation of economic merger decisions by the College of Commissioners and by the mandate of the Commissioner for Competition. The paper argues in favour of a de-centralisation of such internal and external administrative competences, including a Public Hearing Office. The fifth section concludes.

November 19, 2014 | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 18, 2014

Google's Anti-Competitive and Unfair Practices in Digital Leisure Markets

Anca Daniela Chirita, Durham University - Department of Law describes Google's Anti-Competitive and Unfair Practices in Digital Leisure Markets.

ABSTRACT: The purpose of this article is to reflect on the critical use of commitments in the Google case and to analyse and review the matrix of facts that have been highlighted in the academic and practitioner literature. Therefore, the core area of reflection in this contribution are relevant markets; barriers to entry; network and lock-in effects; dominance; and potential anti-competitive, as well as unfair practices as regards commercial advertisements. The analysis of the online search-engine market is complemented by the comparative insights offered by the US class action against Google’s Android mobile applications. In the EU, a similar trend is noticeable in the complaining tone of Google’s competitors. Coupled with the transitional period of the mandate of the newly appointed Commissioner for Competition and the political sensitivity over the potential to misuse search-engine users’ personal data to serve commercial purposes, such as boosting its advertising revenues, the giant Google swims in uncertain waters.

November 18, 2014 | Permalink | Comments (0) | TrackBack (0)

Mergers in Medicare Part D: Decomposing Market Power, Cost Efficiencies, and Bargaining Power

Anna Chorniy, Clemson University, Daniel Miller, Clemson University, and Tilan Tang, Clemson University analyze Mergers in Medicare Part D: Decomposing Market Power, Cost Efficiencies, and Bargaining Power.

ABSTRACT: We examine horizontal mergers amongst Part D insurers with the aim of decomposing market power, cost efficiency, and bargaining power merger effects. We apply a differences-in-differences identification strategy to panel data on plans offered between 2006 and 2012 to document the effects of mergers on plan premiums and drug coverage characteristics. The results indicate substantial market power as mergers cause premiums to rise. But, premiums fall and drug coverage improves for merging insurers that restructure plans and renegotiate contracts with drug suppliers by consolidating existing plans. We attribute these effects to improved cost efficiencies and increased bargaining power.

November 18, 2014 | Permalink | Comments (0) | TrackBack (0)

The Antirust Bulletin Vol 59, No. 3/Fall2014 is out

Volume 59, Number 3/Fall 2014

The Antitrust Bulletin Journal of Antitrust Law and Trade Regulation


SYMPOSIUM: IMPLICATIONS OF RECENT MERGER LITIGATION FOR MARKET DEFINITION       Malcolm B. Coate and Kent Bernard, Guest Editors


 

Introduction        By Malcolm B. Coate and Kent Bernard

HOSPITAL MERGERS—ARTICLES & COMMENTS

From Rockford to Joplin and Back Again: The Impact of Economics on Hospital Merger Enforcement       By Cory S. Capps

Unresolved Questions Relating to Market Definition in Hospital Mergers       By Sean May and Monica Noether

Competitive Effects Analyses of Hospital Mergers: AreWe Keeping Pace with Dynamic Healthcare Markets?       By Margaret E. Guerin-Calvert

The Importance of Substitution in Assessing Health Care Provider Mergers       By Brett W. Wendling and Nathan E. Wilson

LUNDBECK:APRESCRIPTION DRUG MERGER—ARTICLES & COMMENTS

When the Price Isn’t Right – The Lundbeck Case and a Path to Analyze Competition in Drug Research and Development       By Kent Bernard

FTC v. Lundbeck: Is Anything in Antitrust Obvious, Like, Ever? By Chris Sagers and Richard M. Brunell

Nonprice Competition in “Substitute” Drugs: The FTC’s Blind Spot       By Gregory Dolin, M.D.

Predicting Competitive Effects From Prescription Drug Mergers: How Standard Economic Analysis Can Go Wrong       By Gregory J. Werden

H&R BLOCK: AMERGER IN A CONSUMER GOOD—ARTICLES

United States v. H&R Block: Market Definition in Court Since the 2010 Merger Guidelines       By Marc Remer and Frederick R. Warren-Boulton

Market Definition in Differentiated GoodsWhen the Final Consumer Buys the Good: Insights from the H&R Block Case       By Malcolm B. Coate

POLYPORE: AMERGER IN A PRODUCER GOOD—ARTICLES

Market Power in Battery Separators: In re Polypore       By John Simpson and J. Robert Robertson Market Definition—Achieving an Integrated Analysis       By Henry J. Kahwaty and Cleve B. Tyler

November 18, 2014 | Permalink | Comments (0) | TrackBack (0)

Consolidation or Fragmentation? European Competition Law in the EU Air Transport Sector: A Policy Analysis

Dr. Jakub Kociubinski, University of Wroclaw - Faculty of Law, asks Administration and Economics Consolidation or Fragmentation? European Competition Law in the EU Air Transport Sector: A Policy Analysis.

ABSTRACT: This article analyses the priorities of European competition law in the air transport sector in the light of the ongoing process of the industry’s consolidation. The oligopolistic nature of the airline business results in a natural tendency towards its concentration. From the standpoint of regulatory oversight, the question is how to manage or counteract this tendency in order to achieve defined policy goals. In this vein, European competition law has departed from the model whereby the competitive process in itself is the priority and turned to an instrumental approach, with preference given to the welfare of customers.
This analysis will highlight three policy areas relevant to the discussed subject. It begins with antitrust law, with special emphasis on the sector-specific phenomenon of airline alliances; then discusses merger control, especially in the context of pro-competitive remedies, and finally State aid, with particular focus on the effects of the compensatory scaling-down of operations which are imposed on recipients of a rescue and restructuring aid grant.

November 18, 2014 | Permalink | Comments (0) | TrackBack (0)