Antitrust & Competition Policy Blog

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

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Wednesday, May 20, 2015

Melbourne Law School Looking for faculty

ACADEMIC POSITIONS (LEVEL B - E)

Job no: 0016323 Work type: Continuing Location: Parkville

Melbourne Law School

Salary: Professor / Associate Professor / Senior Lecturer / Lecturer (multiple positions) 
$170,900 p.a. (Professor Level E)  $132,677 - $146,169 p.a. (Associate Professor Level D)  $110,190 - $127,054 p.a. (Senior Lecturer Level C)  $89,955 - $106,817 p.a. (Lecturer Level B)

plus up to 17% superannuation  

Melbourne Law School at the University of Melbourne, Australia's leading law school, seeks new colleagues at all ranks (Levels B to E) and across all sub-disciplines who share our commitment to a highly collegial and research-intensive professional life.

We specifically encourage applications from current or aspiring academics who are able to contribute to our compulsory JD teaching, who are able to integrate teaching with research and community engagement activities, and who are prepared to contribute to the vibrant communal life and culture at the Law School and within the University of Melbourne as a whole.

Melbourne Law School is an equal opportunity employer, and welcomes applications from scholars able to enrich the diversity of our community. In particular, we encourage Aboriginal and Torres Strait Islander people to apply.

Enquiries to Professor John Howe, Deputy Dean, at law-hr@unimelb.edu.au, tel. + 61 3 9035 5988.

Applications (consisting of a curriculum vitae, cover letter and statement addressing the selection criteria) must be submitted online by the close date (shown below).  You must also indicate clearly the Level at which you are applying.

Close date:   8 June 2015

Position Description including Selection Criteria

Download File 0016323_v2_30Apr2015.pdf

Advertised: 29 Apr 2015 12:00 AM Aus. Eastern Standard Time Applications close: 08 Jun 2015 11:55 PM Aus. Eastern Standard Time                

Employer of Choice for Women Award                                      
    
 

Apply now  

May 20, 2015 | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 19, 2015

Bidding Rings: A Bargaining Approach

Kalyan Chatterjee (Department of Economics, Pennsylvania State University) Manipushpak Mitra (Economic Research Unit, Indian Statistical Institute, Kolkata, India) and Conan Mukherjee (Department of Economics, Lund University) have written on Bidding Rings: A Bargaining Approach.

ABSTRACT: We address the issue of bidder ring formation in single and multi-unit Vickrey auctions. We address this issue in a bargaining game set up under the assumption that valuation of bidders is commonly known only amongst themselves. In the single unit case, we show that the equilibrium coalition structure can only be an order preserving r-ring, that includes the winner and the top (r-1) losers. In the multiple units case, we specify sufficient conditions for formation of an interesting class of equilibrium coalition structures, which we call single winner ring with free riding, where exactly one winner colludes with all the losers and generates maximum possible bidders' surplus, a! nd, depending on the protocol, the remaining winners free ride either by staying alone or by colluding in pairs.

May 19, 2015 | Permalink | Comments (0) | TrackBack (0)

Robust Exclusion and Market Division Through Loyalty Discounts

Einer Elhauge, Harvard Law School and Abraham L. Wickelgren, University of Texas at Austin - School of Law; University of Texas at Austin - Center for Law, Business, and Economics discuss Robust Exclusion and Market Division Through Loyalty Discounts.

ABSTRACT: We show that loyalty discounts create an externality among buyers because each buyer who signs a loyalty discount contract softens competition and raises prices for all buyers. This externality can enable an incumbent to use loyalty discounts to effectively divide the market with its rival and raise prices. If loyalty discounts also include a buyer commitment to buy from the incumbent, then loyalty discounts can also deter entry under conditions in which ordinary exclusive dealing cannot. With or without buyer commitment, loyalty discounts will increase profits while reducing consumer welfare and total welfare as long as enough buyers exist and the entrant does not have too large a cost advantage. These propositions are true even if the entrant is more efficient and the loyalty discounts are above cost and cover less than half the market. We also prove that these propositions hold without assuming economies of scale, downstream competition, buyer switching costs, financial constraints, limits on rival expandability, or any intra-product bundle of contestable and incontestable demand.

May 19, 2015 | Permalink | Comments (0) | TrackBack (0)

On the Use of Price-Cost Tests in Loyalty Discounts: Which Implications from Economic Theory?

Chiara Fumagalli, Bocconi University - Department of Economics; Centre for Economic Policy Research (CEPR) and Massimo Motta, Universitat Pompeu Fabra ask On the Use of Price-Cost Tests in Loyalty Discounts: Which Implications from Economic Theory?

ABSTRACT: Recent cases in the US (Meritor, Eisai) and in the EU (Intel) have revived the debate on the use of price-cost tests in loyalty discount cases. We draw on existing recent economic theories of exclusion and develop new formal material to argue that economics alone does not justify applying a price-cost test to predation but not to loyalty discounts. Still, the latter contain features (they reference rivals and allow to discriminate across buyers and/or units bought) that have a higher exclusionary potential than the former, and this may well warrant closer scrutiny and more severe treatment from antitrust agencies and courts.

May 19, 2015 | Permalink | Comments (0) | TrackBack (0)

Competition Analyses of Licensing Agreements: Considerations for Developing Countries under TRIPS

Hiroko Yamane, Competition Analyses of Licensing Agreements: Considerations for Developing Countries under TRIPS.

ABSTRACT: This interface between IPRs and competition policy is a complex and multifaceted one and is still not that well-known in many developing countries. The relevant provisions of the TRIPS Agreement, in particular Article 40, leave WTO Members considerable discretion in terms of national implementation. In this context, this Issue Paper examines how Japan approached the control of anti-competitive practices in contractual licenses and compares it with the approaches taken in other jurisdictions, most notably in the United States and in the European Union. The paper seeks to draw implications for developing countries particularly as many of them have adopted some features of the Japanese model but without necessarily paying sufficient attention to how this model evolved over time with changes in the country’s industrial development and technology transfer policies as it went from being a net technology importer to a technological leader.

May 19, 2015 | Permalink | Comments (0) | TrackBack (0)

Monday, May 18, 2015

Re-Aligning Prospective Hospital Merger Guidance: Moving Beyond Concentration to More Meaningful Approaches

Margaret E. Guerin-Calvert, Center for Healthcare Economics and Policy, FTI Consulting, Inc., Jen Maki, Center for Healthcare Economics and Policy, FTI Consulting, and Bruce C Vladeck, Nexera, Inc. are Re-Aligning Prospective Hospital Merger Guidance: Moving Beyond Concentration to More Meaningful Approaches.

ABSTRACT: Mergers and acquisitions play a key role in industries facing disruptive change and the need to restructure effectively to meet future needs; transactions provide potential opportunities for substantial benefits. Significant realignment of the U.S. healthcare delivery system is underway, driven by economic, policy, and demographic factors, with many hospitals, particularly stand-alone hospitals, financially challenged. The effects of these trends are most visible in smaller metro areas, which often have greater hospital capacity than required to meet demand. Over 500 hospital transactions have occurred in recent years; about half involved stand-alone hospitals, many in smaller communities. An anticipated increase in hospital transactions in the near term suggests the importance of clear agency guidance on the factors that will distinguish transactions that are likely to be challenged.

Agency guidance about future enforcement on hospital mergers contrasts with actual enforcement practice. Guidance emphasizes concentration and Merger Guidelines thresholds, even though the vast majority of past hospital mergers, including most of those that exceeded Guidelines thresholds, went unchallenged. Academic price-concentration studies play a uniquely prominent role in statements of enforcement intentions in the healthcare industry, even though those studies are largely dated and mixed in their findings. Limited clarity exists on factors that mattered to competitive effects analysis in concentrated markets with closely reviewed yet unchallenged mergers. Moreover, the modeling used in hospital merger review may not account for current and evolving market realities of healthcare delivery and purchasing.

This paper reviews healthcare delivery trends in the context of recommendations for competitive effects analyses and guidance in industries characterized by dynamic change, differentiated products, large numbers of mergers, and low incidence of actual challenges. It shows that, where concentration thresholds are poor predictors of competitive effects, greater clarity is required of the specific factors other than structure that yielded assessments that mergers in highly concentrated markets were unlikely to result in a substantial lessening of competition. The many changes in healthcare markets necessitate closer scrutiny of economic models to assure they are robust and reflect market realities, including the responsiveness of rivals and payors. Given the substantial reliance on academic studies for guidance, we review the oft-cited concentration-price literature and find that it does not support the claimed systematic quantitative relationship. We undertook independently to address these issues empirically by updating a major study using a comprehensive and current commercial claims database covering 380 metropolitan areas. We found no systematic quantifiable relationship; instead myriad market and firm specific factors account for price variation. Finally, we present some suggestions for review of future transactions.

May 18, 2015 | Permalink | Comments (0) | TrackBack (0)

Collective Redress for Antitrust Damages in the European Union: Is this a Reality Now?

Damien Geradin, George Mason University School of Law; Tilburg University - Tilburg Law and Economics Center (TILEC) asks Collective Redress for Antitrust Damages in the European Union: Is this a Reality Now?

ABSTRACT: Private antitrust litigation is now a reality in the EU and the implementation of the 2014 Directive on actions for damages from competition law infringements will further stimulate such litigation. In 2013, the Commission also adopted a Recommendation on Collective Redress, which takes the form of a horizontal framework whose principles are set to apply to claims regarding rights granted under EU law in a variety of areas, including competition law. The Recommendation takes a conservative approach to collective redress, largely due to the fear that Member States may adopt mechanisms triggering unmeritorious litigation. Many in the EU consider that the US class actions regime has led to excessive litigation by entrepreneurial lawyers that, in the end, produce limited benefits to victims while creating significant costs to society. This view is, however, questionable since district courts, which are called to certify class actions, have in recent years exercised a more rigorous analysis of the claims presented to them. In addition, by opting for an “opt in” regime and the “loser pays” principle, while not authorizing contingency fees and punitive damages, the Recommendation may have made it harder for victims with small claims (i.e., individual consumers that have been overcharged for the goods they purchase) to obtain compensation for the harm suffered.

May 18, 2015 | Permalink | Comments (0) | TrackBack (0)

Is Google a gatekeeper? Not in today’s world

THE DETERRENT AND ENUNCIATING EFFECTS OF CONSENT DECREES

Giovanna Massarotto, Massarotto & Associati describes THE DETERRENT AND ENUNCIATING EFFECTS OF CONSENT DECREES.

ABSTRACT: More than 90 percent of U.S. civil antitrust cases settle by consent decrees. This phenomenon raises two questions. First, do consent decrees sacrifice antitrust deterrence, given that no finding of liability is made and no fine imposed? Second, do consent decrees sacrifice the public good of adjudication to say what the law is? A comparison of the Intel investigations in Europe and the United States shows that consent decrees need not sacrifice deterrence. However, the current European approach to consent decrees, unlike the U.S. approach, does sacrifice the benefit of having courts explain the content of competition law.

May 18, 2015 | Permalink | Comments (0) | TrackBack (0)

Easyjet v Commission: Complainants not Entitled to a Second Bite

Livia Solange West , DG Competition discusses Easyjet v Commission: Complainants not Entitled to a Second Bite.

ABSTRACT: In the easyJet judgment, the General Court clarifies that the Commission or a national competition authority may rely on Article 13 of Regulation 1/2003 to reject a complaint previously rejected by another authority on priority grounds, as long as that previous rejection was carried out in the light of EU competition laws.

May 18, 2015 | Permalink | Comments (0) | TrackBack (0)

Saturday, May 16, 2015

Is there compliance fatigue?

It seems like the demands for compliance grow every year, according to the Wall Street Journal.

May 16, 2015 | Permalink | Comments (0) | TrackBack (0)

Friday, May 15, 2015

Buying Alliances in the Grocery Retail Market: The Italian Approach in a European Perspective

Riccardo Sciaudone and Eleonora Carava, Grimaldi Studio Legale explain Buying Alliances in the Grocery Retail Market: The Italian Approach in a European Perspective.

ABSTRACT: Buying alliances provide their members with a market position allowing them to secure from their supplier(s) prices or other terms in their favour. In Europe, including Italy, anticompetitive effects arising from such alliances are scrutinised under Article 101 TFEU. But the tools of competition law may prove difficult to apply and national contract or fair trading laws may be better placed to tackle the negative effects possibly produced by these alliances on the grocery retail market.

May 15, 2015 | Permalink | Comments (0) | TrackBack (0)

Competition Law and the Opinion 2.13 on the Accession of the EU to the European Convention on Human Rights: Back to Square one?

Arianna Andreangeli, University of Edinburgh asks Competition Law and the Opinion 2.13 on the Accession of the EU to the European Convention on Human Rights: Back to Square one?

ABSTRACT: The Court of Justice of the European Union (EU) ruled that the Draft Accession agreement between the EU and the European Council of Europe, aimed at the accession of the EU to the European Convention on Human Rights, is not compatible with the Treaty on the EU and on the Functioning of the EU.

May 15, 2015 | Permalink | Comments (0) | TrackBack (0)

Beyond Belgium: Jacques Steenbergen's Contribution to Competition Law and Policy

Thomas Lubbig, Freshfields and Winfred Knibbeler, Freshfields have written a tribute Beyond Belgium: Jacques Steenbergen's Contribution to Competition Law and Policy.

ABSTRACT: For a competition agency to be visible and successful, it needs a face and a voice that are known and recognised beyond its remit as an authority in competition advocacy and sound economic judgement. Until not so very recently, it would have been unusual for the President of a national competition authority in the European Union (EU) to be well known beyond its jurisdiction. An exception to this rule—in the past—may have been the case of Italy, where a former Prime Minister was appointed as President of the authority in 1994. But even a number of years later, it would have been rare for competition law practitioners in a given country to be acquainted with the policies of other national competition authorities, let alone their staff.

May 15, 2015 | Permalink | Comments (0) | TrackBack (0)

Thursday, May 14, 2015

Horizontal and Vertical Firm Networks, Corporate Performance and Product Market Competition

Oliver Bischoff, Frankfurt University of Applied Sciences; Monopolies Commission; University of Hamburg and Achim Buchwald, Monopolies Commission; Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE) address Horizontal and Vertical Firm Networks, Corporate Performance and Product Market Competition.

ABSTRACT: This paper sheds new light on the assessment of firm networks via multiple directorships in terms of corporate firm performance. Using a large sample of European listed firms in the period from 2003 to 2011 and system GMM we find a significant compensation effect on corporate firm performance for the initial negative effect of horizontal multiple directorships by product market competition. In markets with effective competition, horizontal multiple directorships turn out to be an efficient mechanism to increase firm performance and thus assure competitive advantages. By contrast, linkages between up- and downstream firms have no significant influence on financial performance, irrespective of the level of competition intensity.

May 14, 2015 | Permalink | Comments (0) | TrackBack (0)

Artificial Intelligence & Collusion: When Computers Inhibit Competition

Ariel Ezrachi, University of Oxford - Faculty of Law and Maurice E. Stucke, University of Tennessee College of Law have a timely paper on Artificial Intelligence & Collusion: When Computers Inhibit Competition.

ABSTRACT: One may find it hard to imagine life without the power of computers. Indeed, all areas of our livelihood are affected and have benefited from technological development and an increasingly powerful computerised environment. In line with these developments, recent years have witnessed an ever increasing reliance on big data and big analytics and investment in the development of ‘smart’, ‘self-learning’ machines. These complex machines are set to assist in decision making, prediction, planning, trade, and logistics. They are also predicted to further enhance our more immediate living environment - the way we commute, shop and communicate.

Not surprisingly, the prospect of Artificial Intelligence (AI) has long fueled human imagination. The development of self-learning and independent computers raises challenging questions as to the future of the human race and the control, or lack of it, humans would exert over machines.

Interestingly, these developments and the challenges raised by them are also relevant to the area of antitrust enforcement. Sophisticated computers are central to the competitiveness of present and future markets. With the accelerating development of AI, they are set to change the competitive landscape and the nature of competition restraints, which enforcement agencies will need to tackle.

This paper addresses these developments and considers the application of competition law to an advanced ‘computerised trade environment.’ Questions raised and discussed are neither futuristic nor speculative. The Department of Justice, for example, charged in 2015 a price-fixing scheme involving posters sold in the United States through Amazon Marketplace. To implement their agreements, the conspirators, according to the DOJ, “adopted specific pricing algorithms for the sale of certain posters with the goal of coordinating changes to their respective prices and wrote computer code that instructed algorithm-based software to set prices in conformity with this agreement.”

With the present usage of computers and anticipated technological advancements, more prosecutions involving pricing algorithms are likely.  Thus the questions raised in these cases are central to our current thinking on antitrust enforcement and technological developments. Such questions concern, for example, the concept of agreement and intent in a computer dominated environment, the boundaries of legality and collusion, the antitrust liability of algorithms’ creators and users, the ability to constrain AI, the relationship between humans and computers, and the possibility of creating ethical, law abiding, machines.

After discussing in Part I the way in which computerised technology is changing the competitive landscape, we explore in Part II possible ways in which computerised agents may be involved in anticompetitive collusion. We consider varying levels of technological development, which differ in the enforcement challenges they raise. Finally, Part III reviews the antitrust policy challenges raised by advanced computers and artificial intelligence.

May 14, 2015 | Permalink | Comments (0) | TrackBack (0)

LEAR Competition Conference June 25-26, 2015

LEAR Competition Conference June 25-26, 2015

See here for details.

 

Among the covered topics:

How can we deal with vertical restraints in the e-commerce? What are the competitive effects of platform parity pricing policies? Does the transparency brought about by the Internet foster competition or increase the risk of collusive behavior? What are the effects of new media on consumer welfare both in the short and in the long run? Is consumer surplus negatively affected by the concentration in the control over personal data?

The sixth edition of the Lear Conference will focus on how this influence is shaping the economic practice, the way firms compete and antitrust enforcement. The conference will cover a wide range of related topics, such as competition among electronic platforms, access to personal data, vertical restraints in e-commerce, competition in search engine market, and across-platform parity agreements, among others.

By bringing together a number of excellent speakers in the field, the Lear Conference 2015 will promote a thorough and lively discussion on these crucial topics.

Stay tuned for the Lear conference 2015!

Keynote speakers and discussants David Abecassis (Analysys Mason); Svend Albaek (DG Comp); Elena Argentesi (Lear and University of Bologna); Susan Athey (Stanford University); Paolo Buccirossi (Lear); Emilio Calvano (CSEF- University of Naples Federico II); Kate Collyer (Competition and Market Authority); Marco D’Ostuni (Cleary Gottlieb Steen & Hamilton); (John Fingleton (Fingleton Associates); Sven-Olof Fridolfsson (Swedish Competition Authority); Joshua Gans (University of Toronto); Damien Geradin (George Mason University and Tilburg University); Justus Haucap (DICE); Alberto Heimler (Scuola Superiore della Pubblica Amministrazione – SNA); Ali Hortacsu (Chicago University); Michael Katz (University of California, Berkeley); Jonathan Levin (Stanford University); Preston McAfee (Microsoft); Antonio Nicita (AGCOM and University of Rome La Sapienza); Veronica Pinotti (McDermott & Will Emery); Martino Sforza (McDermott & Will Emery); Simone Sole (Mediaset); Giancarlo Spagnolo (Stockholm School of Economics); Tommaso Valletti (Imperial College London); Hal Varian (Google); Simonetta Vezzoso (University of Trento) and others.

 

 DAY 1 – Thursday, June 25th, 2015

9:00 – 10:00 Welcome coffee and registration
10.00 – 13.00

The Economics of Peer-to-Peer Markets In the last few years a new set of Internet marketplaces has begun to challenge existing businesses such as the taxi and hotel industry. Some of these businesses, such as Airbnb and Uber, have come under intense regulatory scrutiny. Why have these businesses emerged and what problems do their marketplaces have to solve? To what extent are these new peer-to-peer markets an improvement on traditional business models? What are the parallels and differences with earlier Internet marketplaces for e-commerce, consumer lending and skilled labor? Finally, how should regulatory policy treat peer-to-peer marketplaces, especially when they are competing against established industries? This talk will describe recent research in this area, and try to draw some tentative conclusions.

Keynote Speaker: Jonathan Levin (Stanford University)

Discussion: • John Fingleton (Fingleton Associates)Kate Collyer (Competition and Markets Authority)

Media and the Internet The Internet has largely changed the way people become informed and has led to the appearance of new operators. Among these, there are news aggregators such as Google News and Yahoo! News. News aggregators have had a significant impact on competition in the media markets and several competition authorities have conducted investigations to ascertain whether their conducts were compliant with antitrust rules. Traditional news operators have complained that news aggregators, which do not often pay for the content they display on their website, undermine the incentive of authors and other market participants to create content. The same criticism may hold true for other media, such as TV or cinema, with respect to websites that allow end consumers to watch TV programs or movies without any contractual relationship with the content creator. What are the effects of these new media on consumer welfare in the short and in the long run? Do news aggregators or video portals compete in the same relevant market as the traditional media? Do they enjoy a significant market power? Is the application of competition law the proper remedy for any market distortion that may result from their activity?

Chair: Veronica Pinotti (McDermott Will & Emery)

Keynote Speaker: Susan Athey (Stanford University)

Discussion: • Antonio Nicita (AGCOM and University of Rome La Sapienza)Simone Sole (Mediaset)

Lunch
14.30 – 18.30

Search and Competition The markets for search-based and online advertising differentiate themselves among many levels with respect to most markets. These features include network effects, double-sidedness, and high levels of R&D and innovation. Antitrust enforcement has thus a difficult job. With respect to recent notorious cases such as Google’s, what are the effects of an antitrust intervention on innovation? Do competitors in the search engine market work properly and in the interest of consumers? Does Google enjoy monopoly power?

Keynote Speaker: Hal Varian (Google)

Discussion: • Justus Haucap (Dusseldorf Institute for Competition Economics)

Internet as a distribution channel: dynamics and policy challenges

In the past decades, the Internet has become a very active distribution channel, disrupting traditional modes of distribution, bringing benefits to consumers as well as generating new business opportunities for firms. The market structure of distribution has changed dramatically in many sectors, and suppliers have had to rethink their distribution strategies. These changes give rise to new concerns on the much-debated antitrust issue of Vertical Restraints (VRs). VRs may be introduced in order to improve the vertical structure by reducing transaction costs, improving the stability of supplies, and as a device to align the two firms’ interests. Certain types of VRs may also soften competition. The nature of competition taking place in the digital environment as well as competition between traditional and on-line retailers has not been fully understood yet. Antitrust agencies and courts are still exploring this new field, and this could generate uncertainty in decisions and judgments.

Keynote Speaker: Ali Hortacsu (Chicago University)

Discussion: • Svend Albaek (European Commission – DG COMP)Andrea Pezzoli (AGCM)* 

18.45 – 20.00

Sightseeing* & Aperitif

* For those curious to explore more of what Rome has to offer, there will be a private visit of Villa Farnesina, a Renaissance creation of unequalled beauty and refinement decorated with the famous “Triumph of Galatea” by Raffaello

 

DAY 2 – Friday June 26th, 2015

9.30 – 11.00

Across-Platform Parity Agreements It is widespread among online platforms to require their sellers not to offer better prices or conditions on other selling platforms; this clause is often referred to as Price Parity clause, or Retail Most Favoured Nation due to its similarities to the MFN clause. Despite much analysis efforts made from several agencies around the world, there is still scant literature on the topic. Some initial reflections on their competitive effects are provided in a recent report prepared by Lear for the OFT (Lear, 2012). They defined these pricing arrangements as Across-Platforms Parity Agreements (APPA). An MFN is a clause normally embedded in long-term contracts between two firms for the provision of intermediate goods or raw materials whereby the supplier undertakes to apply to the buyer the best price conditions among those applied to any other buyer. Although some similarity exists between MFNs and APPAs, the two have to be distinguished and it would be wrong to derive clear policy implications from the literature on MFNs. Since 2010, this clause has been enforced by prominent platforms such as Amazon, booking.com, HRS (the German leading OTA), Apple on its iBookstore and many more. Whether such clause should raise any competitive concern is still a much-debated issue among both policymakers and academics.

Chair: Tommaso Salonico (Freshfields Bruckhaus Deringer LLP)

Keynote Speaker: Paolo Buccirossi (Lear)

Discussion: • Giancarlo Spagnolo (Stockholm School of Economics and University of Rome Tor Vergata) Sven-Olof Fridolfsson (Swedish Competition Authority)

Coffee Break

11.30 – 13.00

 

Two-Sided Platforms and Competition Policy: What have we really learned? Multi-sided platforms create value by bringing two or more different types of economic agents together and allowing them to interact. These platforms play critical roles in many economically important industries such as Internet-based ones. By smoothing direct connections between multiple types of affiliated customers, MSPs most often lead to network effects. From a theoretical point of view, MSPs subvert classical economic models. This very nature may affect antitrust analysis in all of its aspects, from cartels to monopolizations because the interrelationship between pricing and output has to be accounted for on all sides and exploitation of one side of the market is not necessarily an indicator of market power. To what extent the development of two-sided market theory has influenced actual antitrust practice? Has that influence been beneficial?

Chair: Alberto Heimler (Scuola Superiore della Pubblica Amministrazione – SNA)

Keynote Speaker: Michael Katz (University of California, Berkeley)

Discussion: • Tommaso Valletti (Imperial College of London and University of Rome Tor Vergata)Simonetta Vezzoso (Università degli Studi di Trento)

Lunch
14.30 – 18.00

Competition in Advertising Markets Advertising markets, including over the air TV, Internet display advertising and search advertising, have a very complex structure. Consumers are not typically paying for content so there is no price signal – competition for users is in product quality and reputation. Web search product quality involves algorithms, an extensive web crawl, information retrieval technology and voluminous, fresh data. Reaching their target audiences may require advertisers to advertise on all platforms, creating pressure for standardization to minimize costs, which conflicts with innovation.

Chair: Marco D’Ostuni (Cleary Gottlieb Steen & Hamilton)

Keynote Speaker: Preston McAfee (Microsoft)

Discussion: • Elena Argentesi (Lear and Università di Bologna) Martino Sforza (McDermott & Will Emery)

Recommendation Systems Competition Recommender Systems are software tools and techniques providing suggestions for items to which consumers are potentially interested. Billions of consumers rely daily on these systems to decide what music to listen to (iTunes), which movie to watch (Netflix), what product to purchase (Amazon) or which restaurant to patronize (Yelp). By controlling consumers’ informational environment these agents can distort consumption choices. What are their incentives? Is recommendation bias a manifestation of market power? To what extent is competition a disciplining force?

Keynote Speaker: Emilio Calvano (CSEF-University of Naples Federico II)

Personal Data and Competition Consumer data have always represented a valuable asset for marketeers and firms alike. Indeed, better information on consumers let firms tailor their offer to address specific customer needs. This can benefit both firms and consumers and eventually increase total welfare. Thanks to technological advances, it is now possible to collect an even increasing amount of personal information and this is particularly true for all those market and non-market activities that are mediated through technology. Firms that hold and control a high volume of quality personal data can offer better products and services (to customers or, as it is common within an ad-funded business model, to advertisers) and, as a consequence, reap higher profits, as they “monetize” the information they have collected. Some critics argue that such a control might be detrimental to the competitive process as the firm that control key information might foreclose actual or potential competitors from the market. This might be particularly relevant when consumer data have been acquired through potentially anticompetitive practices (exclusivity agreements) and in a context in which the quality and value of collected data is subject to network externalities (the more sources used to collect information the higher the quality and value of the collected information). Should the private control over online detailed consumer level data raise specific anticompetitive constraints? Is there the risk to foreclose efficient competitors if they have no access to the bulk of information held by incumbents? Is the consumer surplus negatively affected by the concentration in the control over personal data?

Keynote Speaker: Joshua Gans (University of Toronto)

Discussion: • Damien Geradin (George Mason University and Tilburg University) David Abecassis (Analysys Mason)

English is the official language of the Conference. There will be simultaneous translation into English and Italian at the plenary sessions.

Italian lawyers get 13 credits from the BAR Association for attending

* Please note that this is a draft program, hence still subject to minor changes.

 

Registration

    

Register before 17 May to qualify for an Early Bird registration discount!

Special admission offer of 250 Euros for PhD and Master’s students. 

Please, click here to register for Antitrust Economics 2.0.

To learn more about the Lear Concerence 2015 email us to learconference@learlab.com

 

Location

    

Villa Farnesina, Palazzina dell’Auditorio Via della Lungara 230 – Rome

Villa Farnesina is situated in the area of Trastevere, opposite the Corsini Palace. The Sienese banker, Agostino Chigi, named “magnifico” by his contemporaries, acquired the villa, which had been completed in 1509 by Baldassarre Peruzzi, a Sienese architect of great renown. The villa, a wonderful example of Renaissance art, was decorated by such famous painters as Raffaello, Sebastiano del Piombo, Giovanni Antonio Bazzi (called Sodoma), Giulio Romano and Peruzzi himself, and it was furnished with such magnificence that it aroused general admiration. In the rooms of the Villa high prelates, noblemen, poets, men of letters and artists used to meet; comedies were performed there and sumptuous banquets were held. After Agostino Chigi’s death, the villa was bought by Cardinal Alessandro Farnese (from whom the Villa takes its name). It passed to the Bourbon family in 1714; and finally a long lease of the villa at ground rent was given to the Spanish Ambassador Bermudez de Castro, Duke of Ripetta, who later redeemed it. The Italian State bought the Villa from the Duke’s heirs and in 1928 it was destined to become the home of the Reale Accademia d’Italia. After the suppression of the Accademia d’Italia in 1944, the villa became the property of the Lincei Academy, which, by law, had succeeded the suppressed Academy.

To read more click here http://bit.ly/1OE7u7E

 

May 14, 2015 | Permalink | Comments (0) | TrackBack (0)

The Welfare Effects of Metering Ties

Einer Elhauge, Harvard Law School and Barry J. Nalebuff , Yale University - Yale School of Management discuss The Welfare Effects of Metering Ties. Worth downloading!

ABSTRACT: Critics of current tying doctrine argue that metering ties can increase consumer welfare and total welfare without increasing output and that they generally increase both welfare measures. Contrary to those claims, we prove that metering ties lower consumer welfare and total welfare unless they increase capital good output. We further provide conditions under which metering ties always harm consumer welfare for all uniform and lognormal distributions of consumable usage rates. Finally, we show that with a lognormal distribution, metering ties also lower total welfare absent a large dispersion in desired usage of the metered good. These findings support current tying doctrine, which presumptively condemns ties with market power absent proof of an offsetting procompetitive justification.

May 14, 2015 | Permalink | Comments (0) | TrackBack (0)

Dynamic Matching in a Two-Sided Market

Ming Hu, University of Toronto - Rotman School of Management and Yun Zhou, University of Toronto - Rotman School of Management theorize about Dynamic Matching in a Two-Sided Market.

ABSTRACT: Motivated by the rise of the sharing economy, we consider an intermediary firm's problem of dynamically matching demand and supply of heterogeneous types over a discrete-time horizon. More specifically, there are two finite disjoint sets of demand and supply types. Associated with each possible matching of a demand type and a supply type is a reward. In each period, demand and supply of various types arrive in random quantities. The firm's problem is to decide on the optimal matching policy to maximize the total discounted rewards minus costs, given that unmatched demand and supply will incur waiting or holding costs, and will be carried over to the next period with abandonments.

For this general dynamic matching problem, we obtain a set of distribution-free structural results. First, using only matching rewards, we define a partial order between pairs of demand and supply types (which do not necessarily share a common demand or supply type). With this notion of partial order, we show it is optimal to prioritize the matching of the dominating pair over the dominated pair, and to greedily match a perfect pair that dominates all other pairs sharing a common demand or supply type. Second, we impose a reward structure in which types have (unidirectional) "taste" differences. For these horizontally differentiated types, we show that there exists a matching priority hierarchy related to "taste" locations: for any given demand (or supply) type, the closer its distance to a supply (or demand) type, the higher the priority to match the closer pair. Along the priority hierarchy, the optimal matching policy has a match-down-to structure for any pair of demand and supply types: there exist state-dependent thresholds; if the levels of demand and supply are higher than the thresholds, they should be matched down to the thresholds; otherwise, they should not be matched. Third, we impose a reward structure in which types have "quality" differences. For these vertically differentiated types, the optimal matching policy has an even simpler top-down matching structure (in short, "line up, match up"): line up demand types and supply types in descending order of their "quality" from high to low; match them from the top, down to some level. When demand and supply types have the same abandonment rate, the match-down-to levels have monotonicity properties with respect to the system state, and the one-step-ahead heuristic policy has a simplified state-dependent structure. Lastly, we study the deterministic counterpart of the stochastic problem and show that its solution can be obtained by solving a linear program or approximated by another linear program with much fewer decision variables. It is asymptotically optimal to re-solve the linear program successively for the current time and state and apply the solution as a heuristic policy, when the time and the arrivals of demand and supply are scaled up proportionally.

May 14, 2015 | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 13, 2015

Resolving Reverse-Payment Settlements with the Smoking Gun of Stock Price Movements

Thomas G. McGuire, Harvard Medical School - Department of Health Care Policy, Keith Drake, Greylock McKinnon Associates, Einer Elhauge, Harvard Law School, Raymond S. Hartman, Greylock McKinnon Associates, and Martha Starr, American University - Department of Economics discuss Resolving Reverse-Payment Settlements with the Smoking Gun of Stock Price Movements.

ABSTRACT: The Supreme Court recently held that in reverse payment settlements of drug patent disputes, anticompetitive effects can be inferred if the reverse payment exceeds the patent holder’s anticipated litigation costs, absent some offsetting justification. Application of this standard is problematic because defendants usually (a) obscure the amount of the reverse payment and (b) claim their settlement was justified by risk aversion. Further, even if a net reverse payment can be proven, it is little help in estimating the period of delay or damages. This Article offers another type of evidence that demonstrates and quantifies anticompetitive effects. An otherwise unexplained bump in the patent holder’s stock price shows that the settlement created new future profits by extending the period without generic competition beyond what the stock market expected. The stock market test has several advantages: it rebuts the risk aversion claim (which cannot explain the stock price rise); it more effectively (though still conservatively) captures damages than the magnitude of the reverse payment; and, finally, it relies on the behavior of objective traders rather than deal makers with well-understood incentives to obscure the presence of a payment. We conduct a stock market event study on one of the early instances of a reverse-payment settlement to illustrate how the method works.

May 13, 2015 | Permalink | Comments (0) | TrackBack (0)