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Showing papers in "Journal of Antitrust Enforcement in 2013"


Journal ArticleDOI
TL;DR: In this article, the authors address four scenarios where competition yields suboptimal results and discuss some well-accepted exceptions to competition law, and argue that competition itself is the problem's cause, not its cure.
Abstract: Competition is the backbone of US economic policy. Competition advocacy is also thriving internationally. Promoting competition is broadly accepted as the best available tool for promoting consumer well-being. Competition officials, who regularly try to protect the public from anticompetitive special interest legislation, are justifiably jaded about complaints of excess competition. Although the economic crisis has prompted some policymakers to reconsider basic assumptions, the virtues of competition are not among them. Nonetheless to effectively advocate competition, officials must understand when competition itself is the problem’s cause, not its cure. Market competition, while harming some participants, often benefits society. But does competition always benefit society? This is antitrust’s blind spot. After outlining the virtues of competition, and discussing some well-accepted exceptions to competition law, this article addresses four scenarios where competition yields suboptimal results.

41 citations


Journal ArticleDOI
TL;DR: In this paper, the authors examine the effect of the absence of a compliance program on the enforcement of antitrust laws and the potential positive and negative effects of compliance programs on company liability for antitrust violations.
Abstract: Should companies that have antitrust compliance programmes be granted a reduction in the amount of fines or even immunity from fines when they are found to have committed antitrust infringements? Should the absence of a compliance programme constitute an aggravating factor leading to higher fines for antitrust infringements? Should the adoption of a compliance programme be imposed as part of infringement decisions or settlements? These are the questions which this article examines, on the basis of an analysis of the nature of antitrust infringements, the rationale of company liability for antitrust infringements, and the possible positive and possible negative effects of compliance programmes.

20 citations


Journal ArticleDOI
TL;DR: Wang et al. as discussed by the authors explored the achievements of the competition regime over the past five years and the challenges lying ahead, and revealed the considerable challenges faced by the new regime.
Abstract: China's Anti-Monopoly Law came into effect five years ago—on 1 August 2008—and as such is one of the youngest antitrust laws in the world. This article explores the achievements of the competition regime over the past years, and the challenges lying ahead. The Anti-Monopoly Law has been enforced by a number of agencies—namely, the Ministry of Commerce, the National Development and Reform Commission, the State Administration for Industry and Commerce and the courts through some influential cases, such as a few conditionally cleared merger decisions and the investigation against China Telecom and China Unicom. Without underestimating these successes, these cases also reveal the considerable challenges faced by the new regime.

17 citations



Journal ArticleDOI
TL;DR: In this paper, the authors make a timely contribution to this debate by considering the legislative and case-law developments over the past decade in relation to private enforcement of competition law in the UK.
Abstract: The Department for Business Innovation and Skills introduced a consultation process in April 2012 on ways to facilitate private actions in competition law in the UK. This article makes a timely contribution to this debate by considering the legislative and case-law developments over the past decade in relation to private enforcement of competition law in the UK. In particular, the article focuses on the follow-on action mechanism introduced by the Enterprise Act 2002 whereby damages may be sought by injured parties, relying on prior infringement decisions by the UK competition authorities or the European Commission, before the specialist Competition Appeal Tribunal (CAT). The article notes that there has been relatively little litigation under this mechanism and examines the rationale for continued resort to the traditional High Court litigation route. In addition, the minimal take-up of the consumer representative follow-on action before the CAT is addressed. The article then draws on research undertaken by the author in relation to competition infringement decisions by the UK Office of Fair Trading (soon to be replaced by the Competition and Markets Authority) between 2005 and 2009 and outlines the results of a questionnaire study seeking to understand why aggrieved parties did not seek redress in a follow-on action before the courts or CAT.

12 citations


Journal ArticleDOI
TL;DR: In the context of US antitrust law, many commentators have recently called for an expansion of the Federal Trade Commission's (FTC) adjudicatory decision-making authority and carving out exceptions for the agency from increased burdens of production facing private plaintiffs.
Abstract: In the context of US antitrust law, many commentators have recently called for an expansion of the Federal Trade Commission’s (FTC’s) adjudicatory decision-making authority pursuant to Section 5 of the FTC Act, increased rulemaking, and carving out exceptions for the agency from increased burdens of production facing private plaintiffs. These claims are often expressly grounded in the assertion that expert agencies generate higher quality decisions than federal district court judges. We call this assertion the expertise hypothesis and attempt to test it. The relevant question is whether the expert inputs available to generalist federal district court judges translate to higher quality outputs and better performance than the Commission produces in its role as an adjudicatory decision-maker. While many appear to assume agencies have courts beat on this margin, to our knowledge, this oft-cited reason to increase the discretion of agencies and the deference afforded them by reviewing courts is void of empirical support. Contrary to the expertise hypothesis, we find evidence suggesting the Commission does not perform as well as generalist judges in its adjudicatory antitrust decision-making role. Furthermore, while the available evidence is more limited, there is no clear evidence the Commission adds significant incremental value to the administrative law judge decisions it reviews. In light of these findings, we conclude there is little empirical basis for the various proposals to expand agency authority and deference to agency decisions. More generally, our results highlight the need for research on the relationship between institutional design and agency expertise in the antitrust context.

12 citations




Journal ArticleDOI
TL;DR: The Competition Directorate General of the European Commission has published a useful descriptive Manual of its procedure in cases of restrictive agreements and abuse of dominance as discussed by the authors, which does not deal with submissions made to other parts of the Commission.
Abstract: The Competition Directorate General of the European Commission has published a useful descriptive Manual of its procedure in cases of restrictive agreements and abuse of dominance. However, there are several serious omissions. The Manual does not deal with submissions made to other parts of the Commission. It says nothing about the need for impartiality, or the duty to respect the Charter of Fundamental Rights, or the need to expect judicial review of all decisions. It allows officials to hold meetings without keeping minutes. It says too little about interim measures, and does nothing to reduce the two basic flaws in the Commission’s procedure: the same officials draft the statement of objections and the decision, and none of the Commissioners who formally take the decision have seen the evidence or read the arguments. There are several examples of failure to deal with difficult questions, which are precisely those on which guidance is needed.

6 citations


Journal ArticleDOI
TL;DR: In this paper, the authors used aggregate reviews of Federal Trade Commission merger studies to identify a number of quantitative and qualitative experiments supportive of unilateral effects, coordinated interaction, or continued competition theories.
Abstract: Natural experiments may serve as a test of an economic theory that purports to evaluate the competitive effects of a proposed transaction and therefore play an important role in merger analysis. Using aggregate reviews of Federal Trade Commission merger studies, it is possible to identify a number of quantitative and qualitative experiments supportive of unilateral effects, coordinated interaction, or continued competition theories. The court decisions in Staples, Oracle, and Whole Foods play a role in structuring the review in unilateral cases, while Judge Posner’s commentary on performance analysis is relevant in coordinated interaction cases. Other experiments show either no structure-performance relationship in a market or undermine a key characteristic of Guidelines analysis to imply that the merger in question is not likely to be anticompetitive. A final section evaluates the linkage between the experimental evidence, supplemented at times with validated customer complaint and hot document findings, and the merger challenge decision. While the results show the bulk of the merger challenges were substantiated by some type of evidence, a number of monopoly and duopoly matters are challenged on pure structural grounds.

6 citations


Journal ArticleDOI
Adi Ayal1
TL;DR: In this article, a return to the wisdom of days past, less for the populist reasons then articulated, and more due to the "influence effect", the scale and scope economies in procuring political influence and their detrimental effects on democracy, is discussed.
Abstract: In its early days antitrust policy was motivated largely by public fears regarding economic power, the excess influence owners of large businesses might exert over political and commercial markets. Over time, antitrust enforcement has come to focus exclusively on market power, the ability to raise prices or reduce output in narrowly defined product markets. This article calls for a return to the wisdom of days past, less for the populist reasons then articulated, and more due to the ‘influence effect’, the scale and scope economies in procuring political influence and their detrimental effects on democracy. After delving into the market and political effects created by big business, the recent financial crises and Too-BigTo-Fail (TBTF) dynamic are discussed. The main problem, it is argued, is not potential business failures and resulting bailouts, but the influence TBTF institutions exert ‘while business is going well’. Preventing excess economic power and TBTF firms is a task originally entrusted to antitrust agencies, and this article calls for reaffirming this obligation. There are practical difficulties and political risks inherent in combating economic power, and these are discussed. In the end, such difficulties are very real and require careful formulation of enforcement strategy, but antitrust agencies should not shy away from the task.



Journal ArticleDOI
TL;DR: In this paper, the authors present two primary models of judicial review of state regulatory decisions that impair competition: a representation reinforcement model and a substantive view model, associated with aspects of EU competition law and freedom of movement jurisprudence.
Abstract: At present, there are two primary models of judicial review of state regulatory decisions that impair competition. A representation reinforcement model, associated with the Midcal approach in the USA, seeks to make state regulators politically accountable when they take decisions impairing competition. A substantive view model, associated with aspects of EU competition law and freedom of movement jurisprudence, has judges substantively review the merits of the regulatory decision. Both models have significant drawbacks. The representation reinforcement model often fails because of cost externalization on non-voters or asymmetries between the concentration of benefits on producers and the diffusion of costs on consumers. The substantive review model can create problems of counter-majoritarianism and judicial legitimacy. The weaknesses of the two dominant models suggest that countries implementing new mechanisms of judicial control over regulatory decisions should consider the creation of alternative models.

Journal ArticleDOI
TL;DR: In this article, the authors investigate the key justifications offered by enforcers in support of criminal cartel law enforcement and raise serious questions about claims regarding the deterrence impact of criminal sanctions and the inherent criminality of cartel conduct.
Abstract: Competition authorities increasingly favour criminal sanctions for 'hard core' cartel conduct. However, the empirical case for criminalization is thin. This article reports on 'first of its kind' empirical research that interrogates the key justifications offered by enforcers in support of criminal cartel law enforcement. Based on an Australian case-study, but with implications for other jurisdictions, the research findings raise serious questions about claims regarding the deterrence impact of criminal sanctions and the inherent criminality of cartel conduct. The implications for the criminalization 'movement' are far-reaching. Specific implications for the advocacy and outreach strategies of competition authorities are discussed, with particular emphasis on how such strategies should be formulated so as to maximize their value, not just in securing deterrence, but ultimately in building compliance.

Journal ArticleDOI
TL;DR: The existence of class actions within a jurisdiction's competition law regime has significant implications for other legal and enforcement issues as mentioned in this paper, focusing on the interaction between class actions for damages and immunity programs.
Abstract: The existence of class actions within a jurisdiction’s competition law regime has significant implications for other legal and enforcement issues This article focuses on the interaction between class actions for damages and immunity programmes pursuant to which cartel whistle-blowers may escape criminal punishment, but may remain vulnerable to class actions The article challenges a simplistic conclusion that class actions undermine the incentives to report a cartel pursuant to an immunity programme The threat of independent detection of the cartel, and a corresponding obligation to pay damages in any event, at least mitigates the potentially negative effect of class actions on immunity programmes Moreover, other considerations, for example, the fact that class actions may increase the probability of the cartel’s detection, suggest that class actions for damages may make immunity programmes more effective If positive but lowered penalties are optimal for whistle-blowers, class actions also allow competition agencies to provide a bright-line, and thus more credible, commitment to zero public punishment for whistle-blowers, while maintaining a positive penalty overall because of private actions for damages In light of this analysis, the article considers the question of standing of indirect purchasers to sue for damages from a cartel There are competing considerations: indirect standing may mitigate concerns about reluctant direct purchaser plaintiffs, and about foreign cartels, but may increase concerns about attorney agency problems