The Rule of Reason
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The FTC and the Law of Monopolization
George Mason University School of Law Law and Economics Research Papers Series Working Paper No. 00-34 2000 The FTC and the Law of Monopolization Timothy J. Muris As published in Antitrust Law Journal, Vol. 67, No. 3, 2000 This paper can be downloaded without charge from the Social Science Research Network Electronic Paper Collection: http://papers.ssrn.com/paper.taf?abstract_id=235403 The FTC and the Law of Monopolization by Timothy J. Muris Although Microsoft has attracted much more attention, recent developments at the FTC may have a greater impact on the law of monopolization. From recent pronouncements, the agency appears to believe that in monopolization cases government proof of anticompetitive effect is unnecessary. In one case, the Commission staff argued that defendants should not even be permitted to argue that its conduct lacks an anticompetitive impact. This article argues that the FTC's position is wrong on the law, on policy, and on the facts. Courts have traditionally required full analysis, including consideration of whether the practice in fact has an anticompetitive impact. Even with such analysis, the courts have condemned practices that in retrospect appear not to have been anticompetitive. Given our ignorance about the sources of a firm's success, monopolization cases must necessarily be wide-ranging in their search for whether the conduct at issue in fact created, enhanced, or preserved monopoly power, whether efficiency justifications explain such behavior, and all other relevant issues. THE FTC AND THE LAW OF MONOPOLIZATION Timothy J. Muris* I. INTRODUCTION Most government antitrust cases involve collaborative activity. Collabo- ration between competitors, whether aimed at sti¯ing some aspect of rivalry, such as ®xing prices, or ending competition entirely via merger, is the lifeblood of antitrust. -
Ruling Within Reason: a Reprieve for Resale Price Maintenance
Agenda Advancing economics in business Ruling within reason: a reprieve for resale price maintenance As a result of the US Supreme Court’s recent overturning of the long-standing 1911 Dr Miles decision, which deemed minimum resale price maintenance unlawful per se, this practice is to be judged under the ‘rule of reason’ in the USA, as has been the case with other vertical restraints. Is it therefore time to change the European approach to vertical price fixing? In its June 2007 judgement in Leegin Creative Leather purposes of applying Article 81(1) to demonstrate Products, Inc. v. PSKS, Inc, the US Supreme Court ruled any actual effects on the market.5 that resale price maintenance (RPM) should be judged under the ‘rule of reason’.1 The Leegin ruling overturned In line with the Commission’s approach, in the UK the long-standing 1911 Dr Miles precedent, which held minimum RPM is considered a hard-core practice that that it is per se unlawful under Section 1 of the Sherman ‘almost inevitably’ infringes Article 81 or the Chapter I Act for firms to fix the minimum retail price at which prohibition under the Competition Act 1998.6 Indeed, the retailers may sell goods or services on.2 Office of Fair Trading (OFT) has brought a number of high-profile vertical price fixing cases in recent years, as The outcome of the Leegin case has relieved those who discussed below. support the view that, although under certain circumstances minimum RPM may result in sub-optimal In light of the Leegin judgement, is this the time for market outcomes, this risk is not sufficient to make the European competition policy to move towards an effects- practice illegal per se. -
Resale Price Maintenance and Minimum
Presenting a live 90-minute webinar with interactive Q&A Resale Price Maintenance and Minimum Advertised Pricing: Structuring to Minimize Antitrust Scrutiny State, Federal, and International Treatment of RPM Agreements and MAP Policies THURSDAY, FEBRUARY 28, 2019 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Michael A. Lindsay, Partner, Dorsey & Whitney LLP, Minneapolis William L. Monts, III, Partner, Hogan Lovells US, Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 1. Tips for Optimal Quality FOR LIVE EVENT ONLY Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial 1-866-961-8499 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail [email protected] immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again. Continuing Education Credits FOR LIVE EVENT ONLY In order for us to process your continuing education credit, you must confirm your participation in this webinar by completing and submitting the Attendance Affirmation/Evaluation after the webinar. -
A Proposal to Enhance Antitrust Protection Against Labor Market Monopsony Roosevelt Institute Working Paper
A Proposal to Enhance Antitrust Protection Against Labor Market Monopsony Roosevelt Institute Working Paper Ioana Marinescu, University of Pennsylvania Eric A. Posner, University of Chicago1 December 21, 2018 1 We thank Daniel Small, Marshall Steinbaum, David Steinberg, and Nancy Walker and her staff, for helpful comments. 1 The United States has a labor monopsony problem. A labor monopsony exists when lack of competition in the labor market enables employers to suppress the wages of their workers. Labor monopsony harms the economy: the low wages force workers out of the workforce, suppressing economic growth. Labor monopsony harms workers, whose wages and employment opportunities are reduced. Because monopsonists can artificially restrict labor mobility, monopsony can block entry into markets, and harm companies who need to hire workers. The labor monopsony problem urgently calls for a solution. Legal tools are already in place to help combat monopsony. The antitrust laws prohibit employers from colluding to suppress wages, and from deliberately creating monopsonies through mergers and other anticompetitive actions.2 In recent years, the Federal Trade Commission and the Justice Department have awoken from their Rip Van Winkle labor- monopsony slumber, and brought antitrust cases against employers and issued guidance and warnings.3 But the antitrust laws have rarely been used by private litigants because of certain practical and doctrinal weaknesses. And when they have been used—whether by private litigants or by the government—they have been used against only the most obvious forms of anticompetitive conduct, like no-poaching agreements. There has been virtually no enforcement against abuses of monopsony power more generally. -
Buyer Power: Is Monopsony the New Monopoly?
COVER STORIES Antitrust , Vol. 33, No. 2, Spring 2019. © 2019 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. Buyer Power: Is Monopsony the New Monopoly? BY DEBBIE FEINSTEIN AND ALBERT TENG OR A NUMBER OF YEARS, exists—or only when it can also be shown to harm consumer commentators have debated whether the United welfare; (2) historical case law on monopsony; (3) recent States has a monopoly problem. But as part of the cases involving monopsony issues; and (4) counseling con - recent conversation over the direction of antitrust siderations for monopsony issues. It remains to be seen law and the continued appropriateness of the con - whether we will see significantly increased enforcement Fsumer welfare standard, the debate has turned to whether the against buyer-side agreements and mergers that affect buyer antitrust agencies are paying enough attention to monopsony power and whether such enforcement will be successful, but issues. 1 A concept that appears more in textbooks than in case what is clear is that the antitrust enforcement agencies will be law has suddenly become mainstream and practitioners exploring the depth and reach of these theories and clients should be aware of developments when they counsel clients must be prepared for investigations and enforcement actions on issues involving supply-side concerns. implicating these issues. This topic is not going anywhere any time soon. -
Per Se Treatment: an Unnecessary Relic of Antitrust Litigation Adam Weg
Hastings Law Journal Volume 60 | Issue 6 Article 14 1-2009 Per Se Treatment: An Unnecessary Relic of Antitrust Litigation Adam Weg Follow this and additional works at: https://repository.uchastings.edu/hastings_law_journal Part of the Law Commons Recommended Citation Adam Weg, Per Se Treatment: An Unnecessary Relic of Antitrust Litigation, 60 Hastings L.J. 1535 (2009). Available at: https://repository.uchastings.edu/hastings_law_journal/vol60/iss6/14 This Note is brought to you for free and open access by the Law Journals at UC Hastings Scholarship Repository. It has been accepted for inclusion in Hastings Law Journal by an authorized editor of UC Hastings Scholarship Repository. For more information, please contact [email protected]. Per Se Treatment: An Unnecessary Relic of Antitrust Litigation ADAM WEG* INTRODUCTION Over the past thirty years, the Supreme Court's test for finding a violation of the Sherman Act for certain types of business agreements has changed significantly.' Prior to that time, several types of agreements were illegal "per se,"2 while others were judged by a "rule of reason. ' Per se treatment is based solely on the existence of the offending agreements in the marketplace.' An agreement violates the Sherman Act if it falls into one of the per se illegal categories Conversely, a rule-of- reason analysis (which has recently been supplemented with "quick- look" analysis) allows a court to delve further into the intricacies of an agreement by examining the purpose, power, and effect of the agreement. As the complexity of products and the need for cooperation by market competitors has increased in recent years, the Court has moved several types of agreements from the per se category to the rule- * J.D. -
Justice Stevens and the Rule of Reason. Spencer W
Loyola University Chicago, School of Law LAW eCommons Faculty Publications & Other Works 2009 Justice Stevens and the Rule of Reason. Spencer W. Waller Loyola University Chicago, [email protected] Follow this and additional works at: http://lawecommons.luc.edu/facpubs Part of the Law Commons Recommended Citation Waller, Spencer Weber, Justice Stevens and the Rule of Reason, 61 SMU L. Rev. xx (2009). This Article is brought to you for free and open access by LAW eCommons. It has been accepted for inclusion in Faculty Publications & Other Works by an authorized administrator of LAW eCommons. For more information, please contact [email protected]. JUSTICE STEVENS AND THE RULE OF REASON Spencer Weber Waller* VER the past thirty-plus years, Justice Stevens has played a spe- cial role in the jurisprudence of antitrust. He came to the Su- preme Court after a successful career as an antitrust litigator, scholar, law teacher, and federal appellate judge. Justice Stevens applied the special insights this background provided to articulate a unique voice in shaping antitrust. While much of the antitrust debate since World War II has concerned the proper legal standard for assessing the competitive impact of agreements under the antitrust laws, Justice Stevens focused much of his analytical work for the Court on a more sophisticated, but no less important, question: How should a court actually determine whether an agreement unreasonably restricts competition in violation of the anti- trust laws? In antitrust terms, the question for Justice Stevens was not so much whether the per se rule or the rule of reason applied in a particular case, but what the rule of reason actually means and how should it be applied. -
Essential Facilities, Infrastructure, and Open Access*
Working Draft for DOJ/FTC Hearings. Do Not Cite without Permission of Authors. Essential Facilities, Infrastructure, and Open Access* Brett Frischmann+ & Spencer Weber Waller++ I. INTRODUCTION There is a debate raging concerning the merits of private control over (or conversely, open access to) various types of resources. Treating something as private property grants the property holder the right to exclude others. Treating something as infrastructure or a commons conversely welcomes all users on a nondiscriminatory basis. The battle over which regime best serves society’s interests exists in numerous areas of the law including land use, intellectual property, regulated industries, antitrust, and most aspects of law and economics. It is currently in vogue to propertize, privatize, and deregulate legal regimes under a variety of rationales all connected with maximizing wealth, supporting price discrimination, promoting allocative efficiency, and internalizing externalities. In intellectual property law, these issues are most prominent in contemporary debates over * © 2006 Brett Frischmann & Spencer Waller. + Assistant Professor, Loyola University Chicago. Thanks to Michael Carrier, Michael Jacobs, Mark Lemley, Christopher Leslie, Frank Pasquale, Phil Weiser and Joshua Wright for their comments on earlier versions of this article. ++ Associate Dean for Faculty Research and Director, Institute for Consumer Antitrust Studies, Loyola University Chicago. Thanks to Lindsay Frank and Jackie Clisham for her research assistance with this project. 1 Working Draft for DOJ/FTC Hearings. Do Not Cite without Permission of Authors. the continued expansion of intellectual property rights.1 The conflict over access and exclusion is a central, persistent feature of intellectual property law. Those who create, invent, innovate, and participate in similar intellectually driven, productive activities often borrow from or share with others. -
Dissenting Statement of Commissioner Joshua D. Wright
PROVISIONALLY REDACTED PUBLIC VERSION Dissenting Statement of Commissioner Joshua D. Wright In the Matter of MCWANE, INC. ET AL. Docket No. 9351 Introduction1 I dissent from the Commission’s holding that McWane unlawfully monopolized the Domestic Fittings market.2 In my view, Complaint Counsel has not met its burden to show by a preponderance of the evidence that McWane’s Full Support Program harmed competition in the Domestic Fittings market.3 1 References to the record are made using the following citation forms and abbreviations: CC Answering Brief – Complaint Counsel’s Answering Brief filed July 2, 2013 Commission Opinion Complaint – Complaint filed January 4, 2012 CX# – Complaint Counsel Exhibit IDF – Numbered Findings of Fact in ALJ’s Initial Decision McWane Brief – Respondent McWane, Inc.’s Appeal Brief filed May 31, 2013 Name of Witness, Tr. – Transcript of Trial before the ALJ Oral Argument Tr. – Transcript of Oral Argument before the Commission August 22, 2013 RX# – Respondent Exhibits 2 I concur with the Commission’s decision to reverse the Initial Decision on Counts 4 and 5 and join the Commission’s Opinion with respect to those Counts. I also concur with the Commission’s decision to dismiss Counts 1 and 2 in the public interest and join the Commission’s Opinion with respect to those Counts. I concur with the Commission’s decision to dismiss Count 7 but I do so for separate reasons explained below. 3 Though I do not discuss whether Complaint Counsel established that there is a separate relevant market for domestic fittings, I do not join that portion of the Commission’s Opinion. -
Antitrust Guidelines for Collaborations Among Competitors
Antitrust Guidelines for Collaborations Among Competitors Issued by the Federal Trade Commission and the U.S. Department of Justice April 2000 ANTITRUST GUIDELINES FOR COLLABORATIONS AMONG COMPETITORS TABLE OF CONTENTS PREAMBLE ................................................................................................................................ 1 SECTION 1: PURPOSE, DEFINITIONS, AND OVERVIEW ............................................... 2 1.1 Purpose and Definitions .................................................................................................... 2 1.2 Overview of Analytical Framework ................................................................................ 3 1.3 Competitor Collaborations Distinguished from Mergers .............................................. 5 SECTION 2: GENERAL PRINCIPLES FOR EVALUATING AGREEMENTS AMONG COMPETITORS .................................................................................. 6 2.1 Potential Procompetitive Benefits .................................................................................. 6 2.2 Potential Anticompetitive Harms .................................................................................... 6 2.3 Analysis of the Overall Collaboration and the Agreements of Which It Consists ......................................................................................................... 7 2.4 Competitive Effects Are Assessed as of the Time of Possible Harm to Competition .................................................................................. -
Antitrust Policy and Monopsony Roger D
Cornell Law Review Volume 76 Article 1 Issue 2 January 1991 Antitrust Policy and Monopsony Roger D. Blair Jeffrey L. Harrison Follow this and additional works at: http://scholarship.law.cornell.edu/clr Part of the Law Commons Recommended Citation Roger D. Blair and Jeffrey L. Harrison, Antitrust Policy and Monopsony , 76 Cornell L. Rev. 297 (1991) Available at: http://scholarship.law.cornell.edu/clr/vol76/iss2/1 This Article is brought to you for free and open access by the Journals at Scholarship@Cornell Law: A Digital Repository. It has been accepted for inclusion in Cornell Law Review by an authorized administrator of Scholarship@Cornell Law: A Digital Repository. For more information, please contact [email protected]. ANTITRUST POLICY AND MONOPSONY Roger D. Blairt &Jeffirey L. Harrison$ I INTRODUCTION The owners of major league baseball teams have colluded in dealing with free agents,' the NCAA regulates both the number of athletic scholarships and the amount of compensation that athletes receive, 2 financial aid officers of the elite colleges and universities meet to avoid a bidding war for the most desirable students,3 tuna canneries in California allegedly fix purchase prices at artificially low levels,4 and antique dealers have rigged bids in public auctions, di- viding the spoils later.5 What do all of these parties have in com- mon? They employ monopsony power: power on the buying side 6 of the market. The classical theory of monopsony envisions a market with only one buyer that uses its power to reduce the quantity purchased, t Huber Hurst Professor of Business and Legal Studies, University of Florida. -
Monopolization, Exclusion, and the Theory of the Firm Alan J
College of William & Mary Law School William & Mary Law School Scholarship Repository Faculty Publications Faculty and Deans 2005 Monopolization, Exclusion, and the Theory of the Firm Alan J. Meese William & Mary Law School, [email protected] Repository Citation Meese, Alan J., "Monopolization, Exclusion, and the Theory of the Firm" (2005). Faculty Publications. 58. https://scholarship.law.wm.edu/facpubs/58 Copyright c 2005 by the authors. This article is brought to you by the William & Mary Law School Scholarship Repository. https://scholarship.law.wm.edu/facpubs Article Monopolization, Exclusion, and the Theory of the Firm Alan J. Meeset Introduction .............................................................................. 744 I. Definition of "Monopolize" Under Section 2 .................. 750 A. General Monopolization Standards ........................ 750 B. The Early Years: The Intent Test ........................... 753 C . M odern L aw .............................................................755 D. Application: The Microsoft Case ............................. 762 II. Price Theory, Competition on the Merits, and Contractual Exclusion .................................................... 771 A. Workable Competition, Exclusion, and the Theory of the Firm ................................................... 772 B. Price Theory and Workable Competition in the C ourts ........................................................... 793 1. Early Influence ................................................... 793 2. United Shoe Machinery and