Exclusive Dealing, "Foreclosure," and Consumer Harm
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For Official Use DAF/COMP/WD(2007)100
For Official Use DAF/COMP/WD(2007)100 Organisation de Coopération et de Développement Economiques Organisation for Economic Co-operation and Development 04-Oct-2007 ___________________________________________________________________________________________ English text only DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS COMPETITION COMMITTEE For Official Use DAF/COMP/WD(2007)100 ROUNDTABLE ON REFUSALS TO DEAL -- Note by the European Commission -- This note is submitted by the Delegation of the European Commission to the Competition Committee FOR DISCUSSION at its forthcoming meeting to be held on 17-18 October 2007. English text only English JT03233260 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format DAF/COMP/WD(2007)100 1. Introduction 1. The starting point for any discussion of the extent to which European competition law may intervene to require a company with market power to supply an input or grant access to its property is to recall the general principle that enterprises should be free to do business – or not to do business – with whomsoever they please, and that they should be free to dispose of their property as they see fit. This general principle derives from the market economy which is the central economic characteristic of the European Union and of each of its Member States, and the principle has been explicitly referred to by the European courts in competition cases1. 2. It is therefore only in the carefully limited circumstances described below that EU law allows this freedom of contract to be over-ridden in the interest of ensuring that competition between enterprises is not unduly restricted to the long-lasting detriment of consumers. -
Antitrust Status of Farmer Cooperatives
USDA Antitrust Status of Farmer Cooperatives: United States Department of Agriculture The Story of the Capper- Rural Business- Volstead Act Cooperative Service Cooperative Information Report 59 Abstract The Capper-Volstead Act provides a limited exemption from antitrust liability for agricultural producers who market the products they produce on a cooperative basis. Without Capper-Volstead, farmers who agree among themselves on the pric es they'll accept for their products and other terms of trade would risk being held in violation of antitrust law. Even with the exemption, agricultural producers are not free to unduly enhance the prices they charge, consolidate with or collaborate in anticompetitive conduct with nonproducers, or engage in conduct with no legitimate business purpose that is intended to reduce competition. Keywords: cooperative, antitrust, Capper-Volstead Act, law ________________________________________ Antitrust Status of Farmer Cooperatives: The Story of the Capper-Volstead Act Donald A. Frederick Program Leader Law, Policy & Governance Rural Business-Cooperative Service U.S. Department of Agriculture Cooperative Information Report 59 September 2002 RBS publications and information are available on the Internet. The RBS w eb site is: http://www.rurdev.usda.gov/rbs Preface Antitrust law poses a special challenge to agricultural marketing associations. Certain conduct by independent business people-- agreeing on prices, terms of sale, and whom to sell to--violates the Sherman Act and other antitrust statutes. And these are the very types of collaborative activities that agricultural producers conduct through their marketing cooperatives. Since 1922, the Capper-Volstead Act has provided a limited antitrust exemption for agricultural marketing associations. Producers, through qualifying associations, can agree on prices and other terms of sale, select the extent of their joint marketing activity, agree on common marketing practices with other cooperatives, and achieve substantial market share and influence. -
Use to Effectuate Resale Price Maintenance
Michigan Law Review Volume 56 Issue 3 1958 Regulation of Business - Refusals to Deal - Use to Effectuate Resale Price Maintenance Raymond J. Dittrich, Jr. S.Ed. University of Michigan Law School Follow this and additional works at: https://repository.law.umich.edu/mlr Part of the Antitrust and Trade Regulation Commons, and the Commercial Law Commons Recommended Citation Raymond J. Dittrich, Jr. S.Ed., Regulation of Business - Refusals to Deal - Use to Effectuate Resale Price Maintenance, 56 MICH. L. REV. 426 (1958). Available at: https://repository.law.umich.edu/mlr/vol56/iss3/6 This Response or Comment is brought to you for free and open access by the Michigan Law Review at University of Michigan Law School Scholarship Repository. It has been accepted for inclusion in Michigan Law Review by an authorized editor of University of Michigan Law School Scholarship Repository. For more information, please contact [email protected]. 426 MICHIGAN LAw REVIEW [ Vol. 56 REGULATION OF BusINEss-REFUSALS To DEAL-UsE To EFFEC TUATE RESALE PRICE MAINTENANCE-A manufacturer,1 acting uni laterally2 and in the absence of either a monopoly position or in tent to monopolize,3 has a generally recognized right to refuse to deal with any person and for any reason he deems sufficient.4 A confusing yet important problem in the field of trade regulation is the extent to which a manufacturer may exercise this right to maintain resale prices by refusing to deal with customers who do not resell at his suggested prices. This difficulty does not arise in the numerous jurisdictions having fair trade laws since these stat utes permit a manufacturer to enter into contracts specifying the minimum or stipulated prices at which his goods are to be resold. -
Competition and Monopoly : Single-Firm Conduct Under Section
CHAPTER 8 EXCLUSIVE DEALING I. Introduction prohibiting one party from dealing with 5 Exclusive dealing describes an arrangement others, or the exclusive-dealing arrangement whereby one party’s willingness to deal with can take other forms, as when a seller enacts another is contingent upon that other party (1) policies effectively requiring customers to deal dealing with it exclusively or (2) purchasing a exclusively with it. large share of its requirements from it.1 Exclusive dealing is frequently procom- Exclusive dealing is common and can take petitive, as when it enables manufacturers and many forms.2 It often requires a buyer to deal retailers to overcome free-rider issues exclusively with a seller. For example, a misaligning the incentives for these vertically- manufacturer may agree to deal with a related firms to satisfy the demands of distributor only if the distributor agrees not to consumers most efficiently. For example, a carry the products of the manufacturer’s manufacturer may be unwilling to train its competitors.3 And many franchise outlets agree distributors optimally if distributors can take to buy certain products exclusively from a that training and use it to sell products of the franchisor.4 But it also may involve a seller manufacturer’s rivals. Other benefits can occur dealing exclusively with a single buyer. as well, as when an exclusivity arrangement assures a customer of a steady stream of a Exclusive dealing also occurs between necessary input. sellers and consumers, as when a consumer agrees to purchase all its requirements of a But exclusive dealing also can be particular product from a single supplier. -
In the United States Court of Appeals for the Eleventh
Case: 15-14160 Date Filed: 03/04/2019 Page: 1 of 74 [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT ________________________ No. 15-14160 ________________________ D.C. Docket Nos. 6:14-md-02557-GAP-TBS, 6:14-cv-06012-GAP-TBS QUALITY AUTO PAINTING CENTER OF ROSELLE, INC., Traded as Prestige Auto Body, Plaintiff-Appellant, versus STATE FARM INDEMNITY COMPANY, STATE FARM GUARANTY INSURANCE COMPANY, et al., Defendants-Appellees. ________________________ No. 15-14162 ________________________ D.C. Docket Nos. 6:14-md-02557-GAP-TBS, 6:14-cv-06013-GAP-TBS ULTIMATE COLLISION REPAIR, INC., Case: 15-14160 Date Filed: 03/04/2019 Page: 2 of 74 Plaintiff-Appellant, versus STATE FARM INDEMNITY COMPANY, STATE FARM GUARANTY INSURANCE COMPANY, et al., Defendants-Appellees. ________________________ No. 15-14178 ________________________ D.C. Docket Nos. 6:14-md-02557-GAP-TBS, 6:14-cv-06018-GAP-TBS CAMPBELL COUNTY AUTO BODY, INC., Plaintiff-Appellant, versus STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM FIRE & CASUALTY COMPANY, et al., Defendants-Appellees. ________________________ No. 15-14179 ________________________ D.C. Docket Nos. 6:14-md-02557-GAP-TBS, 2 Case: 15-14160 Date Filed: 03/04/2019 Page: 3 of 74 6:14-cv-06019-GAP-TBS LEE PAPPAS BODY SHOP, INC., DAVID C. BROSIUS, d.b.a. Martins Auto Body Works, Inc., ART WALKER AUTO SERVICES, INC., WHITEFORD COLLISION AND REFINISHING, INC., Plaintiffs-Appellants, versus STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM FIRE & CASUALTY COMPANY, et al, Defendants-Appellees. ________________________ No. 15-14180 ________________________ D.C. Docket Nos. 6:14-md-02557-GAP-TBS, 6:15-cv-06022-GAP-TBS CONCORD AUTO BODY, INC., Plaintiff-Appellant, versus STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM FIRE & CASUALTY COMPANY, et al, 3 Case: 15-14160 Date Filed: 03/04/2019 Page: 4 of 74 Defendants-Appellees. -
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. -
Reconciling the Harvard and Chicago Schools: a New Antitrust Approach for the 21St Century
Indiana Law Journal Volume 82 Issue 2 Article 4 Spring 2007 Reconciling the Harvard and Chicago Schools: A New Antitrust Approach for the 21st Century Thomas A. Piraino Jr. Parker-Hannifin Corporation Follow this and additional works at: https://www.repository.law.indiana.edu/ilj Part of the Antitrust and Trade Regulation Commons Recommended Citation Piraino, Thomas A. Jr. (2007) "Reconciling the Harvard and Chicago Schools: A New Antitrust Approach for the 21st Century," Indiana Law Journal: Vol. 82 : Iss. 2 , Article 4. Available at: https://www.repository.law.indiana.edu/ilj/vol82/iss2/4 This Article is brought to you for free and open access by the Law School Journals at Digital Repository @ Maurer Law. It has been accepted for inclusion in Indiana Law Journal by an authorized editor of Digital Repository @ Maurer Law. For more information, please contact [email protected]. Reconciling the Harvard and Chicago Schools: A New Antitrust Approach for the 21st Century THOMAS A. PIRAINO, JR.* INTRODUCTION: A NEW APPROACH TO ANTITRUST ANALYSIS ............................... 346 I. THE BATTLE FOR THE SOUL OF ANTITRUST .................................................. 348 A . The Harvard School ........................................................................... 348 B. The Chicago School ........................................................................... 350 II. THE PRINCIPAL CASES REFLECTING THE HARVARD/CHICAGO SCHOOL C ON FLICT .................................................................................................... -
Recent Development of Indonesian Competition Law and Agency
The Contribution of Competition Policy to Improving Regulatory Performance Ahmad Junaidi Bureau of Policy 1 Indonesia Competition Law • Competition is regulated by The Law No.5 Year 1999 Concerning Prohibition on Monopolistic Practices and Unfair Business Practices • The Law has been implemented for almost 11 year to enhance fair competition, since Indonesia economic policy and structure changes after crisis 1998. 2 PRINCIPLES AND PURPOSES The Principle (Article 2) Business activities of business actors in Indonesia must be based on economic democracy, with due observance of the equilibrium between the interests of business actors and the interests of the public The Purposes (Article 3) The purpose of enacting this Law shall be as follows: a. to safeguard the interests of the public and to improve national economic efficiency as one of the efforts to improve the people’s welfare; b. to create a conducive business climate through the stipulation of fair business competition in order to ensure the certainty of equal business opportunities for large-, middle- as well as small-scale business actors in Indonesia c. to prevent monopolistic practices and or unfair business competition that may be committed by business actors; and d. the creation of effectiveness and efficiency in business activities. 3 Structure of The Law Prohibited Agreements: Prohibited Dominant (rule of reason’s approach) Activities Position: (rule of reason’s (rule of reason’s Agreement with Foreigner approach) approach) Exclusive Dealing Monopoly Dominant Oligopsony Monopsony Position Trusts Share Ownership Vertical Intregation Market Control Cartel Conspiracy Interlocking Boycott Merger and Oligopoly Acquition Price Fixing 4 The Commission: KPPU • The Commission for the Supervision of Business Competition (KPPU) was established in 2000 with the authority mandated by the Law No. -
Exclusive Dealing: Before, Bork, and Beyond
Exclusive Dealing: Before, Bork, and Beyond The Harvard community has made this article openly available. Please share how this access benefits you. Your story matters Citation J. Mark Ramseyer & Eric B. Rasmusen, Exclusive Dealing: Before, Bork, and Beyond, 57 J. L. & Econ. S145 (2014). Published Version http://www.jstor.org/stable/10.1086/680347;10.1086/680347 Citable link http://nrs.harvard.edu/urn-3:HUL.InstRepos:16952765 Terms of Use This article was downloaded from Harvard University’s DASH repository, and is made available under the terms and conditions applicable to Other Posted Material, as set forth at http:// nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of- use#LAA 1 October 6, 2013 Address correspondence to: [email protected] [email protected] Goal: 5000-7500 words Currently: 6,465 words (including everything) Exclusive Dealing: Before Bork, and Beyond J. Mark Ramseyer and Eric B. Rasmusen* Abstract: Antitrust scholars have come to accept the basic ideas about exclusive dealing that Bork articulated in The Antitrust Paradox. Indeed, they have even extended his list of reasons why exclusive dealing can promote economic efficiency. Yet they have also taken up his challenge to explain how exclusive dealing could possibly cause harm, and have modelled a variety of special cases where it does. Some (albeit not all) of these are sufficiently plausible to be useful to prosecutors and judges. *J. Mark Ramseyer, Mitsubishi Professor, Harvard Law School, Cambridge, Massachusetts 02138, 617-496-4878; Eric B. Rasmusen, Dan R. and Catherine M. Dalton Professor, Kelley School of Business, Indiana University, Bloomington, Indiana 47405-1701, [email protected], 812-855-9219. -
Some Canadian Thoughts on Exclusive Dealing
Some Canadian Thoughts on Exclusive Dealing ICN Unilateral Conduct Working Group Teleseminar July 17, 2012 James Musgrove McMillan LLP with assistance from Devin Anderson Document # 6003961 LEGISLATION A. Section 77(1): For the purposes of this section, “exclusive dealing” means (a) any practice whereby a supplier of a product, as a condition of supplying the product to a customer, requires that customer to (i) deal only or primarily in products supplied by or designated by the supplier or the supplier’s nominee, or (ii) refrain from dealing in a specified class or kind of product except as supplied by the supplier or the nominee, and (b) any practice whereby a supplier of a product induces a customer to meet a condition set out in subparagraph (a)(i) or (ii) by offering to supply the product to the customer on more favourable terms or conditions if the customer agrees to meet the condition set out in either of those subparagraphs; 2 LEGISLATION B. Section 77(2): Where … the Tribunal finds that exclusive dealing ... because it is engaged in by a major supplier of a product in a market or because it is widespread in a market, is likely to (a) impede entry into or expansion of a firm in a market, (b) impede introduction of a product into or expansion of sales of a product in a market, or (c) have any other exclusionary effect in a market, with the result that competition is or is likely to be lessened substantially, the Tribunal may make an order directed to all or any of the suppliers against whom an order is sought prohibiting them from continuing to engage in that exclusive dealing … and containing any other requirement that, in its opinion, is necessary to overcome the effects thereof in the market or to restore or stimulate competition in the market. -
Property, Aspen, and Refusals to Deal Alan J
College of William & Mary Law School William & Mary Law School Scholarship Repository Faculty Publications Faculty and Deans 2005 Property, Aspen, and Refusals to Deal Alan J. Meese William & Mary Law School, [email protected] Repository Citation Meese, Alan J., "Property, Aspen, and Refusals to Deal" (2005). Faculty Publications. 231. https://scholarship.law.wm.edu/facpubs/231 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 PROPERTY, ASPEN, AND REFUSALS TO DEAL ALAN j. MEESE* Free markets and the prosperity they create depend critically upon the institution of private property. Without property, markets would collapse, as parties would have nothing to trade. A nation with no prop erty rights would be very poor indeed; individuals would produce too few goods, while consuming too many. Property entails many rights, the most important of which is the right to exclude. Even at common law, however, this right was not absolute. Instead, courts qualified the right in rare cases when such qualification was necessary to facilitate the low-cost formation of efficient markets. Antitrust regulation follows this common law tradition, further qualifying rights of contract and property when necessary to prevent market failure. The Sherman Act, of course, does not mention property. Instead, Section 1 prohibits unreasonable contracts, and Section 2 forbids monop olization. Yet, contracts generally involve the disposition of property, and firms that monopolize often do so by exercising their property rights to the disadvantage of rivals. For instance, the classic (though rare) example of monopolization-predatory pricing-involves the manufac turer's use of its property to manufacture more property-a product and the subsequent sale of that property at a predatory price. -
Exclusive Dealing and Competition: a US FTC View Alden F
Exclusive Dealing and Competition: A US FTC View Alden F. Abbott General Counsel, U.S. Federal Trade Commission ICN Workshop, Stellenbosch, South Africa, November 2, 2018 1 Introduction: Exclusive Dealing Basics • “An exclusive dealing contract is a contract under which a buyer promises to buy its requirements of one or more products exclusively from a particular seller.” Hovenkamp, Federal Antitrust Policy (2016) • Variations on “full scale” exclusive dealing (partial, de facto) • Loyalty discounts, discounts tied to percentage of purchases from a seller • Slotting allowances, supplier pays fee for preferred or exclusive shelf space • Requirements contracts, agreements to buy all needed units from one seller, also de facto agreements under which firms won’t buy from other sellers • Exclusive dealing may confer substantial procompetitive benefits but also may pose significant anticompetitive risks • case-specific analysis is key • Exclusive dealing assessed by most authorities under antitrust “rule of reason” 2 Evaluating Exclusive Dealing – ICN Review • 2013 ICN Unilateral Conduct Workbook, Chapter 5 – Exclusive Dealing • Outlines elements for flexible rule of reason analysis, focus on evidence • Potential exclusive dealing efficiencies include: • Encouraging distributors to promote a manufacturer’s products more vigorously • Encouraging suppliers to help distributors by providing key services of information • Addressing problems of free riding between suppliers • Addressing “hold up” problems for customer-specific investments • Allowing suppliers to control distribution quality more easily • Potential harms related to market foreclosure (including raising rivals’ costs) • Price increases due to output reduction, also overall reduction in market output • Increase in dominant firm’s market share unexplainable by quality, supply/demand • Exit of existing competitors due to an exclusive dealing arrangement • Entry deterrence (preventing deterrence by potential competitors) 3 Evaluating Exclusive Dealing – U.S.