252.1 sec. 1 - International Antitrust Law and Policy (Spring 2009)[home]

Hanno F. Kaiser

Class 1: Competition law in the context of economic globalization: Recurring Themes and a Roadmap (January 16, 2009)

Topics for discussion

• "All politics is local, and all trade is global." Is that right? Just how global are markets? And just how local is the law?
• Who should regulate conduct with transnational effects? The state in which the conduct takes place or where the protagonists are located? Or all nations in which the effect of the conduct is felt? (GE/Honeywell)
• As a result of the "effects doctrine," multiple nations have jurisdiction over conduct with transnational effects. How should the unavoidable conflicts be resolved? Deference, bilateral agreements, multilateral agreements, WTO? Can conflicts be avoided through convergence?
  
• Antitrust doctrine developed under the assumption of a "closed economy" where all producers and consumers affected by anticompetitive conduct are domestic and have some measure of influence over their government. An "open economy" changes these assumptions. Should national or global welfare be maximized?
  
• Why have a market economy in the first place? And if one chooses a market economy, what other choices follow (private property in non-rivalrous goods, freedom of contract, competition)
  
• The role of competition law: limited intervention or active "marketplace design"?
  
• Efficiency effects of competitive markets: Allocative efficiency, productive efficiency, dynamic efficiency
• Non-efficiency effects of competitive markets: Market integration, employment, provide the tax base for to promote social justice and protect the environment, protecting the democratic process from concentrated economic power, preserving conditions of relative bargaining equality under which contracts can reasonably be trusted to produce fair results

Classes 2, 3: Horizontal Agreements under U.S. and EU competition law (January 23/30, 2009)

Topics for discussion

• Horizontal agreements: price fixing and market sharing compared to joint ventures
• The statutory basis: Sherman Act, Clayton Act, FTC Act and Art. 81/82 of the Treaty
• The institutional basis: DOJ, FTC, States, private plaintiffs; European Commission, etc.
• Substance: horizontal "agreements in restraint of trade"
• • Standards of review: per se illegality and rule of reason
• Cartels have been described both as the "supreme evil" and as "children of despair." Why are cartels so bad? Are they, in fact, always bad? After the Great Depression, cartels were seen as necessary to stabilize the economy. Should there be "crisis cartel" exemptions?
• A first look at export cartels and how national welfare trumps global welfare considerations

Class 4: Guest Lecture: The Honorable J. Thomas Rosch, Commissioner of the Federal Trade Commission, On Behavioral Economics, February 6, 2009

Class 5: The fight against international cartels and the global success of leniency programs, February 13, 2009

Topics for discussion

• A close look at two of the most notorious international cartels: Lysine and Vitamins.
• On keeping your "friends" in and everyone else out: scorecards, audits, compensation schemes.
  
• The reality of international cartel investigations (complete with grainy DOJ/FBI video footage)
• A special problem: Cartels aimed at exploiting developing nations
  
• The Prisoners' Dilemma in action. Leniency programs.

Classes 6, 7: Jurisdiction, extraterritoriality, sovereignty, February 20/27, 2009

Topics for discussion

• The public and private international law dimension of extraterritoriality: Prescriptive jurisdiction and conflict of laws
• The rise of the regulatory state and the need to regulate foreign conduct with domestic effects
  
• Sharpening our analytical toolkit: Conduct, Effect, and the two core constituencies of national competition laws: consumers and producers
• Should foreign private plaintiffs be allowed to sue foreign defendants for harm suffered abroad in U.S. courts?

Class 8: Pricing offenses by dominant firms: Predatory pricing, excessive pricing, and price squeezes, March 6, 2009

Topics for discussion

• The U.S. and the EU approach to unilateral conduct is very different. For the U.S., dominant firms are the winners in a competitive struggle and are entitled to the spoils of monopoly. In the EU, dominant firms are viewed with greater unease for their ability to "opt out" of having to pursue their self-interest through the competitive market, which aligns the private profit motive with consumer welfare.
  
• Should powerful firms have "special obligations" to protect the competitive process? (Peter Parker principle: "With great powers come great responsibilities.").
• If we impose special obligations on a dominant firm, are we not punishing the winners? How is this different from progressive taxation? (Is it?)
  
• Should courts really second guess unilateral pricing decisions by dominant firms?
• What - if anything - does the "recoupment" requirement in Brooke Group add?
• What role should "intent to drive a competitor from the field" have in predatory pricing cases? Isn't that what every firm wants?
  

Classes 9, 10, 11: Unilateral duties to deal, IP and innovation: A special focus on the EU Microsoft Decision, March 20/31, April 3, 2009

Topics for discussion

• Under what circumstances does a dominant firm have a "duty to deal" with a competitor? Do different standards apply to:
  • Duties not to stop dealing (i.e., abusive termination)
  • Duties to start supplying (i.e., de novo supply)
  • Duties to start supplying intellectual property
• "If successful firms have to share their property with competitors, we destroy their incentives to innovate." What (if anything) is wrong with this statement? Think about the similar line of argument in the IP context: "Unless we increase IP protection, artists will have no incentives to create music anymore." Consider how the diamond/water paradox might help us in framing the issue.
• Should essential infrastructure be governed only by exclusive property rights or should there also be a public commons overlay once a dominant firm controls essential infrastructure?
• Should we encourage radical innovation at the expense of incremental innovation?
• Should consumer welfare be the guiding principle for justifying duties to deal? Or is the "open market" principle, which focuses primarily on a competitors freedom to compete, the more appropriate normative foundation?

Classes 12, 13: International mergers & acquisitions, April 10/17, 2009

Topics for discussion

• The great international oligopolies, has the world become more or less competitive since 1945?
• Are large multi-national firms as competitive as smaller firms?
• Should there be a maximum absolute size for firms?
• Should there be a common substantive merger standard for the world? A common procedure?
• Do we (still) need industrial policy that includes values other than efficiency?

Class 14: Putting it all together: The Rise of the Multinational Corporation and Institutions of International Antitrust Enforcement, April 24, 2009

Topics for discussion

• The US (DOJ, FTC, and the States) and the EU enforcement systems (DG COMP and the Member States)
• The third stop on the Grand Tour: China's new Anti-Monopoly Law; a study in distributed enforcement
• Institutional choices: WTO, OECD, ICN
• Bilateral and multilateral cooperation agreements
• Does harmonization work where it increases the power, prestige, and budget of national competition agencies and fail where it doesn't? Is such a public choice analysis of agency behavior appropriate?