252.8 sec.1: Antitrust and the Internet (Spring 2010)

» home

UUniversity of California, Berkeley, School of Law, Spring 2010
Hanno F. Kaiser
Here is a link to the course page.

Class 1: Introduction and net neutrality (part 1) (January 14, 2010)

About this course
How the Internet works
Basics of antitrust regulation
Arguments for net neutrality regulation

Required reading

Optional reading

2007 FTC Staff Broadband Report, Chapters I, III [link]
FCC, Internet Policy Statement (2005) [link]
Hogdman on Net Neutrality [link]

Zittrain, The Future of the Internet, Chapters 1-2 (pp. 1-35) [link]
Moglen, Freeing the Mind: Free Software and the Death of Proprietary Culture (2003) [link]
Lessig & Lemley, The End of End-to-End: Preserving the Architecture of the Internet in the Broadband Era (2000) [link]
Wu, The Broadband Debate: A User's Guide (2004) [link]
Videos and transcripts from the FTC broadband workshop. [link]
Internet Society, All about the history of the Internet. [link]

Class 2: Net neutrality (part 2) and jurisdiction (January 21, 2010)

Arguments against net neutrality regulation
Discussion of the 2009 Open Internet Proposed Rulemaking
Jurisdictional questions: FCC, FTC, DOJ

Required reading

Optional reading

Comcast v. FCC, _____ (D.C. Cir. 2010) [link]
In the Matter of Preserving the Open Internet, GN Docket No. 09-191 (October 22, 2009) (proposed FCC Rules) [link] [Excerpts: ¶¶ 65-66 (the proposed rules); ¶¶ 103-07 (non-discrimination); ¶¶ 135-39 (reasonable network management); ¶¶ 148-50 (managed or specialized services)]
Sidak, What is the Network Neutrality Debate Really About?, International Journal of Communication 1 (2007), 377-388 [link]

National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 US 967 (2005) (Skip part III). [link]
EFF, Is Net Neutrality a FCC Trojan Horse? (2009) [link]
EFF weighs in on proposed net neutrality rules (2010) [link]
EFF Comments to the FCC (2010) [link]
MPAA Comments to the FCC (2010) [link]
RIAA Comments to the FCC (2010) [link]
Communications Act (1934/1996). [link]
2007 FTC Staff Broadband Report, Chapters II, IV [link] (good summary)

Further reading (exclusionary conduct):

2007 FTC Staff Broadband Report, Chapter VII (pp.120-29) [link]
In re Madison River Communications LLC, Order, File No. EB-05-IH-0110, 20 F.C.C.R. 4295 (Enforcement Bureau, 2005). [link]
FCC v. Comcast Order (BitTorrent) (August 2008) [link] [¶¶41-56]
Lessig, Letter to FCC (2008) [link]

Class 3: Unilateral conduct and the U.S. v. Microsoft universe (part 1) (January 28, 2010)

On being "big and bad." Monopolization (U.S.) and abuse of a dominant position (EU)
Antitrust and the Communications Act - implied immunity?
Verizon v. Trinko (2004) [link]
U.S. v. Microsoft (2001)
Monopoly power
Market power and the "application barrier to entry"

Required reading

Optional reading

Monopolization

Elhauge & Geradin, What Unilateral Conduct is Illegal?, Excerpt from Global Antitrust Law and Economics, pp. 248-57 [on bSpace]
Verizon Communications v. Law Offices of Curtis Trinko, 540 U.S. 398 (2004) [link] (Skip the concurring opinion).

Microsoft

Melamed/Rubinfeld, U.S. v. Microsoft: Lessons Learned and Issues Raised, in: Antitrust Stories (2007) [link]

U.S. v. Microsoft, 253 F.3d 34 (D.C. Cir. 2001) [link].
Read ¶¶45-58, i.e.:
I. INTRODUCTION
A. Background
B. Overview
II. MONOPOLIZATION
A. Monopoly Power

Monopolization

Kaiser, Antitrust Primer, pp. 1-19 [link]

Class 4: The U.S. v. Microsoft universe (part 2) (February 5, 2010)

U.S. v. Microsoft (2001) (continued)
Exclusive dealing (OEMs) (see also AMD v. Intel)
Technological tying and "premature software integration" claims
"Embrace, extend, extinguish" (Java)

Required reading	Optional reading
Kaiser, Microsoft Monopolization Offenses Chart (2008) [link] U.S. v. Microsoft, 253 F.3d 34 (D.C. Cir. 2001) [link] Read ¶¶ 58-80, i.e.: II. MONOPOLIZATION […] B. Anticompetitive Conduct C. Causation	Rubinfeld/Fisher, U.S. v. Microsoft, An Economic Analysis, The Antitrust Bulletin, Spring, 2001, pp. 1- 69 [link]

Class 5: Is giving stuff away for free predatory? (February 12, 2010)

The law and economics of predatory pricing
The economics of two sided platforms

Required reading

Optional reading

Anderson, Free (2009) [excerpts on bSpace]
Brooke Group (Liggett) v. Brown & Williamson, 509 U.S. 209 (1993) [Read the excerpts from Gavil, Kovacic, Baker, Antitrust Law in Perspective, 2d. Ed. (2008) on bSpace, which also include an excellent discussion of the basic economics of predatory pricing] [link]
U.S. v. Microsoft, 253 F.3d 34, 68 (D.C. Cir. 2001) [link] (focus on the IEAK discussion on p.68)
Evans and Schmalensee, The Industrial Organization of Markets with Two-Sided Platforms. CPI (2007) [link]

Edlin, Predatory Pricing (2010) [link]
faberNovel, Google's key success factors. (2008) pp. 1-45 [link]
TLF on Bottin Cartographes v. Google (French case) (2009) [link]
Evans, Antitrust Issues Raised by the Emerging Global Internet Economy. Nw. UL Rev. (2008) [link]
Ordover, Comments on Evans & Schmalensee's "The Industrial Organization of Markets with Two-Sided Platforms" CPI (2007) [link]

Class 6: Who owns platforms? (February 19, 2010)

From Kodak (1992) to Newcal (2008): the aftermarket debate
Defending integrated platforms: Apple v. Psystar (2008); Datel v. Microsoft (2009)

Required reading

Optional reading

Eastman Kodak v. ITS, 504 US 451 (1992) ("Kodak I") [link]
Newcal Industries v. Ikon Office Solution, 513 F. 3d 1038 (9^th. Cir. 2008) [link] (read only I and II(A)).
Apple, Inc. v. Psystar Corp., 586 F. Supp. 2d 1190 (N.D.Cal. 2008) [link] (read only the federal claims)
Datel Holdings Ltd. v. Microsoft Corp., CV 09-5535 (N.D. Cal., November 20, 2009). Order [link].

Salop, The First Principles Approach to Antitrust, Kodak, and Antitrust at the Millennium, Antitrust L.J. 187 (2000) [excerpts] [link]
Shapiro, Aftermarkets and Consumer Welfare: Making Sense of Kodak, 63 Antitrust L.J. 483 (1995) [excerpts]
Wall, Aftermarket Monopoly Five Years After Kodak (1997) [on bSpace]
Datel Holdings Ltd. v. Microsoft Corp., CV 09-5535 (N.D. Cal., November 20, 2009). Complaint [link]. Motion to dismiss [link]

Class 7: Open and closed systems: Technological tying (February 26, 2010)

U.S. v. Microsoft (2001) - Windows & IE
Commission v. Microsoft (2004/07) - Windows & Media Player ("XP-N")
Commission v. Microsoft (2008) - Windows & IE ("Choice Screen")

Required reading

Optional reading

U.S. v. Microsoft, 253 F.3d 34, 85-97 (D.C. Cir. 2001) [link] (tying claim)
Case T-201/04, Microsoft Corp. v. Commission, CFI 2007 [link]. Brief summary of the proceedings [link] and implementation [link]. Excerpts from Elhauge & Geradin on bSpace] (tying claim)
Case 39530 Microsoft (Tying). Commitments decision [link]. Choice screen (3/2010) [link].
Larouche, The European Microsoft case at the crossroads of competition policy and innovation. (2008) [link] (read part 3 on tying only, pp. 16-21).

Panel discussion, The European Union Antitrust Case Against Microsoft and What it Means for Silicon Valley Companies (2007) Audio: [link] (Ian Forrester's introduction is excellent and very funny. At the time of the panel, the CFI had not yet ruled on the case.)
Microsoft, Timeline of the Commission v. Microsoft case from 1998-2007 [link]
Draft Notice in respect of a notification lodged by eBay International A.G., Australian Competition and Consumer Commission (2008) [link]
Kaiser, Infrastructure Theory and Essential Facilities (2009) [link]

Class 8: Open and closed systems: Digital Rights Management (March 12, 2010)

Hot tying issues
The "rapid success problem" - when no-market power ties gain widespread acceptance
Third party ties (e.g., phone and service)
What if users are free to untie products after purchase?
The iPod/iTunes System (pre March 2009)
The Kindle and other content-DRM-device connections

Required reading	Optional reading
VirginMega v. Apple, Conseil de la Concurrence (2004) [link] Apple iPod iTunes Litigation, Judgment on the Pleadings, Case No. 5:2005cv00037, N.D. Cal. (2009) [link]. (Note: Here's the docket: [link].) Sharpe/Arewa. Is Apple Playing Fair? Navigating the iPod FairPlay DRM Controversy (2007) [link]	Farrell/Weiser. Modularity, Vertical Integration, and Open Access Policies. (2003) [link] Katz/Shapiro. Systems Competition and Network Effects. (1994) pp. 1-24 Frischmann & Weber-Waller, Revitalizing Essential Facilities, Antitrust L.J., Vol 75, 1-66 (2008) [link] Doctorow, Microsoft DRM talk (2004) [link] von Lohmann, DRM: What is it good for? (2006) Audio [link].

Class 9: Collusive agreements: From BMI to the Google Book Settlement (Part 1) (March 26, 2010)

Price fixing, territorial allocation, group boycotts
Ancillary restraints analysis
The Google Book Settlement (Part 1)

Required reading	Optional reading
BMI v. CBS, 441 U.S. 1 (1979) [link] [excerpt] Google Book Settlement Agreement 2.0 [link] [excerpt] von Lohmann, EFF analysis of the Google Book Settlement (2009) [parts 1 2 3 4 5]	Calkins, BMI v. CBS, 441 U.S. 1 (1979) in: Antitrust Stories [link] Elhauge, Framing the Antitrust Issues in the Google Books Settlement. (2009) [link] More detailed article: [link] Lemley, An Antitrust Assessment of the Google Book Search Settlement (2009) [link]

Class 10: The Google Book Settlement (Part 2) (April 2, 2010)

The Google Book Settlement (Part 2)
What is the correct baseline for innovative products?

Required reading	Optional reading
Author's Guild v. Google, DOJ Statement of Interest regarding Proposed Amended Settlement, 2/4/2010 [link]	Picker, The Google Book Search Settlement: A New Orphan-Works Monopoly?, Journal of Competition Law and Economics (2009) [link] Picker, Antitrust and Innovation: Framing Baselines in the Google Book Search Settlement (2009) [link]

Class 11: Merger analysis in markets with network effects - open source (April 9, 2010)

Open source, free software, and antitrust (Wallace v. FSF)
Introduction to merger analysis - the Guidelines
U.S. v. Oracle (2004)
Comcast/NBC (2010)

Required reading

Optional reading

Open Source

Stallman, The Free Software Definition. [link]
Wallace v. IBM, 467 F.3d. 1104 (7th. Cir. 2006) [link]

Horizontal merger analysis

FTC & DOJ, Proposed 2010 Horizontal Merger Guidelines [link]
Kaiser & Wall, What the New Merger Guidelines Mean for Technology Companies (2010) [link]
U.S. v. Oracle, 331 F.Supp.2d 1098 (N.D. Cal. 2004) [link] Read the excerpts on bSpace.

Vertical merger analysis:

New York Times Editorial, Concerns about Comcast-NBC 12/6/2009 [link]
Thierer, A Brief History of Media Merger Hysteria (2009) [link]

Open Source GPLv3 [link]
What is copyleft? [link]
Smith, A Quick Guide to GPLv3 [link]
Bond, What's so Great About Nothing? The Gnu General Public License and the Zero-Price-Fixing Problem (2005) [link]

Mergers

Blumenthal, Why bother? (2004) [link]
Shapiro & Farrell, Mergers with Unilateral Effects, Presentation (2008) [link]
Katz and Shelanski. Mergers and Innovation. Antitrust Law Journal (2006) [excerpts] [link]
Sidak/Teece. Rewriting the Horizontal Merger Guidelines in the Name of Dynamic Competition. (2009) [link]

Vertical mergers

Kaiser, Antitrust Primer, pp. 21-22, 30-39 [link]
AOL & Time Warner, Inc., FTC Dkt. No. C-3989 (Apr. 17, 2001) (consent order) [link]
Rubinfeld/Singer, Open Access to Broadband Networks: A Case Study of the AOL/Time Warner Merger (2000) [link]

Class 12: Oracle's acquisition of Sun Microsystems (April 16, 2010)

Oracle/Sun (2010)

Required reading	Optional reading
Commission Decision, M.5529 Oracle / Sun Microsystems, 1/21/2010 [link] Monty Program AB Submission to the EC, opposing the transaction (2009) [link] Marten Mickos, Open Letter to EC (2009) [link] Stephen O'Grady, Oracle, MySQL and the EU: The Q&A (2009) [link]	faberNovel, Business Models of Open Source and Free Software (2007) [link] Moglen, The European Commission and Oracla/Sun (2009) [link] Microsoft/Novell, Open Letter to the Open Source Community (2006) [link] DOJ, Statement on the EC's Decision re Oracle/Sun (2009) [link]

Class 13: "Search deals," online advertising, and joint ventures (April 28, 2010)

How the "currency exchange" from traffic into money works - the law & economics of online advertising
Google/Doubleclick (2007)
Yahoo/Google (2008)
Yahoo/Microsoft (2010)

Required reading	Optional reading
Google/Doubleclick (FTC) (2007) [link] DOJ Press Release, Yahoo/Google abandon their advertising agreement (2008) [link]	Katz & Shapiro, Antitrust in Software Markets (1999), pp. 29-54 [link] Google/Doubleclick (EC) (2007) [link] Hahn/Singer. An Antitrust Analysis of Google's Proposed Acquisition of DoubleClick . SSRN (2007) [link] Lande, The Microsoft-Yahoo Merger: Yes, Privacy is an Antitrust Concern. (2008)

Class 14: Review session (April 30, 2010)

***

This work is licensed under a Creative Commons Attribution 3.0 United States License.