Anti-competitive agreements in Russian courts (2008–2012): antitrust law implementation and interpretation

This article analyses antitrust enforcement practice in Russian courts in the area of competition-restricting agreements. The analysis is based on the court decision database of litigations with the Russian competition authority (the Federal Antimonopoly Service (FAS)). In the database litigations that officially started in the period 2008–2012 were included. Final court decisions were evaluated, taking into account litigation duration (sometimes up to 3 years). The database contains 400 cases, including 236 horizontal agreements and 164 other agreements (mostly vertical agreements). Based on the evidence of this database, important features and problems of the interpretation and implementation of competition law in Russia and priority areas of enforcement were identified. Antitrust policy was analysed taking into account the risks of type 1 and type 2 errors, including the problem of flexibility of prohibitions (per se vs Rule of reason (ROR) approaches), standards of proof and the problem of consistency of enforcement.     

THE IMPACT OF ANTITRUST GUIDELINES ON BUSINESS

The dual antitrust goals of predictable law enforcement and accurate decisions in individual cases have been in conflict for decades. There are three dimensions to this conflict. First, there may be insufficient information on how the courts and enforcement agencies interpret the antitrust statutes. Second, the enforcement agencies may not use consistent standards to evaluate actual and potential antitrust cases. Third, antitrust guidelines may differ significantly from case law.
Unfortunately, attempts to improve one dimension of antitrust policy generally create conflicts elsewhere. Thus, the search for better antitrust decision making in individual cases has made antitrust counseling more complex and expensive. Over time, standards have evolved at different rates at the Department of Justice (DOJ), the Federal Trade Commission (FTC), and the courts, and inconsistencies among these three decision-making bodies have further complicated the task of antitrust counseling. In this environment, improved and updated information on antitrust standards can potentially be very valuable to the business community.     

Trade Policy and Antitrust: Do Consumers Matter to Legislators?

We provide one of the first efforts to measure the importance of consumer preferences in legislators' trade policy decisions by estimating the degree to which the level of antitrust enforcement in the legislator's state impacts his or her vote on free trade agreements. To the extent that antitrust and trade liberalization are both viewed as pro‐consumer in nature, we would expect to see a positive relationship between antitrust enforcement in their legislative district and Congressional votes in support of trade liberalization. We find evidence suggesting that consumer preferences do play a role in legislative decisions on trade policy.     

Separating complements: the effects of competition and quality leadership

The literature on the tragedy of the anticommons typically suggests that producers of complementary goods should integrate themselves. Recent decisions by the antitrust authorities seem however to indicate that there exists a tradeoff between the “tragedy” and the lack of competition characterizing an integrated market structure. In this paper we analyze such tradeoff in oligopolistic complementary markets when products are vertically differentiated. We show that quality leadership plays a crucial role. When there is a quality leader, forcing divestitures or prohibiting mergers, thus increasing competition, lowers prices and enhances consumer surplus. However, when quality leadership is shared, “disintegrating” firms may lead to higher prices. In this case, concerns about the tragedy of the anticommons are well posed in antitrust decisions.     

Mergers in the food retailing sector: An empirical investigation

We address the problem of merger evaluation, for competition policy purposes, in the retailing sector. The likely effects of a possible merger are analysed ex ante. The novelty of the paper lies in the inclusion of downstream and upstream market power effects on the retailers. Also, it provides an empirical application to the Portuguese food retailing market. The effects of additional concentration on prices are estimated, as well as the price reduction insiders are likely to obtain via an improved bargaining position. The final effect on prices depends on how these cost reductions are reflected in insiders’ prices, i.e., on the pass-through rate. For realistic values of this rate we find that the merger in question will most likely increase consumer prices and, therefore, should not be allowed on an antitrust legislation basis.     

INTERNATIONAL ANTITRUST ENFORCEMENT AND MULTIMARKET CONTACT*

This article analyzes cartel formation and international antitrust enforcement when multinational firms operate in several jurisdictions with local antitrust authorities. We are concerned with how the sustainability of collusion in one local market is affected by the existence of collusion in other markets when they are linked by a negative demand relationship. The interdependence of cartel stability across markets leads to potential externalities in antitrust enforcement across jurisdictions. Local antitrust enforcement equilibrium enforcement may exhibit a nonmonotonicity in the degree of market integration. We compare it with globally optimal antitrust enforcement policy and discuss the role of international antitrust coordination.     

欧盟合并控制竞争执法中创新损害问题研究

创新是欧盟竞争法中重要的非价格竞争要素之一，在分析企业合并对创新的影响时，欧盟委员会传统上主要从与特定及明确产品市场相关联的潜在竞争角度进行评估。近几年的执法实践表明，欧盟竞争执法范围已经扩展到具有动态性的创新竞争领域，开始关注无形的创新损害，并通过个案审查逐渐在理论基础、制度依据、执法政策、分析框架和方法等方面形成相对体系化的应对方案。欧盟应对创新问题的竞争执法经验为当下我国反垄断法修订以及执法完善提供了良好参考。     

算法合谋的反垄断规制及工具创新研究

在数字经济领域,数字商务企业采用算法定价会明显提高合谋的可能性和可实施性,具有较大的价格合谋风险,因而成为反垄断法关注的重点。学理上,尚待明确的问题有:算法定价促进合谋的内在机理和类型化机制;如何创新反垄断执法体制以有效规制自主学习算法;在反垄断事后执法无效情况下,是否需要以及如何实行事前规制等。研究表明:算法合谋的反垄断规制宜坚持分类治理原则,采取事后反垄断禁止为主并辅之以事前规制的政策组合,反垄断政策工具创新应主要针对自主学习算法合谋。算法合谋反垄断规制政策需重新界定构成非法合谋的"协议"要件,明确当事企业的主体责任,重在采取以"软执法"为主的反垄断执法体制。事前规制政策应坚持"基于设计来遵守法律"的原则,强化算法审查机制和审查能力建设,并将提升算法透明度和可问责性作为重点。     

Cooperative Strategy, Technology Innovation and Competition Policy in the United States and the European Union

The widespread adoption of joint ventures in the 1980s and strategic alliances in the 1990s by a spectrum of businesses across industries has resulted in cooperative strategy emerging as the corporate and business strategy of the global economy. Of further significance, however, is the relaxation by antitrust authorities in the USA and the EU of policies forbidding or restricting horizontal or competitor collaborations. Beginning in the 1980s, legislation, regulations and guidelines have established a business environment conducive to competitor collaborations. This evolution in competition policy is justified by the need for accelerating technology-based innovations at the firm level, thus improving competitiveness at the national level. The US government and the European Commission have provided firms with "safe harbors' to develop strategic technology alliances with competitors, albeit with notable differences in specific market share thresholds and emphases on qualitative versus quantitative perspectives in their respective competition policy frameworks.     

Cooperative Strategy,Technology Innovation and Competition Policy in the United States and the European Union

The widespread adoption of joint ventures in the 1980s and strategic alliances in the 1990s by a spectrum of businesses across industries has resulted in cooperative strategy emerging as the corporate and business strategy of the global economy. Of further significance, however, is the relaxation by antitrust authorities in the USA and the EU of policies forbidding or restricting horizontal or competitor collaborations. Beginning in the 1980s, legislation, regulations and guidelines have established a business environment conducive to competitor collaborations. This evolution in competition policy is justified by the need for accelerating technology-based innovations at the firm level, thus improving competitiveness at the national level. The US government and the European Commission have provided firms with "safe harbors' to develop strategic technology alliances with competitors, albeit with notable differences in specific market share thresholds and emphases on qualitative versus quantitative perspectives in their respective competition policy frameworks.     

UMBRELLA DAMAGES: TOWARD A COHERENT ANTITRUST POLICY

Price‐fixing cartels usually do not involve all members of an industry. To the extent that the nonconspiring industry members set their prices under the price umbrella of the cartel, the customers of the nonconspiring firms suffer overcharges just like customers of the conspiring firms. Whether these so‐called umbrella plaintiffs have standing to sue for antitrust damages is an unresolved policy question, because the Supreme Court has not spoken on “umbrella damages.” In this article, we identify the judicial concerns regarding umbrella damage claims, which can be traced to Mid‐West Paper and Petroleum Products Antitrust Litigation. These decisions raise concerns that the fact of injury is conjectural and the measurement of the damages is speculative. We first review the divided judicial treatment of standing for umbrella plaintiffs. Next, we describe the economics of umbrella pricing, which reveals that umbrella claims are not inherently conjectural. We then examine the econometric analysis necessary to estimate damages, demonstrating that umbrella damage estimates are not inherently speculative. We also examine some difficulties that exist in damage estimation generally and for umbrella plaintiffs in particular. Finally, we argue that granting standing to umbrella plaintiffs is consistent with the goals of antitrust policy. (JEL L1, L4, K2)     

Antitrust Enforcement and Nonenforcement as a Barrier to Imports – with Illustrations from the Japanese Film Dispute

The role of antitrust in opening foreign markets to imports is a strong yet often unpredictable undercurrent in international trade disputes. The U.S. government may seek to protect its exporters who are denied access to a foreign market either by enforcing U.S. antitrust laws or by using trade law remedies against the importing country for not enforcing its antitrust laws. Both actions raise issues of extraterritorial jurisdiction and comity.The primary goals of antitrust law and trade law are sometimes complementary but often diverge. Antitrust is primarily intended to benefit consumer welfare, while the purpose of trade law is to gain access to foreign markets for the benefit of domestic enterprises and their workforces. Consequently foreign market access pursued under antitrust law can raise novel issues when there is no apparent injury to domestic consumer welfare suffers from too little competition, whereas trade law pursue market access strictly as principles of fairness that have no necessary relationship with consumer welfare anywhere.This paper examines two aspects of antitrust law – (1) non-enforcement by the importing country, and (2) enforcement of U.S. law to compel access to the foreign market – and discusses the current dispute between Eastman Kodak Co. and Fujji Photo Film Co. as an illustration of the issues introduced above.     

Legal Principles in Antitrust Enforcement

We study antitrust enforcement that aims to channel price‐fixing incentives of cartels through setting fine schedules and detection levels. Fines obey legal principles, such as the punishment should fit the crime, proportionality, bankruptcy considerations, and minimum fines. Bankruptcy considerations limit maximum fines, ensure abnormal cartel profits, and impose a challenge for optimal antitrust enforcement. We derive the fine schedule and detection level that are constrained‐optimal under legal principles and sustainability of cartel prices. This fine schedule lies below the maximum fine, makes collusion on lower prices more attractive than on higher prices, and, hence, relates to the body of literature on marginal deterrence.     

Legal tradition and antitrust effectiveness

This article uses cross-country data to empirically investigate through which channel legal origin can influence antitrust effectiveness. The evidence shows that the adaptability channel (legal flexibility) is more important for explaining antitrust effectiveness than the political channel (authority independence). The evidence also suggests that countries in which a judicial decision is a source of law will provide more legal flexibility and will adapt more easily to changing economic circumstances. They will therefore also have better enforcement of antitrust rules. On the other hand, a legal tradition that takes no formal notice of legal precedent will make the competition environment much less predictable. To the extent that these findings are true, one would expect competition agencies in Common law countries to perform better than those in Civil law countries.     

Competitive prices as optimal cartel prices

In a linear oligopoly model with antitrust enforcement, the optimal cartel price converges to the competitive equilibrium price. The set of sustainable cartel prices does not shrink to the competitive price. We identify necessary conditions for this counter-intuitive convergence result.     

Cooperation In R&D With Spillovers And Delegation Of Sales ∗

Cooperation in several phases of the innovation process is viewed by antitrust authorities with suspicion. They face the dilemma between providing the right incentives for the appro-priability of returns to R&D and the risks of diminishing product market competition. The current legislation in the European Union and the United States gives special treatment to cooperation in R&D and the joint exploitation of results (extended cooperation).

We study several collusive regimes for a class of examples in which vertical relations are explicitly introduced. Regarding antitrust policy implications we fmd that: a) there is an ana-lytical justification to a ‘rule of reason’ treatment for extended cooperation in research joint ventures and, b) individual exemptions, though restrictive of competition, might be welfare improving.     

研发市场界定的适用困境及应对策略

研发市场是经营者在特定产品和技术竞争中形成的市场范围。由于研发活动的不确定性，反垄断执法机关在界定研发市场时难以准确厘定市场边界，更深层次的原因在于维持竞争与激励研发的关系尚不明晰。研发竞争中的垄断行为难以通过相关市场界定的方式判断其违法性，需要结合具体案情和市场条件，动态分析涉案行为是否损害产品或技术研发竞争。     

State antitrust enforcement in the US and implications for small business entry and relocation

This article examines the impact of the important, yet little studied, state-level antitrust enforcement activity on entry and relocation behaviour by small US firms. Feinberg and Husted (2011) have shown that this enforcement, especially nonhorizontal cases, may be viewed by potential entrants as a negative aspect of the state business climate. However, they did not pursue a more disaggregate analysis of small firm entry behaviour; nor did they investigate different responses between manufacturing, wholesaling and retailing firms. Another related issue is the extent to which state cases filed in tandem with federal investigations have the same impact on establishment entry as do purely ‘independent’ cases. These considerations are dealt with in this article. The author uses annual state-level data from the Statistics of US Business to examine entry and relocation reactions to state antitrust enforcement by firms within three small-business categories: 1–19 employees; 20–99 employees; 100–499 employees. Generally speaking, the smallest retail and wholesale firms seem to favour vigorous antitrust activity, especially enforcement targeted against cartel behaviour by suppliers. The largest small-firm retailers and wholesalers (those with 100–499 employees) seem somewhat threatened by such activity, especially the more controversial nonhorizontal enforcement. However, it must be acknowledged that the effects on entry or relocation of small firms – both positive and negative – are quite small.     

An Analysis of the State of Competition in Long-Distance Telephone Markets

In this paper, we examine seven indicia of the effect of regulated competition in long-distance telecommunications. The evidence we have examined suggests that regulation or the threat of antitrust intervention are the major factors which constrain AT & T's prices to small customers. We conclude that small customers have yet to enjoy the full benefits of competition in long distance.     

COLLUSION AND ANTITRUST DETECTION*

This paper investigates the impact of antitrust policy on the strategic choice of product specification when firms can collude with respect to prices, cannot collude with respect to location and may have their collusion ended if it is detected by the antitrust authority. Depending on the aggressiveness of the antitrust authority, different location configurations may emerge in equilibrium. Extremely aggressive and extremely lax policies lead to the least efficient outcomes while the configuration maximizing social welfare is obtained by an intermediate policy.