The Decline of Antitrust Enforcement

American Antitrust policy has abandoned tight restrictions on mergers and on a variety of business practices, such as vertical restraints indistribution. I argue that the change is permanent for three reasons: 1)rising skepticism about government intervention generally, 2) lack ofdeleterious effects from the new policy, and 3) increasing irrelevance ofantitrust in global markets. Due process considerations will reinforce thechange in policy. New technologies may, however, revive traditionalantitrust concern with price fixing.     

The NCAA Cartel and Antitrust Policy

The National Collegiate Athletic Association (NCAA) was originally founded to protect student athletes from the brutality of college football. The NCAA has established a number of prominent athletic programs and achieved huge commercial success. In spite of this success, the NCAA has limited the compensation of student-athletes through collusive monopsonistic restraints. Ordinarily, these restraints would be vulnerable to antitrust attack, but the NCAA has enjoyed benign neglect by the U.S. Department of Justice and the Federal Trade Commission. The root of this is the Board of Regents [National Collegiate Athletic Association v. Board of Regents of the University of Oklahoma, 468 U.S. 85 (1984)] decision, which requires rule-of-reason treatment of the NCAA’s restraints. The essential role of amateurism of student athletes is used to justify the NCAA’s cartel behavior. In this paper, we demonstrate that amateurism is a myth. We suggest that the NCAA will be unable to provide an evidentiary foundation for its claim that amateurism is crucial to the success of college athletic programs. In addition, we reject the possibility of an efficiency defense for the NCAA’s cartel behavior.     

Determinants of Decertification Activity: An Interstate Analysis

In this paper, a model of union decertification activity in the U.S. is estimated for 1960, 1970, 1975, and 1980. Cross-state data permit the use of regressors capturing the effects of demographic, political, and organizational factors not included in previous research on decertification. The estimated results confirm these effects. Tests for stability over the pooled sample periods 1960–1970 and 1975–1980 show some variability in the strength of the variables' effects.     

Determinants of Decertification Activity: An Interstate Analysis

In this paper, a model of union decertification activity in the U.S. is estimated for 1960, 1970, 1975, and 1980. Cross-state data permit the use of regressors capturing the effects of demographic, political, and organizational factors not included in previous research on decertification. The estimated results confirm these effects. Tests for stability over the pooled sample periods 1960–1970 and 1975–1980 show some variability in the strength of the variables' effects.     

The Tenacity of Antitrust Mythology: Dissenting from Mueller

This comment registers the author's reservations about Professor D.C. Mueller's proposals for revising federal merger policy and about the arguments that he advances in support of them. The comment especially questions the validity of the practice of using concentration data as the basis for inferring the presence or absence of monopoly power. It is argued that the analytical foundation for this practice is non-existent and that the purely statistical foundation is weak. The author finds persuasive Mueller's argument that, in recent decades, the merger activity of large firms has done little or nothing to increase the efficiency of the American economy. He believes that, right or wrong, what drives antitrust is fear of corporate size and power, not fear of textbook monopoly. Therefore, he believes consideration should be given to Mueller's proposal that the ambitious merger projects of large firms should not be allowed to go forward unless they promise some gain in efficiency.     

企业集团引发的反垄断难题

本文从企业集团的界定、性质和域外管辖权三个角度提出了其所引发的反垄断难题。本文的主要观点是企业集团作为一种企业间组织。兼有“企业性”与“市场性”二重属性：企业集团的“二重性”是导致企业集团垄断行为隐蔽性和复杂性的根本原因；处理企业集团的反垄断问题需要准确判断企业集团行为属性。本文通过案例研究．分析了美国和欧盟处理企业集团反垄断难题时的一些典型做法：提出了处理企业集团反垄断难题的基本原则。     

Antitrust in High-Tech Industries

Recent economic growth has been led by high-technology industries (See Jorgenson, Ho & Stiroh (2005) for a summary of the research on the recent acceleration of productivity growth). Many firms in these industries have achieved a dominant market position, thereby attracting the attention of competition authorities, often resulting in major monopolization cases. Unfortunately, this attention has not resulted in improved market outcomes. In this paper, we evaluate the effect of Section 2 Sherman Act cases brought against IBM, AT&T, and Microsoft. We conclude that these cases had limited effect on consumer welfare because they did not stimulate entry or innovation. In these industries, competition authorities cannot expect to promote simply an expansion of output and lower commodity prices; rather they should focus their remedies on promoting innovation—new products that replace or compete with the dominant firm’s products.     

Antitrust Versus Regulatory Merger Review: The Case of Electricity

This paper focuses on the implications of multi-agency review of electricity mergers. It highlights fundamental differences between regulatory and antitrust merger enforcement procedures–ranging from standards of review to data collection, economic analysis, and remedies. Such disparities potentially introduce costly and potentially conflicting redundancy into the merger review process. Illustrative examples are drawn from a number of cases, including apparent inconsistencies across applicant-filed analyses in FERC merger cases. Absent the delegation of competition analysis to the antitrust agencies, the paper makes the case for harmonizing review across regulators and antitrust enforcers.     

The Antitrust Implications of Capacity Reallocation by a Dominant Firm

When a firm acquires rival firms in one market, and moves their capacity to another market, should antitrust authorities be concerned? We address this question by studying a multi‐stage game. A dominant firm has the opportunity to acquire fringe firms that operate in the same market. Then, the dominant firm has the opportunity to move capacity from that market to a second market. The model is motivated by a series of acquisitions in the Specialized Mobile Radio industry aimed at establishing a new cellular carrier. We derive necessary and sufficient conditions for the dominant firm to acquire too little capacity relative to the social optimum. The results shed light on the Consent Decree negotiated in US v. Motorola Inc. and Nextel Communications Inc., 1994.     

Antitrust and Sales-Below-Cost Laws: The Case of Retail Gasoline

Numerous states have sales-below-cost (SBC) laws, often directed at specific products such as gasoline. Potential violations of state SBC laws occur when prices are less than the seller's cost of doing business, or some proxy thereof. The most commonly stated purpose of these laws is to protect small independent firms from predation by larger firms. This study offers empirical evidence on the impact of SBC laws on the retail gasoline market. The result indicate that SBC laws directed specifically at the retail gasoline market have resulted in higher retail margins.     

The Price Effects of Using Firewalls as an Antitrust Remedy

Antitrust authorities have imposed firewalls between the previously separate divisions of newly vertically integrated firms in several industries, to address concerns that access to horizontal rivals’ proprietary information may reduce competition. This paper evaluates a specific antitrust concern by modeling the price effect of one seller’s learning its rival’s production costs before bidding in a duopoly procurement contest. The results show that imposing a firewall as a condition for permitting a vertical merger actually can lead to higher prices than if the flow of information were unimpeded, and they provide guidance as to when this unintended outcome occurs.     

The Learning Curve,Predation, Antitrust,and Welfare

An economic definition of predation is applied to a dynamic model of duopoly competition with learning curves. It is shown that rational predation occurs in equilibrium, although below-cost pricing is neither a necessary nor a sufficient indicator of predation. A conceptual framework for antitrust analysis of predation shows that a prohibition of predation might help or harm consumer welfare depending on details of market structure, although the informational requirements of fashioning an effective legal rule against harmful predation are formidable.     

The Dubious Antitrust Argument for Breaking Up the Internet Giants

Recent calls for using the antitrust laws to break up the large Internet giants are misplaced for a number of reasons. First, similar efforts against oil, tobacco, motion-picture, and telecommunications monopolies have not proved to be beneficial to economic welfare. Second, the failure to break up Microsoft using Section 2 has not proved to be a mistake: competition in operating systems and Internet browsers has flourished recently. Finally, a Section 2 case against Amazon, Facebook, or Google could not succeed if it focused on the digital advertising market. Even in a case based on market power on the other side of their platforms, a structural remedy—a break-up—would not improve economic welfare in the long run.

     

The Determinants of Participatory Management

This paper analyses self-reported participatory management data from a survey of over 900 private-sector employees in Australia and New Zealand. We test for causal linkages between employee desires for participation, while distinguishing between participation at the shop-floor and at higher managerial levels. At higher levels, where there is a significant excess demand for participation, firms often respond to employee desires with formal programmes which in turn create de facto participation at this level. At the shop-floor level, employee desires are more often met through the informal provision of de facto participation. Participation also changes employee desires, with participation at higher levels increasing employee demands for it and participation at lower levels reducing demands for high-level participation. We conclude that shop-floor programmes may favour managerial interests while higher-level co-operative programmes may favour employee interests.     

The Impacts of an Antitrust Investigation: A Case Study in Agriculture

We analyze the impacts of an antitrust investigation on the purchasing practices of a buying collaboration and its common bidding agent. Using a repeated cross section of prices across procurement auctions that were and were not subjected to the investigation, we find that auction prices in the targeted auctions: (i) significantly increased as soon as the targets were made aware they were under investigation; (ii) remained higher as long as the investigation was open; and (iii) systematically declined to the same low pre-knowledge state after the closure of the investigation without prosecution. Finally, the counterfactual impact on auction prices by the removal of the common bidding agent and the demise of the buying collaboration at a later date was on par with the impacts of the investigation.     

Introduction: Antitrust and Regulatory Update

Review of Industrial Organization -     

The Effect of EU Antitrust Investigations and Fines on a Firm's Valuation

EU antitrust investigations involve a sequence of events which affect the investigated firm's market value. We model these relationships and estimate their impact on firms' share prices. On average, a surprise inspection reduces a firm's share price by 2.89%, an infringement decision reduces it by 3.57%. The Court judgments do not have a statistically significant effect. Overall, we find that the total effect of the antitrust action ranges from ?3.03% to ?4.55% of a firm's market value. Fines account for no more than 8.9% of this loss, and we conjecture that most of the loss is due to the cessation of illegal activities.