antitrust law

  • June 20, 2017
    Guest Post

    *This piece is part of the ACSblog Symposium: 2017 ACS National Convention. The symposium considers topics featured at the three day convention, which took place on June 8-10, 2017. Learn more about the Convention here

    by Jeff Mandell, Partner, Stafford Rosenbaum LLP

    The ACS National Convention is always an opportunity to see old friends, to make new connections, and to be inspired. But one of my favorite aspects of the convention is that I always learn something new. As I reflect on this year’s convention, the session that resonates with me is the one on antitrust law. This is particularly surprising because I have never worked on an antitrust case, never took an antitrust class and truly have no knowledge of antitrust law beyond what I have gleaned by osmosis over the years.

    The panel discussion—titled “A Second Gilded Age: The Consolidation of Wealth and Corporate Power”—was engaging and illuminating. It provided a basic overview of the history of antitrust regulation, the evolution of the key theories courts use in evaluating antitrust claims, and a window into new thinking in the academy and how that might apply in practice. This is a tall order for ninety minutes, and the panel was expertly moderated by Ganesh Sitaraman, a professor at Vanderbilt Law School whose recent book, The Crisis of the Middle-Class Constitution: Why Economic Inequality Threatens Our Republic, is garnering acclaim. Professor Sitaraman kept the conversation moving, but also posed pointed questions to specific panelists, ensuring that the discussion was balanced and did not veer into arcana.

  • August 16, 2012
    Guest Post

    By Stan Liebowitz, an economics professor at the University of Texas at Dallas

    Andrew Popper, in his insightful paper on problems and remedies of software theft, focuses on an aspect of theft that is not often considered. Instead of considering the theft of final consumer goods, he focuses on the theft of intermediate goods used in the production of other goods. The thieves in this case are companies, not individuals, and they produce products using stolen software, giving themselves an advantage over their more honest competitors.

    Theft is normally considered harmful to society for several reasons. Most importantly, if theft is allowed to become common, the linkage between effort and reward is weakened for law abiding citizens, thus reducing or eliminating incentives for individuals to provide the efforts to be productive. If the neighborhood thug is capable of taking all the fruits of your labors, you lose an incentive to labor. It is also the case that individuals and governments spend resources trying to reduce theft (so that individuals will have incentives to work) and these are resources that could have been used for other more productive purposes if not for theft.

    The economic model of competition provides clear predictions of how competition would work for firms within an industry when this type of theft is permitted. In the short run, the low cost producers (using pirated software) will earn higher profits than the high cost producers. In the longer run, the low cost producers will drive the high cost producers out of business.

    Normally, we want more efficient firms to drive out the less efficient firms because that lowers the cost of the product and lowers prices for consumers. There is another, probably more important reason to want the more efficient firms to prevail, although this is often left out of the simplistic economic models of competition. The expectation is that the current lower cost firms are generally the better and more capable firms, and thus as conditions change over time, the fitter firms are likely to better handle these changes. This is the same reason that sports teams try to pick the players with the best statistics — because the expectation is that the players who have been above average will stay above average during their productive careers.

  • January 19, 2012
    Creation without Restraint
    Promoting Liberty and Rivalry in Innovation
    Christina Bohannan and Herbert Hovenkamp

    By Christina Bohannan and Herbert Hovenkamp, law professors at The University of Iowa College of Law

    Promoting rivalry in innovation requires a fusion of legal policies drawn from patent, copyright, and antitrust law, as well as economics and other disciplines. Creation without Restraint looks first at the relationship between markets and innovation, noting that innovation occurs most in moderately competitive markets and that small actors are more likely to be truly creative innovators. Then we examine the problem of connected and complementary relationships, a dominant feature of high technology markets. Interconnection requirements, technological compatibility requirements, standard setting, and the relationship between durable products and aftermarket parts and supplies all involve interconnection, or “tying.” But views about the practice tend toward two extremes. Some see tying as inherently anticompetitive, while others view it as unexceptionally benign. In fact, bundling products or technologies is essential in high technology markets and most of it is socially beneficial, but some possibilities of abuse nevertheless remain. 

    Identifying good substantive legal rules for facilitating innovation is often very difficult. Two generations ago antitrust law addressed problems of complexity by shifting the focus to harm. The courts reasoned that they could often avoid unmanageable substantive doctrine by considering whether the plaintiff had suffered the appropriate kind of injury. Plaintiffs who are injured by more rather than less competition should be denied a remedy. In the case of patent and copyright law, the appropriate question is whether an infringer’s conduct served to undermine the right holder’s incentive to innovate, with incentives measured from before the innovation occurred. Some IP infringements do no harm to the incentive to innovate; others actually make the right more rather than less valuable. In these situations relief should be denied without inquiry into the merits of the infringement case.

    Patent and copyright law are both in crisis today – major problems include overissuance, overly broad and ambiguously defined protections, and rules that permit both patentees and copyright holders to make broad claims on unforeseen innovations that lie in the future. The result has been that many patents are valueless, while others have very considerable value precisely because they enclose ideas or technologies that rightfully belong in the public domain. Patent law could be greatly improved if inventions were tied to real, nonobvious technology actually in the patentee’s possession at the time its application was filed, and if patentees were obliged to give comprehensible and timely notice of their inventions. Copyright law would be greatly improved by an aggressive theory of harm that reduces the scope of the derivative works right and increases the scope of fair use. In Eldred the Supreme Court suggested that the First Amendment should not be an important copyright infringement defense because the Constitution’s IP clause and the initial copyright act were passed “close in time,” leading to an inference that Congress must have considered these concerns. But the original copyright act bears little resemblance to the expansive coverage granted by the current Act, passed almost two centuries later.

  • September 20, 2011

    by Nicole Flatow

    Whether Google’s business practices “serve consumers” or “threaten competition” will be the subject of a Senate subcommittee hearing tomorrow.

    The hearing follows the Federal Trade Commission’s announcement in June that it will begin an antitrust probe of Google to determine whether it has “abused its dominance in Web-search advertising.”

    Among the concerns the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights hearing will address is the prominence of "Google-affiliated content” in search results. For example, if a user inputs the name of a business into the Google search engine, the results page might feature a Google map or the company’s stock information via Google Finance.

    As PCWorld’s Ian Paul explains, “That may be handy for you, but the downside of Google's actions is that sites that used to get traffic from a Google search such as Mapquest, Expedia, or weather and stock information sites, lose traffic. With Google providing the answers users are looking for instead of third-party Websites, the search results for competing products are effectively demoted.”

    Google Executive Chairman Eric Schmidt, who will be the first to testify, told ABC News’ Christiane Amanpour that he is looking forward to the opportunity.

    “What we want is sort of a fast hearing on all of these issues,” he said. “I think at the moment this is more of an awareness issue. We have an opportunity to communicate what we’re doing. Senators have an opportunity to communicate their concerns and I think that’s very good.”

    Watch the hearing live at 2 p.m. eastern time tomorrow via the Senate Judiciary Committee’s webcast feed or on C-SPAN’s Capitol Hearings page.

  • June 27, 2011

    The following is a roundup of some recent developments in antitrust news:

    • The Federal Trade Commission plans to launch a formal investigation into whether Google Inc. has “abused its dominance in Web-search advertising,” a probe that some policy watchers say could be a watershed moment for antitrust policy, The Wall Street Journal reports. While Google has been the subject of several antitrust investigations, prior investigations have focused on mergers and acquisitions, as opposed to the search advertising business, which is Google’s biggest money-maker, according to WSJ. In a blog post, Google Fellow Amit Singhal responds to the FTC’s announced investigation by articulating Google’s core principles, which he says will enable the company to “stand up to scrutiny.”  And in a recent column in Main Justice, TechFreedom Senior Adjunct Fellow Geoffrey Manne blasts the FTC’s plan to investigate Google for “unfair methods of competition” under Section 5 of the FTC Act, which, he argues, does not apply to claims that Google harms competitors rather than consumers.
    • AT&T’s planned acquisition of T-Mobile is sparking continued questions about the reason for the merger, with the FTC investigating AT&T’s claim that it needs more “wireless spectrum” to avoid dropped calls and satisfy the need for data access, and a Department of Justice probe continuing, NPR reports. Sprint and other opponents of the deal allege AT&T has more licensed spectrum than any other carrier in the country, and that much of it goes unused, but some policy experts say AT&T is just doing long-range planning. Sprint also filed an FCC petition against AT&T last month.
    • Intel Corp., Apple and several other large companies have received approval from the Department of Justice to bid on a “trove of high-tech patents” from the now-bankrupt telecommunications gear-maker Nortel Networks Corp.,The Wall Street Journal reports.