Antitrust Law
The Ideological Roots of America’s Market Power Problem
While Unlocking Antitrust Enforcement offers solutions to our market power problem, Lina Khan highlights the absence of a discussion of what philosophy should guide antitrust law and enforcement. Addressing America’s market power problem also requires recognizing its ideological roots.
The Twilight of the Technocrats’ Monopoly on Antitrust?
Sandeep Vaheesan contends that Unlocking Antitrust Enforcement is disappointingly modest in scope. Antitrust law is and will be political, and consumer welfare should not be privileged; it is inconsistent with congressional intent and embodies an incomplete understanding of corporate power.
Antitrust and Deregulation
Because regulation works alongside antitrust law to govern U.S. market structure and economic conduct, deregulatory cycles can create gaps in competition enforcement. This Feature argues that antitrust enforcement should strengthen as regulation weakens.
Antitrust Enforcement Against Platform MFNs
Antitrust enforcement against anticompetitive platform most favored nations (MFN) provisions can protect competition in online markets, including hotel and transportation bookings, digital goods, or craft products. This Feature discusses how enforcement could reach anticompetitive platform MFNs.
Beyond Brooke Group: Bringing Reality to the Law of Predatory Pricing
This Feature offers a roadmap for bringing and deciding predatory pricing cases under the Supreme Court’s restrictive Brooke Group framework. Using historical research, Hemphill and Weiser identify flexibility within the framework that permits empirically grounded evaluation of predation claims.
Horizontal Mergers, Market Structure, and Burdens of Proof
Hovenkamp and Shapiro argue that the longstanding structural presumption is strongly supported by economic theory and evidence and suggest ways to further strengthen it. The Feature considers and suggests additions to a promising recent legislative proposal to reinforce and expand the presumption.
Horizontal Shareholding and Antitrust Policy
Horizontal shareholding occurs when a number of equity funds own shares of competitors operating in a concentrated product market. This Feature considers how antitrust laws might be applied to this: identifying a theory of harm and how it matches the law, as well as potential litigation hurdles.
How Antitrust Law Can Make FRAND Commitments More Effective
This Feature argues that Section 1 of the Sherman Act can play an important role in ensuring that the rules established by standard-setting organizations are effective in preventing owners of standard-essential patents from engaging in patent holdup.
Invigorating Vertical Merger Enforcement
This Feature summarizes why and how vertical merger enforcement should be invigorated: in markets where economies of scale and network effects lead to barriers to entry and durable market power. In doing so, Salop disputes the Chicago School account regarding vertical merger enforcement.
Mergers that Harm Sellers
This Feature examines the antitrust treatment of mergers that harm sellers and demonstrates that lost upstream competition is an actionable harm to the competitive process. Hemphill and Rose contend that harm to sellers in an input market is and should be sufficient to support antitrust liability.
Multisided Platforms and Antitrust Enforcement
Multisided platforms are ubiquitous in today’s economy. This Feature concludes that enforcement should use a multiple-markets approach, which appropriately accounts for cross-market network effects without collapsing all of a platform’s users into a single product market.
When Patents are Sovereigns: The Competitive Harms of Leasing Tribal Immunity
The Hatch-Waxman Act and the AIA balance exclusive rights of pharmaceutical patent holders with entry of generic competitors. Allergan’s recent patent transfer to the Saint Regis Mohawk Tribe threatens this balance. This Essay proposes antitrust suits to sidestep sovereign immunity and prevent companies from unduly increasing their patents’ probabilistic value.
Amazon’s Antitrust Paradox
Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space.
Present at Antitrust’s Creation: Consumer Welfare in the Sherman Act’s State Statutory Forerunners
Parallel Exclusion
122 Yale L.J. 1182 (2013). Scholars and courts have long debated whether and when “parallel pricing”—adoption of the same price by every firm in a market—should be considered a violation of antitrust law. But there has been a comparative neglect of the importance of “parallel exclusion”—conduct, engaged in by multiple firms, that blocks or slows would-be market entrants. Parallel exclusion merits greater attention, for it can be far more harmful than parallel price elevation. Setting a high price leaves the field open for new entrants and may even attract them. In contrast, parallel action that excludes new entrants both facilitates price elevation and can slow innovation. Reduced innovation has greater long-term significance for the economy. Moreover, parallel exclusion regimes may be more stable than parallel price-elevation regimes. A basic game-theoretic analysis reveals that the factors that leave price elevation vulnerable to breakdown do not apply as strongly to parallel exclusion. Indeed, in some instances, maintaining an exclusion scheme is a dominant strategy for each of the excluders. In such cases, the likelihood of collapse is even lower, yielding a potentially indefinite system of parallel exclusion. This Article proposes the recognition of parallel exclusion as a form of monopolization—subject to the strict limits already present in case law, including monopoly power, anticompetitive effect, and an absence of sufficient procompetitive justification. It also explains why parallel exclusion is a proper concern for merger policy, and why it is bad policy to automatically condemn certain boycotts without any evaluation of their anticompetitive effects.
The Antitrust/Consumer Protection Paradox: Two Policies at War with Each Other
121 Yale L.J. 2216 (2012). The potential complementarities between antitrust and consumer protection law—collectively, “consumer law”—are well known. The rise of the newly established Consumer Financial Protection Bureau (CFPB) portends a deep rift in the intellectual infrastructure of consumer law that threatens the consumer-welfare oriented development of both bodies of law. This Feature describes the emerging paradox that rift has created: a body of consumer law at war with itself. The CFPB’s behavioral approach to consumer protection rejects revealed preference—the core economic link between consumer choice and economic welfare and the fundamental building block of the rational choice approach underlying antitrust law. This Feature analyzes the economic, legal, and political institutions underlying the potential rise of an incoherent consumer law and concludes that, unfortunately, there are several reasons to believe the intellectual rift shaping the development of antitrust and consumer protection will continue for some time.
Failure Is an Option: An Ersatz-Antitrust Approach to Financial Regulation
120 Yale L.J. 1368 (2011). We distinguish the economic problems when large financial institutions (“banks”) become insolvent from the political challenges that exist before banks are distressed. These political problems arise because policymakers would like to be able to precommit while a bank is still healthy to refrain from bailing out the bank later, should it become distressed. Political theory and historical experience show that politicians facing unsettled capital markets and highly anxious voters will always bail out the financial institutions that they deem “Too Big To Fail.” As such, the only way for government credibly to commit to refrain from pursuing a Too Big To Fail policy is to break up the largest financial institutions before they become Too Big To Fail. We identify the size at which we believe banks become Too Big To Fail. Banks that reach this size should be broken up. Liabilities should be limited to a metric based on the actual funds devoted to resolving failed banks. The metric that we identify is the targeted value of the FDIC’s Deposit Insurance Fund. We would prohibit any financial institution from amassing liabilities in an amount greater than five percent of the targeted value of this fund. The government could thereby commit credibly to stopping bailouts and to pursuing a policy of allowing financial institutions to fail. We believe that the lost economies of scale associated with this “ersatz-antitrust policy” would be offset by the large savings realized by avoiding future bailouts.
Securities Regulation in the Shadow of the Antitrust Laws: The Case for a Broad Implied Immunity Doctrine
120 Yale L.J. 910 (2011). This Note provides a defense of the Supreme Court’s decision in Credit Suisse Securities (USA) LLC v. Billing, in which the Court reaffirmed a broad standard for determining when securities market activities are impliedly immune from antitrust liability. It argues that, contrary to criticisms leveled by several commentators, Billing’s implied immunity analysis is consistent with precedent and, moreover, that a broad grant of immunity is normatively desirable. Antitrust courts are likely to prohibit too much conduct in the securities area and to impose excessive liability even as to activities that merit prohibition. As a result, the concern with a narrow implied immunity doctrine is not just that it might produce overdeterrence ex post but that ex ante it might induce the SEC to forgo an optimal, nuanced regulatory approach in favor of completely authorizing a particular practice in order to preempt antitrust litigation.
American Needle v. NFL: An Opportunity To Reshape Sports Law
119 Yale L.J. 726 (2010). In American Needle v. National Football League, the U.S. Supreme Court will decide whether, and to what extent, section 1 of the Sherman Antitrust Act regulates a professional sports league and its independently owned franchises. For the first time, the Court could characterize a league and its teams as a single entity, meaning that the league and its teams are not able to “conspire” because they share one “corporate consciousness,” and thus cannot violate section 1 through even the most anticompetitive behaviors. Such an outcome would run counter to the sports league-related decisions of most U.S. Courts of Appeals, which have generally rejected the single entity defense because teams often do not pursue common interests. It would, however, prove consistent with the views of the Seventh Circuit, which in 2008 determined in American Needle that the National Football League and its teams constitute a single entity for purposes of apparel sales. This Feature provides a substantive analysis of American Needle, the relationship between antitrust law and professional sports, and the merits and weaknesses of the single entity defense for professional sports leagues and their teams. The Feature also projects how American Needle may influence the legal strategies and business operations of other sports associations. The Feature discourages the Court from recognizing the NFL and similar leagues as single entities, and recommends that Congress consider targeted, sports-related exemptions from section 1.