INTRODUCTION TO ANTITRUST AND COMPETITION POLICY Spot the - PowerPoint PPT Presentation

INTRODUCTION TO ANTITRUST AND COMPETITION POLICY

Spot the differences p p A A S MC p M . . . . . . . . . . . . . . . . . . p C . . . C . . . . . B . . . . . . . . . . . . . . . . . . . . . . . . B . . . . . . . . . . . . . . . . . D . . D . . . . . . . . . . . . . . . . . . . . . . . . . . . MR . . . . . . . . . . . . . . . . . . . . . . . . . . q q . . . . . . . . . . . . . . q C q M Solution: surplus, distribution, rent seeking.

Outline • Competition policy in the US • Competition policy in Europe • Main areas of competition policy

Outline • Competition policy in the US • Competition policy in Europe • Main areas of competition policy

Competition policy in the US: players • Department of Justice • Federal Trade Commission • Sectoral regulators (e.g. FCC, FAA) • District Courts • Supreme Court

Competition policy in the US: sources • Sherman Act − Section 1: Horizontal and vertical agreements − Section 2: Abuse of dominant position • Clayton Act. Following illegal if substantially lessen competition − Section 2: Price discrimination − Section 2: Exclusivity agreements − Section 7: Mergers and acquisitions • Federal Trade Commission Act − Section 5: Unfair methods of competition are unlawful • Regulations and guidelines: − Merger guidelines − Leniency program

US recent developments • September 2008 report: “Competition and Monopoly: Single-Firm Conduct Under Section 2 of the Sherman Act.” • Provide greater clarity by summarizing DOJ’s views (stress on firm efficiencies created by several practices). • FTC disowns report the same day. May 2009: new Assistant Attorney General Christine Varney withdraws report effective immediately. • August 2010: FTC and DOJ jointly publish new Horizontal Merger Guidelines.

Outline • Competition policy in the US • Competition policy in Europe • Main areas of competition policy

Competition policy in Europe: players • DG Comp, part of the European Commission (EC) • National competition authorities • Court of First Instance (CFI) • European Court of Justice (ECJ)

Competition policy in Europe: sources • EC Treaty: Articles 101 and 102 (formerly 81,82; or 85,86) − 101: Horizontal and vertical agreements − 102: Abuse of dominant position • EC Regulations, e.g.: − Regulation 4064/1989 (mergers) − Regulation 2790/1999 (block exemptions to Art 101)

EU recent developments • December 08 guidance document or Art 102 (then 82). • General principles are similar to those of U.S. policy: What really matters is to protect an effective competitive process and not simply protecting competitors (pp 4–5). • But: EU policy places greater burden on defendant than US policy.

Outline • Competition policy in the US • Competition policy in Europe • Main areas of competition policy

Price fixing • Explicit collusion is illegal (a criminal offense in US, UK, Ireland) • Implicit collusion is not illegal • Implicit collusion is frequently more effective • Per se vs rule of reason • Leniency programs

Merger policy • US guidelines, EU regulation • Efficiency vs market power • Market definition • HHI thresholds

Abuse of dominant position • Tying • Vertical squeeze • Predation • Exclusive dealing