The Facts Show That No License/No Chips Was A Successful Policy, Not an Empty Threat – A Reply to Manne and Auer’s New Argument
In their original post, Manne and Auer argued that the antitrust argument against Qualcomm’s no license/no chips policy was based on bad economics and bad law. They now seem to have abandoned that argument and claim instead – contrary to the extensive factual findings of the district court – that, while Qualcomm threatened to cut off ... The Facts Show That No License/No Chips Was A Successful Policy, Not an Empty Threat – A Reply to Manne and Auer’s New Argument
Manne and Auer’s Defense of Qualcomm’s Licensing Policy Is Deeply Flawed
Geoffrey Manne and Dirk Auer’s defense of Qualcomm’s no license/no chips policy is based on a fundamental misunderstanding of how that policy harms competition. The harm is straightforward in light of facts proven at trial. In a nutshell, OEMs must buy some chips from Qualcomm or else exit the handset business, even if they would ... Manne and Auer’s Defense of Qualcomm’s Licensing Policy Is Deeply Flawed
Dan, Come Over to the Rule of Reason
Steve’s next, perhaps final, installment, responding to Dan’s latest post on the appropriate liability rule for loyalty discounts. Other posts in the series: Steve, Dan, Steve, Dan, and Thom. My invitation comes with several hopefully final observations. (1) Dan says, “There’s neither input foreclose nor output foreclosure if a rival can neutralize a loyalty discount without pricing unprofitably.” My examples showed several reasons ... Dan, Come Over to the Rule of Reason
Crane is not Right: A Response to Dan Crane on Loyalty Discounts
Guest post by Steve Salop responding to Dan’s latest post on the appropriate liability rule for loyalty discounts. Other posts in the series: Steve, Dan, and Thom. (1) Dan says that price-cost test should apply to “customer foreclosure” allegations. One of my key points was that many loyalty discount claims involve “input foreclosure” or “raising rivals’ costs” effects, not plain-vanilla ... Crane is not Right: A Response to Dan Crane on Loyalty Discounts
Wright is Right and Price-Cost Safe Harbors are Wrong: The Raising Rivals’ Cost Paradigm, Loyalty Discounts and Exclusive Dealing
Guest post by Steve Salop, responding to Dan’s post and Thom’s post on the appropriate liability rule for loyalty discounts. I want to clarify some of the key issues in Commissioner Wright’s analysis of Exclusive Dealing and Loyalty Discounts as part of the raising rivals’ costs (“RRC”) paradigm. I never thought that I would have to defend Wright against ... Wright is Right and Price-Cost Safe Harbors are Wrong: The Raising Rivals’ Cost Paradigm, Loyalty Discounts and Exclusive Dealing
Was the Whirlpool/Maytag Merger Anticompetitive After All?
One of the most controversial merger policy decisions during the Bush administration was the DOJ’s failure to bring a complaint against the Whirlpool/Maytag merger. Indeed, the decision was even criticized by Carl Shapiro, the economic expert retained by the DOJ on the case. Jonathan Baker and Carl Shapiro summarize this conclusion as follows: “The March ... Was the Whirlpool/Maytag Merger Anticompetitive After All?
WAPO Concludes that Vertical Efficiencies Trump Horizontal Market Power
A Washington Post editorial last week reached the surprising conclusion that a series of vertical and horizontal acquisitions that led to a firm owning about 40% of the gas stations in the District of Columbia was procompetitive. The editorial apparently concluded that the vertical integration efficiencies were more important than the adverse horizontal effects. The ... WAPO Concludes that Vertical Efficiencies Trump Horizontal Market Power
Merger Retrospective
Several years ago, the DOJ cleared a merger between Whirlpool and Maytag. The primary defense was that post-merger prices could not rise because of intense competition from foreign competitors like LG and Samsung. Apparently the actual competition was more than Whirlpool wanted to bear. Guess What? Mr. Laissez-Faire Antitrust, meet Dr. Public Choice. The Wall ... Merger Retrospective
Smoothing Demand Kinks
One criticism of the unilateral effects analysis in the 2010 Merger Guidelines is that demand curves are kinked at the current price. A small increase in price will dramatically reduce the quantity demanded. One rationale for the kink is that people over-react to small price changes and dramatically reduce demand. As a result of this ... Smoothing Demand Kinks
The Proposed Merger Guidelines: How Much of a Shift?
The proposed Horizontal Merger Guidelines (HMGs) have been treated by some as a major shift in enforcement approach away from a tight structure that begins with market definition to a more flexible and open-ended competitive effects approach. Some of the specific concerns that have been raised are that the proposed HMGs dramatically change enforcement policy ... The Proposed Merger Guidelines: How Much of a Shift?
Comments on Updating the Merger Guidelines
Of course, the Merger Guidelines need to be updated. Except for efficiencies, they haven’t been updated in 17 years. Lawyers and economists with a regular antitrust practice may not require an update in light of their knowledge of the 2006 Commentary, speeches and agency experience. But, the rest of the antitrust world does. The most ... Comments on Updating the Merger Guidelines
Response to Comments on Antitrust Exemptions and Joint Monopsony Conduct to Countervail Monopoly Power
In response to my first post on joint monopsony conduct to countervail monopoly power, Mike Ward raises the issue of justifying a merger among sellers on the basis that it will countervail alleged monopsony power. Labor unions have an antitrust exemption for just that purpose. In terms of merger policy, Tom Campbell has written an ... Response to Comments on Antitrust Exemptions and Joint Monopsony Conduct to Countervail Monopoly Power
