Chapter One INTRODUCTION:THE CHALLENGE OF PROLIFERATING COMPETITION LAWS 1
Chapter Two THE SITUATION TODAY:A BROAD LOOK AT DIFFERENCES IN CURRENT LAWS 19
2.1 Statistical Data Show Wide Differences Among Nations 27
2.2 The Problems are Real and Need Solutions 38
2.2.1 Merger Control 40
2.2.2 Coordination of Anti-Cartel Enforcement 48
2.2.3 Joint Ventures and Standards-Setting 53
2.2.4 Monopolization(Abuse of Dominant Position)Rules 56
2.2.5 Distribution Rules 60
2.2.6 Economic Sectors Immunized From Competition 61
2.2.7 Capacity Building and Technical Assistance for Developing Countries 61
2.3 Governments and World Organizations Continue to Encourage Proliferation of Laws.Without Taking Responsibility for Harmonization 62
Chapter Three HISTORY OF GOVERNMENT ATTEMPTS TO COMBAT RESTRAINTS OF TRADE桝N ANCIENT EFFORT WITH FAMILIAR TENSIONS 75
3.1 Competitive Concerns Stretch Back at Least to 3000 B.C 75
3.2 Further History of the U.S..Great Britain.and Germany?Divergent Paths With Different Systems 79
3.2.1 Great Britain 81
3.2.2 Germany 82
3.2.3 The United States 84
3.3 A Special Look at the History of the Concentration Thesis in the U.S 102
3.3.1 The Core Idea of More Than One Competitor and The Concentration Thesis 102
3.3.2 Presumptions of Illegality Based on the Concentration Thesis 102
3.3.3 Why Re-Examination Is Needed 104
3.3.3.1 The New Learning 104
3.3.3.2 The Admonition of the Supreme Court 105
3.3.3.3 The Actual Practice of the Agencies 106
3.4 The Intertwining of Economic Studies With Public Policy Determinations by Courts and Antitrust Agencies桝 Rough Chronology 113
3.4.1 1890 Through the 1940's 113
3.4.2 The 1950 Celler-Kefauver Amendment to the Clayton Act § 7 and Brown Shoe 115
3.4.3 The 1955 Barnes/Oppenheim Committee 115
3.4.4 1955 George Stigler's Article on Mergers and Preventive Antitrust 115
3.4.5 1956-1962-Brown Shoe 116
3.4.6 1963-U.S.v.Philadelphia National Bank 118
3.4.7 1967 and 1968-The Neal Task Force and the Turner Guidelines 121
3.4.8 May 30.1968-The Turner Guidelines 121
3.4.9 July 5.1968 and May 21.1969-The Neal Task Force Report 124
3.4.10 1970-The Stigler Task Force 125
3.4.11 1972-The Hart Bill for Government to De-Concentrate Industry 127
3.4.12 1972-1980-Congress and the Continuing 1968 Turner Guidelines 127
3.4.13 1982-The Baxter Guidelines 128
3.4.13.1 The Baxter Guidelines Accepted the Concentration Thesis 130
3.4.13.2 Comparison of the Concentration Levels(and Increase Levels)in the 1968 and 1982 Guidelines 132
3.4.13.3 The 1983 Scarbrough-Pfunder Comparative Study of the 1968 and 1982 Guidelines 134
3.4.14 The 1984,1992 and 1997 Amendments to the Baxter Guidelines 135
3.4.15 1993-2000 Daubert and Progeny-Admissibility of Expert Testimony 136
3.4.16 1993-1994 Corporate and Individual Leniency Policies of the Antitrust Division 136
3.4.17 1997 ICPAC Created-to Report in 2000 137
3.4.18 1999 California Dental-Decrying Short-cuts and Assumptions 137
3.4.19 2002 Antitrust Modernization Commission Created to Report In 2007 138
3.4.20 2004 The Antitrust Criminal Penalty Enhancement and Reform Act of 2004 138
3.4.21 2004 Supreme Court's Decision in Trinko 138
3.4.22 2001-2004 District Courts'Discounting of Customer Evidence 139
3.4.23 2004-2006 Decisions On Foreign Suits in Empagran 140
3.4.24 2005 Sentencing Commission Increases Penalties 141
3.4.25 2006 Supreme Court's Decision on Joint Ventures-Texaco v.Dagher 141
3.4.26 2006 Supreme Courts Decision on the Robinson-Patman Act in Volvo 142
3.4.27 2006 Supreme Court's Decision in Illinois Tool Works v.Independent Ink 142
3.4.28 2006 DoJ and FTC Publish Commentary on the Horizontal Merger Guidelines 143
3.5 Economic Studies 1968-2001 144
3.5.1 1968-Bork and Sherwood-Dissents to the Neal Report 144
3.5.2 1970-John S.McGee 145
3.5.3 1974-Industrial Concentration-The New Learning(A Discourse Among Economists and Policy Makers) 147
3.5.4 1976-Lawrence White 148
3.5.5 1978-John Kwoka 149
3.5.6 1982-David Ravenscraft 150
3.5.7 1984-Richard Posner and Frank Easterbrook 151
3.5.8 1989-Richard Schmalensee and Robert Willig 152
3.5.9 1990-F.M.Scherer and David Ross 153
3.5.10 1998-Barry Harris and David Smith 160
3.5.11 1999-Timothy J.Muris 162
3.5.12 2003-Timothy Muris 164
3.5.13 2000-2006 Various Economic Studies 165
3.5.13.1 Pautler.Paul A..“Evidence on Mergers and Acquisitions,” a Federal Trade Commission Bureau of Economics Paper dated September 25.2001 165
3.5.13.2 Kelly.Trish;Gosman.Martin L.,“Increased Buyer Concentration and its Effects on Profitability in the Manufacturing Sector,” 17 Review of Industrial Organization 41-59(2000): 169
3.5.13.3 Frech.H.E.III;Mobley.Lee Rivers,“Efficiency.Growth.and Concentration:An Empirical Analysis of Hospital Mergers,” 38 Economic Inquiry 369-84(2000): 169
3.5.13.4 Ekelund.Robert B..Jr.;Ford.George S.;Koutsky.Thomas.“Market Power in Radio Markets:An Empirical Analysis of Local and National Concentration,” 43 Journal of Law and Economics 157-84(2000): 169
3.5.13.5 Baker.Jonathan B..“Horizontal Merger Analysis Grows Up:A Review of Chapter 5 of Richard Posner's Antitrust Law(2d.ed.2001).The Antitrust Source.www.antitrustsource.com(January,2002) 170
3.5.13.6 Boetal.Brenda Lynn.“An Economic Analysis of the U.S.Swine Industry:Capital Investment Rigidity.Food Health Concerns.Generic Advertising and Processor Concentration,” PhD.Dissertation.University of Minnesota,2003: 170
3.5.13.7 Dickson.Vaughan A.;Sun.Yingfeng,“Revisiting the Price Effects of Rising Concentration in U.S.Food Manufacturing,” 2 Journal of Agricultural and Food Industrial Organization 1-15(2004): 170
3.5.13.8 Newmark.Craig M.“Price-Concentration Studies:There You Go Again,” paper prepared for the DOJ/FTC Merger Workshop.revised February 14.2004: 171
3.5.13.9 Dumont.Beatrice.“L'efficacite du Controle Communautaire des Concentrations:Une approche par la methode evenementielle”(The Effectiveness of European Merger Control:An Event Study Approach.With English Summary).70 Recherches Economiques de Louvain(Louvain Economic Review)317-40(2004): 171
3.5.13.10 2006 Lawrence J.White 172
3.5.14 Further Re-Examination of the Concentration Thesis by Government Enforcers is Overdue 172
Chapter Four WHAT WE CAN LEARN FROM HISTORY 193
4.1 Broad Historical Lessons 193
4.2 Specific Lessons on Difficult Subjects 196
4.2.1 Believe in the“Free Market” and Avoid the“Interventionist” Approach 196
4.2.2 Get the Purpose of Competition-Policy Right 198
4.2.3 Illustrations of Improper Purposes 201
4.2.3.1 Keeping Prices“Fair” 201
4.2.3.2 Keeping Prices“Low” 201
4.2.3.2 The Moralist Rationale:Protecting Small.Yeoman Enterprises 202
4.2.3.3 Regulation of the Largest Firms:“Big Is Bad” or“Big Business Must Be Controlled” 202
4.2.3.4 Redistribution of Wealth 204
4.2.4 Promotion of“Competition as the Economist Understands the Term” 205
4.2.4.1 The“Consumer Welfare” Standard 206
4.2.4.2 An Illustration of the Economic Model 207
4.2.4.3 Efficiency.Not Competition Per Se.Is the Goal We Seek 210
4.2.5 Define the“Relevant Market” Correctly 213
4.2.5.1 Ambiguity In the Word“Market” 213
4.2.5.2 Thinking About Relevant Antitrust“Markets 214
4.2.5.3 The Court's Failures and the Emergence of the SSNIP Test 216
4.2.5.4 Challenges to the Improper Use of the“Small But Significant and Non-Transitory Increase in Price” Test 218
4.2.5.5 Michael Porter's“Five Forces/Diamond” Approach桝 Business School Alternative to Examining Markets 221
4.2.6 Get the Priorities Straight 222
4.2.6.1 Cartel Behavior 223
4.2.6.2 Joint Ventures 225
4.2.6.3 Mergers and Notification Regimes 226
4.2.6.4 Monopolization(Abuse of Dominance)Rules 227
4.2.6.5 Distribution Rules 233
4.2.7 Get the Enforcement Mechanisms Right 234
4.2.8 Avoid Enforcement Conflicts(Nexus.Comity.and Abstention) 238
Chapter Five LOOKING FORWARD FROM ANTITRUST HISTORY 257
5.1 The Broadest Look At Where We Are Now 257
5.1.1 Where the U.S.Is Now 257
5.1.2 Looking Forward To Broad Reforms In U.S.Competition Policy 258
5.1.3 The Challenge of the U.S.Antitrust Modernization Commission 261
5.1.3.1 The Set-Up and Personnel of the Commission 261
5.1.3.2 The Real Challenge:Avoiding the Easy Road 264
5.1.3.3 The Modernization Commission's Requests for Public Comment 265
5.1.3.4 The Real Challenge:Taking the Long Look and Hard Road 266
5.1.3.5 Thirteen Major Tasks for the Modernization Commission-A Challenge to Its Agenda and Its Report 270
5.1.3.6 Clarify The Purpose And Underlying Premises Of A National Competition Law 272
5.1.3.7 Create a New National Competition Statute.Pre-empting State Laws 273
5.1.3.8 Create A Coherent National Policy,Repealing Conflicting Laws Such As The Export Cartel Acts and The Robinson-Patman Act 273
5.1.3.9 Simplify the Statutory Language By Creating a New Substantive Law in Plain English 274
5.1.3.10 Reconsider Whether We Need A Separate Merger Control Regime 277
5.1.3.11 If Merger Control Is To Be Continued,Reconsider the Elaborate Hart-Scott-Rodino Requirements and Adopt Simplified New Rules 279
5.1.3.12 Revisit and Rationalize Enforcement Entities 284
5.1.3.13 Investigate and Rationalize Remedies for Violations of the National Competition Act 290
5.1.3.14 Eliminate or Narrow The Exemptions and Immunities From The Competition Law 291
5.1.3.15 Suggest Clearer Rules For The Antitrust-Intellectual Property Interface 292
5.1.3.16 Selectively Repeal Various Statutory Provisions(If Less Than Full Overhaul Is Recommended) 293
5.1.3.17 Set Out Enforcement Priorities And Transparency Requirements 293
5.1.3.18 Recognize The Need For Interaction Between The U.S.And Other Competition Agencies In The World 294
5.2 The Way Forward Internationally-The International Competition Network(ICN) 296
5.2.1 The Origins and Purposes of the ICN 297
5.2.2 The Extraordinary Successes of the ICN So Far 300
5.2.3 Moving the ICN Forward to More Successes 303
5.2.4 Five Major Concerns Need to be Tackled by the ICN 303
5.2.4.1 Unilateral Conduct 303
5.2.4.2 Coordination Of Anti-Cartel Enforcement And Leniency Programs 307
5.2.4.3 The Interface Of Competition Policy With Intellectual Property Protections 308
5.2.4.4 Bringing The Competition Rules Of China And India Into Harmony With Those Of The Rest Of The World 309
5.2.4.5 Helping New Regimes Avoid Adopting a“Mixing-Bowl” Approach 312
5.3 The Way Forward-Continuous Re-evaluation Is Needed:Research Utilizing the Amazing Electronic Databases Available Globally On Competition Issues 313
Chapter Six PRINCIPLES FOR CRAFTING COMPETITION POLICY ENFORCEMENT IN THE 21st CENTURY 329
6.1 The Principle of Focused Purpose 331
6.2 The Principle of Rigorous Factual Examination 332
6.3 The Principle of Rigorous Evaluation of the Competitive Process 333
6.3.1 The Dimensions(Nature)of the Competitive Process Involved 334
6.3.2 The Innovation Potential in the Particular Process of Competition 338
6.3.3 The Materiality of Bad and Good Effects of the Act or Transaction Being Examined 339
6.3.4 The Time Periods Involved in the Effects 340
6.4 The Principle of Balancing Good and Bad Effects.and Long- and Short-Term Interests.With the Costs of Government Intervention 342
6.5 The Principle of Avoiding Presumptions to Justify Government Intervention 343
6.6 The Principle of Non-Discrimination 344
6.7 The Principle of Transparency 345
6.8 The Principle of Accountability 346
6.9 The Principle of Minimalist Intervention 346
6.10 The Principle of Humility 347
6.11 The Eleventh commandment:Regularly Re-Evaluate Policies 349
CONCLUSION 361
APPENDIX Ⅰ -Global Agency Survey Results 363
APPENDIX Ⅱ -Charts from Survey Results 403
APPENDIX Ⅲ -Survey of Economic Studies 435
APPENDIX Ⅳ -U.S.Statistics:1968-2000 481
APPENDIX Ⅴ -U.S.Merger Challenges 2000-20001 487
APPENDIX Ⅵ -U.S.Merger Challenges Data 1999-2003 497
APPENDIX Ⅶ -U.S.Merger Investigations Data 1996-2003 511
APPENDIX Ⅷ -U.S.Merger Transactions Data 1995-2004 519
APPENDIX Ⅸ -Cartel Prosecutions 525
APPENDIX Ⅹ -Update on Cartel Prosecutions 543
APPENDIX Ⅺ -International Cooperation Against Cartels 561
APPENDIX Ⅻ -Cartels: 565
APPENDIX ⅩⅢ -ICN Mission Statement-May,2006 653
APPENDIX ⅩⅣ -Implementation of ICN Recommendations 669
REFERENCES 675
INDEX 699