The Antitrust Hotch Potch

Politicians talk Antitrust

In a fashion similar to the review Concurrences a few months ago (in the context of the French presidential election), the American Antitrust Institute invited the candidates' to the US presidency to submit their views on antitrust and competition policy. To date Senator Barack Obama and Senator John Edwards have responded. A most welcome initiative.

Nicolas

Conference on the Future of EC Competition Law

With the removal of the commitment to free and undistorted competition from the preamble of the future Treaty, our small Bssls community was all shooked-up for a few weeks.

The revue Concurrences, together with the GCLC, has had the good idea to put together a conference in Brussels entitled " The Place of Competition Law in the Future Community Legal Order". The conference will take place on November 8, 2007 from 8.30 am – 13.30 pm. The programme looks extremely promising. The folks at Concurrences have indeed managed to invite not only top-notch lawyers, but also high-profile policy makers.

Nicolas

Paper on Google's merger with DoubleClik

Big Brother's Google's hunger for devouring lucrative companies active on adjacent markets seems limitless. The following paper analyses what would happen following Google's ingestion of DoubleClick. Spicy...

An Antitrust Analysis of Google's Proposed Acquisition of DoubleClick

Robert W. Hahn and Hal J. Singer

Abstract:

By serving as a key revenue source for online content providers, online advertising has been instrumental in the development of innovative websites. Continued innovation among content providers, however, depends critically on the competitive provision of online advertising. Suppliers of online advertising provide three primary inputs-(1) advertiser tools, (2) intermediation services, and (3) publisher tools. Certain suppliers such as Google provide a platform that combines the inputs into one integrated service. In this paper, we focus on the overlapping products sold to advertisers by Google and DoubleClick-namely, the supply of advertiser tools. Because the supply of advertiser tools is highly concentrated, Google's proposed acquisition of DoubleClick raises important questions for antitrust authorities. Proponents of this acquisition argue that Google and DoubleClick do not compete-that is, buyers of search-based or
contextual-based advertising (the two advertising channels in which Google participates) do not perceive graphic-based advertising (the advertising channel in which DoubleClick participates) to be substitutes. Thus, they conclude that the proposed acquisition would not lead to higher prices.

In this paper, we examine economic evidence and legal precedent to help identify the relevant antitrust product market for Google's proposed acquisition of DoubleClick. According to the Federal Trade Commission and Department of Justice Horizontal Merger Guidelines, product markets are defined by the response of buyers to relative changes in prices. To inform how buyers-in this case, online advertisers-would respond to relative changes in price across the three online advertising channels (search, contextual, and display), we analyze the results of a survey of online
retailers. The survey suggests that (1) a significant share of online advertisers would substitute among the three channels in response to relative changes in prices, and (2) a significant share of DoubleClick customers would turn to Google before any other supplier in response to an increase in the price of DoubleClick's advertiser tools. In particular, the survey indicates that a combined Google-DoubleClick would likely have a greater incentive to increase the price of DoubleClick's advertiser tools relative to a stand-alone DoubleClick offering.

Nicolas

Slides of Lunch Talk on MSFT available

Hereafter, the slides presented by T. Graf at today's lunch talk on the Microsoft ruling

Download ms_judgment_presentation.ppt .

Iron Lady

“The European commission does not pass judgement on US rulings and we should expect the same from the US” ... are the words used by N. Kroes in reaction to T. Barnett's comment on the CFI's Microsoft ruling. She added that the later's comment were "totally unacceptable".

D. Sokol at Antitrust and Competition Policy Blog had a good guess. The case is already triggering thorny reactions from both sides of the atlantic.

LL.M in Competition Law and IP Law

I'll be teaching this year in a great LL.M programme (!) which was created 3 years ago and counts, within its professors, several eminent competition lawyers.

I attach the brochure of the LL.M at the end of this post. Note  that the LLM is bilingual, with courses being taught in both French and English. For those interested who are located in Bssls, pls be aware that our experience with - and the record of - Bssls based lawyers/students is so far very positive

Nicolas

Download llm_in_competition_and_ip_law_information_booklet.pdf

70.000 visitors

A few days ago, our blog reached 70.000 visits. Thanks to all our readers.

I'll be making changes on the blog in the coming weeks. Suggestions are most welcome.

Nicolas

...

Damien gave the answer to my question, in making the following comments in the New York Times.

Check it out here.

To post, or not to post

sthing on the Microsoft ruling issued today? I  have been wondering the entire day, and not come up to a conclusion yet if only because there is already a flood of comments by well-informed specialists. What can be the marginal utility (as compared to the marginal cost of reading 157 pages) of just another post?

Share Valuation and Antitrust Intervention

I found this graph on the web, on top of an article dedicated to next weeks' MSFT ruling.  The paper is silent on the link between antitrust fines and MSFT's share price. Yet, the graph suggests to the reader a clear correlation of how the infliction of antitrust fines harms firms' stock valuation.

Here's my concern: the suggestive technique of placing stylized graphs besides papers without any explanation is entirely dishonest intellectualy. On cursory examination, what the above graph suggests is that the higher the legal antitrust fines, the lower the stock valuation, and vice-versa.

Now, take a closer look: this  correlation is only apparent . Between 2004 and 2006, where the amount of fines, diminished substantially, MSFT's share price maintained itself within an average range of $22-31. In fact, if you think about it, the MSFT's stock valuation was rather stable during that period.

Give it a thought: what - besides the infliction of antitrust fines - happened on the financial markets from 2000 to 2003(where the share price falls on the graph)? Clearly, the above graph is fallacious in terms of causality.

I am much more incline to trust well-documented scholarship when it comes to assessing the links between antitrust intervention and financial valuation. See here for an excellent paper by Langus and Motta, entitled “The effect of antitrust investigations and fines on the firm valuation”.