Antitrust: Economic Analysis and Legal Interpretation

This class has been canceled.

Course Information

Registration Information

Meeting Times

Day Time Location
MON, TUE, WED 10:30 - 11:37 am TNH 3.142

Evaluation Method

Type Date Time Location
Midterm
Final December 13, 2016

Description

This course is designed to increase not only students’ ability to practice antitrust law effectively but also their ability to give business advice to clients and to run businesses themselves. It attempts to achieve these goals by helping students understand the business functions and possible competitive impacts of the various categories of business conduct covered by U.S. antitrust law. The course begins by (1) proposing and attempting to justify particular economic interpretations of the test of illegality promulgated by the Sherman Act, the standard test of illegality promulgated by the Clayton Act, and the tests of illegality promulgated by the Federal Trade Commission Act, (2) analyzing the conduct-coverages of the three acts, (3) articulating economic definitions of such concepts as oligopolistic and predatory conduct, (4) defining the various components of the gap between a seller’s price and marginal costs and defining the intermediate determinants of the intensity of quality-or-variety competition in any area of product-space and examining the different ways in which they interact to determine the intensity of quality-of-variety competition in three categories of situations, and (5) explaining why market definitions are inherently arbitrary, not just at their periphery but comprehensively and examining the different approaches to market definition recommended by economists and used by U.S. courts and the DOJ. After that, the course executes economic and legal analyses of various categories of business conduct. It starts by analyzing the determinants of the profitability of price-fixing (contrived oligopolistic pricing), investigating the evidence that can be used to prove that defendants have engaged in price-fixing, and examining various price-fixing-case decision-protocols proposed by academics or used by U.S. courts. It then executes parallel economic and legal analyses of other types of oligopolistic conduct. After that, the course executes parallel analyses of predatory pricing and other types of predatory conduct. Next, the course analyzes the legitimate and illegitimate functions of horizontal mergers and acquisitions, delineates protocols for assessing their legality under the Sherman Act’s specific-anticompetitive-intent test of illegality and the Clayton Act’s lessening-competition test of illegality, and analyzes the approaches to horizontal mergers taken respectively by U.S. courts and by the DOJ and FTC. The course then executes parallel analyses of conglomerate mergers and acquisitions. Inter alia, this section of the course explains that conglomerate mergers can have a broader set of legally-relevant economic effects than economists have supposed, criticizes limit-price theory, scrutinizes the “toe-hold merger” doctrine (which U.S. courts have used to assess the legality of geographic-diversification conglomerate mergers), and examines all other parts of the relevant case-law. The following section of the course analyzes (1) the legitimate and illegitimate functions of various pricing-techniques, of various categories of vertical contract clauses and sales policies, and of vertical mergers and acquisitions, (2) the circumstances in which each variant of such conduct will violate the Sherman Act when engaged in by an individual firm, (3) the circumstances in which an individual firm’s practice of price discrimination will violate the Clayton Act, and (4) the circumstances in which a rule allowing all members of a set of rivals to engage in any variant of such conduct other than price discrimination that is covered by the Clayton Act will violate the Clayton Act by lessening competition, and (5) the case-law on all variants of vertical conduct. The course concludes by examining the legitimate and illegitimate business functions of, Sherman-Act legality of, and case-law on joint ventures of all sorts. The Lecturer will assume that students have no background in economics, though students who have no such background will have to work harder at the beginning. There will be a 100-minute closed-book midterm and a 240-minute closed-book final. The midterm will count only for students who perform better on it than on the final: for such students, the midterm grade will constitute 1/3 of the course grade.

Textbooks ( * denotes required )

Economics and the Interpretation and Application of U.S. and E.U. Antitrust Law: Volume II Economics-Based Legal Analyses of Mergers, Vertical Practices, and Joint Ventures *
Richard S. Markovits
Springer
ISBN: 978-3-642-24312-7
Economics and the Interpretation and Application of U.S. and E.U. Antitrust Law: Volume I Basic Concepts and Economics-Based Legal Analyses of Oligopolistic and Predatory Conduct *
Richard S. Markovits
Springer
ISBN: 978-3-642-24306-6

Instructors

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Important Class Changes

Date Updated
06/22/2016 Course cancelled
Instructor(s) updated