Loyalty discounts pervade our economy, but may expose unsuspecting businesses to antitrust liabil... more Loyalty discounts pervade our economy, but may expose unsuspecting businesses to antitrust liability. This paper explains that the antitrust law governing these discounts is unclear, confusing, and constantly changing. The structure of the loyalty discount will determine how a court is likely to analyze it, choosing from one or more of the following frameworks: predatory pricing, leveraging, and foreclosure. The Federal Trade Commission's recent lawsuit against Intel (now settled) made the landscape for businesses even less certain by advancing theories under both Section 5 of the FTC Act and Section 2 of the Sherman Act that are not supported by existing antitrust law.
BY PAOLO MORANTE, STUART E. POLLACK, AND JAROD M. BONA A greements between competitors to stifle ... more BY PAOLO MORANTE, STUART E. POLLACK, AND JAROD M. BONA A greements between competitors to stifle competition typically are illegal under the antitrust laws but, increasingly, brand-name pharmaceutical companies have settled patent infringement lawsuits against generic companies by paying them to defer market entry. It would seem these ‘‘reverse-payment’’ settlements should lead to antitrust liability for the settling competitors, yet most federal appellate courts that have reviewed such agreements have upheld them— provided certain requirements are satisfied. Against this trend in federal jurisprudence, the Federal Trade Commission and the Department of Justice continue to advocate strongly in favor of tighter standards that either could limit or eliminate these agreements altogether. Recent developments suggest that the legal landscape in this area remains uncertain and that the pendulum of the federal courts’ treatment of reversepayment settlements may be swinging back toward a mo...
State and local government restraints, with a few exceptions, receive little attention from the a... more State and local government restraints, with a few exceptions, receive little attention from the antitrust laws because they are limited by the "state action immunity" doctrine. These public restraints take many forms, from limiting the number of taxicab licenses in a city to professional advertising restrictions to actual price or output limitations. This article focuses on state and local licensing restrictions. In doing so, it examines two instances where state boards that are predominantly made up of licensed occupations enact policies that expand the sphere of commerce that is reserved by law to these occupations. These examples present compelling circumstances for antitrust regulation because the deciding state entity is dominated by members with private incentives to expand the scope of their occupation to the detriment of consumers.
What methods should we use to protect a legal entitlement or right? Guido Calabresi and A. Dougla... more What methods should we use to protect a legal entitlement or right? Guido Calabresi and A. Douglas Melamed in their 1972 article, "Property Rules, Liability Rules, and Inalienability: One View of the Cathedral," introduced the distinction between property rules and liability rules that has now formed the template of the debate over this vitally important question. Many look at this debate from the angle of an efficiencyseeking state. To truly evaluate the efficiency of these two rules, we must look beyond the typical determinants of individual valuations. Indirectly, this will take us to ideas related to consent and, more importantly, the subjective valuations individuals place on consent. The point is not that consent justifies efficiency, but rather that individuals may place a value on autonomy or a cost on loss of autonomy. This value or cost must be taken into account when using an analysis based on efficiency. This article is available in Res Publica Journal of Under...
The U.S. Supreme Court's 2008 decision in Stoneridge Investment Partners, LLC v. Scientific-A... more The U.S. Supreme Court's 2008 decision in Stoneridge Investment Partners, LLC v. Scientific-Atlantic, Inc. illustrated a reformulation of the private-attorney-general model for enforcing federal laws. This case, which rejected another attempt to expand scheme liability in private securities actions to create a new class of defendants, recognized the possible harms from private enforcement. At the same time, it described alternative methods of deterring bad behavior – namely, state and government enforcement. Stoneridge thus follows a pattern of recent securities and antitrust Supreme Court cases that have scaled back on the private attorney general method of enforcement in favor of a more nuanced approach that limits the expansion of private litigation where the harms could exceed its benefits. This article won the 2010 Burton Award for Legal Writing Achievement.
The federal antitrust laws embody fundamental values of free enterprise and economic competition.... more The federal antitrust laws embody fundamental values of free enterprise and economic competition. At the same time, our federal system supports a strong degree of state sovereignty. In most cases, these values peacefully co-exist. But in a subset of cases — federal antitrust lawsuits against state and local government entities — they can collide. Beginning with the U.S. Supreme Court’s 1943 Parker v. Brown decision, the courts have developed a doctrine called state-action immunity that isolates narrow government conduct that is state-sovereign activity and exempts it from antitrust scrutiny. But, the Supreme Court has hinted — without ever deciding — that antitrust law may still apply to these government actors when they are engaged in active competition with private business. The circuits are currently split on the question. Some recognize this “market-participant exceptions,” while others wait for further Supreme Court guidance. In this article, the authors argue that both experie...
Page 1. CARL W. HITTINGER* & JAROD M. BONA** The Diminishing Role of the Private Attorney Gen... more Page 1. CARL W. HITTINGER* & JAROD M. BONA** The Diminishing Role of the Private Attorney General in Antitrust and Securities Class Action Cases Aided by the Supreme Court I. INTRODUCTION THE US SUPREME COURT'S ...
Loyalty discounts pervade our economy, but may expose unsuspecting businesses to antitrust liabil... more Loyalty discounts pervade our economy, but may expose unsuspecting businesses to antitrust liability. This paper explains that the antitrust law governing these discounts is unclear, confusing, and constantly changing. The structure of the loyalty discount will determine how a court is likely to analyze it, choosing from one or more of the following frameworks: predatory pricing, leveraging, and foreclosure. The Federal Trade Commission's recent lawsuit against Intel (now settled) made the landscape for businesses even less certain by advancing theories under both Section 5 of the FTC Act and Section 2 of the Sherman Act that are not supported by existing antitrust law.
BY PAOLO MORANTE, STUART E. POLLACK, AND JAROD M. BONA A greements between competitors to stifle ... more BY PAOLO MORANTE, STUART E. POLLACK, AND JAROD M. BONA A greements between competitors to stifle competition typically are illegal under the antitrust laws but, increasingly, brand-name pharmaceutical companies have settled patent infringement lawsuits against generic companies by paying them to defer market entry. It would seem these ‘‘reverse-payment’’ settlements should lead to antitrust liability for the settling competitors, yet most federal appellate courts that have reviewed such agreements have upheld them— provided certain requirements are satisfied. Against this trend in federal jurisprudence, the Federal Trade Commission and the Department of Justice continue to advocate strongly in favor of tighter standards that either could limit or eliminate these agreements altogether. Recent developments suggest that the legal landscape in this area remains uncertain and that the pendulum of the federal courts’ treatment of reversepayment settlements may be swinging back toward a mo...
State and local government restraints, with a few exceptions, receive little attention from the a... more State and local government restraints, with a few exceptions, receive little attention from the antitrust laws because they are limited by the "state action immunity" doctrine. These public restraints take many forms, from limiting the number of taxicab licenses in a city to professional advertising restrictions to actual price or output limitations. This article focuses on state and local licensing restrictions. In doing so, it examines two instances where state boards that are predominantly made up of licensed occupations enact policies that expand the sphere of commerce that is reserved by law to these occupations. These examples present compelling circumstances for antitrust regulation because the deciding state entity is dominated by members with private incentives to expand the scope of their occupation to the detriment of consumers.
What methods should we use to protect a legal entitlement or right? Guido Calabresi and A. Dougla... more What methods should we use to protect a legal entitlement or right? Guido Calabresi and A. Douglas Melamed in their 1972 article, "Property Rules, Liability Rules, and Inalienability: One View of the Cathedral," introduced the distinction between property rules and liability rules that has now formed the template of the debate over this vitally important question. Many look at this debate from the angle of an efficiencyseeking state. To truly evaluate the efficiency of these two rules, we must look beyond the typical determinants of individual valuations. Indirectly, this will take us to ideas related to consent and, more importantly, the subjective valuations individuals place on consent. The point is not that consent justifies efficiency, but rather that individuals may place a value on autonomy or a cost on loss of autonomy. This value or cost must be taken into account when using an analysis based on efficiency. This article is available in Res Publica Journal of Under...
The U.S. Supreme Court's 2008 decision in Stoneridge Investment Partners, LLC v. Scientific-A... more The U.S. Supreme Court's 2008 decision in Stoneridge Investment Partners, LLC v. Scientific-Atlantic, Inc. illustrated a reformulation of the private-attorney-general model for enforcing federal laws. This case, which rejected another attempt to expand scheme liability in private securities actions to create a new class of defendants, recognized the possible harms from private enforcement. At the same time, it described alternative methods of deterring bad behavior – namely, state and government enforcement. Stoneridge thus follows a pattern of recent securities and antitrust Supreme Court cases that have scaled back on the private attorney general method of enforcement in favor of a more nuanced approach that limits the expansion of private litigation where the harms could exceed its benefits. This article won the 2010 Burton Award for Legal Writing Achievement.
The federal antitrust laws embody fundamental values of free enterprise and economic competition.... more The federal antitrust laws embody fundamental values of free enterprise and economic competition. At the same time, our federal system supports a strong degree of state sovereignty. In most cases, these values peacefully co-exist. But in a subset of cases — federal antitrust lawsuits against state and local government entities — they can collide. Beginning with the U.S. Supreme Court’s 1943 Parker v. Brown decision, the courts have developed a doctrine called state-action immunity that isolates narrow government conduct that is state-sovereign activity and exempts it from antitrust scrutiny. But, the Supreme Court has hinted — without ever deciding — that antitrust law may still apply to these government actors when they are engaged in active competition with private business. The circuits are currently split on the question. Some recognize this “market-participant exceptions,” while others wait for further Supreme Court guidance. In this article, the authors argue that both experie...
Page 1. CARL W. HITTINGER* & JAROD M. BONA** The Diminishing Role of the Private Attorney Gen... more Page 1. CARL W. HITTINGER* & JAROD M. BONA** The Diminishing Role of the Private Attorney General in Antitrust and Securities Class Action Cases Aided by the Supreme Court I. INTRODUCTION THE US SUPREME COURT'S ...
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