This is a completely unsolicited plug for Jeff Adachi’s excellent Bar Breaker and Bar Exam Survival Kit series of books. The two Bar Breaker volumes contain about 80 sample essays with answers and grading keys, and the Survival Kit booklet has condensed outlines of “bar exam law.” Supplement that with BarBri’s Conviser Mini Review, and you’re good to go. I’d recommend the Adachi/Conviser combo over BarBri anytime, in particular for attorney applicants, who only have to take the essay portion of the California Bar Exam and can’t reasonably spend 8 hours/day for six weeks preparing.

Here are the slides from a recent presentation on antitrust issues in mergers and acquisition in Scottsdale, AZ.

Following up on this earlier post, here is a more detailed analysis of the Rambus case that I co-authored.

Here is the complete set of slides from my Fall 2007 course on Antitrust and Innovation at the Benjamin N. Cardozo School of Law. I posted the slides as the course progressed, but these ones contain some updates and bugfixes. As always, the slides are licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License, so feel free to use whatever you like.

Note that using these and other materials at conferences or for presentations is non-commercial use in my book, even though the conferences may be for profit and the presentations may be paid for (e.g., a PowerPoint for a client). What I have in mind with “commercial use” is, for example, printing and selling the slides. I don’t know if this interpretation is consistent with the current thinking at the Creative Commons, but I find that a broad reading of “non-commercial” would negate the benefits of the CC license — at least for me.

Deception in the standard setting process is anticompetitive if the deception leads to increased market power. In other words, the conceptual sequence of events is as follows:

1. Deception:
2. Reliance by the SSO on the deception in the standards-adoption decision
3. Market power gain through inclusion in the standard.

Critically, the post-adoption market power is greater than the pre-adoption market power. The D.C. Circuit, relying on NYNEX v. Discon, invokes a different narrative. Namely:

1. Market power
2. Deception
3. Higher prices as a result of the deception

Here, post-deception market power is no greater than pre-deception market power. As a result, the deception may be actionable as a tort, breach of contract, etc., but it lacks the distinctive feature of exclusionary conduct under the antitrust laws, namely increased market power.

The question is whether the Rambus facts better fit the FTC’s “first deception, then market power” or the D.C. Circuit’s “first market power, then deception” narrative. Strictly speaking, the D.C. Circuit’s opinion requires that the deception netted Rambus no additional market power from deceiving the SSO at all. All of the market power that could be gained came from the patent grant itself. The FTC’s position is softer in comparison. It does not require that the patent grand conferred no market power onto Rambus. All it requires is that some incremental market power was gained from the adoption of the standard.

It will be interesting to see how the FTC responds to this challenge, in particular because the D.C. Circuit did not only rely on the somewhat technical point in NYNEX, but also questioned the FTC’s findings of fact. One statement in dicta seems particularly apropos: “[T]he more vague and muddled a particular expectation of disclosure, the more difficult it should be for the Commission to ascribe competitive harm to its breach.”

Here is a chart that summarizes Microsoft’s conduct and its evaluation by the D.C. Cir. in the Microsoft III case. A similar chart is included in my 2007 Antitrust and Innovation lecture slides, but this one corrects an error: The commingling of OS and IE code was found to be exclusionary. Thanks to Evan Hill-Ries from NYU School of Law for pointing this out.

Bloomberg reports that China

will become a full member of the International Competition Network within a year, said Philip Collins, head of the Office of Fair Trading, in an April 10 interview in London. The move comes as China is taking steps to bring its competition laws in line with other nations, he said.

Following up on a previous post, here’s a brief article on China that I co-authored. The current edition of the Antitrust Magazine also has very useful, in depth discussions of China’s Anti-Monopoly Law by Lester Ross, Fei Deng, and Gregory Leonard. Amazingly, the ABA still does not offer a useful online version. If anyone could explain to me the logic of restricting access to these articles, please educate me. For authors, the restrictive ABA publication polices are a bad deal.

What’s up with McElhaney?

Young people don’t read books; they don’t read papers. And when they say ‘write,’ they use computers to cobble together little snippets of information, have a spell-checker proof it, and even let the computer put in paragraph breaks.

We would like to assure our readers that none of these newfangled computer contraptions will ever touch our paragraph breaks. We are proud of our manually inserted <p> and </p> HTML tags and wax tablets. This whole computer and internets thing is a fad anyway. Way to go, Angus!

No big surprise here.

China’s Legislative Affairs Office of the State Council recently clarified certain key provisions relating to merger control in the Anti-Monopoly Law, which will come into force on August 1, 2008. One of the stranger pronouncements is that “being the largest shareholder” now qualifies as an “acquisition of control” and thus as a concentration. That makes no sense. There’s no connection between “being the largest shareholder” and a change in control. A pension fund holding 5% of a public company may well be its largest shareholder, but that doesn’t mean that it exercises any competitively relevant measure of control. Moreover, I can find myself in the position of being the largest shareholder just by virtue of the fact that someone else sold off their holdings. The public comment period expires on April 12, 2008, and I’m sure that this “clarification” will receive its fair share of hate mail attention.

Of the many comments on the Chinese draft regulations, here are two that I found particularly noteworthy/peculiar:

Lester Ross, a partner in charge of the Beijing office of law firm WilmerHale, agreed it was unwise to use annual sales as a threshold. He said antitrust laws in most key jurisdictions focused on the size of the deal rather than on sales. “Sales have nothing to do with [whether there is a] monopoly,” Mr Ross said. “The rules should focus on the size of the transaction.”

It seems to me that the US is pretty much the only key jurisdiction that does not focus on revenues. In fact, staggered combined revenue tests are by far the most common and sensible way to design notification thresholds. The size of a transaction tells us nothing about the competitive impact. Combined sales, in contrast, are a pretty reasonable proxy. The same article offers further surprising insights:

Wang Xiaojun, a principal of law firm XJ Wang, said the threshold should focus more on market share rather than revenue.

Market share thresholds are even worse than size of transaction thresholds. The latter are somewhat pointless but at least they are easy to apply. The former, in contrast, are a complete pain, which is why the ICN has consistently counseled to abolish them.

The Commission published a White Paper on Private Damages Actions. While EU law clearly provides for the compensation of victims of antitrust violations, many member states have been slow in updating their rules of civil procedure to make the enforcement of such rights commercially viable. The white paper contains recommendations as to collective redress (class actions and representative actions), availability of the pass-on defense and, as a flip side, indirect purchaser actions, offensive collateral estoppel rules for final, non-appealable decisions by competition authorities, and somewhat more relaxed discovery rules. As to the latter, a key component (since US style discovery is neither possible nor desirable), in my view, is the ability of the courts to draw negative inferences from the non-production of materials.

Google just rolled out its much anticipated “custom time” email feature, allowing users to backdate emails. This feature has proven successful in auctions and first-come-first-serve raffles. The Pre-Merger Office is expected to announce that it will accept HSR filings submitted through the Google program. An unnamed spokesperson for the PNO confirmed:

The Google/PNO program helps streamline the HSR process. We expect a sharp decline in corrective filings. Moreover, it will now be possible to obtain early termination prior to the submission of the HSR form.

Check out Google’s press release addressing this significant process innovation.

Bill Kovacic will be the new Chairman of the Federal Trade Commission. Congratulations!

In a complaint filed on 3/21/08 in the S.D.N.Y., the states of New York, Illinois, and Michigan challenged what appears to be a pure intra-brand resale price restraint between the manufacturer of the Aeron chair and its distributors. The manufacturer required the retailers not to advertise below a specified price.

As a result of these anticompetitive practices, consumers were denied the benefits of unrestrained price competition on the Aeron chairs and Aeron prices were raised above their competitive levels.

This case addresses the issue of RPM after Leegin head on. The plaintiffs’ don’t seem to claim any loss of inter-brand competition. Rather

HMH [the manufacturer] implemented its SRP [suggested resale price] policy to improve retail margins and by most accounts, the program did so. The few retailers who chose not to follow the SRP were either terminated or lost access to the Aeron they advertised at less than the SRP. The vast majority of retailers raised and maintained their retail prices at the SRP level.

The case settled the same day for $750,000.