Bates White contributed three chapters to the newly released seventh edition of The Antitrust Revolution. This edition examines the critical role of economic analysis in recent antitrust case decisions and policy and offers real-life examples of how industrial economics theory and econometric tools can impact policy and consumer welfare.
“Electrolux’s Attempted Acquisition of GE’s Appliance Business: U.S. v. AB Electrolux and General Electric,” by Partners T. Scott Thompson and Michael D. Whinston, describes the economic analysis and issues that arose during litigation of a horizontal merger of major cooking appliance manufacturers. The case was litigated in the shadow of a similar merger of Maytag and Whirlpool, which was approved by the US Department of Justice in 2006. Among the topics covered in the chapter are the use of upward pricing pressure to analyze merger price effects, the role of “targeted customers” in market definition, and the appropriate role of analysis of past mergers for prospectively evaluating a proposed merger.
Partners Leslie M. Marx and Keith Waehrer contributed “A Tussle over Royalties: Pandora v. ASCAP, Pandora v. BMI, and the DOJ’s Consent Decree Review,” which examines the horizontal practices between music licensing groups and music publishers. Music copyright royalties in the United States are governed by a complicated set of regulations, including a DOJ consent decree with ASCAP dating back to 1941. The chapter discusses industry events and litigation between the Pandora online music service and the performance rights organization, ASCAP, and BMI over royalty levels. These litigations were followed by a process through which DOJ reviewed its consent decrees for possible revision and in the end decided against making significant changes.
Partner Joseph Farrell and Manager Mark Chicu wrote “Pharmaceutical Patents and Pay-for-Delay: Actavis.” “Pay-for-delay” settlements typically occur when a branded drug manufacturer—whose monopoly over a drug is protected by a patent—pays a prospective generic entrant to stay out of the market for that drug. Such settlements may avoid costly litigation; they also eliminate the risk that the patent is ruled invalid and allow the branded manufacturer to continue earning monopoly profits. Consumers may lose out, as they are denied a prospective entrant and thus lower prices. In Actavis (2013), the Supreme Court ruled that such settlements may contravene antitrust laws and that courts need to weigh a settlement's pro-competitive justifications against its anticompetitive harm. This chapter discusses the institutional details and economics behind pay-for-delay settlements, the arguments presented in Actavis, related cases, and issues that may arise in implementing the Supreme Court’s decision.
You may contact any of the authors for a complimentary copy of these chapters.
The volume is published by Oxford University Press. More information on the volume is available here.