Bay Area Antitrust v.1 (Fall 2018)
Hanno Kaiser. University of California, Berkeley, School of Law, Room 170
Friday, 8 am (sharp!) - 9:50 am
Note that this is an evolving syllabus, as we will discuss key issues of technology antitrust using current cases and materials. In other words, stuff on this website will change during the course of the semester.
Class 1: Technology Antitrust: Framework and a Baseline Case
August 24, 2018
Topics for discussion
- Why I changed the name of this course from "Silicon Valley Antitrust" to "Bay Area Antitrust": The rise of San Francisco and the East Bay
- A roadmap for this course
- What to expect
- Exam, grades, etc.
- The goal(s) of antitrust
- The legal framework: §1 of the Sherman Act; §2 of the Sherman Act; §7 of the Clayton Act; §5 of the FTC Act; Hart-Scott-Rodino (“HSR”) Act
- First draft of the “antitrust superstructure”
- Agreements in restraint of trade (mostly §1)
- Abuse of a dominant position (mostly §2)
- Merger control (mostly to avoid evasion of §1 and §2)
- Two modes of analysis: rule of reason and per se
- Distributed antitrust enforcement in the U.S. (Private plaintiffs; DOJ & FTC; State Attorneys General)
- A look at an uncontroversial baseline: Criminal cartel conduct and per se illegality
- Price fixing, market allocation, bid rigging
- How cartels work: Creating artificial scarcity to get a bigger slice of a smaller (and more expensive) pie
Reading Materials
Optional
Class 2: Disruptive Business Model or Illegal Cartel?
August 31, 2018
Topics for discussion
- Wrapping up the U.S. v. Andreas case. Did crime pay? (In the U.S.? Abroad?)
- The rule of reason
- The ancillary restraints doctrine
- Vertical and horizontal agreements
- BMI: Old but certainly not cold. The basis of the modern ancillary restraints doctrine (1979)
Reading Materials
- Broad. Music, Inc. v. Columbia Broad. Sys., Inc., 441 U.S. 1 (1979). Excerpts
Optional
Class 3: The Sharing Economy and Algorithmic Collusion
September 7, 2018
Topics for discussion
- Unlocking dormant asset value through much, much better coordination: Uber (cars), Airbnb (homes), etc.
- Pricing algorithms and collusion
- Is joining a platform collusion? A closer look at the "agreement" prong.
- What is not an algorithmic collusion case (e.g., organizing a cartel via encrypted messaging)
- The critical role of the (evolving) “no intracompany conspiracies” rule
Reading Materials
Optional
Class 4: Coordinating Ecosystems (Apple, Amazon, eBay, Spotify, etc.) (§1)
September 14, 2018
Topics for discussion
- Vertical and horizontal agreements in the context of ecosystem competition (e.g., Google v. Amazon v. Apple, etc.)
- Apple: The U.S. v. Apple “eBooks” case (2015)
- Disruption via de novo entry as per se illegal antitrust violation?
Reading Materials
- United States v. Apple, Inc., 791 F.3d 290 (2d Cir. 2015). Excerpts
Optional
Class 5: Abuse of dominance, Part 1: Overview
September 28, 2018
Topics for discussion
- The analytical framework for unilateral conduct cases.
- We will cover special situations including aftermarkets, attention markets, and zero-price markets later (see below)
Reading Materials
Class 6: Abuse of dominance, Part 2: Dominance
October 5, 2018
Topics for discussion
- Market definition in the ideal (SSNIP) and the real world (documents, customers, win/loss data)
- The critical role of barriers to entry, both old (expensive stuff) and new (network effects)
- The U.S. v. Microsoft case: Application barrier to entry, interoperability layers, and some background about one of the most important new technology cases.
Reading Materials
Class 7: Abuse of Dominance, Part 3: Abuse
October 12, 2018
Topics for discussion
- What constitutes an abuse of a dominant position?
- Exclusionary strategies (exclusion, leveraging)
- Exploitative strategies (e.g., in the EC)
- Exclusive dealing
- Tying, Bundling, Leveraging
- Two products
- Tie (contract, technology, economic, “nudges”)
- Dominance (or, in the context of §1: market power) in the tying product market
- (Foreclosure) effect in the tied product market
- Creation of strategic incompatibilities (predatory innovation)
- "Embrace, extend, extinguish"
Reading Materials
Optional Reading
- Windows Media Player: Microsoft v. European Commission, Judgment of the Court of First Instance (9/17/2007). This is a long and rather tedious opinion. Read the excerpts from the Commission Decision posted on bSpace.
Class 8: The European Commission’s Google Search Case
October 19, 2018
Topics for discussion
- Background on the FTC and European Commission Search investigations
- How search engines work
- Multi-sided platforms: law and economics
- The two strategic moves that triggered Google's antitrust issues
- Promoting Google's own content (universal search)
- Demoting poor-quality websites and link farms (Panda)
- Beyond the simple “more is always better” paradigm explored in U.S. v. Microsoft
- The (vexing) problem of antitrust remedies in technology cases
Required reading
Optional Reading
Class 9: The European Commission’s Google Android Case (8 am - 9:50 am)
October 26, 2018
Topics for discussion
- Background on the European Commission’s Search and Android investigations
- How Android works, and how it relates to the Android Open Source Project (AOSP)
- Google’s agreements with handset makers (OEM), per the Commission's press releases:
- If you want any part of GMS, you must install all GMS apps/services ("All or nothing")
- If you want Google's AOSP fork (aka "Google Android"), you must not distribute other AOSP forks ("Anti Fragmentation")
- If you want a revenue share for queries sent to Google from your device, then you must not install other search engines ("Economic incentives")
- What are the (beneficial and detrimental) effects of these agreements on competitors, users, and developers?
- Possible cases against Google and the actual case that the Commission brought
Required reading
Class 10: Apple v. Pepper (Guest Speaker: Aaron Chiu) (1 pm - 2:50 pm)
October 26, 2018
Topics for discussion
- Civil antitrust class action litigation
- One of the most important practical questions: "Who can sue?"
- Report from the front lines of a pending Supreme Court case
Required reading
- Illinois Brick Co. v. Illinois et al., 431 U.S. 720 (1977)
- Apple v. Pepper, Apple's Merits Brief, August 10, 2018
- Apple v. Pepper, United States (Solicitor General) Amicus Brief, August 17, 2018
- Apple v. Pepper, Computer and Communications Industry Association Amicus Brief, August 17, 2018
- Apple v. Pepper, Respondents' Brief, September 24, 2018
- Apple v. Pepper, American Antitrust Institute Amicus Brief, October 1, 2018
Class 11: The German Federal Cartel Office's Facebook Investigation
November 2, 2018
Topics for discussion
- The interplay between German and European antitrust law
- Exploitative abuses under German antitrust law
- Recent changes to the German antitrust laws (aka "lex Facebook")
- The FCO's theory of harm: Antitrust and data protection law/GDPR
Required reading
Optional Reading
Class 12: Dominance 202: Aftermarkets
November 9, 2018
Topics for discussion
- Single-brand aftermarkets and limiting principles
- What is the antitrust significance of two-step purchasing patterns ("First you choose a phone, then you choose among the apps available for the phone.")?
- Who gets what? Fairly and unfairly appropriating the gains from collaboration.
- “Closing an open system" v. "maintaining a closed system"
Required reading
Optional reading
Class 13: Multi-Sided Platforms after U.S. v. Amex (2018) and Attention/Zero-Price Markets
November 29, 2018
- Transaction and attention platforms
- Market definition in multi-sided platforms: one market or multiple markets
- Does the "one market v. multiple markets" debate really matter?
- What should we make of eBooks in light of Amex?
- “Attention Brokers” and market power in attention markets
- Defining relevant product markets in the absence of price signals
- SSNIP
- QSSNIP
- “Data” as “price”?
Required reading
Optional reading
Class 14: Review: Putting it all together (and on paper)
December 3, 2018
Topics for review
- Agreements in restraint of trade
- Agreements v. conscious parallelism
- Vertical and horizontal agreements; upstream and downstream
- Modes of analysis: ROR (AE > PE) and per se categories
- Getting out of the per se box (ancillary restraints; lack of judicial experience)
- Unilateral conduct
- Network effects as entry barriers
- Single brand aftermarkets
- Exclusive dealing (single product)
- Tying (multiple products)
- Exam format
- Exam taking technique
- Read the question
- Read the hypo
- Upstream/downstream drawing; clearly identify the markets at issue
- Outline the mandatory elements of the offense, using "the grid"
- Locate the "issues" within the structure of the outline
- Write your answer, using the outline topics as headings
- Claim --> "because" --> Evidence
- Exhaust the hypothetical
- Highlight every fact that you have used
- Find a place for what's left over
- Finish
- Q&A
Required reading
Policy, Tangents and Detours (not mandatory)
A (very incomplete) list of interesting technology books (not mandatory)
- Sterling, The Hacker Crackdown: Law And Disorder On The Electronic Frontier (1993)
- Barlow, A Declaration of the Independence of Cyberspace (1996)
- Shapiro, Varian, Information Rules (1998)
- Raymond, The Cathedral and the Bazaar (1999)
- Kent, The Ultimate History of Video Games (2001)
- Kushner, Masters of Doom (2004)
- Evans, Haigu, Schmalensee, Invisible Engines (2006)
- Post, In Search of Jefferson’s Moose (2009)
- Kirkpatrick, The Facebook Effect (2010)
- Levy, Hackers (2010)
- Levy, In the Plex (2011)
- Assange et al. Cypherpunks (2012)
- Greenwald, No Place to Hide (2014)
Recommended antitrust resources (not mandatory)
This work is licensed under a Creative Commons Attribution 3.0 United States License.