Seminar 1: Preliminary Reflections (10 October 2013)

I have chosen three items for us to read with no apparent connection among them. The first is a judgment of the US Supreme Court that overturns a 1911 precedent; the paper by Kovacic and Shapiro (a lawyer and an economist respectively) considers how law and economics evolved throughout the Twentieth Century, and the paper by two political scientists (Wigger and Buch-Hansen) asks why the present economic crisis has not led to any changes in competition policy orientation.  The common theme then is one of change: why, when and how change occurs in competition law.

Leegin Creative Leather Prods., Inc. v PSKS, Inc., 551 US 877 (2007): please read both majority and dissent. The dissent is more interesting for our purposes.

Kovacic and Shapiro ‘Antitrust Policy: A Century of Economic and Legal Thinking’ (2000) 14(1) Journal of Economic Perspectives 43

Wigger & Buch-Hansen ‘Explaining (Missing) Regulatory Paradigm Shifts: EU Competition Regulation in Times of Economic Crisis’ (2013) New Political Economy 1

14 comments on “Seminar 1: Preliminary Reflections (10 October 2013)

  1. Marita Szreder says:

    Initial reaction to the reading material:

    The articles by Kovacic and Shapiro as well as Wigger and Buch-Hansen both seem to suggest that major changes in competition law policy tend to coincide with bigger financial/socio-economic crises. Yet, the case of Leegin, clearly shows that significant changes in competition policy can occur at other times.The case in question was decided in 2007, so before the beginning of the current financial crisis. While perhaps it cannot be called revolutionary, it has still brought about a radical change in the competition law policy in the US. Price-fixing agreements have always been seen as one of the biggest evils by competition lawyers (more clearly, in horizontal cases, but also in vertical situations like in Leegin). Resale price maintenance is still considered a hardcore restriction in EU law. In the US, the per se rule has been applied to resale price maintenance agreements for nearly 100 years before the Supreme Court in Leegin decided to change to the rule of reason approach.

    This raises the question of what brought about the change in thinking of the majority in Leegin? As pointed out in the dissenting opinion, the Supreme Court had numerous occasions to change its mind throughout the years. The economic studies suggesting potential pro-competitive effects of resale price maintenance are not all recent. One of such studies to which Justice Kennedy refers with approval in Leegin is the Bureau of Economics Staff Report to the FTC from 1983, published a year before the decision in Monsanto v Spray-Rite Service Corp was given, where the per se rule was applied. In light of the above and the strength of the dissenting opinion, it is curious that the majority remained silent as to what the immediate trigger for its decision was.

    My suggestion, though not supported by any research, is that the composition of the court might play a decisive role here. It is always a group of individuals with their educational background and deeply-embedded personal opinions who make the decisions, not a (de-humanised) system. To my mind, the power of an individual in shaping policy, as opposed to an external circumstance, should never be underestimated.

    Existence of a reason(s) for radical changes in approach to competition policy outside a major crisis could also put into question/undermine Wigger’s and Buch-Hansen’s focus on factors within a crisis that are (in their view) necessary to bring about a major change in approach. In any case, the conclusions given in that article seem to me to be premature. While the authors acknowledge that possibility, they fail to put forward arguments that would address that counter-argument. In my view, the authors failed to carry their comparison of the 1970s crisis with the current crisis to its logical conclusion. They point out that the former crisis was recognised as a crisis of the system only after it continued for longer than initially expected, but their parallel realisation that the current crisis also lasts longer than originally predicted, seems to carry no weight in their reasoning. Unfortunately, the whole article suffers from this problem and that affects its persuasiveness even if the conclusions the authors reached ultimately prove to be correct. Moreover, Wiggler’s and Buch-Hansen’s reliance on five specific factors as if they were of equal weight also seems unpersuasive; surely at the end of the day it all boils down to one question – is there an alternative? Even if there are perfect conditions for change, if no solution to the perceived problem is proposed, no change can follow.

  2. Delphine Defossez says:

    As mentioned by Marita, both articles seem to suggest that competition policies are most likley to face major changes in crisis periods. However, if we look at the case we directly see that changes may also occur at different time.
    I do agree with the authors that probably crisis give a stronger input to change the current rules, but changes may occur at different time as well.

    the second problem, I face whil reading Wigger and Buch-Hansen, was that they did not explain how the 5 factors were to be balanced and how they interact with one another. I do agree that some of those factors are key elements for policy changes.

  3. Céline Estas says:

    As we are living in times of crisis, we can easily wonder about the consequences of this present crisis on competition law. This question is natural as we see that the crisis occurred in 1970s has influenced the view of competition law. A. Wigger and H. Buch-Hansen tend to demonstrate that the crisis of 2008 will not result in a paradigm shift in competition law. Their analysis based on five criteria is convincing. One of the most important elements, in my opinion, is the approach of the DG Competition during this crisis. The DG Competition appears to be strong this time. Even if the Commission adopted a soft approach for state aids, it continued to support competition rules and to pursue cartels, for instance. Thus, even though crises can lead to a change in the interpretation of competition law, the crisis of 2008 does not appear to be one of those.

    Moreover, we may consider that it is not the crisis itself that leads to changes in this context, but more the fact that the crisis may imply changes in important elements around competition rules. This consideration can be based on the five criteria developed by A. Wigger and H. Buch-Hansen, but also on the dissenting opinion of Justice Breyer. Indeed, Justice Breyer pinpoints that a change in the interpretation of competition law may occur when changes in circumstances happen. However, from his point of view, the development of economic theories does not constitute a change in circumstances. This is the reason why he does not agree with the overruling of Dr. Miles (because of a lack of sufficient changed conditions).

    However, even without changed conditions, the U.S. Supreme Court initiated a change in the field of minimum resale price agreements in Leegin. On the basis of this case, we may wonder to what extent economic arguments and economic theories can imply a change in the interpretation of competition law. In this context, from my point of view, the courts have considerable powers to introduce changes and integrate economic theories into their interpretations.

  4. Itsiq Benizri says:

    Although the idea of assimilating judicial antitrust decisions to policy decisions as regulatory paradigm shifts might be interesting, I would not subscribe to such an analysis with regard to the theories I red in our readings. Indeed, it is important for me to have a clear approach of what authors meant in the readings we prepared.

    Consequently, I think one should realize that Wigger and Buch-Hansen research on one hand, and the Leegin case with Shapiro and Kovacic research on the other hand, have two different objects. Wigger and Buch-Hansen try to complete the legal institutionalism theory by explaining which criteria can precipitate regulatory paradigm shifts in times of economic crises, while Shapiro and Kovacic try to show the links and even sometimes the convergence between contributions from economists and jurisprudence – and the Leegin case is a perfect illustration of what these authors are trying to demonstrate. Therefore, these analyzes have two different objects in my opinion: the first one concerns the impact of economic crises on law production by politics while the second one concerns the links between economic learning and jurisprudence. This might explain why Wigger-Buch-Hansen theory doesnt apply to Leegin: it is not supposed to.

    Therefore, I don’t think that the Leegin decision allows us to reject the Wigger-Buch-Hansen research. However, even if the factors they proposed were interesting, I did not agree with their methodology : I would have like to find induction where they used deduction.

    Finally, I would also like to underline the fact that, although it is a very interesting matter, I don’t think that economic learning is the starting point of Leegin. In my opinion, the main problem was the one clearly identified in the dissent opinion : how to change a rule that the Court had applied for a century? The will to answer to this question is behind every paragraph of the decision. For example, the Court clearly explains that it had ALREADY changed its jurisprudence by rejecting the rationales in which the doctor Miles jurisprudence was based in its recent decisions. Moreover, the decision was very old, and this implied some problems, according to the Court. One can also see that the stare decisis question was at the core of the dissent opinion. So, it is only because of these arguments that the Court came to analyze economic learning on the case and, of course, this is the most interesting part of the decision. The dissent opinion did not agree with such an approach and considered that economic discussion sould inform antitrust law, but that antitrust law should not replicate economic views. From this point of view, the decision confirms the Kovacic and Shapiro research : economic learning guides the formation of antitrust policy in jurisprudence.

  5. Karin Fløistad says:

    I find the reference in our reading material to historical institutionalism and change interesting. According to historical institutionalists regulatory paradigm shift may occur during critical junctures that disrupt an existing institutional equilibrium. Economic crisis are recognised as examples of such critical junctures. As is well known institutions do matter for the continuity in a regulatory area. Institutional develpment tends to be path dependent, self reinforcing and for the most part incrimental. Consequently missing regulatory paradigm shifts may very well be explained by this perspective.

    Institutional changes are well known in the development of the EU. Institutional competence within the EU has not remained static. As a result there is a change in the political balance of power between the EU institutions over time. In the future it will be particularly interesting to see how division of executive power unfolds over time and how the further extension of the EP’s legislative competence impacts on the legislative process. These changes are more readily seen as incremental than a regulatory paradigm shift which it must be said occur rather seldom.

  6. Theodosia Stavroulaki says:

    In my opinion all the readings of the material lead to the same conclusion: competition law evolves in a particular political, economic and social context and Judges as well as policy makers take into account the economic, political and social environment where the law applies. Such an approach is underlined in the article “antitrust policy: a century of economic and legal thinking” in which it is described how the prevailing economic models and political thinking of each period affected the development and the interpretation of the antitrust rules. It is also emphasized in the dissenting opinion of the Leegin Case where it is stated “Congress should have set the Dr Miles rule in stone, but it chose a more flexible option. We respect its decision by analyzing vertical price restraints, in conformance with traditional paragraph 1 principles, including the principle that our antitrust doctrines “evolve with new circumstances and new wisdom” . However, what I would like to underline hereby is that in the Leegin Case the Supreme Court overruled the Court’s decision in Dr. Miles and the well established case law regarding the per se illegal nature of vertical price fixing despite the fact that there have been no significant changes in the relevant legal and economic thinking and literature. In this context a few questions arise: what are the reasons the Court decided to overturn a well established per se rule on the basis that such a rule is not an efficient rule? Did the Court take all the relevant factors into account before concluding that the well established per se rule should be overturned?

    In my opinion the Court decided to overrule one case of significant importance, Dr. Miles, without taking into consideration two important issues: 1) the higher administrative costs a rule of reason analysis entails 2) the fact that the Court’s overruling jeopardizes legal certainty. From a law and economics perspective the Court should first identify the costs and benefits of each option and then finalize its conclusion. However, the Court identified all possible benefits of the rule of reason approach in vertical price fixing without considering the significant costs of this option. I agree with the more holistic approach of the dissenting opinion which raises the critical question: “But before concluding that Courts should consequently apply a rule of reason, I would ask questions such as, how often are harms or benefits likely to occur? How easy is it to separate the beneficial sheep from the antitrust goals?”

  7. Samantha Palladino says:

    I found that I was left unsatisfied after reading Wigger and Buch-Hansen’s article. While reading through their discussion of the lack of the five preconditions for a fundamental paradigm shift, I found that I kept thinking, okay, but why? The authors have described the ways in which the post-2008 climate and reactions are different from those from the 1970s, but I still do not feel that I have an answer to the question of why some crisis might result in a shift while another would not, as in, for example, why various forces are construing the 2008 crises as within the existing accumulation structures (factor 1), why is the Commission being so “unwaveringly optimistic”? Surely this must reflect some larger political or social condition of the current time, but what? What might account for the lack of a wider shift in the regulation of economic activities post 2008? (factor 5).
    Similarly, I found the title of Kovacic and Shapiro’s article somewhat in-apt. It was only in the conclusion that I was reminded that the article aimed to address the role economists have played in the development of the US antitrust regime (p 58). To me, the article seemed to be a readable and comprehensible brief overview, but without much of an economic slant. The most telling line for me was when the authors discussed the increasing judicial approval for the Chicago School, citing a main reason for the shift as the “change in judicial appointments.” (p 53). Perhaps it is my American law school rearing, but tend to think that a lot of major decisions or changes in law depend on the make-up of the Supreme Court and its political leanings. In this vein, I was also not really shocked by Leegin, but I have read many cases where judges break with stare decisis, either for convincing or unconvincing reasons. In sum, my initial impression is that competition law changes, but no one is entirely sure why. There are definitely forces at play, but it could also be the result of someone or some institution making a decision, perhaps guided by a political or social background, that is a departure from that which preceded it.

  8. Jonas von Kalben says:

    Competition law and economics are closely linked, as competition law deals with economic facts and therefore has to react to economic interdependencies. Moreover, competition rules have to be based on economic insights in the functioning of markets and competition. Both articles but also the Leegin-decision are linked by the question, how law reacts or should react to (new) economic insights and changes in economic theory. At the same time, all reading materials show that the interpretation of competition law is not left – and according to Justice Breyer (“antitrust law cannot, and should not, precisely replicate economists’ (sometimes conflicting) views”) should not be left – exclusively to economists. Economic theory has to be transformed into legal doctrine, taking into account a series of factors such as the normative decision on the goals of certain statutes, practicability and manageability of rules for the addressees of the norms but also for the competition authorities and the judges, or the allocation of the burden of proof between the parties. Even if a shift in economic theory can be identified (e.g. associated with an economic crises), a change in legal doctrine is not the necessary consequence. At the same time, there are many ways in which economic thinking may influence the interpretation and application of antitrust law (economizing evidence and facts of competition cases, changing the goals and substance of competition rules based on economic thinking, or (re)designing antitrust law without changing the normative decision behind it). I think it is important to differentiate between the different ways economic theory may influence the law, when discussing the relationship between the two fields of science.

  9. Sara Perez says:

    As the previous comments explained, both the Kovacic and Shapiro article and Leegin highlight the role economics plays in competition law. While Kovacic and Shapiro, writing seven years before Leegin, discuss the evolution of US antitrust policy and the influx of analytical perspectives affecting judicial decisions in the 1990s, Leegin provides an example of where analytical techniques have taken the courts by the late 2000s. As we can see from the Leegin dissent, there is a tension between the economic underpinnings of recent antitrust policy and the common-law tradition of stare decisis.
    Cases such as Leegin suggest that economics can lead to diverging conclusions regarding anti-competitive or pro-competitive behavior. As someone who does not have an economics background, I was equally convinced by the empirical data presented by the majority and the dissent. I would assume that judges who similarly do not have an economics background would be as confused. Competing economic studies forces judges to witness a ‘battle of the experts’ where they end up forming an opinion guided by matters outside the scope of the analytical research, such as the academic pedigree of the scholar.
    While there are issues regarding conflicting economics research, Leegin also illustrates the relationship between empirical data in the courtroom and the long-standing rule of stare decisis. As Justice Breyer points out, “a Court that rests its decision upon economists’ views of the economic merits should also take account of the legal scholars’ views about common-law overruling.” While studies may show that previous antitrust laws are not “restraints on trade,” I believe there is some merit to Breyer’s point. Antitrust law maintains consistency for the benefit of consumers, distributors, and manufacturers risk-management strategies. I would be interested to know if the dissent’s proposition of gradually phasing out well-established rules would actually avoid the reliance issues consumers, distributors, and manufactures have on antitrust law.
    In addressing the absence of a regulatory paradigm shift in EU competition regulation, Wigger and Buch-Hansen allude to the effects economics has on EU policy, but they do not explore the relationship fully. While this was not the intent of the article, I would like to know how economics plays into the DG Competition’s agenda. For example, Wigger and Buch-Hansen explain that since the 1990’s, the DG Competition sought to implement an agenda ensuring strong competition and the free play of market forces. The 1990s also sees an expansion of the DG Competition staff, where half of the qualified officials have a degree in economics. I am interested to know exactly what effect the staff with the economics background had on the DG Competition’s pro-competition agenda. What strategy does the DG Competition have in the face of competing economic studies? Do analytic perspectives guide their competition policy?

  10. Heikki M. says:

    The article by Kovacic and Shapiro presents a consolidated and well-structured analysis of the magnitude of factors that have acted as key-drivers behind the evolution or development of the United State’s antitrust policy, regulation, and especially the enforcement of antitrust law. The analysis is rich in that the factors it considers include, among others, inter-institutional political tensions (judges–executive–legislature), external conditions (Word War I, globalisation) and particularly the influence Chicago economists to rule-making and decision-making. Their analysis is very different from that of Wigger and Buch-Hansen, in that there is notable absence of outright normative articulation and an attempt to present the development of US antitrust law as pragmatist evolution.

    Wigger and Buch-Hansen adopt in their article a very different approach. Their analysis itself builds upon highly contentious and normatively loaded assumption of the prevailing neoliberal paradigm. Their analysis of paradigm changes (or lack thereof) is also rich in that it is founded on plurality of theoretical approaches including critical political economy, historical institutionalism, rational choice institutionalism and social constructivism. Though this theoretical kaleidoscope they consider several circumstantial factors that effect the emergence and non-emergence of paradigm changes, including the “construction” of the crisis as of, or within, capitalism; the occurrence of a fundamental shift in the balance of power between social forces; the existence of a regulatory counter-project; the capability of regulatory institutions to respond to crisis (or block change) and, finally the emergence of broader changes in the overall regulatory architecture.

    Wigger and Buch-Hansen conclude that no paradigm change has happened or is likely to happen. A few critical points as to their analysis can be raised here: first of all they note that neoliberalism prevails because the crisis is not perceived as being of systemic nature. If there is one thing that everybody seems to agree on about the crisis is that is was systemic. As a result fundamental structural reforms in the area of financial supervision are taking place on global, regional and national levels. Some changes could be seen “paradigmatic”, e.g. the attempts to separate traditional commercial banking activities from risky and possibly speculative proprietary investment banking (Volckers, Vickers, Liikanen). Thirdly, it is widely agreed that the US housing bubble was not just the result of crony financial capitalists, though they did play their part well and extracted huge rents. The availability of cheap credit was maintained indirectly by quasi-public US financial institutions which in effect mutualised the credit risk and supported below-the-market interest rates. The policy behind the US system of housing finance was thus far from market-based (or neoliberal). Fourthly, reregulation, rather than deregulation, of financial sector is very much taking place. G20 and the Financial Stability board acting under its auspices are leading the global efforts to regulate the non-bank credit channelling system known as “shadow banking” system.

    The focus of Wigger and Buch-Hansen on competition regulation is arguably relevant as it indeed constitutes a “key area of economic governance”. But they fail to build a credible connection or a causal-link between EU competition law enforcement paradigm and its institutional foundations on the one hand and the financial crisis on the other. To say that the financial crisis was caused by the failure of neoliberalism can be true, depending on how one defines the concept. (In his book “The Financial Crisis – Who is to Blame?”, Howard Davies identifies 39 different causes that has been reported in literature.) Wigger and Buch-Hansen are nevertheless right in that the EU’s crisis tackling measures are mainly the product of “muddling through” policies rather than the attempt treat the crisis’ deeper structural roots or underlying illness.

  11. Haukur says:

    I found myself agreeing more with the result of the dissenting opinion of the Leegin Case. Not necessarily for the reasons stated that nothing should change in the legal system once decided 100 years ago, but more for the reason of procedural efficiency. There is a certain cost of wrongly assuming negative effects of vertical price agreements, but I think that this cost is offset by the cost of having hardly enforceable rule of reason governing such agreements.

    The Kovacic and Shapiro article gave a nice historical overview of the development of US antitrust enforcement in relation with the prevailing economics wisdoms of each era and enforcement policies.

    I was a bit perplexed about the Wigger and Butch-Hansen piece. And not just about all the fancy words they used. The hypothesis of the article was that EU’s competition policy had undergone a radical change after crisis in the 1970s. These radical changes occurred throughout the 1980s and 1990s, but cumulated in the competition regulation reforms of the early 2000s. As opposed to this 30-40 year process the authors assume that the crisis that started in 2008, and are now 5 years later largely still on-going, had not resulted in the same radical policy change. Still it is admitted in the article that at the onset of the crisis the state aid legislation was largely pushed aside, enabling unprecedented State intervention in the financial sector and to a lesser degree in other sectors. This of course runs contrary to neo liberal orthodoxy, which the authors claim that nonetheless prevails. I thus think that the conclusions of the article are largely unwarranted.

  12. Tiago Andreotti says:

    Wigger and Buch-Hansen’s paper draws a parallel between the conditions that were prevalent for a paradigm shift on competition regulation in the EU after the 1970’s crisis and why a shift didn’t happen after the 2008 crisis.
    According to the authors paradigm shifts happen based on 5 different factors: 1) how the nature of crisis are construed; 2) the power balance between social forces; 3) the presence of a clearly distinguishable counter-project; 4) how those in charge of regulatory institutions respond to the crisis; and finally 5) broader changes in the regulatory context.
    After the 1970’s crisis a lack of competition started to be seen as the central problem that caused the crisis, and an increase in competition became the order of the day (factors 1 and 3). At the same time there was a change in the DG Competition with the leadership of two Neoliberal hardliners (Peter Sutherland and Leon Britta) who used the legal powers available to challenge acts of state aid that could distort competition (factor 4). In addition, other areas of EU Regulation were also being influenced by Neoliberal ideals, such as the merger control regulation (factor 5). Finally, the balance of power between social forces shifted with the development of transnational markets and multinational corporations, who could then escape the powers of organized labor by using labor elsewhere (factor 2).
    Even though bred on a neoliberal environment, the 2008 crisis was a crisis that could be characterized on terms of lack of competition, more specifically on market concentration since there were only a few monstrous banks that were taking too many risks, leading to a collapse of the financial system that left it without alternative paths for liquidity. According to the author it was also a crisis of the existing accumulation structures, as occurred in 1970, but until now it has been seen as a crisis within such structures. In addition, both the financial sector as the productive sector, due to their entanglement through debt creation, support the measures that were deployed during the crisis, which consisted mainly in bailing out banks that were in distress.
    Even though not being explicit on it, the paper seems to divide liberal and neoliberal approaches to competition regulation, while setting a tone condemning the latter as inadequate to the current crisis (for example, in page 18: “Consequently, aside from a few voices calling competition a luxury that is unaffordable in times of crisis, the neoliberal discourse and the weight given to unbridled competition has not yet been sufficiently discredited”).
    This is where I think the articles misses the point, even thought its main objective of showing why a paradigm shift has not occurred is achieved. Framing the current crisis in terms of neoliberal ideology and competition policy as the authors did does not address the financial crisis and the inadequate responses to it for two reasons: first, the crisis was not based on a inherent flaw of the idea of competition and free market, but to the contrary, the basis for it was actually a lack of competition due to the increasing size and power of banks; second, the responses to the crisis bailing out banks were more of a capture of the government by the relevant sectors with a consequent socialization of the losses than the failure of the neoliberal ideology per se.

  13. Mariajo says:

    I think most comments above deal in a pretty exhaustive way with our readings, so I hope to add something new to the discussion by going a little beyond the texts.
    After reading the three texts for tomorrow’s seminars, my thoughts about “why, when and how change occurs in competition law” have been condensed to the perspective of a political realist: Change in competition law occurs when the entity with power to change it is willing to do so. I would say the obvious implication of this perspective is that it deprives competition law from its status as “law”, and reduces it to mere policy. The next question then could then be: When would the entity with power (government, courts or administrative bodies) be willing to change competition law/policy? I think the willingness is driven by the dominant ideology within that entity.
    As mentioned several times in comments above, competition policy is a tool to create and control markets and market behavior. Competition law will therefore most likely be influenced by different ideologies of how a market should function and in how far the government should intervene. The market ideology that has won the race in the 20th century, and is by now without any competitor (= the question of alternative raised by Marita), is free-market capitalism. Free-market capitalism favors competitive markets and minimal government intervention. The first scientific community advocating in favor of this form of market structure were economists. They therefore had an advantage in knowledge and in the development of analytical tools, long before policy makers and legal practitioners became interested in it. The moment for economists’ voice to be heard in policy making and legal practice probably came at different times in the US and in the EU. In the US, the rise of the Chicago school might have been fuelled by the downturn in the US economy in the 70s. In the EU, this moment came much later than in the US however (I agree with Haukur!), and was possibly not directly related to the crisis (contrary to what Wigger and Buch-Hansen seem to suggest). I think that two other factors are just as plausible to explain the economic revolution in EU competition law: 1) the US became an example to follow in terms of competition policy and 2) the Soviet Union, the only political system with an alternative market ideology, was in the process of collapsing.
    If we look at the current crisis and assume that paradigm shifts in competition law are linked to the predominant market ideology, nothing has changed yet because free-market capitalism is still the dominant ideology within those entities possessing the power to bring about a change. There is thus a lack of political willingness bring about a regulatory change.
    I probably don’t have to spell out my guess about the current dominant ideology in the US Supreme Court. I think however that the position of Courts is special, because there it is not only the question of ideology, but the general reluctance of allowing analytical tools from another discipline to penetrate legal analysis.
    What I would like to add about the dissent in Leegin v PSKS, is that I do not find the dissent convincing. To me it sounds like: “I am not sure whether resale price maintenance is pro-competitive or anti-competitive… but since we have a rule that is 100 years old, I am fine to leave the possibility of criminal liability open, even if I’m really not sure whether any damage is done or not”????!!!! I mean, from a criminal law perspective, this goes against all principles, doesn’t it? And at the end of the day, a rule of reason analysis is not akin to per se legality…

  14. Sylvi says:

    The key inference I took from the readings was the central role economic models play SPECIFICALLY in competition law and policy. With no background in competition law (or any sort of “corporate” or “commercial” law for that matter), this introduction was very interesting to me because it shed light on the distinctive nature of the field, regardless of the substantive measures that form the various systems of regulation – so, whether EU or US law governs (and despite the differences between their approaches), the reliance on the discipline of economics felt somehow unique to the field. While clearly almost every area of law NECESSARILY draws upon changing economic theories, the readings made clear just how important economics are to the study of competition law, such that seemingly unquestionable factors such as stare decisis suddenly become questionable. In fact, while it might seem “obvious” to anyone with some sort of background in the field, the Kovacic and Shapiro article really affirmed the Leegin decision for me – overturning precedent might be more problematic in a field such as criminal law (for example) – but because competition law is so inextricably tied to economics, which is inevitably an evolving/adapting field, it seems unrealistic to expect some sort of lofty “ideals” to govern its jurisprudence without attention to changing social/economic theories. In other words, the Leegin decision should not be considered as some sort of dramatic “shift” from previously affirmed policies, since competition law necessarily depends on constantly-evolving economic theories, simply because of the nature of the field.

    However, frankly, I was incredibly confused by the Wigger & Buch-Hansen article…I THINK was able to follow their reasoning regarding the 5 criteria well enough, but I had trouble understanding how their research ultimately connected to the 2008 financial crisis. However, from what I COULD get from their article, I think I agree with Itsiq in that I don’t think the Wigger & Buch-Hansen article is necessarily incompatible with the Leggin decision and the Kovacic and Shapiro article – I think both articles take on interesting (and different) analyses that explore their respective objects thoroughly, but not necessarily in an attempt to address the issues the other article discusses.

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