Antitrust Economics for Lawyers

Antitrust Economics for Lawyers

Antitrust Economics for Lawyers, published by LexisNexis and written by CRA consultants and affiliated experts, is geared towards attorneys in antitrust practice. The book provides lawyers, partners, and associates with clearly explained economic concepts and discusses several important topics in antitrust economics. The topics are organized into three main areas: merger analysis, monopoly and exclusion, and damages cases. Other topics will be added to the book during regular updates of its content.

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Chapter 1—Market Definition and Multi-Product Firms in Merger Analysis
Serge MoresiSteven C. SalopJohn W. Woodbury 
The authors explain the “hypothetical monopolist test,” the standard methodology for identifying relevant antitrust markets in merger cases, and discuss two approaches to implementing the test. They focus on the implementation of the test when firms offer multiple products or services, either inside or outside the candidate market, and discuss the “hypothetical cartel test” introduced in the 2010 US Merger Guidelines.

Chapter 2—Unilateral Effects of Horizontal Mergers
Yianis Sarafidis 

The author explains why gross margins and diversion ratios are crucial for understanding the economic principles that underlie the unilateral effects of horizontal mergers involving differentiated products, and for quantifying these unilateral effects.

Chapter 3—Coordinated Effects in Merger Analysis
Andrew R. Dick 

Concern about coordinated effects has played a central role in US merger enforcement policy for more than 30 years. The author uses case examples to discuss the economic factors that influence the theory of collusion. He also explains how economists apply organizing principles to analyze proposed mergers, using examples drawn from mergers that were ultimately challenged by the DOJ or the FTC. 

Chapter 4—Economics of Distribution and Franchising and Their Legal Implications
Spencer GrafSerge Moresi, John R. Woodbury 

In this chapter, the authors survey the economic principles underlying distribution arrangements between upstream firms (manufacturers) and downstream firms (such as wholesalers, dealers, or retailers). The focus is on the potential procompetitive and anticompetitive effects from vertical restraints, such as exclusive dealing, loyalty discounts, and most-favored nation clauses. The discussion applies generally to franchisor-franchisee relationships as well. All of the effects identified by economic theory have implications for how the antitrust laws treat the distribution or franchise arrangements, particularly given most of these arrangements are analyzed under a rule of reason.

Chapter 5—Distinguishing Between Market Power and Monopoly Power in a Section 2 Exclusion Case
Sean Durkin 

In this chapter, the author explains the economic notion of monopoly power and compares that to the legal concept of monopoly power with the goal of helping lawyers better understand how to address the issue of monopoly power in an exclusion case.

Chapter 6—Bundling
David Reitman 

The author discusses bundling in the context of anticompetitive conduct; whether bundles, in which distinct products are packaged together at a discounted price relative to what each would cost on an à la carte basis, can ever be used as an exclusionary mechanism. If so, how can exclusionary uses of bundled discounts be distinguished from the kinds of pervasive, procompetitive bundling observed in many markets? 

Chapter 7—Contracts That Reference Rivals
Fiona Scott Morton 

In this chapter, the author focuses on contracts that reference rivals (CRRs), such as most-favored-nation provisions (MFNs), and provides a brief survey of past and current CRR cases, as well as the findings in economic literature. CRRs have been and will likely remain to be the subject of antitrust scrutiny in government and private litigation as seen in the recent Apple e-books case. 

Chapter 8—Estimating Damages in Collusion Cases
Timothy S. Snail 

In this chapter, the author discusses the different approaches to damages estimation that are routinely used by experts—plaintiff and defendant experts—in collusion cases. It discusses the potential economic effects of collusion, considerations in building the theoretical model for the damages analysis, data and evidence requirements, methods for estimating damages from collusion using econometric methods, and the validation of results from damages models.

Chapter 9—Class Certification
This chapter discusses the evolution of economic and statistical models used in antitrust class certification proceedings. Since some courts have found that models relying on "average" results are not appropriate in that context, more complex and sophisticated models have been introduced to assess individualized issues of impact. However, those later generation models introduce further and different complications of analyzing antitrust impact in the context of class actions.