Article

Getting the Word Out: The Informational Function of Trademarks

This article challenges the statement that “the only legally relevant function of a trademark is to impart information as to the source of the product.” Information about the source of the product undoubtedly helps the consumer choose the product she wants from a set of possible products. This article argues, however, that the informational function of trademarks is broader: in addition to providing information about the source, a trademark often provides information that reduces consumers’ uncertainty about the product’s qualities and impacts purchasing decisions. Specifically, this article shows that a trademark not only helps the consumer choose the product she wants, but it can also help her decide how many units she should purchase of that product. This article then draws on several examples to illustrate that the reduction in consumers’ uncertainty enhances welfare but that under certain conditions it may be used by unscrupulous sellers to defraud customers. Drawing on these insights, this article turns to explain different types of regulations, the optimal investment in trademarks, and offers an alternative explanation as to why trademark law allows sellers to use “deceptively misdescriptive” marks. Keywords: trademarks, marks, brands, search costs, information, false advertising, interbrand, intrabrand, signaling, branding, regulation, market mechanisms, fraud, strategies, law and economics JEL Classification: D11, D81, D82, D83, D84, K00, K13, K39, L15, M37
Reference :

41 Ariz. St. L.J. 991 (2009)

Famous Trademarks and The Rational Basis For Protecting Irrational Beliefs

Contrary to the traditional view, this article argues that mega-brands are neither economic evils nor limited to imparting information about the products they adorn. It also rejects the view that famous marks persuade “snobs” to “irrationally” pay more for the same physical product they could have purchased for less. Rather, it adopts the view that in purchasing a branded good, the consumer is actually purchasing a bundle of three products: a physical product, information about the physical product, and an intangible product, such as fame, prestige, peace of mind, or a pleasant feeling. This article explores the demand for the intangible product and its impact on pricing, welfare, and the strategies of consumers and producers. It concludes that under certain conditions one may witness the anomaly of an increase in both price and output. Further, contrary to conspicuous goods theory, this analysis shows that snobbism may occur in the traditional downward-sloping demand curves and is not limited to goods with conspicuous properties. A direct implication of this analysis is that mega-brands neither confer a monopoly nor foster price discrimination. On the contrary, they enhance competition in both the physical and intangible spheres. Further, the analysis provides a rational basis for anti-dilution law. Anti-dilution law - widely considered to protect producers and injure consumers - actually inures to the benefit of both groups. Finally, this analysis shows that even snobs are rational, and that there are sound economic justifications for the law’s unique protection of famous marks. Keywords: famous trademarks, mega brands, persuasive advertising, branding, intangible product, snobs, conspicuous goods, irrational consumers, social norms, anti-dilution, externality, intellectual property, price discrimination, tying, antitrust, psychological value
Reference :

14 Geo. Mason L. Rev. 605 (2007) (Lead Article)

Intellectual property, standards, and antitrust: a new life for the essential facilities doctrine? Some insights from the Chinese regulation

It is still controversial whether the intellectual property-antitrust interface should be viewed as a conflict or a finalistic convergence. The recent Chinese Regulation on the “Prohibition of Conduct Eliminating or Restricting Competition by Abusing Intellectual Property Rights” provides the opportunity to update the analysis of this real (or apparent) conflict.
Reference :

(with R. Pardolesi) in P. Drahos, G. Ghidini, H. Ullrich (eds.), “Kritika: Essays on Intellectual Property”, Edward Elgar, 2017, 70

Data Protection in Attention Markets: Protecting Privacy through Competition?

Every day, digital platforms generate, gather, store and analyze a huge amount of data, personal data included: these data can be elaborated on to cluster individuals and offer personalized prices and services. Individuals are progressively losing control over their personal data and digital identities and, accordingly, data protection authorities are looking at the operations of these digital platforms carefully. The paper addresses the issue of a possible commingling of data protection rules and antitrust provisions and the lively global debate between those who call for strong antitrust intervention to buffer privacy risks and those who would keep antitrust law at bay.
Reference :

Journal of European Competition Law & Practice (2017)

Aggregate Concentration Concerns: Competition Law Solutions?

Competition law is generally focused on competition in a market. Yet, as recent economic studies have clearly indicated, one of the main sources of competition concerns of jurisdictions around the world is the impact of high levels of aggregate concentration in their markets, when a small group of economic entities controls a large part of the economic activity through holdings in many markets. High levels of aggregate concentration can significantly impact competition and welfare. On the one hand, conglomerates' substantial resources and varied experiences, as well as their economies of scale and scope, often enable them to enter markets more readily than other firms, especially when entry barriers are high. On the other hand, high levels of aggregate concentration raise significant competitive concerns. Most importantly, oligopolistic coordination in and across markets as well as entry barriers into markets might be increased. These effects, in turn, might lead to stagnation and poor utilization of resources, which adversely affect growth and welfare. Another major concern is a political economy one: given their size and economic heft, large conglomerates may attempt to translate their economic power into political power in order to create, protect and entrench their privileged positions. Given these effects, the paper attempts to explore the weight given- if at all- to aggregate concentration in the application of competition laws around the world. The analysis is based, inter alia, on the experiences of 35 different jurisdictions in dealing with aggregate concentration through competition law, based on a survey performed with the assistance of the UN Conference on Trade and Development.
Reference :

35. Michal S. Gal and Thomas Cheng, "Aggregate Concentration Concerns: Competition Law Solutions?" Journal of Antitrust Enforcement (2016)

Access Barriers to Competition

While data were always valuable in a range of economic activities, the advent of new and improved technologies for the collection, storage, mining, synthesizing, and analysis of data has led to the ability to utilize vast volumes of data in real-time in order to learn new information. Part I explores the four primary characteristics of big data: volume, velocity, variety, and veracity and their effects of the value of data. Part II analyzes the different types of access barriers that limit entry into the different links of the data value chain. In Part III, we tie together the characteristics of big data markets including potential entry barriers, to analyze their competitive effects. The analysis centers on those instances in which the unique characteristics of big data markets lead to variants in the more traditional competitive analysis. Our analysis suggests that the unique characteristics of big data have an important role to play in analyzing competition and in evaluating social welfare.
Reference :

Rubinfeld, Daniel L. and Gal, Michal S., Access Barriers to Big Data, forthcoming Arizona L. Rev (2017), available at SSRN: https://ssrn.com/abstract=2830586

Algorithmic Consumers

The next generation of e-commerce will be conducted by digital agents, based on algorithms that will not only make purchase recommendations, but will also predict what we want, make purchase decisions, negotiate and execute the transaction for the consumers, and even automatically form coalitions of buyers to enjoy better terms, thereby replacing human decision-making. Algorithmic consumers have the potential to change dramatically the way we conduct business, raising new conceptual and regulatory challenges. This game-changing technological development has significant implications for regulation, which should be adjusted to a reality of consumers making their purchase decisions via algorithms. Despite this challenge, scholarship addressing commercial algorithms focused primarily on the use of algorithms by suppliers. This article seeks to fill this void. We first explore the technological advances which are shaping algorithmic consumers, and analyze how these advances affect the competitive dynamic in the market. Then we analyze the implications of such technological advances on regulation, identifying three main challenges.
Reference :

Gal, Michal S. and Elkin-Koren, Niva, Algorithmic Consumers (August 8, 2016). Harvard Journal of Law and Technology, Vol. 30, 2017. Available at SSRN: https://ssrn.com/abstract=2876201

Margin Squeeze in the Telecommunications Sector: A More Economics-based Approach

A margin squeeze occurs when a vertically integrated company, dominant in the supply of an indispensable upstream input, pursues a pricing policy which prevents downstream competitors from trading profitably, thereby leading to their ultimate exclusion from the downstream market. In the telecommunications sector, where large ex-state firms still enjoy considerable market power, margin squeeze has long been frequent. Interestingly, the United States and the European Union have tackled this problem in considerably different ways. Dismayed by the idea of an antitrust court intervening in a company’s price setting, the US Supreme Court held that margin squeeze was exclusively the domain of regulation. Conversely, the Court of Justice of the European Union has endorsed a modern economics-based approach enabling competition authorities to engage in a coherent and verifiable antitrust assessment of the price differentials that potentially amount to a margin squeeze. This paper will argue that (1) the economics-based approach is the right solution in the European context, but that (2) this approach will only lead to convincing results if it includes a rigorous and transparent analysis of the effects on competition and consumers.
Reference :

World Competition 35(2)/2012, S. 205–232 (Kluwer Law International BV, The Netherlands)

Damages claims in the Spanish sugar cartel

Market conditions in the sugar industry are strongly affected by protectionist regulatory measures and interventions, leaving narrow room for business competition. Moreover, competition authorities worldwide have investigated and successfully prosecuted anticompetitive actions by sugar producers and refiners in this market. As an example of collusive behaviour in the sugar industry, this article looks at the Spanish sugar cartel uncovered and sanctioned by the Spanish competition authority. It then turns into the subsequent private enforcement actions that concluded successfully last year with a Euro 5 million award in damages by the Supreme Court. Several lessons can be extracted from the Supreme Court’s decisions that will have an impact on future private claims for damages arising from competition law violations in Spain. They clarify the relevance and legal force of public enforcement decisions for private enforcement, how damages’ calculations should be done, and how expert forensic opinions on the matter should be assessed by the courts and, finally, they rule on the availability of the passing-on defence. In all, the Spanish Supreme Court dicta from its decisions in the sugar cartel case may well open the gateway for new private claims in the future.
Reference :

Journal of Antitrust Enforcement, 2015, 3, 205–225

The 'Consumer Choice' Paradigm in German Ordoliberalism and its Impact Upon EU Competition Law

This paper explores the origin and the development of the "consumer choice" paradigm as the core concept of German ordoliberal thought which has had a strong impact on EU competition policy and law. Even though it is actually under attack from the welfare economic approach that emphasizes "consumer welfare" instead of "consumer choice", the latter paradigm is still deeply rooted in the jurisprudence of the CJEU.
Reference :

http://ssrn.com/abstract=2568304

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