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Your Weekly Digest | Issue 241

Valur Thrainsson
6 min read

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Here below, you find the most recent and relevant competition and anti-trust news, blogs and journal publications over the last week.

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FTC urges judge to unwind $7.1 bln Illumina-Grail merger | Reuters
Aug 24 (Reuters) - The U.S. Federal Trade Commission on Tuesday said it seeks to unwind life science company Illumina Inc's (ILMN.O) $7.1 billion acquisition of Grail Inc (GRAL.O), alleging it would harm innovation and boost prices.

FTC senior counsel Susan Musser said in her opening statement at a trial in Washington that cancer test-detection company Grail and its competitors rely on San Diego, California-based Illumina's DNA sequencing technology. She argued that Illumina's purchase of Grail would give the company the "incentive and ability to foreclose downstream rivals." Read more.
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Meat wars: why Biden wants to break up the powerful US beef industry | Meat industry | The Guardian

As the pandemic drives calls for a radical overhaul of the food system, can the president take on the meat giants?

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The Bundeskartellamt has imposed a fine totalling around 2 million euros on Fond Of GmbH, a company based in Cologne, on account of vertical price fixing. Fond Of specialises in the development and manufacture of school backpacks and school bags under the brand names “ergobag” and “Satch”. The company is accused of having restricted the pricing of school bags and school backpacks sold by retailers cooperating with the company. Read more.
Since December 2020 Chinese antitrust enforcement has become visible to a larger audience. Some in the Chinese antitrust community have even identified a “new area.”  A number of speeches by the country’s top leadership over the past few months – including a key speech in December 2020 – have indicated high-level support and may have... Read more.
Antitrust enforcement is not a panacea. Without regulatory reform, distortions of competition will remain in pharmaceutical markets. Read more.
Yesterday, the FTC announced certain changes in response to the continuing “massive surge” in HSR filings. See Reforming the Pre-Filing Process for... Read more.
John Kwoka and Spencer Weber Waller
Fix It or Forget It: A “No-Remedies” Policy for Merger Enforcement - The inherent limitations of remedies as a method of resolving... Read more.
Jonathan B. Baker
Growing market power in the United States today puts a spotlight on our nation’s antitrust laws—the critical policy tool for restoring competition where it is lacking—from airlines and brewing to hospitals and dominant online platforms. But how can these laws be made more effective in this environment? The best guide from the past is Thurman Arnold, President Franklin D. Roosevelt’s longest-serving antitrust enforcer. Read more.
The raising rivals’ costs theory predicts that a vertical merger will create an incentive for the vertically integrated firm to increase input prices to downstream rivals. A simple formula exists to estimate the magnitude of this input price increase. This formula has played a central role in the regulatory evaluation of a number of important recent vertical mergers and is likely to continue to play an important role in the regulatory evaluation of future vertical mergers. The formula requires an estimate of the upstream pass-through rate. Calculation of the upstream pass-through rate is complicated by the fact that prices in many upstream markets are determined by bilateral negotiations, where bargaining power is split between both sides of the market. Thus the manner in which the division of bargaining power affects the upstream pass-through rate must be taken into account. This paper shows that the existing formula for estimating the upstream pass-through rate has some deficiencies and suggests two new formulas for estimating it—depending on the timing of the upstream and downstream pricing decisions. Read more. 
Pablo Ibáñez Colomo
European competition policy is in the midst of a fundamental transformation. The ongoing tectonic movements are in every way comparable in relevance to the modernisation era and the rise of the ‘more economics-based approach’, which took off two decades ago. The winds of change will impact on the substantive aspects of the law, the institutions through which it is enforced and the very philosophy underpinning the system. The implications are not easy to calibrate at present, but the direction of travel is clear. Over the past 20 years, enforcement has been marked by caution and the emphasis on the specific circumstances of each case. By contrast, the emerging ethos favours fast and decisive action to match the pace of change in online markets. In relative terms, this new incarnation of competition policy is less concerned with minimising errors. In addition, it does not seem to shy away from the administration of complex remedies—the very remedies that had long been confined to exceptional circumstances. Read more.
Christopher S. Yoo
My colleague, Herbert Hovenkamp, is almost universally recognized as the most cited and the most authoritative US antitrust scholar. Among his many honors, his status as the senior author of the authoritative Areeda and Hovenkamp treatise makes him the unquestioned leader of the New Harvard School, which has long served as the bellwether for how courts are likely to resolve emerging issues in modern antitrust doctrine. Unfortunately, its defining tenets and its positions on emerging issues remain surprisingly obscure. My contribution to this festschrift explores the core commitments that distinguish the New Harvard School from other approaches to antitrust. It then explores Hovenkamp’s scholarship on key issues, including tying, the neo-Brandeisian/hipster antitrust movement, and digital platforms. A better understanding of Hovenkamp’s work and the New Harvard School should prove invaluable to anyone wishing to understand antitrust’s likely future. Read more.
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