Digital Antitrust (Law 276.45)

Stephen M. Maurer and Suzanne Scotchmer


Spring 2011, Wednesday 3:35-6:15, Room 145 Law School


Office Hours: Maurer Thurs 9-11, Scotchmer Tues 9-11


Description: The course will prepare students for for an antitrust practice in the digital economy, especially as it relates to intellectual property. Topics will include net neutrality, search advertising, platform competition, proprietary interfaces, network effects, commercial open source, new media.


Requirement: The course requirement is to attend every class, participate in discussion, and write five short comments providing a legal/economic analysis of an assigned reading so that you can take a leadership role in class discussion. Go to bspace and sign up for written discussion related to five topics, using the Wiki.


Prerequisites: None. We will teach the economics needed to make arguments in this territory. The course is self-contained, but it is useful to have taken the basic antitrust course.




1. Introduction: What is special about the digital economy? Natural monopoly, Network effects, Schumpeterian Competition, Public Goods.


Chapter 7 of Information Rules Shapiro and Varian

Suzanne Scotchmer, Innovation and Incentives (2006) Chapter 10.

SHERMAN ACT 1: Agreements in Restraint of Trade

2. Physical Networks: Internet Service Providers and Open Access


N. Economides, Economics of the Internet Backbone, (up to page 401) in S.K. Majumdar, Ingo Vogelsang & Martin Cave (eds.), 2 Handbook of Telecommunications Economics 373. (2005)

A. Compart. Jan 10, 20100. The Hard Sell: American leads the battle to change how flights are sold, but resistance is fierce. Aviation Week & Space Technology.

Discussion questions

3. Network Effects: Tying

U.S. v. Microsoft 253 F3d 34 (DC Cir 2001)

suggested resource: Nalebuff, Bundling, Tying and Portfolio Effects and Case Studies

Discussion questions

4. Network Effects: Standard Setting and FRAND


Rambus v. Federal Trade Comm n, 522 F.3d 456 (DC Cir 2008).

Qualcomm v. Broadcom, 548 F.3d 1004 (Fed Cir 2008)

Broadcom v. Qualcomm, 501 F.3d 314 (3rd Cir 2007).

Damine Geradin, Standardization and technological innovation: Some reflections on ex ante licensing, FRAND, and the proper means to reward innovators. (2006).

Richard Gilbert, Deal or No Deal? Licensing Negotiations by Standards Development Organizations (2010)

Herbert Hovencamp, Patent Deception in Standard Setting: The Case for Antitrust Policy.

Discussion questions

5. Network Effects: Merger Policy

Federal Trade Commision Statement of the Commission Concerning Google/AdMob (May 21, 2010).

Federal Trade Commission Statement of Federal Trade Commission Concerning Google/DoubleClick and Dissenting and Concurring Statements. (Dec. 20 2007)

Texas AG Probing Google s Searches, Wall Street Journal (Sept. 3 2010)

Travel Sites Ally to Block Google Deal, Wall Street Journal (Oct. 25, 2010)

Discussion questions

6. Licensing, pools, and grantback clauses.

Suzanne Scotchmer, Innovation and Incentives (2006), Ch. 6

Discussion questions

7. Open Source and GPL

Wallace v. International Bus. Mach. Corp., (7th Cir .2006) 467 F.3d 1104

S.M. Maurer, The Penguin and the Cartel: Rethinking Antitrust and Innovation Policy for the Age of Commercial Open Source, SSRN No. 1652292

Schwarz and Takhteyev, Half a Century of Public Software Institutions: Open Source as a Solution to the Holdup Problem and Overview

Discussion questions

SHERMAN ACT 2: Monopolization

8. Monopolization: Elements, Exclusive Dealing, .Deceptive Practices. Copyright and Innovation Defenses.


U.S. v. Microsoft 253 F3d 34 (DC Cir 2001) v. Google Inc. Complaint dated Feb 17, 2009 (2009 WL 455244)

BBC: European Commission launches antitrust probe into Google

Discussion questions

9. Natural Monopoly: Google Books


Pam Samuelson, Google Book Search and the future of Books in Cyberspace

Paul Courant. Economists Voice, Vol. 6 2009. The Stakes in the Google book Search Settlement

Department of Justice Statement of Interest

Discussion questions

10. Essential Facilities:

Intergraph Corp. v. Intel Corp., 195 F.3d 1346; Fed. Cir. 1999)

Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 US 398 (2004)

Recommended: Microsoft v. Commission 2007 E.C.R. II-3601 (Ct. First Instance) (CFI Decision 2007).

Pacific Bell Tel. Co. v. Linkline Comms., Inc., 129 S.Ct. 1109 (2009).

Pitofsky, Patterson and Hooks, The Essential Facilities Doctrine under U.S. Antitrust Law , 70 Antitrust L.J. 443 2002-2003

Ahlborn, C. and D. Evans, The Microsoft Judgment and its Implications, Antitrust L. J. 75:

Pierre Larouche, The European Microsoft Case at the Crossroads of Innovation and Competition Policy, Antitrust L. J. 75: 993.

Discussion questions

11. Network Neutrality

Economides, N. Net Neutrality, Non-Discrimination and Digital Distribution of Content Through the Internet. 4 I/S: J. Law & Policy 209 (2009).

H. Shelanski, Network Neutrality: Regulating With More Questions Than Answers, 6 J. on Telecomm. & High Tech. L. 23

Discussion questions


12. Relief

Howard A. Shelanski and J. Gregory Sidak, Antitrust Divestiture in Network Industries, 68 U. Chi. L. Rev. 1 (2001)

Nicholas Economides and Ioannis Lianos, A Critical Appraisal of Remedies in the E.U. Microsoft Cases, 2010 Colum. Bus. L. Rev. 346

Massachusetts v. Microsoft Corp., 373 F.3d 1199 (DC Cir. 2004)

Discussion questions

13. Extraterritoriality

Andrew Guzman, Choice of Law: New Foundations, 90 Geo. L.J. 883 (2002)

Discussion questions

14. Hot news

National Basketball Assn v. Motorola, 105 F.3d 841 (2nd Cir 1997)

Deutsch, Kasi, Omar, Publishers increasingly invoke hot news doctrine. National Law Journal May 17, 2010, at 22.

James Boyle Hot news: The next bad thing. Financial Times, March 2010

Discussion questions

15. Review and overflow