Competition Economics provides economic research and consulting services to law firms, corporations, and government agencies. The focus of our research and consulting is in four practice areas: antitrust, damages, intellectual property, and regulation.
Our directors and academic affiliates are distinguished experts in their respective fields and testify with authority on complex issues arising in business litigation and regulation in the United States and around the world.
Competition Economics Director Dr. Michael A. Williams assists $504.5 million settlement agreement in an antitrust class action over the ISDAfix
Competition Economics Director Dr. Michael A. Williams assisted in a $504.5 million settlement agreement in an antitrust class action over the ISDAfix.
Several pension funds and municipalities had accused 14 large investment banks of conspiring to manipulate the benchmark rate known as ISDAfix to benefit their own trading positions. The ISDAfix is a key interest rate benchmark in the global derivatives market. In addition, the case alleged that the broker ICAP assisted in the manipulation to earn brokerage commissions. The period of alleged misconduct spans from 2006 to 2014.
The case is noteworthy because the amount recovered for the class, over $500 million, is one of the most significant recoveries in an antitrust class action proceeding.
The case is Alaska Electrical Pension Fund et al v. Bank of America NA et al, at the U.S. District Court, Southern District of York, case no. 14-07126.
The Plaintiffs were represented by Scott & Scott Attorneys at Law LLP, Quinn Emanual Urquhart & Sullivan LLP, and Robbins Geller Rudman & Dowd LLP.
CE Consultant Ellen Li, and co-authors Elena Krasnokutskaya and Petra Todd to publish an upcoming article entitled “Product Choice under Government Regulation: The Case of Chile’s Privatized Pension System” in the International Economic Review
Chile’s long-running individual retirement pension accounts system has been a model for many countries in the world. To limit the riskiness of pension investments, Chile introduced a minimum return regulation that required pension fund management firms to deliver returns that are not more than two percent below of the industry average. This paper develops and estimates an equilibrium model of the pension market and uses the model to understand how minimum return regulation affects this industry. We find that the regulation leads to higher consumer demand for riskier investment products and creates incentives for pension managers to offer riskier portfolios. Hence, contrary to the original intent, such regulation results in higher overall riskiness of pension investments. Moreover, the cost imposed on the industry by this regulation leads to higher pension management fees. Nevertheless, we find that the regulation stimulates balance accumulation which, despite higher risk, ultimately reduces reliance upon government pension support.
CE Director Professor Simon J. Wilkie, Professor Melanie Stallings Williams, CE Director Dr. Michael A. Williams, CE Principal Wei Zhao, and Christopher Burke, Stephanie Hackett and David Mitchell to publish an upcoming article entitled “Masters of the Universe: Bid Rigging by Private Equity Firms in Multibillion Dollar LBOs” in the University of Cincinnati Law Review
CE Director Professor Simon J. Wilkie, Professor Melanie Stallings Williams, CE Director Dr. Michael A. Williams, CE Principal Wei Zhao, and Christopher Burke, Stephanie Hackett and David Mitchell to publish an upcoming article entitled “Masters of the Universe: Bid Rigging by Private Equity Firms in Multibillion Dollar LBOs” in the University of Cincinnati Law Review.
The article analyzes aspects of a case involving a shareholder class of investors with antitrust claims against the world’s largest private equity (“PE”) firms. The Dahl v. Bain Capital Partners, LLC case began in 2007 when a proposed class of shareholders alleged that the world’s largest PE firms had violated the Sherman Act, 15 U.S.C. §1, by conspiring to suppress the prices paid to shareholders in several large leveraged buyouts (“LBOs”). After nearly seven years of litigation, in 2014, the shareholder class settled their antitrust claims for an agreed payment of $590.5 million.
The Dahl case extends the use of economic analysis, and specifically auction theory, in antitrust matters, including class action cases. Dahl was not an ordinary case in that it did not involve either a commodity or a sellers’ cartel. Instead, it involved a buyers’ cartel which, plaintiffs alleged, conspired to drive down the price of a number of unique, large LBOs during the mid-2000’s. The case was also notable because of the Plaintiffs’ decision to use auction theory to demonstrate both the existence of antitrust violations and the extent of damages. In particular, the Dahl case extends the use of economic analysis in antitrust by using auction theory to (1) specify and empirically test plus factors used to evaluate the likelihood of collusion; (2) provide a methodology utilizing evidence common to class members to demonstrate that members of a proposed class incurred a common impact as a result of the alleged collusive conduct; and (3) provide a methodology based on generally accepted economics that can be used reliably to quantify class-wide damages.
CE Academic Affiliate Professor Justine Hastings and CE Director Dr. Michael A. Williams to publish an upcoming article entitled “Market Share Liability: Lessons from New Hampshire v. Exxon Mobil” in the Journal of Environmental Law and Litigation
Competition Economics Academic Affiliate Professor Justine Hastings and Competition Economics Director Dr. Michael A. Williams to publish an upcoming article entitled “Market Share Liability: Lessons from New Hampshire v. Exxon Mobil” in the Journal of Environmental Law and Litigation.
Economics teaches that firms causing “negative externalities” should be taxed or fined to “internalize” the costs they cause, thus ensuring market efficiency. For instance, environmental regulation and remediation requirements can mitigate or prevent negative externalities by forcing firms to internalize the costs of their pollution through the use of monetary penalties for environmental damage.
Negative externalities are pervasive in today’s modern economy. Economic efficiency requires, and public policies attempt to ensure, that polluting firms internalize the costs they impose on society. In many instances, however, tracking a pollutant back to its source can be difficult or impossible. In such circumstances, market share liability may serve as a viable method with which to assign damages. In other circumstances, e.g., global warming litigation, the alternative methodology of substantial causation may better serve that purpose.
The article examines the history of market share liability in litigation involving a number of products, as well as the strengths and weaknesses of market share liability in other areas of product liability litigation. The paper also discusses how market shares can be weighted to reflect the relative damages caused by similar but not identical products.