American Business Law Journal最新文献

The Supreme Court's decision in Pacific Bell Telephone Co. v. linkLine Communications, Inc. removed an important tool from competition regulators’ arsenals. Not only did the Court express skepticism about the existence of a price squeeze cause of action, but it also applied the economically mismatched predatory pricing test to price squeeze cases. Unfortunately, the lack of clarity on linkLine's reach also caused significant confusion in the lower courts. Examining these issues, this article clarifies the distinction between price squeeze and predatory pricing claims, and argues that the second step of the predatory pricing test, probability of recoupment, is inappropriate for price squeeze cases and should either be dropped from the test or replaced with a presumption of recoupment.

This is a dynamic time for insolvency law. Many jurisdictions have made or are considering reforms to their insolvency regimes. The United Kingdom has proposed a new standalone restructuring mechanism that incorporates many attributes of Chapter 11, including a cross-class cram down and the absolute priority rule. A distinctive feature of the UK proposal is the infusion of judicial discretion permitting courts to deviate from the absolute priority rule. This discretion is not permitted in the United States. This judicial discretion addresses a key problem with the application of the absolute priority rule in the United States—it may serve as an impediment to reorganization. This impediment is exacerbated by the recent U.S. Supreme Court decision, Czyzewski v. Jevic Holding Corp., which impacts the effective use of Chapter 11 rescue tools. This article explores the absolute priority rule, the problems associated with it, and the effect of Jevic in the United States. Drawing on the UK reform proposal, I argue that the United States should implement reforms that infuse judicial discretion into the application of the absolute priority rule. Doing so will facilitate the underlying policy goal of rescuing the company in Chapter 11 and also promote a broader policy goal of rescuing the business.

Because federal law does not expressly prohibit employment discrimination on the basis of sexual orientation or gender identity, LGBTQ Americans were thrilled to learn that a preliminary draft of the United States–Mexico–Canada Agreement (USMCA) included a provision (the Provision) requiring each nation to enact LGBTQ-inclusive nondiscrimination laws. That excitement promptly turned to despair, however, after the Trump administration insisted on the addition of a footnote (the Footnote) designed to exempt the United States from the Provision. To date, the Footnote has been derided by scholars and trade experts alike as a transparent attempt to evade the Provision's LGBTQ-inclusive mandate. Yet, by focusing only on what the USMCA does not do, these analyses overlook what the agreement does do, even if unintended, to benefit LGBTQ Americans. This article provides the first comprehensive analysis of the USMCA's implications for federal antidiscrimination law and demonstrates that—regardless of how the Supreme Court rules in a trio of LGBTQ employment cases—the Footnote actually stands to help, not hinder, the cause of LGBTQ equality.

It is well understood that the exchange of information between horizontal competitors can violate competition law provisions in both the European Union (EU) and the United States, namely, article 101 of the Treaty on the Functioning of the European Union and section 1 of the Sherman Act. However, despite ostensible similarities between EU and U.S. antitrust law concerning interfirm information exchange, substantial differences remain. In this article, we make a normative argument for the U.S. antitrust regime's approach, on the basis that the United States’ approach to information exchange is likely to be more efficient than the relevant approach under the EU competition regime. Using economic theories of harm concerning information exchange to understand the imposition of liability in relation to “stand-alone” instances of information exchange, we argue that such liability must be grounded on the conception of a prophylactic rule. We characterize this rule as a form of ex ante regulation and explain why it has no ex post counterpart in antitrust law. In contrast to the U.S. antitrust regime, we argue that the implementation of such a rule pursuant to EU competition law leads to higher error costs without a significant reduction in regulatory costs. As a majority of jurisdictions have competition law regimes that resemble EU competition law more closely than U.S. antitrust law, our thesis has important implications for competition regimes around the world.

This article uses the context of daily fantasy sports (DFS) to analyze how companies use strategic categorization in regulatory arbitrage. Recent actions by two leaders in the DFS industry, DraftKings and FanDuel, provide an ideal context to study this issue. DraftKings and FanDuel categorized themselves differently to different audiences at different times in a manner that evaded categorization as an illegal gambling activity, only to then dominate the sports betting market after the Supreme Court's decision in Murphy v. NCAA. We examine how this type of strategic categorization, which we call “fluid categorization,” raises important questions for regulators and others concerned with regulatory arbitrage. We also explore how fluid categorization provides lessons for other businesses. While this article has broad implications for the sports gambling marketplace, it also contributes to meaningful discourse for the broader business community, as its findings are relevant to industries beyond DFS that offer gray market products and seek to fight categorical labels until there is a reclassification event.

For most of its modern history, antitrust law distinguished between normal competition and monopolization by looking for merit, legitimate business justifications, or efficiencies in the challenged business conduct. These proxies were seen as appropriate because they served antitrust law's welfare objectives well. However, the universal adoption of these proxies has overshadowed significant shortcomings, chief among them being that firms do not think in terms of legitimate business justifications or efficiencies, but rather in terms of long-term sustainability and appropriation of value. As a result, antitrust law becomes detached from the very subjects it purports to regulate. Against the backdrop of the recent resurgence of enforcement activity, particularly involving tech giants, this article attempts a conceptualization of monopolization that does not revolve around merit in any form or function. Instead it introduces the proxy of commonness of business practices to determine their legality. This helps highlight the importance of considering “how things are done” in the relevant market, and helps reground antitrust law in business realities, which can enhance the heuristic mechanism of distinguishing between normal and anticompetitive practices. To prove this point the article develops an error test framework, through which it compares current tests with the proposed test in terms of their error footprint and concludes that the integration of the commonness parameter delivers better results. Ultimately, the inquiry undertaken herein is not only about constructing a conception of normal competition different from the only standard we currently have, that is, variants of merit, but also about shifting the conversation from how to fine-tune existing standards to how to capture a more complete conception of competition.

Historically, intellectual property (IP) owners could rely on injunctive remedies to prevent continued infringement. The Supreme Court's eBay v. MercExchange decision changed this, however. After eBay, patent courts no longer apply presumptions that push the deliberative scales in favor of injunctions (or “property rule” protection). Instead, patent injunctions require a careful four-factor analysis, where plaintiffs must demonstrate irreparable injury (i.e., that money damages cannot compensate). Without question, eBay has made it harder for patent plaintiffs to secure injunctions, and has led many district courts to consider innovation policy concerns (e.g., the strategic behavior of patent “troll” plaintiffs) in the injunction calculus. By and large, courts’ more deliberative approach to patent injunctions post-eBay has been viewed as beneficial for the patent system.

Over the past decade, eBay’s influence has migrated to other areas of IP. This article offers the first account of eBay’s impact on federal trade secrecy injunctions. Important differences between trade secret law and other areas of IP—for example, the hard-to-quantify risk that disclosure poses to trade secret owners—has lessened eBay’s influence on trade secrecy injunctions. This article argues that disclosure risks justify a bifurcated approach to trade secrecy injunctions. That is, in cases involving the dissemination of trade secrets, courts should presume irreparable injury in the injunction calculus. However, in cases involving the unauthorized use of a trade secret—that is, where a defendant builds upon a plaintiff's trade secret but does not disseminate it—courts should not presume irreparable harm and, instead, should apply the eBay framework. As part of this assessment, courts should consider policy concerns related to cumulative innovation and employee mobility.

In the Industrial Revolution, machines took on the burden of physical labor; in the Big Data Revolution, machines are taking on the tasks of making decisions. Algorithms are the rules and processes that enable machines to make those decisions. Machines will make many decisions that affect general well-being. This article addresses a threat to the efficacy of those decisions: the intentional distortion or manipulation of the underlying algorithm so that machines make decisions that benefit self-interested third parties, rather than decisions that enhance public well-being. That threat has not been recognized or addressed by legal thinkers or policy makers. This article first examines the lifecycle of an algorithm, and then demonstrates the likelihood that self-interested third parties will attempt to corrupt the development and operation of algorithms. The article then argues that existing mechanisms cannot protect the integrity of algorithms. The article concludes with a discussion of policies that could protect the integrity of algorithms: transparency in both the development of and the content of algorithms that affect general well-being and holding persons who corrupt the integrity of such algorithms accountable. Just as the Industrial Revolution eventually improved the quality of life for many, so too does the Big Data Revolution offer enhancement of general well-being. That promise, however, will only be realized if policy makers take action to protect the integrity of underlying algorithms now, at the beginning of the revolution.

Behavioral scientists boast that their insights have increased savings in 401(k) plans. Evidence shows that careful use of default decision settings and nudges can prevent decisional errors and encourage behavior that aligns with public policy while retaining individual power of choice. Indeed, even the Swedish National Academy of Sciences highlighted the effect of his behavioral science work on retirement savings when it awarded the 2017 Nobel Prize in economics to Professor Richard Thaler. This article shows, though, that, unlike the three plan default settings attributed to behavioral science insights, the default setting that I term automatic retention fails. That failure means too many savers take affirmative actions to move (rollover) assets from their 401(k) plans to individual retirement accounts (IRAs). Primarily because of rollovers, IRAs hold more than 11.5% of U.S. household financial assets. However, usually the decision to roll over is not an optimal choice for the saver. This last mile problem undermines the goal of the first three default settings to help employees build long-term retirement savings. This article examines research on what causes default settings to be slippery, as is the case for automatic retention, instead of sticky, as is the case for the other 401(k) default settings. It then evaluates three categories of potential interventions to mitigate the popularity of rollovers: aggressive regulation, expansion of fiduciary obligation, and use of incremental impeding altering rules. It concludes that adoption of incremental impeding altering rules would be both politically feasible and effective in increasing the stickiness of the automatic retention default setting.