J. Gregory Sidak
An Antitrust Rule for
Software Integration
What is the proper
legal standard for product integration involving software? Because software is
subject to low marginal costs, network effects, and rapid technological
innovation, the Supreme Court’s existing antitrust rules on tying arrangements,
which evolved from industries not possessing such characteristics, are
inappropriate. In this Article, I ask why firms integrate software products.
Next, I review the Supreme Court’s tying decisions in Jefferson Parish and
Eastman Kodak. I propose an approach to judging the lawfulness of product
integration in technologically dynamic markets that supplements the Supreme
Court’s current standard with four additional steps in cases of tying of
computer software. Thereafter, I examine
the D.C. Circuit’s approach to software integration, which arose from that
court’s 1998 interpretation, in Microsoft II, of an antitrust consent decree
between the U.S. Department of Justice and Microsoft Corporation. I argue that
the D.C. Circuit’s rule has general applicability and should be recognized as
the appropriate standard for software integration under antitrust law. I
show how my approach imparts greater clarity to the D.C. Circuit’s rule. I
examine the competing product integration rule proposed in 2000 by Professor
Lawrence Lessig as amicus curiae in the
government’s subsequent antitrust case against Microsoft, concerning the
integration of Internet Explorer and Windows 98. My approach enables
Professor Lessig’s analysis to be reconciled with the D.C. Circuit’s rule, but
Professor Lessig’s rule, on its own, would contain serious shortcomings.
Thereafter, I evaluate Judge Thomas Penfield Jackson’s April 2000 findings of
law on the integration of Internet Explorer and Windows 98. I conclude that
Judge Jackson’s approach, in contrast to the D.C. Circuit’s rule as refined by
my approach, would harm consumers in the technologically dynamic market for
computer software.
Jeffrey M. Gaba
Regulation by Bootstrap:
Contingent Management of Hazardous Wastes Under the Resource Conservation and
Recovery Act
In the last few years, EPA
has increasingly employed the questionable technique of “contingent management”
to regulate wastes under the federal Resource Conservation and Recovery Act
(RCRA) in order to limit the costs and avoid the stigma of hazardous waste
classification. Through the technique of contingent management, EPA has
exempted materials from classification as hazardous waste on the condition that
the materials are managed in the particular manner specified in the regulation.
The ultimate bootstrap, contingent management allows EPA to regulate
non-hazardous wastes over which it has no statutory jurisdiction. Perhaps more
troubling, contingent management allows EPA to avoid the specific statutory
scheme adopted by Congress for the regulation of hazardous wastes.
Although
one case appears to endorse the use of contingent management, the most
significant issues raised by this technique have not been addressed. The legality
of the contingent management technique is far from clear. Among other things,
EPA is relying on the factors of cost and stigma that may not properly be
considered in classifying wastes as hazardous, and EPA is avoiding specific
statutory requirements that would otherwise apply to hazardous wastes.
Furthermore, the rationale used by EPA to justify contingent management is
essentially boundless; EPA could potentially eliminate the statutory
requirements of RCRA by regulating any otherwise hazardous waste through
contingent management. EPA is, in effect, asserting discretion to regulate such
wastes in any manner it deems appropriate. This is a position rejected by
Congress when it amended RCRA in 1984 to constrain EPA’s discretion. Given
these concerns, courts should closely scrutinize EPA’s use of contingent
management and not defer to EPA’s construction of its authority under RCRA.
After
discussing the rationale and weaknesses of contingent management, this Article
concludes with recommendations for a more rational and consistent means of
classifying and regulating hazardous waste.
Jerry A. Hausman, J. Gregory Sidak, and Hal J. Singer
Residential Demand for
Broadband Telecommunications and Consumer Access to Unaffiliated Internet
Content Providers
In this article, we examine the open access debate in the context of
cable services and broadband Internet services from an antitrust
framework. Our analysis is prompted by
the recent AT&T-MediaOne and AOL-Time Warner mergers, which raise issues
concerning the impact of integrated cable content and Internet access to
residential telecommunications.
Economic analysis, demographic surveys and federal antitrust guidelines
each indicate that the broadband Internet access market is distinct from the
narrowband Internet access market. Emerging or competing technologies, such as
satellite Internet services or digital subscriber lines, cannot discipline the
broadband Internet access market over the relevant time horizons. Vertical integration increases the incentives
and power of cable providers to discriminate against unaffiliated broadband
content, thereby substantially decreasing consumer welfare. We conclude that the recent mergers of cable
content and Internet access is the most current manifestation of the classic
strategy of cable providers to control alternate channels of content
distribution.