The Alignment of Evidence and Economic Theory in FTC v. Qualcomm: A Response to Ginsburg & Wright By Joseph Kattan & Timothy J. Muris (Gibson, Dunn & Crutcher; Sidley Austin)1
In a recent post on CPI Journal’s Blog O’ Blogs, Judge Douglas Ginsburg and Professor Joshua Wright criticize the expert testimony of Professor Carl Shapiro in the FTC’s case against Qualcomm.2 Ginsburg & Wright contend that Shapiro’s Nash bargaining model was “based upon assumptions that are contrary to real-world evidence and  does not robustly or persuasively identify anticompetitive effects.”3 Ginsburg & Wright avoid criticizing Shapiro’s model itself, focusing entirely on the alleged lack of evidentiary support for it. Curiously, however, their post does not discuss any of the evidence presented by the witnesses who testified at the trial. We have reviewed the trial record, and the evidence it contains supports Shapiro’s testimony overwhelmingly.
Before we begin, let us clear the air on one critical point. We agree with Ginsburg & Wright that liability for monopolization should be based on proof of anticompetitive effects. The two assert that one of us (Muris) “would apparently find it sufficient merely to allege a theoretical ‘ability to manipulate the marketplace,’”4 but the article that they cite5 actually affirms both the need for and the existence of evidence of anticompetitive effects in the Qualcomm case. Let there be no doubt....