Aftermarkets in Systems Competition


2006 Invitational Symposium, 20 Jun 2006, The Future of Aftermarkets in Systems Competition, sponsored by the American Antitrust Institute

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Date: Mon, 1 May 2006 13:30:01 -0400
From: "Gundlach, Gregory" <>

American Antitrust Institute
2006 Invitational Symposium

The Future of Aftermarkets in Systems Competition

On Monday, June 20, 2006, the American Antitrust Institute ( will sponsor a multidisciplinary invitational symposium at the National Press Club (14th and E Streets, NW, Washington, DC) on “The Future of Aftermarkets in Systems Competition.”  Invited papers presented at the symposium will be published by the Antitrust Bulletin.  The symposium will feature leading academics, antitrust experts and knowledgeable industry practitioners (see program below).  For information, please contact Bert Foer, or

Who should consider attending?  The symposium should appeal to those in marketing with an interest in consumer behavior and marketer practices with respect to product complements and systems.  In addition, those with an interest in intercategory product relationships, dynamic market environments and strategic thinking, feedback effects, network externalities and associated phenomenon should find the symposium appealing.  Focus will be given to applying these and other insights from marketing and economics for the understanding of competition policy issues in aftermarkets and other circumstances involving product systems.

What are “aftermarkets?”  Aftermarkets (also called “secondary markets”) comprise complementary products (or “secondary products”) that are purchased subsequent to the purchase of another product (the “primary product”) to which it relates. Common examples may be found in markets for durable goods (i.e., automobiles and repair parts and services) as well as consumables (i.e., printers/photocopiers and ink cartridges).  In addition to “intrasystem” competition between different primary or secondary product providers, producers of primary and secondary product combinations also compete with one another (i.e., “inter-system” competition). System-related competition issues can arise when a supplier of a primary product attempts to reserve the secondary market for itself or when a supplier of a primary and secondary product in the form of an integrated system attempts to reserve the entire system for itself. Depending on the circumstances, antitrust concerns may result.

Why are aftermarkets important for antitrust?  The choice of “aftermarkets” for AAI’s 2006 symposium was generally prompted by current developments in technology, standard-setting, and intellectual property that are redefining aftermarkets issues. These developments threaten substantially to curtail or eliminate intra-system related competition within aftermarkets through inhibiting the ability of competing aftermarket providers to offer a competitive alternative to parts and services available from the original manufacturer.

Because aftermarket questions often involve allegations of monopoly (i.e., single firm) abuse, three on-going events give the topic particular currency. First, the Antitrust Modernization Commission is about to begin its debates on a variety of antitrust topics, including standards relating to single-firm conduct. Second, the Federal Trade Commission and Department of Justice are about to launch a high profile series of joint public hearings on single-firm conduct. And third, the European Commission is considering guidelines for dealing with abuse of dominance and the EC’s landmark discussion paper contains a separate section on the treatment of aftermarkets.

There are a number of industries that provide strong examples of current aftermarket issues, all of which should be good subjects for discussion. In automobiles, for example, original equipment manufacturers (OEMs) are increasingly using patents and copyrights to encumber independent repair and service competitors’ access to technical interfaces, software, documentation, and other aftermarket technologies. In the automated teller machine market, new encryption standards will require the replacement or retrofit of ATM machines. However, OEMs may seek to restrict competing aftermarket providers’ access to the software and security necessary to service the new generation ATMs. Aftermarket issues also arise in the aftermath of the Supreme Court’s Independent Ink opinion relating specifically to ink refills for printing equipment, but more generally to a patent-holder’s ability to utilize its intellectual property rights to foreclose aftermarket competitors.

The foregoing developments in aftermarkets possess the potential of restricting competition through increasing the costs of independent providers attempting to gain access to OEM parts and specifications. Diminished competition in aftermarkets may inflict harm on businesses and their employees and place consumers at the mercy of integrated system or network proprietors. Once consumers adopt a particular integrated network or system, they will not be able to control the cost or quality of repairs or replacement parts. And while there may be options to switch to a competing system, this will frequently be unrealistic due to sunk investments, switching costs, and the potential loss of the benefits of system compatibility that lock in consumers.  The symposium will focus on a number of issues and topics that are important for developing and shaping competition policy

Limited seating.  Because the day is structured with the intent that all who attend will have an opportunity to speak, attendance is limited to a maximum of 70. AAI will attempt to assure that a wide range of stakeholders are represented. If you would like to attend, please send an e-mail to AAI President Bert Foer at or Greg Gundlach at providing a brief statement of your interests in the topic. Because of the generosity of our co-sponsors, there is no charge for attendance or for the lunch.

Sponsors.  Co-Sponsors with the American Antitrust Institute, The Antitrust Bulletin; Computer & Communications Industry Association; CRA International; Independent Ink, Inc.; Certified Automotive Parts Association; Financial & Security Products Association; and Robert Clarke Industries.

American Antitrust Institute
2006 Invitational Symposium

The Future of Aftermarkets in Systems Competition

Framing the Day (8:45-9:30)

  • Welcome by Albert Foer  – President, American Antitrust Institute
  • Aftermarkets, Systems, and Antitrust – Gregory Gundlach, Visiting Eminent Scholar of Wholesaling, University of North Florida

Illustrative Industry Profiles (9:30-12:30) [15 min + 5 Q&A ]

  • Re-filling ink – Ranganathan Nk, Executive VP &  C.O.O, Independent Ink Inc.
  • Servicing ATM machines – John Vrabec, Executive Director, Financial & Security Products Association
  • Reselling Credit Reports – Terry Clemans, Executive Director, National Credit Reporting Association

Break (10:40-10:55)

TBD (10:55-11:15)

Focus on Automobile Aftermarkets  (11:15-12:15)

  • Supplying Auto Crash Parts – Jack Gillis, Executive Director, Certified Automotive Parts Association
  • Servicing Autos – Robert Clarke, President, Clarke Automotive Systems)
  • Auto manufacturer industry spokesperson TBD
  • Discussion

The Law of Aftermarkets (12:15- 12:45)

  • Aftermarket Law – Joseph Bauer, Professor of Law, University of Notre Dame Law School

Luncheon and Speaker (12:45- 2:00)

  • The Global Debate on Monopolization: Where Aftermarkets Fit – Eleanor Fox, Walter J. Derenberg Professor of Trade Regulation, New York University Law School

Perspectives From Economics and Marketing (2:15-3:45)

  • Economics of Aftermarkets – Joseph Farrell, Professor of Economics, University of California at Berkeley
  • Consumer Insights – Peter Dickson, Knight Ridder Eminent Scholar Chair in Global Marketing, College of Business Administration, Florida International University
  • Marketer Insights – Allan Shocker, Visiting Professor of Marketing, Graduate School of Management, University of California at Davis

Facilitated Discussion (3:45-5:30)

  • Foer and Gundlach

For information, please contact Bert Foer, or