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J Gregory Sidak

J Gregory Sidak

Criterion Economics LLC1717 K Street, N WSuite 900WashingtonDistrict of ColumbiaUSA20006
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Thought Leader

WWL Ranking: Thought Leader

WWL says

Gregory Sidak “always does an excellent job”, praise peers who “would definitely recommend him” for his adept handling of damages valuations in contentious proceedings.

Questions & Answers

Economist and lawyer J Gregory Sidak is the founder and chairman of Criterion Economics. A prolific author on antitrust, intellectual property, regulation and constitutional law, he co-founded the Journal of Competition Law & Economics (Oxford University Press) and publishes the Criterion Journal on Innovation. He testifies as an expert economic witness throughout the world, and his writings have been cited by the US Supreme Court, the European Commission and other governmental bodies.

Being both an economist and a lawyer, how have you combined those two disciplines in your career?

I founded Criterion Economics in 1999 after nearly two decades of a career focused on economic analysis of law. I started doing serious economic research on antitrust policy while in college. While 25 and still a student at Stanford, I co-authored an econometric analysis of antitrust enforcement in the Journal of Political Economy, the premiere economic journal published by the University of Chicago.

After leaving law school and economics graduate school at Stanford, I became Judge Richard Posner’s first law clerk at the Seventh Circuit. As a 28-year-old associate at O’Melveny & Myers, I published an article in the Columbia Law Review on predatory innovation, which the Supreme Court cited the following year in Jefferson Parish. By 30, I had moved to Washington to join the senior staff of the Council of Economic Advisers (CEA) in the Executive Office of the President. There, my portfolio included antitrust, regulation, intellectual property and corporate governance, and I represented the CEA in working groups of the Economic Policy Council, which prepared option memos for the President on such matters.

The chairman of the CEA liked my writing and entrusted me to draft President Reagan’s introduction to the 1987 Economic Report of the President. At 32, I became deputy general counsel of the Federal Communications Commission (FCC) and oversaw 50 lawyers. After the Reagan administration, I practised antitrust, regulatory and appellate law with Covington & Burling.

At 36, I became a resident scholar at the American Enterprise Institute for Public Policy Research (AEI), where I stayed for 13 years and wrote six books. I founded and directed AEI’s Studies in Telecommunications Deregulation and became the first holder of AEI’s F. K. Weyerhaeuser Chair in Law and Economics. From 1993 to 1999, while at AEI, I was also a senior lecturer at the Yale School of Management, where I taught courses on regulation and competitive strategy in the telecommunications sector with Dean Paul W MacAvoy.

How did your economic consulting practice begin?

In 1993, the Regional Bell Operating Companies asked me to outline the content and oversee the production of expert economic reports that would support their intended motion to vacate the line-of-business restrictions in the AT&T divestiture decree.

The project encompassed more than 40 witnesses, including four Nobel laureates. After that, my consulting practice grew quickly, and I myself began testifying as an economic expert in matters in the Americas, Europe, Asia and the Pacific. I have also advised the Antitrust Division of the US Department of Justice and the Competition Bureau in Canada.

What is your forte?

Conceptualising and producing expert economic evidence essential to executing a legal strategy that will directly influence a company’s enterprise value.

What is a typical engagement?

My typical engagement arises from a disruptive technological change that poses a major strategic risk or opportunity, that overlaps jurisdictions, and that implicates novel questions of law and economics. In recent years, I have worked extensively on antitrust, IP and contract questions concerning the licensing of standard essential patents (SEPs) on fair, reasonable and nondiscriminatory (FRAND) terms, largely but not exclusively with respect to smartphones and other mobile communication devices. I have written literally thousands of pages on the economic analysis of these legal questions.

Previous matters in technologically dynamic industries have included the AT&T divestiture; access pricing in network industries; the Microsoft antitrust case; the patent-licensing dispute between Qualcomm and Apple; the implementation of the Telecommunications Act of 1996 in the United States and analogous laws in other countries; the recovery of stranded costs arising from the regulatory restructuring of the electric power industry; net neutrality regulation of the internet; IP involving the smart grid, mobile communications and medical devices; and arbitrations concerning joint ventures and technology transfers that have soured.

I have deep experience in telecommunications, media, software, internet, networks and technology. With William Baumol, I wrote Toward Competition in Local Telephony, and with Dan Spulber, I wrote Deregulatory Takings and the Regulatory Contract: The Competitive Transformation of Network Industries in the United States. Both books have been widely cited by courts and scholars. I have considerable experience analysing regulatory transitions, price regulation, and cost recovery in network industries, such as the telecommunications, energy and postal sectors. Since the early 1980s, I have also worked on questions of dynamic competition, innovation and the overlap of antitrust and intellectual property law.

My training and professional experiences have enabled me to spot connections that cut across antitrust law, IP law, regulatory law, administrative law and constitutional law. One recent example is the opportunity to use hedonic price analysis to compute FRAND royalties for SEPs practiced in multicomponent products, like smartphones. Or recognising the relevance of the economic theory of tournaments or the market-design principles that underlie spectrum auctions to provide fresh insights into the efficient licensing of standard essential technology. Or, because I have deep experience in matters of rate design in regulated industries, understanding the folly of a federal court’s recent imposition of a regime of reverse Ramsey pricing as an injunctive remedy in a monopolisation case concerning standard essential technologies.

What distinguishes your work as an economic witness?

I view my work not only as the economic analysis of competition, but also the economic analysis of legal rules. I bring practical insight to those tasks since I have practiced law in major firms and as the deputy general counsel of a large regulatory agency before launching a career in economic consulting and testifying.

In addition, as a scholar, I have a completely separate body of work on administrative law, separation of powers, and other constitutional topics, which has been widely cited by courts, scholars and government agencies; it is not what I do these days much, but it certainly infuses my framing of expert economic arguments that are intended to supply evidence with which a court or agency will make some dispositive legal determination.

Consequently, I understand the legal principles and institutions within which I must render my economic opinions to make them relevant and helpful under the Federal Rules of Evidence.

Given your professional experience in both law and economics, do you have a different style of writing and testifying from other economic experts?

I believe so. Because I am experienced at writing briefs, I have developed the ability to write quickly yet precisely. I tailor my reports to an audience of decision makers who are almost invariably lawyers. Consequently, outside counsel with whom I work typically find that I complete drafts very quickly and that my economic analysis is already framed in terms of answering the question of economic fact that the judge or jury faces.

For example, on short notice, AT&T once asked me to write an amicus brief of economists in support of certiorari in linkLine. I am of the view that an amicus brief that merely repeats a party’s arguments wastes paper, ink and the court’s time. In linkLine, the challenge was to get four votes for cert, since it was obvious (to me at least) that the Supreme Court would certainly reverse if the Justices took the case. My strategy was to appeal to the conservatives and to Justice Breyer by arguing that the Ninth Circuit was more simpatico with the European Union’s solicitude for competitor welfare than with either the Supreme Court’s modern antitrust jurisprudence or Justice Breyer’s Town of Concord decision on margin squeeze when he sat on the First Circuit (which the Ninth Circuit ignored), such that it was high time to put Judge Learned Hand’s reasoning in Alcoa out to pasture.

I worked through the middle of the night from a hotel room in Milan over the span of two days. My late colleague from the American Enterprise Institute, Judge Robert Bork, joined me as co-counsel on the completed brief. The brief infuriated some distinguished economists in Europe and Cambridge, Massachusetts. But the Court granted cert as hoped, and AT&T began its merits brief by quoting some soaring words from our amicus brief in support of cert. Then, on the merits, the Court adopted the recommendation to abolish the margin squeeze as a cause of action under antitrust law and in a footnote respectfully lay Alcoa to rest.

How did you hone your skills as a writer on economic questions?

By starting early. I have written academic articles and books on antitrust or other law-and-economics topics for 40 years. Dick Posner taught me how to write quickly.

What have been the most enjoyable moments in your work?

Being deposed when I served as Judge Posner’s court-appointed neutral economic expert under Federal Rule of Evidence 706. I might be the only person who can say he was defended in a deposition by Dick Posner. Another memorable experience was being cross-examined by a Queen’s Counsel in an international commercial arbitration in The Hague – the repartee was like a game of speed chess. You cannot script that kind of performance ahead of time. It needs to flow spontaneously.

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WWL Ranking: Thought Leader
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