Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Where’s the Law? (or Google and the European Commission)

with 2 comments

where

I said to myself I would keep up the promise I made to Alfonso and continue writing in the blog until Nicolas is back or he recovers (which we hope will be very soon) and starts posting notes again (I failed to anticipate that he wouldn´t stop…)

More to the point: as a complete outsider, I find the lack of publicly available information on the European Google case frustrating, as it is fascinating on more than one level. I just thought that the best way I could rebel against this situation is by making my views on the ongoing proceedings publicly available.

The behaviour of the European Commission in the past few months is interesting (if not puzzling) in at least three important respects:

  • The Commission has repeatedly asked Google to submit commitments. One could very well argue that nothing prevents the Commission from doing this. At the same time,this conduct is at odds with the logic of Article 9 of Regulation 1/2003. At least it shows (as if we did not know it already) that the ECJ judgment in Alrosa (as well as AG Kokott’s opinion) ignores how negotiations between firms and competition authorities are conducted in reality.
  • A commitment decision is the only acceptable outcome for the Commission. In his public statements Commissioner Almunia suggests that the case will only be closed once the authority accepts the commitments submitted by Google. Put differently, we have reached a point where the case is not so much about an authority establishing an infringement by a firm but about a firm proposing a settlement that is acceptable for the authority.
  • The Commission assumes that the alleged discriminatory conduct is an abuse of dominance: The whole case seems to be based on the premise that the fact for Google to favour its own services is an abuse of dominance within the meaning of Article 102 TFEU. Commissioner Almunia has even been explicit about this matter. This conclusion is very far from straightforward to reach. It is a factual scenario that can be approached in many different ways. It raises novel and complex questions to which different (and contradictory) lines of case law seem to apply .Unfortunately, the Commission has never even attempted to articulate the legal framework potentially applicable to this case. This would be most desirable, if only because it would make it possible to ascertain whether the Guidance Paper was just the expression of a moment of temporary folly, and not (as I assumed it would) a pre-commitment device designed to preserve long-run legal certainty.

I do not think an expert poker player would advise the Commission to take these moves. Even outsiders like me cannot avoid inferring from them that the (legal) case is probably weaker than the Commission appears to suggest. As an academic, it is the fact that the law has disappeared from the case that I find most worrying, in any event. The question of whether, and why, Google’s conduct would be abusive seems to be no longer of relevance for its outcome. In this sense, this case shows the dramatic impact that the abusive recourse to commitment decisions (in particular where, as is the case here, genuinely novel legal questions are at stake) can have on the evolution of our discipline.

Pablo

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Written by Alfonso Lamadrid

19 January 2013 at 7:56 pm

2 Responses

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  1. Pablo, I agree 100%.
    The EC trapped itself in an awkward position with all such far-reaching statements. Commissioner Almunia is a good guy, but he should stick to its role and measure the public statements he makes.
    And let’s not forget that the U.S. settlement makes the EC position even more awkward, I think. The FTC acknowledged “the close cooperation” with DG Comp (rather obvious in this case). But I wonder how can it be close a cooperation where the two buddies basically agree to disagree. I doubt this can be considered Giuda’s kiss, but the fact remains that the FTC’s settlement has put the EC in offside (unintended or not, it does not matter), using a rugby metaphor.
    In turn the fact that the FTC closed the case prior to the EC makes me think to another issue: timing. Leaving aside the issue of convergent/divergent approaches, if, for once, DG Comp had closed the proceedings prior to their U.S. colleagues, they would probably have made themselves a favor (this issue is particularly relevant for companies in cartel cases).
    The trouble is that the EC is probably not brave and bold enough to say they reassessed their position in the light of how quick such markets evolve (the Google/Double-Click merger docet)… Errare humanum est, perseverare diabolicum.

    Gabriele Accardo

    20 January 2013 at 11:21 am

  2. […] the EC on weak legal footing in its Google investigation (as indicated by what would look like normal plea bargaining on this […]


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