Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for February 2013

Post Danmark – More than just One Case

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Post_Danmark

Our friend Christian Bergqvist has offered us a most interesting post on the national sequel of the CJEU judgment in Post Danmark. Christian is an associated professor at the University of Copenhagen/Faculty of Law. He holds a PhD in competition law and has specialized in  particular on dominant firm conduct and the interplay of Article 102 TFEU and sector specific regulation. For more, see here.

PS: for a good reminder of the ruling and of its implications for future competition policy, I advise the reading of the excellent piece of E. Rousseva and M. Marquis (which suggests (in my view rightly) that the Court eventually embraced the Commission’s approach set forth in the Guidance paper).   

About a week ago, on Friday 15 February, the Danish Supreme Court delivered its ruling in Post Danmark vs Konkurrenceraadet. This judgment settles the national case behind the (fabulous) 2012 CJEU ruling Post Danmark (C-209/10). Given the strong pronouncements made by the CJEU it does not come as a surprise that the Danish Supreme Court eventually decided to quash the challenged (national) decision on grounds of an incorrect material test. Rather than concluding that discriminatory conduct was per se able to exclude a competitor, the Danish Competition and Consumer Authority, should  have conducted an “equally efficient competitor test”, or something close (the latter being my interpretation). Absent this, nothing conclusive could be decided on the existence of an abuse.

The ruling of the Supreme Court leaves little space for ambiguity. Yet, the final word might not have been said on the matter. First, the Danish Competition and Consumer Authority can at least theoretically reopen the case and conduct a proper analysis. This, however, looks quite unlikely. Second, back in 2009, the alleged “victim” of the exclusionary behavior (Forbruger-Kontakt) had successfully filed an action for damages, and was subsequentely awarded DKK 75 million (app. EUR 10 million). Unsurprisingly, Post Danmark has appealed this decision to the Danish Supreme Court, which is yet to decide on the matter.

This short post seeks to offer some thoughts on this issue. Prior to this, I provide some background information on the initial EU case.

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Written by Nicolas Petit

28 February 2013 at 1:02 pm

Data protection and antitrust law

with 2 comments

Regretably I couldn’t attend Concurrence’s New Frontiers of Antitrust conference held last Friday in Paris in spite of Nicolas Charbit’s kind invitation. I hear that the conference was once again most interesting, so congrats again to Nicolas and the rest of the team at Concurrences.

Perhaps the most prominent topic in this year’s program related to the interface between data protection and antitrust law. I’m sorry to have missed the discussions over this issue, for perhaps they would have enabled me to see where’s the substantive beef that justifies all the recent noise. Whereas I understand the practical reasons why this issue has conveniently become a hot one in certain academic circles, I confess my inability to see the specific features that make this debate so deserving of special attention.

The way I see it, personal data are increasingly a necessary input to provide certain online services, notably in two-sided markets. So far so good. But this means that personal data are an input, like any other one in any other industry, with the only additional element that the recompilationa and use of such input is subject to an ad hoc legal regime -data protection rules-.

In my view, competition rules apply to the acquisition and use of personal data exactly in the same way that they apply to any other input, and then there’s a specific layer of protection. I therefore understand that data protection experts have an interest in finding out about the basics of antitrust law to realize about how it may affect their discipline, but I fail to see the reasons why competition law experts and academics should devote their time to an issue which, in my personal view, raises no particularly significant challenges. [The only specificity may be that data protection practices may constitute a relevant non-priceparameter of competition, for companies may compete on how they protect consumer data]. I would argue that this is a serious matter, but one for consumer protection laws to deal with, and in which competition policy may at most play a marginal role (I understand this was also the view expressed by Commissioner Almunia in a recent speech).

To compensate for my absence at Concurrence’s conference, on Saturday morning I read some interesting “preliminary thoughts” published last week by Damien Geradin and Monika Kuschewsky: Competition Law and Personal Data: Preliminary Thoughts on a Complex Issue. The piece provides a contrarian view to the one I just expressed. Since I might very well be wrong (that’s at least what my girlfriend’s default assumption in practically all situations…) I would suggest that you take the time to read it in order to make up your own mind. It won’t take you long, but since behavioral economics (and the clickthrough rates to the links we show) tells us that many of you are of the lazy type, in the interest of a balanced debate here’s a brief account of its content; my comments appear in brackets:

(Click here if you’re interested in reading more)

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Written by Alfonso Lamadrid

25 February 2013 at 1:47 pm

Forthcoming seminars

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As you know, we like to use this blog to favor our own related services ;)  So here’s some advertising on three upcoming seminars to be held in Madrid within the framework of the Competition Law Course that Luis Ortiz Blanco and I co-direct, now on its XVI edition. (The pic above was taken during a lecture I gave there last Wednesday on antitrust in non-regulated network industries).

28 February- 1 March: Seminar on Competition Law in the Public Sector (coordinated by José Luis Buendía -Garrigues- and Jorge Piernas -EUI-), also featuring Joaquín Fernández (DG Comp), Luca Rubini (Univ. Birmingham), Jerónimo Maillo (CEU),  Carlos Urraca (Legal Service, European Commission), Deborah Heredia (Spanish Ministry of Foreign Affairs), Juan Arpio (Univ. Zaragoza), Alejandro Requejo (Compass Lexecon), Juan Pedro Marín (SEPI), Rafael Calvo (Garrigues) and Juan Espinosa (Spanish Competition Authority). Program available here: Competition law in the public sector 2013

8 March: Seminar on Recent Developments in Merger Control and Art. 102, featuring Cecilio Madero (Deputy Director General, DG Comp), Per Hellström (Head of Unit, DG Comp), Nick Banasevic (Head of Unit, DG Comp), and Milan Kristof (Référendaire, CJEU). Program available here: Recent developments in EU merger control and Art. 102 TFEU

15 March: Seminar on IP and Antitrust (coordinated by Alvaro Ramos), featuring Claudia Tapia (IP Director, Blackberry), Gil Ohana (Senior Director, Cisco Systems), Gunnar Wolf (DG Comp), Ief Daems (EU Counsel, Samsung), María Álvarez (Advisor, Spanish Competition Authority) and Victoriano Darias (Managing Director, The Napkin Idea). Program available here: Seminar IP and Antitrust 2013

Written by Alfonso Lamadrid

22 February 2013 at 5:12 pm

Competition Policy and Happiness

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Many of you have probably had a chance to read various texts on the goals of competition law (the one in Giorgio Monti’s book is particularly good; more recently, I also liked Kevin Coates’ approach).

For an original approach to this discussion, check out Maurice Stucke’s recent paper “Should Competition Policy Promote Happiness?”  As noted in the abstract, the paper builds on recent academic literature on happiness and goes on to argue that “competition policy in a post-industrial wealthy country would get more bang (in terms of increased  well-being) in promoting economic, social and democratic values, rather than simply promoting a narrowly-defined consumer welfare objective“,

Many thanks to Wouter Wils for the pointer!

 

P.S. And speaking of papers, Pablo Ibañez, Hans Zenger and myself could use some additional votes for Concurrence’s Antitrust Writing Awards   ;)

Written by Alfonso Lamadrid

20 February 2013 at 1:41 pm

What I really meant (on recourse to commitment decisions)

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As I was exiting a plane on Friday night I received a bunch of email notifications about the comments that were being written to one of our posts (probably the most interesting public discussion over allegations of “scraping” so far; not the post, but the comments to it) in which “Bagnol” made a couple of attempts to clarify what it was that I really meant on my post and in a later comment thereto. At the same time, I read a post written by Nico that started with an idea that I must have thrown out at a conference on why the Commission resorts to commitment decisions, but with which I don’t feel identified (most likely it’s my fault for not having expressed it well).  Funnily enough, I couldn’t write any comments on what I really thought because I had committed to take a break from my blackberry (like certain companies I also break my commitments: I had to check my email hidden in an airport’s restroom; yeah, it was very glamorous..).

Anyway, let’s cut to the chase, and let me clarify my (not at all original) views on the increasing resort to negotiated solutions (for previous posts on this see, among others, here, here or here).

I have mixed feelings about the use of Article 9 decisions. On the one hand, I understand the Commission’s tendency to resort to them. Commitments enable authorities with limited resources to swiftly and effectively address certain practices (particularly in rapidly evolving markets, where a level-playing feel is needed, or when a fine does not appear to be adequate). On the other hand, given my whining-lawyer nature (and because of the little academic wannabe that some of us have inside) I sometimes also regret the lack of discussion and precedent inherent to such decisions. Now, is this new commitment-based enforcement paradigm positive or negative? There’s no clear answer. I guess that it all comes down to the role one atributes to the Commission: is it to put and end to anticompetitive conduct and to restore competition immediately through direct intervention, indirectly through precedent setting, or through a careful balance of both?

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Written by Alfonso Lamadrid

18 February 2013 at 8:58 pm

Avoiding Judicial Review + Random thoughts on Setbacks and Victories in Court

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winner

During his presentation last week, Alfonso shed some light on why the Commission was so eager to settle abuse cases in the high tech sector. In brief, he argued that the Commission uses commitments decisions because it does not know how to handle those cases under the current Article 102 TFEU standards. Settlements arguably offer a convenient exit route, because remedies are brought to the table, and the Commission avoids the risks of annulment before the Court.

Similarly, in a comment a few weeks ago, Adrian made the following observation:

“Isn’t it because the EC shies herself away from building a rather complex novel case by reaching the compromise of commitments? And isn’t it the trend lately that the EC is less prone to take the risks of probing unwalked cases and prefers to plea bargain?!”

I quite like this judicial avoidance theory, not least because it also has a strong managerial angle. When DG COMP is taken to Court, the Legal Service normally deals with the case. But DG COMP is not entirely out of the picture. The case-handlers must indeed brief the agents of the Legal Service, and assist them throughout the proceedings. In other words, important human resources from DG COMP are diverted from case-handling to litigation. And this is somewhat disruptive from an enforcement perspective.

Now, this brings me to the substance of this post: we often are prompt to talk of cases as victories or failures either for the Commission or for the parties. On this blog, for instance, we have often written that the Commission had won (or lost, as the case may – more rarely – be) cases in Court. Whilst this language is clearly inappropriate from a formal standpoint – annulment proceedings are not trials against the Commission, but against decisions (“un procès à un acte” in the words of French administrative law) – it also shrouds that the Commission may “gain” when its decisions are set aside. In hindsight, for instance, the Airtours v. Commission case can be interpreted as a big win for the Commission, because it helped those in the Commission willing to adopt refined legal tools for merger analysis (amongst other things, the Guidelines on horizontal mergers) and it ushered in an unprecedented internal administrative reform that was praised by the whole antitrust community.

This reflection sprung to mind today when I read again the General Court’s judgment in T-427/08, CEAHR v. Commission. In this case, the Court quashed a Commission decision that had rejected a complaint out of market definition arguments. In essence, the Commission was arguing that the market for spare parts of luxury watches could be conflated with the primary market for luxury watches, and that all spare parts for luxury watches belonged to the same relevant market regardless of the brand. The General Court disagreed (rightly in my view), and forced the Commission to investigate the complaint. The General Court held that the Commission had not proven that a price increase in the secondary market would have led consumers (i) to switch to other secondary products; and (ii) to switch to other primary products. I note here in passing that contrary to routine decisional practice, the Commission was supporting here a very wide market definition.

Interestingly, the CEAHR v. Commission judgment – which had been at the time described as a big setback for the Commission (including by myself) – has served the Commission to an unexpected extent, providing it with useful ammunition to craft new abuse of dominance cases. The best proof of this is perhaps the IBM Mainframe case. In this decision, the Commission relied extensively on CEAHR v. Commission to suspect IBM of dominance on the  markets for “inputs needed in order to provide maintenance services to IBM mainframes which cannot be sourced outside IBM” (see §24 of the Decision).

The upshot of the above point is that behind the Commission’s judicial misfortune, lurk possible advances for EU competition law, including some that benefit to the Commission itself. This, in turn, should prompt us to stop talking of cases in terms of victories and defeats. Otherwise, as mentioned by Cedric Argenton last week at the same lunch talk, we will witness less and less standard Article 7 decisions, and a propagation of Article 9 decisions which insulate the Commission from judicial review and yield only little, if no, guidance on the substance of the law.

Written by Nicolas Petit

15 February 2013 at 7:13 pm

Posted in Uncategorized

More on Google: is scraping anticompetitive?

with 16 comments

 

One of the good things about my powerpoint presentation on “Search engines and competition law”  is that it does not give a clue about the substance of what I said  ;)

As you can infer from my previous posts on this investigation, I’m quite skeptical (to put it mildly) with regard to the legal basis for the accusations against Google (partly because I don’t know whether there are any…).

Whereas in my presentation I mostly addressed search bias-related allegations, there is another issue that raises pretty fundamental questions. I’m referring to the claim that Google “scrapes” content from other websites and appropiates it (these allegations refer to the small portion of black letter text that contextualizes search results and that you find below the green web address shown below every result).

Allegations over this practice strike me for various reasons and raise a few important questions, mainly what on earth does it have to do with competition law?

If the content at issue is not copyright-protected; if they are short informative excerpts originating from content made publicly available; if they contribute to “scraped” pages getting more traffic; and if they’re necessary for users to understand search results; why should competition law ban their use? Why should competition law create a second level of protection stricter than copyright law? Why second-guess copyright law?  This brings us back to an old debate: where does competition law stop? Should antitrust also second guess, for instance, environmental law, tax law, accountancy or data privacy? (I’ll come back to the data privacy-antitrust interface on a later post, for it “coincidentally” appears to be a hot academic topic nowadays).

Allegations on scraping were discussed within the framework of the FTC’s investigation. In fact, as part of the settlement with the FTC Google has committed to allow all websites to opt out of appearing on Google’s vertical sites while still appearing in organic results.

Given that complainants in the EU proceedings have also insisted on this matter [(probably scraping content from each others' complaints ;)] it’s safe to guess that the European Commission might attempt to obtain a similar commitment, and I find this quite a problematic precedent.  Againg: why is scraping a competition law issue?

I’m comforted not to be the only dissenter. Commissioner Rosch authored a dissenting opinion accompanying the FTC’s statement in which he articulates the view that these practices “do not violate the antitrust laws in any respect“.  He notes that his colleagues manifested “strong concerns” about these practices, but that no one ever argued that they breached antitrust rules, not even Section 5 of the FTC Act.

For a sensible opinion on why the display of content from other websites in search results is a perfectly valid business practice, take a look at the German Supreme Court’s Judgment in the Paperboy case (click here for a summary in English)

Written by Alfonso Lamadrid

14 February 2013 at 8:45 pm

Posted in Uncategorized

Revolving doors (a markup)

with 12 comments

76102.image2

Below in CAPS my markup on Alphonso’s post:

Nico and I have come up with a way of duplicating posts out of one piece of news; one of us writes something and then the other disagrees ;) [WE NOW TRIPLICATE MATE]

Last Tuesday Nico wrote a post titled “Revolving doors” in which he expresses the concern that “the cumulative effect of appointing previous Commission officials as judges, plus the very many référendaires who have spent some time in the EU administration may give rise to a pro-Commission bias at the Court“.

[I was actually in Luxembourg for a Court hearing -my first one in the front lawyer's row- when Nico wrote it, but I'll tell you about that some other time].

Without entering into the debate on whether there is or there isn’t too much of a pro-Commission bias at the Court (in my view, there is the same deference towards the public authority that we find in any European administrative system – in the US, on the contrary, that deference is less visible-), I don’t at all share Nico’s concern [CHECK CONSISTENCY: YOU DONT WANT TO ENTER INTO THE DEBATE, YET YOU EXPRESS DISAGREEMENT. WOULD SUGGEST DELETING THE INITIAL CAVEAT].

Assuming that there was such bias [YOU DEPART FROM MY INITIAL ASSUMPTION, WHICH POSTULATED THE ABSENCE OF BIAS, YET ANTICIPATED A RISK OF BIAS], I would argue that it has nothing to do with former Commission officials becoming members of the Court: [CORRECT. TO BE MORE ACCURATE, THIS POSSIBLE BIAS  HAS NOT ONLY TO DO WITH COMMISSION OFFICIALS BECOMING JUDGES AT THE COURT, BUT ALSO IS DUE TO SEVERAL OTHER FEATURES OF THE COURTS SYSTEM. A FREE PERSONAL SAMPLE: PRESUMPTION OF LEGALITY OF COMMISSION DECISION, DOCTRINE OF MARGINAL REVIEW OVER COMMISSION SUBSTANTIVE ANALYSIS, REPEATED APPEARANCE OF SPECIALIZED LEGAL SERVICE AGENTS ON BEHALF OF THE COMMISSION (AS COMPARED TO HIGH TURNOVER OF LAWYERS  REPRESENTING CLIENTS IN COURT), INEQUALITY OF APPLICANTS CHALLENGING A X-HUNDRED PAGES DECISION UNDER A 50 PAGES CAP ON SUBMISSIONS; SYSTEMATIC RELIANCE OF THE COMMISSION (READ THE LEGAL SERVICE) ON FORMS-BASED DEFENSE ARGUMENTS, ETC.]

Only two current Judges at the GC have previously worked at the Commission:  Marc van der Woude  (who was also a private practitioner, which should offset any bias; ask anyone in the business their opinion on him and you won’t hear a single negative one), and Guido Berardis (of whom I’ve also heard very positive things) [THE ISSUE IS NOT ABOUT WHAT WE PERSONALLY AND SUBJECTIVELY THINK ABOUT THEM; I TOO HOLD THOSE JUDGES IN GREAT ADMIRATION.  IT IS ABOUT COGNITIVE PROXIMITY TO CERTAIN IDEAS, OBJECTIVE QUIRKS AND BIASES, WHICH ARE HUMAN AND AFFECT ALL OF US, INCLUDING THOSE SEEN AS THE BEST PROFESSIONALS. THOSE THINGS HAVE BEEN ADUNDANTLY DOCUMENTED BY BEHAVIORAL ECONOMISTS]. 2 out of 27 (3 if the Committee gives the green light to Kreuschitz, which it undoubtedly should) does not appear to be an unreasonable proportion [UNLESS YOU PLEAD BEFORE A 3 JUDGES CHAMBER - THE STANDARD FORMAT FOR A GENERAL COURT CHAMBER - AND ALL THREE SIT IN IT]. Furthermore, all three of them were part of the Legal Service, which means that an important aspect of their work -aside from pleading- consisted in identifying flaws in the Commission’s work [NOT SURE THIS IS YOUR BEST SHOT. LET ME EXPLAIN. WHEN A DECISION IS APPEALED, THE LEGAL SERVICE HAS ALREADY CONCLUDED TO THE ABSENCE OF FLAWS [OTHERWISE THE DECISION WOULD NOT HAVE BEEN ADOPTED]. OUR JUDGES WHO IN THE PAST WORKED FOR THE LEGAL SERVICE WILL THUS LIKELY BE TEMPTED TO ASSUME THAT THE DECISION IS LAWFUL, AND DEFER TO THEIR FORMER COLLEAGUES ANALYSIS. WHY REDO THE ANALYSIS OF THEIR ***** PEERS? ].

If you ask me (and part of my job is to beat the Commission in Court), the problem lies not in Judge’s previous professional experience, but rather in Judges being appointed for political reasons other than their knowledge of the law (see here). And people who know about EU law are generally -there are a few exceptions- either academics (most of whom also have defined pro or anti Commission biases), practitioners (we may have the opposite bias, plus we’re too competition law oriented), and Commission officials.

In sum, I would argue that we need Judges that know their stuff inside out, no matter their nationality or whether they are national judges, academics, ex-Commission officials or former practitioners. [AGREED. I WOULD KEEP THE SENTENCE AS SUCH, AND SIMPLY ADD  "IMPARTIAL" AT THE BEGINNING:  "IN SUM, I WOULD ARGUE THAT WE NEED IMPARTIAL JUDGES THAT KNOW THEIR STUFF INSIDE OUT"]

A FEW OTHER COMMENTS/REMARKS:

YOU DO NOT ADDRESS THE REFERENDAIRES;

IN MOST MODERN SYSTEMS OF LAW, THERE IS A REAL SEPARATION BETWEEN PROSECUTORS AND JUDGES, AND FOR GOOD REASON; 

THE QUESTION IS NOT SO MUCH ABOUT WHETHER THERE IS OR NOT A BIAS. WHEN IT COMES TO JUSTICE, THE MERE SUSPICION OF A POSSIBLE BIAS IS INTOLERABLE. JUSTICE IS THE LAST RESORT REMEDY AGAINST RISKS OF ARBITRARINESS. IT THUS  MUST COMPLY WITH THE HIGHEST POSSIBLE STANDARDS OF IMPARTIALITY. PUT SIMPLY, IMPARTIAL JUSTICE MUST NOT ONLY BE DONE, IT MUST ALSO BE SEEN TO BE DONE.

Written by Nicolas Petit

13 February 2013 at 4:37 pm

Posted in Uncategorized

Materials from the GCLC lunch talk on Google

with 6 comments

Last Friday I was invited to speak on these issues at a GCLC lunch talk on “Google Search engines and competition law“.  I truly enjoyed it.

I might develop the content of my presentation in a series of forthcoming posts, but today we’ll simply provide you with the presentations projected at the lunch talk.

I had the impression that the audience was a bit surprised at my rather unusual power point, which you can see here:

GCLC_Google_Lamadrid  (looks better if you play the slide show; also, it’s password protected, so click “read-only”).

As I explained at the event, I decided to run the risk of projecting this ppp when I learnt that Google had pledged before the FTC not to ask for injunctions aimed at protecting its intellectual property ;) Actually, I’m much more scared of my firm’s format-strict marketing department….

I shared the panel with Cédric Argenton (TILEC) and Anne Perrot (Mapp), both of whom did a great job.  Here are their presentations:  GCLC2013_Argenton  &  GCLC_Perrot

P.S.  A necessary and fair disclosure. The power point I had in mind became real thanks to Enrique Colmenero, a terribly nice and smart guy, a techie and an entrepeneur who is now fortunately working with me on a few tech-related cases.

Written by Alfonso Lamadrid

12 February 2013 at 4:59 pm

Revolving doors (a contrarian view)

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Nico and I have come up with a way of duplicating posts out of one piece of news; one of us writes something and then the other disagrees ;)

Last Tuesday Nico wrote a post titled “Revolving doors” in which he expresses the concern that “the cumulative effect of appointing previous Commission officials as judges, plus the very many référendaires who have spent some time in the EU administration may give rise to a pro-Commission bias at the Court“.

[I was actually in Luxembourg for a Court hearing -my first one in the front lawyer's row- when Nico wrote it, but I'll tell you about that some other time].

Without entering into the debate on whether there is or there isn’t too much of a pro-Commission bias at the Court (in my view, there is the same deference towards the public authority that we find in any European administrative system – in the US, on the contrary, that deference is less visible-), I don’t at all share Nico’s concern.

Assuming that there was such bias, I would argue that it has nothing to do with former Commission officials becoming members of the Court:

Only two current Judges at the GC have previously worked at the Commission:  Marc van der Woude  (who was also a private practitioner, which should offset any bias; ask anyone in the business their opinion on him and you won’t hear a single negative one), and Guido Berardis (of whom I’ve also heard very positive things). 2 out of 27 (3 if the Committee gives the green light to Kreuschitz, which it undoubtedly should) does not appear to be an unreasonable proportion. Furthermore, all three of them were part of the Legal Service, which means that an important aspect of their work -aside from pleading- consisted in identifying flaws in the Commission’s work.

If you ask me (and part of my job is to beat the Commission in Court), the problem lies not in Judge’s previous professional experience, but rather in Judges being appointed for political reasons other than their knowledge of the law (see here). And people who know about EU law are generally -there are a few exceptions- either academics (most of whom also have defined pro or anti Commission biases), practitioners (we may have the opposite bias, plus we’re too competition law oriented), and Commission officials.

In sum, I would argue that we need Judges that know their stuff inside out, no matter their nationality or whether they are national judges, academics, ex-Commission officials or former practitioners.

Written by Alfonso Lamadrid

12 February 2013 at 4:58 pm

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