Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

The ultimate competition law quiz

with 15 comments

It’s been quite a while since our last quizz (see here, here or here for some of them).

In a recent book review I wrote: “Ask most competition specialists about what a “restriction of competition” is and you will get a surprising variety of theories, and most likely some striking silences“.

So this is an empirical test. The question should be simple for anyone geek enough to read this blog:

WHAT IS A RESTRICTION OF COMPETITION?

The best one paragraph response wins. You can write your definitions as comments to this post. The one who gets the most “likes”/”thumbs up” by October 1st wins (and this includes both the blog’s homepage and the LinkedIn group.

This time we’re raising the stakes: instead of a round of beers, we offer to invite the winner of this quiz (+ a guest) to either lunch, dinner or an open tap of beers.

Low participation confirms my point (that’s a smartass way of turning this into a win-win situation)  ;)

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Written by Alfonso Lamadrid

20 September 2013 at 3:37 pm

Posted in Polls and quizzes

15 Responses

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  1. what ever DG Comp decides is a restriction of competition :)

    Jennifer POLY

    20 September 2013 at 3:49 pm

  2. A restriction of competition is an ingredient in the cooking of Article 101 TFEU. It is always a hit when it comes as the main course (or object) of an agreement. Some also serve it as the side dish (or effect) of an agreement, in which case its taste will depend on the specific menu. It could be replaced by the prevention or distortion of competition, but nobody actually eats it that way. Did you make your choice?

    Philipp

    20 September 2013 at 3:50 pm

  3. Most probably not what AG Kokot believes…

    Dorin Rat

    21 September 2013 at 10:08 am

  4. I am going to intake a very imaginative approach in my attempt to define this concept. Let’s suppose that the competition authorities play the role of a market police and the undertakings engaged in anticompetitive behaviour are their ‘clients’.

    In the movie ‘Murder by numbers (2002)’ Captain Rod Cody tells Cassie, his colleague: ‘You’re supposed to identify yourself with the murderer, not the victim’.

    Maybe in order to give an answer to this question we must identify ourselves with the competition ‘murderer’, not the competition ‘victim’. From the undertakings perspective competition might be seen as a restriction in itself:
    -it obliges them to exit a mature market
    -it does not allow them to enter a new market
    -it reduces their profit margins etc
    -it obliges them to take risks and invest in new technologies in order to hopefully win some edge over their current/future competitors…

    From the undertakings perspective competition is a restriction of their freedom to take business decisions exclusively in their own interest. Competition law divides the spirit of competitiveness in two categories:
    1) Benign: It serves the public interest such as innovation, consumer welfare, market integration
    2) Malign: It serves exclusively the interest of the ‘competition murderer’ and it has actual or potential negative effects on the named public interest considerations.

    Once again from the undertaking perspective a restriction of competition is a restriction of a restriction, meaning it serves to enlarge the range of available decisions by removing the pressure and reassuring more freedom of action.

    Why the quiz still remains a quiz? For a very simple reason: in real life the delimitation between the evil and the redemptive competitive ‘Geist’ cannot be determined with exactness and the fact that potential effects constitute a sufficient indication of evilness implies an obvious risk and imposes an extra ‘safety belt’. The vigilance must extent to what ‘might be’ not only to what ‘is’ a restriction of competition.

    The rule of ‘hand to ball or ball to hand’ in football offers another ingenious analogy. The soccer culture prohibits hand passing, but of course it permits accidental hits. In matters of competition an economically justified parallel conduct serves as an example for an accidental hand hit.

    Now from the legal point of view… we tend to arrive to a quasi-subjective reasoning concerning the intention of the player to use some illegitimate method or not. Here the scheme is that in the absence of any reasonable economical justifications the ‘Geist’ must be deemed evil.

    The trouble is that economics is not an exact science; while in football we theoretically can calculate the predictable trajectory of the ball with a certain precision, in the appreciation of an ‘unfair economic play’ the result of the assessment incorporates implicitly a margin of discretion. The absolute proof of not being engaged in anticompetitive conduct may be to play ‘with both hands tied behind back’ (and still win the match). The restriction of competition is defined negatively in this sense.

    However, the notions of market and competition are social constructions reflecting a certain mindset. As I see it, we follow in the steps of Darwin. From an evolutionist perspective any restriction of the conditions in which the game takes place stimulates and favours the players to use their imagination and skills to find a new strategy to overcome the restriction. The market players are not allowed to rest on their laurels, but sent back to the arena to entertain the large public. (Read: to serve the public interest, not only their own keenness to win the ‘match’).

    Competition is seen as natural characteristic of the market, but cooperation as well is natural to human behaviour and as we know cooperation is allowed under certain conditions even in horizontal relations.

    A restriction of competition is a reflection of a zero-sum game mindset, in which gains and losses perfectly match each other. A restriction of competition is also the action of a perfectly rational actor who is always supposed to act in his own best economic interest. Moreover a restriction of competition implies an atomic understanding of markets and a certain acceptation of the concept of markets. More than anything else a restriction of competition implies that markets in themselves play a regulatory role. Therefore the shortest possible definition to this quite fuzzy concept might be:

    A restriction of competition refers to practices prone to jeopardize the regulatory role of market forces within an economic setting in which free competition is assumed to constitute the natural state.

  5. likely, the “next” Big Thing…

    Gabriele

    22 September 2013 at 9:23 am

  6. An original quote used by the authors of Chillingcompetition in order to arrange a disguised speed-dating ;-)

    Name

    23 September 2013 at 4:49 pm

  7. “Name” is right; let me nuance the offered prize: if you’re a bloke then you get the open tap of beers or, at most, lunch. If you’re one or two beautiful women then dinner is fine ;) If you’re more than two, then maybe Nico can join too :p

    And now let’s hope that the Ms and the Mrs of the authors of Chillingcompetition don’t read this (there’s a low risk that they will!)

    Alfonso Lamadrid

    23 September 2013 at 4:57 pm

    • haha. Such a special bet, the rules are changing even if the game has already started ;) . And there is no deadline to count the votes. Now I am pretty sure that is a disguised speed-dating !
      Since I am not a female, I will let the price to Ms. Poly, and will not disturb anymore :D

      Name

      23 September 2013 at 5:02 pm

      • Not well framed; it’s rather an evolving quiz… But ok, let’s play by the rules: Nico can also buy dinner to any male winners.

        You’re right again rearding the absence of a deadline: I just edited the main post to include one.

        Ms. Poly is happily married to Mr. Poly and they happen to be friends, so no worries there. Btw, congrats Jen for the so far winning response!

        Alfonso Lamadrid

        23 September 2013 at 5:13 pm

  8. An action which on the face of it that leads to a less competitive outcome than would otherwise be the case, second or third round effects might be pro-competitive though – except for when the restriction is by object. “By object” clearly stands for “no reasonable person can think of how this might be pro-competitive down the line, so it must be that…”. Think of selective distribution as an example of a restriction of competition.

    I know this is not particularly funny…but then I sit in Hamburg and cannot come over for dinner anyway. All the funny responses are clearly silence in disguise!

    Melanie Etten-Rueppell

    24 September 2013 at 9:36 pm

  9. Any agreement between competitors that reduces (due) rivalry among them. Do not confuse it (as Consten-Grundig does) with independent behavior or cooperation among firms.

    jesus alfaro

    1 October 2013 at 6:55 pm

  10. so when do I get my prize? :) although I do admit my response was rather cheeky. lucky for you, Alfonso, I am in Brussels next weekend! you can invite me and Romain for a drink!

    Jennifer POLY

    4 October 2013 at 9:38 am

  11. Congrats, Jen, for a well deserved prize (as Adam has rapidly observed, beating that one wasn’t easy). Will be more than happy to invite you two for a drink (no quizzes needed for that!).

    Thanks also to other respondents: Philipp for an analogy aimed at making complexity digestible; Dorin and Gabriele for replies that required some follow-up thinking, Emanuela for the imaginative approach and the work put into the (non one-paragraph :) ) reply, Name for trying to get me into marital trouble, and Melanie and Jesús for the two attempts at concise serious replies. Just in case this may trigger some follow-on reactions, I guess Jesus’ would seem to leave out agreements between non-competitors (maybe it’s intended) and Melanie’s would still leave open the question of what a “less competitive outcome is”.

    Given that the quiz has apparently had over 8,000 views (of which only 7,900 should be attributed to Nicolas, myself and the monkeys that we keep at home accessing the blog repeatedly), it has proved that even the antitrust geeks who read and write this blog couldn’t -or couldn’t bother- to try to come up with a one para definition of the concept at the very core of our discipline! On the positive side, let’s keep it that way; if things weren’t so obscure I don’t know what I’d make a living of… ;)

    Alfonso Lamadrid

    7 October 2013 at 2:54 pm

  12. […] convient donc de mentionner à titre liminaire une petite expérience réalisée il y a quelque temps par un spécialiste de la discipline. La personne en cause, un […]


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