Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Antitrust quote of the day and the evolution of the law on refusal to supply

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In 1989 late Philip Areeda (picture above) wrote one of the most influential and cited antitrust pieces in the history of the discipline: Essential Facilities: An Epithet in Need of Limiting Principles, 58 Antitrust L.J. 841. I recall my first reading of this article as student at the College of Europe and how I truly enjoyed it (at roughly the same time I remember having felt the same about Joseph Weiler’s The Transformation of Europe) (yes, those were two good indicators of geekishness). From time to time I’ve gone back to that piece from Areeda, and as a fan of pendulum-based evolutional/historical theories, I’ve quite often cited one particular excerpt therein; here it is:

As with most instances of judging by catch-phrase, the law evolves in three stages: (1) An extreme case arises to which a court responds. (2) The language of the response is then applied -often mechanically, sometimes cleverly- to expand the application. With too few judges experienced enough with the subject to resist, the doctrine expands to the limits of its language, with little regard to policy. (3) Such expansions ultimately become ridiculous, and the process of cutting back begins“.

I think this captures the evolutionary process of the law in many other areas of law in general and of competition law in particular. To mention only one among many possible examples, I used it some days ago to explain the evolution of the notion of the “single and continuous infringement” under Art. 101 TFEU.

There’s an interesting additional thought in relation to this quote. A few years after this piece was published the ECJ ruled on Magill, and I think it’s not at all unreasonable to say that Areeda’s piece was pondered by the Judges in that case (see, and cast your vote, here). Now, if you think about it, Areeda in many ways anticipated how the evolution of the law on refusal to supply would discur in Europe:

(1) Magill was a extreme case to which the Court responsed with a reasoning that was very much tailored to the facts at issue (a point often forgotten); (2) The language of the response was then applied -possibly mechanically, as an illustration of judidicial inertia (not to be confused with stare decisis)- to other factual settings and, with too few judges experienced enough with the subject to dare to nuance it (?), the Magill criteria consolidated in cases like Bronner and IMS. (3) Their consolidation as the sole relevant criteria ultimately became perhaps unreasonable and inconvenient, which led to an attempt to nuance them [the Commission's -in my view very reasonable- claim in the first Microsoft Decision that “there is no persuasiveness to an approach that would advocate the existence of an exhaustive checklist of exceptional circumstances and would have the Commission disregard a limine other circumstances of exceptional character that may deserve to be taken into account when assessing a refusal to supply.” (para. 555)].

As you know the the General Court did not follow the Commission on that particular point, not because it disagreed, it just didn’t need to rule on that point because it thought the Magill criteria were in any event fulfilled. That was done with the aim of minimizing the chances of getting quashed in an appeal and at the cost of some legal contortionism. In my view, it would have been desirable for the Court to assess whether all “extraordinary circumstances” to identify a refusal to suppy could or not be subsumed within the Magill criteria. Instead the Court gave a practical illustration of how its hammer can make square pegs fit round holes (an exercise that was repeated a few months later in BUPA re the Altmark criteria).

For a most interesting discussion on the legal contortions in Microsoft featuring some of the people who were actually associated to the case see the 16 comments to Nicolas’ post on The Magill-IMS Re-animator.

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Written by Alfonso Lamadrid

6 March 2014 at 6:28 pm

2 Responses

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  1. […] post in another place about Areeda’s article on essential facilities – “an epithet in need of limiting […]

  2. Reblogged this on Wettbewerbspolitik and commented:
    Interessantes Zitat und interessante Links.

    Markus Saurer

    10 March 2014 at 11:34 pm


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