Intel and the fight for the soul of EU competition law
Wouter Wils (one the finest legal minds at the Commission, currently Hearing Officer and one of our Friday Slot interviewees –see here-) has today released an article that will certainly have a significant impact in the discussions on the convenience of following a “more economic approach” to abuse of dominance (and that is likely to be highly controversial, particularly among competition law economists).
We’ve recommended many other articles before, but this really is a must-read.
By the way, Wouter was inspired to write the article by Pablo Ibañez Colomo’s comment on the Intel Judgment in this blog and by the ensuing discussion (see here).
The piece (soon to be published in World Competition) is now available here:
We very much look forward to the debate that this piece will spur.
Chillin'Competition 
I find it extraordinary that an Hearing Officer should write and publish such an article on such a contentious subject and one which no doubt will in the future come before his Office again, and at a time when the Intel decision of the General Court has been appealed to the CJEU. Furthermore, the intemperate language used in the concluding section which attacks much work that was undertaken by DG Comp officials, a firmer Commissioner, her Cabinet and thinking/writing by many practitioners thinking about this subject in good faith and not being paid to do so, as alleged by dominant companies or economic consultancies is a disgrace. Wouter is a fine lawyer, but in writing this article whilst holding the position that he occupies at the very least requires him voluntarily to recuse himself from all future cases involving 102 and pricing issues. The language used in the last section of his paper requires him, in my personal view, to resign his position as Hearing Officer; is this what someone holding such a supposedly independent position should be saying, let alone thinking? A disgrace.
Brussels practitioner (anonymous due to potential retaliation)
21 September 2014 at 10:27 pm
Strange. I have never seen Brussels pratitioners asking for resignations as regards speeches and articles written by Commission officials criticizing the case law or telling what many Brussels pratitioners want to hear. Freedom of speech only comes in one direction? Should we recuse judges or advocate-generals as soon as they express any view on competition law? Should they have one at all?
yet another one
22 September 2014 at 10:46 am
The previous comment shows that some people have a very thin skin.
Than an academic paper provokes this sort of intemperate reaction (which moreover plays the man and not the ball) may suggest that perhaps the paper has struck a chord.
Wils has written a brave paper under his own name (unlike the previous commentator and unlike myself, who criticize from the shadows). One may or may not like what he writes, but he has been willing to stand for it, even though he certainly must have been aware that it would not be welcomed by some.
I also do not see the conflict suggested above. Recuse himself from all 102 cases? His role as a HO has nothing to do with the matter discussed in the paper. In what way does what he says compromise his independence?
I would be interested by a debate on ideas, but not in disgraceful anonymous comments targeting a person for his ideas.
Another Brussels practitioner
22 September 2014 at 10:07 am
I assure you that I have an extremely thick skin. The contents of Wouter’s article didn’t upset me at all, it was the abuse of office that did.
The issues raised by Wouter are quite rightly matters to be debated, this “ball” should be knocked around and discussed. There are many different views on this subject. My issue with the paper is neither the “ball” nor indeed the “man”, as you suggest, who I like very much. It is the position that he occupies as one of two HOs. How can it be proper for an HO to write on such matters which may well come before him/her in an investigative procedure where the HO is supposed to be independent and can advise the Commissioner, should he/she so wish, on the merits of the case put forward by the Commission, as well as on procedural aspects. At least Wouter is being honest in his views and we will all know what to expect, but he follows the standard SJ line set out over time. Also, seriously, are the rather extraordinary remarks contained in the final section appropriate for someone in such a position to make: I doubt Emil Paulis, Philip Lowe, Damien Neven and others who inputted into the revised 102 approach could ever be accused of being part of a conspiracy to help the economist profession and/or support dominant companies. I do not believe my comments were in any way disgraceful and they were not targeting an individual as such, rather the abuse of office. Indeed, the version of Wouter’s paper that has been circulating around the Bar was sent by him from his HO email address, no pretence at sending it from an academic one.
Sadly still anonymous
22 September 2014 at 10:44 am
I personally believe Wouter’s views in the last part of the article are hardly new or surprising. See this statement (in a much cited article) made over twenty years ago;
“The legal profession is not indifferent to how laws are designed. Since some of the promulgation costs and much of the costs of advice and enforcement consist of fees for lawyers’ services, the profession as a whole has a general interest that tends to oppose that of society. Laws that induce individuals to seek advice more frequently or to seek advice having a higher cost, or that increase the cost of litigation, will be favorable to the economic interest of lawyers. Thus, while the bar will often have special expertise in evaluating many of the factors relevant to the design of laws, one must keep in mind that lawyers’ advice on such matters may be tinged by self-interest.”
– Louis Kaplow, Rules Versus Standards: An Economic Analysis, 42 Duke Law Journal p. 620 (1992).
Dutch Student
24 September 2014 at 12:29 pm
This reply reminds of something that I read happened at a hearing. I did not remember which one, but I asked a friend who remember these things. And found it. In the AkzoNobel legal privilege case the Commission was reported by Mlex saying: “Confusion, is good for lawyers – the more confusion there is, the more legal advice is needed.” The legal profession was well represented in that case, as several lawyers’ associations intervened (in support of AkzoNobel). I do not know if the official who said that had to resign, but it shows that what Mr Wils says is, after all, not that new. And the personal attacks are more difficult to understand when one sees his record. About a decade ago he wrote an article exposing the type of biases officials may have when dealing with cases. The article was acclaimed by practitioners and frequently relied upon in articles and books criticizing the EU competition enforcement structure. The fact that the view came from a Commission official, it was said, made it even more credible. The same prolific official now exposes other type of biases which may be at work, but he is not acclaimed anymore by the same practitioners. The fact that he may not always follow the “official view”, always praised, is now cause of concern, as he may be questioning decisions of his superiors. His independent spirit should be curtailed: the “let alone thinking” at the end of the first comment of our anonymous friend, self-proclaimed guardian of internal Commission hierarchies, is frightening. The problem is not even what he writes, it is what he thinks.
To be fair, EU Courts have been not nice to practitioners. Lawyers’ advice, when it is mentioned in a judgment, is often in a situation which does not give the best description of their work. In T-241/01 the General Court said that the presence of the applicant’s lawyers could not be regarded as constituting an assurance that those meetings were entirely lawful. It pointed out that “the lawyers of the parties to the cartel knowingly assisted in setting up the prohibited agreements” (§194). The recent Schenker judgment of the ECJ not only affirmed that the (wrong) advice of a lawyer will not be an excuse not to pay a fine, but also exposed the (bad) quality of the advice in question, as the company this time was happy to conveniently waive any privilege it may have enjoyed. All very unfortunate. Economists [leaving aside the area of mergers, where apart from relying on esoteric science or simple intuition only economics appears to provide some tools to (try to) predict the future], have not done much better, but for different reasons. Certain judgments explicitly consider their reports irrelevant, often because what they try to prove is not relevant for qualifying the conduct. Even worse, certain judgments do not even care to mention the reports in question (after all the money the company has spent). When the judges do take the time to explain in more principled terms why an economic report was not credible, they have recently equated the report to an exculpatory statement of the company (T-112/07, § 320). This is really low. If a hierarchy exists on evidentiary matters, this means that it ranks below the simple (interested) statement of the lawyer of the party (who at least has deontological obligations that a company does not have). There is not even the consolation of getting some publicity in the judgments. Unlike lawyers, the names of the economists or their consultancies tend not to be mentioned anymore.
I wish I was like Zoë and Desteney
25 September 2014 at 8:36 am
I fully agree with Mr Wils – and here is a supporting quote against a “more economic approach” with the involvement of more economists by no other than a senior economist (E Derman):
“Economics is the study of how to utilize limited resources to achieve good ends. And good, of course, is in the eye of the beholder, defined by humans. But economists don’t agree with each other about ends or means. They can’t agree on the efficacy of money printing or austerity. They keep changing their minds every few years about conventional wisdom while at every instant appearing to be certain that they are right. My gripe with economists is not that their models don’t work well – they don’t, look at the role of central banks in the financial crisis – but that they seem so reluctant to acknowledge the riskiness of their advice. And yet, beware their fearsome unelected power. Anyone visiting from Mars last year and asking to be taken to our leader would undoubtedly expect to meet Bernanke.
As a result their public arguments have an incestuous yet masturbatory quality that is exhausting to follow. The only field more self-confidently but just as regularly wrong as economics is nutrition, whose recommendations to shun butter/margarine or red meat/carbohydrates regularly reverse themselves.
Natural scientists (physicists, chemists, biologists) have had frightful power, and not always used it well. But at least they can more or less agree about truth and efficacy. Economists cannot, except by using statistical regressions which are often flawed and prove little.”
Source: http://www.theguardian.com/money/2014/sep/21/-sp-thomas-piketty-bestseller-why
Asimo
24 September 2014 at 2:33 pm
[…] One of the most downloaded and talked-about competition law articles of the year was Wouter Wils‘ one on “The Judgment of the EU General Court in Intel and the So-Called “More Economic Approach” to Abuse of Dominance“, which we discussed and first announced here. […]
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