Archive for the ‘Journals’ Category
Some of you might remember one of ours posts titled State aid conferences: that’s where the fun is! (Michael O’Leary and Kim Jong Il make for a great marketing combination and attracted quite a few readers) [Btw, today’s picture features another “peculiar” character; see below for an explanation].
In reality, and jokes aside, State aid is a field where much is currently happening, and that most antitrust lawyers often fail to follow and even perceive as distant. Let me explain why that may not make much sense:
Off the top of my head, I would say that around 40% of DG Comp’s decisional output and resources are devoted to State aid. In economic terms, State aid issues generally have much greater repercussions than most antitrust cases (to put just one example, the guys at my office are advising Spain on how to use some tenths of billions granted by the European Council to restructure the financial sector). The substantive issues are no less interesting, complex, and challenging as the one’s posed by antitrust law.
On the other hand, to be sure, political interference is much more frequent, intense, and often less camouflaged (politicians, very particularly French and British ones, seem to be the ones realizing about the impact of these rules) than in antitrust. You might have read this morning about the French Industry Minister, Arnaud Montebourg, openly attacking both State aid rules in general and Vice-President Almunia in particular. In the Minister’s words, the Commission lives in a “legal delirium” and “makes up rules that don’t exist in the Treaties in order to perpetuate its powers”. He also referred to the Commissioner an “obsolete liberal integrist” and asserted that he has the backing of 11 Member States to “revise and liberalize State aid”. For once I will be the controversial one here instead of Nico, and I’ll refer to Monsieur Montebourg as the first recipient of the “Thicko of the day” award (pictured above proudly receiving his trophy)
Despite all the above (the fun, the legal complexity and the political and economic importance), State aid is not paid the attention it deserves by practicing lawyers. Why? Easy: because those most directly affected often seem to be public authorities (many companies haven’t yet understood the opportunities and the risks associated to these rules), and those don’t pay as high bills as private companies do. (I guess efficiency and profit-maximizing related incentives also give rise to market failures/externalities).
Whereas I agree with the idea that State aid DNA shares more chromosomes with internal market rules than with antitrust law, there are some common feature between the two disciplines. Aside from the fact that they were placed in the same chapter of the Treaty –which led to their enforcement being entrusted to the same body: DG Comp-, State aid law is also always constantly in the making and questioning itself, which is what initially seduced me from antitrust.
An example: on January 17th the European Commission launched a consultation paper on the very the notion of aid. Think about it; no one would dare of doing the same in antitrust, even if very few people (perhaps with the exception of the influential Giuliano Marenco) have a comprehensive theory to explain what a restriction of competition actually is (an idea I also stated here and here).
There’s loads of “low-hanging fruit” in this domain. If you’re interested in an overview of the legal issues involved in determining what an State aid really is, I very strongly encourage you to read Andrea Biondi’s recent piece: State aid is falling down, falling down: An analysis of the case law on the notion of aid (very recently published in Common Market Law Review).
In the past few weeks I’ve taken a few initiatives to compensate for our State aid deficit. On a personal level, I got heavily involved together with José Luis Buendía in drafting and lodging no less than 12 State aid appeals concerning a particularly controverted and interesting decision (little did I know that I’d have to do that in the course of the Christmas holidays; btw, the experience left me wondering how we could manage in the pre e-Curia days). On a blog-related level, we’ve just asked a couple of the best minds in the field to become regular contributors to Chillin’Competition. We hope to be able to announce their coming on board soon.
- Fresh off the Court. This morning the ECJ handed down a Judgment in which it has ruled that the Court itself is not supposed to reduce the fine imposed on a company whenever judicial review by the General Court exceeds a reasonable time. This Judgment effectively and explicitly overrules the Baustahlgewebe Judgment, in which the ECJ had followed the opposite (and in my view much more reasonable approach). Today’s Judgment is premised on the idea that an application for damages brought against the EU would in all circumstances constitute an effective remedy to compensate for any damages caused by the GC’s failure to adjudicate within a reasonable time.
For those of you with less background on general EU law, actions for damages against the EU shall be brought before the General Court. In other words, parties who believe that the duration of proceedings before the General Court was excessively lenghtly should, by means of a different application, ask the General Court itself to ascertain whether its own behavior was appropriate in the light of the circumstances specific to the case and whether the parties suffered any harm. Good luck with that…
- Save the date! On February 7th and 8th AIJA [Association Internationale de Jeunes Avocats) (a generous institution according to which lawyers below 45 qualify as young] will be holding a two-day conference in Bruges under the title “Competition Law 2.0- Competition Law and Technology“. A not-to-be-missed excuse to
spend part of the weekend in Bruges and pay a visit to the greatest beer bar ever discuss hot topics in current antitrust. Both Prof. Petit and myself will be speaking there.
- Speaking of current antitrust debates: the last number of the Journal of European Competition Law and Practice (a great journal that has rightly earned a prominent place in a saturated? market) features various very good articles, including one by our guest blogger Pablo Ibañez on State aid litigation. At another level, it also features a brief piece of mine [the hyperlink only leads to the abstract] about Google’s commitments (you already know my views). Ironically, my comment was written in relation to the first version of the commitments but features in the “current intelligence” section of the journal. Fortunately I did explicitly envisage “likely further tweaks over specific details” and all comments are applicable to the new (leaked) proposal.
Some time ago Nicolas Charbit (Concurrences) asked Luis Ortiz Blanco and myself to write a foreword for a special issue of e-Competitions on “Nullity/Voidness”.
Yes, at first I had the same reaction you just had; kinda ”What?? Wasn’t there a less sexy topic? I bet they asked us because no one else wanted to do it!”. But we accepted the offer (partly because it was for Concurrence, and partly because we still haven’t learnt to say no). Then we started thinking about it. For some time our only thought was mainly “damn, damn, damn, why did we accept to do this?“.
But when we really undertook to work on this foreword (the weekend before the tenth deadline expired), we realized the reason why the theme of nullity does not rank high in the list of preferred topics of EU competition law commentators. Reflecting upon it requires an excursion into “terra incognita”. Making sense out of the various intellectual riddles that arise with regard to nullity/voidness requires not only a knowledge of competition law principles, but also a mastering of general principles of contract law, as well as of comparative law, that are all too rare in our narrow discipline. In other words, we found out that the topic demands not a foreword but a doctoral dissertation. In spite of the appearances, it’s as interesting as it is important.
In our view, the most interesting issues concern so-called “fruit agreements”, that is, agreements distinct from the one found in breach of the competition rules but that are instrumental to realise the profits sought therewith (e.g. the agreements between a company participating in a cartel and its customers). It is clear that a given anticompetitive clause within an agreement shall be deemed void. It is also well-established that the nullity of such given clause can possibly extend the nullity to the rest of the agreement of which it is part provided that the two are not severable, and that whether a given clause is severable from an agreement is to be decided by national courts in the light of the applicable legislation in each Member State and of the specific features of each agreement. And whereas the practical application of these principles may give rise to divergent results, the situation –at the level of EU law principles- is fairly satisfactory.
What is less satisfactory is the uncertainty surrounding the validity of agreements which do not directly breach the competition rules but which stem –and actually put into practice- another agreement that does. The case law of the European Courts states, on the one hand, that the “the nullity referred to in Article (2) (…) is capable of having a bearing on all the effects, either past or future, of the agreement” (Courage v Crehan, para. 22) and, on the other hand, that “[t]he consequences of such nullity for other parts of the agreement, and for any orders and deliveries made on the basis of the agreement, and the resulting financial obligations are not a matter for community law. Those consequences are to be determined by the national court according to its own law” (Kerpen & Kerpen, para. 12). In other words, EU law purports to deal with the nullity of the effects of the anticompetitive agreement, but not with the vehicles (ensuing contracts) that carry out such effects. Does this make sense?
Those interested in finding out our view on this issue, and on a few others, can read the full foreword here: Foreword eCompetitions Nullity/Voidness (It’s only 5 pages long; not long enough to bore you to death).
The rest of the special issue is available here.
Have a great weekend!
A few days ago someone sent us a very interesting piece published by Okeoghene Odudu (who is also the author of a great book on Art. 101) in European Competition Journal (August 2011) under the title: “Indirect Information Exchange and the Constituen Elements of Hub and Spoke Collusion“.
Although we have enjoyed the substance of this article, the reason why it was sent to us in the first place was not its content but rather a particular footnote at the very end of it. It reads as follows:
“187. In his blog posting of 21 February 2011, Nicolas Petit expressed the view that there was nothing worthy of analysis in the hub-and-spoke phenomenon and concluded by writing, “The bottom-line: I will fight any proposal to organise an event on hub-and-spoke agreements. See http://chillingcompetition.com/2011/02/21/much-ado-about-nothing/.”
[*Note by Alfonso: The original post features a smiley face like this right after this quoted statement. The face is nevertheless missing in the quote that appeared in the article. It's a pity, because it would have been funny to see the smiley appear in European Competition Journal!].
However, by 24 May 2011 he seems to have had a conversion, announcing that, through the Brussels School of Competition Law, he had co-organised a seminar on information exchange, to deal in part with “Sharing Information through Intermediaries (supply-purchase relationships, distribution agreements, meet and release clauses, hub-and-spokes, etc)”. See http://chillingcompetition.com/2011/05/24/information-exchange-in-eu-competition-law-conference-22-june/“
We were surprised at this footnote (since we don’t always take what we write seriously, it’s curious to find out that people do), which nonetheless expresses a very legitimate opinion.
Last week the European Commission announced the opening of formal proceedings to investigate whether international publishers may have engaged in anti-competitive agency agreements regarding the sale of ebooks (see Press Release). Dawn-raids in connection with this case were carried out last March.
Today´s edition of the Financial Times (edited by Pearson -a publisher affected by the investigation-) features a most interesting piece on a very related topic under the title Don´t make Amazon a monopoly.
Its author -John Gapper- argues that competition authorities in the US and the EU should not challenge the arrangements under which publishers set minimum prices for ebooks and preclude companies such as Amazon, Apple or Barnes&Noble from offering discounted prices. It explains that this is a textbook example of the situation that the US Supreme Court had in mind when it overturned Dr. Miles in its Opinion in Leegin, and submits that it would be paradoxical for competition rules to enable free riding-based discounting on the part of Amazon, thus enhancing its alleged “monopoly”.
This situation and the legal controvery surrounding it raises very interesting questions that go beyond the situation at issue and which have the potential to affect online distribution in general.
Does anyone have any strong views on this?
With rising fines for antitrust violations, there’s been a lot of fuzz about the adequacy of the current EU penalty system.
The EU fines system is generally lambasted on two counts. First, it would be inefficient because the average level of fines currently slapped by competition authorities would still be far below the optimal deterrence level. Second, it would be unfair because it targets companies as a whole, rather than the individuals which have secretly engaged into unlawful conduct. In so doing, administrative fines would thus harm a range of third parties (shareholders, workforce, etc.) which have nothing to do with the infringement. Interestingly, increasing fines to satisfy the efficiency concern would further exacerbate the unfairness concern.
The upshot of this has been a renewed interest for alternative penalties (director disqualification, individual fines, etc.). In a recent paper published in ECLR, our esteemed colleague Prof. Alan Ryley (City University London) puts forward a creative, and somewhat radical proposal:
Thirdly, the expulsion of aliens from EU territory: Most international business executives need to be able to travel into the European Union, the world’s largest single market. Prohibition from entering EU territory for a term of years would make it difficult for them to act as senior level executives, as well as significantly damaging their reputations.
Now a question: beyond preventing business executives from making Xmas shopping in Paris and London – which I do not view as a particularly strong deterrent – I fail to see how this could really dissuade guilty alien executives to operate cartels within the EU. Paradoxically, those executives will be increasingly incentivized to negotiate cartels targeted at the EU outside of the European territory, with the unintended side-effect that the Commission’s will face mounting difficulties to gather evidence of unlawful conduct.
The full reference of Prof. Riley’s excellent paper is “The modernisation of EU anti-cartel enforcement: will the Commission grasp the opportunity?”, E.C.L.R. 2010, 31(5), 191-207, 2010.
Thanks to my assistant N. Neyrinck and my student B. Boggaerts for the pointer.
The picture above is taken from one of the worst French movies ever.
My paper on competition authorities’ enforcement discretion has just been published in Concurrences. Amongst the various papers I published to date, I am really proud of this one. The reason? It embodies all the things which make research, and academic life, a thrilling job:
- It forced me to conduct research on a largely unchartered topic, and to propose an original – at least I believe – conceptual framework;
- I benefited from strong empirical input received from more than a dozen national reporters;
- The LIDC annual congress – for which I prepared the paper – was a great moment in a wonderful town. I met loads of fascinating people during the congress;
- We eventually managed, on the basis of this paper, to draft public policy proposals, which were eventually sent to competition authorities.
As to the information: the next LIDC congress will take place in Bordeaux (France), from 30 September to 3 October. To all those interested in learning how competition law and a Lafite Rotschild combine, I recommend the conference. A specific website has been created to advertise the conference.
Finally as the explanation: the past days have been increasingly busy. This explains the belated posting activity on the blog.
I heard in Vienna that Oxford University Press (OUP) will be launching in 2009 the Journal of European Competition Law & Practice. This new bi-monthly journal intends to have a strong practical flavour. It will be edited by T. Lubbig and P. Nihoul and seeks, from what I am told, to compete head-to-head with the well-known European Competition Law Review (ECLR) from Sweet & Maxwell. Yet, I understand that ECLR has lately focused a lot on national competition law, and that this journal’s purpose is to deal primarily with EC competition law.
Interestingly,it ought to be noted that this new journal is not pure, greenfield, entry for OUP, but expansion with a new title besides, amongst others, OUP’s Journal of Competition Law and Economics (JOCLE). Whilst some may think that OUP’s move is not necessarily safe because the new journal may partly eat away some of the JOCLE readership, I understand the two journals are not substitutes, but complements (with the JOCLE focusing primarily on longer studies, with a stronger scientific, economic and comparative – EC/US – flavour).
My feeling is that OUP’s agressive, ambitious, expansion strategy should be welcome. I have indeed often deplored the paucity of european competition law journals. Let’s just hope that the pricing of this new title will be affordable.