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Archive for the ‘Other interesting papers’ Category

‘Stealth Licensing’ – Are Antitrust Law and Trade Regulation Squeezing Patent Rights ?

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Monsieur le Professeur Nicolas Petit has just published a piece titled “Stealth Licensing”- Or Antitrust Law and Trade Regulation Squeezing Patent Rights. In this paper he illustrates his points by resorting to metaphors on black swans and butterflys (read the last sentence in the 3rd paragraph below), which is a good indication that he may well have definetely lost it   ;)   

In Nico’s view (and from now I’m pasting the paper’s abstract): a “stealth licensing” paradigm is emerging across the globe. It can be seen through subtle interventions from policy makers, judicial organs and administrative agencies. Those interventions seek to facilitate compulsory licenses outside the TRIPS agreement exceptions and/or to water down those exceptions. Altogether, they ramp up pressure on patent owners to give away their freedom – it is actually a “right” – to exploit their innovations as they see fit. The paper submits that stealth licensing is a significant phenomenon that adversely impacts the social welfare functions of the patent system. It risks undermining investment in technology, technology creation and the dissemination functions of the patent system at a critical juncture in time, as new critical technologies like green technology, the internet of things, machine to machine technology, smart medical devices or biotechnologies are being called for, and rolled out, across the globe. Moreover, stealth licensing is occurring despite the fact that both private and public investment in R&D is critical to help developed economies back on the path to growth, competitiveness, employment and prosperity.

This paper the concept and policy of “stealth licensing”. To that end, it first surveys the literature on the social functions of the patent system, and in particular, on the role of patents to incentivise (risky) R&D efforts and to disseminate successful technological innovations (I). In this context, it recalls that whilst divided on the exact function of patent law, scholars broadly concur that patents have social utility. The paper then shows the emergence a “stealth licensing” paradigm adversary to the social functions of the patent system. To aid understanding, it starts with a definition of the concept of “stealth licensing” (II). It then describes its emergence in international trade regulation where a “flexible” interpretation of the TRIPS compulsory licensing exceptions is making way (III); and in antitrust law, where a distinct though equally problematic “undercover” licensing paradigm is gaining prominence (IV). Finally, it explains the perils of squeezing patent rights through stealth licensing with two metaphors: that of a black swan (V) and that of a butterfly (VI).

For a link to all of Nicolas’ previous articles available on SSRN, click here.
On a related note, I’m told that, in addition to other interesting articles, the April issue of European Competition Journal  features a couple of pieces that partly discuss Nicolas’ prior writins on Standard Essential Patents. I was also told that if I wrote this here he’d get a free copy of the issue…
And if you want to register to attend the conference on Conflicts of Interest, Ethical Rules and Impartiality in EU Competition Policy that Nico has put together and that will take place on Thursday  (you already know my views on this subject), you can do so here.
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Written by Alfonso Lamadrid

22 April 2014 at 6:32 pm

Supermarket power

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Some of the tastiest issues in current competition law arise in the food sector. In fact, as you’ll see in a second, some of those issues are the same ones that we often face in other dynamic two-sided markets that generally attract more public attention.

At Chillin’Competition we’ve always paid our fair share of attention to food distribution and groceries (in fact our first posts on endives still ranks among out most read ever  (actually, when you search for Chilling Competition on Google the word endives appears immediately in the autocomplete box, which may seem a bit odd). Today, we’re happy to include a “sponsored link” to the work done on this subject by a good friend of ours.

Javier Berasategi (former lawyer at Stanbrook in Brussels, former President of the Basque Competition Authority –yes, there is one-, surfer, runner, alpinist and overall a quite unique guy now running a solo legal practice) has authored an also quite unique work on supermarket power. As always, it’s original, thought provoking and perhaps a bit controversial.

But regardless of whether one agrees or not with the analysis and the suggestions in it, its approach is certainly interesting; here’s the abstract:

“This paper analyses the sources of supermarket power vis-à-vis shoppers and independent brands. This power transforms leading supermarkets into vertically-integrated competitive bottlenecks that are able to restrict competition between brands (including their own ones) and reduce consumer welfare. However, competition enforcement has failed to address their bottleneck role and the negative consequences of their practices on dynamic competition (i.e., a market where the competitive process fosters innovation, quality and variety), the ultimate goal of competition policy. This paper proposes complementary regulatory and competition remedies to ensure that access to supermarket platforms and competition within them promotes fair dealing, consumer welfare and economic growth. It draws inspiration from the remedies enforced in other competitive bottlenecks such as CRSs, mobile communication networks, internet service providers, internet search engines and credit card networks”.

[It's interesting that the paper brings together groceries and tech stuff, particularly following Nicolas Sarkozy's cautionary words about the perils of comparing endives to Apple (see here). Although, to be fair, Kevin Coates had done a similar link before with his "exploding banana hypothesis" (I'm saying this to force him to explain it on 21st Century Competition ...)].

The report, titled Supermarket Power: Serving Consumers or Harming Competition, is available here  Take a look, it’s only slightly above 350 pages.

Further work on this subject will also be made available through a new website: http://www.supermarketpower.eu/en/

P.S. The picture may be subject to copyright, but I deserve full credit for having found an image of a supermarket actually called power.

Written by Alfonso Lamadrid

4 March 2014 at 5:47 pm

Antitrust and Tech Seminar Materials

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A few days ago I participated at a very interesting AIJA seminar in Bruges on Antitrust and Technology. All panel discussions were great, but I’m particularly grateful to Pablo Ibañez (LSE) and Kevin Coates (DG Comp) for their participation in the panel I moderated on interoperability issues, which was truly excellent (and not because of me).

The presentations projected at the conference have been made available at AIJA’s website (I include the hyperlinks below for your convenience):

  • Technology Licensing and the New TTBER

Dominic Muyldermans – Exclusion of termination for challenge of IP

Olivier Sasserath – Exclusion of the exclusive grant-back obligations

Anna Vernet – update after public consultation

Stefan Vollering – Big Change on a Minor Issue

  • Keynote speech – With great power comes great responsibility

Dr Philip Marsden – With great power comes great responsibility

  • Caught in the antitrust web -Regulating internet services

Gerardo Faundez – Travel as evolving market

Thomas Graf – The EU Google Investigation

Silke Hossenfelder – German Antitrust Cases in the Internet Economy

Sebastian Jungermann – Regulating internet services

  • Patent litigation and settlements -The limits of settlements and Pay-for-delay

Tamar Dolev-Green – Pay-for-delay

Kyriakos Fountoukakos – Patent litigation settlements

Simone Gambuto – latanoprost-pfizer saga in Italy

  • Patent strategies and abuse of dominance What are the antitrust boundaries

Miguel Rato and Nicolas Petit – Abuse in Technology Enabled Markets

Maria Troberg – Patent Strategies and abuse of Dominance

Jan Peter Van der Veer – An economic perspective on patent strategies

  • Competition law and interoperability

Pablo Ibanez Colomo – Interoperability issues under EU Competition Law

Alfonso Lamadrid – Interoperability

 

(Image quite possibly subject to copyright)

Written by Alfonso Lamadrid

20 February 2014 at 11:22 am

Light summer reading

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It’s July; the weather is good even in Brussels; you should be either on holidays, enjoying outdoors, or finishing off work in order to be able to go out and to do some photosynthesis; but nevertheless you’re reading a competition law blog… (yes, writing it is even worse, but we aren’t talking about us now…).

So, there is cogent, consistent and sufficient evidence to indicate that you’re a bit of a geek. If that’s the case, these are 3 recommendations of short reads, all of which deal with issues on which we’ve touched in the past:

- Wouter Wils, Ten Years of Regulation 1/2003, A retrospective- A very good and concise overview of the history and results of the procedural modernization of EU competition law (my only negative comment is that, for some unknown reason, it doesn’t cite my masterpiece, excellent, quite good, good, decent? more or less tolerable paper on the issue…)

- Thomas Graf – who together with Maurits Dolmans (click here for his Friday Slot interview) is the main lawyer for Google in the framework of the Commission’s investigation-  has written a blog post about Google’s proposed commitments., available here. It’s always interesting to know the impressions of those with first hand knowledge of cases. My own post on this subject is referred to as a one among three “thoughtful comments”; not sure if that is because my post was any good or because we actually have similar views on the main issues…

- Also on Google, last week I received a piece published in the Financial Times positing that “true progressivists” would seek Google’s break up.

Actually, this was of quite some interest to me, since (as frequent skimmers may remember)  I’ve devoted a few posts to what “true progressivism’ or “radical centrism”should mean to the antitrust world: see here (for the original post), here (for the short article developing the post), and here (for an interview in which I’m quoted saying that both the post and the article are superficial exercises of wishful thinking -I’ve original marketing techniques, you see..-).

Not being a fan of labels, I would have more or less defined myself as a radical centrist, and nevertheless I fail to see the reasons for Google’s breakup; query: does that make me a bad centrist?! The author of this interesting piece is Prof. Richard Sennet, a LSE professor. Since I didn’t recognize the name I “Googled” it and saw that he’s professor and expert in urban sociology.

Now, this is a worrying development for most competition lawyers. First it was economists who (quite successfully) started to eat “our cake” become antitrust experts, and now it’s urban sociologists!!  I guess it’s time to retaliate and send the FT my expert piece on the effects or rural migration in postmodern Spain..  ;)

Written by Alfonso Lamadrid

8 July 2013 at 9:23 pm

Preliminary thoughts on Google’s proposed commitments

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As long anticipated, here are some comments on the proposed commitments in the Google case (I graciously granted myself an extension, like the one other third parties have received; it actually is convenient because I can comment on others’ comments as well).

Four caveats are in order:

  • The views expressed below are written against the background of the Commission’s concerns as set out in the press release and the Q&A doc. accompanying the market testing of Google’s proposal. The relevant question to keep in mind is whether the proposed commitments –in their current form- are apt to address the concerns identified by the Commission in its preliminary assessment, not whether they are apt to lead to candy world for satisfy the wishes of all third parties.
  • My views are necessarily incomplete and they’re also work in progress. I’ve only read the limited publicly available information and have not had access to any confidential info or documents that might be contained in the case-file.  Moreover, I have allocated two flights time to draft this (and I should ideally also do some billable work, you see), so I’ll (i) update and improve this document on the basis of any new thoughts or possible feedback and (ii) refine my thoughts for a forthcoming piece on Oxford’s Journal of Competition Law and Practice
  • My views are mine (sounds like a tautology, but don’t always take this for granted in our area of work…); some of my colleagues and clients may well have different opinions.
  • I haven’t worked nor for Google nor for any of the 17 complainants.

In case I haven’t yet got you tired before even starting, here is a methodological explanation. This will be a five-pronged analysis; I will very succinctly summarize (i) DG Comp’s concerns; (ii) my take on the substantive concerns; (iii) the content of the proposed commitments; (iv) third-party criticism of the proposal (notably that read here, here, here or here) (I actually read some favorable comments as well); and (v) my take on the proposed commitments.  And this for each of the four concerns flagged by the Commission (although only the two first ones raise interesting issues).

The structure will make this post longer. In order not to cram the page, click if interested.

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Written by Alfonso Lamadrid

13 June 2013 at 7:00 pm

Data protection and antitrust law

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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

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

On how to find the perfect couple (2012 Nobel Prize in Economics)

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As announced yesterday by the Swedish academy, the recipients of the 2012 Nobel Prize in Economics are Angela Merkel and the German Government Al Roth and Lloyd Shapley.

Their research has mainly focused on the stable allocation of resources in markets where prices are inexistent. They focused on two-sided markets where monetary exchanges would be inappropriate (i.e. patients-kidney donors or the two individuals in a marriage) and figured out the way to strike non improvable (stable) matches.

As we wait for Nico to come up with a Chuck Norris joke on this, we can point you to Al Roth’s blog . In yesterday’s entry he said that his daily post could be delayed, and on Sunday Roth had written a post on the correlation between national chocolate consumption and per-capita Nobel prizes (Belgium is the exception that confirms the rule) ;)    (there is, however, a correlation which seems even stronger than the chocolate one: if you’re a US citizen, a Harvard Professor, and your research is on game theory then it’s pretty clear that you’ll get a Nobel sooner or later!).

We could also recommend you to read Shapley’s seminal paper on Long term competition (a game theoretic approach) (if you do, please tell us what it says, because we can’t really read equations!).

Now, since you probably won’t read neither Roth’s blog nor Shapley’s 1992 paper, and since the only think in this post that caught your attention was that they figured out the best way to find the perfect match in marriage, that’s where we will focus on:

In a 1962 paper Shapley and Gale assumed a market in which men propose to women (a debatable assumption as it is a bit male-chauvinist and also leaves out people who wish to stay single, gay and bisexual people and a bunch of other “real life stuff”), in which each individual has views about what their ideal couple should be like, but in which those views do not lead to perfect matching [otherwise a bunch of us would be matched to Monica Bellucci or Bar Refaeli, and that can't work; or could it?? (note to my girlfriend: this is only a joke mandated by our editorial line; don't worry)]. Shapley and Gale stood up for the proposition that an stable result could only be attained if women applied a “deferred acceptance” strategy. This would work as follows:

First, men would propose to their favorite woman. This means that Monica and Bar (which is how Nico and I call them in private) would have multiple choices but that other women would have less or zero choice, which (even if certainly acceptable by some of us) is unfortunately not stable. Instead of accepting their favorite “candidate”, they argue that women should “pocket” the strongest offer without accepting it and reject all others. Rejected men would then make a second proposal, which would allow women to stick to their previous pick or to replace it by one of the new candidates. Shapley and Gale proved that, if repeated enough times [1st round Monica Bellucci, 2nd round Bar Refaeli... 1456th million round Snowwhite's evil stepmother -with two notable exceptions-] the algorithm will lead to stable non-improvable matches.

Sure this doesn’t seem to “match” the real world and, although intellectually interesting, its practical application seemed doubtful (and discouraging!).  But Roth figured out that Shapley’s algorithm could have enormous practical applications on students-schools, patient-donors, and doctors-hospitals. A great example where the intelectual beauty of economics results in very practical solutions to real problems that truly affect peoples lives. In sum, a very deserved prize.

Written by Alfonso Lamadrid

16 October 2012 at 12:29 pm

Fine and Punishment

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In the article that  kept me working during my otherwise summer holidays last year Luis Ortiz Blanco and myself wrote for the Fordham Conference held last September [the final version is published here; a draft version is available for free here] we quoted one of our “Friday Slotters”, Ian Forrester, (actually, he was the one who proposed “The Friday Slot” as a name for the section) saying that competition fines imposed by the Commission “exceed fines imposed by the public authority in any democracy of which I am aware for any offence“.

Some evolution is apparently taking place in this regard. Look, for instance, at the  $3 billion fine that GlaxoSmithkline has agreed to pay for promoting its best-selling antidepressants for unapproved uses and failing to report safety data. Take a look also at this very interesting graph, which points out at the largest corporate fines and settlements in the past seven years, and also presents the fine as a percentage of the yearly income of the sanctioned companies.

During a Paris-Brussels train trip last night I read an interesting piece on The Economist that deals precisely with the recent increment in corporate fines using international cartel fines (which reportedly “rose by a factor of one thousand between the 1990s and 2000s”) as the main example. 

The Economist‘s piece draws on economic research to justify the conclusion that “to deter bad behavior fines need to rise”.

You may recall that our guest Benoît Durand dealt with this same issue some posts ago and came to a contrary conclusion: that deterrence would be better served by envisaging individual sanctions (fines, disqualification and/or prison penalties) for the executives directly involved in cartel meetings. We haven´t really thought this through, but we’re not big fans of prison penalties, nor would we favor the imposition of disproportionate individual fines. A well designed disqualification sanction, however, would appear to us as a reasonable measure. Any views?

Written by Alfonso Lamadrid

23 July 2012 at 3:08 pm

Reading Competition Law Books

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In our “Friday Slot” interviews we ask what competition law book deserves an Antitrust Oscar. A frequent reply from our interviewees is that they do not read competition law books but rather consult specific sections of such books when they are looking for something in particular.

We don’t necessarily agree with this view. Even though there are certainly some books that we only use for reference, we believe that some of the best books on antitrust are texts that you will not come accross if you’re just looking for references or for the answer to a very particular problem.

In our very own experience, reading certain competition law books written by people who clearly outsmart us has provided us good general overview of issues that we may not had/have yet seen in our professional life, and, most importantly, it has obliged us to reflect and think about what makes sense and what doesn’t in a discipline to which we devote an insane proportion of our life. Personally, we have learnt most of the theory we know from books and not from attending courses, seminars or conferences, no matter how good they were.

The obvious -and reasonable- response is “if, as you say, you already devote an insane amount of time to this, why on earth would you spend non-working time reading about the same subject?”. That’s partly true, but, the way we see it, it is one thing to spend your time working on a particular issue, and a very different one to take the time and distance (not to let the trees hide the woods) to reflect on the reasonableness of the overall discipline in which we are immersed.

We’re not saying that we do -nor, of course, that anyone else should- read competition law books instead of non-competition law books. No matter how good a competition law book is, non-competition law books teach you or open your mind to much more important stuff. We are just saying that -when we’ve had the time- we have found it useful to include some competition law books in our reading list.

A (certainly non-exhaustive) selection of some of the competition law books that make a most interesting read could feature Hovenkamp’s “The Antitrust Enterprise“; Areeda and Kaplow’s “Antitrust Analysis: Problems, Text, Cases“; Bork’s “The Antitrust Paradox“; Posner’s “Antitrust Law“; Amato’s “Antitrust and the Bounds of Power“; Luis Ortiz’s “Market Power in EU Antitrust Law“, Giorgio Monti’s “EC Competition Law” or Odudu’s “The Boundaries of EC Competition Law; The Scope of Article 81“. There are many other great books but we can’t name them all (suggestions in the form of comments will be welcome!).

The ones I’m currently in the (slow) process of reading (alternating from one to the other) are “Creation without Restraint: Promoting Liberty and Rivalry in Innovation” by C. Bohannan and H. Hovenkamp;  Kevin Coates’ “Competition Law and Regulation of Technology Markets” and Einer Elhauge’s (Ed), “Research Handbook on the Economics of Antitrust Law“. I´ll also be happy to read Nicolas’ most recent book ; sorry, wrong link; this is the right one!  ;) I intend to post a review of these books here once I´m done with them.

Regardless of all the above, my personal favourite antitrust book ever is one that I have only used for specific consultations and that I will most likely never read: the Treatise written by Areeda and Hovenkamp: “Antitrust Law: An Analysis of Antitrust Principles and their Application“. The reason why I know I won’t read it is that it looks like this:

Three additional comments:

- Herbert Hovenkamp -whose work is referenced above a few times- is clearly one of the 4 or 5 people from whom I’ve learnt more antitrust law, and the only one of these (aside from his co-author late Philip Areeda) whom I have never had the chance to meet in person (which again proves the importance of competition law books). We are very proud to anticipate that our next Friday Slot interview is with him!

- There is much to be said about the pricing of many of these books. But we’ll deal with that in a separate post.

- I recently recommended here a non-competition book -in Spanish, though- and a few (four) of you have sent emails saying that you loved it, which is nice to hear. Here is another suggestion, in English this time: A Heartbreaking Work of Staggering Genious.

Written by Alfonso Lamadrid

2 May 2012 at 5:55 pm

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