Archive for the ‘International Antitrust’ Category
As you might have noticed, we took an unnanounced temporary break from bloggin’. First it was due to a particularly intense period of work (I might give more details about it in the future) and then to (my only…) week of Summer holidays during which I wanted to hear nothing about competition law [btw, I read these two very recommendable books (here and here), only to find out that the latter -a dystopian novel about tech companies- does refer to European Commission's antitrust investigations as part of the plot...].
In between this break Chillin’Competition surpassed 750,000 visits [I checked the stats and only in the past year we've had visits from 193 countries (exactly the same as the members of the UN)], which still today feels pretty surprising. We are however increasingly struggling to find the time to improve what we do here; at least in my case, this is proving a challenge (and it’ll be even more in the near future once the upcoming paternity reshuffles my priorities). This is to say that you should expect some significant changes in Chillin’Competition after the summer holidays, hopefully for good.We’ll explain this in more detail soon.
Nicolas -who will soon end his time at DG Comp- and myself discussed a bit about this yesterday when we met by surprise at a corridor of the College of Europe in Bruges; we were simultaneously lecturing in two contiguous rooms and hadn’t realized about it… By the way, I was lecturing to a group of very smart Chinese officials (pictured above) about EU Competition Procedure and Article 106 TFEU (the provision with the greatest unexploited potential in EU Competition Law) and very much enjoyed discussing with them (this in spite of -excellent- consecutive translation, which added a level of complexity to the conversation). In case anyone is interested, here are the two power points I used (although I’m afraid you might have trouble understanding much): EU Competition procedure (CoE-China) and Article 106 (CoE-China) (many thanks, by the way, to Carlos Bobillo and Ana Balcells for taking care of these. One day they’ll realize that the main advantage of spending a few years at a law firm is that you can get someone to do your PowerPoints ;) )
As I mentioned some posts ago, over the past few months I’ve been paying increased attention to competition law issues arising in Latin America. Until now I hadn’t shared here any views about what’s going on there, but this time the issue merits a comment, not the least because it calls into question the much talked about process of international substantive (or at least legislative) convergence in our field.
As you may know, Mexico is currently considering a reform to its competition law system. This is a move that many considered necessary; respected publications such as The Economist or even the influential book How Nations Fail had insisted in recommending Mexico to boost its competition law system and target market concentration as a way to increase growth and reduce inequality. But whereas few would challenge Mexico’s need for vigorous competition policy, many in the antitrust community are voicing out concerns in relation to some of the envisaged reforms.
For the most part, Mexico’s contemplated Competition Act is in line with other competition regimes around the world, including the EU’s. The proposed reform, however, includes some novel and unusual provisions, concepts and remedies that have given rise to concern, namely:
(i) several provisions (arts. 52, 55 and 57) that would turn the erection of “barriers to competition” (a term not defined in the draft Law) into a new self-standing violation of competition law (one that would seemingly be added to the prohibition on restrictive agreements and abuse of dominance); and
(ii) a provision (art. 94) that would grant the authority powers to “determine the existence of barriers for free competition” and order “corrective measures deemed necessary” for the purpose of eliminating them (“the measures may include the elimination of barriers to free competition, regulation of essential inputs or divesture of assets, rights, partnership interests or shares in Economic Agents in the proportion required (…) The measures concerning the existence of an essential input shall include modes of access to it, price or tariff controls, technical and quality conditions and time schedules”. This last provision reportedly attempts to mirror (although with some diferencies) the UK’s market investigation system.
Unsurprisingly, strong varied opinions have been published in various forums.
One of the best pieces written so far on the subject (and one that has the virtues –for us- of departing from the EU system and of being written in English) has been co-authored by our friend Assimakis Komninos (who has contributed to this blog in the past) and Anne Perrot (with whom I had the pleasure of sharing a panel last year). The Komninos-Perrot piece has been echoed not only in Spanish language press, but also in places like the Financial Times. It’s worth a read, and it’s available here: MexicoEurope(Komninos&Perrot)
For those of you who are interested in more and can read Spanish, I would recommend this document, featuring opinions from various experts.
P.S. Unrelated to the reform, but nevertheless interesting: a former member of the Mexican competition authority recently told me about a Mexican case that perfectly illustrates both the need for competition advocay in the country as well as how strictly the concept of “policing” a cartel has been interpreted. This 2010 COFECO decision refers to an official agreement subscribed by the municipal authorities of a given city with “tortilla producers”; the municipality divided the city into various areas, each one of which was exclusively assigned to a particular producer (delivery motorcycles all were painted in a color corresponding to the area in which they could operate). The task of ensuring compliance with this market sharing arrangement was entrusted to the municipality’s police. No kidding. And if you think this would not happen in Europe, read again our previous post on Monsieur Arnaud Montebourg.
Many EU officials and
some of the fauna making a living around them as well as many -like me- working in the EU area in Brussels are (once again) experiencing security checks, traffic disruptions and blockades today due to the visit of US President Barack Obama to conmemorate the 10th anniversary of the Microsoft decision, and to lobby Vice-President Almunia with respect to the Gazprom and Google antitrust investigations (Chillin’Competition has obtaiend a pic of the President discreetly entering the Madou tower this morning).
Chillin’Competition has also learnt that Obama’s travel arrangements haven’t gone according to plan:
First, Obama’s staff sent to Europe in advance to verify in person the recent developments on the antitrust damages front experienced some trouble as they were initiating the mission trying to consume a typical and typically cartelized product (beer).
Second, President Obama is reported not to have landed at Zaventem airport, as planned, but at the secret runway at Charleroi airport discovered by DG Comp (if you didn’t know about this one, click on the link; it’s too good to be true). Apparently, the managers at Zaventem told AirForceOne that it couldn’t land because the flight had not been scheduled with enough antitipation (“on sait pas faire ça, ici c’est la Belgique, monsieur“) were the exact controllers words.
Third, the President chose to spend the night at The Hotel (the usual venue for GCLC conferences) with the hope that he could perhaps attend a lunch talk. He couldn’t.
Finally, it seems that, at the end of the day, road blockages served no purposes:
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.