Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for the ‘International Antitrust’ Category

Hotch Potch

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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 ;) )

 

 

 

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Written by Alfonso Lamadrid

9 July 2014 at 2:58 pm

Wrapping up the week (on SEPs, Uber, Tesla, lawyer moves and legal rankings)

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This week’s blogging inactivity has had a lot to do with a pile of new and old work, the fact that I’m moving houses and have the in-laws here (a painful process; the moving, I meant), the fact that I devoted some time to watching two Spanish teams get to the Champions League’s final (I guess Germans and English will now put increased pressure on the ongoing State aid investigation) and the fact that we had some farewell events for one of my closest friends and colleagues (this guy, who is moving to the Commission).

So, here’s a quick overview of some stuff we couldn’t cover:

- The news of the week was the adoption by the Commission of decisions in two much talked about SEPs cases. The Commission made binding the commitments proposed by Samsung (see here for our initial comment on these) and -as we anticipated last week- adopted a decision declaring an infringement on the part of Motorola, which did not receive a fine. The Commission has sough to introduce some clarity on a matter in which the industry couldn’t agree by providing a safe harbour for standard implementers/willing licensees. We might discuss these more in depth in the coming weeks. For the time being, the Commission’s FAQ’s are available here . The Commission’s decisions might have brought additional clarity to the industry, but they also will have side-effects on conference organizers and on certain academics, lawyers and officials, all of whom will now have to find a new topic to talk about  :) [Btw, WordPress’ new smiley faces are much uglier than the older ones..]

- I also see that the controversy surrounding Uber continues.  To date I don’t think  anyone has brought up a potentially very interesting EU competition law aspect to the case (other than the cartel accusation launched by Neelie Kroes in her most unusual blog post). It’s always surprised me how little we take advantage of the potential of EU law to challenge public restraints on competition…

- On a sort of related note, I was glad to read that 3 FTC staff directors have decided to intervene (albeit informally by means of a blog post; does everybody do blog-policy these days??) against unjustifiable prohibitions on Tesla to sell directly to final customers (that story would merit an ad hoc post) (btw, some people wrongly blame antitrust law for those restrictions: see here).

- There were recent moves at Covington&Burling, this time on the opposite direction as the most recent ones. The firm has hired one of our Friday Slotters (Johan Ysewyn) as well as re-hired Peter Camesasca, who was working with his own firm at Samsung during the course of the above mentioned investigation on SEPs.

- [Sort of self promotion alert] Chambers& Partners rankings came out last week and for some odd reason I seem to be the only ranked associate for EU Competition Law under a certainly narrow “associates to watch” category. Since some of you have sent emails in private commenting on this, I’ll repeat my response in public: I’m not going to lie saying that it bothers me, but off the top of my head I could think of a good pile of names to include there (I won’t list them here because my list -like any list- would also be subjective, potentially discriminatory and based on very imperfect information). In addition to that, (i) I always said these things are to be taken with many pinches of salt, and I of course maintain that; (ii) being there might have to do with being at a smaller place with a lot of exposure to clients (who moreover were kind enough to seemingly do positive reviews) and perhaps (I don’t know) with the non-merits based visibility given by this blog; and (iii) my firm’s overall positioning in the ranking is not yet where it should.

In any event, I’m not even sure this is something to be proud of: I guess it only means that I’m the poorest guy in the list…

 

On Mexico’s controversial antitrust innovations

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innovation

 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.

 

Written by Alfonso Lamadrid

8 April 2014 at 8:51 am

Obama’s secret antitrust dealings in Brussels today

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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:

TrafficDisturbance

Written by Alfonso Lamadrid

26 March 2014 at 12:56 pm

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.

Written by Alfonso Lamadrid

6 March 2014 at 6:28 pm

An announcement and a nomination

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bestes jurablog 2014 sonderpreis ausland

The announcement:  On 15 February my co-blogger Monsieur le Professeur Nicolas Laurent Max Petit (no kiddin’) will be joining DG COMP for a 6-month stint.  I’m curious as to how this experience will impact his views on the Europen Commission’s work.

Btw, Nico took care of the inaugural lecture at the IEB course in Madrid on Friday and did a great job. Tomorrow he’ll be delivering a must-attend presentation on Art. 102 at Les Mardis de la Concurrence in Brussels (the PPP will be made available here).

The nomination: Chillin’Competition has been nominated as one of the best foreign legal blogs in a competition ran by our favorite German site (Kartellblog) (as if we were able to read German…). Thanks to Johannes Zöttle and to whovever nominated us. Since it’s always nice to win something (or so I’m told  ;) ) you can vote for us here: http://kartellblog.de/2014/01/06/poll-beste-jurablogs-2014/

Written by Alfonso Lamadrid

13 January 2014 at 9:09 pm

Antitrust tidbits

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- On Friday Brazil’s CADE announced that it’s also investigating Google pursuant to a complaint filed by Microsoft (see here). The investigation appears to address the very same practices previously investigated by the FTC and DG Comp, on which we’ve already commented ad nauseam. I may reduce my coverage of all Google-related issues (despite the attention we’ve paid to that case in recent times, there’s world beyond that in antitrust), but given that my firm is finally! currently betting big in Latin America (see here), I’ll now be spending more time looking at competition law developments over there, and possibly commenting on them here. Btw, if you’re interested, there is a very good blog on competition law in Latin America.

- Some of you may have wondered about how the Federal Government shutdown in the States is affecting antitrust enforcement. If that’s the case, here are the contingency plans set up by the DOJ and the FTC.  On a non-antitrust related note, I’d strongly recommend you to check out Jon Stewart’s hilarious coverage of the shutdown:  Rockin’ Shutdown Eve

- Headhunting season remains open in the Brussels legal market, with David Hull also leaving Covington (third partner to leave in recent weeks following Lars Kjolbye and G.Berrisch) to join VanBael & Bellis.  Speaking of headhunting, for some interesting thorughts on the Brussels recruiting world, check out Steve Meier’s blog.

- A friend sent me this piece from abovethelaw.com on 10 Reasons to Leave BigLaw. Don’t think that a good part of what it says applies to everyone, but it’s always good to measure your choices against a contrarian -even if arguably exaggerated- view.

- Certainly the most relevant thing that happened in the antitrust field in the past few days (or maybe not) was my presentation about Interoperability in the payments industry last Thursday in Brussels :)  Here’s my presentation: Interop_Payments_Lamadrid (only makes sense if you click on slideshow).

Until I was invited to do this I’d frankly never paid much atention to the much-hyped mobile payment fever, but have now discovered a most interesting area. As I explained at the conference, if smartphones and payments have received so much antitrust scrutiny on their own, their marriage will be something like an antitrust lawyers’Nirvana!

The sector shares all the interesting features of high tech (multi-layered, multi-sided, strong network effects, rapid evolution, etc.) but has the peculiarity to feature both strong incumbents and stong entrants (traditional payment service providers, mobile network operators, tech companies…), all of which enjoy some degree of market power that they’re trying to leverage. The business strategy aspects of it are most interesting: everyone is setting up alliances (often with natural competitors), often betting on multiple horses, and at the same time acting unilaterally not to renounce the opportunity to reign the market (hence the Game of thrones slide). At the same time, we’re told that all players will end up holding hands and competing happily in an interoperable candyland where consumers’ life will be made easy and pleasant (hence the following slide). My bet is that on that road a number of interesting competition issues will arise, notably concerning access to the “secure element” (which is the key to the provision of m-payment services).

Written by Alfonso Lamadrid

12 October 2013 at 5:17 pm

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