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The General Court on the scope of the Commission’s powers to request information

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On Friday 14 March the General Court issued seven Judgments in cases T-292/11, T-293/11, T-296/11, T-297/11, T-302/11M T-305/11 and T-306/11. We represented one of the seven applicants (needless to say, the opinions below are exclusively my own, and in no way can be attributed to my client or my colleagues).

I had already anticipated those Judgments noting that -irrespective of who the prevailing parties were- they would be of great interest and procedural relevance. [The Judgments came out while I was lecturing on competition procedure at the Brussels School of Competition, so I discussed them almost live].

The cases concerned seven appeals lodged by cement companies against massive -arguably unprecedented- requests for information, and they are important because the Court was asked to clarify whether there are any real limitations to the Commission’s investigative powers.

There have been two groups of Judgments:

-In six cases the applicants grounded their appeal on the lack of motivation of the information request. In those cases the GC has ruled (a) that although “it is true that “the presumed infringements [were] set out in very general terms which might well have been made more precise”, they have the minimum degree of clarity in order to be able to be considered to be consistent with the requirements of EU law; and (b) that even if “the size of the workload caused by the volume of information and the very high degree of precision in the response format imposed by the Commission cannot be reasonably disputed”, that workload was not disproportionate in the light of the necessities of the enquiry and the extent of the presumed infringements.

[Intermission: Too often, when the Court decides to dismiss an application it practically denies any reason to every argument made by the applicant). This wasn't the case here, and the Court was objective and transparent enough to acknowledge that there could be problems, but that they were overridden by effectiveness considerations. I like it better this way].

-The content of the Judgment in the seventh case (T-296/11 in which we acted for the applicant) is different, as explained in the Court’s press release http://curia.europa.eu/jcms/upload/docs/application/pdf/2014-03/cp140035en.pdf

Instead of focusing our arguments on lack of motivation (which we thought would at most have only given us a temporary victory), we had posited that the criterion of “necessity” in Art. 18 of Regulation 1/2003 should be interpreted not in light of what the Commission intends or hopes to find, but in the light of the elements that the Commission has and that raise the suspicion triggering the investigation. We claimed that otherwise the criterion of necessity would be devoid of any practical significance.

The GC has accepted the theory (as it did in Prysmian and Nexans -now pending before the ECJ- regarding inspections). According to the GC, the Commission is not obliged to disclose to the companies the preliminary evidence at its disposal, but it must have enough evidence to justify the information request (paras. 38-40).

In this particular case, and since the Court acknowledges we had “put forward factors capable of casting doubt on the sufficiently serious nature of the evidence concerned”, the Commission was very exceptionally asked to produce a summary of its file. Luis Ortiz Blanco and myself were asked to go to Luxembourg to access it and make observations without being allowed to disclose anything not even to our client [I'm not disclosing anything confidential because this is all explained in paras. 23-26 of the Judgment]. This is what explains that a great part of the Judgment is redacted as confidential.

Obviously I can’t say or even hint at anything that’s not been disclosed in the non-confidential version of the Judgment. Essentially, the Court explains that in the light of the Commission’s file the Institution could have validly addressed the exhaustive and exhausting information request to the applicant. The reasoning (mainly contained in para 59) is that even if we did offer an alternative interpretation of the elements in the file, the Commission cannot be asked at a preliminary stage to have evidence so consistent as to be sufficient to establish an infringement; it’s enough to have evidence that -at a preliminary stage and absent third party contextualization- would have arouse a reasonable suspicion.

The lines of what’s reasonable are of course blurry, and the Court’s approach is -rightly or wrongly- deferential to the Commission and to the need of safeguarding the effectiveness of its investigations, particularly at an early stage. Some may fear that if Courts started annulling requests for information (or Phase I clearance decisions, to pick a “random” example) then the floodgates would open. However, failing to annul those categories of decisions systematically and regardless of their merits or lack thereof those may also be akin to conferring carte blanche on the Commission, and that (regardless of the unquestionable good intentions of the Institution) might also have drawbacks.

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Written by Alfonso Lamadrid

14 April 2014 at 9:38 am

Conflicts of Interest in EU Competition Law

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It’s been two months since Nicolas temporarily left this blog for a half a year stint at DG Comp’s Private Enforcement Unit.

In the course of this short period he’s managed to single handedly unblock negotiations on the Commission’s proposal for a Directive on Antitrust Damages, and he’s adapted very well to the fonctionnaire lifestyle (meaning that he’s now taking some days of holidays) ;)  (jokes aside, congrats to Eddy de Smijter and to the rest of the people involved in the negotiations about the Directive).

As he anticipated in his farewell post, Nico is maintaining all academic activities. Within that context, he’ll soon be participating at a conference on one of is favorite topics organized by his University. So, on 24 April the Liège Competition and Innovation Institute will be hosting a conferece in Brussels on Conflicts of Interest, Ethical Rules and Impartiality in EU Competition Policy .

Although Nicolas knows that I don’t share the same passion for the topic (or maybe precisely because he does?), he’s asked me to advertise the conference here. So voilà. It will feature representatives from the General Court, the European Commission, the OECD, the Belgian Competition Authority, as well as lawyers in private practice, The New York Times’ Brussels correspondent and ULG Professors and Researches, including Nico himself. Even Emilly O’Reilly (the current Ombudsman, whom you may remember from this) is on the tentative list of speakers.

Why do I say I don’t share the passion for the issue? Because whereas some improvements could possibly be made in the rules -mainly regarding their transparency-, I think we should be careful in not overshooting the mark. Otherwise we’d risk creating the impression that there’s a major endemic problem where I’m not at all sure there’s one (I, for one, I’m much more concerned about the Commission’s recruitment processes and about internal rules that oblige experienced people to rotate jobs too often or too soon). Anyone working in Brussels for some time will have worked with, against and before friends or professional acquaintances (sometimes the line is drawn too thinly). In my experience who you have on the other side doesn’t matter (at least for good: I do know of situations where lawyers’ friends deciding on cases have been unnecessarily harsh on them just to make a point and dispel any concerns, and that’s as unfair as the contrary) and there are enough checks and balances to avoid problems. The only positive consequence of working before people who know you is that they will perhaps trust you, provided that you have never proved not worthy of that trust (and competition law practice is also a game of repeated interactions), but I don’t see what’d be wrong about that.

As I told Nico back when he wrote his controversial piece on this subject, what’s different in our field is that our “relevant market” is very narrow; we’re not so many lawyers/economists repeatingly interacting among us and with the same academics, officials and judges. The only solution to the perceived problem, as framed, would be to have virginal public officials and lawyers who have not moved around jobs, who know no one, who haven’t studied at the same places, who haven’t worked with different people and who haven’t established a personal rapport with those in their field. In my view, at least, in that case the cure (assuming it were feasible, quod non) would be worse than the disease.

That said, considering the speaker line-up I’ve no doubt the conference will be most interesting.

 

Competition law in two-sided markets

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This is a last call: exactly in one week (on thursday, 3 April) the Academy of European Law (ERA) will be holding an afternoon workshop on Two sided markets in abuse of dominance and merger cases.

I don’t think it’s an overstatement to say that this is the most interesting possible event ever to have been organized on what definately is the single most important and fascinating subject in contemporary antitrust (and beyond).

The two speakers (Thomas Graf and Lars Wiethaus) are great; the Chair a bit less so.

If you haven’t done so yet, you can still register here.

As a teaser, I leave you with the only slide I’ve been able to come up with so far  ;)

 

Written by Alfonso Lamadrid

27 March 2014 at 6:37 pm

On DG Comp’s fight against tax competition and tax planning

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Tax%20Planning

The European Commission has in recent years been very active applying State aid rules to tax provisions and regimes. The first paper I ever wrote back in 2004 (don’t read it, it was initially done for a tax course and I was a 20 year old student…) dealt with those issues; now, ten years later, I’ve taken interest again on this subject and am currently involved in a handful of cases dealing with the taxation/State aid interface before the General Court.

The fact is that the Commission has recently undertaken a more proactive and prominent role in resorting to State aid rules to public initiatives that, in its view, facilitate aggressive tax planning. Those of you attending the 2014 Competition Forum back in February will recall that the Commission held a panel on “Taxation and Competition Policy”, in which it inquired about the role of State aid investigations in tackling tax evasion, tax fraud and aggressive tax planning (a video recording of the discussion as well as the transcripts of the speeches are available here).

Against a background of lack of political consensus on how to deal with harmful tax competition and what is seen as tax avoidance, the Commission is keen on being regarded as a proactive authority (it’s not the first time that competition policy is used to achieve results that couldn’t be attained by governments and legislators).

As part of this effort, the Commission has sent information requests to various Member States in order to assess the compliance of tax ruling practices (advanced binding decisions in fiscal matters which may allow for special treatment for some particular companies) and patent box regimes (incentives designed to encourage companies to make profits from their patents) with state aid rules. Yesterday the European Commission went through the trouble of issuing a Press release aimed at naming and shaming Luxembourg for having failed to provide information (specifically, the names of thelargest 100 companies benefitting from the patent box regime) , invoking fiscal secrecy.

I was quoted yesterday in a Bloomberg piece in relation to this news, so I though it’d be interesting to recycle my thoughts explain my views in a bit more detail here:

This is a highly sensitive area where publicly visible messages (such as yesterday’s press release) may send powerful signals and give rise to concern on the parts of governments and companies, and where playing to the gallery might therefore be considered useful at times. That’s part of the game and shouldn’t surprise anyone.

But if we’re realistic, we should realize that (for as long as fiscal policy remains within the realm of nation States), there’s a limit to what can be achieved with State aid rules, and that it’s doubtful that the current investigation, focused on patent box regimes and tax rulings, will yield any meaningful results:

-       Patent box regimes have been authorized in several Member States, and the Commission has consistently accepted that they do not confer the selective advantages that would qualify them as State aid.

-       With regard to tax rulings –and whereas I’m not aware of the details of the investigation- even in the event that the Commission were to find incompatible State aids, this would only have the effect of suppressing divergent tax treatment within the Member State at issue (the Commission can only identify as aid deviations from “the system of reference” provided by the State’s standard tax regime ). This would therefore not at all address the main, big picture, concern linked to divergent treatment across, and beyond, different Member States.

It’d nevertheless be interesting to follow developments on this area. The amounts that could be in play for many companies would make any antitrust fine look insignificant. Anyone in need of a lawyer? ;)

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On 20 March the Global Competition Law Center will be holding its 68th lunch talk. The topic is the 2014 Communication on the notion of State Aid, and the speakers Vittorio di Bucci (Director at the EC’s Legal Service), Nicola Pesaresi (Head of Unit, DG Comp) and my colleague/boss José Luis Buendía (Partner at Garrigues). You can register (this is an interesting, brief and cheap one: 30 euros) via this website.

The Institute for European Studies at the VUB in Brussels will be starting a series of lectures on the role of national competition law and national competition authorities. The inauguaral lecture will be delivered by Alexander Italianer (Director General at DG Comp) on 21 March at 12. More info is available here.

Also on 21 March there will be a seminar on the application of competition law by judges and arbitrators (in Madrid and in Spanish, though), organized within the framework of the course that Luis Ortiz and myself co-direct there.

On 3 April ERA will be hosting an afternoon workshop on Two sided markets in merger and abuse of dominance cases here in Brussels featuring Thomas Graf (Cleary Gottlieb), Lars Wiethaus (E.CA Economics) and myself. This is not to be missed. The program is available here: Two Sided Markets in Merger and Abuse of Dominance Cases (ERA)

The 21st St.Gallen International Competition Law Forum ICF (“Current issues and developments in competition law“) will be held on May 15th and 16th 2014. Even though for some odd reason we haven’t been invited to speak there (which obviously lowers the quality of any event ;) ) we acknowledge that the speaker line-up is otherwise quite impressive. Further information including a detailed programme are available on the conference website: http://www.sg-icf.ch/.

Last but not least, the book Comparative Private Enforcement and Collective Redress Across the EU, edited by Barry Rodger, is just out. Looks quite promising.

P.S. And speaking of ads, I’ve just checked Chillin’Competition’s ad-related earnings and we get approximately $4 per month (which is slightly below my hourly rate) for approximately 25,000 monthly visits. We have high aspirations, though, and, I tell you, one day we’ll be getting enough to pay for at least two monthly beers.

Written by Alfonso Lamadrid

12 March 2014 at 12:23 pm

Posted in Events, GCLC

Two-sided markets in merger and abuse of dominance cases

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When you have a 8 9 10 to 9 ? job it’s often quite hard to do things on the side, and, between us, it may not make much sense that many of them are work-related. Only this month, and in addition to ordinary work -which included 5 Court deadlines- and blog posting, I had to lecture in Madrid about 102 (intro, tying and refusal to deal in 3 hours), participate in the panel on interop at AIJA’s antitrust and tech conference on a Saturday morning, finish and present a paper on evidence in cartel cases, and lecture -next Friday- for 6 hours at the Brussels School of Competition on procedure. And since I thought it would be the quietest month in sight, I took a week off for my postponed Christmas holidays (not very smart, no). Overall I spent almost as much times in planes (11 flights this month) as in the office, and had to compensate at the cost of sleeping hours.

Why should you care about all this? You shouldn’t; this is all to explain why during this whole month I kept on swearing myself that -blogging aside- I would refuse any non-work projects for the next few months. Well, said and not done:

On 3 April ERA will be hosting an afternoon workshop on Two sided markets in merger and abuse of dominance cases here in Brussels. They couldn’t have chosen a more interesting topic, so I gladly accepted to chair it. Not only is the subject matter a fascinating one, it will also be dealt with by two great panellists: Thomas Graf (Cleary Gottlieb) and Lars Wiethaus (E.CA Economics).

The program is available here: Two Sided Markets in Merger and Abuse of Dominance Cases (ERA)

Written by Alfonso Lamadrid

26 February 2014 at 1:10 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

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

ADS

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In the course of the past few days and weeks some friends have asked us to advertise a few upcoming Competition-related happenings. We’ve taken our time, but here’s a compilation of stuff worth knowing about:

The 3rd edition of Concurrence’s Antitrust Writing Awards is now ongoing.  You can vote for your favorite piece before the 1st of March.

Harvard’s European Law Association (HELA) has scheduled its first Antitrust conference, to be held on 24 March. It will deal with the informal application of  competition law in the U.S. and the EU. Click here to check out the call for papers and to find out more info: Hela_Call_Abstracts_updated (and apologies to Zena Prodromou for not having done this before!)

On 30 January the ABA’s Section of Antitrust Law will be holding a networking reception + a panel (Inquiries into Competition and Alleged Misconduct in UK Financial Services) in London. Click here for more info.

The annual junior competition lawyer’s conference will take place on 31 January. This is an initiative that we’ve always supported and that would be nice to see replicated in places other than the UK. Click here for more info.

And also on 31 January we will be hosting the first seminar within the competition law course that Luis Ortiz Blanco and I co-direct in Madrid. It will be devoted to Recent developments regarding the application of Article 101 TFEU (including damage claims, anti-competitive agreements in the pharma industry and the fight against cartels in a context of economic crisis), and will feature Fernando Castillo de la Torre (EC’s Legal Service), Eric Gippini Fournier (EC’s Legal Service), (Carlos III University, EAGCP and CEPR), Mario Mariniello (Bruegel), Helmut Brokelmann (MLAB), Maria Luisa Tierno (DG Comp), Natalia Fabra (Universidad Carlos III, EAGCP), Flor Castilla (EC’s Legal Service), Borja Martínez (Uría Menéndez), Antonio Martínez (Allen&Overy), Jesús Alfaro (Linklaters) and Gerald Miersch (DG Comp). I’ll post the final program here as soon as it’s ready.

Very importantly, a reminder is in order: on February 7-8 AIJA and the College of Europe will be holding the not-to-be-missed conference Antitrust 2.0 Competition Law and Technology.

P.S. We’ve also been asked to mention that the Swedish Competition Authority is taking steps to publish decisions in English. Our source suggests to present this as one of the major 10 developments on the year, which I’m a bit hesitant to do ;) However, the Swede’s move is commendable, particularly when compared to what other national competition authorities do (the new Spanish authority doesn’t even have an English version for its webpage…)

Written by Alfonso Lamadrid

8 January 2014 at 5:49 pm

News

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Gradués

Next week:

  • On 17 December, we’ll have a GCLC lunch talk on the Aegean/Olympic merger decision. S. Simon (COMP), B. Durand (RBB) and A. Guttermuth (Arnold & Porter) will be our speakers. Registration here.
  • On 18 December, we will have the graduation ceremony of the Brussels School of Competition. This is an open ceremony, and you can register here. There will be tons of good food and  top notch tier antitrust lawyers. Not sure which of the two is the seller :). Above, some of last year freshly graduated studs.

Recently, our friend David Henry and his friend David Ashton have published a timely, thorough, thoughtful book on Competition Damages Actions in the EU. The book is impressive, it makes a thorough exploration of how the main EU MS have dealt with antitrust damages to date. Congratulations to them.

Yesterday: I was at a conference in Paris giving a presentation on IP and antitrust law. And I finally spoke of lions, black swans and butterflies. For more, see below (2 files, read 1 before 2).

Presentation ASPI – Rappel des grands principes applicables à la relation DEC-DPI (2) Presentation ASPI – Rappel des grands principes applicables à la relation DEC-DPI (1)

 

 

 

 

 

Written by Nicolas Petit

12 December 2013 at 5:22 pm

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