Archive for the ‘Our Organizations’ Category
As anticipated a few days ago, on 7-8 February AIJA -with the collaboration of the College of Europe- will be holding a two-day conference on: Antitrust 2.0- Competition and Technology.
The conference will cover all hot issues in current antitrust enforcement in the IT sector, and will feature an impressive line-up of panelists (and then also Nicolas and myself).
It will be very much worth the visit to Bruges. The program is available here: Antitrust 2.0- Competition law and technology
For 16 years now Luis Ortiz Blanco has been directing a top-notch competition law course in Madrid, which is actually where Nico and I first met. I followed this program as a student quite a few years ago, have lectured on it since then, and last year I started co-directing it together with Luis (which comes handy as a justifications to travel to Spain a bit more).
The line-up of more than 50 high-profile guest speakers who come every year from all over Europe to
enjoy Madrid lecture in Madrid is a true Who’s Who of EU competition law experts. Moreover, the 115 hours of scheduled classes allow for a more detailed coverage than that offered by many other competition law courses on the market. About half of the course is lectured in English. Price wise the course is unbeatable: full registration is available for only 3,000 euros.
The final program for each module and seminar has yet to be confirmed, but the overall structure and dates have been set, so I’ve included the info below. Anyone interested can register both for the full program or just for specific module/s or seminar/s. Anyone interested in more information can contact me at email@example.com
The 2014 program will be structured as follows:
- An inaugural/introductory session by the not-so-good Professor Nicolas Petit will take place on January 10.
- A module on cartels (coordinated by myself) will be held on 13-15 January.
- A module on other restrictive agreements and practices (coordinated by Juan Andrés García Alonso; Peugeot) will take place on 20-22 January
- On 31 January there will be a seminar on recent developments in relation to Art. 101 (coordinated by Fernando Castillo de la Torre and Eric Gippini Fournier, both from the Legal Service of the European Commission).
- A module on abuse of dominance (coordinated by Nicolas) will take place on 3-5 February.
- A module on merger control (coordinated by Jerónimo Maíllo; San Pablo CEU University) will be held on 10-12 February.
- A seminar on recent developments in abuse of dominance and merger control coordinated by Cecilio Madero (Deputy Director General, DG Comp), Nicholas Banasevic and Per Hellström (both Heads of Unit at DG COMP) and Milan Kristof (Référendaire at the ECJ) will be held on 21 February.
- A module on competition law and regulation in network industries (coordinated by myself) will be held on 3-5 March.
- A module on the application of competition and state aid rules to public entities (coordinated by José Luis Buendía and Jorge Piernas) will take place on 13-14 March.
- A seminar on the application of competition law by judges and arbitral tribunals (coordinated by Francisco Manuel Serrano, Garrigues) will take place on 21 March.
Then the Antitrust Writing Award (thanks, btw, to the campaign I so well managed… ; see here).
And now (actually, last Saturday) Nico got the “Prix du livre juridique” to the best legal book published in France (see here), for his new textbook Droit européen de la concurrence.
The prize was awarded at the Constitutional Court in Paris; prestigious setting for a prestigious prize (see pic above; in case you were wondering, Nicolas is the one posing).
Judging by his mother’s comment on his Facebook wall, the prize has made the family happy. You know, there haven’t been so many ocassions to feel proud of the chap
Congrats to Nico for the prize and for his contribution to spreading the competition gospel in France. Hopefully new generations of French will gain a better understanding of competition law and,
unlike the jury in this case, will be able to tell what’s sound legal competition reasoning and what’s not !
P.S. Contrary to what you might think, I’m not writing this simply to promote my co-blogger’s achievement. I’m doing it because the a****** said he won’t give me a free copy, so I’m hoping that some advertisement will earn me one from the publisher.
The 3rd edition of EU Competition Procedure (Oxford University Press) is out.
I’m the least objective reviewer, because its editor is Luis Ortiz Blanco, who, among many other things, is the person because of whom I work in competition law (he essentialy planned my whole professional career the very first day he interviewed me for an internship, when I was only 20).
For this third edition Luis has brought together a truly exceptional team. In addition to my colleagues Konstantin Jorgens, Marcos Araujo and José Luis Buendía, who, together with Kieron Beal, Gordon Blanke and Jean Paul Keppenehad already contributed to the 2nd edition, there have been very notable additions from the Commission’s Legal Service and DG Comp, namely: Carlos Urraca, Ralf Sauer, Corneliu Hodlmeyr, Manuel Kellerbauer, Nicolas von Lingen and Maria Luisa Tierno Centella.
The book (a short read of over 1,200 pages) deals in more depth than any other source with procedural issues in antitrust, merger control, State aid, public undertakings and exclusive/special rights, competition enforcement in the EEA and arbitration. It’s a must-have.
I’ll do my best to get you an invite for the launching party, like last time.
On 15 August Microsoft announced on a blog post that Skype will come installed by default in Windows 8.1, and that it will be prominently displayed in its “Start” Menu (see Skype-right from (the) “Start”)
And, of course, given my involvement in Skype-related competition matters, when I returned from my summer holidays I had a good number of emails from students, journalists, lawyers, friends and even family who were sending me the news and asking for an opinion. Since it would not be practical to reply to all those emails separately, I have decided to do it here.
[A disclaimer first: as frequent readers of this blog know I represent the two companies who chose to challenge the Commission’s decision authorizing the Microsoft/Skype deal. This means that I certainly am not an impartial observer, but it does not mean that the views set out here are to be attributed to my clients or my firm; they are exclusively mine. These views also refer to a conduct which is post-decision and therefore not the subject of the pending case].
My first comment is: Did anyone really not see this coming?
During the past few months Microsoft has pervasively integrated Skype with most of its products. Skype is now closely integrated with, for instance, Office, Office 365, Outlook, Outlook.com (formerly Hotmail), Windows Phone 8, Xbox, Lync (as announced only minutes after our Court hearing ended), and it was only a matter of time that it would come pre-installed in Windows. In the meanwhile, Skype’s only meaningful competitor in the consumer world (WindowsLiveMessenger) has disappeared and its users have been migrated to Skype. As a result, Skype’s user base has skyrocketed since the merger (going from approx. 150 to over 300 million unique monthly users), and rapidly growing.
[By the way, all this obviously voluntarily enhances the already powerful network effects at play in the only communication markets where interconnection is not mandatory, with obvious consequences]
Microsoft’s decision to bundle Skype pervasively with other Microsoft products, including – as just announced – Windows, may actually have come as a surprise to the European Commission. In its Microsoft/Skype decision, the Commission concluded that Microsoft would not have the incentive to tie Skype to other Microsoft “leading/dominant” products (e.g., para 155). No kidding.
Now let’s cut to the chase, can the integration of an application with a dominant operating system run afoul of the competition rules?
The European Commission itself has held various seemingly contradictory views over time. Microsoft, too, appears to have opposite views on this question. Let me explain this:
In the light of the spirit and the letter of the Microsoft’s 2004 infringement decision, the 2007 Microsoft Judgment, the 2009 Microsoft commitment decision, Skype’s integration with Windows would likely raise some antitrust flags (notably concerning the market for video calls, given that currently over 3 out of 4 video calls are made using PCs). As you know, in all of those precedents, the Commission and the General Court observed that pre-installation resulted in an unparalleled distributional advantage that could not be offset by the downloading of competing applications.
The Microsoft/Skype 2011 decision, however, arrived at exactly the opposite conclusion. The comments voiced out in the past few days in the media seem to have overlooked the fact that the Microsoft/Skype Decision – despite denying Microsoft’s incentives to tie Skype to its products – did actually address the possibility that Skype could be tied to Windows, and that it ruled out any competition concerns. The Decision acknowledged that pre-merger Skype was already present on approximately 60% of Windows PCs pursuant to agreements with OEMs, but alleged that there was data -not cited- showing that in practice pre-installation resulted only in a small share of Skype users (para 162). In other words, the Commission considered that pre-installation does not offer that much of a competitive advantage because users could easily and freely download Skype and other competing applications.
Query: does anyone see any inconsistencies between the Commission’s approaches to downloading? The Commission is certainly entitled to change approaches, but since the reasons for this change were not set out in the Decision, it’s difficult to identify with clarity what the Commission’s current approach to pre-installation vs. downloading is.
If you want to play more “find the differences”, try comparing the Commission’s prospective analyses and approaches to technical tying/bundling (and, for that matter, to interoperability degradations too) in Intel/McAfee (2011) and Microsoft/Skype (2011).
And whereas the Commission’s shifting viewpoints are remarkable, what is more striking is that Microsoft is, as of today, advocating two opposite legal standards, one for itself and another for Google:
As you may remember, back in April the FairSearch coalition (led in this case by Microsoft and Nokia) lodged a complaint against Google arguing that Google is abusing Android’s alleged dominance in the market for mobile operating systems by bundling certain “core Apps” with its operating system.
[The way I see it, in the case of Android the dominance and the bundlling are much more doubttful, but that is another story, and one interesting enough -I've just realized- to deserve some specific comments in the coming days].
So, in one case Microsoft is claiming that the pre-installation of Google apps on Android phones constitutes an abuse of a dominant position in the market for mobile OSs (no matter if users are free to download any competing application; btw, Skype for Android has no less than 100 million users!), but, at the same time, having Skype pre-installed in the dominant PC OS poses no problem (precisely because users are free to download other applications).
Anyone else sees any issue conflict?
You already know this trick: busy days=
attempts at light funny or stupid posts. Today’s post isn’t particularly funny, but it sure is particularly stupid. Even though it’s not prima facie related to competition law, I’m sure that you’ll be able to find it of practical application to your law firm, competition authority, university or psychiatric institution (to name only the four organizations from which we get more readers):
A couple of Swedish professors (M. Alvesson and A. Spicer) have recently published an article titled A Stupidity-Based Theory of Organisations in which they develop the concept of “functional stupidity” and conclude that organizations with too many smart individuals risk being disfunctional. Their article has been discussed in other places like Fortune or New Scientist, where it was originally published.
The authors posit that stupidity boosts productivity, streamlines things in an effective manner, facilitates consensus, conveys respect for hierarchy, fosters a culture of commitment and effort, and that it can even help you (no offence; I didn’t mean you, I meant the stupid at issue..) get a promotion faster (the argument supporter the latter being that bosses would not promote their most useful assistants because they couldn’t do without them).
The theory also goes that people who try to make sure that everyone notices how smart they are are likely to do worse than those who hide their intelligence (a troubling thought for many of us show-off lawyers). Likewise, places where people tend to be
lieve they are clever are, according to this theory, quite inefficient (I wonder whether profit per partner ratios confirm this intuition)
Interestingly, the Fortune piece discussing this article and the benefits of stupidity concludes with a reference to Google’s simple and functional user interface (as already anticipated a few times, whether Google’s UI will be smartened up or made more complex thanks to DG Comp will be discussed in our upcoming comments on Google’s commitments; but don’t take my word for it, a couple of years ago we also committed to hold a Chillin’Competition conference and, well…).
For more on stupidity, check out Cipolla’s masterpice on The Basic Laws of Human Stupidity.
P.S. If you ask me, whereas there may be some logical basis and abundant practical evidence for some of this “functional stupitidy” theory, holding it as true would be a bit stupid, and, as most things stupid, quite dangerous.
On 23 May, the GCLC will have a lunch talk on Compliance Programmes in EU and National Competition Law.
Hendrik Bourgeois (GE), Steven Preece (OFT) and Wouter Wils (European Commission) will discuss this controversial issue.
Ahead of this event, some reading suggestions: Wouter has published a thorough paper in support of the view that compliance programmes should NOT be rewarded by agencies. Interestingly, a friend of this blog, Damien Geradin (Covington) has recently published a reply to Wouter, where he argues to the contrary. I have myself written that no rewards should be given for such programmes… but now that I have read their prose, I have to admit that I have done this less eloquently than those two antitrust titans.
Another friend of this blog, David Mamane, has asked us to advertise the programme of a forthcoming interesting seminar organised by the International Association of Young Lawyers (do I qualify for young?). This event will be devoted to competition law issues in regulated industies, and it will be held in the beautiful city of Marseille.
My back of the envelope analysis of the Commission’s prohibition decision in UPS/TNT, following yesterday’s GCLC lunch talk.
Some facts first - With this decision, the Commission prohibited a merger to duopoly in the express mail business. The Commission found that the merger would have given rise to an overly powerful n°2 – DHL being the leading player – and to the disappearance of a “maverick“, TNT (a so-called “gap case” ). Whilst efficiencies were deemed sufficient to outweigh the restrictive price effects on a number of geographic markets, the balancing test in central and eastern European markets yielded a negative outcome. The parties did not manage to convince the Commission that their “last minute” proposed remedies package (divestiture of parts of TNT’s business to La Poste + 5 years’ access to UPS/TNT’s aircraft fleet) would allay its concerns. The Commission had thus no other choice but to block the merger. The deadline for appeal exprises next week. My feeling – based on smoke signals – is that the parties will appeal before the General Court. Unfortunately, the decision is not yet published. But the Commission has published a press release and a comprehensive MEMO on the decision.
On a possible toughening of EU merger policy - Contrary to what has been written in the press, the case does not suggest a harder merger policy. The headcount of prohibited mergers for Almunia currently lurks at 4, where Van Miert and Monti respectively had shot down 9 and 8 mergers. Rather, this decision shows that merger scrutiny remains effective, even in a period of merger morass and of depressed capital markets.
On the alleged protectionist instrumentation of EU merger policy - In the US, journalists were prompt to compare the EU with China, arguing that “the Commission uses antitrust enforcement to curb the efforts of American companies to expand in their countries”. To me, this is ill-thought: the prohibition decision also protects FedEx, a US company, from the fierce competition of DHL and UPS .
On the missed opportunity to “industrialise” EU merger policy – The Commission refused to view La Poste as a “suitable purchaser” for the parties’ proposed divestiture. From an industrial policy angle, one may argue that the Commission has thereby counter productively prevented the rise of a second European giant in the parcels business, besides DHL (Deutsche Post). Now, it is well known that the Commission also seeks to open postal markets to competition. A further strenghtening of La Poste may have undermined the Commission’s parallel liberalisation agenda.
On the perils of economic analysis in EU merger policy – Let’s be frank: in this case, the parties awkwardly offered to the Commission the rope to hang them. To prove that the disappearance of TNT would lead to price increases, the Commission relied on the price concentration study initially provided by UPS and TNT. It seems the Commission just had to tweak some numbers, and what looked like a minor positive correlation according to the parties became a significant impediment to effective competition (the parties did not deny the existence of a price effect, but they argued that it was de minimis in magnitude) which could only be offset by redeeming efficiencies. In other words, by pushing this price concentration study forward, the parties lifted the burden of proof away from the Commission, and placed themselves immediately in the uncomfortable position of having to argue efficiencies. The bottom line: economic analysis can backfire.
On the interpretation of the “efficiency defense” in EU merger policy - This case is probably one of the first merger cases in which the Commission accepted that – at least on some markets – cost efficiencies would be passed on to customers. So far, the Commission had often accepted the existence of efficiencies, yet rejected them as either insufficient in magnitude or on the ground that they would not be transferred to customers. This is a very positive evolution in merger policy.
On the fallacious distinction between fixed and variable costs in the context of the “efficiency defense” – The Commission rebuffed the administrative efficiencies (overheads) advanced by the parties on the ground that they constitute fixed cost efficiencies, i.e. one-offs which have no impact on prices charged to customer. To me, this is bad policy. Whilst firms do not seek to recoup ALL their fixed costs in their short term prices, most firms try to recoup some of their fixed costs in their short term prices. So if, with a merger gives rise to fixed costs reductions, then there is less to recoup on customers in the short term. The bottom-line: fixed costs efficiencies have an influence on short term pricing. Moreover, “one-offs” fixed cost efficiencies have an additional beautiful feature: they are “structural” efficiencies that benefit to consumers forever, regardless of market evolution (growth or decline). They are thus more plausible, and likely to unravel, than “conjonctural” variable costs efficiencies.
On the interface between EU merger policy and Article 102 TFEU - To reject the proposed remedy package, the Commission speculated that La Poste would likely not develop its own aircraft fleet, so that after the expiration of the 5 years’ access remedy, it would not exert significant competitive pressure on the integrators (DHL, UPS/TNT and FedEx). This is not very convincing, for both factual and legal reasons. First, La Poste has already started a process of vertical integration. Second, after the expiry of the 5 years commitment, the Commission remains able to maintain an access remedy under the Article 102 TFEU essential facilities doctrine.
On conflicts of interests in EU merger policy – Rumour has it that at the hearing, the parties infuriated a big fish from DG COMP. The reason? The official who previously held his position had dared appearing as consultant for the parties.
On the scope of the UPS/TNT decision - The Decision concerns only 29 countries in the EEA, and not 30. The explainer it that the Commission did not manage to get any significant data on Liechtenstein, so it decided to drop this country from its investigation.
For more on this, see A. Lofaro’s excellent RBB Brief here.
The ppts of the speakers at yesterday’s lunch talk will shortly be made available on the GCLC’s website.
And thanks to Stephan Simon for suggesting to title the event after AC/DC’s “TNT“, rather than after Queen’s “Another one bites the dust“.
The College of Europe – host organisation of the GCLC – has just appointed a new Rector, Prof. Jörg Monar, who will take over from Prof. Paul Demaret on 1 September 2013.
Congrats’ to Prof. J. Monar and thanks to P. Demaret for his support to the GCLC.
This is not a 1st April joke.
BTW: for those who are in town, we have a GCLC lunch talk on the Commission’s decision in UPS/TNT on 4 April. I am particularly fan of the title of the event :).