Relaxing whilst doing Competition Law is not an Oxymoron

Archive for the ‘Our Publications’ Category

Recent output

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In the course of his time off blogging, Nicolas has remained pretty productive on the academic front. Here are the abstracts and links to some of his latest work:

1. A sequel to the World Cup, with a short paper on the UEFA Financial Fair Play Regulation. In brief, he expressess doubts that the FFPR recently introduced by UEFA will promote competition in the football industry. According to Nico’s view, the FFPR is likely to create an ‘oligopoleague’ of football clubs that will freeze the market structure, to the detriment of the smallest clubs. The conclusion is that the FFPR may well constitute an unlawful agreement under Article 101 TFEU. The paper can be downloaded here.

2. A paper arguing that the TeliaSonera judgment on price squeezes has been in part repealled by subsequent case-law. The paper resorts to a short numerical example to show the flaw of finding a price squeeze in the presence of positive margins. The final version of this paper was published in the “Revue du Droit des Industries de Réseaux“, a new journal on the regulation network industries. See here: Price Squeezes with Positive Margins – Economic and Legal Anatomy of a Zombie (Final)

3. A presentation on the General Court’s Judgment in Intel, where he argueS that the Guidance Paper is not yet dead. In his view, the impact of Intel is confined to leveraging rebates – ie retroactive rebates – which are subject to a quasi per se illegality standard. As for the other rebates – eg incremental rebates – they remain subject to a rule of reason standard, though the assessment method need not be quantitative. The General Court also has generalized the Article 102(3) defense in abuse of dominance cases, though it is complex to see if this will be practical. The paper concludes with an optimistic note on the future of the Guidance Paper, and discusses the more philosophical point of whether Article 102 should seek to protect competitive OUTCOMEs or rather the PROCESS of competition. Nicolas submits that if 102 protects the PROCESS of competition, this should not dispense agencies and complainants to bring a certain degree of economic evidence in support of their allegations. See here: Intel v Commission – ABC Seminar – 10 07 14

4. A presentation on “Problem Practices”, ie practices that do not fall neatly within the conventional antitrust prohibitions: planned obsolescence strategies, most unfavored customer clauses, IP tracking- pricing, etc. He gave a speech on this at the CCP (University of East Anglia) Annual conference on Problem Markets arguing that existing EU rules can be flexibly stretched to capture such practices, and that we do not need a Section 5-type provision in our legal framework. In other words, he submits that there is no gap within the EU competition toolbox. See here: Problem Practices – CCP

5. A presentation on the principles of effectiveness and procedural autonomy in EU competition law given before an audience of judges at EUI as part of a seminar hosted by Giorgio Monti. See here: The Principles of Equivalence and Effectiveness -Petit

Nicolas is currently writing papers developing the content of presentations 3 and 4, so he’ll be grateful to anyone interested in sharing thoughts on those.

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Written by Alfonso Lamadrid

23 July 2014 at 12:32 pm

More on the antitrust-privacy interface

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In some previous posts we’ve commented on the interface between the competition rules and data protection/privacy regulation, which is one of the trendiest topics in international antitrust these days.

As you may recall, the European Data Protection Supervisor recently held a high level workshop (high level but for my intervention on it, that is) on Privacy, Competition, Consumers and Big Data. On Monday, the EDPS made available on its website a report summarizing what was discussed in the workshop (conducted under Chatham House rules). The EDPS’ summary is available here:  EDPS Report_Privacy, competition, consumers and big data.

A summary of my intervention at the workshop was published in two recent posts (here and here).

For more, you can re-read Orla Lynskey’s A Brave New World: The Potential Intersection of Competition Law and Data Protection Regulation as well as the interesting comment by Angela Daly on my latest post on the issue.

The German Monopolkommission has also addedd its voice to the debate by issuing a recent report (“A competitive order for the financial markets“) which contains a section on data-related questions regarding the internet economy. The Press Release (in English here) expressess some concerns but notes that, according to the report, “an extension of the competition policy toolkit does not (yet) seem advisable on the basis of current knowledge and understanding“.

Written by Alfonso Lamadrid

16 July 2014 at 9:33 am

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 ;) )




Written by Alfonso Lamadrid

9 July 2014 at 2:58 pm

Materials on commitment decisions + upcoming conferences (on Intel, Samsung and Motorola)

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I realized yesterday that the slides used by all speakers at the Brussels School of Competition’s and Liège Competition and Innovation Institute’s very interesting conference on Commitment Decisions in EU Competition Policy are available here  (the image above corresponds to one of mines;  as an animated GIF it looked better in slidehow).

As for my presentation, I don’t think I said anything that was particularly original. I essentially did a 20 minutes quick overview and categorization of  the commitment decisions adopted so far on the bases of  (a) the (real) underlying reasons to resort to them, which may not always have to do with procedural economy considerations; (b) the sectors they affect (you can observe clear clusters that provide useful insights regarding enforcement priorities complementing regulatory initiatives -or lack thereof-); (c) the theories of harm at issue in each case and (d) the remedies made binding. This exercise made (even more) evident that both the theories of harm and the remedies that we see in these cases are nowhere to be found in Art. 7 infringement decisions. My purpose was merely to provide an objective account of these cases, so I left the discussion on the pros and cons of this approach to my fellow panelists.

Btw, the Liège Competition and Innovation Institute will also be holding other two interesting conferences in the coming days:

Intel v Commission: More eco or more ordo fiendly? next Monday 16 of June


The Commission’s Decisions in the Samsung and Motorola Cases – IP v. Competition 2.0?on 11 July

Have a nice w-e!



Written by Alfonso Lamadrid

13 June 2014 at 11:12 am

On Privacy, Big Data and Competition Law (Post 1/2)

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As I self-advertised in my previous post, I participated yesterday at the European Data Protection Supervisor’s impressive workshop on Privacy, Consumers, Competition and Big Data, where, by the way, this blog received a few mentions.

My impression is that it provided a useful opportunity for various actors to reflect together on the nature, potential and limitations of each discipline in the wake of the EDPS preliminary opinion on these issues.

The workshop touched on competition issues several times. On the EU side, Kris Dekeyser gave the Commission’s view, and on the private side I was honored (and, frankly, a bit surprised) to be the sole EU competition lawyer speaking.

Julie Brill (FTC Commissioner; her speech is available here) and Pamela Jones Harbour (former FTC Commissioner now in private practice) also shared their views on the US approach to these issues.

I was asked to explain to a non-expert audience (by non-experts I mean those who retain the ability to realize sometimes that the king may sometimes be naked…) the notion of market power, why it is important for the application of our rules, how it is assessed in practice, and what are the particular challenges posed by digital markets and big data in this regard.

I’ll spare you the content on my intervention on the most basic issues; suffice it to say that I pointed out that the traditional means to define markets and market power are far from perfect in many ways, but that they’re not supposed to be used mechanically and in the abstract, that the Commission may depart from standard assessment tools to capture the dynamics of competition in any given sector, and that it enjoys wide discretion to act flexibly in this regard.

Moving on to the more interesting stuff. Following a conventional explanation of the main peculiar features of technology/digital markets and of their mixed competition law implications I gave my (non data protection expert) views on the big relevant issues addressed in the workshop, namely (A) What are the implications of data and big data for market definition and market power assessments and (B) Should privacy data protection standards be incorporated to substantive assessment under the competition rules

Today we’ll discuss A, and tomorrow [on Friday] we’ll deal with B, so:

What are the implications of data and big data for market definition and market power assessments?

(i)                 Data is without doubt an increasing important asset/input, and it should no doubts be acknowledged as such. As some of you may remember, some time ago I commented on an article that essentially posited this idea, which I consider to be fairly uncontroversial. In this sense, I’ve no objection to the idea that, depending on the circumstances, data-related issues may give rise to competition concerns.

At the same time, however, data is an important asset or even crucial asset, but no more; and I don’t see why competition law would be required to adapt its rules to when applying them to data-heavy markets.

(ii)               I see one exception to the above. As I explained in a recent post, our current turnover thresholds are not well-suited to capture mergers in the subsidized side of two-sided markets (which may often be markets where non-traded data is important). Only jurisdictions envisaging market share thresholds (often criticized, also by me) may be competent to assess these transactions. Facebook’s very recent decision to try to have the EU review the acquisition of Whatsapp is to be read within this context. I don’t know what the solution is, but it’s worth a thought.

(iii)             Some (including Pamela Jones Harbour in her dissent to the FTC’s Google/Double Click decision) have advocated for a definition of relevant markets for “data used for x [in that case targetted advertising] purposes”. I’m not persuaded by this proposal (except perhaps when the data is subject to trade) because I’m not sure the intermediate data market is a meaningful market in the sense of competition law. If the alleged problem is that the use of data might have consequences in some markets, then my take is that it makes more sense to assess those markets directly.

(iv)             Regarding the big substantive issue, which is related to scale, aggregation, network effects playing to the benefit of allegedly dominant firms, I essentially said that:

  • far from being an obvious competitive problem this also has mixed implications, for data can also be a source of very significant efficiencies (and big data a source of big efficiencies) in many and important fronts;
  • it is true that access to data may in some circumstances be a barrier to entry and even a very important one depending on the facts (I also noted that barriers to entry are not in themselves a problem requiring intervention because competition law is about conducts and not structure);
  • many people throw out “essential facility” as a buzzword in this context to support the contention that some firms should be mandated to share data. In my view the term is used too loosely. As I explained, the identification of an essential facility is subject to an extremely high legal burden (indispensability, elimination of competition in a downstream market…) which makes it difficult to think of instances where it could be satisfied;
  • some people had formulated the idea that network effects and scale determine that users may be locked-in to a given provider and therefore have no meaningful choice as to the privacy policy applied to them. On this point I recalled, among others, that the recent Microsoft/Skype Judgment (yeah, I’m already starting to quote it) seems to close the doors to any argument based on laziness/stickiness when switching is technically and economically feasible.

(v)              I also observed that the main issue where competition law and data protection policies may converge relates to data portability. In cases where it is shown that scale is of the essence, then practices that could deny rivals a minimum viable scale could fall within the scope of the competition rule (in fact, Google’s proposed commitments -see here and here- already incorporate a section on the portability of data for AdWords campaigns). On the regulatory front, the proposed new EU regulation on data protection (currently stuck at the Council) also incorporates a right to data portability. Btw, some of the major companies cited in these discussions already have tools to facilitate portability (see here or here)

(vi)          My last comment on this point was that privacy policies can also be a parameter of competition (even if admittedly many users currently appear to confer more importance to other parameters).

Apologies for making it so schematic, but having quite some work to do I’ve chosen to basically to a transcript of my notes, plus this is already lengthy enough for a post.

On the next post I’ll state my views on whether non-economic privacy considerations should be included as part of the consumer welfare standard.

Written by Alfonso Lamadrid

3 June 2014 at 3:00 pm

Speaking engagements

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Minutes after I published the post on endives’ right to be forgotten I received a call from the European Data Protection Supervisor’s office. At first I admit I thought it was someone (my first suspect was that guy from 21stcenturycompetition because he’d read a draft of the endive thing; don’t worry, Kevin, I won’t disclose you thought it was serious) returning the joke, but it wasn’t, and I got invited to speak next Monday  the most interesting (but closed door) Workshop on privacy consumers, competition and big data (to be held at the European Parliament and arranged in the wake of the EDPS report that we –actually Orla- discussed here).

I’d solemnly committed myself to have a life and not take on any more non-work (non-billable, that is) stuff in the coming weeks/months, but it was an offer I couldn’t refuse. My topic is Market Power in the Digital Economy.

Three days later, on Wednesday 5 June I’ll be providing an overview of the commitment decisions adopted by the Commission since the enactment of Regulation 1/2003 at the Brussels School of Competition’s annual conference. This event you really should attend (click here for info: Programme_Commitments in EU Competition Policy – 5 June 2014).

[ I apologize in advance to all attendants at these two conferences: I’ve an important General Court deadline on Friday and then a bachelor party weekend, so preparing might be a challenge. Yes, this is the ol old expectation-lowering trick ! ]

Then on 8 July I’ll be lecturing on EU competition procedure and on Special and Exclusive Rights (Art. 106) at the College of Europe’s Competition Summer School for Chinese officials. Talking with Chinese officials about how competition law applies to public measures should be quite an interesting experience.  And then on the 11th same procedural class in the context of the College’s summer course on competiiton law.

And then, following my first paternity leave in September, I really plan to take on less of these commitments.

Well, on 28 November I’ll be participating at the Swedish Competition Authority’s annual and always excellent Pros and Cons conference, which on this edition will be devoted to Two Sided Markets, but I couldn’t say no to that either…

Written by Alfonso Lamadrid

28 May 2014 at 5:52 pm

A comment on Case T-79/12 Cisco Systems and Messagenet v European Commission (Microsoft/Skype)

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On 15 February 2012, Cisco Systems and Messagenet appealed the Commission’s decision authorizing the purchase of Skype by Microsoft. On 11 December 2013, the General Court rendered its Judgment dismissing the application for annulment.

As many readers of this blog will know, I was one of the lawyers representing the applicants, and was personally very involved in the judicial phase of the case, which I very much enjoyed. For the past 5 months I’ve read some succinct comments about and I think that there are many genuinely interesting things about it that might so far have been overlooked.

Whereas I –biased as I am- have issues with most of what’s in the Judgment (and particularly with what isn’t there), I’ve decided to try to get rid of any bitterness (some irony will be inevitable, I’m afraid) and approach it in a hopefully constructive way, leaving a myriad factual case-specific issues aside, and focusing only on selected matters of general relevance to any competition lawyer.

So instead of re-arguing the case –which would be of little use at this time- my intention is to shed light on some aspects of the Judgment which otherwise not attract the attention they deserve. I’ll touch on 6 selected issues, and will offer some personal views as a conclusion.

Needless to say, my opinions are, aside from non-objective, exclusively attributable to myself, not to anyone else, notably clients and colleagues, and neither Cisco nor Messagenet have anything to do with this post.

1)      The Court ruled that the standards of proof and review applicable to Phase I (Art.6) decisions are identical to those applicable to Phase II (Art. 8) decisions

Whereas we argued that the merger should be annulled regardless of how the Court interpreted the applicable standards of proof and review, we also claimed that the standard of proof must necessarily be higher in the case of Phase I decisions because the Commission has to prove that the case couldn’t objectively give rise to “serious doubts” (which is the applicable legal test according to Art 6 of Regulation 139).

This interpretation, now held wrong, was fairly uncontroverted in academia (see e.g. the contributions EUI’s 2009 workshop on standard of proof in competition law), and had been formulated previous cases. In her Opinion in Impala AG Kokott went even further and explained that a “beyond reasonable doubt” standard applied to Phase I decisions “to compensate for the fact that at that stage the investigation of a concentration is merely a summary one” (…) “[a]t that stage, serious doubts as to the compatibility of a concentration with the common market will only prevented its being cleared to quickly and force the Commission to make a more extensive investigation in a formal procedure”. A test of absence of doubts also governs the initiation of in-depth reviews in the State aid domain, and the Court has established in that context that this test requires a review that “will, by nature, go beyond simple consideration of whether or not there has been a manifest error of assessment” on the Commission’s part (for more on this see, e.g. cases T-73/98, para 47 and T-119/02, para 77).

The Judgment in this case nonetheless states that “the standard of proof is no higher for decisions adopted under Article 6 of Regulation 139/2004 than those adopted under Article 8 of that regulation (para 46). The Court then goes on to explain that even if we correctly argued that the Commission has no discretion as regards the initiation of Phase II whenever it has serious doubts, the Institution “enjoys a certain margin of discretion” to carry out the “complex economic assessments” required in merger cases (para. 49), and that therefore the standard of review for both Phase I and Phase II is the same: that applied to complex economic assessments (limited judicial review).

What the Court is effectively saying in paras 46 to 49 is that even if the notion of serious doubts is an objective one, the Commission has discretion to have doubts or not. In my mind, this would mean that the alleged objectivity of the concept is meaningless, but perhaps there’s a different reading, which I don’t yet grasp. Even if the standard of review is the same for Phase I and Phase II decisions, it seemed intuitive to me that what has to be proved in one case (no serious doubts) and the other (compatibility or incompatibility with the internal market) is different. By rejecting this previously uncontroversial interpretation I think the Court has importantly -rightly or wrongly- expanded the Commission’s margin of discretion in merger cases.

2)      Unless I’m missing something in para. 67 the Court explains that competitive assessments in most Phase I decisions are not to be taken seriously because they do not assess the “real” relevant market.

The applicants therefore base their complaint relating to market power held by the new entity on an incorrect assumption, in so far as the Commission did not define the existence of a specific market for consumer video communications on Windows based PCs. The Commission did not therefore establish in the contested decision that operators present on the narrow market could act independently of the competitive pressure from other means of consumer communications, such as services offered on other platforms or other operating systems. In addition, the applicants did not themselves submit any evidence or study to support the conclusion of the existence of such a narrow market. By contrast, they merely criticised the factors put forward in the contested decision in order to qualify the significance of market shares”.

What this paragraph says isthat the fact that the Commission chose to assess the market for video communications on Windows based PCs was irrelevant, and that we could only have challenged this assessment if we proved that the market was the real one (!). This is quite astonishing may perhaps be a bit surprising to some, because what we were challenging was precisely the conclusion that “the proposed transaction does not give rise to any competition concerns even on the narrowest possible definition of the relevant product market”. The market might have been hypothetical, but its assessment was the only one contained in the decision and therefore the only one that could be appealed.

Unless I’m wrong (again, let me know if you see it differently) what this means that from now onwards any party wishing to appeal a Phase I merger decision should not challenge the assessment actually carried out by the Commission, but will need to prove that the assessment of the “narrowest possible market” corresponds to a real market, which will almost never be the case! In other words, from now onwards the Commission could get immunity from Court review by carrying out assessments of markets whose definition is left open.

3)      On the irrelevance of market shares in dynamic markets

The few paragraphs that have so far received public attention are the ones concerning the irrelevance of high market shares. In para 69 the Judgment states that “the consumer communications sector is a recent and fast‑growing sector which is characterised by short innovation cycles in which large market shares may turn out to be ephemeral. In such a dynamic context, high market shares are not necessarily indicative of market power”.

In fact, I agree with this statement. Market shares in these markets are “not necessarily indicative of market power”; they provide an indication which may be disproved by other factors. My problem with this is they do provide an indication, and even if it can be disproved by looking at countervailing factors, I still struggle to see those here.

In any event, there are a few paras in this section (mainly paras 79 to 84) that that are potentially quite troublesome for enforcement, particularly in technology and communication markets. No wonder these will from now onwards be cited by any company with large market shares.

4)      On the irrelevance of network effects in a non-interoperable communications market

Paragraph 76 also marks –in my view- a change in the way network effects are assessed in EU competition law by stating that the existence of network effects does not necessarily procure a competitive advantage for the new entity”.

This may seem at odds with all past Commission precedents, mainstream economics, regulation of other communication markets, the Commission’s soft law on market definition, 102 and mergers, as well as with Skype’s own repeated statements in official public submissions claiming that “the scale, global distribution and growth of our user base provide us with powerful network effects, whereby Skype becomes more valuable as more people use it, thereby creating an incentive for existing users to encourage new users to join. We believe that these network effects help us attract new users and provide significant competitive advantages”.

You may recall that the Decision’s argument to rebut the role of network effects was that users “make the majority of their voice and video calls to the small number of family and friends that make up their so called “inner cicle” (4-6 people) and that “it is not difficult for these groups to move between communication services”. This peculiar argument was endorsed by the Court. As I’ve repeatedly said over the past two years, I may well Skype the most with my wife, girlfriend (J), mother and best friend, but I would assume that my best friend has in turn a different mother, girlfriend and wife (or so I’d like to think…); in other words, groups of people are interconnected and do not communicate in movable autarkic nodules. On this point, the Judgment simply repeats (thereby endorsing) the Commission’s argument at the end of para 52 (“the network effects to which the concentration might give rise would be diluted by the fact that users tend to communicate in small restricted circles and use a range of operators. Those factors demonstrate the ease with which user groups switch to other communications services”). [On multi-homing, note that the “range of operators” meant the two merging parties –otherwise they couldn’t have a 90% market share- as openly acknowledged in footnote 52 of the decision].

4)      On the identification of competitive constraints.

A paragraph that could also prove important for various markets where companies rely on others’ technology (and for private label products) is para. 72, which dismisses the claim that Facebook (the second largest player with an overwhelming 10% of the market, whose video call service runs on Skype, which has Microsoft as a shareholder and which interoperates with Skype) would not be an effective competitor with this reasoning.

The only factor that they put forward in support of that argument is that Facebook is a licensee and strategic ally of Skype, which cannot use Skype’s software to offer services in competition with the paid services of Skype, called SkypeOut, which make it possible to, inter alia, call fixed or mobile telephone numbers and to conduct video calls involving more than two persons. However, they do not submit that that agreement prevents Facebook from offering its video communications services to consumers who might decide to switch away from the new entity if it decided to exert any market power.

So, being a “strategic ally”, using the same technology and the existence of a non-compete agreement do not indicate mitigated competitive vigor. Note taken.

5)      On switching, statement of reasons and the comparison with the Microsoft (and Google) abuse cases


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Written by Alfonso Lamadrid

12 May 2014 at 9:01 am

Motorola won’t be fined in SEPs case, sources say

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To be frank, I didn’t have anything to post today. I’m halfway writing lengthy posts on the Uber controversy (which I’m a bit hesitant to publish), on AG Wahl’s Opinion in Cartes Bancaires, on the French Nespresso case and on the new Damages Directive, but haven’t found the time to finish any. I also had an idea for a possible lame joke to post, but I think it’s way too lame even for this blog’s standards. On top of that, I’m asked (ordered) to go to IKEA later, and having to take care of the blog is no longer a valid excuse chez moi

Fortunately, Aoife White (Bloomberg) just saved my blogging day:

She tells me that credible sources anticipate that Motorola won’t be fined in the decision that the European Commission will apparently be adopting next Wednesday. Aoife explained that some people find this exceptional, and asked for my views to include a quote in her piece, available here:

Here’s the text of the email I’ve just sent Aoife (who has no objection to me recycling it into a post):


“If the news were confirmed, I would view this as a very sensible decision on the part of the Commission.

The law on abuse of dominance is often nebulous, even more so in a novel context such as the one involving SEPs, which the Commission has moreover distinguished from precedents on “sham litigation” (ITT/Promedia). In these circumstances, the imposition of substantial fines could have raised issues as to its compatibility with general principles that require certainty in the law if a penalty is to be imposed.

A declaratory decision with no fines would enable the Commission to clarify the law and set a precedent without punishing actions that took place against an unclear legal background.

This would not at all be a first; the Commission has in the past imposed no fines, or only symbolic fines, in cases where at the time when the conduct took place the law wasn’t clear on whether it could constitute an infringement.  In abuse of dominance cases, this has happened, for instance, in relation to the discriminatory sale of tickets for the 1998 Football World Cup case (2000), regarding Deutsche Post’s interception of cross-border mail (2001) and, more recently, in the Clearstream case (2009).

This may be only for geeks, but the explanatory memorandum accompanying the draft of Regulation 1/2003 also explained that the mere clarification in the public interest of new legal questions could justify the adoption of purely declaratory decisions.

Interestingly, however, EU Courts have nevertheless consistently rejected the argument that the novelty of an abuse could be invoked as a ground to seek a reduction of a fine imposed by the Commission (e.g. in Irish Sugar or Deutsche Bahn)”.


Written by Alfonso Lamadrid

25 April 2014 at 5:19 pm

‘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.

Written by Alfonso Lamadrid

22 April 2014 at 6:32 pm

On problematic markets, a new competition law app and a great book

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You know the drill: busy day= quick advertising.

- On June 12-13 2004 the University of East Anglia (Norwich) will be holding a conference on “Problem markets” (according to the organizers, this refers to markets that are “too hot for regulators to handle, with nobody quite sure why or what should be done about it“).

One of the speakers will be an also problematic (the definition above applies, except for he “too hot” bit) French Professor now turned temporary DG Comp staffer who founded this blog and who goes by the name of Nicolas Petit.  In addition, there will also be a number of big names among the speakers ;) For further details, click here.

- I’ve been contacted by the developers of a new app called “Comp law” that provides access to updated versions of the main legal documents of daily use (in the antitrust, state aid and merger control domains) in a smartphone-user friendly format; it also includes other stuff, such as a merger control calendar which takes into account Commission holidays (which I guess should be particularly useful for the holiday planning of Commission officials dealing with mergers…). It’s available at the AppStore and costs € 1,79 (for the moment it’s only available for iOS).

- The 3rd edition of Faull & Nikpay’s The EU Law of Competition is now out. It is without a a doubt one of the must-have books in EU competition law, and most likely the most comprehensive one. Indeed a great book (with over 1.2 million words according to the publicity we’ve seen).

Btw, and since we’re on advertising mood, my other must-have books are this one, this one, this one, this one (undergoing updating works), and, of course, this one (for Frenchies) and this one Before you click on any of these, be aware that the selection may not be strictly neutral…


Written by Alfonso Lamadrid

9 April 2014 at 4:44 pm


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