Archive for the ‘Our Publications’ Category
I’m typing live from the Swedish Competition Authority’s top-notch Pros and Cons conference, which in this 13th edition deals with the pros and cons of two-sided markets.
Despite the fact that the conference has been opened by myself and will be closed by Nicolas Petit, I promise this is a serious and highly reputed event.
In my intervention I have focused on what I’ve called the double duality of (practices carried out in) two-sided markets. A paper on the subject is in the pipeline (to be finished when work and baby allow), but most of the views I just developed are contained in this presentation (comments would be very welcome):
Having to spend a couple of quieter than usual days sick at home, I decided to catch up and so some summer reading on some recent European Commission’s publications.
As you know, DG Comp is quite prolific from a literary viewpoint (I’m not saying that this is because anyone there may have free time). Aside from an extraordinary number of soft law instruments it has also tried new genders, such as show-off comics, and regularly issues other
seldomly read stuff.
A first point to be made –and oddly enough I’ve just realized about it- is that the Competition Policy Newsletter has disappeared for good. I don’t know what has led to its termination, but it’s a pity; the articles featured in it often offered interesting insights on how some cases were viewed from the inside. The publication has been replaced by the Competition Policy Brief, which mainly deals with policy issues; not really the same concept.
A great candidate for an article on the Competition Policy Newsletter would have been the case on spare pieces of luxury watches shelved yesterday by the Commission, which did not find an infringement. This marked the first and only time that the Commission has used the claw-back clause provided for in Article 11(6) of Regulation 1; it took the case from a national competition authority (the Spanish) that was on the verge of sanctioning it and now it has concluded that there is no infringement. [For advertising disclosure purposes: we were active in both the national and EU phases of the case representing a number of the companies investigated].
I’ve also done some catching up on actual decisions. We keep on complaining that the Commission adopts fewer infringement (Art 7) decisions in non-cartel cases than it should and that we lack guidance, but then very few people read the scarce ones there are. How many people have, for instance, read Telefónica/Portugal Telecom, which raises very interesting and never discussed points on the self-assessment of restrictive agreements? The very recently published Motorola decision is also an interesting read for those geeky enough.
Then I skimmed trough the latest set of documents published by DG Comp in relation to the 10th anniversary of Regulation 1/2003, namely the Communication on Ten Years of Antitrust Enforcement under Regulation 1/2003: Achievements and Future Perspectives and the accompanying Staff Working Documents (here and here) Aside from interesting stats on enforcement, these documents contain a cautionary discussion on institutional issues related to national competition authorities (in relation, mainly, to their independence vis à vis political authorities, the necessary appointment of members of the authority on the basis of merit, “amalgamation of competences” risking “a weakening of competition enforcement”). I wonder if they had any specific NCA in mind… Some of the understatements in these papers make evident a couple of problems; for instance, when the Commission says that the “mechanism by which the Commission is informed of national courts judgments (…) has not worked optimally”, what it means to say is that national courts have completely ignored this mechanism in practice.
But what those documents are mainly about –and they’re right on point- is in identifying procedural divergences across Member States as the next obstacle to tackle. This is a recurrent issue on which I’ve insisted every time I had the chance (both in lectures and papers like this one –the others are in Spanish-). At the present moment, and due to the principle of procedural autonomy, very significant differences remain regarding, for instance, inspection powers, discretion to take on cases, powers to impose structural remedies, regulation of commitment decisions, leniency rules, existence of cartel settlements, procedural rights and calculation of fines. This leads to the result that the application of the same –EU competition- rules is very likely to lead to very different outcomes depending on the authority dealing with the case (and rules on jurisdiction often make it difficult to predict who that would be). To me, this is legally the big, fat, painted elephant in the EU competition enforcement room (hence the pic –taken at a Banksy show- at the top of the post)
Lastly, I also read a few speeches by high officials at DG COMP. In preparation for a paper which will touch a bit on commitment decisions and on the technology sector, I read a speech by Vice President Almunia on commitment and settlement decisions in which –this grabbed my attention- he referred to the e-books case explaining that the Commission “accepted commitments in a nascent and extremely dynamic market which called for quick and decisive action”. Why is that so, you may ask. The response is contained in para. 90 of the Staff document on the 10 years of Regulation 1 referred to above: at the beginning of a special section on IT, Internet & Consumer Electronics, the Commission states that “these are industries characterized with strong network efforts [it seems quite likely that they meant to say effects, not efforts] which enable the lock-in of customers and further strengthening of dominant positions. Vigilance on the part of competition authorities is thus warranted”. So, we’re told that nascent and extremely dynamic markets call for quick and decisive action because of the risks generated by network effects. The thing is that I sort of recall having read something different somewhere…
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.
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.
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“.
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 ;) )