Chillin'Competition

Today, my ex-Howrey colleagues invited me to give a presentation on recent developments on EU competition law at Shearman & Sterling. I was very honoured.

It gave me the opportunity to read  the recent judgments in Telefónica v Commission, Post Danmark and Tomra v Commission.

On my own arbitrary scale, the ranking of those judgments is as follows:

1. CJEU, Post Danmark, C-209/10
2. CJEU, Tomra v Commission, C 549/10 P
3. GC, Telefónica v Commission, T-336/07

A word of explanation is in order: amongst those three judgments, the Grand Chamber of the Court should  first be praised for its ruling in Post Danmark. The judgment dissipates the uncertainty generated by Compagnie Maritime Belge in clarifying that selective price cuts are presumably legal when prices > average incremental costs. But this is not all. The Court makes very explicit – and this is right in my opinion – that dominant firms can compete on the merits even if this forces rivals off the market (§22). In so doing, it recognises that not all foreclosure is unlawful, but only that “anticompetitive foreclosure” matters under Article 102 TFEU. Last, but not least, the judgment upholds the unnamed “Article 102(3) TFEU defense” that the Commission had plugged in §30 of its Guidance Paper (see §42).

The second judgment on my podium is Tomra. It comes second because the dicta that dominant firms should be able to compete on the merits for the entire market is wholly unfortunate (§42). It is first non-sensical from an economic standpoint. But as we wrote here, it is also inconsistent with the approach followed in other areas of competition law . A similar comment applies to the unconvincing assertion that a “suction effect” can be established without any need to run a price-cost analysis (§79). Not all in Tomra is bad though. In particular, the judgment encapsulates a subtle message of hope at §81 when it implies, a contrario, that the Guidance paper will have increased relevance in future Article 102 TFEU cases:

“As the Advocate General observes in point 37 of his Opinion, the Guidance, published in 2009, has no relevance to the legal assessment of a decision, such as the contested decision, which was adopted in 2006”

The worst of those three judgment is, by far and large, Telefónica v Commission. In this judgment, the General Court obediently implements the perplexing standards set by the Court in Konkurrensverket v TeliaSonera Sverige AB (C-52/09). To me, it is beyond common sense, conventional wisdom, reason, logic, honesty, intellectual sanity to consider that a dominant firm can abusively squeeze its rivals through high prices, meanwhile being under no duty to deal with them (see §180). In the language of driving metaphors (I love them), this is akin to forbidding someone from driving at 130 km/h, meanwhile explicitly entitling him to drive at 200 km/h.

I should, however, be very grateful to the Court. The release of those rulings comes at a perfect time, with our Brussels School of Competition conference on “Costs in EU competition law” scheduled on 9 May. The number of participants keeps increasing, and yesterday, the General Counsel of one of the 3 firms involved in those cases registered .

In preparation for my lecture at the Brussels School of Competition last week I read a couple of Commission documents that I had not had a chance to look at: the Manual on Procedure and the recent Guidance on Confidentiality Claims. For very different reasons both of them are commendable.

- The Manual of Procedure is much more comprehensive than what I think most of us had expected (even if the non-confidential version -which has 277 pages- appears to be half as long as the original one, which according to the Ombudsman was “roughly 500 pages”). John Temple Lang deserves to be congratulated for having managed to have the European Commission make its Manual public, but the Commission also deserves to be thanked for having favored transparency when drafting the publicly available version.

The only thing I find missing in the public version is a summary description of the content that has not been included in the Manual because of confidentiality concerns. It would have been nice if the Commission had followed the instructions set out in its own guidance on confidentiality claims which state that “[f]rom the non-confidential version it has to be clear where information has been deleted“.

- The Guidance on Confidentiality Claims was not a promising document. There can be little of promise in a document whose subject-matter is the most boring thing a lawyer can do (I must confess that I started reading the doc very late at night on Thursday and was very tempted to skip it). But against all odds, the Guidance makes a fun skim read. Yep, I´m serious. Whoever wrote it has done a terrific job. The main characters of the Guidance are Red Little Riding Hood, her Grandma, Big Bad Wolf, Mr. Charming, Snow White, Ms. Magic Mirror, Wicked Step Mother, Mr. Humpty Dumpty, the Little Mermaid, the three little pigs and others. 

P.S. By the way, on the procedural front the Commission has in recent times issued not only the Manual, but also a comprehensive set of Best Practices and a new Hearing Officer’s mandate. Query: are any of these moves aimed at preempting a possible challenge to the current procedural framework before the European Court of Human Rights once the EU joins the Convention?

Lately, several good friends of Chillin’Competition have made interesting career moves. A brief recap:

• Scott McInnes (Jones Day and She Goes Electro) is moving to Mastercard.  BTW, Alfonso, here’s a present suggestion for Ms. Lamadrid who recently got her driving licence: Scott sells a very nice car at a very competitive price;
• Ief Daems (ex Howrey/Shearman & Sterling) has moved to Samsung;
• Laura Zadunayski (former student of the ULg LL.M in Competition and IP law) leaves Johnson & Johnson for boose Diageo (this one is very bad);
• Tarik Hennen (Squire Sanders Brussels and GCLC) leaves the bar and is poised to reappear in a wholly unrelated market;
• Guillaume Taillandier has left Squire Sanders Brussels for a in-house position at Bemis – a flexible packaging company with its European HQ in Belgium;
• The new Richard Whish, Christopher Townley (King’s College London) has been awarded the title of Senior Lecturer with effect from 1 September 2012
• Alfonso ………….. stays at Garrigues.
• I stay full time in my good old Belgian university…

Congrats’ to all of them!

We’ve returned from our holidays with recharged batteries and with plenty of new ambitious and perhaps unfeasible projects that we’ll be disclosing here in due course.

One of our blog-related aims for the coming months is to boost one of the most characteristic market failures in legal markets: not to much competition, but rather too many competititons.

We observe with interest that in our little antitrust world there are almost more prizes, awards and rankings as there are antitrust law specialists. To be sure, we’ve also contributed to this by creating the Worst-Antitrust development Prize and our Antitrust Oscars, but there are many more: just think of Concurrence’s new Writing Awards, of the Jacques Lassier Prize; of the many law firm directories ranking firms and lawyers such as Chambers, The Legal 500, Best Lawyers, IFLR,  Global Competition Review’s Annual Awards, or in GCR’s well-known and recently-published 40 under 40 – by the way, don’t you also get the impression that some people must have lied about their age?  -.

The problem with some of these sometimes pricey prizes is that they are inherently subjective. Whereas most of us admit that absolute neutrality and objectivity are unrealistic aspirations (a dozen recent complainants before the European Commission seem to think differently), some things in life can still be measured objectively.  That’s why we at Chillin’ Competition have decided to create the first objective legal competition:  we’re creating the “Fastest Antitrust Expert” Award.

The news of the Spanish professor who got sued because of an antitrust-related story that he wrote on his blog led us to question our way or life. “Should we run marathons instead of blogs“, we thought. This profound thought led both Nicolas and myself to register to run the Brussels 20 k on May 27th. 

In the context of a mutually encouraging exchange of  emails (which in essence consisted of Nicolas saying that my two previous running times reveal that I’m slow and of me responding that he’s short-legged) we came up with the idea of opening our challenge to all readers of this blog. These are the rules:

• The “Fastest Antitrust Expert” Award is open to all readers of Chilling Competition: public officials, lawyers, academics, students and, basically, to anyone who has registered for the 20k and who registers on the blog.
• Registering yourself with us is easy: you can either send us an email or write your name in a comment to this post; you must however do that before 1 May.
• On 2 May we will publish the list of names of those of our readers who are taking part in the 20k;
• In the weeks before the race we will be organizing some more stuff open to all participants (I have in mind something like Nicolas cooking pasta for everyone the night before the race…).
• The Prize: the winner will get an special interview at “The Friday Slot” as well as a pair of Li-ning running shoes.

Sorry, can’t help it.

It is now the Commission that puts food on the table.

Yesterday, the Commission announced a 169,000,000€ fine in the Freight Forwarders cartel.

On this occasion, it announced that some cartel participants had organised their contacts in a so-called “Gardening Club” and that they had used coded language based on names of vegetables – such as “asparagus” and “baby courgettes” –  when talking about fixing prices…

Thanks again to Aoife White for the pointer

As most readers know, Alfonso has been gung ho about endives.

On pain of breaking the anti-food fatwa enunciated yesterday by my learned co-blogger, I must report today the ultimate case in this series of post.

Earlier in the month, the Belgian competition prosecutor issued the equivalent of a SO in a case concerning a “salad” of unlawful exchanges of information. Please tighten your seatbelt. The practices under investigation cover:

• Candies, including possibly chocolate;
• Ice-cream;
• Sauces (BBQ season is coming);
• Veggie and other stocks;
• Pet food…

Clearly, the scope of this investigation goes beyond anything reported earlier on this blog.

Thanks to Aoife White (Bloomberg) for the pointer.

One last thing: given my co-blogger’s obsessive focus on food, I suggest that, for our next quizz, chief Alfonso cooks an antitrust dinner to the winner, where endives will be served with flour and BBQ sauce.

Photographed yesterday, in Moscow’s metro. I know, I am a real antitrust geek…

Now, more seriously, I am spending the week in white Russia – it has been heavily snowing here – where I teach a course on competition law at MGIMO university. This is the third year I do this. Again, it is a very pleasant experience. I am very impressed by the level of the students.

Teaching EU competition law outside Europe requires some adaptations, in particular when it comes to give  examples. I thus did my homework to get acquainted with the names of (i) national telco incumbent and of the big supermarket chains; (ii) the basic structure of Russian competition law; (iii)  the Customs Union between Belarus, Kazakhstan, and Russia.

A final thing. I made a presentation at Deloitte and Touche Moscow yesterday on recent developments in EU competition law (see link to the ppt below). It is a rather basic presentation. I have to make a similar presentation in several law firms in Brussels in the upcoming months, but I intend to sophisticate it a little. If you have any comment/input/remarks that may help, please write to me.

Recent Developments in EU Competition Law – Deloitte (21 03 12) NP

PS: to avoid any misunderstanding, the title of this post is in relation to The Dude’s favorite drink…

Endives have been a highlight of this blog.

They have become a presidential topic.

Last week, in a large-audience TV programme, N. Sarkozy discussed – and actually lambasted – the decision of the French competition authority (FCA). This comment was in reaction to a question by a woman in the audience, who complained that the FCA decision prevented agricultural producers to coordinate selling prices.

Here’s N. Sarkozy’s answer (quick and dirty translation):

The FCA “went a little to far … I would like agricultural producers to be able to sell at prices above production costs … hence one must define, with other production groups, what is an average production price … and the competition authorities must not consider this average production price as a restriction of competition“.

In clear, the price of veggies should be defined collectively amongst producers at a level > costs, and the competition watchdogs should not challenge this.

But there comes my preferred part. To conclude N. Sarkozy added, referring to the FCA officials:

“They must have the intelligence of understanding that were are not talking about Microsoft and Apple“.

Check the video above or here between 2:00:45′ and 2:01:57′.

[Note by Alfonso: That competition authorities compete to be among the world-class enforcers is something we all knew (see for instance GCR's Ranking Enforcement Special Issue). What you probably didn't know (and, frankly, we didn't either) is that there is a football championship in which competition authorities also sweat out their competitive spirit. We have been asked by the organisers of the upcoming edition to help promote this event among competition authorities, and we're glad to do it; it looks like sure fun!]

After two highly successful and memorable events hosted by the NMa and the Bundeskartellamt in 2010 and 2011, the Hungarian Competition Authority (GVH) has the pleasure to announce that the 3^rd European Competition Football Championship (ECFC) will take place in Budapest this year.

The GVH is pleased to invite all European competition authorities to the 2012 ECFC in Budapest, which will be organised together with a workshop on sports and competition law.

Workshop on sports and competition law
3^rd European Competition Football Championship 2012
7-8 September 2012
Budapest, Hungary

Should you have any questions, don’t hesitate to contact the organisers at ECFC2012@gvh.hu. Any interest in participating at the event should be made by the end of April.

Here are some pics from the winners of the previous editions: The Ducth NMa (2010) and the Hungarian GVH (2011).

This weekend we were sending out invitations to the next guests of The Friday Slot, and at one one point the issue of how many readers Chillin’Competition has came up. We checked our stats with a bit more detail than we normally do, and we were amazed at what we saw:

In almost every month of its existence (leaving aside the summer holidays and Christmas) Chillin’Competition has set new readership records.

Last week was important, because it was the first time that we consolidated the figure of 1,000 daily readers. Last week, people from 83 different countries (!) read 182 different posts. Belgium, with 1282, was the country of origin of most of these visits, followed by the UK, the U.S., Spain, France, The Netherlands, Luxembourg and Italy.

Below is the map that wordpress shows us:

In February 2010 we recall thinking that maybe we had hit our ceiling (that month we had 4,993 readers). But in February 2011 we had 10,873; and then in February 2012 we had 14.994…

Throughout its history, Chillin’Competition has had 239,908 readers. Its LinkedIN group has 524 members, and more than 260 other people are directly suscribed to through our homepage.

We are thrilled.

Thank you!!