A refreshing – and couterintuitive – quote from Judge Bork as the EU is heading towards increased private enforcement:
“Much of the improvement in antitrust policy over the past decade and a half has come not from the courts but from the enforcement agencies. If the courts abandon economic rigor, only those agencies can preserve the rationality of the law, and then only partially. Private plaintiffs and their lawyers have rather less interest in rational rules than they do in triple damages and contingency fees. Expert economic witnesses can be found to support any theory. Without firm judicial control, private actions make antitrust “policy” ad hoc, as trials become ad hominem. Much more could be said about the devastating unfairness and anticompetitive consequences of much private antitrust litigation, but that is outside the scope of this book. In antitrust, it is possible to think the European Community as has wisely not followed the american example but has instead centralized all enforcement in a single government agency” (The Antitrust Paradox, Epilogue p.439).
In brief, Bork accuses the US courts system of the state of theoretical confusion in which antitrust law was until the 1980s. And he says that agencies often promote better substantive standards (though they select those most advantageous to them) than courts who hear cases brought randomly by private parties with evolving business interests.
We surely can agree with Bork – as we have endlessly advocated on this blog – that with prospects of increased private enforcement in the EU it becomes compelling to (i) induce judges to delve more into economic analysis; (ii) require a very stringent system of judicial review.
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.
In the past months, our savory series of posts on food and competition law had been kept in the freezer.
Thanks to the French Competition Authority (“FCA”), it is our pleasure today to defrost this category of posts.
In Groupe coopératif Agrial/Bakkavör (a merger case), the FCA concluded to the existence of a product market for salads, distinct from the product market for other fresh vegetables.
But this is not all. The FCA further delineated the market on the basis of the “technology“(sic!) applied in this sector. It accordingly distinguished between salads of 1st category (i.e. fresh, raw, unwashed, unpeeled) and salads of 4th category (i.e. fresh, raw, washed, peeled).
The bottom-line: there’s technology everywhere.
PS: thanks to A. Ronzano for the pointer.
Being a competition lawyer one cannot help but to be interested in the competitive dynamics of the very market in which we operate.
There are a few odd things to it, but I usually -although not on this blog- refer to one particular market failure in the market for EU competition law legal services: its lack of transparency (not price wise, but rather quality wise). My take on this (developed below) is that making certain legal submissions public would contribute to addressing this market failure. The report on accesibility of Court documents just issued by the European Parliament has given me
an excuse not to comment on the Google commitments that I’ve been unable to read in full the push I needed to write about it.
It’s funny to observe that the cult of personality/firms prevalent in the EU competition world is, to a great extent, grounded on practically no available information. Firms and individuals are revered and ranked in various ways and tiers; they (we) are reviewed, reveive prices, etc, but, if you stop for a sec to think about it: how do you know that any of them/us is any good?
The maximum information that one can get about the quality of a firm’s or lawyer’s work merely relates to the cases in which a given firm/lawyers has worked. Interestingly, the outcome of those cases tends to matter little; what appears to matter is to have been involved in them. Many lawyers advertise the fact that they have acted on particular cases regardless of the result, and there’s no way of knowing whether they did excellent, good enough or poorly (at the extreme, I know a few cases of lawyers who show off for having represented clients in proceedings initiated as a result of poor legal advice in the first place). To be sure, although outcomes are, at times, a very good proxy, they are not a definitive criterion, for we often know little about the objectives pursued, about the details of a case, or about its a priori odds. Actually, telling whether an outcome is positive or not, as well as determining what a lawyer’s/economists’ contribution to this result was, is almost always unfeasible.
I’d argue that the only ones who can really have an informed idea about how good a firm or a lawyer is are the people working at the Commission and at the Courts who have shared cases with them/us; they are the sole ones who are able to measure their/our work against the background of all factors in play (when it comes to pleading, the Mlex guys who listen in at the hearings could have something to say too; I’ve said before that Lewis Crofts could make some extra money by publishing a litigators’ ranking..) but no one asks them (and even if they were asked, it’s arguable whether they should disclose favoritism in this regard either).
You could argue that in-house lawyers can be good comparative judges as well, but this is not always the case: in-house lawyers are often exposed to a very reduced subset of lawyers (sometimes retained due to political reasons outside their control). Moreover, many in-house lawyers may not be experts in the area for which they hire external lawyers (this is frequent in the competition world except when you deal with particularly large firms with specialized competition counsel), and very often the less risky thing to do is to pick people who others perceive as triple A, even if the reasons justifying the perception are
ranking based unknown (the force of inertia and virtuous/vicious circles do the rest).
I’ve worked in various cases where I’ve seen well-known lawyers and firms produce documents that were not…worthy. I’ve also seen well regarded firms (sometimes even the sames as in my previous example) produce excellent work. And I’ve also seen work by less-known firms that was pretty good. The interesting thing is that in these cases the quality of the work tends to impact the result ot the case, but not the firm’s/lawyer’s reputation, for good or for bad, because no one can see and assess what was done.
In sum, to a great extent, law firms and economic consultancies are credence goods.
If you ask me, the only way to get rid of many of the absurdities derived from this market failure, and to improve the quality of legal services at the same time, would be to increase the transparency of legal submisions. It has happened all too often that I read something (a document, a plea or an argument) and wonder whether it would have been
billed for written had its authors known that it would be publicly available.
Nico and Miguel Rato wrote a few years ago about sunshine regulation; I would argue that sunshine lawyering would also be a good thing; why not follow the example of the U.S., where Court filings are considered to be public records? There are very good reasons why this should not be the case in administrative proceedings, but I see no impediment in the case of Court proceedings, and nor does the European Parliament’s report recommending that changes be adopted in order to facilitate access to Court files at the EU level.
With a group of LL.M. students from Liège, we attended last Wednesday the hearing at the General Court in Chimei InnoLux Corp v Commission (T-91/11).
This case is better known as the LCD panels cartel case. In a nutshell, Chimei InnoLux challenges a Commission infringement decision inflicting a €300,000,000 fine. Chimei seeks primarily to obtain a reduction of this fine. Its key argument is that the Commission could not include in the value of the sales used to calculate the fines, the so-called “Direct EEA sales through transformed products“, namely sales of cartelised LCD panels incorporated into finished products (screens) by downstream Chimei subsidiaries located outside the EEA. According to Chimei, those internal sales were outside the juridictional reach of EU competition law (the parties rely on Woodpulp).
On this occasion, we also had several most informative meetings with several people working at the GC and the CJ. Here’s a grab bag of impressions following this trip at the Court:
- It’s all about the facts => once again, I was amazed by the granularity of the arguments raised in proceedings before the General Court;
- G. Berardis, the juge rapporteur was just impressive. He was very picky, seemed to know the file inside out, and asked a gazillion questions to the parties. On several occasions, the parties had a tough time responding to his inquiries. External observers, like myself, often pass judgment on the intensity of judicial scrutiny just by reading judgments. I guess my views have slightly changed since last Wednesday. Judicial review is also about what happens in the Court’s room, and about how judges discharge their duties. Whilst I have, a few weeks ago, voiced concerns about the appointment of a former Commission official as judge at the GC, I also recognize that such appointments probably come with increased expertise, and in turn contribute to strenghtening the intensity of judicial review. The trade-off between impartial and efficient judicial review is clearly a complex one;
- Read Wouter Wils! We’ve praised Wouter’s papers on many occasions. But we did not know that his prose was that influential. In response to a question on the compatibility of administrative proceedings with Article 6 ECHR, someone working at the General Court said something close too: “we know there is a big debate over this issue in scholarship. I read Wouter Wils’ papers. Wils considers that there are no such problems. So my conclusion is that there are no problems“;
- Internal drafting guidelines: judges and référendaires are apparently requested not to quote any piece of scholarship, or at least to limit such quotes;
- And to conclude: rumour has it that the draft Intel judgment is approx. 700 pages long (double spaced)…
Overall, this was a great day in Court.
Google’s proposed commitments have just been made public. You can read them here: http://ec.europa.eu/competition/antitrust/cases/dec_docs/39740/39740_8608_5.pdf
And here’s DG Comp’s interesting Q&A memo on the market test.
I’ve only skimmed through them, but they are not as densely worded as I thought + they include quite useful screenshots. By the way, the Commission should get some market testing-advertising revenues too: the screenshots contain some good avertising of Digital SRL cameras (see capture above; btw, pay special attention to (i) the “sponsored” label at the top and the box that appears when you hover on it; and (ii) the line at the very bottom: “Search on Site 1, Site 2 or Site 3″; we’ll come back to these), of restaurants in Mountain View, and of President Obama.
The complainants have asked for an extended review period -3 months instead of 1-. Due to various reasons these are particularly busy days on our side, but we’ll try to to provide you with a summary and our first comments asap.
Today we hit the 500,000 visits mark on Chillin’Competition, so we just wanted to say THANKS!
Nicolas started this on March 2009, and I joined a few months later, in October (with a guest corner at the time). It’s been 4 years, 765 posts, 1 or 2 interesting posts, 763/4 nonsense ones, 1,050 comments, 1042 Linkedin group members, 506 WordPress subscribers, and a few hundred hours of telephone calls [during which I tried to
censor persuade Nico not to publish some stuff (one I can tell you about is the proposal to do the EU competition law version of this) and he complained at my (alleged) lack of political incorrection], $ 72.08 of AdWords earnings and $ 65 spent in preserving the chillingcompetition.com domain (that’s a $7 profit in 4 years, or $ 0,02 per hour spent writing here; as you see, we’re still struggling with the notion of opportunity costs…). Below’s the wordpress table depicting our evolution.
P.S. Nico has committed to pay you all a beer when we hit 1 million…