Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

On bus lanes and State resources: AG Wahl in Eventech

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The best way to start the first post I write after my ‘formal’ induction into the blog is, I tell myself, by referring to one I wrote back in July, and which concerned the preliminary references in Eventech and Kunsten Informatie and Media. The two AG opinions came out during the Court’s hyperproductive month of September. While I still think the two cases are relatively straightforward in terms of substance, it makes sense to write a couple of notes on Eventech (in the form of two separate posts).

You may remember that the key question in that case was whether regulation allowing black cabs (the iconic London taxis) to use bus lanes and excluding the so-called minicabs (private hire vehicles) entails the use of State resources. The answer, in my view, is an obvious no. It is in fact a good textbook example showing that advantages within the meaning of Article 107(1) TFEU are not always granted through the use of State resources. The position taken by AG Wahl therefore comes as no surprise to me. It is rather the orderly analysis of the question that inspired me to write this post.

When going through it, I thought, first, of AG Jacobs’ classic opinion in PreussenElektra. It seems difficult to believe, but many of the issues that now seem straightforward were far from established when that opinion was written back in year 2000 (which, or so I like to think, is not such a long time ago). If a masterful analysis was necessary to put some order into a set of scattered and seemingly contradictory precedents, this must mean that State aid has come of age only relatively recently.

Second, I thought that I had never seen such a careful dissection of the different ways in which State resources may be involved in a case. Eventech had raised several arguments trying to link the regulatory advantage to the use of resources by the State. For instance, the firm argued that black cabs can be said to be exempted from fines for using the bus lanes, which, in turn, leads to a loss of revenue for the State. The opinion is valuable not because this argument, or similar ones, were particularly powerful or persuasive, but due to the way in which they are examined by AG Wahl. To this day, I still have misgivings about the treatment of some issues in landmark cases like Sloman Neptun. From this perspective, the opinion sets a model for the future, in particular to the extent that the Court had seemingly never been confronted with some factual scenarios that were relevant in this case.

I will write something in the coming days about the advantage aspect of Eventech. Before that, I will end on a personal note. I took an Uber cab this summer for a fairly long ride and one of the many questions with which I pestered the driver had to do with this case. Interestingly, he was of the opinion that the regulatory regime in place makes sense. He said that traffic would be unmanageable in London if minicabs were allowed to use bus lanes. And he thought he would rather be subject to lighter regulatory obligations, even if it means giving up some privileges. Thoughtful and sensible, I would say.

Pablo

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Written by Pablo Ibanez Colomo

13 October 2014 at 12:25 pm

Posted in Uncategorized

A new kid on the blog: Introducing Pablo Ibañez Colomo

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As I said in my farewell post to Nicolas, I don’t think it’s good for this blog to be run only by a practitioner like myself, so we have a “new” luxury addition to the team.

As of today, Pablo Ibáñez Colomo, who’s already been writing here for the past few months, has finally cracked and will join Chillin’Competition as editor. Most readers of this blog already know Pablo. He’s an Associate Professor of Law at the London School of Economics; prior to that was a teaching assistant at the College of Europe for three years (I was actually his student there), completed his PhD at the European University Institute in Florence (he was also Visiting Researcher at Stanford during his research period) and, among other things, is also one of the authors of the best competition law textbook ever written (in Spanish).

More importantly, like Nicolas, Pablo is also a reputed young and independent academic, a brilliant guy, a very good friend, a person whose ideas often differ from mine. On top of that, and in case you haven’t realized yet, he’s probably even geekier than Nicolas and myself :)

P.S. We will also be accepting more “guests posts”, so feel free to contact us (alfonso.lamadrid@garrigues.com and P.Ibanez-Colomo@lse.ac.uk) in case you have an urge to get anything off your chest.

Written by Alfonso Lamadrid

8 October 2014 at 11:48 am

In brief

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- I watched life –rather heard while working- the European Parliament hearings on the new Commissioner for Competition, Margrethe Vestager. She did so well that I couldn’t help thinking that perhaps she should have been given a more politically decisive portfolio (it also made me compare her with many politicians in my home country, but that’s another story).

- It’s been a while since our last quiz. I offer to pay lunch to whoever is able to tell us what was the new and special method for calculating fines that the General Court says to have used in this case (see in para. 5 the mysterious reference to “the Court’s choice of a methodology that diverges on purpose from the methodology laid down in the 2006 Guidelines”).

- Last Friday the Commission approved the acquisition of Whatsapp by Facebook (on which we had commented here). I’m looking forward to reading the decision, but from the press release I gather that the Commission has significantly refined the approach taken in Microsoft/Skype (e.g. no trace of the “inner circle” argument). Don’t know why that would have been necessary considering that, according to the General Court’s Judgment, that decision was irreproachable…

- Remember our discussion on the Groupe Gascogne Judgments (see here and here)? It has now been published on the Official Journal that Gascogne has introduced a damages action before the General Court…against the General Court: see here.

- If you have a minute (which I guess you do if you are reading this) read Kevin Coates’ new post: Gilding Refined Gold and Painting the Lily

- It is still possible to register to the Competition Day conference within the Brussels Technology Days series of events. I’ll be speaking on a panel discussing the Android proto-case together with Trevor Soames, Thomas Vinje and Neil Dryden. For more info, click here.

Written by Alfonso Lamadrid

7 October 2014 at 6:40 am

On Nicolas Petit leaving Chillin’Competition and on reasons to continue it

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(Cautionary note:  as this post is rather lengthy and rather personal, you won’t lose too much if you skip it).

Last Friday Nico announced that he was quitting Chillin’Competition, so this blog loses its founder and main figure (although it’s true that there weren’t so many).

In order to dispel the rumors that seem to be going around I’ll address them directly: no, it’s not a hoax; no we haven’t fought (in fact we had lunch together today, as witnessed by some prominent Commission officials, one of whom even said that it was good to see that we were still talking to each other despite the rumors…); no he didn’t have an affair with my wife (at least not that I know of) nor me with his girlfriend (apparently because I’m not attractive enough), and no, his move is not due to political pressures from his home country after our posts on Arnaud Montebourg (see here and here) provoked the French Government’s collapse.

So, yes, Nico is leaving the platform he created back in September 2009 (I only joined a few weeks later –on 8 October 2009-, initially as a guest, and I’m still grateful for his invitation for me to join, particularly because back then he was already well known and I was a very young associate at a Spanish law firm whom he really didn’t know that much). For some reason it worked, and in the course of these 5 years –time flies- we have written no less than 960 posts(!) and had 800,000 visits. His creature fared well.

Nicolas and I certainly didn’t have the same views on some substantive issues and we naturally did have divergences, all of them because he always wanted me to be more politically incorrect  and I always told him not to play the enfant terrible. But I think the mix contributed to this blog being less one-sided and hopefully more interesting.

As for the real reasons behind this decision, he can explain better, but I think he summed it up well when he said that “the thrill is gone”. His quitting the blog fits within a reshuffling of priorities that also includes his resignation as Director of the Global Competition Law Center. As I’m writing I’ve just recalled that, interestingly, both of these moves were already anticipated in a post he wrote 3 years ago listing possible things to quit fromin order to refocus a little on things that really matter”.

As he said in his farewell post, we had been discussing this for a while. I even wrote here back in July thatyou should expect some significant changes in Chillin’Competition after the summer holidays” . To tell the truth, at the time I was thinking of quitting myself.

I saw plenty of reasons to do it. For one, finding the time to think things through and write properly about them was becoming impossible, with the result that our publications weren’t nearly as good as we’d like them to be and wouldn’t reflect well on us. On top of that, which has been a constant over these years, I felt that what used to be a fun exercise now had become an obligation, that I was running out of ideas worth your and my time, and that what used to be a fresh approach to things wasn’t really anymore. No less important, what I enjoy is actual lawyering, and was –and still am- quite weary of being seen more as a blogger than as a lawyer, even if a bit of that is, I guess, inevitable. And most important of all, my first son was about to be born (Edu came on August 30th) and I want to save all my non-working time for him. As you can see, and as this esteemed guy observed back then over a beer or two, it really sounded like I’d made up my mind. [Actually, all this is starting to sound compelling again!]

This is all to say that when Nicolas gave me some of the same arguments in support of his contemplated move, I understood him perfectly. And the fact that he’d already quit posting 6 months ago whilst at DG Comp certainly broke the inertia and made the decision easier for him.

At the same time, it also made me reconsider my own position. For one, I thought it’d be a pity for the two of us to leave and let the blog die; not because it has any social value –which it obviously hasn’t and we surely could do more useful things with our time- but because, after all, we’ve had fun doing it, we’re even told that at times our writings may have even had an influence in the application/interpretation of the law (which, if true, I’m not sure is positive for the law, though) and it has also enabled us to meet very interesting people.

Many advised us to continue with the blog because it is good as a matter of “visibility”. Indeed, when we have asked for advice about terminating it, many –particularly lawyers- replied that we shouldn’t do it because it gives us visibility, as if that were per se a good thing. To that I consistently responded that visibility cuts both ways, that any stupidity we might write would also be very visible, that sometimes it’s preferable to remain silent and look stupid than to open one’s mouth to confirm that appearances don’t lie, and that it’s a bit of a problem that our most visible work is precisely that which –unlike real work- is done hastily and not always upon careful reflection.

I confess that the main reason why I’ll remain writing here even with Nicolas gone, at the least for as long as the baby is still a baby (I see too many people in this job with skewed priorities), is one of intellectual hygiene. For some reason I can only think properly about something when I write or teach about it. So even if it may be uncomfortable to commit to finding the time and the ideas to write here, and even if I’ll have to remain being careful with balancing it with my real job, I guess this is a good way of forcing myself out of the comfort zone to continue learning.

Since I don’t think it’s good for the blog to be run only by a practitioner like myself, a new addition to the team will be announced in the coming hours. Your ideas and suggestions on the way to go will also be very welcome.

A last note: Nicolas is quitting regular posting but I hope that he’ll be willing to contribute from time to time. We will also continue to work together in the Brussels School of Competition, the Madrid course and possibly in some other projects under the Chillin’Competition brand. And you won’t get rid of ads, because I’ve promised him to continue advertising all his events and publications here.

In sum, thanks so much, Nico, and you know you’ll always be most welcome if you ever want to return chez toi.

Written by Alfonso Lamadrid

6 October 2014 at 5:46 pm

Exit

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To all readers,

After a long period of silence – part of it was Commission-imposed – the shareholders of chillincompetition have decided to transform this blog.

From today onwards, the blog moves from joint to sole control. In plain words, I quit, and leave the blog in Alfonso’s hands.

We discussed this together, but the reasons for exit are compelling.

Paraphrasinging BB King: “The Thrill is gone, it’s gone away for good“.

Alfonso’s challenge is now to find a new “bad cop“, to keep a sane degree of political incorrectness on this platform.

Thanks to all for the support in the past years.

And to my good pal Alfonso: “And now that it’s all over, All I can do is wish you well

Written by Nicolas Petit

3 October 2014 at 10:50 am

Posted in Uncategorized

Microsoft’s Android Anathema

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by Geoffrey Manne

I want to thank Alfonso and Nicolas for letting me post here. I’ve been following the discussion of the most recent Google competition case in Europe here at Chillin’ Competition (click here for Alfonso’s comments and here for Pablo Ibañez Colomo’s) and elsewhere with great interest. And I’ve written about it back on my home blog in the US, Truth on the Market. But I have a keen interest in discussing the case with a more European audience, so when Alfonso asked for thoughts about the case, I gladly took him up on it . The following is a re-publication of my post, Microsoft’s Android Anathema. I’d welcome any feedback. Thanks!

 

Microsoft wants you to believe that Google’s business practices stifle competition and harm consumers. Again.

The latest volley in its tiresome and ironic campaign to bludgeon Google with the same regulatory club once used against Microsoft itself is the company’s effort to foment an Android-related antitrust case in Europe.

In a recent polemicMicrosoft consultant (and business school professor) Ben Edelman denounces Google for requiring that, if device manufacturers want to pre-install key Google apps on Android devices, they “must install all the apps Google specifies, with the prominence Google requires, including setting these apps as defaults where Google instructs.” Edelman trots out gasp-worthy “secret” licensing agreements that he claims support his allegation (more on this later).

Similarly, a recent Wall Street Journal article, “Android’s ‘Open’ System Has Limits,” cites Edelman’s claim that limits on the licensing of Google’s proprietary apps mean that the Android operating system isn’t truly open source and comes with “strings attached.”

In fact, along with the Microsoft-funded trade organization FairSearch, Edelman has gone so far as to charge that this “tying” constitutes an antitrust violation. It is this claim that Microsoft and a network of proxies brought to the Commission when their efforts to manufacture a search-neutrality-based competition case against Google failed.

But before getting too caught up in the latest round of anti-Google hysteria, it’s worth noting that the Federal Trade Commission has already reviewed these claims. After a thorough, two-year inquiry, the FTC found the antitrust arguments against Google to be without merit. The South Korea Fair Trade Commission conducted its own two year investigation into Google’s Android business practices and dismissed the claims before it asmeritless, as well.

Taking on Edelman and FairSearch with an exhaustive scholarly analysis, German law professor Torsten Koerber recently assessed the nature of competition among mobile operating systems and concluded that:

(T)he (EU) Fairsearch complaint ultimately does not aim to protect competition or consumers, as it pretends to. It rather strives to shelter Microsoft from competition by abusing competition law to attack Google’s business model and subvert competition.

It’s time to take a step back and consider the real issues at play.

(Click here to continue reading)

Read the rest of this entry »

Written by Alfonso Lamadrid

3 October 2014 at 10:10 am

In the press this week

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On the tax-related State aid investigations. Many newspapers opened this week with big headlines on the alleged news that the Commission had adopted a “preliminary decision” regarding the State aid probe into Apple (see e.g. here). I’m a bit intrigued by what’s behind this press campaign; the only news is that the Commission has published in the Official Journal decisions that had already been adopted before the summer. This sort of publication is never news, so why the fuss about it now is beyond me.

[It is, by the way, interesting to observe how some developments are “sold” twice, whilst others –including the closure of infringement proceedings against luxury watch manufacturers- go under the radar (disclaimer/advertising: my firm represented one of the main companies subject to that investigation)].

Given that I’ve lately been working on loads of tax-related State aid cases before the General Court I’ve developed a particular interesting in these matters. We might comment more in-depth on them in the future; for the moment, I’ll simply point out that by questioning not national taxation systems or tax rulings in general but rather APAs (advance price agreements) the Commission might be opening Pandora’s box (how many multinationals –including many EU ones- have similar arrangements?; could all of those now be challenged under State aid rules? ) For my previous comments on these issues, see here.

On the Google search investigation. The Google case has been on the news again, which, paradoxically, is no news. It’s been a while since we last commented on this investigation (partly because there wasn’t anything substantial on which to comment, and partly because the susceptibility around these issues is quite acute). One of the main contributors to this blog –Pablo Ibañez Colomo- gave his views to Global Competition Review a few days ago; Pablo explained that “[i]t is very controversial to argue that, as a rule, article 102 [prohibiting abuse of dominant position] requires all dominant companies to give access to their facilities – including operating systems or search engines – on non-discriminatory terms and conditions (…) I do not believe there is case law supporting this understanding of the provision.” According to Pablo, “there is the expectation that remedies are justified even if it is not clear why Google’s conduct is illegal”.

Last time I wrote about the case I made some comments on the politicization of competition law enforcement (see here). Since then, Vice-President Almunia has explained that politics are being left aside of the case (here, ehem). So, politics aside, let me focus on a purely legal point without discussing who’s right or wrong:

The complainant’s interesting main legal argument now seems to be that Google’s proposed commitments do not address the concerns set out in the Commission’s preliminary assessment (see, e.g. here). This a most interesting claim, and one on which many –including myself- can’t really comment because we haven’t read the preliminary assessment. In fact, no one other than Google was supposed to have seen it (according to the Manual of Procedure, “the complainant has no right to a hearing or to receive a (non-confidential) copy of the Preliminary Assessment or to have access to information”). In this case, however, the Hearing Officer granted a request for access on the part of some of the complainants (see the previous hyperlink for a source).

Now, consider the future implications of this move: in the past the Commission could overdo a bit its concerns in its preliminary assessments because, after all, they are not subject to the same requirements as the SO, would not be subject to any rebuttal on the part of its addressee, unlike SOs do not need the approval of the Commission’s President and, at most, could give the Commission a stronger hand in commitment negotiations (which, regardless of what Alrosa says, obviously exist). Now that the Commission is aware of the fact that preliminary assessments will/could be accessed by complainants, will it have to show more self-restraint? Will this have an impact on future commitment negotiations? Would these problems be avoided if the Commission was required to adopt a proper SO prior to entering into commitment negotiations?

On Android. I also saw some headlines this week anticipating, once more, the initiation of a formal investigation into Android. As frequent readers will recall, I’ve already written quite extensively about this (see here). On October 15th (the same day in which, by the way, the Commission will be making public an avalanche of decisions…) I’ll be speaking about it at a conference in Brussels, so in case anyone has thoughts about the case feel free to send them my way.

On the Euribor probe and the role of the Ombudsman. Last week, the fact that Crédit Agricole had resorted to the Ombudsman to complain about a possible bias on the part of the Commission also hit the news. CA’s claim has to do with the Commission having adopted a settlement decision finding a cartel infringement in relation to the Euribor prior to concluding the infringement proceedings against those who chose not to settle (see Gaspard Sebag’s piece for Bloomberg here). This obviously raises most interesting procedural questions, which I’d nevertheless tend to think pertain more to the realm of judicial review than to the Ombudsman. The piece includes a quote of mine which is a candidate for the prize of ‘dullest comment of the year in the press’: “It’s always uncomfortable to have to deal with the Ombudsman”. A deep thought that is… ;)

 

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