As Nicolas announced on Sunday, he has just joined DG Comp and won’t be posting for 6 months. I’ve only a couple of things to say:
- To the European Commission (which offered him a job and will now keep his mouth shut and his pen down): very cunning…
- To Nicolas: you’ll be missed and, despite some possible changes, this blog will stick to its original purpose: providing the competition law community with lame jokes and dodgy legal analysis
On December 17 Ombudsman Emily O’Reilly stated that there could be an appearance of “conflict of interest” on the fact that the European Commission had taken too long to open a State aid investigation affecting, among others, Athletic de Bilbao, the team apparently supported by Vice-President Almunia.
No kidding, look:
“The Commission has failed to act on this complaint for more than four years. Not only is this bad administration, but to the European public it can look like a conflict of interest given the Commissioner’s strong links to one of the football clubs in question. In my inquiry, I have not looked into the merits of the allegations concerning the breach of State Aid rules. I trust, however, that the Commission will decide to open an investigation tomorrow in order to investigate the facts and dispel any suspicions.” (see here)
The day following this a bit
absurd unusual reproach, the Commission did open an investigation which, by the way, had the effect of suddenly and exponentially multiplying the number of State aid experts in my home-country.
And last week we learnt –thanks to Lewis Crofts and MLex- that the Commissioner –who by now must be, understandably, fed up of being spied upon and even of having Spanish press report on personal matters- immediately responded to Ms. O’Reilly, explaining that:
“I am also a Spanish citizen, a member of the Spanish Socialist Workers’ Party, a keen opera-goer, I enjoy cinema and I use the Internet every day (…). These elements are however irrelevant when it comes to the commission adopting decisions on State aid regarding Spanish cases, or granted by center-left governments, or benefiting cinema or culture in general, or to tackling antitrust issues with Microsoft and Google”.
It is certainly quite unusual in the EU context to point out at “apparent biases” in the way Ms. O’Reilly did, and it makes it more striking that the bias in this case consisted in supporting a given football club.
For instance, we’d absolutely never dare to suggest or imply that it may be relevant to the investigation that Ms. O’Relly is Irish and that Irish football teams haven’t fared well against Spanish teams (with the last Irish defeat occurring in the course of the procedure before the Ombudswoman’s office!)
By the way, an “interesting” fact for competition geeks: Ms. O Reilly previously worked at Magill and RTE, two of the parties to the well-known Magill case.
P.S. For the record, we predicted this State aid to football clubs mess almost 4 years ago (see here).
Next Friday we’ll be holding the annual seminar on Recent developments in abuse of dominance and merger control within the framework of the course that Luis Ortiz and myself direct in Madrid. Starting at 16.00, this seminar will feature:
Cecilio Madero (Deputy Director General, DG Comp): Introduction and overview.
Nicholas Banasevic (Head of Unit, DG Comp): Competition law and Intellectual Property: Recent developments.
UPDATE. The intervention on Recent developments in merger control has been cancelled.
Milan Kristof (Référendaire at the European Court of Justice): Recent developments in the case law of EU Courts.
For more info you can contact the course’s secretary at email@example.com or drop me a line at firstname.lastname@example.org (I will be travelling for the next 30 hours (including 3 very tedious transfers…) so don’t expect a rapid response from me).
As Alfonso hinted in a previous post, I will be an “atypical” trainee at DG COMP in the next 6 months.
The stage starts tomorrow, and whilst I keep my ULg, GCLC and BSC activities, I have decided to discontinue my posts on the blog during my stay at COMP.
Alfonso will of course remain active. And I’ll be back in full force in 6 months.
Meanwhile, you can still write to me at my usual university address.
This post also gives me a last opportunity to share with you several recent presentations and papers:
- A presentation on injunctions on SEPS given at the University of Wurzburg (Germany), in the context of a seminar series organized by Professor Florian Bien: Universität Wurtzburg – Presentation on Injunctions
- A presentation on Compliance Programmes in EU and National Competition Law, given in Paris at a joint EDHEC-Ernst&Young conference: Antitrust et compliance – 11 02 14 – Risque juridique et compliance – tendances actuelles NP
- A paper on the flawed patent=monopoly equation (co-authored with Prof. Bostyn): http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2373471
- A paper on market power in the credit rating industry (co-authored with Profs Candelon and Gautier): http://ssrn.com/abstract=2392989
With Alfonso, you guys are in good hands.
And my posts will presumably be better informed when I return in 6 months.
Vice-President Almunia has just made it clear that the Commission will accept the third version of Google’s proposed commitments. In his words, ”the new proposal obtained from Google after long and difficult talks can now address the Commission’s concerns. Without preventing Google from improving its own services, it provides users with real choice between competing services presented in a comparable way; it is then up to them to choose the best alternative. This way, both Google and its rivals will be able and encouraged to innovate and improve their offerings. Turning this proposal into a legally binding obligation for Google would ensure that competitive conditions are both restored quickly and maintained over the next years.”
The Commission’s press release is available here.
What happens now is that the Commission will send complainants a letter (pursuant to Article 7(1) of Regulation 773/2004 informing them that the Commission has obtained what it considers adequate commitments and that in its view there are no longer grounds to pursue the case. They will then have a chance to complain again. The Commission will then adopt a number of decisions: one under Art. 9 of Regulation 1/2003 in order to make those commitments binding, and a number of decisions rejecting all complaints received. I suppose that Google’s very active and well funded rivals will want to appeal those decisions before the General Court (with, I believe, arguable chances of success after the Court’s recent ruling in Microsoft/Skype, which was extremely favorable to Google for reasons that I might explain in a later post). This is, by the way, the outcome we always predicted.
In my personal opinion, this is a wise move on the part of the European Commission. However, it’s unlikely that the Institution will receive much praise: some will say that it demanded too much from Google (particularly given the US precedent), many others will say it’s been too lenient, some will say the investigation took too long, others will claim that it was incomplete. The fact that they will be criticized from both sides may actually suggest that perhaps the Commission has done something right.
As you know, I was never a big fan of the case (see here, here or here among others), but I always saw the proposed commitments (even in their first version) as a balanced attempt at putting and end to it getting the Commission what it wanted without introding too much in Google’s innovative business model. For my analysis of those commitments (as forecasted, despite some improvements the essence doesn’t appear to have varied since then) see here and here.
It will be interesting to discuss this development in the course of the upcoming AIJA conference on antitrust and technology in Bruges this weekend.
As I mentioned on a previous post, for quite some time now I have been attempting (or rather planning) to finish a lengthy piece about evidence in cartel cases. Any of you weird enough to also find these things interesting –or who are otherwise obliged to follow the developments in this area- might have also noticed an increased willingness on the part of EU Courts to engage in a critical analysis of factual elements regarding evidence.
One illustration of this intermittent but commendable approach can be seen in a recent Judgment in case T-379/10. The Judgment concluded that the Commission did not have sufficient and reliable evidence to find that there had been a particular infringement (an agreement on minimum prices for low end ceramic products for the French market in 2004 by the members of an association –AFICS-).
In paras. 110-121 of the Judgment the Court motivates its conclusion, assessing one by one each of the four items of evidence put forward by the Commission. In a nutshell, it rules that (i) a third party’s reply to the SO wasn’t valid evidence because it had not been disclosed during the administrative procedure; (ii) that leniency statements by another party, given that they are contested, are not “on their own” sufficient proof of the infringement; (iii) that a chart provided together with a leniency application wasn’t enough, because it was “undated and contains nothing that might link it to the AFICS meeting of 25 February 2004 or to any anti-competitive discussions (…) In particular, the chart does not mention the names of competitors or any minimum or maximum prices which those competitors should apply”; and (iv) that yet another party’s leniency application, despite confirming exchanges of minimum prices within AFICS during 2002-2004, disputed the recollection of facts related to the specific meeting of February 2004. [Keep this last bit in mind; we’ll come back to it in a sec].
Few national Courts would have engaged in a similar assessment. The easy way out would’ve been to say that (ii) and (iv) corroborated each other and were moreover corroborated by (iii), and possibly also by (i). Since the appraisal of factual evidence is not a matter of law (however malleable this may be), that assessment would have most likely not been appealed before the ECJ. The GC nevertheless did not take this safe shortcut, and it should be commended for that rigorous approach. I wish all Courts did the same.
There is a problem, though. This sort of assessment occurs in some cases but not in others. For the most extreme example possible (I’m not aware that this has ever happened before), see…. the very same infringement!! Yep, in two other parallel Judgments issued on the same day, by the same Judges and in relation to the same facts (case T-373/10, paras. 286-296; and T-364/10, para 324), the General Court declares that that very same alleged infringement (really, the same one, the agreement on minimum prices at the meeting of February 24 2004) had been properly found by the Commission.
And the reasoning to do so resorts pretty much to the shortcut I described above; i.e. that (ii) and (iv) corroborated each other. What is more, the party that made the leniency statements that I referred to above as item (iv) actually received a 6% fine reduction for having contributed to proving that infringement (yes, the one that had not been proved in the parallel case!).
So we have two different solutions to the same exact issue. Not sure about how this gets fixed now (I understand there are pending appeals against these Judgment).
I have some friends who like to claim that no one reads Judgments anymore, but I thought that was only endemic outside the Court itself… ;) In the Court’s defense, however, I guess this -among other things- is what may happen when the workload is very significant and Member States don’t agree on increasing resources (i.e. the number of Judges).
Have a great weekend!