User’s Guide
The naysayers pretend that this blog is for “self-promotion“.
Last WE, we received again a comment by “Someone” (or is this Raymond again?) who bashed us for our lack of objectivity, our allegedly one-sided editorial line, and other things that I cannot even recall.
Since we do not publish rubbish, especially when anonymous, we decided to trash the comment.
Now, a few reminders are in order:
- The reading of this blog is not compulsory. Escaping Chillin’Competition is just “one click away“;
- There are no barriers to entry on this market. A blog costs nothing to set up. Those who may be willing to contradict us can freely do so;
- We do not self promote, and certainly not Alfonso (did you read yesterday’s love declaration?). Our Friday slot series and the Economist corner bring ample proof of this;
- If I am the one to self-promote, it is because I am a fairly anonymous guy: I have a twin brother, and I have two very famous homonyms (see here and here).
The European Commission’s Legal Service
One of the good things about this blog is that it enables us to give credit to the people who, in our view, deserve it.
Today it’s the turn of the European Commission’s Legal Service.
Why them? Because many of the most brilliant jurists and many of the most reasonable and kind people that I have come across in my professional life were/are members of the Commission’s Legal Service. We won’t cite individual names because it would be unfair to those not mentioned, but also because the list would be too long.
These guys know competition and State aid law inside out, but they also know there are other provisions in the EU Treaties; they have the uncomfortable mission of second-guessing the case team’s work and of facing lawyers in Courts; they don’t have the same means and tools that big firms have; they sometimes have to fight armies of lawyers with the help of only one or two colleagues; they have an unbearable workload (Fernando Castillo de la Torre recently told us that he’d had more than 20 oral hearings last June!); and still they win most cases. And when they win there are two options: (a) either other people get the credit; or (b) everyone blames the Court for getting things wrong. That’s not always fair; I have worked with, and most often against, them, and in every single case they did an outstanding job.
Were Court submissions in the EU not confidential (query: should they?), people would realize the importance that the Legal Service has had in shaping up competition law.
All of this sounds like we are buttering them up but, frankly, it´s what we think. We seldom see their work praised in public (praising the ones on the other side of the table is not always common whereas demonizing the Commission is), so we decided to take it upon us to say that the work these guys do is to be acknowledged.
We said above that some of the most brilliant and nicest people in the competition law we’ve met in the competition law world belong to the Legal Service. We are very proud to anticipate that one person who fits perfectly into this description, Eric Gippini-Fournier, will be our next “Friday Slot” interviewee.
François Hollande and Competition Law
The French Presidential election was held yesterday and, as you know, François Hollande won.
There is significant expectation as to the changes that the result of this election might entail for the rest of the European Union. Now, should we expect any changes in the competition law domain?
Nicolas Sarkozy did have an undeniable impact on competition law. First he managed to delete from the Lisbon Treaty the reference to the objective of ensuring “free and undistorted competition“ in the EU (see here and here) and then he taught us the difference between endive growers, Apple and Microsoft (an explanation that, as you may remember, prompted our friend Mark English to stop wrapping his iPhone in ham).
Those interested in Hollande’s views on competition law should read his replies to Concurrences’ interview (in French, though).
The Friday Slot (10): Herbert Hovenkamp
As we announced a couple of daus ago, today’s Friday Slot festures an interview with Herbert Hovenkamp. We also said in our previous post that, even though we have never met Professor Hovenkamp in person, there are very few people who have taught us more about antitrust law. His works (cited in this 17-page CV) exude an all too rare lucidity. When he was awarded the John Sherman Prize by the US Department of Justice, Thomas Barnett said that “Professor Hovenkamp sets the standard for antitrust scholarship today”. We agree. If you ask us, Professor Hovenkamp is not only the co-author of the best book in the history of antitrust law, but he’s also the author of a few more of the works that would feature in our top-10. That’s why we were thrilled to receive an email in our inbox from him (signed as “Herb”) accepting our invitation to take part in The Fridat Slot only a few minutes after we contacted him.
We are immensely grateful to Professor Hovenkamp for having accepted our invitation, for all that his work has taught us and will continue to teach us, and for his enormous contribution to making antitrust law a more sensible discipline. We leave you with him now.
“Oscar” of the best antitrust law book? Non-antitrust book?
Best Antitrust Book: Oliver E. Williamson, Markets and Hierarchies: Analysis and Antitrust Implications (1975).
Best non-antitrust book: Louis Menand, The Metaphysical Club: A Story of Ideas in America (2001)
“Oscar” of the best case-law development in the past year? “Oscar” of the worst case-law development?
Best: Mayo Clinic v. Prometheus Laboratories, 132 S.Ct. 1289 (2012)
Worst: FTC v. Phoebe Putney Health System, Inc., 663 F.3d 1369 (11th Cir. 2011).
Let’s do it like economists => assume that you could change 3 rules, principles, judgments, institutions in the current EU antitrust system. What would you do?
Answer: I would speak only to the United States system, where I would change the following three things:
A. The per se rule against tying arrangements (insofar as it still exists)
B. The strict recoupment requirement in predatory pricing cases when prices are clearly below average variable cost
C. The federal courts’ repeated refusal to see the competitive harm in reverse payment settlements in pharmaceutical infringement cases
Average working time/week?
According to my family, way too much.
Why do you work in antitrust law? How did you first get into it?
A very good and inspiring teacher in law school, Lino Graglia of the University of Texas
Most interesting, intense or funny moment of your career?
The first time I sent a manuscript to my sadly departed and at the time very senior co-author, Phillip E. Areeda, in 1985. It was intense although not necessarily funny.
Your role model (if any) in the antitrust community?
What do you like the least about your job?
Grading exams
What do you like the most about your job?
The classroom, particularly my antitrust, torts and innovation and competition policy classes.
What do you like the most about economics in antitrust law?
Its ability to separate rational from irrational conduct (at least in many cases)
What you like the least about economics in antitrust law?
Its tendency to become overly technical and thus beyond the reach of the people who are most central to antitrust decision making.
What career/personal achievement are you most proud of?
Completion of the Antitrust Law treatise after Phillip E. Areeda’s death in 1995, and also the recent completion of my book Creation Without Restraint: Promoting Liberty and Rivalry in Innovation (with Christina Bohannan) (Oxford, 2012)
A piece of “counterfactual” analysis: what would you do if you weren’t in your current position?
I would be either a Dutch Reformed clergyman or a Professor of American History
Besides being a “antitrust geek” (sorry for this one, but we all are), what are your hobbies?
Raising children and dogs, and traveling
Favorite movies?
Sappy chickflicks: The Notebook, Sleepless in Seattle, Titanic
Favorite music style in general?
1980s and 1990s rock and progressive country
Your favorite place in the world?
Paris
Your favorite motto?
« Just Do It » [apologies to Nike]
Websites that you visit the most (besides Chillin’Competition)?
–RealClearPolitics.com
–Slate.com
–eBay.com
A piece of advice for junior antitrust professionals?
For young antitrust academics: don’t get too hung up on ideology.
Costs Conference – Last Call
A last call for our conference on costs next week (I have pasted below the earlier annoucement, Tomra is out).
I would be very grateful if our readers could disseminate the programme within their respective organisations.
To help clarify how and why costs are used in competition proceedings, the Brussels School of Competition(BSC) will organize on 9 May a half-day compliance seminar (this seminar was due in early 2012, but was rescheduled).
Amongst other things, this seminar intends to review recent case-law developments, in particular the recent judgments handed down by the EU Courts in the Post Danmark (C-209/10) and Telefónica (T-336/07) cases. Hopefully the Tomra ruling will also be out by this time [it is out].
In line with the interdisciplinary spirit of the BSC, this seminar attempts to “blend” competition law and economics. Under each selected topic (see agenda here), it thus brings together a team of one lawyer and one economist, who will seek to provide an integrated perspective on the issue.
This event is a joint initiative of the BSC and of the Institute for European Legal Studies (IEJE) of the University of Liege (ULg). The registration form can be found here.
Reading Competition Law Books
In our “Friday Slot” interviews we ask what competition law book deserves an Antitrust Oscar. A frequent reply from our interviewees is that they do not read competition law books but rather consult specific sections of such books when they are looking for something in particular.
We don’t necessarily agree with this view. Even though there are certainly some books that we only use for reference, we believe that some of the best books on antitrust are texts that you will not come accross if you’re just looking for references or for the answer to a very particular problem.
In our very own experience, reading certain competition law books written by people who clearly outsmart us has provided us good general overview of issues that we may not had/have yet seen in our professional life, and, most importantly, it has obliged us to reflect and think about what makes sense and what doesn’t in a discipline to which we devote an insane proportion of our life. Personally, we have learnt most of the theory we know from books and not from attending courses, seminars or conferences, no matter how good they were.
The obvious -and reasonable- response is “if, as you say, you already devote an insane amount of time to this, why on earth would you spend non-working time reading about the same subject?”. That’s partly true, but, the way we see it, it is one thing to spend your time working on a particular issue, and a very different one to take the time and distance (not to let the trees hide the woods) to reflect on the reasonableness of the overall discipline in which we are immersed.
We’re not saying that we do -nor, of course, that anyone else should- read competition law books instead of non-competition law books. No matter how good a competition law book is, non-competition law books teach you or open your mind to much more important stuff. We are just saying that -when we’ve had the time- we have found it useful to include some competition law books in our reading list.
A (certainly non-exhaustive) selection of some of the competition law books that make a most interesting read could feature Hovenkamp’s “The Antitrust Enterprise“; Areeda and Kaplow’s “Antitrust Analysis: Problems, Text, Cases“; Bork’s “The Antitrust Paradox“; Posner’s “Antitrust Law“; Amato’s “Antitrust and the Bounds of Power“; Luis Ortiz’s “Market Power in EU Antitrust Law“, Giorgio Monti’s “EC Competition Law” or Odudu’s “The Boundaries of EC Competition Law; The Scope of Article 81“. There are many other great books but we can’t name them all (suggestions in the form of comments will be welcome!).
The ones I’m currently in the (slow) process of reading (alternating from one to the other) are “Creation without Restraint: Promoting Liberty and Rivalry in Innovation” by C. Bohannan and H. Hovenkamp; Kevin Coates’ “Competition Law and Regulation of Technology Markets” and Einer Elhauge’s (Ed), “Research Handbook on the Economics of Antitrust Law“. I´ll also be happy to read Nicolas’ most recent book ; sorry, wrong link; this is the right one! 
I intend to post a review of these books here once I´m done with them.
Regardless of all the above, my personal favourite antitrust book ever is one that I have only used for specific consultations and that I will most likely never read: the Treatise written by Areeda and Hovenkamp: “Antitrust Law: An Analysis of Antitrust Principles and their Application“. The reason why I know I won’t read it is that it looks like this:
Three additional comments:
- Herbert Hovenkamp -whose work is referenced above a few times- is clearly one of the 4 or 5 people from whom I’ve learnt more antitrust law, and the only one of these (aside from his co-author late Philip Areeda) whom I have never had the chance to meet in person (which again proves the importance of competition law books). We are very proud to anticipate that our next Friday Slot interview is with him!
- There is much to be said about the pricing of many of these books. But we’ll deal with that in a separate post.
- I recently recommended here a non-competition book -in Spanish, though- and a few (four) of you have sent emails saying that you loved it, which is nice to hear. Here is another suggestion, in English this time: A Heartbreaking Work of Staggering Genious.
The Friday Slot (9) – Damien Geradin
This 9th edition of the Friday Slot features an interview with Damien Geradin (Covington & Burling, TILEC). I owe a lot to Damien. If Alfonso ever did me the honour to invite me on the Friday Slot, I would explain that Damien is the one who really got me into competition law. We met at the College of Europe, where I was his student. Came the end of the year, he offered me a research assistant position in Liege. I took it, and he then taught me how to write, introduced me to the more economic approach of EU competition law and taught me that all established truths – and in particular legal principles – deserve to be discussed. I will never be grateful enough for all the things he brought me. More generally, in the competition community, Damien is known for his many powerful papers on abuse of dominance law. He is also amongst the very few EU law scholars who managed to obtain a teaching position in a US university, and to reach position 40 in the ssrn ranking of top authors for law. We are immensely happy to publish his interview today.
“Oscar” of the best competition law book? And of the best non-competition law book?
I have never really used any competition law book (as when I am looking for a piece of information, I am rather trying to find the relevant law review article), so it is a hard question to answer. The Antitrust Paradox of Robert Bork was certainly very influential and a good read, but it was flatly wrong on some points.
Mémoires d’Hadrien by Marguerite Yourcenar is a fabulous historical novel, which I read when I was a teenager. Since then, I have read very many books, but none exceeded the level of perfection and erudition of that book. Albert Speer’s memoir Inside the Third Reich is also a book that needs to be read (as it explains how the unthinkable happened), although I regretted that Speer did not express stronger regrets for his actions.
“Oscar” of the best case-law development in the past year? “Oscar” of the worst case-law development?
Although this is not a case-law development, I think that the Commission did a fine job with the guidelines on horizontal cooperation agreements. The Commission managed to find a good balance on some complex and sensitive issues.
As to the worst case-law development, the ECJ judgment in TeliaSonera is a terrible piece of work. It will be hard to explain to future generation of students why margin squeeze is conceptually different from refusal to supply, and why the condition of essentiality that must be met in refusal to supply cases doesn’t apply to margin squeeze cases. This leads to patently absurd results.
Let’s do it like economists => assume that you could change 3 rules, principles, judgments, institutions in the current EU competition system. What would you do?
1. I would split investigative and decision-making functions in EU competition cases. No one would create enforcement agency combining such functions today. There is a large consensus among scholars and practitioners that such a reform is needed even if it is resisted by the Commission. How this should be done in practice is subject to discussion and various modalities could be envisaged. But the principle that no authority should combine investigative and decision-making functions is fundamental.
Output
With today’s announcement that Harvard University will soon endorse an “open-access” policy for academic publications, I thought time was ripe to post something on recent interesting publications (including my own :).
There’s a new journal coming, The Journal of Antitrust Enforcement, Oxford University Press. A label of quality => the journal is edited by Ariel Ezrachi (Oxford CCLP) and William Kovacic (George Washington University). More here.
A new GCLC book is out: “The Role of the Court of Justice of the EU in Competition Law Cases”, M. Merola & J. Derenne (eds), Bruylant. As the title suggests, the book contains papers on issues related to judicial review, in all areas of EU competition law. The list of authors is impressive, not least because my co-blogger is in. Topics covered include effectiveness, intensity and scope of judicial review, specialized courts, expert economic evidence, effects-based standards and legal certainty. A must read: Alfonso and Luis Ortiz Blanco’s paper. In short, they advocate that “legal certainty is hardly compatible with effects-based enforcement“. This view, which still holds sway in most of the Brussels legal community, would certainly deserve to be further discussed and researched (through, for instance, a survey with in-house counsels).
Finally, on a market where the “Whish” remains by far the dominant player, a maverick has made entry : It is entitled “EU Competition Law and Economics“. It is edited by Oxford University Press. And it was written by Damien Geradin, Anne Layne-Farrar and myself. This is the first edition, yet the end of a long story. Our goal has been to integrate as much basic, non quantitative economics into the book. Given that we will shortly start working again on the next iteration, we’d be glad to have your comments.
One last puzzling thing: in OUP ‘s catalogue competition law titles are classified under the category Public International Law…
PS: I forgot a piece of importance, i.e. a book on Vertical and Distribution Agreements in EU Competition Law edited with my colleague and friend Charles Gheur, from the Brussels School of Competition.
Change of tone
Today’s edition of The New York Times features an interesting piece on the “change of tone” that migh have taken place at DG Comp with regard to antitrust intervention in high-tech industries. It argues that the Commission is now favouring effective and timely solutions instead of the time-consuming proceedings and the headline grabbing large fines that characterized ”Steely Neelie’s” era (their expression, not ours!) The article attributes this change to the lessons learned throught the Microsoft case as well as to the appointment of Joaquín Almunia as Competition Commissioner.
Very importantly, The New York Times once again quotes a certain Professor Petit, from the University of Liège
The piece does not make any mention to the change of key people at DG COMP’s Unit in charge of IT, Internet and Consumer Electronics. Per Hellström -who was until now its Head of Unit- is leaving for the merger unit dealing with energy and utilities. Its successor will be facing a huge workload and quite a few challenges, many of them in the form complaints, which these days are growing like mushrooms in the IT sector. If our information is correct, the Commission will be appointing an excellent new Head of Unit (sorry, but this time we can’t give you the Chillin´leak…yet).
One of the hottest potatoes on the desk of the new Head of Unit will be to deal with the many IP-related complaints and ongoing investigations. This will be precisely the topic of an interesting lunch talk held today by Concurrences, Arnold&Porter and CRA, that I will be attending in a few hours (will have already attended by the time this post is published).
This is not the sole social competition law event of the day. Nicolas and I have also been very kindly invited to attend the gala dinner for the EU Business Summit. The downside (apart from the fact that given the presence of the Royal Family we’ll have to shave) is that I´ll be missing the Real Madrid-Bayern match (any email informing on the evolution of the match will be greatly appreciated!). And this leads us to the final piece of info of today’s post:
Bayern Munich appears to be fighting Spanish clubs not only in the pitch. DG Comp confirmed yesterday that, pursuant to a complaint lodged by German clubs, it is now investigating whether Spain is granting unlawful State aids to a number of clubs. Two years ago we already said that there was a risk that this could happen. We’ll keep you posted on this too.
Recent Article 102 TFEU Case-law
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:
- CJEU, Post Danmark, C-209/10
- CJEU, Tomra v Commission, C 549/10 P
- 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 
.
