Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Of metaphors, airplanes and the publication of decisions

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Metaphors are quite common in antitrust, and there is more to their use than meets the eye, as famously developed in Boudin’s “Antitrust and the Sway of Metaphor“. A while ago Nicolas wrote about the limits of antitrust metaphors, and now @Berlaymonster (a good reason to have Twitter) has spotted an antitrust/airplane metaphor that really went wrong:

Screenshot

And speaking of airplanes, almost 5 years ago I wrote a post about the adoption of the Commission’s air freight cartel decision (for disclosure/advertising: I was involved in that case representing a client who was an addressee of the Statement of Objections but was eventually left out of the Commission’s decision). Following the adoption of the decision it took the Commission 5 years to publish a non-confidential version, and this publication took place coinciding with the oral hearings before the General Court in the case. This delay was pretty controversial and even considered excessive by some national Courts, which have ordered the disclosure of a mostly un-edited version of the decision to a closed group under certain conditions, thus giving rise to a most interesting legal debate.

Not being involved in these follow-on actions I have not followed the cases in detail, but the point I want to make today is a more general one about how practical arrangements concerning the publication of decisions (some perhaps inherent to the procedures currently in place, which Comp cannot ignore in individual cases) can frustrate, or at least contradict, wider policies, notably: is the fact that it might take 5 years for the non-confidential version of a decision to be published consistent with the Commission’s goal of furthering follow-on actions?

And this is not just a matter of publication timing; there’s some element of policy in it as well. Any of you who might have had the curiosity to take a read at recent cartel settlement decision (e.g. the Swiss franc interest rate derivatives cartel decision available here) will have realized about the… frugality of the factual and legal assessment (in the example I’m giving you the description of the infringement is done in merely one paragraph, the full text of the decision is exactly 20 pages and contains no detail at all). Why? Because as we said long ago at the time the settlement procedure was created, the main benefits of the system would not lie in the 10% reduction but (a) in the possibility to “negotiate” (a term that the Commission dislikes) the scope and duration of the infringement; and (b) not less importantly, the fact that a full-fledged detailed fact-intense x-hundred page decision would not be adopted.  Fair enough, there may well be good reasons to do this but query: how well does that fit with the Commission’s excellent job of boosting follow-on actions on the policy front?

Having said that, there is even a possible inconsistency within the inconsistency. Sometimes the Commission contends that lack of info in the decisions is justified by the need to protect leniency applicants. But then in some cases (I have this one in mind)  it has decided, years after the publication of a first succint decision, to publish longer, more detailed, versions including leniency materials; but query: is this consistent with the policy of protecting leniency applicants?

Admittedly, the Commission has the very difficult task of balancing partly conflicting interests, but, last query, wouldn’t it be better to have a consistent policy rather than saying one thing or the contrary depending on the case?

Comments welcome…

Written by Alfonso Lamadrid

16 June 2015 at 7:07 pm

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The Association of European Competition Law Judges

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Lack of recent blogging activity on my side has to do with the complexities of juggling a particularly busy period at work (currently writing from Luxembourg, again) with parenting a little man, half-training for a triathlon next Saturday (this guy tricked me…) and participating at a couple of very interesting, but not so well-timed, conference appearances. It is about the latter that I wanted to write.

On Wednesday I participated as chair/speaker at ERA’s workshop on competition law in banking and financial services in Brussels [The slides used by all speakers will be uploaded in this post asap]. As all ERA events, it was most interesting.

But on Friday I had the great privilege of being the guest lawyer (literally) at the conference organized by the Association of European Law Judges, the European Commission and Uppsala University in Sweden (pictured above). It is remarkable, and probably unparalleled in any other field, to see a very large number of judges from practically every Member State and with all sorts of different backgrounds getting together to discuss issues such as, in this occassion, multi-sided markets. As I told them, it is quite refreshing to speak at a gathering where attendees are only interested in an honest discussion about the law (and know that there is life and law beyond two provisions in a Treaty). I explained that, by contrast, many other conferences in our field are two-sided and consist of practitioners paying to be listened to by potential clients and competitors… The judges in Uppsala grasped complex stuff, exchanged ideas and were a genuinely nice group of people. I was so impressed that I thought they deserved a mention here, and so do DG Comp’s policy guys, who significantly contribute to making these events possible to the benefit of all of us working in this field. My humble contribution consisted of a tuned-for-judges version of my now stump speech on two-sided markets (my slides are available here: Lamadrid_AECLJ Uppsala

And by the way, in case you haven’t noticed, Chillin’Competition is about to reach its first million visits. Pablo and I are have some ideas on how to celebrate it, but suggestions are welcome!

P.S. Happy birthday to Pablo; as a gift, I promise him a couple of upcoming posts on more substantive stuff

Written by Alfonso Lamadrid

9 June 2015 at 10:55 pm

On conferences, again: Ascola and the ‘more doctrinal approach’ to Article 102 TFEU

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Ascola

I promised I would come back to you with the slides used by the participants in the conference that took place in Leeds on 15 May. You can find some of them (including Nico’s and mine) here. Thanks again Pinar and Peter!

Another highlight of the past month was the 10th ASCOLA conference, which took place at Meiji University in Tokyo. I had not been in Japan since 2007 and I was delighted to be back. The programme of the event, put together by Professors Paul Nihoul and Iwakazu Takahashi revolved around ‘abuse regulation’. I was lucky enough to discuss some of my recent ideas in the first plenary session, chaired by Professor Eleanor Fox.

In my presentation, I defended the value of what I called the ‘more doctrinal approach’ to abuse of dominance issues. I have become convinced that real progress in our understanding of Article 102 TFEU is likely to come from the sort of traditional legal analysis that has been somewhat neglected in the past few years.

Ultimately, abstract debates about the objectives of EU competition law and/or grand designs about the right approach to abuse of dominance cases tell us very little about the nature of Article 102 TFEU and its likely evolution over time.

Much could be gained, in my view, if academic (and practising) lawyers worked more on tasks such as restating the principles underlying the case law and identifying tensions between individual rulings (as well as reasonable ways in which such tensions could be addressed). As I tried to show in the past couple of posts, legal controversies – and legal change – tend to be less spectacular than we like to believe.

Written by Pablo Ibanez Colomo

1 June 2015 at 9:28 pm

Posted in Uncategorized

AG Kokott in Post Danmark II: a legal test for quantity rebates

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I mentioned earlier this week that the legal test proposed by AG Kokott is likely to prove more controversial than the broad principles discussed in the opinion. I can think of at least two reasons for this. The test is, first, difficult to reconcile with some aspects of the relevant case law. In addition, it is based on an unstructured set of indicators that might prove difficult to apply by a national court. For the same reasons, it may not allow for the effective judicial review of administrative action.

The test proposed is difficult to reconcile with Hoffmann-La Roche and Michelin I

Are categories relevant in rebate cases?

AG Kokott states in paragraph 29 of the opinion that categories are ‘ultimately immaterial’ when determining whether a rebate scheme is abusive. This is a sensible argument – the Commission Guidance is based on a similar idea – but it is a normative claim, not a positive one. Formal categories (neatly presented by the GC in Intel) were relied upon in Hoffmann-La Roche, and the Court derived clear legal consequences from them.

I have the impression, moreover, that paragraphs 28 and 29 of the opinion are somewhat contradictory. AG Kokott relies upon formal categories to claim that loyalty rebates and target discounts are abusive by their very nature. If categories are deemed relevant to conclude that some practices are prima facie abusive, it is not easy to understand why they would be ‘ultimately immaterial’ when determining whether prima facie lawful conduct is in breach of Article 102 TFEU. The legal test should adapt to the categories crafted in the case law, not vice versa.

Quantity rebates in Hoffmann-La Roche

Since Hoffmann-La Roche, quantity rebates are deemed to have a valid economic justification. The underlying presumption is that they reflect the cost savings made by the dominant firm. Against this background, a legal test for quantity rebates should probably start by ascertaining whether the scheme under consideration is inconsistent with a cost saving rationale and thus abusive by its very nature. It would be for the competition authority or the private claimant to show that the scheme does not have a valid economic justification (the opposite is required from dominant firms once a prima facie abuse is established).

That a quantity rebate scheme is abusive by object could be established, for instance, when it is shown to be predatory within the meaning of AKZO (pricing below average variable cost can be safely presumed to be an irrational strategy for a firm to pursue). On the other hand, I fail to see why the factors identified by AG Kokott are inconsistent with a cost saving story. Why would the award of retroactive quantity rebates over a period of one year not be credible in an industry with high fixed costs?

The assessment of ‘all the circumstances’ in Michelin I

AG Kokott proposes to assess the lawfulness of quantity rebates in light of ‘all the circumstances’ relating to the scheme in question. This test is drawn from Michelin I, but it was not conceived for quantity rebates. The Court examined in that case the legal status of schemes that are not formally conditional upon exclusivity but that are not quantity rebates either. As a result, one cannot conclude, without more, that this test can or should be extended to other categories of rebates. Michelin II, which was not appealed before the ECJ, seems to be the only quantity rebates case to which reference is made in the opinion (at least in relation to this question; Portugal v Commission, also cited, was about exploitative discrimination).  Read the rest of this entry »

Written by Pablo Ibanez Colomo

28 May 2015 at 6:52 pm

Posted in Uncategorized

AG Kokott in Post Danmark II: issues of principle

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Happy Postbox

Some people like to see controversies around Article 102 TFEU as an epic battle between conflicting worldviews. Alas, everyday life is more pedestrian and less exciting. Fortunately, we are constantly reminded of it. These were my thoughts after reading AG Kokott’s opinion in Post Danmark II. It shows that the scope of disagreements about the appropriate legal treatment of unilateral practices tends to be greatly exaggerated.

AG Kokott’s opinion is indeed remarkable, first and foremost, because it reveals that there is much common ground. The points of contention exist and are undoubtedly important, but are technical in nature. They do not relate to a fundamental disagreement about the objectives of EU competition law, but to the way in which the principles underpinning the existing case law are to be interpreted and applied to specific factual scenarios.

On issues of principle, I am ready to guess that the vast majority of commentators will agree with AG Kokott’s understanding of the case law. What is more, I am convinced that they will praise the opinion insofar as it sheds light on certain crucial issues. On the test applying specifically to quantity rebates, my impression is that not everybody will agree. Certain aspects of the opinion are objectively difficult to reconcile with the relevant case law – in particular Hoffmann-La Roche, Michelin I and AKZO. It will not take long before commentators pinpoint these aspects. I will be discussing issues of principle in this first post and will leave the second question for another one.

Quantity rebates as an ‘abuse by effect’

It has become clear in recent years that there are two broad categories of potentially abusive practices. Some conduct is deemed abusive by its very nature (this category comprises, inter alia, exclusive dealing, loyalty rebates and tying). Other practices are only abusive where they have, or are likely to have, an anticompetitive effect. These include ‘margin squeezes’ and selective price cuts, in addition to refusals to deal. Unsurprisingly, AG Kokott comes to the conclusion that quantity rebates fall under the second category. The Court has consistently held since Hoffmann-La Roche that such rebates are an expression of competition on the merits.

AG Kokott proposes a true analysis of effects for quantity rebates

I have written elsewhere that the case-by-case analysis of rebates differs from the analysis of exclusionary effects in ‘margin squeeze’ and selective price cuts cases. The analysis of ‘all the circumstances’ in target rebate cases (think of Michelin I and British Airways) has so far focused on whether the scheme in question amounts in practice to a formal exclusivity obligation. This assessment differs from that sketched in Deutsche Telekom, TeliaSonera or Post Danmark I.

AG Kokott proposes a test for quantity rebates that is closer in nature to that underlying the latter three rulings. According to the opinion, the features of the relevant market would be an integral aspect of the analysis. Interestingly, AG Kokott cites Post Danmark I in support of this conclusion. There is every reason to welcome this clarification. Practices that are not abusive ‘by object’ are subject to an analysis of effects that is comparable to that found in the context of Article 101(1) TFEU and merger control. Only if the features of the relevant market reveal that exclusionary effects are likely will an abuse be established.

Substantive standard: ‘likelihood’ of exclusionary effects, not ‘risk’ or ‘capability’

As I said above, it has been clear for a while that some practices are only abusive if an anticompetitive effect can be shown. The substantive standard applying to the assessment of effects has remained elusive, however. In cases like TeliaSonera, the expressions ‘capable’ and ‘likely’ are seemingly used interchangeably by the Court, even though they do not have the same meaning (I remember Bill Allan making this point in a great lecture he delivered a while ago). AG Kokott puts an end to this confusion. The opinion argues that the relevant substantive standard is one of likelihood. More precisely, AG Kokott considers that a claimant would have to show that the exclusionary effects are ‘more likely than not’ to arise in the context in which the practice is implemented (para 81; Post Danmark I is cited, again, in support of the conclusion).

I welcome this point, which is a very sensible interpretation of Article 102 TFEU case law. Arguably, and more importantly, it is broadly in line with the substantive standards applying in the context of Article 101 TFEU (to ‘by effect’ restrictions) and merger control (think for instance of Tetra Laval). Across the board consistency in the interpretation of EU competition law is of the outmost importance and the opinion is a crucial step in this direction. It would be difficult to justify why restrictive effects on competition would be subject to a different substantive standard under Article 102 TFEU.

Is the ‘capability’ standard entirely irrelevant in Article 102 TFEU case law? I do not think so. Concerning practices that are deemed abusive ‘by object’, it is sufficient to show that they are capable of restricting competition. This is exactly the point made by the GC in Michelin II. The capability standard also applies to agreements that are shown to restrict competition by object within the meaning of Article 101(1) TFEU, as clarified by the ECJ in T-Mobile and again in Bananas.

Generalities on rebates and exclusive dealing

I am sure it has not escaped you that AG Kokott seems to suggest that target discounts are abusive by their very nature (para 28). This is not entirely uncontroversial. One could argue that it is at odds with what is formally stated in the relevant rulings. It is difficult to deny, on the other hand, that AG Kokott’s statement is an accurate depiction of the practical consequences of the case law.

The opinion also reiterates the fundamental reason why exclusive dealing and loyalty rebates are deemed abusive by their very nature. Paragraphs 28 and 29 insist on the presumption that such practices lack an economic justification and that they necessarily serve an exclusionary purpose. I have already explained at length why this presumption is difficult to reconcile with Delimitis, which is grounded on different premises. As I have so many other interesting things to say about Post Danmark II, I will not insist on that point!

Written by Pablo Ibanez Colomo

26 May 2015 at 2:16 pm

Posted in Uncategorized

Two important Opinions: AG Kokott on Post Danmark II (C-23/14) and AG Wahl on AC Treuhand (C-194/14 P)

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A few hours ago two important competition law-related Opinions were made public by the European Court of Justice. Both are remarkable and, interestingly, I would even dare to say –and note that this is not a criticism- that the direction of each of them could have been expected in the light of the track record of their respective authors, Mr. Wahl and Ms. Kokott. Similarly, I also have the sense that the Court might finally be inclined to follow only one of the two Opinions, I let you guess which.

That said, both Opinions raise most interesting questions regarding two very different issues, one of them novel (can a cartel “facilitator” be sanctioned under 101 TFEU despite not being a party to the agreement?) and one of them fairly old but always hot (what are the criteria to assess loyalty rebates by a dominant firm?; Is it mandatory to follow the “as-efficient competitor test”; Is there an appreciability threshold for such conduct to fall under 102 TFEU?).

Let’s look at them one at a time. I have more extensively summarized Kokotts Opinion (because I know you’re too lazy to read Opinions in full), but have included all key messages in bold for those lazy enough to not read even the blog posts ;)

AG Kokott on Post Danmark II (more on the fight for the soul of EU Competition Law)

The legal treatment to be applied to rebates on the part of dominant companies remains one of the most contentious issues in contemporary EU competition law and is in many ways the main battleground on the –legal or economic- soul of EU competition law. Discussions about it have abounded in recent times (see here for a summary), and have also occupied our attention (for Pablo’s views see here, here or here, and for my own views click here).

Kokott sends a clear message right from the start (para. 4), noting that the case comes at a particularly controversial time when many push for a more “economic approach”, and recommends that “in is replies, the signal effect of which is likely to be extended well beyond the present case (she refers to Intel in a footnote) the Court should not allow itself to be influenced so much by current thinking or ephemeral trends, but should have regard rather to the legal foundations on which the prohibition of abuse of a dominant position rests in EU Law”.

In her Opinion the AG first goes on to identify the general criteria that should be taken into account in order to assess rebates, referring first to the special responsibility of the dominant company (para. 24), underlining that the “quantitative” or “loyalty” labels are irrelevant, and that what is decisive is the possibility that they may lead to an exclusionary effect which is not economically justified (para. 29). AG Kokott then insists but that there is not a closed list of factors to be considered given that each rebate might have its peculiarities, but identifies some particular criteria, namely (a) the “criteria and rules governing the grant of the rebate” (paras. 36-41: referring to loyalty building/suction effects, which depend inter alia on retroactivity, the volume and time-span of the rebate, as well as intent -the latter is referred to as a “strong additional indication” as opposed to a “mandatory precondition”-; she also adds that the charging of “negative prices” should not be a precondition either (para. 41); and (b) the conditions of competition in the market and the position of the dominant company (see paras. 42-50, very closely linked to the facts of the case). She sums all this up in a “interim conclusion” (para. 55) stating that a rebate scheme operated by a dominant company will be abusive “where an overall assessment of all the circumstances of the individual case shows that the rebates are capable of producing an economically unjustified exclusionary effect, it being important to take into account in that regard, in particular, the criteria and rules governing the grant of the rebate, the conditions of competition prevailing on the relevant market and the position of the dominant undertaking on that market”. Nothing groundbreaking or too controversial here.

From para. 57 onwards she refers to the Commission’s Guidance on exclusionary abuses and its endorsement of the “as efficient competitor test” that the Institution imposed upon itself. She notes that such an administrative practice “is not, of course, binding on the national competition authorities and Courts”. Importantly, she says that “although the national authorities themselves are not precluded from following the Commission’s example and using the AEC test, they are none the less, from a legal point of view, bound only by the requirements arising from Article [102]” and that “[i]t is for the Court to define what those requirements are”. This isn’t groundbreaking at all either, but some might consider it controversial.

It is at this point that the most relevant stuff comes. In para. 61 the Opinion observes that Article 102 does not support the inference of any legal obligation requiring the use of the AEC test. It then observes that in previous cases (Telia Sonera or Post Danmark I), the ECJ has validated this test but not as an “absolute requirement” for all price-related cases. The AG remarks, first, that the said-case law is specifically concerned with other pricing practices that are by their nature closely related to the cost structure of undertakings and also, second, that the wording used by the Court in those cases made it clear that anticompetitive exclusion is not only that which affects equally efficient competitors (62-63).

With regard to rebates in particular the Opinion refers to the ECJ’s Judgment in Tomra (para. 92 later mentions that Tomra was rendered “at about the same time” as Post Danmark I) to support the contention that a cost-price assessment is not mandatory. Although she contemplates the possibility of establishing this requirement, she expresses “skepticism” towards any reorientation of the law (65) given that (i) “the added value of expensive economic analyses is not always apparent and can lead to the disproportionate use of resources” [economist will love this..] (66); (ii) “it is wrong to suppose that the issue of price-based exclusionary effects can be managed simply and in such a way as to ensure legal certainty by applying some form of mathematical formula based on nothing more than [business data] not uncommonly open to different interpretations” (67); and (iii) “the finding of an abuse requires taking into account all the relevant circumstances of the individual case in question and must not be confined to an examination of price and cost components alone” (68).

In para. 69 the Opinion explains that taking into account all circumstances + considering whether there is any objective justification for the rebate “adequately ensures that the legal requirements (…) do not disregard economic realities”.

Paras. 71 to 75 then develop some further objections to the AEC test, notably regarding the fact that when a dominant company is present the structure of the market often rules out the presence of equally efficient competitors (due e.g. to barriers to entry, economies of scale or network effects) which implies that “the competitive pressure exerted by less efficient undertakings must not be underestimated.

In the light of the above, Kokkot’s recommendation for the Court in para. 75 is to respond that Article 102 does not require the abusive nature of rebates to be established pursuant to an AEC test, but that national authorities and Courts are at liberty to avail themselves of a price/cost analysis unless, on account of the circumstances, it would be impossible for another undertaking to be as efficient as the dominant one.

Finally, the Opinion addresses the question about how “likely and serious” the exclusionary effect must be in order for Art. 102 to apply.  With regard to likelihood, it states that “hypothetical effects” are not enough because the rebate must be capable “not only in the abstract but also in practice of making it difficult or impossible for the dominant undertaking’s competitors to gain access to the market”; in its view, the provision is triggered in the face of “likely” effects, not of “very likely” or ·particularly likely” or “beyond reasonable doubt”. At most, the Opinion explains, the degree of likelihood may have a bearing on sanctions. With regard to seriousness (appreciability) she first observes that the doubts of the Danish Court may have to do with a deficient translation of the Judgment in Post Danmark I from French to Danish (the latter version referred to appreciable effects/elimination effects instead of exclusionary effects). In her view, likely exclusionary effects are enough, there not being a need to qualify it those effects as serious or appreciable; the Opinion then cites Tomra for support, and adds that a de minimis threshold doesn’t seem necessary given that there will already be a an assessment of all relevant circumstances and also given the fact that Art. 102 extends only to conduct that is likely to affect trade between Member States [I personally don’t think that this latter argument is valid, for the effect on competition and on trade between Member States are two different things assessed pursuant to different criteria; this, in my view, is quite clear in the case law on 101]

This very last section of the Opinion is what I find less satisfactory (many people will probably take issue with the previous stuff too) because it leaves a question unaddressed (in its defense, one that was not posed directly in the case, and one that I think is at the root of most major current substantive discussions: what is really anticompetitive exclusion/foreclosure? when is it enough to warrant intervention? is it about making life more difficult to competitors –and how much more?- or about their elimination –and to what extent-?) I’m not sure that the argument that “we will know after considering all circumstances” is enough. In practice the issue if often solved by prosecutorial discretion (the EC at least has chosen well its cases) but, query, is that the appropriate solution? Perhaps the question is not so relevant for loyalty rebates since –according to Michelin and Intel –the only two Judgments that, unless I’m wrong, contain the expression- they are considered restrictive “by object” (pending the objective justification assessment), but it is the key question to every other practices assessed under 102.

As for the rest of the Opinion, I think there is nothing new; it fits within the line of the established and controverted case-law on the issue that we have extensively discussed here. I suspect that (i) people with strong views on either sides will regard this Opinion as a lost opportunity for very different reasons; (ii) the ECJ is likely to endorse this view; and (iii) I also suspect AG Wahl might take a different view when he writes his Opinion in Intel. And speaking of AG Wahl:

***

AG Wahl on AC-Treuhand (or what is a restriction of competition?)

The second Opinion rendered today concerns a novel issue which AG Wahl proposes to address by returning to the fundamental –and unclear– concept of restriction of competition.

The case concerns an appeal against the General Court Judgment endorsing the Decision which –for the first time- sanctioned a company for its role as a “cartel facilitator” despite not being a player in the affected markets. In essence, the company’s role consisted in arranging and participating in meetings, gathering and circulating data, moderating tensions and fostering commitments in exchange for a remuneration.

The ground of appeal that is dealt with in the Decision raised two interesting questions, namely: (i) does Article 101 encompass this sort of conduct?; and (ii) subsidiarily, could the company be sanctioned in a manner compliant with the principle of legality considering that there was no previous case-law establishing that such conduct fell within the scope of Article 101?

In the view of AG Wahl, “in order to identify a restriction of competition it must be shown, following the pertinent economic analysis, [intermission, note the difference in the language compared to the previous commented Opinion] that the company at issue has renounced, totally or partially, by its conduct, to exert a pressure characteristic of effective competition on the rest of the operators in the market or markets affected to the prejudice of economic efficiency and consumer welfare” (para. 1, later paraphrased at various key paragraphs of the Opinion, notably 47, 50, 51, 62 and 69). In the light of this notion of restriction, and considering that AC Treuhand did not exert any competitive pressure on the other participants in the cartel prior to the agreement, it never ceased exerting any such pressure and therefore, according to AG Wahl, cannot be held directly responsible for the cartel. Consequently, he recommends the ECJ to annul the General Court’s Judgment.

I see the point, but at the same time I have doubts: didn’t the company participate in an agreement that had as its object the restriction of competition? Also, it is true that a wide interpretation of Art 101 to capture facilitators could potentially extend even to lawyers not doing their job properly; at the same time, however, organizing cartels should probably not be a legitimate business.
Btw, the  notion of restriction used here –despite the reference to economic analysis- seems close to that often criticized as ordoliberal; I’m not saying this pejoratively, I’m simply observing it.

According to the Opinion – which in para. 71 is quite blunt- if the Court were to endorse the view of the General Court and of the Commission, it would “profoundly disturb” the method of identification of anticompetitive conduct by disconnecting the conduct and the economic restriction in such a way that the definition of the relevant market and the identification of anticompetitive constraints therein would become completely superfluous. Again, I see AG Wahl’s major point, but I’m not really persuaded by the latter part of this particular argument, for market definition is already deemed superfluous when it comes to cartels…

The Opinion then goes on to consider the theoretical question of whether the company could be sanctioned as an “accomplice” (paras. 77-83). It notes that whereas this would seem convincing at first sight, the charges were not framed in that sense and, moreover, the concept of “accomplice” belongs to criminal law and is alien to administrative law, so resorting to it in a case like this would not make sense (para. 82).

In AG Wahl’s view, it is exclusively for the legislator to foresee a sanction for accomplices under EU Law. After stating this, at the very end of the Opinion, he sends a clear message that I, for one, am likely to quote in the future-: it is necessary to underline that the will of the Institutions of safeguarding the effectiveness of their policies must be conciliated with legality and legal certainty. As pointed out by an author (a footnote clarifies that the “author” is Pierre Pescatore) the effectiveness -effet utile- doctrine cannot lead the Court of Justice to interpret Treaty provisions so as to extend to the maximum the competences of the Institutions, but must permit to interpret the pertinent rules in the light of their objective and goal”. (Note that an English version of the Opinion is not yet available; this is my own translation).

The second question raised by the applicants was, in my view, equally interesting, but was not addressed in the Opinion (although I predict that it may be more relevant to the eventual Judgment…). Could the company be sanctioned for acting as a facilitator when the law was unclear –there was no precedent- as to whether it violated Art. 101? In practice the Commission has sometimes decided not to sanction a company resorting to this reasoning but it has done so on its own motion (see here). However, is there a legal obligation for the lege to be clear for the poena to be imposed? This is a question –or rather a problem- that, in reality, concerns not only this issue but the whole of competition law (with the exception of cartels, or at least of how the term “cartel” was traditionally understood). I will recall the answer that the General Court gave to an argument that also concerned the principle of legallity in Case T-167/08, Microsoft (compliance):

  1. “(…)the use of imprecise legal concepts within a provision does not prevent liability being established as against a person who contravenes it. As the Commission points out, if it were otherwise, an infringement of Article 101 or 102 TFEU – which are themselves drawn up using imprecise legal concepts, such as distortion of competition or ‘abuse’ of a dominant position – could not give rise to a fine without the prior adoption of a decision establishing the infringement“. 

I guess that says a lot about our discipline…

Written by Alfonso Lamadrid

21 May 2015 at 6:53 pm

Posted in Case-Law, Uncategorized

Post- and pre-conference thoughts

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Conference thoughtsI was delighted to attend a conference on Friday last week at the University of Leeds. Drs Pinar Akman and Peter Whelan put together a really interesting programme combining young academics (as I like to fancy myself) and experienced practitioners. Great chance (for me) to meet some people (long overdue in some cases) and to see some friends, including Nicolas (I should definitely take the Eurostar more often). I hope to be able to share the slides (mine and others’) very soon on the blog.

Pinar and Peter asked me to discuss the interface between competition law and sector-specific regulation. The topic brings together my doctoral dissertation (on technological convergence between media and telecommunications) and some ongoing issues that I follow with particular interest – in particular, the Google investigation and the broader Digital Single Market Strategy.

The commonalities across issues are clear, and the fundamental research questions remain the same they were 10 or 15 years ago. It is not a secret that there is big appetite for the regulation of convergent technologies – whether it is telecommunications networks, pay TV channels, search engines, or e-commerce) One of the key ideas of my talk was that, when the impulse to regulate is too strong, competition law may be the casualty, and this in two ways. Enforcement may shift towards a newly crafted sector-specific regime (as the one that is now envisaged for the so-called ‘digital platforms’, or the one set up by Ofcom in relation to pay TV in the UK). If the shift does not occur, the challenge for courts and authorities is to ensure that the integrity of the competition law system is not jeopardised.

Tomorrow I will be flying to Japan to take part in the 10th ASCOLA conference. It is the first time that I speak at one of their events and I really look forward to sharing my thoughts with the participants. The topic is on the regulation of abusive practices, about which I have written abundantly on the blog. I hope to persuade my fellow academics that it is about time to place the law (as opposed to economics and policy-making) at the very centre of discussions around Article 102 TFEU (and equivalent provisions in other regimes).

Talking conferences. Our friend David Mamane tells us about an upcoming one on the enforcement of EU competition law at the national level.

Written by Pablo Ibanez Colomo

19 May 2015 at 5:38 pm

Posted in Uncategorized

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