Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

On Case C-377/20, Servizio Elettrico Nazionale (I): overarching framework or case-specific judgment?

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The Court of Justice delivered its judgment in Servizio Elettrico Nazionale last week (see here for the French version). Because the questions asked by the Italian Consiglio di Stato were so broad, some hoped that the ruling would provide an overarching framework applying to potentially abusive practices (what we might call an arrêt de principe).

Having read the judgment, it seems more likely that the analysis is tailored to the specifics of the case and will not apply to other cases (what we might call an arrêt d’espèce). Seen from this (more modest) perspective, both the analysis and the outcome at which the Court hints make perfect sense.

The case concerns a textbook example of abuse, if there is one. An incumbent that uses the assets it owes to its status as a former monopoly (as opposed to its investments or innovation) to favour its own activities is prima facie in breach of Article 102 TFEU. It is a quasi-Article 106 TFEU scenario. Thus, there would be every reason to be as strict as the Court has always been in cases involving exclusive or special rights.

The outcome suggested by the Court is supported by an analytical framework that works well in the specific context of the case. On the other hand, this framework does not appear to capture the case law in its full complexity. As a result, there is a chance that it will not be the reference that some hoped would become. I can think of two main reasons in this sense.

The first reason is that the scope of Article 102 TFEU is broader than one might infer from the judgment. The scenarios identified in the judgment do not encompass all instances in which Article 102 TFEU can come into play. The Court is careful to use language that suggests that its framework is not exhaustive (see para 76, where the French version uses the word ‘notamment‘ and the Italian one ‘in particolare‘). These nuances, however, may be lost in future interpretations of the ruling.

If nuance is indeed lost, the framework applied in the judgment may lead to the underenforcement of Article 102 TFEU. Some behaviour that amounts (and has been found in the past to amount) to an abuse of a dominant position would escape the prohibition.

In Servizio Elettrico Nazionale, the Court of Justice identifies two instances in which conduct implemented by dominant firms departs from competition on the merits:

This is so, in the first place, where the practice has no plausible purpose other than the restriction of competition (para 77). As is well known, practices are deemed abusive where they have an anticompetitive object. The Court refers in this regard to pricing below average variable costs, which is the most eloquent example. The practice at stake in Lithuanian Railways (the destruction of the dominant firm’s own property with the sole aim of restricting competition) is another one.

According to the judgment, a practice also departs from competition on the merits where it cannot be replicated by an equally efficient competitor, and this insofar as it flows from the exploitation by the dominant firm of its position (para 78).[1]

These passages may be interpreted as suggesting that, in an Article 102 TFEU case, an authority or claimant would need to show that the practice at stake (i) departs from competition on the merits, either because (ii.a) it has an anticompetitive object or because (ii.b) it cannot be replicated by an equally efficient competitor.

As I understand the case law, it seems clear to me that an abuse can be established in circumstances other than those described in the preceding paragraph. Suffice it to mention the following three points in support of this idea.

There should be little doubt, to begin with, that there is no need for an authority or claimant to show that a practice is not in keeping with competition on the merits. That is, after all, the very point of the ‘special responsibility’: conduct that would otherwise be unproblematic can be prohibited precisely because it is implemented by a firm that enjoys a dominant position.

The very finding of dominance, in other words, dispenses from the need to establish that the behaviour is somehow improper or abnormal. For instance, the unconstrained exercise of a firm’s duly earned intellectual property rights is the purest expression of competition on the merits. As such, it is in principle unproblematic. However, there are (exceptional) circumstances in which Article 102 TFEU imposes a duty to license a firm’s intangible property.

In a different vein, paras 76-78 (in particular para 78) may be interpreted as suggesting that the abusive conduct somehow needs to flow from the dominant position. There is consistent case law, dating back to the very early days (Continental Can), which shows that, as the law stands, there is no need to establish a link between the dominant position and the practice.

Finally, it is clear from the case law that an abuse can be established even when the contentious practice can be replicated by an equally efficient firm. ‘Others also do it‘ has never worked as a defence in the context of Article 102 TFEU (and I do not believe it should). If this ‘replicability test’ had applied in the Microsoft I case, for instance, the firm would have escaped the prohibition (at least as far as the Media Player aspects of the decision are concerned).

***

Second, and somewhat paradoxically, the scope of Article 102 TFEU is also narrower than suggested by the Court. I would be most interested to hear your views on the scope of para 78. Having read it a few times in French and Italian, this key paragraph appears to suggest that behaviour that involves the use of assets or resources that cannot be replicated by an equally efficient rival is not in keeping with competition on the merits.

If this is indeed the correct reading of para 78, it seems difficult to reconcile with other aspects of the case law. The unique assets or resources enjoyed by a dominant firm may be the fruit of its inventive and creative efforts. If this is so, any unique advantages resulting from them would be the very manifestation of competition on the merits, rather than the opposite (just think of the exercise of duly earned intellectual property, which I mentioned above).

The implication of a literal reading of para 78 is that every time a dominant firm exploits a competitive advantage flowing from assets or resources that its rivals do not have, it would not be competing on the merits. It is not surprising that there is no basis for this position in the case law: it would paradoxically disincentivise the very inventive and creative efforts that Article 102 TFEU seeks to promote and preserve.

One can also read para 78 as applying to the specific circumstances of the case. In Servizio Elettrico Nazionale, the dominant firm was exploiting assets that were unique, but not as a result of its inventive and creative efforts (that is, they had not been acquired on the merits). Rather, they were the product of the dominant firm’s status as a former monopoly.

If para 78 is confined to these circumstances (that is, if it is read as applying to the cas d’espèce), it makes perfect sense (and I tell myself that it is perhaps what the Court had in mind).

I will follow up with a few posts on other aspects of this fascinating ruling. The next one, on whether, and to what extent, the framework crafted by the Court captures the essence of the case law on which it is based. In the meantime, I very much look forward to your comments on this first entry.


[1] The French version of para 78 reads as follows: ‘Il en va de même, ainsi que l’a relevé M. l’avocat général aux points 69 à 71 de ses conclusions, d’une pratique insusceptible d’être adoptée par un hypothétique concurrent qui, bien qu’aussi efficace, n’occupe pas une position dominante sur le marché en cause, car cette pratique repose sur l’exploitation de ressources ou de moyens propres à la détention d’une telle position‘.

Written by Pablo Ibanez Colomo

16 May 2022 at 4:31 pm

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The Role of the EU Courts- A View from the Bar

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A few weeks ago I participated at the Global Competition Law Centre’s Annual Conference, on a panel devoted to discussing the role of the EU Courts in competition cases together with General Court President Marc van der Woude and Judge Ingeborg Simonsson. My task was to talk about the role of EU Courts and judges from the point of view of lawyers. I guess this was much more comfortable than listening to what judges think about lawyers…

As I explained then, my views on this subject are necessarily informed and deformed by my own experience in quite a few cases before the EU Courts, both challenging and defending Commission decisions. Since the GCLC will be editing a book with speaker contributions, I thought it could make sense to post a summary of my general thoughts so that I can gather and incorporate additional feedback from the readers of this blog. So here they are.

In many ways, the view of lawyers about the role and the performance of Courts is quite straightforward: If we win a case, it’s our merit and the Court only fulfilled its role. And if we lose, then it’s the Court’s fault for failing to play its role.

That is only partly a joke, because we lawyers, but also other stakeholders, including in academia and in the press, tend to assess the performance of the EU Courts in quantitative terms. Too often we associate effective or thorough judicial review with annulments or with other observable metrics (number of cases decided, number of cases annulled, amount of fines confirmed or annulled, or average duration of cases). But all those are very superficial ways to measure performance.

So the key question that we should be asking is what is really the role of the Courts, and what can we reasonably expect from them? Once we have identified this benchmark, we can then enquire as to their performance and discuss the challenges they face.

A. What is the role that we expect the EU Courts to play in the field of competition law, and what are the hallmarks of effective judicial review?

In my view, the first and most important task of the EU Courts is to preserve the rule of law and the legitimacy of the EU competition enforcement system. Competition law is not only about policy, or economics or outcomes; it is primarily law, and it is for the Courts to ensure that its interpretation and enforcement are in line with fundamental rights and general principles of law that also apply in other domains. There are certain principles like, for example, the presumption of innocence, the rules on the burden of proof, or the principle of proportionality, that cannot be bypassed or sacrificed at the altar of expediency, because they are core rule of law requirements, and because there is too much at stake.

The second task of the Courts, very much linked to the first, is to contribute to a stable, consistent and predictable legal framework. The rule of law also requires legal certainty: to play by the rules, you need to know what the rules are. As much as we might enjoy the dynamic nature of competition law, and the case-by-case discussion, we need to build on a common and stable analytical framework that we can anticipate. This is important for companies required to self-assess their conduct, but also for repeat players like the European Commission, which needs to base its decisions on a clear and established analytical framework. It is of course desirable for the law to move and evolve, but wide pendulum swings do not benefit anyone.

At the same time, we also need to be realistic. We lawyers expect the Courts to state what the law is, but we often fail to realize that the Courts do not always have this possibility, as Courts are subject to their own constraints: they are called to decide on specific cases, on the basis of the arguments raised by the parties either under a review of legality or in reply to questions crafted by a national court in the context of a specific controversy.

The EU Court’s third main task, in my opinion, is to constrain administrative discretion while enabling effective enforcement. Courts do not only need to protect general principles of law and fundamental rights and lay down a stable and predictable framework, they also have the complex duty of doing this while not preventing sound and effective enforcement. In other words, the application of the law must not be arbitrary, discretional and based on mere hypothesis, but constraints need to be reasonable.

B. Measured against those benchmarks, how have the EU Courts fared so far?

First, there can be little doubt that the EU Courts have preserved the rule of law and the legitimacy of the EU competition enforcement system. Regardless of whether we as lawyers win or lose, the system does work.

I believe that there is a general feeling that, subject perhaps to exceptions, judicial review at the EU level has become more thorough and meaningful. Regardless of outcomes, the EU Courts have (i) recalibrated the standard of review following KME/Chalkor, marginalizing marginal review; (ii) placed a renewed emphasis on the right allocation of the burden of proof and the presumption of innocence (cases like Intel or Apple); and (iii) been acutely aware of the need to protect fundamental rights (I have in mind the very recent case law on ne bis in idem, Consob on the protection against self-incrimination, many cases, like Casino, on the right to a private domicile, or the Order in Facebook Ireland in relation to the right to privacy. Speed-Pro is perhaps a highlight in this trend).

EU Courts have also seen their role evolve as competition law became increasingly more about negotiations with the surge in settlement, cooperation and commitment decisions and the consequent decrease of litigation. In my view, the Courts have been up to the task, paying particular attention to new procedural questions regarding the presumption of innocence (ICAP, Pometon), non-discrimination (Timab), third parties’ rights and the principle of proportionality (Canal +), or the need to balance rights of defence and other considerations (Lantmännen Agroetanol). The Courts have made clear that negotiated solutions need to be guided, and can only be overridden, by procedural considerations and general principles of law.

Second, have the EU Courts contributed to a stable and predictable legal framework? I think we have made significant progress, particularly in the areas where preliminary references have been more common, but also in those where annulment proceedings have been more frequent in recent years, like State aid.

Absolute legal certainty may not be a reasonable aspiration, but I believe that there has been a meaningful incremental evolution in our understanding of some key notions. We now have a better idea, or a clearer framework to determine what is or what is not a restriction by object (Cartes Bancaires or Budapest Bank), what is not a SIEC (CK Telecoms), the criteria that are relevant to assess foreclosure in unilateral cases (Intel, Post Danmark cases). Preliminary rulings have also been particularly helpful (think of Slovak Telecom, Budapest Bank, Generics, Sumal, Volvo, bpost and Nordzucker).

There remains, in my view, room for improvement. We can currently more or less connect the dots across different cases, but we still lack a coherent and systematic framework in some respects, particularly in the field of Article 102, where some fundamental issues remain in dispute. At the same time, again, we need to be realistic; progress is incremental, and this is a good thing; if it were not, we would risk pendulum swings, which is precisely what we need to avoid.

Third, have the EU Courts succeeded at constraining discretion while enabling effective enforcement? In the past, many lawyers complained that judicial deference towards the Commission made it impossible for companies to successfully appeal Commission decisions in certain areas. Many practitioners will disagree with me, but I never bought that. Today, even if the ratio of annulments remains low, some commentators have argued that a few recent annulments would pretty much make competition enforcement impossible. I personally do not buy that either. I guess this position might make me unpopular on both sides, which is probably also how the Court must feel most of the time.

The one remarkable trend that I see in judicial review in recent years is the emphasis on the need to take the burden of proof and the principle of presumption of innocence seriously and avoid shortcuts. This is how I read Cartes Bancaires, and Budapest Bank on the “by object” shortcut, or the Court of Justice’s Judgment in Intel (which I believe is in many ways their equivalent for Article 102), Servier in relation to market definition, or the Starbucks, Apple and Amazon State aid cases when it comes to the criterion of advantage in State aid. The most recent General Court Intel Judgment raised some important issues in this regard. I will expand on those in a separate blog post.

C. What are the new generation challenges for the EU Courts in the field of competition law?

Challenges to the rule of law. Unfortunately, we live at a time when challenges to the rule of law are becoming common. There is perhaps a feeling that the law places uncomfortable constraints that ties our hands when facing certain problems. Sometimes we see a temptation to avoid constraints to pursue a certain view of the public good, including proposals to reverse the burden of proof, stretch legal bases, shield some decisions from judicial review or “take antitrust away from judges”. In my view, we need to remain vigilant here. The law is about constraints, and constraints are uncomfortable, but they are the wise restraints that make us free. There are a few vital red lines that we should not cross.

Keeping the law relevant in the DMA world. Under the DMA we will not need to be concerned about market definition, market power, counterfactuals, effects, efficiencies, proportionality, the competitive process and consumer welfare. It will all be about remedy design and outcomes. At first sight this does not leave much room for the law, lawyers and Courts. Creating a regulatory system from scratch is not easy, and it will be a challenge for Courts to keep the law relevant and make this system compatible with general principles of law and draw the necessary limits to administrative discretion.

Maintaining predictability and consistency in an increasingly fragmented landscape. A major challenge for the future will be to offer a stable EU law framework in an increasingly decentralized and fragmented landscape, at a time when much of what we knew is in dispute, where several Member States are experimenting with new theories, and where politicians are increasingly interested in competition law. While some degree of experimentation may be positive, major substantive divergences threaten the very idea of the internal market. As I have explained before, the problem here is that the Court’s current reactive tools are rather limited and, absent some changes, may not be sufficient.

Consistency. It might be important to make an extra effort to ensure consistency across competition law provisions, across time, between Courts (for example, between preliminary rulings and Judgments in annulment cases) and within Courts (frequent customers of the Courts, including some Commission lawyers, feel frustrated when they feel they receive different messages from different Chambers).

Evidence requirements. Evidential requirements on both the Commission and private parties need to be realistic and proportionate to the information that can be available to each party depending on their means and powers of investigation at their disposal. In my mind, the helpful clarifications on the allocation burden that one can see in recital 166 of the recent General Court Intel judgment (along the lines of the proof proximity principle) are also a step in the right direction.

Need for speed. Commentators frequently complain that it takes too long to find out what the law is. I can see how this is an issue, but at the same time it takes a while to go through all the motions of a case giving all parties sufficient time to make their case, study, organize and digest a hearing, write a thorough Judgment and translate it. Discovering the law often takes time and I, for one, much prefer thorough judicial review over quick and hasty review. There is, however, scope to strike a better balance, and the Courts are making an effort, even awarding damages in cases where judicial proceedings take too long. I have little doubts that the situation will continue to improve.

Written by Alfonso Lamadrid

11 May 2022 at 6:21 pm

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LSE Short Course on State Aid and Subsidies Regulation (May-June)

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The Short Course on Advanced EU Competition Law is off to a great start. We have a full house and a wonderful mix of officials, practitioners and academics. The discussions on the first day were, as expected, high level and enriching.

The Short Course on State aid and subsidies regulation follows the same format (4 hours of online teaching over four Fridays). It will run from 27th May and there are still a few places available. With the UK Subsidy Control Act 2022 finally receiving royal assent, and with discussions ongoing around the EU’s Foreign Subsidies Regulation, I thought some of you might be interested in taking part in it.

If you have any questions about the course, do not hesitate to contact my colleague Amanda Tinnams (A.Tinnams@lse.ac.uk). And remember that the course comes with a certificate and CPD points!

Written by Pablo Ibanez Colomo

4 May 2022 at 12:09 pm

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UPDATED PROGRAMME: Conference at the London School of Economics (12th May, Old Theatre)

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We really look forward to seeing many of you at the conference organised by the LSE Law School in two weeks’ time (12th May, LSE’s Old Theatre). Remember that you can register for free here and that you can reach my colleagues with any inquiries via law.events@lse.ac.uk.

You will find an updated version of the programme below. The key novelty you will spot: John Newman (Deputy Director of the Bureau of Competition, Federal Trade Commission; on leave from the University of Miami School of Law) will be sharing some thoughts (in his personal capacity) during the lunch break at LSE’s Shaw Library. We are excited that the audience will get a flavour of the US experience and perspective.

See you very soon for what promises to be a great in-person (finally!) event.

Programme

9:15-9:30 | Welcome

David Kershaw (Dean and Professor, LSE Law School).

9:30-11:00 | Looking ahead: policy matters

Andrea Coscelli (Chief Executive, Competition and Markets Authority);

Cani Fernández (President, Comisión Nacional de los Mercados y la Competencia); and

Andreas Mundt (President, Bundeskartellamt).

In conversation with Thorsten Käseberg (Visiting Professor, LSE Law School and Head of Competition Policy, German Ministry for Economic Affairs and Climate Action).

11:00-11:15 | Break

11:15-12:45 | Looking ahead: substantive matters

Fernando Castillo (Principal Legal Adviser, European Commission);

Heike Schweitzer (Professor, Humboldt University of Berlin); and

Fabienne Siredey-Garnier (Vice-President, Autorité de la concurrence).

In conversation with Pablo Ibáñez Colomo (Professor, LSE Law School).

12:45-14:30 | Lunch (LSE Shaw Library)

With John Newman (Deputy Director of the Bureau of Competition, Federal Trade Commission).

14:30-15.45 | Coordination and enforcement in the new landscape

Sarah Cardell (General Counsel, Competition and Market Authority);

Niamh Dunne (Associate Professor, LSE Law School); and

Damien Gerard (Prosecutor General, Belgian Competition Authority).

15:45-16:00 | Break

16:00-17:15 | Lessons from other regulatory regimes

Claudia Berg (General Counsel, Information Commissioner’s Office);

Martin Cave (Visiting Professor, LSE Law School and Chair, Ofgem); and

Lindsey Fussell (Group Director Networks & Communications, Ofcom).

17:15-18:30 | Drinks (LSE Shaw Library)

Written by Pablo Ibanez Colomo

28 April 2022 at 12:53 pm

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REGISTRATION OPEN: Conference at the London School of Economics (12th May, Old Theatre)

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LSE Law School is proud to announce its 12th May conference, which will bring together top officials and academics to discuss the future of competition law and regulation. You can check the programme, with all confirmed speakers, below.

Registration (for free) is open here. The event will take place in the venerable Old Theatre (at the heart of the LSE campus) and we will continue the conversation over lunch and drinks at the no less venerable Shaw Library. If you have any questions about it, please get in touch. You can also reach my colleagues via law.events@lse.ac.uk.

Programme

9:15-9:30 | Welcome

David Kershaw (Dean and Professor, LSE Law School).

9:30-11:15 | Looking ahead: policy matters

Andrea Coscelli (Chief Executive, Competition and Markets Authority);

Cani Fernández (President, Comisión Nacional de los Mercados y la Competencia); and

Andreas Mundt (President, Bundeskartellamt).

In conversation with Thorsten Käseberg (Visiting Professor, LSE Law School and Head of Competition Policy, German Ministry for Economic Affairs and Climate Action).

11:15-11:30 | Break

11:30-13:00 | Looking ahead: substantive matters

Fernando Castillo (Principal Legal Adviser, European Commission);

Heike Schweitzer (Professor, Humboldt University of Berlin); and

Fabienne Siredey-Garnier (Vice-President, Autorité de la concurrence).

In conversation with Pablo Ibáñez Colomo (Professor, LSE Law School).

13:00-14:15 | Lunch (LSE Shaw Library)

14:15-15.30 | Coordination and enforcement in the new landscape

Sarah Cardell (General Counsel, Competition and Market Authority);

Niamh Dunne (Associate Professor, LSE Law School); and

Damien Gerard (Prosecutor General, Belgian Competition Authority).

15:30-15.45 | Break

15:45-17:00 | Lessons from other regulatory regimes

Claudia Berg (General Counsel, Information Commissioner’s Office);

Martin Cave (Visiting Professor, LSE Law School and Chair, Ofgem); and

Lindsey Fussell (Group Director Networks & Communications, Ofcom).

17:00-18:30 | Drinks (LSE Shaw Library)

Written by Pablo Ibanez Colomo

22 April 2022 at 12:35 pm

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Are there any restraints on vertical block exemptions (by Stephen Kinsella)

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[We are happy to publish a guest post from Stephen Kinsella touching on the VBER reform. We hope it will trigger a discussion; as always, we would be happy to hear different views]

Some time next month the Commission is due to adopt a revised version of the regulation that governs how the competition rules are applied to online sales in Europe. The Vertical Block Exemption Regulation (VBER) is set to run until 2034 and will have a major impact on the relationship between brand owners, retailers and consumers. It also risks causing harm to the European economy and creating considerable legal uncertainty because of the way in which the Commission has approached the renewal process.

The Commission does not have unlimited discretion when it passes laws in this area. It is bound by a Council Regulation dating from 1965 that only allows it to create a safe harbour for “vertical agreements” (agreements between parties at different levels in the supply chain) where it is clear that they are no more restrictive than necessary and will benefit consumers. In order to make sure that is the case, the Commission is supposed to carry out a rigorous assessment of the impact of its proposal on competition. Unfortunately in this instance, it failed to undertake that analysis. As a result the regulation it proposes goes beyond the powers it was granted back in 1965, and even beyond Treaty rules on competition, meaning its new regulation will be open to legal challenge. A regulation that is supposed to create legal certainty will instead generate considerable uncertainty.

A concrete example is the proposal relating to dual pricing. Under the existing regulation, when a brand supplies its goods to a retailer who then resells them both online and in its high street store, the brand owner has to offer a single wholesale price to the retailer. If the brand owner wants to encourage the retailer to invest in point of sale efforts, it can offer financial assistance. But it cannot “penalise” the retailer for reselling any of its stock online.

Under the new proposals, a brand owner will be able to say: here is a consignment of goods but for those you eventually sell in the store the wholesale price is X but for those you ultimately sell online the price will be Y. Meaning that it will only be apparent after a good has been sold to a consumer what will be the wholesale price that is retrospectively applied to that item.

So far so simple, one might say. But so many questions arise. Is the retailer to keep distinct consignments of stock, separating those to be sold online from those sold in-store? What if a customer comes into the store to view the goods but then places an order via the retailer’s website – is that an online or offline purchase? Conversely, if the customer orders online but for a click-and-collect purchase, how does one categorise that sale?

These issues and others could have been tested in a rigorous market study. After all, the process of renewing the regulation was launched over three years ago. But these dual pricing provisions (and a number of other changes) that were only proposed last summer, were never subjected to proper evaluation of their effects on the European economy, and there has been no attempt to explain what their impact will be. In particular, there has been no serious evaluation of what the impact of dual pricing could be when combined with other proposals, such as allowing brands to ban their retailers from selling via online marketplaces and allowing them to discriminate against online sales channels in general. Would not one outcome be that the majority of online sales are effectively reserved to suppliers via their own website? And is it not inevitable that measures that deter or make online sales more expensive are bound to lead to higher prices, undermining the Commission’s focus on controlling inflation?

The Commission itself recognises that the powers it was granted in 1965 are limited. A recital in the draft states that the benefit of the exemption “should be limited to vertical agreements for which it can be assumed with sufficient certainty” (my emphasis) that they satisfy the conditions for exemption laid down by the EU Treaty. Another provision goes on to say that the regulation “should not exempt vertical agreements containing restrictions which are likely to restrict competition and harm consumers or which are not indispensable to the attainment of the efficiency-enhancing effects”. Put simply, the Commission has the obligation to show that its proposals meet these tests.

The criticism of the approach adopted for this renewal, and the inexplicable failure to conduct a genuine impact assessment, is growing. BEUC, the pan European consumer body, expressed its concerns last year: “the Commission must be wary of unsubstantiated efficiencies. Any relaxation of the rules applicable to vertical agreements is likely to impact consumers.” Even national competition authorities, who take the vast majority of antitrust decisions regarding vertical / distribution agreements, do not seem convinced by the proposed relaxation regarding dual pricing. A senior French competition official recently described the proposal as “neither proportionate nor necessary”.

What can be done this late in the day? Many organisations who have contributed during the renewal process (and seen much of their evidence ignored) are weary of it, and it could be that the Commission is counting on that fatigue. But it may be that the only pragmatic solution would be to prolong the existing regulation for one year, to allow time for the objective empirical evaluation of effects that has been lacking to date. Otherwise we will find ourselves with a seriously defective regulation set to govern the digital space for the next 12 years, which is far too long when you consider how often the Commission talks about “future proofing” its legislation. By way of comparison, the parallel regulation that the UK intends to adopt will have a lifespan of 6 years.

If the Commission does not even now rethink its approach, the new regulation will certainly be open to legal challenge. That could arise in a number of ways, but will most likely come out of a dispute in a national court, where the question of validity will need to be referred to the European Court for an answer. In addition the national competition enforcers of the Member States will be asked to use their own powers to withdraw the benefit of the VBER because it will be permitting anticompetitive practices on a scale that threatens consumer interests. In short, we will be faced with an entirely avoidable mess.

Written by Alfonso Lamadrid

21 April 2022 at 12:39 pm

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The leaked (almost final) DMA text

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Over the past few months, the European Institutions have been working on a major legislative initiative that seeks to leverage DG COMP’s experience to create a new regulatory instrument, close an enforcement gap and address some of the greatest distortions to competition and the internal market.

We are talking about a bold, but well-thought out and balanced initiative that pursues true public interest goals. Some aspects still need to be ironed out, but the proposal is sound. Its success, however, will be determined by its practical implementation in the face of political pressures, potential legal challenges and EU relationships with third countries. This is a legislative initiative that touches on issues that we have discussed through the years, and we will be following it closely.

We are, of course, talking about the European Commission’s Proposal for a Regulation on Foreign Subsidies distorting the internal market, which has arguably not received the attention it deserves.

The opposite is true of the Digital Markets Act, which has attracted lots of attention from the press, politicians, lobbysts and commentators. Last Thursday, an almost-final version of the final DMA text was leaked. This text is now circulating widely in Brussels circles. We figured you would be interested. It is available here:

Written by areeader

20 April 2022 at 12:19 pm

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SAVE THE DATE: 12th May | Conference at the London School of Economics

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On 12th May, the London School of Economics will be hosting a major conference that will look into the future of competition law and regulation. The event is the product of joint work with Thorsten Käseberg, who moonlights as a Visiting Professor at LSE on top of his duties at the German Ministry for Economic Affairs and Climate Action.

The conference will address upcoming challenges from a legal, institutional and policy perspective. In addition, we will explore the lessons that can be drawn from sectoral regimes, in particular utility regulation and data protection.

We hope to see many of you in London in May. We will be providing all information on how to register (for free) and how to attend already next week: make sure you keep an eye on this blog and LSE Law School’s social media profiles (including Twitter and LinkedIn). In the meantime, do not hesitate to get in touch.

If you want a taster of the conference, here is the lineup of confirmed speakers:

On policy matters:

  • Andrea Coscelli (Chief Executive, Competition and Markets Authority);
  • Cani Fernández (President, Comisión Nacional de los Mercados y la Competencia); and
  • Andreas Mundt (President, Bundeskartellamt).

On legal issues:

  • Fernando Castillo (Principal Legal Adviser, European Commission);
  • Heike Schweitzer (Professor of Law, Humboldt University of Berlin); and
  • Fabienne Siredey-Garnier (Vice-President, Autorité de la concurrence).

On institutional and coordination matters:

  • Sarah Cardell (General Counsel, Competition and Market Authority);
  • Niamh Dunne (Associate Professor, London School of Economics); and
  • Damien Gerard (Prosecutor General, Belgian Competition Authority).

On lessons from other regulatory regimes:

  • Claudia Berg (General Counsel, Information Commissioner’s Office);
  • Martin Cave (Chair, Ofgem); and
  • Lindsey Fussell (Board Member, Ofcom).

Enjoy the break!

Written by Pablo Ibanez Colomo

11 April 2022 at 4:59 pm

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OUT NOW: Special Issue on Google Shopping in JECLAP

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On behalf of JECLAP‘s editorial team, I am proud to announce the publication of the Special Issue dedicated to the General Court’s ruling in Google Shopping.

You can be access it here. Choosing the pieces was not an easy task (we received over 30 submissions in no time), but we could not be more delighted about the end-product.

The contributions are invariably thoughtful and approach the judgment from different angles (some more practical, other more theory-minded). As an editorial team, we are particularly happy that this Special Issue provides a platform to new voices in academia and the world of practice (we are convinced they will become household names in the near future).

If you are curious, below is a glimpse of what the Special Issue offers (I will be discussing some pieces in closer detail in the coming weeks). If (for reasons beyond comprehension) you or your institution are not yet subscribed to JECLAP, you will be pleased to see that some contributions are available in Open Access format.

Enjoy and do not hesitate to contact us and/or the authors with any comments!

Rules, Discretion, and Reasoning According to Law: A Dynamic-Positivist Perspective on Google Shopping (open access), by Justin Lindeboom (Groningen).

The General Court’s Google Shopping Judgment Finetuning the Legal Qualifications and Tests for Platform Abuse, by Friso Bostoen (Leuven).

Bronner revisited: Google Shopping and the Resurrection of Discrimination Under Article 102 TFEU, by Christian Ahlborn, Gerwin Van Gerven and Will Leslie (Linklaters).

Article 102 TFEU, Equal Treatment and Discrimination after Google Shopping, by Lena Hornkohl (Max Planck Institute Luxembourg).

Anticompetitive Effects and Allocation of the Burden of Proof in Article 102 Cases: Lessons from the Google Shopping Case, by Raffaele Di Giovanni Bezzi (European Commission).

Google Shopping and the As-Efficient-Competitor Test: Taking Stock and Looking Ahead (open access), by Germain Gaudin (Freiburg) and Despoina Mantzari (University College London).

Business Models and Incentives: For an Effects-Based Approach of Self-Preferencing?, by Patrice Bougette (Côte d’Azur), Axel Gautier (Liège) and Frédéric Marty (Côte d’Azur).

Between Substance and Autonomy: Finding Legal Certainty in Google Shopping (open access), by Yasmine Bouzoraa (Groningen).

Following the Google Shopping Judgment, Should We Expect a Private Enforcement Action?, by Jeanne Mouton (Côte d’Azur and College of Europe) and Lewis Reed (College of Europe).

Written by Pablo Ibanez Colomo

6 April 2022 at 3:06 pm

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Announcing the Winner and Finalists of Chillin’Competition’s 2nd Rubén Perea Award

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On 1 April 2020 we lost Rubén Perea, a truly extraordinary young man who was about to start a career in competition law. We decided to set up an award to honour his memory, and to recognize the work of other promising competition lawyers/economists under 30. Today we are announcing the winner and runners-up of the 2nd edition of this award.

The winner of the 2nd (2021) edition of the Rubén Perea Award is JÉSSICA NEMETH, for her paper “Blockchain, Behavioral Remedies and Merger Control: How can access remedies do better?”.

Lass Tuesday Jessica and the winner of the first edition (Vladya Reverdin) received their awards from EVP Vestager, who very kindly accepted to give out the awards at her offices:

The jury also selected 4 finalists whose papers will be published in a special JECLAP issue. The finalists are:

-“Firm’s own price elasticity of demand in dominant position analysis” (by Jan Kupcik)

-“Trading Off the Orchard for an Apple: the iOS 14.5 privacy update” (by Alba Ribera)

-“Is ‘‘more’’ better? Broadening the right to sue in competition damages claims in both sides of the Atlantic” (by Grigorios Bacharis)

-“Should the New Competition Tool be put back on the table to remedy algorithmic tacit collusion?” (by Vasileios Tsoukalas)

Congratulations to Jessica, Alba, Jan, Grigorios and Vasileios, and many thanks to my fellow members of the jury, namely Damien Gerard, Lena Hornkohl, David Pérez de Lamo, Michele Piergiovanni and Gianni De Stefano.

We will soon be announcing the 3rd edition of the Rubén Perea Award. Stay tuned!

Written by Alfonso Lamadrid

24 March 2022 at 8:01 pm

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