Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

The ASCOLA conference that was (at NYU School of Law) and that will be (Aix-en-Provence, 27-29 June 2019 – with a CALL FOR PAPERS)

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Ascola

The conference that was

The Academic Society for Competition Law (ASCOLA), of which I am a proud member, is doing really well, and its profile keeps raising. No surprise, given that the awesome Michal Gal is the current Chair.

Many will know that this year’s conference took place at NYU School of Law, a strong contender for the Coolest Location Award (and this without getting started about the quality of its antitrust faculty members, who were our hosts).

The event was intense and full of interesting stuff. I am certainly being unfair but cannot resist highlighting two presentations that got me thinking:

Ioannis Lianos gave a fascinating talk about food sovereignty and competition law. His presentation (see here) was primarily devoted to merger control issues. Ioannis discussed the transformation of the food industry, in particular the increased concentration that it is taking place.

I was left with the impression (and I told him so) that it would not be unreasonable to launch a sector inquiry identifying conduct potentially falling within the scope of Article 101 TFEU (and/or their equivalents around the world). Cross-licensing, joint ventures and patent settlements are all practices that deserve close scrutiny in a concentrated industry.

I also enjoyed a paper (available here) by Marco Botta and Klaus Wiedemann on exploitative practices in the data economy. The paper is solid, rigorous and firmly grounded on positive analysis (quite important at a time when many scholars like to indulge in speculation, in particular when addressing all things digital).

Incidentally, these were some of the very qualities I identified as desirable in a pre-conference discussion on what makes a good competition law paper.

As far as I am concerned, I gave a presentation on Regulatory Capture and the New EU Competition Law (available here). It is a topic about which I have been thinking for a while (remember this post?). I have the impression that competition lawyers tend to be somewhat complacent about the risk of capture. I discussed some of the reasons why competition law may be vulnerable to this phenomenon, as well as the safeguards available in the system.

The conference that will be

David Bosco, in his capacity as host-to-be, said a word about the location of next year’s ASCOLA conference. It will take place at the Faculty of Law of Aix-Marseille University (in lovely Aix-en-Provence, in case you were wondering whether it was one or the other city). The call for papers can be found here. Make sure you save the dates: 27-29 June 2019.

The conference will be devoted to ‘Challenges to the Assumptions at the Basis of competition Law’ and will cover issues such as the following:

  • The goals of competition law and how they can be achieved;
  • How markets operate (including the effects of certain types of conduct and/or technologies on market performance);
  • The correct balance between risks and benefits of certain market actions or technological changes;
  • The institutional structure that best serves competition law enforcement;
  • Burdens of proof, and economic and legal presumptions that best serve its goals;
  • The interaction of competition law with other legal or regulatory spheres, and how they affect overall social welfare.

Please note that the pre-conference discussion will be this time devoted to ‘Innovative Ways to Teach Competition Law’.

And before I forget: if you would like to join ASCOLA, please follow this link.

Written by Pablo Ibanez Colomo

14 August 2018 at 2:10 pm

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Memories of my workation in Buenos Aires

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Buenos Aires

Alfonso’s last post was devoted to work-life balance among lawyers. Things are quite different for academics. I rarely ever think of the things I do as work. For better (I would say) or worse, it is all a blurred line.

My recent trip to my beloved Buenos Aires was not an exception. On top of the planned (non-competition related) activities which justified my purchasing the flights, I gave three talks last week.

The occasion could not have been better. Competition law is picking up again in Argentina, and I was delighted to see so much intelligence and enthusiasm put into it. The role of competition policy in the improvement of ordinary citizens’ lives seems to be well understood by the government and key stakeholders.

My talks were given at the initiative of two Commissioners of the Argentine Competition Authority (Comisión Nacional de Defensa de la Competencia, or CNDC): Pablo Trevisán (who was lucky enough to study at LSE before I arrived) and Eduardo Stordeur (who is also the Director of the LLM in Law & Economics at Torcuato di Tella University).

On 30 August, I gave a talk at di Tella about my book (info on it and a youtube video – In Spanish – can be found here). Di Tella, a real success story, is modelled upon top US research-intensive universities. This is something I could certainly notice in the lively exchanges that followed my presentation.

A couple of days later (1 August), I spoke at the Bar Association of the City of Buenos Aires and the CNDC.

At the former, I spoke about the preconditions for competition law to emerge and flourish, and about how fragile consensus in its favour can be. I also emphasised that law and mainstream economics cannot be avoided – if they are, they eventually come back to highlight the inconsistency and unpredictability of the system.

My presentation (also in Spanish) at the Bar Association can be downloaded here.

At the competition authority, I gave an overview of recent developments in EU competition law. Officials quickly jumped in to share their views and the discussion, as expected, was of the highest level.

Whether the reasons are competition law-related or not, you should definitely visit Argentina if you ever have the chance to do so (just so you know, I already look forward to coming back). And, no matter the reasons that take you there, let me know if you want any tips!

 

Written by Pablo Ibanez Colomo

10 August 2018 at 12:59 pm

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Side effects of DG Comp’s work (and research all lawyers should read)

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(Official pictured just hours after having clicked “Send”)

Competition law enforcement is also a multi-sided industry. Optimal enforcement depends on a complex balancing of incentives between enforcers, Courts, companies, lawyers, economists, politicians, journalists and other stakeholders.

This means that we often forget about the implications of certain initiatives on other sides of the market. And there is one of these cross-side effects on which (for several reasons) I have particularly strong feelings this year.

You know the joke about how the Commission plays with lawyers holidays adopting Decisions, Statements of Objections and Information Requests just before August? Well, some lawyers are lucky enough to have just received all three.

So at a time when many are asking for summer read suggestions, this is my suggestion to DG Comp: “LEISURE AS A COPING RESOURCE“, a study of how lack of holidays impacts lawyers’ life based on a sample of 900 law firm lawyers.    😉

This is the abstract:

This article explores whether leisure is an effective coping resource in response to the demands of one’s job and in reducing depression. Karasek’s job demand-control-support (JDCS) model of psychological strain serves as a framework for empirically examining the importance of leisure in reducing depression and buffering the detrimental effects of excessive job demands. This article relies on data from a sample of 887 law firm lawyers who are renowned for working in highly stressful work settings. We find that participating in active and social leisure activities or taking a vacation are important in reducing lawyers’ depression, whereas participating in passive leisure is not. None of the leisure variables buffer the harmful effects of job demands on depression. We discuss the implications of these findings“.

 

Enjoy your time off! 

Written by Alfonso Lamadrid

27 July 2018 at 4:36 pm

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Ithaca Competition Summit: update (and last two weeks to register!)

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Vathy

The Ithaca Competition Summit is just a month away! There are still a few places available, and you can register until 8 August here. All extra info you need (or so I think) can be found in this file.

The programme is as stellar as last time you looked at it. You should note, in addition, that there will be a discussion on AT&T/Time Warner following recent developments. And that CPD/CLE points will be available.

If you still have any questions, you can always send an email to Ithaca.Summit@gmail.com.

Written by Pablo Ibanez Colomo

23 July 2018 at 9:26 pm

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The Android decision is out: the exciting legal stuff beneath the noise (by Pablo)

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Exciting stuff

To nobody’s surprise, the Commission has announced, today, the adoption of a decision concerning Android. The stakes in the case are so high that the outcome was known well in advance. The only open question related to the amount of the fine. But even then, it looked like a given that it would be the highest ever. Which turned out to be correct.

When the stakes are so high, corporate strategies tend to dominate the landscape and the discussions.

Some aspects of these strategies are beyond reproach. It makes sense for companies to hire the very best lawyers – a category that definitely includes Alfonso, who has always been open about his involvement in this case.

Alfonso, by the way, will not be blogging again on Android, no less because he is likely to have very little time in the coming months (bye bye summer holidays and bye bye paternity leave, I guess).

I regret other aspects of these corporate methods. Companies tend to make loads of noise when their interests are at stake. Big Food, for instance, has perfected a strategy of confusion that gives many people the impression that beef and cheese are perhaps healthy after all (they are not).

There has certainly been a lot of noise recently in the competition law community – coming from all over the place.

The ongoing cacophony is a real pity, since there is a lot of exciting legal stuff beneath the noise. And it is worth discussing it.

For those interested in the law bit of competition law and policy, here are some thoughts.

According to the press release, the Android decision finds that three main practices amount to an abuse of a dominant position:

  • The tying of Google Play to other applications: Google does not license its applications a la carte. In particular, the Commission takes issue with the fact that Google Play Store is not available as a stand-alone product. For a comparable practice, think of pay TV providers preventing users from cherry-picking the channels to which they subscribe.
  • Compensation for exclusive pre-installation: According to the press release, mobile phone manufacturers are given financial incentives for exclusively pre-installing Google Search. This arrangement makes me think of a supermarket chain receiving compensation as consideration for prime shelf space – or perhaps an online store receiving compensation for placing some products as default choices.
  • Android Forks: If mobile phone manufacturers choose to offer the Google version of Android, they may not offer rival versions of Android. It is like McDonald’s requiring its franchisees not to run their own burger joints (or a Burger King restaurant) in parallel.

The second of these practices is perhaps the least exciting one. The only intriguing question is perhaps whether the exclusive pre-installation amounts to an exclusivity obligation a la Hoffmann-La Roche (which is what the press release seems to imply) or to a practice falling elsewhere along the spectrum of schemes that can have a fidelity-building effect. Either way, the legal framework is firmly in place after Post Danmark II and Intel.

The two other practices, on the other hand, raise more fundamental issues. So much so, in fact, that this case may mark the evolution of EU competition law. Allow me to explain.

Tying: how products are sold vs how products are made

Some people will argue that the application of Article 102 TFEU in relation to the tying aspect of the decision cannot surprise anyone. And it is a reasonable point to make. After Microsoft I, any tie-in that gives a distribution advantage to the dominant firm’s tied product amounts to an abuse – which is another way of saying that tying is presumptively abusive under Article 102 TFEU.

What can be exciting around this case, then? Well, the fact that, in some respects, the setting is different from that found in traditional tying scenarios. Inevitably, the remedy is also different.

Traditional competition law in general, and tying in particular, typically interferes with how products are sold. By the same token, competition law is generally wary not to second-guess how products are made.

What do I mean by this distinction? I mean that, absent exceptional circumstances, competition law is not there to tell companies how to run their business. The point of competition law is to ensure that companies have the ability and the incentive to thrive in the marketplace using the strategies of their choosing.

Competition law is agnostic about whether companies vertically integrate or sell their products through third parties, whether they choose selective distribution over franchising or (more to the point) make money through advertising (like a free-to-air TV channel) or through subscriptions (like HBO). For the same reasons, authorities dislike telling firms what prices they should charge.

How is Android different from traditional tying cases?

It is obvious to everyone why Play is tied to Search (and why Search is given a distribution advantage). It is through this mechanism that a company like Google makes money. Thus, if the tying of content and advertising is made unlawful, Google will have to find new ways to make money – or perhaps reinvent Android as a non-profit entity.

The remedy in the case is likely to lead to a fundamental rethink of Android. This issue does not arise in traditional tying cases. If a firm like Coca-Cola is not allowed to engage in tying, it can carry on making money the same way it used to. Not even Microsoft had to change its business strategy – this said, the Media Player remedy failed, which is not an unimportant factor in this context.

To sum up: Android will inevitably lead to more intrusive intervention than usual. And the potential unintended consequences of second-guessing firms’ strategies are universally acknowledged in the competition law community (and have often informed legal analysis).

Against this background, the open question, I guess, is whether, and to what extent, this difference should be reflected in the law.

Is this factor irrelevant from a legal standpoint? If it is not irrelevant, how does (or should) the law adapt to the increased intrusiveness? What are the closest precedents at which the remedy hints?

The reach and scope of competition law intervention may vary significantly depending on how these questions are answered.

Android forks and the legal status of non-compete obligations

What I say above can also be extended to the issue of Android forks. As explained above, obligations relating to this matter are like the sort of non-compete obligations found in franchising agreements or in those seeking to protect the goodwill around a business (think of Remia). From this perspective, one could argue that they are reasonable.

Is it not sensible for a company to prevent free-riding and to make sure that it does not create competition to itself when licensing its products and services? One could point to the Guidelines on technology transfer agreements to suggest that, indeed, it is. In relation to these agreements, Valentine Korah consistently emphasised that competition cannot be examined from an ex post perspective alone.

One could also argue, equally reasonably, that dominant firms have a special responsibility. I agree that they do. This point, however, does not say anything about the relevant legal test. Under what conditions are dominant firms precluded from taking measures against free-riding? Can they avoid creating competition to themselves when licensing their products? How are these considerations integrated in the legal framework?

These are questions, again, for which there is no clear-cut answer in the case law – Article 102 TFEU case law, that is. In that sense, Android looks like a good opportunity to evaluate and clarify the status of these business strategies – and similar ones raising the same issues.

Conclusions

These are not the only questions in which I am interested. But it gives you an idea of the sort of major points to which I will jump when the decision is made available. The telecoms lawyer in me is also intrigued by some aspects of market definition mentioned in the press release (in particular the reference to indirect constraints). And I am curious to know how the notion of effects is defined.

If you are interested in making sense of the law (as opposed to making noise) too, I would very much welcome your thoughts.

Written by Pablo Ibanez Colomo

18 July 2018 at 6:59 pm

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Save the date- The Ultimate Chillin’Competition Conference- 20 November 2018

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The 4th Chillin’Competition Conference will take place in Brussels on 20 November 2018.  

Here is what we can tell you for now:

-It took us a while to settle on a venue (because Pablo mocks my ambitions; the picture above corresponds to a real recent Whatsapp conversation regarding possible venues. His counterproposal reveals how seriously he takes me…).

-We have so far invited only one speaker, who has very kindly accepted: Commissioner Vestager will once again be our star speaker;

-The theme of the conference will be: “Concepts“. We will pick a few common but often misunderstood, or yet unclear, concepts and we will invite a group of experts to discuss their meaning and implications. It’s a bit what we did with the notion of “neutrality” in our 2nd conference, but with a broader scope. We will discuss horizontal concepts, not cases or industries.

-We are selecting the specific concepts that will be disected and your feedback would be most useful; what are the concepts that you think are in need of clarifications?

We are open to fresh ideas and new speakers, so if you think you can astonish the competition community with a brilliant speech on any particular concept, please send us a one pager with your ideas. Depending on what we get, we might invite those with the best ideas to deliver a brief Ted-like talk (note that candidates will be selected “on the merits”; i.e. on the basis of wholly subjective and undisclosed criteria);

-Our non-business model consists in making the conference accesible to everyone by offering the service for free. If you want to be one of the sponsors that makes this possible, please shoot us a line;

-It will be, by far, the best Chilling Competition conference to date;

-Yes, yes, there will be drinks afterwards 

More info on the programme, registration, etc. will follow in September…

Written by Alfonso Lamadrid

16 July 2018 at 11:29 am

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REGISTRATION OPEN: Chillin’ in London (14 September, @LSELaw)

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Chilling in London

REGISTRATION for our Chillin’ Event in London (14 September, at LSE) is now open. Please click here to sign up!

UPDATE: The event is now sold out. But please sign up to the waitlist if you are interested in attending! Thanks everybody for the interest! We look forward to seeing many of our readers in September.

Written by Pablo Ibanez Colomo

13 July 2018 at 9:30 am

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