Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

My interview with Global Competition Review

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A few days ago, Global Competition Review issued the first edition of its survey of antitrust academics. As you can see here, it features 25 scholars working on the legal, economic and management dimensions of our field.

It was a pleasure to share some thoughts on the direction of competition law and policy and even more of a pleasure to discuss, for once, issues that wholly unrelated to antitrust (or indeed the law). Global Competition Review has been kind enough to allow me to reproduce the interview on the blog (tip: scroll to get to the non-legal stuff).

What is the next academic “frontier” for antitrust law or economics?

The implementation of complex remedies is the most obvious challenge for authorities in the next few years. Traditionally, a decision finding an infringement was the end of a case for a competition authority. No longer. Enforcement, in particular in digital markets, is far more ambitious. Agencies are now far less reluctant to engage in the sort of far-reaching intervention from which they shied away for decades. They do not hesitate to interfere with the design of products, to question the core of firms’ business models or to deal with exploitative conduct. These cases are inevitably more complex and demanding, and this in a number of ways. First, the authority must design (or at least approve) an appropriate remedy, typically in the form of a positive obligation (and not just a cease-and-desist order). Second, this remedy must be subsequently implemented and monitored. As a result, uncertainty may extend well beyond the date when the decision finding an infringement is adopted. Some recent cases involving Apple and Google go to confirm this point: disagreements about whether the remedy, as implemented by the firm, brings the breach to an end can go on for years.

Our community is only starting to realise how much this kind of ambitious enforcement is transformative. Competition law has been, for a long time, about establishing infringements, the remedy being, if at all, an afterthought. If this trend continues, the discipline, and debates in the field, will revolve primarily, if not exclusively, around remedies. At present, our field is imperfectly equipped to deal with this shift in the centre of gravity. It seems to me that the legal framework will have to be adjusted and a new kind of expertise developed.

What is the most important academic debate currently taking place within the competition community?

I would say that the most important debate is the one that is not taking place (and that, if you ask me, should be taking place). Until the beginning of the 2010s, there was wide consensus about what makes competition law legitimate: it was all about process. I mean process in a wide sense, as encompassing not only procedural aspects but also the substantive and economic side of things. Whether or not intervention is justified in a given case would follow the process, under this approach. It would all depend on whether the theory of harm matches the facts of the case, whether the economic and legal context has been considered in its full complexity and whether agency action remains within the boundaries of what is allowed by law. Under this understanding of competition law, review courts are central: it is for them to check whether process has been followed.

Things are now changing. It would seem that, for many, what makes competition law legitimate is not whether the appropriate process has been followed, but whether the outcome that is deemed desirable is reached. Competition law would then be legitimate where it produces a particular result (typically, a finding of infringement). Under this novel understanding, competition law would not be ‘fit for purpose’ if, for instance, it leads to the finding that a practice implemented by a digital platform is incapable of restricting competition, or that it is on the whole procompetitive. By the same token, judicial review is seen with suspicion. If a court comes to the conclusion that the agency had erred in law or fact, it is deemed an obstacle to enforcement, rather than as a safeguard.

People will of course have different views about the wisdom of this shift. What matters is to acknowledge the shift is underway and discuss its consequences.

Which competition agencies (if any) are pushing the boundaries (rightly or wrongly) of antitrust law or economics the most and why?

Allow me to mention, first, that it is not wrong for a competition agency to test the boundaries of its powers. It is what they are expected to do and what they should do. The flipside, of course, is that courts may conclude that their analysis in individual cases goes beyond what the law permits. The European enforcement model is more conducive to agencies testing the limits of the discipline. Add to that excellent, well-trained staff and the experience acquired over decades and you get the ideal mix. I have followed with a great deal of interest what the French Autorité de la concurrence and the Italian AGCM have been doing (the latter’s decision in Android Auto and Amazon are most intriguing). I also look forward to the outcome of the European Commission’s investigations into Apple’s practices, as they hint at novel interpretations in more than one way.

Most important academic paper or book you’ve written and why?

The Shaping of EU Competition Law, published by Cambridge University Press in 2018, is, I believe, my most important work for several reasons. First, because it crystallises my thoughts of several years. It is in a way the culmination of a path that started with several shorter pieces. Second, because it is also quite ambitious: I compiled a comprehensive database of all Commission decisions and all EU courts judgments. Third, because it is a more mature piece of work than my PhD (which gives me the hope that my best research is yet to come!).

Most important academic paper or book you’ve read and why?

I admire many competition law scholars, but I will go for Marc Galanter’s classic Why the Haves Come Out Ahead. It is, I believe, a must-read for any legal academic. It encapsulates what we could contribute to society (and we should all aspire to do as scholars). It addresses an important problem (the limits of legal change and the factors that explain why the powerful get their own way), adds to our understanding of the world and creates a meaningful framework for addressing it.

Is corporate capture undermining the integrity of academic research?

It is very important to be aware of the risk of capture, but I believe that this risk has been somewhat overstated (at least in Europe, which is what I know well). The community has reacted effectively and put robust mechanisms in place. By and large, claims of academics being captured should be taken for what they are, more often than not: just another corporate strategy to advance some stakeholders’ interests.

Do you accept paid work from private companies?

No, and never will. I am happy to explain why. Us academics are the most privileged people in this community. We are paid by our institutions literally to think and write. I believe this status comes with a duty to avoid actual or potential conflicts of interests, provided that our personal circumstances allow for it. And my personal circumstances happen to allow for it. I am immensely fortunate to have a secure, well-paid job at a leading institution. Plus, I do not have extravagant hobbies and have a habit of reminding myself of how lucky I am.

What are your hobbies outside of academia?

As said above, my hobbies are not extravagant. I enjoy running and reading non-competition stuff (Amélie Nothomb’s Premier Sang and Irene Vallejo’s El Infinito en un Junco, both widely translated, are the highlights of this year). I also enjoy cycling, hiking and trying vegan places with my partner (if you happen to be in London, we recommend Sazzy & Fran for breakfast/brunch, En Root for lunch and great music as well as What the Pitta for a cheeky takeaway).

Written by Pablo Ibanez Colomo

25 November 2022 at 10:49 am

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The notion of abuse after the Android judgment (Case T‑604/18): what is clearer and what remains to be clarified (II)

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Following my first post on the Android judgment, in which I addressed some of the issues that have become clearer after the General Court’s analysis, here is the second part, discussing those where further clarity will be needed. As ever, I really look forward to your comments (and, as ever, nothing to disclose).

What needs to be clarified after the Android judgment

The point at which an anticompetitive effect can be said to exist.

As mentioned in the first post, the judgment is valuable in that it confirms what an effect is not. It is not just a competitive advantage, and it is not merely a limitation of a firm’s freedom of action. If these factors alone are not enough, what is the point at which an anticompetitive effect exists? How to differentiate it from a mere competitive disadvantage? This is one of the issues where the Android judgment fails to shed enough light.

Suffice it to focus on the MADA aspects of the decision to illustrate this idea. The judgment covers at length the main competitive advantage identified by the Commission, namely the ‘status quo bias’ from which Google’s products would benefit and which would derive from the pre-installation of these products in smartphones.

Claims of ‘status quo bias’ raise a number of factual questions, in particular whether rival applications can be pre-installed alongside Google’s (thereby nullifying any competitive advantage) and how pervasive pre-installation was.

What matters, in any event, is that the ‘statu quo bias’ is as such insufficient to show that a practice leads, or has the potential to lead, to foreclosure. Decades of experience – including in technology markets – show that even a significant competitive advantage does not necessarily result in exclusion and that it may well be compatible with thriving competition (one needs to look no further than the Microsoft/Skype decision).

In this regard, the judgment does not offer anything by way of an approach to distinguish between advantage and effects within the meaning of the case law. It touches upon the issue, but ultimately leaves it open and unaddressed (see para 565, which ends up speaking of a ‘significant competitive advantage’). This is one of the blind spots that will hopefully be explored in the near future.

This point is not a minor or esoteric one. The development of a comprehensive toolkit to evaluate anticompetitive effects (and tell them apart from mere competitive advantages) is a necessity if the assessment is to be meaningful. In the absence of effective analytical tools, establishing foreclosure would be a mere formality, not an actual informed scrutiny of the impact of potentially abusive conduct in the relevant economic and legal context. It would be sufficient, in practice, to point to a competitive advantage.

As things stand, a toolkit exists, but only in relation to some practices. As a result, distortions will persist unless the issue is directly addressed by the EU courts. If gaps remain in the case law, the evaluation of anticompetitive effects will only be meaningful for some categories of conduct, not others. The meaning of foreclosure – and the nature and depth of the scrutiny – would therefore vary depending on the practice. It would be difficult to justify or rationalise this reality.

As far as price-based conduct is concerned, for instance, the EU courts already rely on an operational toolkit (including the ‘as efficient-competitor test’). As a result, the potential impact on competition can be meaningfully ascertained. In addition, the coverage of the behaviour has emerged, since Intel, as a helpful tool with regard to both pricing and non-pricing strategies, and it has proved particularly illuminating in some recent cases.

The Android judgment shows that an operational toolkit is missing in relation to other conduct, including tying. As a result, there is some way to go to achieve consistency within Article 102 TFEU case law (and, indeed, EU competition law at large – for instance, it has long been acknowledged in EU merger control that a significant competitive advantage is insufficient to establish foreclosure).

The benchmark against which effects are assessed

One of the reasons why this case is so fascinating is that the but-for world (the famous counterfactual) is not straightforward to establish. This is so for at least two reasons.

First (and as mentioned above), the practices at stake in the case create competition, in the sense that they sustain an ecosystem that provides opportunities for rivals to expand their business. Second, it is far from clear that alternative monetisation strategies would have given rivals more opportunities to thrive (look no further than the iPhone to realise what may happen when other business models are relied upon).

In the specific circumstances of the case, accordingly, it may well be that, in the absence of the contentious behaviour, there would have been less, not more, competition. If this is so, it would not be possible to argue that the practices have exclusionary effects. If it appears that they allow for more competition relative to the counterfactual, they fall outside the scope of Article 102 TFEU.

Fascinating as this issue may be, it was avoided by the General Court. Even though it concedes that the Android platform is pro-competitive, in the sense that it opens opportunities for rivals, it fails to consider the counterfactual.

In paras 587-596, the judgment merely points out that the Commission decision only challenged some aspects of Google’s monetisation strategy, not the business model as a whole. Which, if there was any doubt, does not address the question of what the conditions of competition would have been in their absence.

The attributability of anticompetitive effects

It is well-established case law that the effects of a practice must be attributable to the contentious practice for Article 102 TFEU to come into play. In other words, there must be a causal link between the behaviour and the impact on competition. In many respects, Android provides an ideal scenario in which to test the question: are Google’s market shares the result of its conduct or are they the consequence of the fact that its products are superior?

Inevitably, these questions emerge in the case, but, again, there is no definitive answer from the General Court. It is worth reading paras 546-558 and 570-584 in this regard. The judgment describes the evolution of market shares and explains that other competing applications are not downloaded by users. Whether or not the observable consumer behaviour can be attributed to the conduct is not something that is addressed directly.

In fact, the General Court notes at some point (para 574) that the figures outlined in the judgment are in themselves sufficient to establish harm. In this sense, the judgment suggests that attributability may be established by proxy. It remains to be seen whether this is enough to show a causal link between conduct and effects.

Written by Pablo Ibanez Colomo

3 November 2022 at 6:57 pm

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Book launch at UCL Laws (2nd November, 6pm): Courts, Regulators and the Scrutiny of Economic Evidence (by Deni Mantzari)

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This is yet another post (like Wednesday’s) on the judicial review on administrative action. This time around, I write to celebrate the publication of Despoina (Deni) Mantzari‘s wonderful monograph on the topic and to invite you to come along to the book launch next week (2nd November, 6pm) at UCL Laws.

Information on the book launch, and on how to register, can be found here. We will be discussing Deni’s amazing achievement alongside the following confirmed speakers:

Peter Freeman, CBE, QC (Hon), (former Chairman of the UK Competition Appeal Tribunal)

Dr Andriani Kalintiri, (Senior Lecturer in Competition Law, King’s College London)

Joe Perkins, (Compass Lexecon, former Chief Economist at Ofgem)

Dr Christel Koop, (Reader in Political Economy, King’s College London)

Prof. Ioannis Lianos, (President of the Hellenic Competition Commission, UCL, Chair)

Written by Pablo Ibanez Colomo

28 October 2022 at 11:54 am

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AG Kokott in Case C-376/20 P, CK Telecoms: legal tests, standards of proof, and the gap in between

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Advocate General Kokott’s Opinion in CK Telecoms came out last week. Her analysis departs markedly from the first instance judgment, which she proposes to set aside.

The various dimensions of the Advocate General’s analysis, taken together, would have a transformative impact on the judicial review of EU merger decisions.

The Opinion takes issue with the substantive and evidential aspects of the General Court’s scrutiny of the original decision. In fact, it refers to both across all grounds of appeal, as if they were two sides of the same coin and as if a substantive matter was an evidential one, and vice versa.

In paras 111 and 124, for instance, Advocate General Kokott argues that the General Court’s substantive analysis is erroneous, and claims that this incorrect analysis ultimately flows from the excessively demanding standard of proof imposed upon the Commission.

A close reading of the Opinion, however, suggests that, in reality, it is all about substantive law, not evidence. References to the applicable standard of proof (as in paras 111 and 124, both mentioned above) are little more than a digression.

The analysis that follows focuses on the core question, which is the legal assessment of mergers under the SIEC test.

The above said, I will also address other controversial, or heterodox, points of the Opinion. Seasoned competition lawyers know that Advocate General Kokott does not hesitate to depart from the case law and from conventional wisdom (i.e. the proverbial zeitgeist), occasionally quite markedly.

This Opinion is not an exception. So much so, in fact that, if the Court were to follow it, these aspects would take EU merger control to a new era.

Legal tests and effective judicial review under the SIEC standard: the question that remained unanswered

When is an impediment to effective competition ‘significant’?

CK Telecoms raised an unprecedented question: in the absence of dominance, when is an impediment to effective competition significant within the meaning of Regulation 139/2004?

The issue is particularly important in the context of horizontal mergers. These transactions entail, by definition, an impediment to effective competition (a source of competitive pressure disappears). As a result, their compatibility hinges exclusively on whether the impediment is significant.

Above all, CK Telecoms exposed the need for the Court of Justice to lay down a legal test to evaluate, case-by-case, this fundamental matter.

The need for an administrable (and reviewable) legal test

Effective judicial review of merger control decisions necessitates an administrable legal test with definite boundaries (that is, one that revolves around a set of clear and well-defined criteria that can be anticipated).

A ‘liquid’ test that lacks definite boundaries (in the sense that the boundaries vary from one case to another) cannot be subject to meaningful judicial review. Such a test would give the competition authority, in effect, the discretion to decide which mergers are compatible with the internal market. And (at least in the EU legal order) administrative authorities do not have any leeway on issues of law.

In its first instance judgment, the General Court addressed the above question directly, both by noting that the Commission’s (liquid) interpretation of the SIEC standard gives it de facto discretion over horizontal mergers and by proposing a legal framework revolving around two cumulative conditions to be satisfied in every instance.

Advocate General Kokott’s analysis

Advocate General Kokott rejects the General Court’s approach, and does so comprehensively. Little in fact, remains of the first instance judgment.

She argues, first, that an impediment to effective competition can be significant in circumstances other than those identified by the General Court (and thus that the legal test laid down at first instance would be overly reductionist and insufficiently accurate; see paras 72-80).

In addition (and this is one of the most interesting points raised in the Opinion, which would alone justify setting aside the first instance ruling), she takes the view that the General Court distorted the original meaning of the decision.

Third, the Opinion dismisses the idea that the Commission’s interpretation of the SIEC standard would give it de facto discretion in relation to horizontal mergers. It claims, in this regard (paras 63 and 111), that it has not been established that the Commission would systematically prohibit all horizontal mergers if its approach were endorsed.

The key legal issue (how is a significant impediment to effective competition evaluated in non-dominance cases) remains unanswered in the Opinion. Advocate General Kokott does not lay down an alternative framework.

The alternative test will have to await the Court of Justice’s judgment and/or the General Court’s ruling following a renvoi.

Heterodox aspects of the Opinion: a break from Tetra Laval

From full to limited review: importing common law standards?

Since the days of Tetra Laval, the standard of judicial review has been clear. Legal and factual issues are subject to full review, with the exception of ‘complex economic assessments’.

Advocate General Kokott proposes to move away from this standard and make limited review the default in merger control. In para 51 of the Opinion, she suggests that the judicial scrutiny of Commission decisions in the area of merger control is confined to manifest errors of assessment.

In Advocate General Kokott’s words: (‘[i]t follows that the review by the EU Courts of a Commission decision relating to concentrations is confined to ascertaining that the facts have been accurately stated and that there has been no manifest error of assessment‘).

This position is not only difficult to square with the relevant EU case law, but also with continental legal traditions. The Opinion is more aligned with the ‘judicial review standard’, which gives greater deference to administrative authorities and which is the norm in jurisdictions like the UK.

Standard of proof: is plausibility enough?

There is another aspect that is foreign to continental traditions but that is prominent in the Opinion, which is the discussion of the applicable standard of proof in merger control cases.

As noted, among others, by Eric Gippini Fournier, this question fascinates common law commentators, but is far less important (and relevant) in EU law.

Advocate General Kokott’s Opinion is remarkable not only because of the extensive discussion of the issue, but because of the meaning attached to the concepts. In particular, her analysis appears to equate ‘plausibility’ and ‘balance of probabilities’ (para 56).

This interpretation will not have been anticipated by many. It is perhaps the first time that the ‘balance of probabilities’ standard (which by definition implies a probability of >50%) is deemed satisfied when the plausibility threshold (which implies a considerably lower probability) is met.

Implications of the Opinion: a new relationship between authority and judge

Some of the aspects of the Opinion, when examined in isolation, may come across as somewhat puzzling. This is true, for instance, of the idea that a legal error is in reality a consequence of the standard of proof administered; or of the idea that the ‘balance of probabilities’ can be equated with ‘plausibility’.

When considered together, however, they make more sense. Whether it is about the legal characterisation of facts, evidence or the standard of review, judicial deference is the overarching theme. An authority-court relationship, in other words, that is more similar to that prevailing in common law systems.

Written by Pablo Ibanez Colomo

26 October 2022 at 10:53 am

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11th MaCCI Law & Economics Conference on ’20 Years of Regulation 1/2003′ (ft. yours truly)

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The Mannheim Centre for Competition and Innovation has long had a most deserved reputation as one of the premier groups carrying out truly interdisciplinary research on issues at the interface of intellectual property, regulation and competition policy.

The Centre’s conferences have become a classic in our circles. This year’s event (10th and 11th November) promises to be even more special than the preceding ones. As you will see in the programme, it is devoted to Regulation 1/2003, both from a retrospective and a prospective standpoint.

I am honoured to have been invited to deliver one of the keynote speeches, which will revolve around remedies. The centre of gravity of competition policy is clearly shifting towards remedies, and there are reasons to discuss the extent to which we may need to adjust our legal framework to acknowledge this emerging reality.

Other keynote speakers are Mike Walker (CMA), Wouter Wils (European Commission) and Johannes Laitenberger (General Court). Alongside them, four amazing panels featuring leading civil servants, academics and practitioners.

If you would like to register, please do so here. It would be lovely to see some of you in Germany!

Written by Pablo Ibanez Colomo

21 October 2022 at 6:50 pm

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Will Article 106 TFEU Case Law Transform EU Competition Law?

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Issue 6 of this year’s volume of the Journal of European Competition Law & Practice came out a few days ago. Among others, it features an editorial of mine (available for free here), where I discuss one of the most interesting and potentially consequential trends of the past few years in the case law of the General Court.

In some recent judgments, Article 106 TFEU case law has occasionally found its way into some competition law rulings. Even though this trend has not caught the attention of many commentators, it has the potential to transform EU competition law in fundamental ways.

It cannot be emphasised enough that Article 106 TFEU does not apply to undertakings, but to Member States. One consequence that follows from this fact is that this case law cannot be transposed, as such, to cases dealing with the application of Articles 101 and 102 TFEU.

A second consequence is that Article 106 TFEU case law is by necessity stricter than its Article 101 and 102 TFEU counterpart. In particular, it makes sense to impose non-discrimination obligations, applicable across the board, on Member States, but not on private undertakings.

When the conduct of the latter is at stake, such non-discrimination obligations are only relevant, if at all, under very narrow circumstances. From selective distribution to exclusive dealing and refusal to deal, discriminatory conduct by private firms is pervasive and, most of the time, wholly unproblematic.

Cases like International Skating Union and Google Shopping are interesting in that they challenge this received wisdom (and well-established case law).

International Skating Union, for instance, relies primarily on MOTOE, even though the latter was never about the behaviour of private undertakings, but about legislation conferring an advantage to one firm over its rivals (and thus at odds with the principle of equality of opportunity).

In Google Shopping, the General Court draws from cases dealing with the principle of equal treatment as it applies to the EU legislature, and refers to it as if it could be directly transposed to the behaviour of dominant firms, which, as the law stands, are only subject to the principle under the very qualified scenarios identified by the Court of Justice in Deutsche Telekom.

It remains to be seen whether these ideas will be embraced by the Court of Justice. What matters is that, if the legal revolution ever comes to be, the transformation and its implications are openly acknowledged and discussed.

Written by Pablo Ibanez Colomo

12 October 2022 at 12:20 pm

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NEW PAPER | Future-Proof Regulation against the Test of Time: The Evolution of European Telecommunications Regulation

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I have uploaded on ssrn a new paper (available here). It is forthcoming in the Oxford Journal of Legal Studies.

If you take a look at it, you will see that it is different from the sort of stuff I have generally written (it was probably about time to do something else). It is a tad more academic, and it is not on competition law, but on economic regulation (more precisely, on the EU telecommunications regime). Here is hoping that, in spite of all that, some of you will find it interesting.

I had two objectives in mind when writing the paper. First, present to a generalist audience the EU Regulatory framework for electronic communications. This regime is, in my view, one of the most impressive accomplishments of the Union.

The Framework is impressive not only because of what it achieved (it accompanied the liberalisation of telecoms activities) but because of the legal techniques on which it relies. It is a hybrid between competition law and regulation (just like the DMA) that was designed to adapt seamlessly to economic and technological change. Not enough people know how clever and carefully calibrated it is.

My second objective was to reflect on future-proof regulation more generally. Dealing with fast-moving industries (including telecoms and digital markets) is always a challenge for legislatures and agencies. Which is why regulation is designed to be future-proof.

Against the background of the European experience with the regulation of telecommunications activities, the main point my paper makes is that ensuring that regulation is future-proof is a challenge, but not for the reasons one may think.

The main challenge does not come from the design of the regime (in that respect, the EU Framework was most impressive), but from the fact that legislatures may not commit to future-proof intervention. The European experience shows that the temptation to avoid future-proof techniques and revert back to the old ways of regulating is always very strong.

Thus, with every new amendment of the EU Framework, the regime became a little less future-proof. Roaming charges is the perfect example. The EU legislature could not resist the temptation of dealing with the issue a l’ancienne, that is, by directly setting roaming charges (instead of following the cautious approach enshrined in the Framework Directive). Same with net neutrality, or with interconnection.

I end the paper asking whether future-proof regulation is an illusion, at least insofar as legislatures’ and agencies’ priorities change over time: in a way, it is an aspiration that hopes or assumes that everything around the regime might change, but that the principles underpinning it will not.

It would be wonderful to get your comments on this paper. And I take the opportunity to thank my colleagues at LSE Law School for their comments during a staff seminar and the competition law scholars who attended a Jean Monnet Workshop.

Written by Pablo Ibanez Colomo

5 October 2022 at 7:27 pm

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IEB Postgraduate Competition Law Course (26th edition) (in Madrid and online)

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The 26th (!) edition of the EU and Spanish competition law course that I co-direct at the IEB in Madrid will run from January to March 2023. We are now accepting applications.

Like last year, the course will adopt a hybrid format (attendees can participate either in person or online). The course is taught partly in English and partly in Spanish. Lectures take place in the afternoon (16h to 20h CET) to facilitate the attendance of students joining from Latin America and the US.

As always, the course will feature an exceptonal line-up of international lecturers (83 in the past edition), including Judges from EU and national courts, officials from the European Commission, the Spanish CNMC and other national competition authorities, as well as top-notch academics, in-house lawyers and practitioners.

Students are typically officials from competition authorities, in-house lawyers as well as lawyers/economists in private practice. The course is designed to cater to all levels.

All relevant information (program, costs, sponsors, and list of lecturers in the past edition of the course) is available here:

IEB COMPETITION LAW COURSE 2023

In addition to the possibility of registering for the full course, it is also possible to register for individual modules or seminars. The modules and seminars in this 26th edition will be the following:

Introductory session (13 January- afternoon).

Module I – Cartels and procedure (16-18 January-afternoon). Coordinator: Isabel López Gálvez (CNMC)

Module II – Other agreements and restrictive practices: vertical and horizontal agreements (23-25 January- afternoon). Coordinator: Carmen Cerdá Martínez-Pujalte (CNMC)

Seminar 1- Recent Developments in EU Competition Law (3 February- afternoon). Coordinators: Fernando Castillo de la Torre (Legal Service, European Commission) and Eric Gippini-Fournier (Hearing Officer, European Commission)

Module III- Abuse of dominant positions (6-8 February- afternoon). Coordinator: Konstantin Jörgens (Garrigues)

Module IV – Merger Control (13-15 February- afternoon). Coordinator: Jerónimo Maillo (USP-CEU)

Seminar 2 – Judges and Competition Law (24 February- afternoon). Coordinator: Mercedes Pedraz (Magistrada, Audiencia Nacional)

Module V- Sector Regulation and Competition (27 February-1 March-afternoon). Coordinator: Pablo Ibáñez Colomo (LSE, College of Europe)

Module VI – Public competition law: State aid and Public undertakings (6-8 March- afternoon). Coordinators: José Luis Buendía (Legal Service, European Commission) and Jorge Piernas (Jean Monnet Chair, University of Murcia)

Seminar 3 – Competition Law in Hi-Tech Markets (24 March 2023- afternoon). Coordinators: Alfonso Lamadrid (Garrigues, College of Europe) and Nicholas Banasevic (Gibson Dunn).

We will also be holding three practical workshops dealing with inspections, distribution agreements and mergers.

For additional information please contact competencia@ieb.es

Written by Alfonso Lamadrid

3 October 2022 at 1:50 pm

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The notion of abuse after the Android judgment (Case T‑604/18): what is clearer and what remains to be clarified (I)

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The Android judgment was widely awaited, not only because of its implications for the Commission’s policy, but because the underlying legal issues were intriguing and, in many respects, completely new. It was anything but a run-of-the-mill tying case.

In its decision, the Commission ventured where it does so only rarely: the core of a company’s business model. It did not question a peripheral aspect of the company’s strategy, but the central mechanism through which it appropriated the value generated by its activity.

In addition, there were some practices (such as the so-called AFA) for which there were no obvious precedents (at least not in the context of Article 102 TFEU enforcement).

The General Court’s ruling had thus the potential to clarify (and address for the first time) a number of issues. The impression one gets is that only some of them have definitely become clearer, and confirm the trend of the past few years. Others (perhaps the most novel and exciting ones) might require additional fine-tuning.

The points where the judgment brings clarity (if only because it confirms past trends) include the following:

  • Tying is subject to an effects analysis (at least sometimes).
  • The judgment confirms what an effect is not.
  • We know that the coverage of a practice must be significant for an effect to exist (and this is different from appreciability and de minimis).

The points that remain to be clarified, in my view, comprise:

  • The point at which an anticompetitive effect can be said to exist.
  • The benchmark against which effects are assessed.
  • The analysis of the attributability of anticompetitive effects.

What is clearer after the Android judgment

Tying is sometimes subject to an effects analysis

If I had been asked, before the Android judgment, whether tying is a ‘by object’ or ‘by effect’ practice, I would have replied that it is abusive irrespective of its impact on competition (that is, by object). The cases that made it all the way to the Court of Justice may be old, but they state what the law is.

Now, I would be more cautious when making statements about the legal status of tying. If the Court of Justice were to be asked about it (and it may not take very long for this to happen), it is more likely than not that it will hold that an effects analysis is a precondition for a finding of infringement (at least so in some instances).

The General Court openly acknowledges that, in the specific circumstances of the Android case, the anticompetitive impact of the tying conduct could not simply be presumed, and had to be established in light of the relevant economic and legal context (para 295, where it concludes that the Commission had been right to assess the effects of the practice it its decision and draws analogies with Microsoft).

The judgment confirms what an effect is not

The past decade gave us clarity about a key aspect of the analysis under Article 102 TFUE: an anticompetitive effect is more than a competitive advantage (or disadvantage) and more than a limitation of a firm’s freedom of action. In this sense, paras 280-282 of the judgment are particularly instructive.

These paragraphs are consistent with the case law, which has long suggested that an exclusionary effect exists where the impact of a practice is such that it hinders the ability and incentive of rivals to compete (and ‘thus allow[s] that [dominant] undertaking negatively to influence, to its own advantage and to the detriment of consumers, the various parameters of competition, such as price, production, innovation, variety or quality of goods or services‘, as explained in para 281).

This clarification marks a welcome departure from the tying aspects of the Microsoft case (and one that seemed inevitable, given the evolution of the case law). In that ruling, the General Court famously held that the mere fact that tying gives a competitive advantage to the the dominant firm is sufficient to establish foreclosure.

The Android judgment confirms that Microsoft does not reflect the case law. Thus, an authority would have to dig deeper to establish foreclosure to the requisite legal standard. How much deeper, you may be asking? This is precisely one of the points where we need more clarity. At least in relation to tying, drawing the line between a mere competitive advantage and an anticompetitive effect remains an exercise for which we have few tools.

My sense is that we need a set of workable proxies to spot anticompetitive effects in relation to several non-pricing behaviours, including tying. A meaningful assessment of the impact of a practice can only be conducted in light of proxies like coverage, which are both clear and administrable. In their absence, the whole evaluation is shrouded, by and large, in mystery. Which takes me to my next point.

The coverage of a practice must be significant for an effect to exist (and no, this is not about de minimis)

As was true in the Intel renvoi, the General Court ruled that the Commission decision had failed to appropriately consider the coverage of the exclusivity-like practices in Android (the so-called RSA restraints). The judgment, in fact, is incredibly valuable in this respect.

The General Court concludes that, properly considered, the coverage of RSAs was far from significant, in that they merely encompassed [10-20]% of the national markets for general search services. Such figures would be insufficient to limit rivals’ ability and incentive to compete.

At this point, you may be asking: is the requirement of significant coverage not an endorsement of the de minimis doctrine, which the Court expressly (and rightly) rejected in Post Danmark II? If so, is the General Court deviating from the case law? I do not believe so, for the reasons explained, a while ago, in this paper.

What Post Danmark II held is that, where an anticompetitive effect is established in an Article 102 TFEU case, such an effect will by definition be appreciable. Since the de minimis doctrine has always been about the market power of the firms involved in a practice, it has no place in scenarios that presuppose a substantial degree of market power.

What Post Danmark II did not hold, however, is that anything that dominant firms do amounts to an effect. This is where the confusion lies.

Holding that the effects, if established, will be appreciable, does not say anything about what an effect is. The latter is a separate question, and one that precedes the issue of de minimis. Thanks to the Intel saga, Android and Qualcomm, we know that (i) not everything is an effect and that (ii) if the coverage is insignificant an effect does not exist (and therefore appreciability does not even come into the picture).

I will follow up with a second part, since this post is already too long. In the meantime, please let me know your thoughts (nothing to disclose, by the way).

Written by Pablo Ibanez Colomo

28 September 2022 at 7:24 pm

Posted in Uncategorized

EU Law Live Competition Corner (in cooperation with Chillin’Competition)

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On September 19th 2022 EU Law Live launched its new Competition Corner, a section exclusively devoted to developments in the field of EU competition and state aid law. EU Law Live is a project devoted to the promotion and research of all areas of European Union law that has become a must-read for those interested in legal developments spanning beyond one practice area.

Chillin’Competition will be cooperating with this new project and with the driving forces behind it (namely ELL’s Editor-in-Chief Daniel Sarmiento and Competition Corner Editors Lena Hornkohl, David Pérez de Lamo, Lewis Reed and Pablo Solano).

Specifically, we will contributing to ELL’s Competition Corner with blog posts, op-eds and suggestions for symposiums. The first symposium is devoted to judicial review in EU competition law. In addition to our opening op-eds (here and here), the symposium will feature contributions from José Luis da Cruz Vilaça, Judge Alexander Kornezov, Paul Craig, Or Brook, Barry Rodger, Jorge Padilla, Assimakis Komninos, Fernando Castillo de la Torre and Silvère Lefèvre.

Stay tuned!

Written by Alfonso Lamadrid

22 September 2022 at 12:05 pm

Posted in Uncategorized