Relaxing whilst doing Competition Law is not an Oxymoron

NEW PAPER | Competition law and policy in the digital economy (with Marino García, CNMC) – FIDE Congress (The Hague, 20-23 May)

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The venerable FIDE Congress will take place this year in The Hague on 20-23 May 2020 (speaking of which: you can still get the early bird rate until the end of the month here).

One of the three topics is ‘EU Competition Law and the Digital Economy‘. I am proud and grateful to have been invited to work on the report for Spain, which I have prepared with Marino García, a chief case handler at the Spanish Competition Authority (CNMC). A draft can be found here.

The UK Report was prepared by our friends Andriani Kalintiri (King’s College London) and Ryan Stones (City, University of London) and can be found here. And the general rapporteurs will be Nicolas Petit (European University Institute) and Pieter van Cleynenbreugel (University of Liege).

You may want to take a look at the Report that I prepared with Marino. It was fascinating to look systematically at all the digital economy cases examined by the CNMC. The impression one gets is that competition authorities have so far effectively addressed the challenges raised in these markets, and that usual remedies can be powerful.

I am tempted to draw your attention to two key cases. One is a merger case, Just Eat/La Nevera Roja, which deals with exclusivity and tipping in two-sided markets; and the second is an abuse case, Estudios de Mercado Industria Farmacéutica, which deals with access to data (and an old friend that goes by the name of IMS Health).

Marino and I would very much welcome your comments. We look forward to seeing many of you in The Hague!

Written by Pablo Ibanez Colomo

13 February 2020 at 5:52 pm

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Case C-307/18 Generics (UK) and others v CMA (Paroxetine), a major landmark in the case law (I): principles

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It is safe to predict that last week’s judgment in Paroxetine will be remembered as a major landmark in EU competition law. It is unusual due to the depth and the breadth of the contributions it makes to our understanding of some fundamental principles. We have had many judgments clarifying a discrete point of law. Unlike these, Paroxetine engages with several notions at the same time (the notions of competition, restriction by a object, effects and abuse), which is uncommon in the case law, and this, in depth.

A bit over a year ago I explained why the pay-for-delay saga would test the fundamental principles (see here) underpinning Articles 101 and 102 TFEU. I do not believe it was an exaggeration: it is sufficient to take a look at the questions raised by the national court in Paroxetine. The CAT asked whether the likelihood of a patent being declared invalid should be considered when evaluating the effects of an agreement. From a system that does not question the existence of intellectual property rights, I explained, we could be moving to one treating them as probabilistic titles.

Eventually, the case law has proved to be resilient. The judgment is in line with AG Kokott’s Opinion (see here for my take on it). The notions of competition and potential competition have not changed (they are still based on objective considerations), and the relationship between competition law and intellectual property is the same it has been since Consten-Grundig. It is not because nothing has changed that the judgment is not interesting. On the contrary.

I would not do justice to such a major landmark in a single post. This one is on principles. One will follow on pay-for-delay and the final one on issues of proof, where, now that the law is clear, the attention will move.

On restrictions by object

The law has been consistent from the very early days, but we have heard claims until not so long ago (including in Budapest Bank), that the pro-competitive aspects of an agreement are not relevant under Article 101(1) TFEU. Now we can definitely say that such claims did not reflect the reality of the case law. In paragraph 103 of the judgment, the Court clarifies that the pro-competitive effects of an agreement ‘must, as elements of the context of that agreement, be duly taken into account for the purpose of its characterisation as a “restriction by object”’.

The Court is prudent to state that such pro-competitive effects must be ‘demonstrated, relevant and specifically related to the agreement concerned’. In other words, claims about the pro-competitive effects must not be merely pretextual (as they were in cases like BIDS, which concerned a plain-vanilla crisis cartel).

What is the threshold to rule out that the agreement is a ‘by object’ infringement? I had suggested in the past that the threshold is one of plausibility. Paroxetine seems to confirm this interpretation of the case law. There is an express reference to plausibility in the assessment of the reverse payment (para 89). In addition, the Court explains that the pro-competitive effects of the agreement must cast a ‘reasonable doubt’ about the object of the agreement. This position is also in line with AG Bobek’s Opinion in Budapest Bank.

On competition, potential competition and the counterfactual

Prior to the release of Paroxetine, I explained that the notion of competition in the Treaty is best understood as meaning ‘actual or potential lawful competition which would have existed in the absence of the practices under consideration’.

The judgment confirms this definition. In paragraph 40 of the judgment, the Court makes it clear that, when considering whether a firm is a potential competitor, it is necessary to consider the ‘regulatory constraints that are characteristic of the medicine sector’, thereby confirming that only lawful entry counts as competition within the meaning of Articles 101 and 102 TFEU.

Second, it is necessary to consider the counterfactual in light of the relevant legal and economic context, and more precisely the market conditions in the absence of the practice under consideration. This position puts an end to the idea that the counterfactual is not relevant at the ‘by object’ stage. As AG Kokott explained, if the market conditions would not have been affected by the agreement, the practice does not restrict competition, whether by object or by effect.

Reasonably (para 38), the Court holds that potential entry must not be a ‘purely hypothetical possibility’. By the same token, it need not be shown that entry is certain or that the potential entrant ‘will be capable, thereafter, of retaining its place’ on the market.

Third, subjective considerations may be a factor, but the notion of competition is an objective notion. In this regard, the judgment confirms the case law. I understand it as meaning that subjective considerations are relevant insofar as they shed light on the objective ability of a firm to enter the market.

On the notion of effects

There has been no shortage of posts on this blog on the notion of effect under Articles 101 and 102 TFEU. One of the points that has always been emphasised is that not every competitive disadvantage and not every limitation of a firm’s freedom of action amounts to an anticompetitive effect within the meaning of the abovementioned provisions (Post Danmark I and II, as well as MEO, insist on this point).

Crucially, Paroxetine leaves no doubt. According to the Court (para 172), in order to establish an exclusionary effect under Article 102 TFEU it is necessary to show more than just the impact of the practice on the parties involved in the transaction. The analysis must ‘[go] beyond’ such effects and consider, the market as a whole (in past cases, the Court has already had the chance to identify the relevant factors to consider in this assessment).

On the notion of abuse

The bit on whether the practice amounts to an abuse deserves to be read closely. Interestingly, it refers to the object and effect to the conduct, thereby indicating that there can indeed be abuses by object.

Second, and more importantly, the Court points out that, whether the practice has as its object or effect the restriction of competition, the application of Article 102 TFEU ‘presupposes that that conduct was capable of restricting competition and, in particular, producing the alleged exclusionary effects’ (para 154).

Whether the impact on competition needs to be shown (as in Post Danmark II) or is implicit (as in Intel), a practice is not abusive within the meaning of Article 102 TFEU if it is incapable of having restrictive effects. This clarification also means that the panoply of arguments discussed above – relating to the counterfactual, or to the fact that the impact of the practice does not go beyond the relationship between the parties – would be relevant too.

Hopefully I will address the pay-for-delay aspects next week. As ever, your comments would be most welcome.

Written by Pablo Ibanez Colomo

7 February 2020 at 7:12 am

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2nd Ithaca Competition Summit – SAVE THE DATE: 20-21 August 2020

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Port of Ithaca

The Ithaca Competition Summit is back! Our friend Peter Alexiadis will once again host an impressive group of top competition lawyers and economists in the island of Ithaca.

This year’s programme is about to be completed, but we can confirm that speakers will include the President of the General Court of the EU, Marc van der Woude; the President of the Portuguese Competition Authority, Margarida Matos Rosa; and Gabriella Muscolo from the Italian Competition Authority. And all but one of the former Chief Competition Economists at DG Comp (plus the current one!) have already confirmed their attendance!

I was fortunate enough to attend the first edition. The place is breathtakingly beautiful. Together with a high-level event, it is a wonderful way to end the summer.

We will be keeping you informed about the summit, and about how to register. Hopefully many of you will be able to make it!

Written by Pablo Ibanez Colomo

3 February 2020 at 6:06 pm

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NEW PAPER | The Evolution of EU Antitrust Policy: 1966–2017 (with Andriani Kalintiri)

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I have just uploaded on ssrn (see here) a paper on the The Evolution of EU Antitrust Policy: 1966–2017, which I jointly authored with Andriani Kalintiri (King’s College London) and which is coming out in the Modern Law Review later this year. The article is available on an Open Access basis under a Creative Commons licence (so make the most of it).

Before I say anything about our project I should let the world know that we are really grateful to Wouter Wils, who read the paper very carefully and whose comments substantially improved it.

Wouter was the ideal person with whom to exchange views on a piece that examines how the European Commission’s policy in the area of competition has evolved over the years.

We felt that there were two ways in which we could contribute to shedding light on this question.

First, the conventional wisdom does not seem to be grounded on particularly robust and reliable data. To address this issue, we built a database with all formal Commission decisions applying Articles 101 and 102 TFEU since 1966 (when the Court of Justice set the tone with the two seminal judgments in the field).

The database is, of course, also open access. You can access it via the publisher’s early view version of the article (see here).

Second, we had the impression (rightly or wrongly) that a vocabulary and a conceptual framework to trace the evolution of EU competition policy were both missing. Without them, discussions tended to remain superficial, and were occasionally obscured by purely semantic points.

So what is it that we have done?

It is of course is a little longer than what follows, but we have come up with a way of identifying the different categories of cases that the Commission may wish to pursue when enforcing Articles 101 and 102 TFEU, which you see below.


Some cases form the core of competition policy. This category, which comprises in particular cartels, encompasses the most egregious violations. There is no doubt about the fact that they are prohibited and warrant fines, and remedies are easy to administer. As far as these practices are concerned, the real challenge for an authority is to detect the infringement and to deter future violations (hence the label ‘detection-deterrence’).

The second layer is called ‘trade-enabling’ and concerns the traditional administrative practice on market integration and the distribution of goods (absolute territorial protection, export bans and so on). This category captures one of the peculiarities of the EU system: these cases differ from ‘detection-deterrence’ practices in that they concern intra-brand competition (think Consten-Grundig).

The third layer (‘market-protecting’) concerns the practices that may be lawful or unlawul depending on the context (what we would call today ‘by effect’ conduct) and which can be addressed by the usual reactive remedies (a one-off obligation not to do something). Think of vertical restraints like exclusive distribution, franchising and so on.

The fourth layer (‘market-shaping’) is the ‘final frontier’ of the system. These are cases where the lawfulness or unlawfulness of the practice is context-dependent and which, in addition, require the administration of proactive remedies (a duty to license an intellectual property right, setting of the terms and conditions of access to an infrastructure, a structural divestiture), which, at least to some extent lead to the re-shaping of the competitive process (a product is re-designed, a firm is no longer vertically-integrated or a business model is changed).

What do we observe? It looks like enforcement has progressively moved to the core and the edges (toward the most egregious ‘detection-deterrence’ violations, on the one hand, and towards the ‘final frontier’ of ‘market-shaping’ enforcement, on the other).

Paradigms 1

Take a look at the graph. As you see, there is a nice mix of the three inner layers, and little appetite for adventure into the ‘final frontier’, during the formative period. These policy priorities are suggestive of an attempt to develop a body of precedents clarifying the circumstances in which ‘by effect’ behaviour is lawful.

Since 2005, however, enforcement seems to have moved towards the core and the edge of the competition system. The precedent-setting function of enforcement had declined substantially by the end of 2017 (and old-fashioned ‘market integration’ cases had all but disappeared). On the other hand, the Commission seemed keen to take action in cases involving proactive intervention (requiring firms to re-design their products, as in Microsoft I and II, or leading to structural divestitures, as in E.On).

Time will tell whether this trend will continue. This said, we felt that the project ended at the right time. It looks like enforcement against cartels might decline; on the other hand, traditional ‘market integration’ cases seem to be making a comeback, which we do not know whether it will be sustained over a longer period of time; finally, ‘market-shaping’ enforcement (in particular in the digital sector) shows no sign of slowing down (quite the opposite).

We will see. One thing is clear: we will be keen to re-examine the question in 2030 to take stock of the evolution. In the meantime, we would really welcome your comments. Thanks in advance!

Written by Pablo Ibanez Colomo

29 January 2020 at 6:50 pm

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The paperback edition of The Shaping of EU Competition Law is out – and with a 20% discount!

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I have just received the good news from Cambridge University Press that the paperback edition of The Shaping of EU Competition Law is out. I will not hide how pleased I am: it almost feels like publishing a new book (minus the effort); and, why not say it, it also brings back many good memories of the excitement when writing it.

One of the perks of the release of a paperback is that the book gets much cheaper overnight (which I hope it will also mean more readers and more comments).

This edition is sold for 26 pounds or around 30 euro. However, for a limited time it will be available with a 20% discount. To get the discount, click here and enter the code TSECL2020 when checking out. The flyer with all the info can be found here.

And I take this opportunity to thank all the people who took the time to review the book!


Written by Pablo Ibanez Colomo

27 January 2020 at 6:19 pm

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AG Kokott in Case C-307/18, Generics UK and others (Paroxetine): dispelling the myths about Article 101(1) TFEU and restrictions of competition (I)

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Advocate General Kokott personifies, perhaps more than any of her colleagues, orthodoxy in EU competition law. During her tenure, she has warned against getting carried away by the zeitgeist (a piece of advice that is probably more valuable than ever these days). If the law is to evolve, it has to do so in an incremental way, step by step (just as she advocated in Post Danmark II).

Against this backdrop, her much-awaited Opinion in Paroxetine cannot come as a surprise. It is thorough and well-structured. It reflects the orthodox approach to Article 101(1) TFEU and the analysis of restrictions of competition (how could it be otherwise?). Importantly, the Opinion is in line with – and complements – AG Bobek’s in Budapest Bank, which is frequently cited with approval.

When I wrote about AG Bobek’s Opinion, I argued that it would probably ensure the survival of this orthodoxy. Following AG Kokott’s confirmation of the principles that have always underpinned the analysis of restrictions of competition under Article 101(1) TFEU, it is likely that some of the persistent myths we have discussed in this blog will vanish once and for all.

The Opinion is fairly long, and I would not do justice to it in a single post, which is why I will be addressing today the notion of restriction by object and the application of the principles of the case law to the issues raised in Paroxetine the Opinion. Issues of proof and effects will have to wait for another day (on effects, I can anticipate that it is also orthodox, in addition to valuable – we have not had that many Article 101 TFEU judgments on effects).

The notion of restriction of competition

Pay-for-delay cases are interesting in that they expose the most frequent myths around the notion of restriction by object. The Opinion tackles them one by one in an exhaustive way.

It is, first and foremost, all about the object (the aim, the purpose, the rationale) of an agreement

This point may seem self-evident but discussions about Article 101(1) TFEU have occasionally become so far detached from the letter of the Treaty and the principles of the case law that it is important that AG Kokott emphasises the obvious: assessing whether an agreement is restrictive by object means figuring out its aim, its ‘precise purpose’ (see BIDS), its rationale.

We are reminded of this fundamental question in several key points of the Opinion. I will mention just one, perhaps the most important. In para 115, AG Kokott evaluates the rationale for the ‘reverse payment’ and takes the view that, absent another plausible explanation, this could be an indicator that the objective purpose of the agreement is the restriction of competition.

In the same vein, AG Kokott explains that the assessment of a restriction, whether by object or effect, is never undertaken in the abstract: context is everything.

The pro-competitive aspects of an agreement are relevant under Article 101(1) TFEU (and specifically to ascertain whether an agreement is restrictive by object)

I have often written about this. In spite of the abundant evidence from the case law, it is not unusual to hear, still, that the pro-competitive aspects of an agreement can only be considered under Article 101(3) TFEU. In this regard, the Opinion is particularly valuable.

In her careful overview of the case law, AG Kokott explains that the pro-competitive aspects of an agreement are relevant in the context of Article 101(1) TFEU in two ways:

  • The clauses in an agreement may be objectively necessary to attain a pro-competitive aim. In such circumstances, such clauses do not restrict competition either by object or effect (paras 150-156 of the Opinion).
  • Even when not objectively necessary, the pro-competitive potential of an agreement may rule out its qualification as restrictive by object (paras 157-179; the key precedents cited are Cartes Bancaires and Maxima Latvija). It is in this regard that AG Kokott cites with approval AG Bobek’s Opinion in Budapest Bank. Sensibly, the Opinion clarifies that not every advantage claimed by the parties rules out a finding of an object infringement. This clarification follows logically BIDS: you will all remember that BIDS was an obvious object case; the fact that the parties invoked certain pro-competitive benefits did not alter the conclusion.

An agreement must be capable of restricting competition for it to be caught by Article 101(1) TFEU

This is a point that was already made clear in another case in which AG Kokott delivered an Opinion, T-Mobile. In Paroxetine, she insists on this fundamental point, in particular when dealing with the notions of competition and potential competition. She notes that the qualification of an agreement as restrictive presupposes that there is a degree of competition that can be restrained (para 57).

In other words, and as I understand it, the agreement must be capable of restricting competition that would otherwise have existed. The Opinion seems to avoid being explicit about whether the evaluation of the counterfactual is relevant at the object stage. However, when one puts together the different pieces, it seems obvious that the counterfactual, whether implicitly or explicitly, is a fundamental consideration.

The application to pay-for-delay agreements

Pay-for-delay agreements are a source of unique challenges for competition law. The economic and legal context of which they are a part makes it particularly difficult to establish whether they are capable of restricting competition that would otherwise have existed.

On the one hand, patents are presumed valid, on the other, patents are not presumed infringed. On the one hand, patents do not give protection against challenges before a court; on the other, courts and authorities acknowledge that settlements to avoid court proceedings are not necessarily anticompetitive.

How does AG Kokott go about the question? Provided that the pay-for-delay settlement is capable of restricting potential competition, it will restrict competition where its sole aim is to prevent generic producers from entering the market.

The question is whether the agreement is a genuine settlement of a real patent dispute (I came up with a similar interpretation here). The key paragraph is 134:

134. Furthermore, as the Commission correctly points out, even in the case of an actual dispute with an uncertain outcome concerning a lawful patent, in order to assess whether an agreement to settle such a dispute has an anticompetitive object, it must be ascertained whether that agreement has actually resolved the dispute in question and whether those terms reflect a compromise between the parties in that regard. In other words, the question is whether the agreement is a genuine compromise reached on the basis of an independent assessment by the parties of their situation regarding the patent, or whether the agreement consists, rather, in putting an end to the dispute by means of a payment made by one of the parties to the other, so that the latter no longer challenges the patent and no longer competes’ (emphasis added).

On the facts, AG Kokott concludes that it was not a real settlement, and that the ‘precise purpose’ of the agreements at stake in the case was to restrict competition (I leave the analysis of concrete outcomes in individual cases to others).

Another crucial point, noted above, is that the existence of a large reverse payment is not necessarily a determinant factor. There may be a plausible explanation for such conduct (para 115), which, as in Murphy and Intel, the parties would certainly be able to advance. This last point takes me to the issue of proof, which will be the subject of my next post on the Opinion. I look forward to your comments!

Written by Pablo Ibanez Colomo

23 January 2020 at 7:59 am

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Recent Developments in Competition Law (Madrid, 31 January)

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Next Friday 31 January 2020 we will be holding the traditional annual seminar on “Recent developments in EU Competition Law and Policy” at the IEB in Madrid. The seminar is coordinated by Fernando Castillo and Eric Gippini and is part of the wider specialist course that I co-direct there (and that Pablo inaugurated last week). It is also a great opportunity for a weekend escape to Spain (a selling point I’ve tried to downplay at home).

The program:

16.00-17.45. Enforcement: Reports from the frontline

Damages in practice

Patricia Pérez. Associate, Cuatrecasas

Marc Barennes. Executive Director, CDC Cartel Damage Claims

The revival of interim measures and the birth of restorative remedies

Peter Schedereit. European Commission, DG Comp

Alfonso Lamadrid. Partner, Garrigues

18.00-19.45. Vertical agreements entering 2020

Isabel Pereira Alves. European Commisison, DG Comp

Patricia Lorenzo. Vice President, Compass Lexecon.

Sergio Baches. European Commission, Legal Service.

José María Jímenez Laiglesia. Partner, Latham&Watkins.

For registration info (the price is 150 euros), please contact If anyone registers after having read this post, you also get a free drink from me 😉

Written by Alfonso Lamadrid

20 January 2020 at 7:33 pm

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