No brainer
We have already commented the Court’s 2009 ruling in Glaxo.
In going through the judgment this morning, I got shocked again.
Frankly speaking, this judgment is a mascarade. What the Court has thrown in this judgment is a straightforward statement that it has no interest in substantive competition law issues. To justify this, the Court dissimulates itself behind (i) the black letter, old-Treaty wording (name it judicial textualism); and (ii) its existing case law (name it judicial conservatism).
Look closely at §§59-63. In fact, it takes the Court just a few lines to quash the CFI’s ruling, which raised a novel – and worth discussing – question of substantive competition law (i.e. the role of consumer welfare under Article 101 TFEU) . Here is what the Court says in this case:
1. We’ve said that a practice restricting parallel trade is a restriction by object a million times (§59)
2. This applies to pharmaceuticals. The AG has said so (!), and we made a case in pharma a while ago. (§§60-62)
3. The wording of the Treaty does not talk of consumer welfare. Competition is thus protected as such.
4. **** off
A discussion of the very issue (regardless of its outcome) would have been – at the very least – welcome. I believe, indeed, that the role of the ECJ is not only (1) to scrutinize cases (judicial review) but (2) to take stances on novel issues and set substantive standards (rule making).
Two final remarks:
- In the EU, executive and legislative institutions can be prosecuted for failure to act. Why is the Court immune from such proceedings?
- Lately, the Court has delivered remarkable judicial output in other fields (e.g. institutional law, the four freedoms, etc.) Why has substantive competition law been left unaffected by this evolution?
(Image possibly subject to copyrights: source here)
Chillin'Competition 
Very provocative, Nicolas, as usual.
You definitely have a point (more 2 than 1: in what would consist the failure of the Court here?).
Alberto Alemanno
15 July 2010 at 1:16 pm
Thanks Alberto, and congrats for your terrific website.
2 would simply consist in saying that the Court has failed to discharge proper, effective judicial review. But this point was more theoritical than practical. In the current state of the law, I obviously fail to see how this could ever occur, unless you add a new layer of judicial review on top of the Court.
Nicolas Petit
15 July 2010 at 7:54 pm
I fully agree. My comments on the ruling went in the same direction. Formalism at its worst!
http://derechomercantilespana.blogspot.com/2009/10/nueva-sentencia-en-el-caso-glaxo.html
jesus alfaro
21 July 2010 at 1:38 pm
I do not feel very comfortable defending the judgment, but I think one should read the Court as saying, in an orthodox fashion but not very surprisingly, that competitive rivalry as such is protected by Article 101.1; that restrictions by object is an experience-based concept and that it is possible to rely on case-law; and that consumer welfare considerations should primarly be taken into account under Article 101.3.
Fredrik
22 July 2010 at 12:28 pm
Seeing an opportunity to disagree with my friends Nicolas and Jesús, I could not resist dropping a line. I am disappointed with the judgment too…but for very different reasons. Forget your personal opinions for a moment (I know, it is difficult). A dispassionate reader can hardly fail to notice that the more abstruse and hardly reasoned part of the judgment is the second part (the one that the Commission lost, on Article 81.3); I am surprised to see no comment on this. I hope this does not mean that you subscribe to the intellectually weak (but widespread) paradigm according to which judicial control is “good” if the Commission loses, and “poor” if the Commission wins. Of course the way the Court portrays the role of consumer welfare in EU competition law may meet or disappoint our various desires and yearnings. But this does not make it wrong. Those close to the case could legitimately level much stronger criticism at the CFI’s simplistic ruling, which had nothing to do with the parties’ pleadings and was plainly wrong in some respects. I can reassure my good friends that the economic debate before both Courts was rich and complete. I would have loved to see in the judgment more of the arguments presented by the Commission. Unfortunately, judgments often do not reflect fairly the economic arguments of the parties, as I have learned …not least before the CFI in Glaxo.
Of course, these are purely personal views.
Eric Gippini
29 July 2010 at 11:13 am
Eric, thanks a lot for the thoughtful comments, which bring useful clarifications on what happened in Luxbg. Yet, you know how the saying goes: justice must not only be done it must also be seen to be done…
Now, on judicial control: in my opinion, it involves 2 things: 1. judicial review and 2. rule-making. On 1, annulment proceedings involve scrutinizing administrative decisions. Those proceedings are not about saying which party loses or wins. In an ideal world, judicial review ought to be deemed good (effective) if the General Court declares unlawful all those decisions which contain errors in law and/or facts, and upholds all those decisions which are not vitiated by such errors. On 2, the CFI often seems reluctant to clarify/define substantive competition standards (and to give the reasons for this). I find this very unfortunate.
Finally, saying as the Court does, that competition is protected as such is not a source of satisfaction, much to the contrary. I believe the Court interprets the concept in the good old, ordoliberal, orthodox view (to which Fredrik rightly alludes). And this is a concern to me, because protecting rivalry (if competition is reduced to rivalry, which can itself be discussed) as such (i) entails protecting inefficient entry; (ii) generates measurement problems; and (iii) contradicts the progresses made in recent years with the economic approach. Frankly speaking, I see no clear merit to this approach.
Nicolas Petit
29 August 2010 at 8:17 pm