Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Linkedln: A new book, a new case, and an “innovative” ground for exploitation claims

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The new book: Lorenzo Pace is the editor of a forthcoming book on The Impact of the Commission Guidance Paper on Article 102 which features contributions by a bunch of truly outstanding academics, namely Pace himself, Valentine Korah, Ernst-Joachim Mestmäcker, Catherine Prieto, Richard Whish, and Luis Ortiz Blanco together with Pablo Ibañez Colomo.  I´ve  had the chance to read some of the contributions, and they are frankly excellent. Keep an eye open for its publication.

The new case: L. Ortiz and P. Ibañez´s contribution in that new book emphasizes that a significant difference exists between the enforcement of the almost identical provisions on abuse of dominance at the EU and Spanish levels. In particular, they show that, in remarkable contrast to the record of the European Commission, as much as half of the total number of prohibition decisions adopted by the Spanish authority were of a “regulatory nature”, in the sense that they concerned exploitative practices put in place by undertakings enjoying or having enjoyed exclusive rights or operating in regulated network industries.

An investigation formally initiated yesterday by the Spanish authority seems to prove their observations right, and not only retrospectively: Telefónica Móviles, Vodafone and Orange are being investigated for having allegedly set excessive prices for wholesale origination and termination services for short SMS and MMS messages on their mobile telephone networks.

As reported on this blog, Telefónica was also recently sanctioned for having abused the collective dominant position that it enjoyed together with Vodafone and Orange  in the retail mobile telephone market. I am wondering whether the CNC will be attempting to bring this new case on the basis of a finding  of collective dominance on the wholesale market (seems unlikely, but remember the Irish case where ComReg decared O2 and Vodafone collectively dominant in the whosale market; that decision recently commented and criticized in the August 2010 issue of European Competition Journal), or will rather act the “Magill way”,  holding that each operator is dominant with regards to its respective  network.  

An innovative ground for complaint:  As harsh as the CNC´s attitude in relation to claims of excessive pricing may seem, things can always be worse:

The Bolivian government has announced the initiation of a probe on the rise of 50 cents in the price of Coca Cola. The reason why the government is reacting as if the price of a 1st need product had skyrocketed and might even order CocaCola´s bottler to cease its activities is simple: last year the government launched its own drink with the aim of competing against Coca Cola. They named their product: Coca Colla. Subtle, isn´t it? .  

Despite its appealing brand name the government-sponsored drink wasn´t a success, so Evo Morales´administration is now following an alternative path; i.e. investigating  their direct competitor for having increased its prices (even if it only did so in response to the 23% increase in the price of sugar approved by the government..). Aside from the fact that forcing a producer to stop production seems an interesting remedy to excessive pricing (aka restricting output), this is a genuinely innovative ground  for competitors to take action. Who would have guessed it?  Bolivia at the avant-garde of antitrust..

Written by Alfonso Lamadrid

19 January 2011 at 8:45 pm

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