Relaxing whilst doing Competition Law is not an Oxymoron

Archive for February 1st, 2011

Brussels Urban Legends – Guest Post by P. Werner

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We are delighted to publish a post written by our friend and former colleague, Philipp Werner (McDermott Will & Emery in Brussels). Philipp devotes a considerable amount of his time to State aid issues. In his post, he kills a Brussels urban legend, and illustrates how State aid principles may be exported to other areas of EU competition law. We academics call this “cross-fertilization”.

Down here in Brussels, the talk of the town is that State aid law would not part of competition law. This, arguably, is because State aid law (i) often involves discretionary political bargains; and (ii) only occasionally draws on the insights of economic theory.

At best, any such contentions are Brussels’ urban legends. State aid law is just as rigorous (or not) as other areas of competition law. While political considerations may play a role in some of the biggest State aid cases, I doubt that this fundamentally differs from other areas of competition law (think of the Microsoft decisions or of mega-merger cases involving US firms). In addition, those who – like Nicolas – are interested in the economics underpinning competition law will find refined economic analysis in many State aid cases. To take only an example of this, State aid lawyers grapple almost daily with law&econ issues such as the market economy investor principle (MEIP). For more on this, check “The economic analysis of State aid: some open questions” or the 2009 “Study on counterfactual scenarios to restructuring state aid“.

Now, quite to the contrary, State aid law may constitute a source of guidance for other areas of competition law, where legal issues remain unsettled. Take the issue of access of third parties to the antitrust authority´s case file. Third parties willing to bring private damages actions in national courts may request, before the antitrust authority, to access to the leniency applications. Advocate General Mazak has recently delivered a somewhat Solomonic opinion in the Pfleiderer case (C-360/09) on this issue. On of the issues here is Regulation No 1049/2001 regarding public access to documents, and more specifically Article 4 (2) of Regulation No 1049/2001, which provides that “The institutions shall refuse access to a document where disclosure would undermine the protection of commercial interests of a natural or legal person, including intellectual property, court proceedings and legal advice, the purpose of inspections, investigations and audits, unless there is an overriding public interest in disclosure.”

Interestingly, this issue is well settled in State aid cases, and could arguably provide a good point of reference under Article 101 TFEU. In Technische Glaswerke Ilmenau GmbH (C-139/07 P), the ECJ ruled that there is a general presumption that disclosure of documents in the administrative file undermines the protection of the objectives of investigation activities. As a result, the Commission must not show, in principle, for every single document that the exception of Article 4 (2) of Regulation No 1049/2001 applies. The ECJ acknowledges that this does not exclude the right of an interested party to demonstrate that a given document disclosure of which has been requested is not covered by that presumption.

Looking forward to reading your views/ comments on this.

(Image possibly subject to copyrights: source here)

Written by Nicolas Petit

1 February 2011 at 8:00 am