Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for March 2011

Microsoft´s complaint against Google

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It´s been reported today that Microsoft has lodged a formal complaint with the Commission. So far the news have basically reported what was said in a blog post published last night by Microsoft´s General Counsel, so we´re going to try to be the first ones going a little beyond.

I´ve already stated my views on many of the issues which the complaint presumably deals with, but I will add here some ideas (and insist on others). As usual, a disclaimer is in order:  my views are those of an outsider with no access to information other than that which is public.

This will, once again, be a bit lengthy, so, if interested, you can click here to keep reading.

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Written by Alfonso Lamadrid

31 March 2011 at 3:59 pm

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ULg – New Full English Version of the LL.M. in EU Competition and IP Law

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To many people, Liege is an old industrial city which has little to offer.

But Liège has a great geographical position. It is just a 100 kms away from Brussels. Thanks to this, it is close from many brainy competition (and IP) professionals. This is what prompted my predecessor Prof. Geradin to create a bilingual LLM in EU Competition and IP law.

Now that we have a 8 years track record, I think I can modestly pretend – pardon the bias – that we have the best, and most likely the cheapest –  several hundred  € – LL.M in competition (and IP) law of Europe :).

Obviously there’s a downside with cheap tuition fees: little money for my research centre. But there’s a big upside: in Liege, we are not bound to award degrees to poor LL.M students that should be failed. Put differently, our evaluation process is not influenced by the risk of losing money out of a decrease in prospective applications  [on second thoughts, it may not be good advertisement to say publicly that we fail students: we do not fail that many].

Now, our LL.M has been increasingly successful in the past years, attracting students from everywhere in Europe and outside (Peru, China, Russia, etc.). I trust the many conferences we organize in Brussels and the opportunities for publication in e-competitions are interesting for prospective students.

This year, we’ll open a full-english version of the LL.M programme. It will be opened to students from far-away countries, who have no background and no professional interest in the French language.  The programme of this English-based LL.M can be found hereafter.

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Written by Nicolas Petit

30 March 2011 at 7:00 am

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RE: Information exchange=cartel?

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Some days ago I wrote a post on the change of approach towards exchanges of information set out in the new EU horizontal guidelines, in which I challenged the assertion that this practices should (or could) be equated to cartels (an assertion which, as I see it, has come out of the blue) and expressed my concern over the possibility that the statements made by the Commission in that document could be interpreted in a excessively wild wide manner by overzealous enforcers.

Since then, I have received various comments on that post. Since we´ve always liked the idea of fostering as much interaction as possible on this blog and most of those comments are not visible here, I´ve decided to provide an overview of what some of them said (other must be kept confidential) and, where necessary, to reply to some of the questions they raise.  I have checked with their authors and have only mentioned their names where theu have given their express consent.

This will be lengthy, so, if interested, click here to keep reading.

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Written by Alfonso Lamadrid

29 March 2011 at 8:17 pm

Internet Players v. Communications Carriers

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Mammoth firms like Google, Facebook, Microsoft, Sun, IBM, etc. are not those threatening the future of the Internet.

Over the past decade, those firms have fueled growth and spurred innovation. In fortcoming years, they will likely continue to bring vibrant competition on Internet markets.

In his latest piece on the future of the Internet, Farhad Manjoo (Slate) incriminates another group of market players, the big American telcos:

This future [the future of the Internet] depends on fast and ubiquitous broadband, which, in the oligopolistic American telecom market, isn’t guaranteed to happen soon. Over the next few years, major American mobile carriers will adopt faster “4G” wireless Internet systems—but will they be fast, cheap, and reliable enough to spur the sort of innovation I’m describing? I don’t know. Honestly, I’m pessimistic.

And a question: with their increased, some would say obsessive, focus against Google, Microsoft, IBM, etc. are Western antitrust enforcers shooting the right target(s)?

Written by Nicolas Petit

28 March 2011 at 9:29 pm

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Competition Law and Free Riding

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A common line of defense for companies subject to antitrust scrutiny is to argue that the complainant seeks to free ride on their investments.

With my assistant Norman Neyrinck, we explore in a recent working paper (in French) whether firms can instrumentalize the competition rules to free ride on others’ efforts. See link hereafter.

We come to the conclusion that attempts to free ride through Article 101 TFEU allegations are likely to fail. In contrast, Article 102 TFEU offers a more promising legal avenue to wanna-be free riders.

As usual, we apply the first footnote acknowledgment to comments.

Droit de la concurrence et instrumentalisation parasitaire – PETIT et NEYRINCK _24 03 11_

Written by Nicolas Petit

25 March 2011 at 4:43 pm

Google Books Settlement Rejected

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Some of you will recall that roughly a year ago I wrote a post on the Google Books settlement (“Google Books Settlement: It´s the search market stupid!”) in which I argued that the only competitive problem, if any, posed by the amended settlement related to the search market.  [In that post we also directed you to the transcript and a very good summary of the fairness hearing (Part I ; Part II) which may allow you to better understand all subsequent developments].

Yesterday, Judge Chin, of the Southern District of New York, issued an opinion concluding that the Amended Google Books Settlement (“ASA”)  is not fair, adequate or reasonable, precisely because it would further entrench Google´s maket power in the online search market. The Opinion is available here.

Judge Chin acknowledges that Google´s plan of creating a universal digital library would bring about great benefits for many, but concludes that the ASA “would simply go to far”. In his view, “it would permit the class action to implement a forward-looking business arrangement that would grant Google significant rights to exploit entire books, without permission of the copyright owners. Indeed, the ASA would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case“.

From a reading of the opinion it is obvious that (i) Judge Chin has conferred significant relevance to the number and vociferousness of the objections presented to him, and has mainly based his Opinion upon them; and (ii) the decision is to a great extent motivated by concerns which are not directly antitrust-related, such as those over the adequacy of class representation  (e.g. foreign authors), involuntary expropriation of copyrights by virtue of the “opt-out” mechanism, or the alleged improper use of the settlement of a class action to regulate a aspects of a “forward  looking” business arrangement which had not been raised before the Court.

With regards to the antitrust concerns posed by the ASA, and after referring to the submissions made by several parties, Chin concludes that “Google´s ability to deny competitors the ability to search orphan books would further entrench Google´s market power in the online search market”.

Most, if not all, of the concerns outlined in the opinion would be addressed “simply” by switching from an opt-out to an opt-in model, although that would surely be detrimental to the scale and quality of the service provided and could perhaps even affect the viability of the project. Balancing all the interests at stake is certainly a daunting challenge.

There are no easy answers to the many fascinating issues that arise in connection with this case. In fact, its interest lies precisely on the fact that those issues can only be addresses by adopting a defined stance with regards to the core, almost ideological, debates underlying our discipline (amongst others, and to put a couple of them in their most basic terms: would we rather have a natural or de facto monopolist providing a service that no one else can provide, or would we rather prefer a counterfactual where we renounce to have that service for the sake of not having a monopolist controlling it? What room is there for fairness concerns in antitrust analysis?).

These are particularly complicated days at work, but you can expect a more detailed commentary of Judge Chin’s Opinion from us once things clear up a bit.

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PS. And speaking of Google, as announced here some days ago, on Friday I will be presenting a discussion on antitrust issues in cloud computing featuring Tero Louko (Google) and Carel Maske (Microsoft).

Other panels will feature Jennifer Vasta (Qualcomm), Thomas Kramler (European Commission), Luis Ortiz Blanco (Garrigues), Álvaro Ramos (Cisco), Miguel Rato (Shearman&Sterling), Pablo Hernández (SGAE) and Daniel Escoda (Telefónica).

Written by Alfonso Lamadrid

24 March 2011 at 2:25 am

JV

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I attach hereafter the slide deck presented jointly by J. Rattliff (WilmerHale) and C. Gauer (COMP) at our GCLC lunch talk last week.

A somewhat unusual, but welcome joint venture between DG COMP and a law firm

On a related issue: I was puzzled to learn that all the Article 102 TFEU cases dealt with by the Commission in 2010 concerned the energy sector… but less surprised of their outcome: all of them gave rise to Article 9 decisions.

2011 03 18 EU Competition law and Energy CGauer JHRatliff

Written by Nicolas Petit

23 March 2011 at 2:43 pm