Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for June 2011

There´s always a first time (Parent company escapes liability for the conduct of a wholly-owned subsidiary; case T-185/06)

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Some weeks ago, in one of our competition law quizzes we asked the following question:

 ” When was the last time that a company was able to rebut the presumption on the exercise of decisive influence applicable to 100% owned subsidiaries?”

Until this morning, the correct answer was: never. 

The General Court has just issued a Judgment as a consequence of which, for the first time ever, a parent company has escaped liability for the anticompetitive conduct of a wholly owned subsidiary despite the Commission´s attempt to apply the Stora presumption.  (The English version of Judgment is not yet available; click here for the Spanish version). 

Remarkably, the General Court does not provide any guidance on the type of evidence that could be put forward in the future by parties attempting to rebut the presumption. That is because the Court did not engage in a substantive balancing exercise of the elements adduced by the applicant and by the Commission; on the contrary, its Judgment concludes that the Commission failed to address adeuately the applicant´s arguments and thereby breached its duty to provide sufficient motivation to its decisions.

In a way, the General Court is sending the Commission the same message that the Court of Justice addressed to the General Court in its Judgment on the General Química case.

In my view, this is a step in the right direction, but there´s still way to go…

Written by Alfonso Lamadrid

16 June 2011 at 12:25 pm

Fordham Brainstorming Room (I)

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As we announced last Friday, and thanks to Barry Hawk and Luis Ortiz Blanco, in the upcoming weeks we will be using this blog as a “brainstorming room” to come up with issues related to “European Competition Enforcement” that could be worth discussing at the 2011 edition of Fordham´s 38th Annual Conference on International Antitrust Law and Policy.

In addition to having your suggestions appear on the blog, once in a while we will devote a post to setting out our own ideas on possible topics.

Here go a handful of them. We look forward to hearing your views!

1. Positive v. Negative Enforcement of Competition Law

a. “Negative” decisions (decisions concluding to the absence of infringement). If we follow Tele2 Polska, NCAs cannot adopt such decisions under Regulation 1/2003. Importantly, this ruling may have an impact on how a number of NCAs run their decisional business, and in particular the French CA which occasionally adopted negative decisions.

b. Inapplicability decisions and guidance letters. Under Regulation 1/2003, the Commission can adopt several types of negative decision. To date, the Commission has never used such powers. In light of (a) stakeholders face now a competition enforcement system that looks very prohibitive. Query: could this lead to over-fixing/type I errors (with firms being excessively risk averse)?

c. Guidance on firm behavior through non-decisional instruments. As we reported on a previous post, the French CA adopted earlier this year a report (avis) on Google and more generally on search advertising. The French CA has an important track record in relation to such reports. Those documents are somehow akin to positive decisions in the making: they contain only provisional findings and do not prescribe remedies. Yet, they are a considerable source of concern for the companies targeted in such reports. They make individualized statements on market definition, dominance, abuse and so on. In practice, they may trigger follow-on complaints from third parties, litigation, etc.  By contrast to positive decisions adopted as a result of formal proceedings, the companies targeted by such reports have little procedural rights.

2. Priority setting, “opportunité des poursuites”. On which sectors/practices should Commission/NCAs focus, both in abstract terms (e.g. sectors where consumer welfare improvements can be large?) and concrete ones (e.g. financial services?) ? Should there be coordination EU/NCAs and NCAs/NCAs in relation to the definition of enforcement priorities?

3. Impact assessment. How to quantify the contribution of competition policy to economic growth and other macro-economic indicators (investment, productivity, employment, etc.)?

4. Alrosa-like case law. A question on the state of play at the national level (Can commitments go further than conventional remedies? Can they escape a strict proportionality assessment?)

5. Appeals. NCAs ability/duty to stand in review courts to defend their decisions (see the VEBIC ruling, also commented on previous posts).

6. Integrated v. bifurcated agency model. Think of the ongoing discussions over the merger of the OFT and the CC in the UK.

7. Competition within agencies. It is somehow of a “secret de polichinelle” that there are diverging views on the effects-based approach between the Legal Service and DG COMP. Are such situations beneficial or counterproductive? In the latter case, could they be avoided?

8. Private enforcement. The elephant in the room?  What are NCAs doing and what can they do to foster private interaction? How do they feel about the Judgment issued yesterday by the ECJ which states that it is a matter for national courts to discern whether access to leniency documents can be granted to parties seeking evidence to substantiate claims for damages?

Written by Alfonso Lamadrid

15 June 2011 at 9:18 pm

Draft Op-Ed on Inflation and Competition Policy in Belgium

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It took me part of the day to draft the attached text (in French).

Comments are very welcome. The thing should go to press shortly.

Carte blanche – Indexation automatique Inflation et Concurrence – N Petit

Written by Nicolas Petit

14 June 2011 at 8:09 pm

A New Guest Blogger, a New Jurisdiction and a New Type of Unlawful Information Exchange?

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[Note by Nicolas and Alfonso: Chillin’Competition is going global. From now on, we will have guest bloggers of reference in major jurisdictions or regions other than the EU and the US. They will report regularly on what’s hot in their jurisdictions. Their posts will appear under 2 new categories: China Watch and Latin America Watch (new country/region sections will be created in the future). There’s so much interesting stuff going on out there that it would be a shame to miss it.  

A good friend, long-time reader of this blog and bright lawyer, Adrian Emch (Counsel at Hogan Lovell’s in Beijing) will be our correspondent for China (of course all the views expressed by Adrian here are strictly personal and not necessarily coincidental with those of his firm or clients). Now that you’ve been introduced, we leave you with him].

Welcome to the wondrous world of Chinese competition law! I am very honoured to join this blog and help it ‘go global’–to chill competition on a worldwide basis. As an avid reader of the blog from the beginning, I personally share many of Nicolas’ and Alfonso’s views, including the view that there is room for fresh ideas and even fun within the competition law world. So I am very glad to contribute to the debate on worldwide convergence (and divergence!), best (and worst) practices, etc. with blog posts aimed at enhancing cross-fertilization among Eurasian competition law cultures!

For this inaugural post, I have chosen at topic that falls within the heart of Nicolas’ and Alfonso’s obsessions expertise, namely exchanges of price-related data between competitors.  So it is not only an ideal topic to blend in, but also a very timely one. Today marks the 10th anniversary of the one-off information exchange meeting between the five Dutch telecoms operators held by the European Court of Justice to have engaged in cartel-like (?) conduct in the infamous T-Mobile judgment. As insiders know, 13 June is considered the date of birth of information exchanges as a new and basically independent antitrust discipline…

More importantly, how to deal with information exchanges is a question that many antitrust regulators are still grappling with in many jurisdictions beyond the EU. With this background, on 6 May 2011, the National Development and Reform Commission (NDRC) –one of China’s three-plus competition authorities, with jurisdiction over price-fixing (among other things)– slapped a record antitrust-related fine (over €200,000) on Unilever. At first sight, the NDRC decision may seem to smack of old-fashioned industrial politics. But, at the same time, some might view it as cutting-edge antitrust enforcement.  Read the rest of this entry »

Written by Nicolas Petit

13 June 2011 at 3:58 pm

Posted in China Watch

38th Annual Conference on International Antitrust Law and Policy- A virtual seat for Chillin’Competition readers

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The 38th edition of the Annual Conference on International Antitrust Law and Policy directed by Barry Hawk at Fordham Competition Law Institute will take place in New York on Wednesday, September 7 and Thursday, September 8, 2011. As usual, the conference will feature la crème de la crème in international antitrust (see here for this edition´s truly impressive programme).

As long-time admirers of this conference and avid readers of its published annual proceedings, Nicolas and I are very glad to offer our readers what we see as a unique chance to contribute to the discussions that will take place there this year. Here’s how:

Amonsgt other most interesting panels, on this upcoming edition there will be a roundtable on “European Competition Enforcement”.  The line-up of panelists for the roundtable on this topic is certainly unmatchable: Alexander Italianer (Director General, European Commission); Bruno Laserre (President of the French Conseil de la Concurrence); John Fingleton ( Chief Executive at the UK´s Office of Fair Trading),  Andreas Mundt (President of the Bundeskartellamt) and Manuel Sebastiao (President of the Portuguese Autoridade da Concorrencia). The task of chairing a bunch of chairmans will fall upon the shoulders of the competition lawyer I´ve always looked up to Luis Ortiz Blanco.

I will be assisting Luis in the drafting of his written contribution, and while dicussing about it an idea sprang to mind. Given the surprising and rising number of competition law experts from all over the world who read this blog, we thought it could be very interesting to ask you to share your ideas on issues related to European Competiton Enforcement that you think should be dealt with by the speakers taking part in this roundtable. We proposed it to Barry Hawk and he also thought it could be interesting, so that’s what we’re doing now.

If you wish to directly contribute to this top-level discussion with your thoughts or experiences on issues related to European competition enforcement, please send them to us preferably as comments to this post. Please note that all of your suggestions will be seriously considered as potential issues to be thrown to the panel, but also that we cannot guarantee that all of them will make it there.

Thanks go to Barry Hawk and Luis Ortiz Blanco for this opportunity. We look forward to hearing about your ideas!

Written by Alfonso Lamadrid

10 June 2011 at 10:49 pm

Posted in Uncategorized

Antitrust Syllogism of the Day

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Combine: “… negotiation between competitors may facilitate the supreme evil of antitrust: collusion” (Supreme Court Justice A. Scalia, Verizon Communications, Inc. v. Law O¢ ces of Curtis V. Trinko LLP, 2004)

with: “Collusion of firms can take many forms, of which the most comprehensive is outright merger” (G. J. Stigler, “Theory of Oligopoly”, (1964) 72 Journal of Political Economy, 44)

and get → “the supreme, most comprehensive, evil of antitrust is outright merger

Or a good antitrust illusltration of the limits of legal syllogism.

Written by Nicolas Petit

9 June 2011 at 11:44 pm

Posted in Uncategorized

Next GCLC Lunch Talk on Restructuring Aid in the Financial Sector – 27 June

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What price did banks pay for restructuring aid amidst the financial crisis?

Get a chance to know more on this by attending our next GCLC lunch talk on 27 June (see programme below and registration form here).

This event is entitled “Restructuring Aid in the Financial Sector: An Overview of Compensatory Measures and other Innovative Remedies“. Speakers are Nicola Pesaresi (DG Comp) and Hans Gilliams (Eubelius).  Time and place as usual.

53rd GCLC Lunch Talk – 27 June 2011

Written by Nicolas Petit

8 June 2011 at 11:05 pm

Competition Video

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The video footage of the 2011 ICN conference was just posted online. It confirms several “on-the-spot”  impressions:

  • Our dutch friends still use human navigation systems, 0’52
  • White walls and black doors make a “boombastic“, “unique” architecture, 1’03
  • Museums can be funny places, 1’57 (I will not disclose identities)
  • Live performance piracy was pervasive,   3’11
  • Some people were very hungry when they reached The Hague, 3’50
  • John Turturro  Fingleton attended the event, 4’05
  • Speeches during black-tie dinners can actually be hilarious, 7’16
  • Excellent officials also have terrific dancing skills (check the video on the left, in the back), 7’40-7’42

More seriously, the conference was a great event.

Written by Nicolas Petit

7 June 2011 at 5:10 pm

2011 Moot Court in French Competition Law (Concours Lamy de la Concurrrence)

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To the best of my knowledge, the Concours Lamy de la Concurrence (in French) is the sole moot court competition specifically devoted to antitrust law in the EU.

Last year, a team of Liege LL.M students won the first edition.

This year, our team reached only the semi-finals. I would nonetheless like to  congratulate E. Baretta, D. Auer, J. Dahmoun and their coach E. Provost for placing their crew before 10 other teams (out of 14). Congrats’ also and best of lucks to the finalists who seem to be very strong competition lawyers.

As you may understand, the primary purpose of this post is to make some advertisement for the final oral pleadings of the Concours, which will take place at the Paris Court of Appeals on 8 June (at 5.00 pm). For more information, please write to concoursconcurrence@lamy.fr.

Written by Nicolas Petit

6 June 2011 at 7:29 pm

Posted in Uncategorized

Inside Job

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Yesterday was a public holiday in Brussels and I took part of the day to watch Inside Job, the Oscard winning documentary which attempts to trace back the origins of the financial crisis. The documentary is certainly controversial, but I believe worth watching. It is a strong critique of the deregulatory policies that had prevailed in the US since the years of the Reagan admministration. For our purposes, it suffices to realize that the rationale underlying those policies is exactly the same as the one driving those who advocate loosening or even repealing antitrust enforcement. In fact, Alan Greenspan, who is blamed in Inside Job as one of the individuals responsible for these policies, authored some years ago an article on antitrust law. Many of his views on economic policy have recently been proven wrong; could the same be said of his ideas on antitrust? I would say the answer is quite obvious. For all its initial incoherences and its current flaws, antitrust enforcement is as indispensable as financial regulation; hopefully we won’t have to learn this the hard way.

In any case, if you can, I very much recommend taking some time off to watch this movie and to read Greenspan’s very brief piece so that you can arrive to your ouwn conclusions.

Written by Alfonso Lamadrid

3 June 2011 at 5:42 pm

Posted in Hotch Potch