Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for November 19th, 2011

The Rick Perry Syndrome

with one comment

 //////////////

Oops“, the Commission did it again…

Yesterday, in the S&P case, the Commission again closed abuse of dominance proceedings with an Article 9 decision. As already explained, Article 9 decisions have become the conventional procedure in Article 102 TFEU cases.

What is less conventional is that the lion’s share of recent Article 102 TFEU cases involves exploitative abuse allegations. Think of  Rambus, S&P, IBM  – where the Commission dumped bundling allegations to focus on excessive pricing – and the recent Apple-Samsung investigation.

As a matter of principle, I see no wrong to this. But, this raises several interesting questions, which cast doubt on a number of commonly accepted viewpoints.

First, is there  a Rick Perry problem at the Commission? I mean how could our Commission friends forget that the Guidance Paper states that exploitation cases are no enforcement priority?

Second, does the focus on exploitation means that those cases are easier to manage than exclusion cases, in particular under the effects based approach (where proof of anticompetitive foreclosure involves proof of exclusionary effects + proof of subsequent exploitation).

A final remark. Exploitation cases are conceptually close to constructive refusal to supply cases (see what the Commission says in IBM, §3), and thus can be also deemed exclusionary cases. But the crux of the matter is that all exploitation practices necessarily foreclose someone. From an economic standpoint, the deadweight loss of monopoly that arises out of price hikes is nothing but the foreclosure of customers. Hence my question: is the distinction between exploitation/exclusion really useful?

Written by Nicolas Petit

19 November 2011 at 2:42 pm

Posted in Case-Law