Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for November 2011

Forthcoming Events

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A quick post to update our readers on forthcoming events:

Written by Nicolas Petit

17 November 2011 at 10:13 am

Boutique

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On the market for antitrust economics consultancy, a bunch of  solo practictioners have embraced the “boutique” business model:

  • Some time ago, Juan Briones founded the firm e-Konomica (a strange name, true, for a field of business where free market economics are king);
  • More recently, David Spector founded MAPP;
  • And even more recently, Paul Höfer created AMC economics.
In addition to competing with the big fish (read CRA International, Compass Lexecon, RBB Economics), those guys are real risk takers, and they should be congratulated.
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Now, could this business model ever be replicated on the market for EU competition legal services?
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A reality check suggests a negative answer. There’s only Biglaw dealing with EU competition cases.
Sure, there is the example of Oswell and Vahida. But the question remains whether this firm (and possibly others) has achieved traction in the market place.
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Written by Nicolas Petit

16 November 2011 at 7:12 pm

Posted in Uncategorized

There’s no way, but the hard way

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The Commission’s Draft Proposal for a New Regulation on Credit Rating Agencies (“CRAs”) is just out.

It enshrines a whole host of competition-related remedies (see text at the end of this post). Amongst the  proposals on the table:

  • A limitation of the duration of CRA-issuers business relationships to a maximum of 3 years (article 6b);
  • Injunctions on outgoing CRAs to exchange information with incoming CRA (article 6b);
  • A 10 years general ban on merger and acquisitions, that applies to CRAs holding a market share > 20% (article 6c);
  • Remedies including fines, which bear intriguing resemblance to penalties for competition infringements.

The proposal however abandons the option of creating a publicly funded European rating agency, given “concerns relating to conflicts of interest and its credibility, especially if such CRA would rate sovereign debt”.

In light of  this, a question springs to mind: if (i) the problems that plague the rating industry are competition related; and (ii) similar remedies can be ordered on the basis of the competition rules, why follow a  cumbersome legislative approach, rather than using the good old, flexible Articles 101 and 102 TFEU?

The answer is relatively straightforward: the competition rules only kick in in the presence of a competition infringement in the form of an unlawful agreement or an abuse. To date, no such conduct has been reported in the ratings industry (that said, I have argued elsewhere that cooking an Article 101 or 102 TFEU case might not be that difficult).

Because all competition problems cannot be solved with the competition rules, there is thus a “gap” in the competition toolbox of the TFEU.

In some Member States, like the UK,  this gap is filled with the possibility to launch “market investigations” and possibly order intrusive remedies where “any feature, or combination of features, of each relevant market prevents,  restricts or distorts competition“.

It is certainly about time for the EU to enjoy similar powers. The sector inquiries found at Article 17 of Regulation 1/2003 only provide an imperfect substitute.

Otherwise, the EU might have no other choice but to follow the “hard way” with competition issues subject to political maneuvers of all sorts and endless,  protracted negotiations (but true though, in Airbourne’s lyrics “there’s no way but the hard way“).

Draft_Regulation_CRAs_20111104 clean FINAL-1 (1)

Written by Nicolas Petit

15 November 2011 at 12:43 pm

11/11

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Today is a day off in Belgium and France. A quick post though.

A group of Phd students from University College Dublin is organising a Postgraduate Workshop (in March 2012) on competition law enforcement.

Hereafter the link to the call for papers.

Written by Nicolas Petit

11 November 2011 at 11:11 am

The Italian Way

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A message of hope, for our Italian readers.

In Italy, competition experts face promising career prospects:

Both of them held professorships in prestigious academic institutions (Amato as a lawyer, Monti as an economist).
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In our small epistemic community, Amato is also known for being the author of Antitrust and the Bounds of PowerMany have praised the book. I have a slightly dissonant view on this book. Sure, it does a good job a casting new light on the history of competition policy. But, the style is often cryptic. It makes the book  very hard to read.

Written by Nicolas Petit

10 November 2011 at 7:51 pm

Assorted links

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  • Wouter Wils has a new paper on recidivism. I understand it will appear in World Competition. A question: Does Wouter have an exclusive supply agreement with Kluwer?;
  • At the GCLC we are DESPERATELY looking for a Commission official to come present the best practices on the conduct of proceedings in antitrust cases (101 and 102 TFEU) at a forthcoming lunch talk;
  • I gave a presentation on standardisation agreements, IP and competition law. See link thereafter for the ppt. Droit des brevets et droit de la concurrence – Accords de normalisation A paper is in the making;
  • A good New Yorker paper on why the current laudative discourse on small business is misguided;
  • And a rumination/question: what makes it that in some markets, the supplier pays for distribution (publisher-search engines, airlines-travel agents), and in other markets, the supplier sells to distributors (consumer goods-supermarkets)?

Written by Nicolas Petit

9 November 2011 at 8:18 pm

Posted in Uncategorized

On the EU and the sovereign debt crisis (because life isn’t just competition law)

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We spend most of our time working on competition law matters – be it in academia or in private practice-, and we also spend part of our free time trying to look at competition law from a different angle on this blog. If we devote so much time to try to make sense –and sometimes fun- out of competition law it isn’t because we believe that competition law is more important than other stuff. For all its many virtues, it actually isn’t.

We started this because we thought there was something a bit different that could be done within our tiny and endogamic professional circle, and because we only feel comfortable speaking out loud about issues on which we feel we can add something coherent and hopefully useful (as you can imagine, writing every day what comes off the top of our heads without thorough reflection and in front of such an informed audience as you are means entails certain challenges and risk, notably the risk of making fools out of ourselves). In other words, we do this because we thought there was something meaningful –if only a tiny bit- that we could add to the area in which our professional lives are focused.

But even though our economist friends could argue that we are rationally choosing to exploit our competitive advantage, we can’t help thinking sometimes that maybe our priorities are somehow skewed. One example: while EU leaders were holding crucial talks in Brussels–just a few meters away from my office- on October 27th and 28th, we were writing here about the names of partners at an American firm as well as about the “slow death of Article 101(3)”. Wouldn’t it have made much sense for us to write about the slow death of the European project?

We are just as politics geeks and fervent EU supporters as we are competition law geeks; the difference is that we feel, or rather know, that you wouldn’t give a damn about our personal views on general issues on which our opinion is not different from anybody else’s; that’s why we’ve only gone off track on very rare occasions. There are times however where we feel that we have to give vent to some non-competition related thoughts.

There are some things we simply can’t understand. We don’t have solutions and are not going to fix the world, but since we need to let some steam off, we thought we’d use this platform.

If interested in knowing what we can’t understand, keep on reading. If not, we’ll be back tomorrow with the usual stuff, and apologies for going off-track.

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Written by Alfonso Lamadrid

8 November 2011 at 9:03 pm