Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Students’ Bests (2)

with 2 comments

I had forgotten this one. In response to the question what is a “restriction by object“, I got the following answer:

There is a restriction by object when, “following an individual and specific examination of the content and objective of that contractual clause and the legal and economic context of which it forms a part, it is apparent that, having regard to the properties of the products at issue, that clause is not objectively justified.

Where things are a little tricky here is that this definition is not the product of this student’s imagination. Rather, this definition is a straightforward restatement of §47 of the ECJ’s ruling in Pierre Fabre Dermo-Cosmétique SAS.

I know Alfonso and Antoine Winckler have expressed mixed – or even hard – feelings about the judgment. But personally, I had not realised until now how confused this ruling was. In a single paragraph, the Court manages to conflate the notion of a “restriction by object” with that of a “restriction by effect” … together with the issue of “objective justification” which is normally understood to belong to Article 101(3) analysis. And in so doing, it rejuvenates the debate on whether the rule of reason system inhabits Article 101(1) TFEU.

In this post, I would like to try a somewhat improbable analogy. In the history of EU competition law, the ECJ’s trajectory is not dissimilar to that of Metallica, the famous heavy metal band.

In the 1980s and 1990s, both have released excellent pieces. Since the 2000s, however, their production has been no more than average, and at times even mediocre. The reason for this: both are stuck in time, incapable of embracing advances in modern musical and legal art.

A last point, worth mentioning. On my own personal grid, to be “good”  a ruling must satisfy at least three conditions: maximise legal certainty; make sense from an economic perspective; use simple, clear language.  There are examples of very good rulings in the ECJ’s case-law. Think of Woodpulp which fullfills all of those conditions. Why can’t we, in 2012, benefit from a similar degree of quality when it comes to judicial production?

Written by Nicolas Petit

27 February 2012 at 8:58 pm

Posted in Case-Law

2 Responses

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  1. I certainly don’t agree with some judicial developments, but I wouldn’t be very hard on the Courts.

    Although there have recently been some very questionable Judgments (think of T-Mobile or parts of TeliaSonera, for instance), I tend to think that the Courts -and in particular the General Court- do not have such low-quality production with regard to competition cases:

    – I read well judged cartel cases all the time, and these make up for most of the competition cases before EU Courts.

    – The Court’s track record in the field of merger control has so far been widely praised (I will hope for the Court to keep on getting things right in one particular pending case…).

    – It is with regard to abuse of dominance that the Courts are most often criticized for. Whereas there is room for substantial improvement in the case-law, I really don’t think that it was ever any better (it was more simple for the good and for the bad). I may be part of a minority, but I tend to respect the way in which the Court is attempting to balance effects-based assessments with legal certainty. Again, things can always be done better, but I truly don’t believe that they are so bad.

    One might disagree with how the Court treats specific legal issues, but this is almost inevitable (even more so in the competition law world, where everyone -like us- is ready to voice out an opinion on almost everything).

    In any event, I do agree with the idea that there are some wider key matters that are certainly in need of clarification because the Courts have failed to address them satisfactorily (and object/effect is perhaps the main one).

    Alfonso Lamadrid

    28 February 2012 at 2:32 pm

    • Alfonso, I agree, at GC level, there have been some very good rulings. If I could pick two contemporary ones, I would chose GSK v Commission and Airtours v Commission. In Article 102 TFEU, however, things are not equally satisfactory.

      But where things seriously derail is at CJ level… To name a few culprits, think of Alrosa, Tele2 Polska, TeliaSonera and now Pierre Fabre…

      Nicolas Petit

      28 February 2012 at 2:45 pm


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