Relaxing whilst doing Competition Law is not an Oxymoron

Archive for June 28th, 2012

Tacit cartels

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A year and a half ago we anticipated that there was a rumor that the European Commission was thinking about attempting to prove a cartel by resorting to indirect economic evidence instead of to “smoking-gun” sort of evidence. See here. We said back then that economic analysis may be very useful for the purpose of identifying cartels, but that it may not be sufficient to prove their existence.

A few developments have taken place since we wrote that post. To mention only three: (i) the case -concerning cement producers- was indeed formally opened; (ii) I became involved on it as one of the lawyers for one of the investigated companies, which is why I’ve never referred to it again on this blog; and (iii) a number of affected companies -including our client- appealed the Commission’s decision requesting the said companies to dig their own grave provide the millions of  data necessary to cook the economic evidence.

We won’t talk about this ongoing investigation nor about the pending Court cases. What we want to bring to your attention is that the Competition Commission of India (CCI) has already made a very similar move by sanctioning (with $ 1.26 billion) 11 cement producers for an alleged cartel on the basis of circumstantial economic evidence. See the press release here.

The CCI’s case is built on the observation of price paralellism, increases in price following certain meetings, low levels of capacity utilization, dispatch paralellism and the earning of super-normal profits.

As I told my new Korean friends last Tuesday, competition law is becoming a discipline with no center. It’s therefore safe to guess that we will be seeing many additional test-cases initiated in jurisdictions other than the US and the EU.

Another different but very important news: more than a month has gone by since WordPress selected us for a pilot project pursuant to which AdWords are now displayed on Chillin’Competition. We are very happy to report that the approximately 25.000 visits that we’ve had since then have almost made us rich. We have so far earned 9,80 euros!!! In another month we’ll save enough money to pay a couple of beers 😉

Written by Alfonso Lamadrid

28 June 2012 at 7:40 pm