Relaxing whilst doing Competition Law is not an Oxymoron

Archive for October 11th, 2012

More on Karate Competition Law

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In the light of the current thresholds governing the grant of IP rights, we could have claimed a copyright for the term “Karate Competition Law” coined by Nicolas.  Judging by the number of times that I’ve heard it since that post was published, I’m sure we (meaning him) would have made much more money than the …let me check… $ 10.33 that we made in July via advertising [P.S. this post was written in August and saved for a busy week].

Why did this come to mind? Because I just came accross the US Federal Trade Commission’s elegant formulation of what “karate competition law” is. In its Intel Complaint (for our previous and rather simple post on it, see here), the FTC asserted that:

“where a respondent that has monopoly power engages in a course of conduct tending to cripple rivals or prevent would-be rivals from constraining its exercise of that power, and where such conduct cumulatively or individually has anticompetitive effects or has a tendency to lead to such effects, that course of conduct falls within the scope of Section 5″.

Section 5 has been the primary tool to which US authorities have resorted in their attempts to fill in the perceived gaps of the Sherman Act. Some argue that there’s no EU competition law equivalent to Section 5 of the FTC Act. However, I’m not so sure that we need any equivalent instrument.  Whether one likes it or not, as thing currently stand– and obviously leaving aside the dominance/monopoly threshold- I don’t think that the reference in Section 5 to “unfair methods of competition”  or the above-quoted passage of the Intel Complaint encompasses much more than the wording of Article 102. “such abuse may, in particular, consist of (…) b) limiting production, markets or technical development to the prejudice of consumers” .

The General Court’s interpretations of this provision in Microsoft, Astra Zeneca Judgments appears to endorse this wide view of Art. 102.b) [arguably previous Judgments from the ECJ such as AKZO, Compagnie Maritime Belge or even Tetra Pak also opted for a quite wide construction of Art. 102]. Interestingly, whereas the case-law and precedents are endorsing a wide view of the protective scope of Art. 102,  the effects of the effects-based approach on practical enforcement push in the opposite direction. Self regulation, I guess.

PS. With this I’m not criticizing the use of Section 5 by the FTC. I, for one, am a fan of the FTC’s theory in the Ethyl (Du Pont de Nemours) case,  in which the FTC prosecuted unilateral practices by non-dominant firms that were used to facilitate parallel pricing. What I’m saying (and I use the first person here because Nicolas might disagree) is that European judges seem to have construed wider “standard provisions”. For instance, even the situation at issue in Ethyl could have been approached under Art. 102  under the Irish Sugar  notion of individual abuses of a collectively dominant position.

Written by Alfonso Lamadrid

11 October 2012 at 3:12 pm