Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for November 2012

Best competition law course ever (?)

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Ok, yes, I might perhaps have exaggerated a bit, but I needed a catchy title to call your attention to this one  😉

On a previous post we already referred to the competition law course that pays me a few weekend trips to Spain I’m co-directing at the IEB in Madrid. The brochure is finally now available: XVI_Curso_Competencia_IEB_2013.

We already have a bunch of students from the Spanish competition authority, Latin american competition authorities, as well as from several companies and law firms.

We would be grateful if you could please pass the brochure on to anyone who you think might be interested!

Written by Alfonso Lamadrid

14 November 2012 at 8:22 pm

Posted in Our Organizations

Antitrust Rumours

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Heard three weeks ago in Hong Kong: our antitrust master, our antitrust icon, our antitrust god Prof. Richard Whish – who will be leaving King’s College London in August 2013 – would be a strong contender for a high-level position at the forthcoming Hong Kong Competition Authority.

Heard last week in Brussels: people close from the Court case have leaked to Chillin’Competition that the draft ruling in Intel v. Commission (T-286/09) will likely be an outstanding piece of nonsense ordoliberalism. Not yet out, and we already have a candidate for the worst 102 judgment of 2012. Wow!

Written by Nicolas Petit

13 November 2012 at 9:44 pm

Antitrust and political imbecility

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(The post below will perhaps be a bit more controversial than the stuff we usually publish here. I nonetheless bet that its title will draw some additional readers to it: insults -particular when linked to politics- are always good marketing tools!  Please note that these are simply some Sunday afternoon ruminations that aren’t that well though through; they are rather “thoughts in progress”. Would be happy to further distill/refine them through public discussion, so feedback will be appreciated).

In The Revolt of the Masses,  Ortega y Gasset wrote a phrase that I often quote:

Aligning oneself with the left, as with the right, is only one of the numberless ways open to man of being an imbecile: both are forms of moral hemiplegia.”.

This quote has in the past got me into trouble long discussions. There can certainly be some nuances to be made to it (some issues traditionally defended by the left, or by the right, -extremisms aside- are certainly worth aligning with; the quote rather refers to all accross the board uncritical alignments), but, frankly, I think Ortega had a point.

Another great writer -Orwell-  said that “to see what is in front of one’s nose needs a constant struggle”. Undertaking such exercise from a pre-defined right or left perspective makes things easier, for you know in advance about what stance to take on most issues. On the contrary, assessing all issues objectively and on their merits (to end up agreeing sometimes with the left, sometimes with the right, and often benefiting from a mixture of the two) is complex, tiring and some would say perhaps unfeasible.

Now, considering that you probably – and rightly- don’t give a damn about our views on politics, you might legitimately ask why on earth I’m telling you all this. Well, because I think that the expansion and consolidation of antitrust laws accross the world can actually contribute to mitigating political imbecility through the promotion -even if implicit- of sensible centrist attitudes (actually, I’m not sure I think it, but it’s an interesting thesis anyway). Let me try to explain what I mean, and please tell me what you think:

The widespread adoption of antitrust rules implies a recognition that (i) freedom of enterprise and free competition is positive; and (ii) for such freedom to be real market forces and excessive market power need to be effectively supervised and corrected through public intervention. This crucial paradox -to limit some sorts of freedom for the sake of freedom itself- might sound obvious to you (after all the laws themselves are “those wise restraints that make men free“), but it has not been a feature of the economic policies pursued in many places around the globe. As a matter of principle, the recognition of the need to strike a balance between the two principles outlined above through the very enactment of antitrust rules (unless purely cosmetic) around the world constitutes a giant step towards the construction of centrist economic policies.

The enactment of antitrust rules also obliges public authorities in many jurisdictions to make complex economic decisions (notably on when to intervene and when not to). To be sure, these decisions may certainly be (and often are) infused by different ideologies, and instrumentalized to pursue non-centrist political agendas. However,  as experience, precedents, inter-relations and peer pressure consolidate, it will (I hope) become increasingly harder for decision-makers to  adopt decisions on the basis of elements other than objective ecomomic and legal knowlegde. That, to me, would be sensible centrist economic policy too.

The underlying assumption that smart public intervention might not only restrict but also actually promote economic freedom could hopefully be extended to other economic domains. For instance, it would be nice if some (not only in developing countries, think of the Tea Party movement) who identify themselves as pro-individual freedom (a principle with which I agree) would realize that for freedom to be real (and not confined to a few) public intervention is required in order to provide effective and equal opportunities to actually exercise it.

I was positively surprised to see that I may not be sole one thinking this way. A recent editorial in The Economist (which I would very much suggest you read; available here) not only called for “radical centrist policies” (what the piece also referred to as “true progressivism”) to combat growing inequalities, but also attributed antitrust a primary role in the pursuance of a centrist agenda. (“The priority should be a Rooseveltian attack on monopolies and vested interests, be they state-owned enterprises in China or big banks on Wall Street. The emerging world, in particular, needs to introduce greater transparency in government contracts and effective anti-trust law“).

Btw, I have the feeling (no evidence though) that The Economist drew inspiration for some these ideas from a recent and truly great book: Why nations fail  -which I’m trying to read when work allows-. This book also contains compelling arguments about why the promotion of competition through the application of antitrust rules is one of the most effective ways to contribute to the development of any given nation.

Written by Alfonso Lamadrid

12 November 2012 at 12:43 pm

The Friday PowerPoint

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I attach below the presentation I gave today at the GCLC annual conference. It deals with the nexus between competition enforcement and industrial policy.

A rough 45 pager,  co-penned with my assistant Norman Neyrinck, was circulated to the participants.

BTW, I am contemplating moving to Prezi, and leave the conventional PowerPoint world. Anyone with feedback on this?

INDUSTRIAL POLICY AND COMPETITION ENFORCEMENT

Written by Nicolas Petit

9 November 2012 at 6:41 pm

Ugly -at first sight- but interesting (on nullity under EU competition law)

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Some time ago Nicolas Charbit (Concurrences) asked Luis Ortiz Blanco and myself to write a foreword for a special issue of e-Competitions on “Nullity/Voidness”.

Yes, at first I had the same reaction you just had; kinda  “What?? Wasn’t there a less sexy topic? I bet they asked us because no one else wanted to do it!”. But we accepted the offer (partly because it was for Concurrence, and partly because we still haven’t learnt to say no). Then we started thinking about it. For some time our only thought was mainly “damn, damn, damn, why did we accept to do this?“.

But when we really undertook to work on this foreword (the weekend before the tenth deadline expired), we realized the reason why the theme of nullity does not rank high in the list of preferred topics of EU competition law commentators. Reflecting upon it requires an excursion into “terra incognita”. Making sense out of the various intellectual riddles that arise with regard to nullity/voidness requires not only a knowledge of competition law principles, but also a mastering of general principles of contract law, as well as of comparative law, that are all too rare in our narrow discipline. In other words, we found out that the topic demands not a foreword but a doctoral dissertation. In spite of the appearances, it’s as interesting as it is important.

In our view, the most interesting issues concern so-called “fruit agreements”, that is, agreements distinct from the one found in breach of the competition rules but that are instrumental to realise the profits sought therewith (e.g. the agreements between a company participating in a cartel and its customers). It is clear that a given anticompetitive clause within an agreement shall be deemed void. It is also well-established that the nullity of such given clause can possibly extend the nullity to the rest of the agreement of which it is part provided that the two are not severable, and that whether a given clause is severable from an agreement is to be decided by national courts in the light of the applicable legislation in each Member State and of the specific features of each agreement. And whereas the practical application of these principles may give rise to divergent results, the situation –at the level of EU law principles- is fairly satisfactory.

What is less satisfactory is the uncertainty surrounding the validity of agreements which do not directly breach the competition rules but which stem –and actually put into practice- another agreement that does. The case law of the European Courts states, on the one hand, that the “the nullity referred to in Article [101](2) (…) is capable of having a bearing on all the effects, either past or future, of the agreement” (Courage v Crehan, para. 22) and, on the other hand, that “[t]he consequences of such nullity for other parts of the agreement, and for any orders and deliveries made on the basis of the agreement, and the resulting financial obligations are not a matter for community law. Those consequences are to be determined by the national court according to its own law” (Kerpen & Kerpen, para. 12). In other words, EU law purports to deal with the nullity of the effects of the anticompetitive agreement, but not with the vehicles (ensuing contracts) that carry out such effects. Does this make sense?

Those interested in finding out our view on this issue, and on a few others, can read the full foreword here: Foreword eCompetitions Nullity/Voidness  (It’s only 5 pages long; not long enough to bore you to death).

The rest of the special issue is available here.

Have a great weekend!

Written by Alfonso Lamadrid

9 November 2012 at 6:39 pm

Posted in Journals

HK

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As reported earlier on this blog, Hong Kong recently joined the league of jurisdictions with a domestic competition regime.

On this occasion, CCH Wolter Kluwers organized a one day conference to discuss forthcoming challenges for the new law.

I was one of the happy many to be invited to the conference, together with a bunch of lawyers from Brussels, Beijing, Australia and the United States.

Now, our Hong Kong friends might be pondering how to apply their new law, they know how to throw a good event. Everything was perfect. Congrats’ in particular to Shirley Hon and Simon Bellamy for the superb organisation.

The level of the discussions was by all standards very high. You could tell the speakers had put time and energy in their presentations. Not the usual quick and dirty, taxi-drive preparation. I personally gave a talk entitled “New Challenges for XXIst Century Competition Authorities” where I identify 5 new enforcement challenges, and 4 new substantive ones. My ppt is available at the end of this post.

The after-conference evening was also a success. There was a cocktail reception, which was followed by rounds of free cocktails, courtersy of Kluwer (no kidding here). With a bunch of enthusiastic conference participants (including several speakers), we then moved to Lan Kwai Fung where we had a lot of fun. I then took a few days off, enjoyed the sun and did some trekking with an old friend who relocated there.

The bottom-line: it was a fantastic trip. And I must confess that since I came back, I have been looking once or twice if academic positions were available in the region…

Presentation – New Challenges for 21st Century Competition Authorities – HK [Mode de compatibilité]

Written by Nicolas Petit

7 November 2012 at 9:57 pm

OOO

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Some people are real professionals.

In response to a mass mailing a few days ago, we received the following Out of Office message:

À : Utilisateur de Microsoft Office
Objet : Out of Office: LAST CALL: 8th Annual Conference: Competition Law in Times of Economic Crisis: In Need for Adjustment ­

I apologise for my absence.  I am out of the office on Friday and the weekend.  I have access to email except when travelling mid-Friday and Sunday evening, but my response time may not be as timely as you would like.  If you expect a more immediate response, please contact my assistant at …

Unconventional. Had never seen a WE OOO email before.

My fear is that if lawyers start to apologise for being OOO on the WE, then those jobs will be increasingly difficult to sell to students, and in particular to clever ones.

Or maybe it’s just me, and I should just design my own WE OOO email?

Written by Nicolas Petit

6 November 2012 at 11:38 am

Posted in Uncategorized

The Gallois Report on Competition

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Today, L. Gallois (former CEO of EADS) handed down to JM Ayrault a long awaited report on how to boost the competitiveness of the French economy.

This report comprises a section on competition policy. It is entitled “A competition policy that serves competitiveness“.

Hereafter is the text of the section (in French):

La politique de la concurrence « domine » toutes les politiques européennes qui ne peuvent se déployer que dans le cadre qu’elle définit. Cette « domination » est également idéologique ; elle s’appuie sur une administration extrêmement compétente devant laquelle les autres administrations s’inclinent le plus souvent. La politique de la concurrence de la Commission souffre de deux faiblesses : d’une part, elle intègre mal la dimension de la compétition mondiale à laquelle l’industrie européenne est confrontée et donne la priorité au consommateur par rapport au producteur ; d’autre part, les décisions relatives à la concurrence (aides d’État ou concentrations) ne peuvent être remises en cause que devant la Cour de Justice Européenne ; elles sont donc très largement fondées sur des critères juridiques et prennent mal en compte la dimension économique, la taille du marché pertinent, les dynamiques des secteurs à moyen terme, les effets d’échelle ou les régimes d’aide dont bénéficient les concurrents. Nous ajoutons que les délais des procédures sont déconnectés de la réalité industrielle. La politique de la concurrence doit être davantage mise au service de l’industrie européenne et de sa compétitivité. Nous proposons donc que toutes les décisions concernant la concurrence soient accompagnées d’un avis d’experts économiques et industriels, extérieurs à la Commission ; cet avis serait public. Il permettrait, sans remettre en cause les prérogatives de la Commission de la conduire à mieux intégrer l’économie réelle dans ses décisions. Un pas supplémentaire conduirait à ouvrir une possibilité d’appel des décisions de la Commission devant le Conseil des Ministres européen qui se prononcerait alors à la majorité qualifiée ; cette possibilité remettrait, sans doute, en cause une des prérogatives « fédérales » de la Commission. Elle ne ferait pourtant que reproduire les dispositifs nationaux où les décisions des autorités de la concurrence sont susceptibles d’appel devant les instances politiques.

On grounds of legal certainty, risks of decisional capture and other evils of the same kind, I can only disagree with the proposal to subject Commission decisions to appeal before a political organ.

And I actually fail to see where he found that NCA decisions were in general already subject to political appeal.

The same applies to his proposal to create a panel of external economists and industry representatives, with advisory power on the Commission. Most CAs, including the Commission, now have teams of economists that advise at all stages of the decisional process. Do we really need another layer of bureaucracy?

Gallois makes however several good points. First, when he says that the case-law of the EU Courts is overly legalistic. Second, when he contends that the Commission’s obsession with consumer welfare may not always be apposite. Third when he criticizes the protracted nature of competition proceedings.

But anyway, who cares. After all, this document will likely be watered down real bad, as most such reports have been in the past.

Written by Nicolas Petit

5 November 2012 at 2:02 am

Posted in Uncategorized