Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for January 2013

Where’s the Law? (or Google and the European Commission)

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where

I said to myself I would keep up the promise I made to Alfonso and continue writing in the blog until Nicolas is back or he recovers (which we hope will be very soon) and starts posting notes again (I failed to anticipate that he wouldn´t stop…)

More to the point: as a complete outsider, I find the lack of publicly available information on the European Google case frustrating, as it is fascinating on more than one level. I just thought that the best way I could rebel against this situation is by making my views on the ongoing proceedings publicly available.

The behaviour of the European Commission in the past few months is interesting (if not puzzling) in at least three important respects:

  • The Commission has repeatedly asked Google to submit commitments. One could very well argue that nothing prevents the Commission from doing this. At the same time,this conduct is at odds with the logic of Article 9 of Regulation 1/2003. At least it shows (as if we did not know it already) that the ECJ judgment in Alrosa (as well as AG Kokott’s opinion) ignores how negotiations between firms and competition authorities are conducted in reality.
  • A commitment decision is the only acceptable outcome for the Commission. In his public statements Commissioner Almunia suggests that the case will only be closed once the authority accepts the commitments submitted by Google. Put differently, we have reached a point where the case is not so much about an authority establishing an infringement by a firm but about a firm proposing a settlement that is acceptable for the authority.
  • The Commission assumes that the alleged discriminatory conduct is an abuse of dominance: The whole case seems to be based on the premise that the fact for Google to favour its own services is an abuse of dominance within the meaning of Article 102 TFEU. Commissioner Almunia has even been explicit about this matter. This conclusion is very far from straightforward to reach. It is a factual scenario that can be approached in many different ways. It raises novel and complex questions to which different (and contradictory) lines of case law seem to apply .Unfortunately, the Commission has never even attempted to articulate the legal framework potentially applicable to this case. This would be most desirable, if only because it would make it possible to ascertain whether the Guidance Paper was just the expression of a moment of temporary folly, and not (as I assumed it would) a pre-commitment device designed to preserve long-run legal certainty.

I do not think an expert poker player would advise the Commission to take these moves. Even outsiders like me cannot avoid inferring from them that the (legal) case is probably weaker than the Commission appears to suggest. As an academic, it is the fact that the law has disappeared from the case that I find most worrying, in any event. The question of whether, and why, Google’s conduct would be abusive seems to be no longer of relevance for its outcome. In this sense, this case shows the dramatic impact that the abusive recourse to commitment decisions (in particular where, as is the case here, genuinely novel legal questions are at stake) can have on the evolution of our discipline.

Pablo

Written by Alfonso Lamadrid

19 January 2013 at 7:56 pm

Discriminatory online advertising – Upcoming events

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As Pablo noted yesterday, my blogging urgers trump doctor’s recommendations; I figured that if Cervantes could write Don Quijote with one hand I could at least try typing a couple of posts on competition law single handedly..

We’ve undertaken a search for the most relevant competition law events to be held in February, and decided to advertise the results here. Coincidentally (or not) the events shown below are related either to friends or to us. We are aware that promoting one’s own stuff has for some become a risky business, but oh well…

On 1 February 2013 we will be holding a seminar on recent developments in relation to Article 101 within the framework of the IEB course in Madrid. Eric Gippini Fournier and Fernando Castillo de la Torre have come up with a great line-up of speakers:  Viktor Bottka (Legal Service); Pablo Ibañez Colomo (LSE) and Luis Ortiz Blanco (Garrigues) will be dealing with object/effect issues; Cani Fernández (Cuatrecasas), Marisa Tierno Centella (DG Comp until recently, now CNC) and Fernando Castillo will speak about sanctions (fines, leniency and private enforcement); Lorena Boix (DG Connect), Helena Larsson Haug (DG Comp) and Ainhoa Veiga (Araoz&Rueda) will focus on online distribution and distribution of digital works. For further info you can drop me a line (alfonso.lamadrid@garrigues.com)

On Friday 8 February at 12.00 h. there will be a Global Competition Law Centre lunch talk in Brussels on “Google Search Engines and Competition Law. The speakers will be Anne Perrot, Cédric Argenton and myself (photo taken on 30 December..). Click here for further info and registration.  (I’ve already checked all the publicly available materials about the European Commission’s investigation (piece of cake since there are practically none) and I’m in the process of reading relevant U.S. materials, national cases and academic papers; I’d be very grateful in case any of you could recommend any particularly interesting materials.

On a larger scale, on 22 February  2013 our friends at Concurrences will be holding the New Frontiers of Antitrust 2013 conference at the Assamblée nationale in Paris. This conference has earned its place among the top competition law events of the year. Even though it’s not cheap, it’s always packed, so that should tell you something about the quality of the sessions. For info and registration see here. As you will see in the program, the interface between data protection and competition law will be one of the main topics dealt with; we’ll provide you with some personal views on this non-?issue soon.

Written by Alfonso Lamadrid

17 January 2013 at 3:13 pm

Not-so-mainstream pending cases (II)

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I am back with a reference to another ‘not-so-mainstream’ case (you could all see that Alfonso cannot control his blogging urges)

This one is probably more mainstream than the previous one, but the whole field of State aid remains conveniently ‘underground’, so it probably belongs here too (incidentally, my State aid seminar has just started). This case brings us back to the good all days of the dot-com bubble (and we all thought that was a recession). As many other ‘convergent’ firms, France Telecom was in big trouble. In those dramatic circumstances, the French government stepped in and essentially announced that it would do anything to save the company. The goal was to stabilise the credit ratings of the firm. Now that we are undergoing a dramatic recession we understand the importance of ratings much better (just think of Mario Draghi’s bold statement in July last year).

The question raised in the case was that of whether the steps taken by the French government to preserve the viability and creditworthiness of France Telecom amounted to State aid. The General Court disagreed with the Commission and concluded that, while granting an advantage, such steps did not involve the use of State resources, as consistently required by the ECJ since Preussen Elektra. In an interesting opinion (in French only) issued in June last year, AG Mengozzi proposes to set aside the GC judgment. He considers that the interpretation given by the GC (at least as far as some of the measures are concerned) is excessively formalistic. I am looking forward to the judgment. If one considers the case law on guarantees and similar measures, AG Mengozzi is probably right.

A couple of thoughts in relation to the judgment:

  • This is a good reminder of why the Trinko doctrine will never carry the day in Europe. I think Trinko is a sensible and thoughtful opinion that is widely misunderstood. However, if one takes account of the links between incumbent operators and Member States, it probably makes sense to leave room for the application of competition law in Europe. Let us not forget that the facts giving rise to the Wanadoo decision (predatory pricing) took place at roughly the same time.
  • The GC and the ECJ have recently and notoriously disagreed on some high profile State aid cases. These cases relate to the notion of selectivity (British Aggregates, Gibraltar, NOx). The GC tends to side with Member States and the ECJ with the Commission. AG Mengozzi’s opinion suggests that this will be the case here. We will see

Pablo

Written by Alfonso Lamadrid

16 January 2013 at 9:33 pm

Posted in Uncategorized

A nickname for Commissioner Almunia

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People like giving nicknames to our Competition Commissioners. 

The trend probably started with Super Mario (Monti) (see image above); it continued with Steely Neely (Kroes); now, the US Federal Trade Commission itself refers to Joaquín Almunia as Lucky Nahmoodia.

As noted by Simon on a comment to this post, the transcript of Chairman Leibowitz’s press conference in relation to the end of investigations on Google (p.3) reads as follows:

[W]e talk to the Europeans fairly often, I actually spoke to Lucky Nahmoodia, who runs …, this morning. We have great respect for the work they’re doing and I think they are making progress in their negotiations with Google.

Lucky Namoohdia sounds like a Star Wars name to me, but we could get used to it…

[I feel simpathy for whoever is responsible for these transcripts; I myself am currently having interesting issues with a voice recognition software…]

Written by Alfonso Lamadrid

14 January 2013 at 12:51 pm

Posted in Jokes

‘Not-so-mainstream’ pending cases (I)

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I am coming off the bench to replace Alfonso (fans do not worry: it is all temporary, and the All-Star blogger will be back and kicking very soon!).

When he asked me to prepare a post, I thought it would be a good idea to write on pending cases before EU courts with which our readers are maybe less familiar, but that raise most interesting issues nonetheless. Those who know me will not be surprised to know that it is once again all about electronic communications.

Today’s post is on a reference from a preliminary ruling coming from a Dutch court (Case C-518/11), that I find most intriguing. According to the information found on the website of the Court, the hearing took place on 22 November 2012.

The Gerechtshof te Amsterdam submitted a list of eight (very detailed) questions. It seems that the municipality of Hilversum included a ‘tariff-limiting clause’ when it sold its cable television activities to a third party. This factual scenario raises important questions relating to the scope of the Regulatory Framework for electronic communications and others relating to the scope of Article 101 TFEU.

  • Scope of the Regulatory Framework: The Dutch court asks whether the provision of cable television services to end-users is subject to the Regulatory Framework and whether the fact for the municipality to cap retail tariffs is compatible with the sector-specific regime. This question is relevant not so much because of the (predictable) outcome but because it shows that the artificial content/network divide found in the Regulatory Framework is plain impracticable in the current technological landscape.
  • Scope of Article 101(1) TFEU: Is it contrary to Article 101(1) TFEU to impose tariff-related conditions when selling a business? Because the seller in this case is a municipality, an array of sub-questions come to mind. Is the municipality engaged in an economic activity when imposing such conditions? Is this conduct contrary to ‘the obligation of Union loyalty’ (as drafted in the questions)? This set of questions is probably more interesting from a substantive perspective, at least so because the chances of an unexpected outcome are probably higher.

Another post on another not-so-mainstream case will follow soon!

Pablo

 

 

 

Written by Alfonso Lamadrid

11 January 2013 at 7:35 pm

Posted in Uncategorized

Missing in action

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Reinosa-20130110-00068

 

We are a disgrace:

Nico is missing in action in some lost island, and I’m on forced semi-vacation in Spain due to a humerus fracture provoked by a humorous ski fall, and unable to do anything but bad jokes (see above) and read (on the antitrust-related side I’ve particularly enjoyed the two in the pic above -Interop, and Antitrust and the bounds of power- which I would recommend you to read whenever you injure yourself..).

I’m telling you this because since Nico and I are unfit (that is, even more) to take care of the blog as we’d like, our friend Pablo Ibanez Colomo (LSE) has accepted to write some stuff in the coming days. We’re grateful to him, even if we know there’s a risk that you’ll like his posts more than ours! 😉

Write to you soon!

Written by Alfonso Lamadrid

11 January 2013 at 6:07 pm

Posted in Uncategorized

Google reaches a settlement with the FTC

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FTC vs Google

Google has reached a settlement with the FTC!   Details can be found here.

The settlement concerns the licensing practices of some key technologies to competitors and the management of campaigns by online advertisers. The investigation into Google’s search-related practices, on the other hand, has been closed (by a 5-0 vote).

According to the press release, Google’s ‘Universal Search’ and other changes can be ‘plausibly justified as innovations that improved Google’s product and the experience of its users’.

We are all wondering the impact this outcome will have on the (European) Commission’s ongoing investigation (although we presume this did not catch DG Comp’s officials by surprise).

Btw, I will be speaking soon about antitrust and search engines, so these developments come in handy (not sure if that’s the right expression considering that for a couple of months I’ll be a one handed man..)

Written by Alfonso Lamadrid

4 January 2013 at 1:16 pm

Posted in Uncategorized