Chillin'Competition

As I was exiting a plane on Friday night I received a bunch of email notifications about the comments that were being written to one of our posts (probably the most interesting public discussion over allegations of “scraping” so far; not the post, but the comments to it) in which “Bagnol” made a couple of attempts to clarify what it was that I really meant on my post and in a later comment thereto. At the same time, I read a post written by Nico that started with an idea that I must have thrown out at a conference on why the Commission resorts to commitment decisions, but with which I don’t feel identified (most likely it’s my fault for not having expressed it well).  Funnily enough, I couldn’t write any comments on what I really thought because I had committed to take a break from my blackberry (like certain companies I also break my commitments: I had to check my email hidden in an airport’s restroom; yeah, it was very glamorous..).

Anyway, let’s cut to the chase, and let me clarify my (not at all original) views on the increasing resort to negotiated solutions (for previous posts on this see, among others, here, here or here).

I have mixed feelings about the use of Article 9 decisions. On the one hand, I understand the Commission’s tendency to resort to them. Commitments enable authorities with limited resources to swiftly and effectively address certain practices (particularly in rapidly evolving markets, where a level-playing feel is needed, or when a fine does not appear to be adequate). On the other hand, given my whining-lawyer nature (and because of the little academic wannabe that some of us have inside) I sometimes also regret the lack of discussion and precedent inherent to such decisions. Now, is this new commitment-based enforcement paradigm positive or negative? There’s no clear answer. I guess that it all comes down to the role one atributes to the Commission: is it to put and end to anticompetitive conduct and to restore competition immediately through direct intervention, indirectly through precedent setting, or through a careful balance of both?

Regardless of how I may have expressed it the other day, I don’t think that the Commission chooses the commitment route whenever it doesn’t know how to deal with a case, or when it wishes to avoid a judicial setback. I would argue that in each case the Commission will ponder several elements, including administraive efficiency, availability of resources, the need to achieve a precedent, the convenience of imposing sanctions or not, the constraints posed by current precedents, and, yes, sometimes the chances of suceeding before the Courts. [In our Fordham paper Luis Ortiz and I asked the main competition enforcers in Europe about all this; their replies are only available here].

What I did intend to say in my presentation on the Google case last week is that I see a trend pursuant to which commitment decisions are used to address practices that the competition authority at issue regards as likely to have anticompetitive effects (generally when undertaken by particularly powerful -some would say superdominant- firms), but that it cannot comfortably address under current legal standards. Two perfect examples are the FTC’s request for Google to address “scraping” and the European Commission’s commitments decision in the ebooks case. This same will of combatting conduct seen as anticompetitive but not captured by antitrust standards is also behind the FTC’s recent use of Section 5 of  the FTC Act.

The reason why I said all this was because I intended to distinguish cases where consumer harm is clear but the practice may not be covered by current legal standards (e.g. some interoperability denials; see the FTC’s case in relation to Intel) from other cases (like Google‘s) where the consumer harm is not at all obvious (in this respect, see iComp’s press release stating that Google does a very good job hiding consumer harm…). Whereas I understand the justification for some standard-blurring in the first of these situations, I find it questionable in the second.

To be sure, I don’t think that competition authorities opt for commitments in order to minimize the chances of losing in Court either. Regardless of whether one agrees or not with the case, the first Microsoft decision was actually a case that proved that the Commission can be quite brave in this regard. More recenty, the Commission further confirmed that it doesn’t shy off from bringing cases which may arguably seem hard to win when it decided to address an SO to Samsung despite the latter’s efforts to bring the case to a close.

There’s considerable room to develop or nuance all the above, but the post is already getting long enough.

P.S.  By the way, the concern about too many commitments and too little litigation is not specific to antitrust (yes, there’s life outside antitrust law, seriously). I’d recommend that you take a look at Elizabeth Warren’s “grilling” of US banking regulators last week.