Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Auto-critique + Mixed bag of thoughts

with 3 comments

 

I’ll tell you a secret. I’ve lately been quite frustrated with regard to my latest contribution to this blog. In the past few weeks there have been very interesting substantive developments that we could’ve covered, but I’m having increasing trouble to find the time to write here. That’s a problem, for it makes little sense to write for a (now) large audience unless you’ve something meaningful to say. So I thought, either I quit, either I make an enhanced effort to post some -arguably decently- interesting stuff. Risking sleep deprivation I’ve chosen option 2.

But, as with all important commitments, I’ll start next week 🙂  For the time being, I’ll leave you with some brief thoughts on some of the different issues that we’d like to cover more in depth in posts to come:

1)     On Google’s proposed commitments: Some basic elements of Google’s proposed commitments were leaked to the press (see the Financial Times’ piece on this). Rumor has it that the text to be market tested next week will be a bit dense, which has given us an idea for our very own commitment: we commit to explaining its content as objectively as we can in order to make Chillin’Competition a forum of discussion on this topic.

Some preliminary comments: (i) DG Comp appears not to object to Universal search itself; the basic description of the commitments reveals that the Commission has sensibly engaged in a balancing exercise which aims at creating more room for competition without disrupting too severely Google’s successful and innovative business model; (ii) apparently the commitments in relation to search mainly concern changes in Google’s user interface (UI). I would be curious to know who within COMP took responsibility for assessing what changes needed to be effected on something as important to Google as their UI (some say that the Commissioner himself had a significant intervention on this point!). We’ll come back to this as soon as there’s more info available.

2)     On the reactions of Google’s complainants to the commitments: A few weeks ago –while teaching a 6 hour course on procedure at the BSC in the middle of easter (my gf appreciated that we had to break our holidays for this…) I had to talk about, among others, commitment decisions and I used the Google case to illustrate some points. I realized then that many people don’t know that when the Commission adopts an Art. 9 decision in a case in which it has received complaints, it also has to adopt specific decisions rejecting each complaint. Now, if complainants were really sure that their theory of harm fits within current legal standards and that the commitments are insufficient, they would appeal the decisions rejecting the complaints, right? I’m not sure they will (even if it would be interesting to read for once how this case can be framed in legal terms).

Also, some complainants are there to address a specific business concern that they have concerning Google’s practices; others seem to be there just to put some sticks on Google’s wheels no matter what. I’m intrigued as to whether these two categories of interested parties will adopt the same approach from now onwards or not…

3)    On Nico’s yesterday post on the Expedia Judgment: Readers of this blog will not be surprised at the fact that Nico and I disagree on something 😉 I told him yesterday that I didn’t share his reading of the Expedia Judgment. In fact, when it came out I thought about writing a post on it, but when I read it I thought it was so common-sensical that there was little to be said.

However, and whereas I still like the overall Judgment, I now get Nico’s point, and I understand that para. 37 of the Judgment  might sound equivocal. I also see the point in the comments made by Bagnole and Asimo to that post. My take on it: the criterion of “appreciability” of restrictions of competition has a qualitative and quantitative dimension; restrictions by object are qualitative appreciable by definition; the quantitative appreciability criterion should be assessed separately. In this case the Court appears to assume that, to the extent that trade between Member States is affected the quantitative requirement is fulfilled, which could be understandable, but it’s also very arguable. Effects on inter-State trade may be an acceptable proxy as Bagnole and Asimo say, but I’d rather regard this as a different jurisdictional element not necessarily related to the quantitative significance of the restriction. True that in practice the Völk Judgment mixes them, and true that Expedia does too, but strictly speaking they’re different things.

(I hope this is clear despite the abstraction; I’m writing while on a plane next to someone who’s snoring [(-_-)zzz]  and trying that my diet coke doesn’t spill on me, so I’ve trouble concentrating…) 

Pay also attention to the fact that para 11 of the de minimis notice solely states that the threshold in the Notice are not applicable to hardcore restrictions, but it does not exclude the possibility that a hardcore restriction could be considered of minor importance when the combined market power of the parties is significantly below those thresholds.

4)     On the CISAC Judgments: Last Friday the General Court issued its Judgments in the Cisac case. We haven’t commented on them because the case is quite complex, and having only skimmed through it I would risk saying some stupidity missing something. We’ll come back to it. A couple of non-substantive interesting things in the meanwhile: (i) There have been various outcomes to the case for different parties: some did not appeal –apparently because they liked the new scenario-; others (the Spanish applicant) missed the deadline to lodge the appeal (I’ve nightmares about this ever happening to me), and others appealed everything but the point on concerted practices, which is the one that has been quashed. At the end of the day, however, the result may matter little in practical terms, for collecting societies could always unilaterally decide to do adopt any licensing policy, including the same one challenged by the decision (only on the grounds that it had been collectively agreed upon).  In any case, I’m told that market circumstances may have changed, and that some collecting societies are now interested in the “liberalization” (in terms of multi-territorial licenses)  that the decision sought to promote.  (ii)  It’s funny to read the Court saying that the Commission failed to explain some stuff; these cases required more than 100 hours of hearings (as our readers may know, the hearings had to be repeated for procedural reasons); Fernando Castillo, the lead Commission agent in the series, is well known for speaking extremely fast; surely he must have explained quite a few things in the course of so many hours !

5)     Remember the debate on exhaustion of copyrights in the case of computer programs and the most interesting Usedsoft/Oracle Judgment? The Spanish Competition Commission just issued a decision concerning Microsoft’s policies in this regard. It’s not yet published, but we’ll give you our views on it as soon as it is. [If you prefer not to wait for the free comments that we’ll publish here, I can always offer a premium version at hourly rates 😉 ]

6)      More on Microsoft. Some of you may have read that Microsoft is the target of a complaint lodged by Spanish users of Linux. I have no knowledge of this case other than what has appeared on the press (which sounds a bit odd, since it was reported that the complaint was lodged at the Commission’s delegation in Madrid and that it refers to Arts 81 and 82…). Reports say that the complaint alleges that the secure boot system in Windows 8 forces developers to conform to Microsoft’s requirements, thus extending the latter’s dominance in the OS market. Apparently, the new firmware supports authentication with digital certificates of the installed OS and their loader; in order for OEMs to get a “Designed for Windows 8″ label they must comply with Microsoft’s requirements, among which is the one (applicable to ARM equipment) of only booting Microsoft-certified software. Whereas I can’t comment on whether there’s any actual legal basis for this complaint, I’ve come across an interesting technical piece that explains what’s the factual background thereto: see Arstechnica’s piece here.

Written by Alfonso Lamadrid

19 April 2013 at 2:22 pm

3 Responses

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  1. […] thoughts on competition happenings in […]

  2. Alfonso, 100% agreed. To bring some wind to your mill:

    §12 of notice on effect on trade: “The effect on trade criterion is an autonomous Community law criterion, which must be assessed separately in each case. It is a jurisdictional criterion, which defines the scope of application of Community competition law”

    §4 of the same notice: “4. The present guidelines do not address the issue of what constitutes an appreciable restriction of competition under Article 81(1). This issue, which is distinct from the ability of agreements to appreciably affect trade between Member States”

    A question though: after Expedia, has this notice lost relevance too?

    Nicolas Petit

    21 April 2013 at 3:30 pm

  3. The Notice remains of relevance, of course. The rule laid down in Expedia only applies to object restrictions.

    There is an aspect which you have not discussed in detail and that may explain Expedia (I insist that I just find it to be a reasonable ruling). The intractable problem is that it is not necessary to show the effects on competition of agreements restricting competition by object to establish a violation of Article 101(1) TFEU. If this is so, perhaps (and only perhaps) the only way in which one can establish that their effect on competition is ‘insignificant’ within the meaning of Volk is through the effect on trade criterion.

    Here comes my question: is there really a clear-cut distinction between the so-called ‘jurisdictional’ and ‘substantive’ conditions in Article 101(1) TFEU?

    Bagnole

    21 April 2013 at 10:50 pm


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