Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for June 2013

Economics 1.01

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The publication of this book confronts me to THE elementary issue at the core of economics: how to best allocate scarce resources? 

My editor has sent me 10 free copies of the book. What shall I do?

Option 1 => Auction them, and let the market decide;

Option 2 => Reward friends, out of my political discretion. This option is tricky. Assuming I have more than 10 friends (I guess I have), how to pick those that should receive the book without p****g off disincentivizing other from being my friends?

Option 3 => Reserve part of them for the university library out of “universal service” considerations + sell the remainder

Option 4 => Do nothing, and shelve them, like a lazy monopolist

 

 

Written by Nicolas Petit

27 June 2013 at 12:21 pm

Out!

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IMG-20130625-00429

For more, see here.

Written by Nicolas Petit

25 June 2013 at 11:35 pm

Lamadrid & Petit LLP

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We live in a world of “experts“.

Readers, corporations, public institutions all crave for expert advice.

And the beauty of it is that we are all experts at something, including at unexpected subjects.

Take a look at what landed in my mailbox last week:

Dear Nicolas,

Chambers & Partners is producing a new guide for clients which provides practical insights into doing business around the world.

We are currently doing research for the guide on Merger Control. The contributing editor is John Doe of Doe, Doe & Doe LLP.

I am writing a chapter in the guide which will give useful advice to clients who are new to undertaking mergers in Spain. Given your experience in merger control proceedings in Spain, I was hoping you might talk to me for a few minutes to pass on some of the insights that you’ve gained.

The interview would be in complete confidence.

If you are willing to be interviewed, please let me know a time that would be convenient for me to ring you. My email is: JohnQ@chambersandpartners.co.uk. Or please feel free to call my direct line: +__________.

 With thanks for your consideration.

Kind regards,

John Q.

Legal Practice Guides

Chambers and Partners”

I guess the selling argument in this email is the “Given your experience in merger control proceedings in Spain“.

John Q must have been confused by my credentials as a founding partner of Lamadrid & Petit LLP.

To me, this says it all about the reliability of those “guides“.

On second thoughts, I should have taken the interview to prove my point.

Written by Nicolas Petit

24 June 2013 at 10:27 am

Posted in Uncategorized

Book Review – Soft Law in Court

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Oana Stefan (HEC Paris) has kindly sent us a copy of her book on soft law in competition and state aid law.

This book is the first monograph ever devoted to this issue.

Amongst other things, the book uses quantitative data to confirm that the judgments of the EU Courts abundantly refer to soft law instruments.

It also argues that the distinction between binding and non binding effects is too crude.

Lastly, it shows that the EU courts have created legal hybrids when endorsing soft law instruments on the ground that they are the expression of general principles of law. This generates, in the author’s words, a “judicialization” of soft law.

A must read. Apparently, Oana will in the future focus on how national courts deal with soft law instruments.

A full description of the book can be found here.

Two final remarks. First, I’d love  to read Oana’s views on the appalling Expedia judgment (Expedia Inc v Autorité de la concurrence and Others C-226/11). Second, this book review does not mean that we are “sokolizing” this blog. Our tacit understanding with Dan is that he focuses on the scholarship reviews, we concentrate on the rest (including the nonsense).

Written by Nicolas Petit

23 June 2013 at 1:51 pm

Cases that never will be (I) – Hynix (Case T-148/10)

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Last week one of the most knowledgeable people in the EU competition law world (Commission official whose name I can’t disclose) tipped me to a new series of blog posts:

His words were “someone should one day write on a blog the story of competition cases that could have had a significant impact on the law had they not been withdrawn”. Since the number of competition law bloggers is not that high (even though it’s rapidly increasing…), and since I was the addressee of the message, I sort of got the point.

Actually, I very much like the idea of writing about cases that never were or, rather, that never will be.

There are a few candidate cases to be discussed; a non-exhaustive tentative list of non-cases could include: Siderca, Chi Mei, Suez-Environment, Formula One, Oulmers, BIC Deutschland, Balog or Van der Weerd. [Additional suggestions would be welcome].

Today we’ll start with Hynix (Rambus), a case in which the hearing was scheduled for 2 July but that was withdrawn a few days ago following a settlement.

The Judgment that will never come to light in this case would have constituted a most important precedent in relation to some important general enforcement issues, as well as in relation to an eventual judicial review of the current investigations concerning Google or Samsung.

A bit of background:

In 2002 Hynix filed a complaint alleging that Rambus had engaged in deceptive conduct in a standard setting procedure in relation to DRAM chips by not disclosing the existence of the patents and patent applications which it later claimed were relevant to the adopted standard, and that it had later charged excessive royalties for the use of those patents (i.e. royalties higher than those that it would have been able to claim had it not engaged in deceptive conduct). This is what is generally referred to as “patent ambush”.

The case was interesting because the deceptive conduct at issue had made Rambus acquire dominance (it preceded dominance), and the charging of high royalties could be regarded as the natural consequence of such dominance. Given that EU law does not target “monopolization” practices (those use to achieve dominance), the Commission had attempted to close this enforcement gap by targeting exploitative pricing under Art. 102 under the argument that dominance had been unlawfully attained. This was a brave and controversial move on the part of the Commission.

On 27 July 2007 the Commission adopted a statement of objections setting out its concerns. Rambus responded to the SO and a hearing was held.

Almost two years later, however, Rambus submitted preliminary commitments, those were later market-tested, revised, and eventually made binding on December 2009 (in a nutshell, Rambus committed (i) not to charge royalties for the two standards adopted while Rambus engaged in the deceptive conduct; (ii) to set a maximum royalty of 1,5% for the later generation of standards and to offer thus maximum rate to all market participants). (Note that the commitments concerned only future payments, not those already made).

As you know, in a case like this (or in a case like Google’s), once the Commission accepts commitments it must (a) adopt an Article 9 decision making them binding; and (b) adopt a decision rejecting any complaints stating that there are no longer grounds for action.

Hynix appealed both of these decisions.

In essence, Hynix argued that the Commission violated Article 9 of Regulation 1/2003 by choosing the procedure envisaged in that article where its concerns related to a serious violation of Art. 102.

In its SO, the Commission had envisaged a finding that the charging by Rambus of capped royalties is incompatible with Article 102 (82 back then). However, the corollary of the commitment decision was to make royalty caps binding, thus endorsing their legality.

The Judgment that will never on this case would have shed light on some of the hottest current topics in EU competition law (abuse of dominance in high-tech sector, misuse of patents, the circumstances in which the Commission can or cannot adopt commitment decisions…).  In the past we have devoted lots of ink pixels to discussing these issues, and it’s a pity for the law that questions like the following will, for the time being, remain unaddressed:

 What constitutes an abusive practice with respect to standardization, in particular so far as concerns patent ambushing?

Were commitments in the form of future royalty caps sufficient to eradicate the competitive problems found by the Commission?

What guiding principles (beyond Alrosa) are to be taken into account when assessing the appropriateness and adequacy of commitments? 

Can the Commission address what it had perceived as a serious violation by means of a commitments decision? In that context, may the Commission adopt remedies which are only prospective in nature? Is the Commission entitled to have recourse to a commitment (Article 9) decision after having adopted a Statement of Objections? And in this case, can a Statement of Objections be considered as a valid “preliminary assessment” for the purposes of Art. 9 of Regulation 1/2003?

Written by Alfonso Lamadrid

21 June 2013 at 10:00 am

Back in Business

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Sans titre

with two presentations:

Number 1: evidence in oligopoly settings (or can tacit collusion be proved ex post)? My submission is yes. I give examples of papers that proved tacit collusion, and try to explain how economists do this . I gave this presentation 10 days ago at the IMEDIPA conference in Athens. Looking back at the success of the event, Greek competition law is NOT in crisis.

Evidence in Oligopoly Settings – IMEDIPA N Petit 8 June 2013

Number 2: under what substantive standard of abuse should the Commission deal with injunctions on FRAND-encumbered SEPs? I gave this presentation at GCR’s conference last week. A nice but pricy event + quite one-sided. I got some free tickets for my LLM studs.

Injunctions for FRAND encumbered SEPs – GCR Conference – June 2013 – Petit

Written by Nicolas Petit

20 June 2013 at 10:20 am

Preliminary thoughts on Google’s proposed commitments

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As long anticipated, here are some comments on the proposed commitments in the Google case (I graciously granted myself an extension, like the one other third parties have received; it actually is convenient because I can comment on others’ comments as well).

Four caveats are in order:

  • The views expressed below are written against the background of the Commission’s concerns as set out in the press release and the Q&A doc. accompanying the market testing of Google’s proposal. The relevant question to keep in mind is whether the proposed commitments –in their current form- are apt to address the concerns identified by the Commission in its preliminary assessment, not whether they are apt to lead to candy world for satisfy the wishes of all third parties.
  • My views are necessarily incomplete and they’re also work in progress. I’ve only read the limited publicly available information and have not had access to any confidential info or documents that might be contained in the case-file.  Moreover, I have allocated two flights time to draft this (and I should ideally also do some billable work, you see), so I’ll (i) update and improve this document on the basis of any new thoughts or possible feedback and (ii) refine my thoughts for a forthcoming piece on Oxford’s Journal of Competition Law and Practice
  • My views are mine (sounds like a tautology, but don’t always take this for granted in our area of work…); some of my colleagues and clients may well have different opinions.
  • I haven’t worked nor for Google nor for any of the 17 complainants.

In case I haven’t yet got you tired before even starting, here is a methodological explanation. This will be a five-pronged analysis; I will very succinctly summarize (i) DG Comp’s concerns; (ii) my take on the substantive concerns; (iii) the content of the proposed commitments; (iv) third-party criticism of the proposal (notably that read here, here, here or here) (I actually read some favorable comments as well); and (v) my take on the proposed commitments.  And this for each of the four concerns flagged by the Commission (although only the two first ones raise interesting issues).

The structure will make this post longer. In order not to cram the page, click if interested.

Read the rest of this entry »

Written by Alfonso Lamadrid

13 June 2013 at 7:00 pm