Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

NYT

with 6 comments

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Lucky me, I made it to the NYT again, on the Google investigation. See here.

To be honest, my quote is very lame.

I had a better one though. But it did not make it through.

James Kanter reveals it on twitter: ‘Enforcers risk becoming Don Quixote figures, tilting at windmills.

The point is: 4 years to solve a high-tech case under a settlement, come on…

4 years ago, Nokia was the worlwide leader in handsets. And Blackberry was the dominant smartphone player.

In those sectors, 4 years is an eternity…

And antitrust enforcers may not be far from Quixote, who fell into the illusion that he was fighting a cause that matters, i.e. fighting giants which in reality were innocuous windmills.

Written by Nicolas Petit

2 October 2013 at 7:34 pm

Posted in Uncategorized

6 Responses

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  1. Congrats again, Nico

    Even though my repeatedly stated views on the substance of the case differ from the Commission’ -and even though your criticism is absolutely legitimate- I beg to disagree and defend DG Comp on this particular point:

    – The investigation started in November 2010, so it’s been ongoing for less than 3 years now (not unusual at all in ordinary antitrust investigations);
    – There have been tons of complaints, all of which need to be dealt with formally and carefully;
    – Imagine how many informal submissions -in different languages- DG Comp must have received and had to adequately process on top of complaints;
    – Some parties may have had incentives to stall the investigation to keep Google under the spotlight for as long as possible;
    – Take into account the period needed for market testing, extending market testing and re-market testing;
    – The case isn’t easy + I’m quite sure that Google has defended itself quite well and not yielded + imagine how tricky ity must’ve been to negotiate sensible yet effective commitments;
    – DG Comp has much more limited resources than one may think;
    – The same guys dealing with that investigation are handling quite a few prominent and complex others;
    – In the US many more resources were spent and the investigation on search was dismissed without any action on the part of the agencies, state attorneys or Congress; whether you agree with the case or not, the Commission is getting a return on the investment;
    – The Commission’s procedures aren’t designed to be fast (in response to constant criticism, they’re rather crafted to safeguard rights of defense for companies, third parties’ rights and constant in-house reviews);
    – And (even if I believe that Google’s position is mainly attributable to the fact that it is, on its merits, the best search engine) the Commission would be likely to reply to your post saying that the search engine landscape has not become less concentrated in the past 4 years, and that its evolution has not been as radical as that of the smartphone market with which you illustrate your point.

    Alfonso Lamadrid

    3 October 2013 at 12:31 pm

    • Hi Alfonso,

      It is difficult to deny that (i) the Commission is taking a long time (even considering all the procedural hurdles through which it has to go) and that (ii) this is not a straightforward case. Saying that the case is not straightforward sounds in fact like an understatement. I still do not understand (and I am certainly not alone here) why the claims against Google would be problematic under Article 102 TFEU. And I suspect that if the Commission had to formally establish an abuse of dominance, it would have serious problems to articulate the case from a legal standpoint.

      Nicolas’s points are valid. If high-tech industries move so fast, why not focus on clear-cut questions instead of devoting resources to cases in which problems are even difficult to identify in the first place? Wouter Wils’s seminal (another understatement) piece on prosecutorial bias (and the desire to justify past efforts) comes to mind whenever the Google case is discussed

      Pablo Ibanez

      3 October 2013 at 8:01 pm

  2. Thaanks, Pavel
    I’m not denying that it’s taking long (only that it’s not so unusual, that to a certain extent some delay is inevitable, and that to another certain extent this “delay” is justifiable) nor am I saying that the case is far from straighforward (in fact, I have repeatedly stated here and elsewhere- that I don’t share the EC’s substantive concerns, and I entirely concur with your view on the difficulties that the Commission would have had to build an Art. 7 decision in this case).

    I nevertheless tend to disagree with the (also legitimate) argument that competition enforcement in the IT sector should only address clear-cut questions/cheap exclusion. IT markets are often multi-layered, multi-sided, subject to not-yet-well-understood dynamics, and are characterized by features that make competition enforcement comple (such as opaque price/cost structures). I see the intuitive appeal of a (Chicago influenced?) approach to let things run their course and only intervene if something is clear, but I also see its perils. Tthings are often complex and unclear. In fact, many people don’t share our view on this very case, and rather say there’s an obvious abuse! Who decides what’s clear-cut? More importantly, practices that are complex and not-clear cut can also be very harmful, so I don’t think competition authorities should shy away from intervening in the face of complexity.

    Also, I don’t think the problem with this case is one of prosecutorial bias (even though there probably is a certain small or large degree of that in almost any case). My take is that the Commission -rightly or wrongly- sees a practical problem and wants to (and is very much prompted to) address it, even if that means not lowering standards (and this is not solely a EU Commission attitude: here we have the commitments shortcut; in the States they have the Section 5 shortcut). I don’t like any of the labels, but I see more (over)zealous enforcement than bias.

    Alfonso Lamadrid

    3 October 2013 at 8:38 pm

    • My dear Alfonso, You know better than to cry ‘Chicago’ to discredit a view with which you disagree 😉

      The idea that competition authorities devote their limited resources to the most serious infringements is not only advanced by a bunch of evil (and possibly baby-eating) Chicagoans, but also by the European Commission itself. After all, the Commission issued a Guidance on its enforcement priorities (then conveniently ignored in the Google case) and has publicly and repeatedly declared that cartels are its no 1 priority

      I am afraid we will look back and we will see the Google commitments as the second Internet Explorer case. Years spent on a non-issue to extract commitments that were not necessary and that do not achieve anything significant

      On overzealous enforcement vs. prosecutorial bias: I would agree with you if the Commission had issued by now a statement of objections, which (surprise) it refuses to issue.

      Pablo Ibanez

      3 October 2013 at 9:05 pm

  3. Come on, I give you that Chicago has produced admirable people, such as… Michael Jordan and Obama.

    Or do they come from Brooklyn and Hawai? 😉

    In any event, there must be some worthy Chicagoans… somewhere.

    Alfonso Lamadrid

    3 October 2013 at 9:14 pm

  4. DonaldTrump

    3 October 2013 at 9:17 pm


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