Chillin'Competition

The Commission’s decision in Microsoft/Skype contradicts its previous Article 102 decisions in Microsoft I (WMP) and Microsoft II (Internet Explorer).

Read §152 of Microsoft/Skype :

“consumers do not simply use whatever communications product is provided with Windows. The consumers use multiple communications services on multiple platforms, such as Apple iOS and Android, which include their own built-in communications services (Facetime and Google Talk). The parties further submit that some online communications applications such as Facetime and Viber are not even made available for the Windows platform, and yet they are very successful”.

This § tramples on the theory of harm used by the Commission to nail Microsoft in 2004 and 2009:  ie that lazy consumers do not use more than one software (no multi-homing), and that they tend to stick to the the default software preinstalled on the platform (users inertia).

Now, the § reproducted above misquotes the Commission’s decision.

In reality, § 151 starts with: “In addition, the parties claim that consumers do not simply use whatever communications product is provided with Windows” blablabla.

But is this really the parties talking here?

Take a look at the full section of the decision:

“151. With regard to a possible tying between Skype and Microsoft’s products, the Commission considers that most of the arguments mentioned above in order to demonstrate the absence of incentives for a strategy of degradation of interoperability (in particular the necessity for Microsoft to maintain and enhance the value of the Skype brand) are also relevant to the assessment of the strategy of tying. 152. In addition, the parties claim that consumers do not simply use whatever communications product is provided with Windows. The consumers use multiple communications services on multiple platforms, such as Apple iOS and Android, which include their own built-in communications services (Facetime and Google Talk). The parties further submit that some online communications applications such as Facetime and Viber are not even made available for the Windows platform, and yet they are very successful.153. Moreover, consumers increasingly prefer services that offer online communications as part of a broader user experience such as Facebook, the recent Google+ and Gmail, which all run on Windows. 154. Competitors would therefore have many possibilities to market and many different means available to attract consumers. 155. In the course of its investigation, the Commission has not received any substantiated replies demonstrating  that Microsoft has incentives to tie Skype and Microsoft’s products”.

Read in context, §151 sounds like Commission’s thinking.

There is no rebuttal, no discussion of the parties’ submission. And §151 is planted in the middle of bunch of other Commission arguments, all supportive of the view that there is no risk of bundling.

Now, it would have looked bad for the Commission to say black in 2004 and 2009, and then reverse to white in 2011.

So our Commission friends probably decided to use the parties as scapegoats, and (i) conveniently avoid the blame of inconsistency in decision making; or more plausibly, (ii) the pain of explaining why users of communications services are geeks shopping for software, distinct from the lazy users of media players and browsers.

Improper decision drafting…

PS: stay tuned, my little finger tells me that Alfonso will report on this case very soon.

Joint Ventures and EU Competition Law by Luis Silva Morais

This book examines the treatment of joint ventures (JVs) in EU Competition Law, and at the same time provides a comparison with US law. It starts with an analysis of the rather elusive concept of JV, encompassing both concentrative JVs (subject to merger control) and non-concentrative JVs. Although focused on possible definitions of joint ventures in terms of competition law, it also includes a broader perspective (going beyond competition law) on the different legal models of structuring cooperation links between undertakings.

At the core of the book is an attempt to build an analytical model for the assessment of JVs in terms of antitrust law, especially as regards Article 101 of the TFEU. The analytical model used proposes a set of sequential analytical levels, taking into account structural factors and specific factors related to the main constituent elements of the functional programmes of JVs. The model is applied to a substantive assessment of four main types of JVs identified on the basis of their prevailing economic function: research and development JVs; production JVs; commercialization JVs; and purchasing JVs. Also covered are particular situations of joint ownership of undertakings falling short of joint control.

In the concluding part of the book recent developments in JV antitrust law are put into context within the wider reform of EU Competition Law. The book is also comprehensively updated with the latest developments concerning the reform of the EU framework of horizontal cooperation between undertakings that took place at the end of 2010.

Luis Silva Morais is a Professor at the University of Lisbon Law School (FDL) and holds a Jean Monnet Chair of EU Law (Competition and Economic Regulation). He is a founding partner of ‘Luis Silva Morais – Law Firm’ (based in Lisbon). He has been Vice-President of the Privatization Advisory Board of the Portuguese Ministry of Finance (2001-11), Member of the Board of the Portuguese Insurance and Pension Funds Supervisory Authority-ISP (1998-2001) and currently chairs the Research Centre on Regulation and Supervision of the Financial Sector of FDL in scientific partnership with the Bank of Portugal and the ISP. He is a member of several arbitral courts.

November 2013 586pp Hbk 9781841137933 RSP: £95 / €123.50

20% Discount Price: £76 / €98.80 (+ Postage and Packing)

Order Online

http://www.hartpub.co.uk/BookDetails.aspx?ISBN=9781841137933

If you would like to place an order you can do so through the Hart Publishing website (link above). To receive the discount please type the reference ‘ CC B ’ in the voucher code field and click ‘apply’.

Competition Laws, Globalization and Legal Pluralism – China’s Experience By Qianlan Wu

Building upon a theoretical framework and empirical research, this book provides a thought-provoking analysis of the interests, strategies and challenges that China has faced in developing its Anti-Monopoly Law (AML) in the context of economic globalization.

The book comprises three main parts: Part I reviews the directions of convergence of global competition law; Part II provides a contextual analysis of China’s market governance and its strategic interests; and Part III examines the latest enforcement of the Anti-Monopoly Law by focusing on the interactions between global actors and China, the relationships between Chinese competition and sectoral regulators, and the enforcement of global competition law norms in the Chinese context.

This book is one of the first to provide a critical understanding of China’s experience as a new competition regulator, set against the background of the plural sources of global competition laws.

Qianlan Wu is a Lecturer in Law and Senior Fellow of the China Policy Institute in the School of Contemporary Chinese Studies, University of Nottingham, UK. Dr Wu holds a PhD in Law from London School of Economics and Political Science and an LLM from the University of Edinburgh, UK.

November 2013   242pp     Hardback     9781849464321     RSP: £55 / €71.50

20% Discount Price: £44 / €57.20 (+ Postage and Packing)

Order Online

http://www.hartpub.co.uk/BookDetails.aspx?ISBN=9781849464321

If you would like to place an order you can do so through the Hart Publishing website (link above). To receive the discount please type the reference ‘CCB’ in the voucher code field and click ‘apply’.

In reading Commissioner Almunia’s latest speech, I thought to myself: did he changed jobs?

Or is he already campaigning for a position as Internal Market Commissioner ahead of the European elections?

I mean half of the speech is devoted to the banking union and other regulatory issues in the banking sector.

I also read Commissioner Almunia’s antepenultiam speech on the digital economy.

And here I thought to myself: some things never change.

In particular, the sticky, erroneous perception that patents are akin to monopoly.

The reasoning is not straightforward. It comes in two stages.

Stage 1. Introduce an exotic concept (here “gatekeeper“):

“We can distinguish different types of gatekeepers in the online world: search engines, patent holders, network operators, and operating systems”.

Stage 2. Equate the new concept with “dominance”:

“One of the priorities of competition control is to ensure that dominant firms and gatekeepers do not abuse their positions”

A reminder: this is nothing new. In 2004, Microsoft had already been labelled a gatekeeper.

There’s competition law everywhere,

Even in the stockpile of US diplomatic cables revealed by Wikileaks.

A document published by Wikilieaks reveals that in 2009, the US were concerned of the influence of the EU on the shaping of competition policies in Africa (through the Africomp programme).

“The United States may wish to consider becoming a donor member of AFRICOMP in terms of providing in-kind donations in the form of expert advice. Such advice could support the development of effective competition policies in Africa and ensure that European views on competition policy are not the only ones heard by AFRICOMP”

Thanks to my assistant Norman (and now fellow blogger) for the pointer.