Relaxing whilst doing Competition Law is not an Oxymoron

Archive for January 2014

Oops! Anecdotal evidence on the assessment of evidence

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As I mentioned on a previous post, for quite some time now I have been attempting (or rather planning) to finish a lengthy piece about evidence in cartel cases. Any of you weird enough to also find these things interesting –or who are otherwise obliged to follow the developments in this area- might have also noticed an increased willingness on the part of EU Courts to engage in a critical analysis of factual elements regarding evidence.

One illustration of this intermittent but commendable approach can be seen in a recent Judgment in case T-379/10. The Judgment concluded that the Commission did not have sufficient and reliable evidence to find that there had been a particular infringement (an agreement on minimum prices for low end ceramic products for the French market in 2004 by the members of an association –AFICS-).

In paras. 110-121 of the Judgment the Court motivates its conclusion, assessing one by one each of the four items of evidence put forward by the Commission. In a nutshell, it rules that (i) a third party’s reply to the SO wasn’t valid evidence because it had not been disclosed during the administrative procedure; (ii) that leniency statements by another party, given that they are contested, are not “on their own” sufficient proof of the infringement; (iii) that a chart provided together with a leniency application wasn’t enough, because it was “undated and contains nothing that might link it to the AFICS meeting of 25 February 2004 or to any anti-competitive discussions (…) In particular, the chart does not mention the names of competitors or any minimum or maximum prices which those competitors should apply”; and (iv) that yet another party’s leniency application, despite confirming exchanges of minimum prices within AFICS during 2002-2004, disputed the recollection of facts related to the specific meeting of February 2004. [Keep this last bit in mind; we’ll come back to it in a sec].

Few national Courts would have engaged in a similar assessment. The easy way out would’ve been to say that (ii) and (iv) corroborated each other and were moreover corroborated by (iii), and possibly also by (i). Since the appraisal of factual evidence is not a matter of law (however malleable this may be), that assessment would have most likely not been appealed before the ECJ. The GC nevertheless did not take this safe shortcut, and it should be commended for that rigorous approach. I wish all Courts did the same.

There is a problem, though. This sort of assessment occurs in some cases but not in others. For the most extreme example possible (I’m not aware that this has ever happened before), see…. the very same infringement!! Yep, in two other parallel Judgments issued on the same day, by the same Judges and in relation to the same facts (case T-373/10, paras. 286-296; and T-364/10, para 324), the General Court declares that that very same alleged infringement (really, the same one, the agreement on minimum prices at the meeting of February 24 2004) had been properly found by the Commission.

And the reasoning to do so resorts pretty much to the shortcut I described above; i.e. that (ii) and (iv) corroborated each other. What is more, the party that made the leniency statements that I referred to above as item (iv) actually received a 6% fine reduction for having contributed to proving that infringement (yes, the one that had not been proved in the parallel case!).

So we have two different solutions to the same exact issue. Not sure about how this gets fixed now (I understand there are pending appeals against these Judgment).

I have some friends who like to claim that no one reads Judgments anymore, but I thought that was only endemic outside the Court itself…  😉  In the Court’s defense, however, I guess this -among other things- is what may happen when the workload is very significant and Member States don’t agree on increasing resources (i.e. the number of Judges).

Have a great weekend!

Written by Alfonso Lamadrid

24 January 2014 at 3:07 pm

Posted in Case-Law

State aid: you don’t know what you’re missing (+ thicko of the day award)

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Some of you might remember one of ours posts titled State aid conferences: that’s where the fun is! (Michael O’Leary and Kim Jong Il make for a great marketing combination and attracted quite a few readers) [Btw, today’s picture features another “peculiar” character; see below for an explanation].

In reality, and jokes aside, State aid is a field where much is currently happening, and that most antitrust lawyers often fail to follow and even perceive as distant.  Let me explain why that may not make much sense:

Off the top of my head, I would say that around 40% of DG Comp’s decisional output and resources are devoted to State aid. In economic terms, State aid issues generally have much greater repercussions than most antitrust cases (to put just one example, the guys at my office are advising Spain on how to use some tenths of billions granted by the European Council to restructure the financial sector). The substantive issues are no less interesting, complex, and challenging as the one’s posed by antitrust law.

On the other hand, to be sure, political interference is much more frequent, intense, and often less camouflaged (politicians, very particularly French and British ones, seem to be the ones realizing about the impact of these rules) than in antitrust. You might have read this morning about the French Industry Minister, Arnaud Montebourg, openly attacking both State aid rules in general and Vice-President Almunia in particular. In the Minister’s words, the Commission lives in a “legal delirium” and “makes up rules that don’t exist in the Treaties in order to perpetuate its powers”. He also referred to the Commissioner an “obsolete liberal integrist” and asserted that he has the backing of 11 Member States to “revise and liberalize State aid”. For once I will be the controversial one here instead of Nico, and I’ll refer to Monsieur Montebourg as the first recipient of the “Thicko of the day” award (pictured above proudly receiving his trophy)    🙂

Despite all the above (the fun, the legal complexity and the political and economic importance), State aid is not paid the attention it deserves by practicing lawyers. Why? Easy:  because those most directly affected often seem to be public authorities (many companies haven’t yet understood the opportunities and the risks associated to these rules), and those don’t pay as high bills as private companies do. (I guess efficiency and profit-maximizing related incentives also give rise to market failures/externalities).

Whereas I agree with the idea that State aid DNA shares more chromosomes with internal market rules than with antitrust law, there are some common feature between the two disciplines. Aside from the fact that they were placed in the same chapter of the Treaty –which led to their enforcement being entrusted to the same body: DG Comp-, State aid law is also always constantly in the making and questioning itself, which is what initially seduced me from antitrust.

An example: on January 17th the European Commission launched a consultation paper on the very the notion of aid. Think about it; no one would dare of doing the same in antitrust, even if very few people (perhaps with the exception of the influential Giuliano Marenco) have a comprehensive theory to explain what a restriction of competition actually is (an idea I also stated here and here).

There’s loads of “low-hanging fruit” in this domain. If you’re interested in an overview of the legal issues involved in determining what an State aid really is, I very strongly encourage you to read Andrea Biondi’s recent piece: State aid is falling down, falling down: An analysis of the case law on the notion of aid (very recently published in Common Market Law Review).

In the past few weeks I’ve taken a few initiatives to compensate for our State aid deficit. On a personal level, I got heavily involved together with José Luis Buendía in drafting and lodging no less than 12 State aid appeals concerning a particularly controverted and interesting decision (little did I know that I’d have to do that in the course of the Christmas holidays; btw, the experience left me wondering how we could manage in the pre e-Curia days). On a blog-related level, we’ve just asked a couple of the best minds in the field to become regular contributors to Chillin’Competition. We hope to be able to announce their coming on board soon.

Written by Alfonso Lamadrid

23 January 2014 at 5:58 pm

Milton Friedman and EU Competition Law. Did you know?

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That the Chicago School has had a profound and lasting impact on competition law analysis is well-known. That Milton Friedman, the intellectual leader of the most legendary of Economics Departments, played a (minor) role in the creation of an EU competition law system, is probably ignored by many of our readers.

As they explain in their memoirs, Milton and Rose Friedman spent some months in Paris in 1950, working for the Marshall Plan agency. Milton’s main task during his time in France was to analyse the Schuman Plan. He expressed concern that the project would lead to the ‘substitution of a single super-monopoly for the present collection of monopolies’ and that the ‘fine words about “competition” and “single market” have been interpreted to mean centrally directed and controlled industries’.

This passage is useful to put things in perspective. Many contemporary commentators tend to see the ordoliberals and the Chicago School as two extremes in a continuum. Against the widespread view, Milton Friedman’s account suggests instead that he shared with the ordoliberals of the time a concern with central-planning and with the cartelisation of key industries. Both saw competition as necessary for the emergence of a genuinely free and democratic society. And the rest is after all just details 😉


Written by Alfonso Lamadrid

22 January 2014 at 4:51 pm

Posted in Uncategorized

BIICL’s merger conference + AIJA’s tech conference + a pub-related question

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The British Institute of International and Comparative Law will be holding its 11th annual conference in Brussels tomorrow. The line-up of speakers is quite impressive and the topics extremely timely; you can check them out here: 11th_BIICL_merger_conference

In case you’re too lazy to click on the above hyperlink to the program, just know that the panels will address the following subjects:

 – Screens and inferences in mergers: has DG Comp opened the Pandora’s box of price pressure tests?

Remedies and Efficiencies – What Really Compensates for the Loss of Competition?

Hot topics: Minority Stakes, Procedural Simplification, the Rise of MOFCOM.

Apologies to Philip Marsden, to whom I said I’d advertise this a bit more in advance…

Also, be aware that the early bird rate offer for AIJA’s must-attend Bruges conference on Antitrust and Technology is expiring today. For more info, click here:

P.S. And speaking of Bruges, on Wednesday I’ll be visiting the College of Europe as part of Garrigues’ recruitment process. I was told yesterday that De Garre (the real reason why I wanted to go to Bruges) is closed these days; if any student can give any inside-information, that’d be much appreciated 😉

Written by Alfonso Lamadrid

20 January 2014 at 1:12 pm

Posted in Events

New Issue of European Competition Journal

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Blank bookcover with clipping path


Volume 9 . Number 3 . December 2013

The 3rd issue of the 2013 volume of European Competition Journal is now available online.


To access this issue online and purchase individual papers please click here.


For further information about European Competition Journal, please click here.


Antitrust Marathon V: When in Rome Public and Private Enforcement of Competition Law

A discussion led by Philip Marsden, Spencer Weber Waller and Philipp Fabbio


Topic 1: Public–Private Partnerships for Effective Enforcement

Public–Private Partnerships for Effective Enforcement: Some “Hybrid” Insights?

Philip Marsden

Topic 2: Effective Injunctive Relief

Effective Injunctive Relief

Spencer Weber Waller

Topic 3: Private Actions for Damages

Private Actions for Damages

Philipp Fabbio

Topic 4: Criminal Enforcement

Real Crime: Criminal Competition Law

Susan Beth Farmer

Abstract: The Antitrust Marathon is a long-running series of roundtable discussions sponsored by the Institute for Consumer Antitrust Studies of Loyola University Chicago School of Law and the Competition Law Forum of the British Institute of International and Comparative Law, focusing on enduring issues of comparative competition law. These discussions always take place the day before or after the great marathon races of the world which some of the participants also endure. However, no running is required for the roundtable discussion itself. Past Antitrust Marathons have focused on Abuse of Dominance, Antitrust and the Rule of Law; Competition and Consumer Protection, and other topics, and have been held in Chicago, London, Boston and Dublin. We are grateful to the Italian Competition Authority and the University of Rome I (Sapienza) for hosting and being co- sponsors of the 2013 Antitrust Marathon.

Please click here to purchase paper

Read the rest of this entry »

Written by Nicolas Petit

20 January 2014 at 11:40 am


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Vote for me friends: here.

And three questions/remarks:

1. Why wasn’t Alfonso’s great piece on “Antitrust and the policital centerselected in the Business section? This was the single most read piece in CPI last year.

2. Will the prize be effectively awarded this year? I was one of the laureates two years ago, but I am still awaiting my invitation to GWU.  It goes without saying that if I win again this year, I am happy to give two lectures at GWU on the same trip.

3. Why has the voting count disappeared this year? 2 years ago, you could see the number of votes attracted by papers. This year not.

Written by Nicolas Petit

19 January 2014 at 6:59 pm

Posted in Uncategorized

Follow-on thoughts on (and beyond) Microsoft/Nokia (by Luis Ortiz Blanco)

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[Note by Alfonso: A few weeks ago I wrote a brief post regarding one particular aspect of the Commission’s press release about the Microsoft/Nokia decision that caught my attention. Before posting it, I discussed the matter with two of my bosses’ colleagues: Luis Ortiz Blanco and Marcos Araujo, both with significantly more merger experience than myself, and both of whom initially agreed with the point I was trying to make. A few days ago this question came up again, and I managed to extract from Luis the commitment that he would write his views on a guest post here (all previous attempts to get him to do that and a Friday Slot interview were unsuccessful…). Luis needs no introduction; he’s an exceptional person, professor, lawyer, and was even also one of the best men at my wedding… He’s also the reason why I work in competition law, but that’s a long story. I leave you with him].

Readers of this blog may by now be familiarized with Alfonso’s and Nicolas’ well-known “persistence”. I admit to be and old-school guy, more prone to do my writings with time, pen and paper rather than swiftly and informally on blogs, but this time they caught me off guard and suggested an interesting topic, so here I am, giving blogging a try.

Despite the title of this blog entry, my intention is not to comment on the Microsoft/Nokia decision specifically, not the least because the decision is not yet available and I have not directly or indirectly worked on the case. My intention is to discuss an interesting theoretical point that appears to have arisen in that case and that prompts very relevant legal question for practitioners, academics and competition authorities which go beyond the facts of a given matter: do or should merger control rules and remedies apply also to impediments to competition that a transaction may generate on the seller’s side?

Alfonso already touched on this issue in a previous post. In my view, he rightly identified what I also see as an erred reasoning in the European Commission’s press release, according to which:

  • The Commission considers that any possible competition concerns, which might arise from the conduct of Nokia, following the transaction, in the licensing of the patent portfolio for smart mobile devices which it has retained falls outside the scope of the EU Merger Regulation. The Commission cannot take account of such concerns in the assessment of the current transaction. Indeed, Nokia is the seller whereas the Commission’s investigation relates to the merged entity.

Now, do really merger control rules really relate only to the merged entity, to the exclusion of the seller?

Prior to providing you with my answer to this question, I would remark that, in my experience, it is most unusual to see the European Commission (or any other competition authority for that matter) self-limiting its own powers. Competition enforcers often tend to do the contrary, that is, to explore the powers they have, even if at the risk of perhaps going beyond them at times.

If among the readers of this blog is the one person that bought my book Market Power in EU Antitrust Law, she or he might recall the criticism I directed (pp. 77-78) at a few cases (ExxonMobil, and particularly at Grupo Villar Mir/EnBW/Hidroelectrica del Cantábrico and EnBW/EDP/Cajastur/Hidrocantábrico in relation to the ‘third-party dominance theory”) in which the Commission had intervened aggressively on the market in order to address effects unrelated to the transaction. In those cases the Commission extended and arguably exceeded its powers because of its will to address what it saw as a competitive problem. In its Microsoft/Nokia press release, however, the Commission does the contrary: it appears to restrain or limit the powers it has in order to justify not evaluating what many saw as a competitive problem.

This stance is all the more surprising if one recalls that in the past the Commission has accepted/required some “soft commitments”  in Oracle/Sun and, in a  more similar setting, on the part of Google at the time it acquired Motorola Mobility. The theory of harm in both the latter case and Microsoft/Nokia related to the alleged possible anticompetitive use of patent portfolios. If anything, Microsoft/Nokia would seem to give rise to increased suspicion [the deal was structured in a way that has resulted in an unusual situation: Microsoft buys Nokia’s mobile device business but not valuable mobile device patents, which it will only license. Nokia, in turn, will be under pressure to assert its patents aggressively, may possibly also act under the influence of Microsoft, and would be immune from possible retaliatory strategies because it will not manufacture smartphones anymore. The move is smart, but, in my personal view, maybe also a bit obvious too].

The sole argument seemingly adduced by the Commission to justify its different treatment of the two deals seems to be the precisely the one we are discussing in this post. But, think for a second, would it make sense to endorse an interpretation of the merger regulation that would enable parties to avoid scrutiny by carefully tailoring the structure of a deal?

Now, and more importantly, why do I say that the Commission must have the power to assess the effects of a merger on the selling party?

First of all, because it makes sense. If a merger does affect the incentives of the players in a given market in such a way that competition may be significantly impeded, there would seem to be no valid reasons for competition authorities not to look at the problem and, where necessary, accept (i.e. demand) commitments The contrary would undermine the effectiveness of the merger control system. Why could not the Commission condition the authorization of a transaction to a commitment from one of the parties to it (the seller)?

Secondly, because as Alfonso pointed out in his previous post, the letter of the Merger Regulation supports this idea. He referred to recital 25 of the Horizontal Merger Guidelines; I would also argue that the references in articles 6(2) and 8(2) to “modifications [of the concentration] by the undertakings concerned” shall logically encompass the parties to the transaction (the only ones that can modify it), which obviously would include the seller.

Thirdly, because the Commission’s practice reveals that in the past remedies have been required from the selling party. Think of cases such as E.ON/MOL, where the commitments accepted by the Commission concerned the seller (interestingly, the commitment was drafted in a way such that E.ON would “undertake to procure MOL to dispose of [certain shares in the transferred companies]’. Think also of Alcatel/Telettra, where assurances by a third-party (Telefonica) were relied on by the Commission in accepting commitments. This is not to mention the cases in which the Commission relied on Member State’s (i.e. third parties) assertions and declarations of intentions in support of certain commitments.

Perhaps the Commission would benefit from a third party appeal (not that these have been successful lately) prompting the Courts to rule that the Institution has more powers than it now purports to have. Once again –just like it happened in Camera Care regarding interim measures (a story that I always like to tell my students about)- the Commission could experience the serendipity of obtaining increased powers without even seeking them.

Written by Alfonso Lamadrid

17 January 2014 at 1:31 pm