Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for February 2014

Two-sided markets in merger and abuse of dominance cases

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When you have a 8 9 10 to 9 ? job it’s often quite hard to do things on the side, and, between us, it may not make much sense that many of them are work-related. Only this month, and in addition to ordinary work -which included 5 Court deadlines- and blog posting, I had to lecture in Madrid about 102 (intro, tying and refusal to deal in 3 hours), participate in the panel on interop at AIJA’s antitrust and tech conference on a Saturday morning, finish and present a paper on evidence in cartel cases, and lecture -next Friday- for 6 hours at the Brussels School of Competition on procedure. And since I thought it would be the quietest month in sight, I took a week off for my postponed Christmas holidays (not very smart, no). Overall I spent almost as much times in planes (11 flights this month) as in the office, and had to compensate at the cost of sleeping hours.

Why should you care about all this? You shouldn’t; this is all to explain why during this whole month I kept on swearing myself that -blogging aside- I would refuse any non-work projects for the next few months. Well, said and not done:

On 3 April ERA will be hosting an afternoon workshop on Two sided markets in merger and abuse of dominance cases here in Brussels. They couldn’t have chosen a more interesting topic, so I gladly accepted to chair it. Not only is the subject matter a fascinating one, it will also be dealt with by two great panellists: Thomas Graf (Cleary Gottlieb) and Lars Wiethaus (E.CA Economics).

The program is available here: Two Sided Markets in Merger and Abuse of Dominance Cases (ERA)

Written by Alfonso Lamadrid

26 February 2014 at 1:10 pm

WhatsApp, Facebook?

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A few hours ago Facebook announced its purchase of WhatsApp, which has been -more or less- valued at over 13 billion euros, one of the most expensive tech aquisitions ever.

As any well-informed competition lawyer may have learnt from recent case-law, this may seem like a risky investment: WhatsApp operates in a dynamic market, in which barriers to entry are said to be almost inexistent, in which there are no technical or economic obstacles to switching to a competing provider (particularly for small groups of people), in which services are mostly provided for free, and in which, despite the lack interconnection, having the largest network with hundreds of millions of users does not give rise to network effects providing a competitive advantage….

If such reasoning were right, it’d be hard to see why anyone would invest over $40 per user of a 55 employees company.

Bitter ironies aside, this deal raises another interesting question: given WhatsApp’s limited turnover I guess it’s likely that the deal will fall outside EU merger notification thresholds. Now, should it? I don’t have a stance on this, but now that there are so many ongoing discussions about the reform of the scope of the Merger Control Regulation, it could perhaps be useful to reflect on whether turnover thresholds are well-suited to reach mergers in the era of free services, in which turnover may not always be good proxy to competitive significance. Think of the possibility that depending on market definition, these transactions could only have to be notified in jurisdictions contemplating market share thresholds (which I’ve always criticized but that remain in place in Spain and Portugal); does that make sense? To be sure, I’m not saying this merger raises any substantive competition concerns; my point is a more general one unrelated to the specificities of any particular case.

Written by Alfonso Lamadrid

21 February 2014 at 3:31 pm

Antitrust and Tech Seminar Materials

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A few days ago I participated at a very interesting AIJA seminar in Bruges on Antitrust and Technology. All panel discussions were great, but I’m particularly grateful to Pablo Ibañez (LSE) and Kevin Coates (DG Comp) for their participation in the panel I moderated on interoperability issues, which was truly excellent (and not because of me).

The presentations projected at the conference have been made available at AIJA’s website (I include the hyperlinks below for your convenience):

  • Technology Licensing and the New TTBER

Dominic Muyldermans – Exclusion of termination for challenge of IP

Olivier Sasserath – Exclusion of the exclusive grant-back obligations

Anna Vernet – update after public consultation

Stefan Vollering – Big Change on a Minor Issue

  • Keynote speech – With great power comes great responsibility

Dr Philip Marsden – With great power comes great responsibility

  • Caught in the antitrust web -Regulating internet services

Gerardo Faundez – Travel as evolving market

Thomas Graf – The EU Google Investigation

Silke Hossenfelder – German Antitrust Cases in the Internet Economy

Sebastian Jungermann – Regulating internet services

  • Patent litigation and settlements -The limits of settlements and Pay-for-delay

Tamar Dolev-Green – Pay-for-delay

Kyriakos Fountoukakos – Patent litigation settlements

Simone Gambuto – latanoprost-pfizer saga in Italy

  • Patent strategies and abuse of dominance What are the antitrust boundaries

Miguel Rato and Nicolas Petit – Abuse in Technology Enabled Markets

Maria Troberg – Patent Strategies and abuse of Dominance

Jan Peter Van der Veer – An economic perspective on patent strategies

  • Competition law and interoperability

Pablo Ibanez Colomo – Interoperability issues under EU Competition Law

Alfonso Lamadrid – Interoperability

 

(Image quite possibly subject to copyright)

Written by Alfonso Lamadrid

20 February 2014 at 11:22 am

Nico’s temporary good bye

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As Nicolas announced on Sunday, he has just joined DG Comp and won’t be posting for 6 months. I’ve only a couple of things to say:

– To the European Commission (which offered him a job and will now keep his mouth shut and his pen down): very cunning…

– To Nicolas: you’ll be missed and, despite some possible changes, this blog will stick to its original purpose: providing the competition law community with lame jokes and dodgy legal analysis

Written by Alfonso Lamadrid

19 February 2014 at 9:17 pm

Posted in Hotch Potch

A high-level football (soccer) quarrel

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On December 17 Ombudsman Emily O’Reilly stated that there could be an appearance of “conflict of interest” on the fact that the European Commission had taken too long to open a State aid investigation affecting, among others, Athletic de Bilbao, the team apparently supported by Vice-President Almunia.

No kidding, look:

The Commission has failed to act on this complaint for more than four years. Not only is this bad administration, but to the European public it can look like a conflict of interest given the Commissioner’s strong links to one of the football clubs in question. In my inquiry, I have not looked into the merits of the allegations concerning the breach of State Aid rules. I trust, however, that the Commission will decide to open an investigation tomorrow in order to investigate the facts and dispel any suspicions.” (see here)

The day following this a bit absurd unusual reproach, the Commission did open an investigation which, by the way, had the effect of suddenly and exponentially multiplying the number of State aid experts in my home-country.

And last week we learnt –thanks to Lewis Crofts and MLex– that the Commissioner –who by now must be, understandably, fed up of being spied upon and even of having Spanish press report on personal matters- immediately responded to Ms. O’Reilly, explaining that:

I am also a Spanish citizen, a member of the Spanish Socialist Workers’ Party, a keen opera-goer, I enjoy cinema and I use the Internet every day (…). These elements are however irrelevant when it comes to the commission adopting decisions on State aid regarding Spanish cases, or granted by center-left governments, or benefiting cinema or culture in general, or to tackling antitrust issues with Microsoft and Google”.

It is certainly quite unusual in the EU context to point out at “apparent biases” in the way Ms. O’Reilly did, and it makes it more striking that the bias in this case consisted in supporting a given football club.

For instance, we’d absolutely never dare to suggest or imply that it may be relevant to the investigation that Ms. O’Relly is Irish and that Irish football teams haven’t fared well against Spanish teams  (with the last Irish defeat occurring in the course of the procedure before the Ombudswoman’s office!)   🙂

By the way, an “interesting” fact for competition geeks: Ms. O Reilly previously worked at Magill and RTE, two of the parties to the well-known Magill case.

P.S.  For the record, we predicted this State aid to football clubs mess almost 4 years ago (see here).

Written by Alfonso Lamadrid

19 February 2014 at 1:55 pm

Recent developments in abuse of dominance and merger control

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Next Friday we’ll be holding the annual seminar on Recent developments in abuse of dominance and merger control within the framework of the course that Luis Ortiz and myself direct in Madrid. Starting at 16.00, this seminar will feature:

Cecilio Madero (Deputy Director General, DG Comp): Introduction and overview.

Nicholas Banasevic (Head of Unit, DG Comp): Competition law and Intellectual Property: Recent developments.

UPDATE. The intervention on Recent developments in merger control has been cancelled.

Milan Kristof (Référendaire at the European Court of Justice): Recent developments in the case law of EU Courts.

For more info you can contact the course’s secretary at competencia@ieb.es or drop me a line at alfonso.lamadrid@garrigues.com (I will be travelling for the next 30 hours (including 3 very tedious transfers…) so don’t expect a rapid response from me).

Written by Alfonso Lamadrid

17 February 2014 at 5:15 pm

Posted in Uncategorized

Bye bye

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téléchargement

As Alfonso hinted in a previous post, I will be an “atypical” trainee at DG COMP in the next 6 months. 

The stage starts tomorrow, and whilst I keep my ULg, GCLC and BSC activities, I have decided to discontinue my posts on the blog during my stay at COMP.

Alfonso will of course remain active. And I’ll be back in full force in 6 months.

Meanwhile, you can still write to me at my usual university address.

This post also gives me a last opportunity to share with you several recent presentations and papers:

With Alfonso, you guys are in good hands.

And my posts will presumably be better informed when I return in 6 months.

 

 

 

 

Written by Nicolas Petit

16 February 2014 at 5:27 pm