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Archive for May 15th, 2014

The Diluted Legality of Competition law

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In the past days a Commission official who ranks among my preferred legal minds expressed her/his though that our discipline may not be as legal as we often think. The thought, formulated on the fly  (don’t click, very bad joke) (I told you..) , was triggered by the observation that whereas the law and legal reasoning should be cuasi cartesian, logic, certain, it’s nevertheless very often impossible to predict the outcome of a given case. [This may remind some of a Holmes’ quote: “prophecies of what the courts will do in fact, and nothing more pretentious, are what I mean by the law”].

Then on Monday a lawyer in the audience (not me, really) made a similar remark (this time at a conference in London regarding a certain case I discussed on my previous post, coincidentally published that day). The idea expressed there was that the Commission could have taken exactly the opposite conclusion it took in the face on the very same facts at issue, and it would very presumably also have been endorsed by the Court.

And a few minutes ago a colleague sent me an email discussing the spill-over effects that Alrosa has had in competition enforcement.

As much as I don’t like to admit it, all those are right and share a common theme. I guess Competition Law may indeed be partly losing its last name. I suppose an element of this could be found in other areas of law, but my feeling is that the issue is more acute in our field:

Is it because of the simplicity and vagueness of our main working provisions and the terms they use? (as I observed here, the Court itself recently acknowledged that “Article 101 or 102 TFEU are drawn up using imprecise legal concepts, such as distortion of competition or ‘abuse’ of a dominant position” ).

Is it because of the transformation of the discipline by the incorporation of economic analysis to the assessmente of legallity of market practices? (on that, you know my views). It has become popular to bash ordoliberals, but they crucially emphasised the need to preserve the competitive process through law-making, as opposed to unconstrained policy choices, and this is a lesson we may be forgetting.

Is it because of the Court’s inclination to show deference to (what they see as, and often are) specialized agencies?

Is it because of developments like Alrosa, that enable a disconnect between the problem and the solution and, in a way, may legitimize the abuse of an institutional dominant position?

Is it because of the number of the unavoidable yet more-or-less-reliable proxies (market definition, market shares, cost-assessments, object short-cuts, etc..) we use and the little certain tools we have?

Is it because law and policy-making are inextricably intertwined in our field? (in the sense that policy choices are often expressed through the choice of cases).

As with anything else, the answer is very likely cumulative and complex, but the fact is that competition law may have become a discipline where the authority’s self restraint, negotiations in the shadow of the law, disclaimers in lawyers’ risk assessments, administrative/judicial discretion, and therefore uncertainty, play a larger role than perhaps they should.

The fact that the law needs to be interpreted, or even the fact that legal reasoning can be played with has upsided (allowing me to earn a living or making the profession interesting are just two examples), but I can’t help feeling that there is something not right about it.

P.D. These are, as always, thoughts in progress. If you don’t agree with them, remember our disclaimer.

 

Written by Alfonso Lamadrid

15 May 2014 at 2:09 pm