Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Prof. Whish on the Intel Judgment

with 9 comments

Professor Richard Whish (click here for his Friday Slot interview with us) has just written an editorial piece for the Journal of European Competition Law and Practice commenting on the General Court’s Intel Judgment (for our previous publications on the Judgment, see Pablo Ibañez´s “Intel and the problem with wrong economic assumptions” as well as the post on Wouter Wils’ piece, available here) [Btw, Pablo has written a proper article on the subject that will be out in a few days].

The editorial, which we are making available with the consent of both Prof. Whish and JECLP (thanks very much to both), predicts that “the Court of Justice will uphold the judgment of the General Court, not because it believes in the Dark Ages and enjoys wreckage, but because the judgment is perfectly sensible“. It then goes on to develop the reasons why he finds some criticism targetting the Judgment unconvincing.

The piece is as succint as it is interesting, so instead of summarizing it, we leave you with it:

R.Whish_ Intel v Commission_Keep Calm and Carry On _JECLP

Written by Alfonso Lamadrid

3 December 2014 at 11:58 am

Posted in Case-Law

9 Responses

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  1. The Whish op-ed is a nice read. But I wonder how the proposed cocktail work in practice? If you look at it carefully how do you “require the Commission to show an appreciable effect on the market” and at the same time let it “apply the rule that exclusivity is presumed to be abusive”. There’s a big flaw in the reasoning here.

    Similarly, I very much like the idea that all rules have some form. But this is an oversimplifcation of the current debate. Everyone agrees it’s just a matter of degree, between forms and effects. Proponents of effects-based assessments dont contest this. The Guidance Paper, itself, formalised categories of abuse for the assessment under Article 102 TFEU. What is at play is the degree of formalism to be followed in the assessment of economic evidence. As Alfonso wrote yesterday, there is a peril in oversimplicity, that of losing credibility. The argument is all too complex to be left to a binary 0-1, forms-effects discussion.

    A number of factual incorrections also affect Prof Whish’s argument. To take just one of them, contrary to what he argues, Tomra and Intel have been presented by COMP officials as “textbook examples” of the more economic approach, including in the defunct EU Competition Policy Newsletter (see e F. Maier-Rigaud and D. Vaigauskaite, “Prokent/Tomra, a textbook case? Abuse of dominance under perfect information” (Summer 2006) 2 Competition Policy Newsletter).

    Lastly I am puzzled by this edito, because Prof Whish has expressed a somewhat inconsistent view in a previous post https://chillingcompetition.com/2012/02/03/the-friday-slot-4-richard-whish/). In the Friday Slot he talked, and complained about per se illegality. He says that per se illegality is not what Intel conveys, because the Domco can argue objective justifications. But let’s cut the crap here: I bet anyone to advance instances of cases in which Domcos have succesfully articulated an objective justification.

    To cut this comment short, a final question: has this paper been financed? Disclosure would help. Most papers written before, except that of Pablo exhibit some sense of bias. Venit’s, for his clients. The hearing officer for his own (or previous) shop (the LS). Could it be that Prof Whish too is a “practice-oriented academic” as denounced powerfully by W. Wils?

    DomHemingway

    3 December 2014 at 2:17 pm

    • Pointing to “factual incorrections”, the commentator notes “Tomra and Intel have been presented by COMP officials as “textbook examples” of the more economic approach, including in the defunct EU Competition Policy Newsletter (see e F. Maier-Rigaud and D. Vaigauskaite, “Prokent/Tomra, a textbook case? Abuse of dominance under perfect information” (Summer 2006) 2 Competition Policy Newsletter)”. First, since the article is of 2006, I guess it cannot discuss the Intel decision. Second, the commentator appears to confuse the Tomra judgment and the Tomra decision. The decision, as well as the pleadings before the court, contained quite a lot of economics, Whether the judgment finally does not discuss certain matters cannot certainly be the fault of the two authors of that article, or Mr Whish. Actually, the article is written well before the judgments. I hope in the future people will check the facts before referring to “factual incorrections”. It is quite easy, one just needs to read the decisions and the pleadings (publicly available under regulaton 1049).

      Joan

      9 December 2014 at 6:37 pm

      • It is obvious that I was talking about the Commission decision(s). Sorry for the misunderstanding. The Commission decisions in Tomra and Intel make clear that rebates constitute abusive pricing practices. More on Commission officials endorsing effects: http://ec.europa.eu/competition/publications/cpn/2009_2_10.pdf

        Dom

        9 December 2014 at 8:51 pm

  2. How quickly time passes.

    Richard Whish, Competition Law (6th edn, OUP 2008), p. 675:

    ‘This language [Hoffmann-La Roche, para 89] suggests a per se approach on the part of the ECJ, that any single branding agreement on the part of a dominant undertaking is abusive. However, it is questionable whether it is appropriate to apply per se rules under Article 82: a preferable position would be that liability is dependent on plausible evidence that the agreement could foreclose access to the market’.

    Richard Whish and David Bailey, Competition Law (7th edn, OUP 2012), p. 730 — Chapter 18 Abuse of Dominance (2): Pricing Practices:

    ‘The test set out in paragraph 89 of Hoffmann-La Roche (and in subsequent cases) is expressed as a per se rule; however, as has been pointed out in chapter 5, it is highly questionable whether per se illegality is appropriate under Article 102: this is particularly so in the case of rebates. Most rebates are simply manifestation of the competitive process; customers obviously benefit from the lower price that a rebate necessarily results in: a point acknowledged by the Commission’s Guidance on Article 102 Enforcement Priorities. The Guidance should also mean that future cases will concern rebates which the Commission considers to have had, or to be likely to have, an anti-competitive foreclosing effect. If this is the case, and, if, for example, the Commission does consistently apply the ‘as-efficient’ competitor test to rebates, over time this should have a positive influence on the content of the law’.

    Lionel Hutz

    3 December 2014 at 3:11 pm

  3. I agree with DomHemingway that Richard Whish is not consistent in arguing for a requirement of “appreciability” in Article 102, if that means “appreciable effect”. But that’s only a criticism of his quibbles with paragraph 116 of the judgment. It does not dent his general stance on the Intel judgment, which I largely share.
    The other points made by commenters above all boil down to saying that they had understood Whish to hold different views in the past. If critics find nothing better, Richard Whish does not have to lose much sleep. Personally, I had understood quite well in previous writings that Professor Whish believes that there are no per se rules in EU competition law; he is of course entirely right, and I don’t read anything different in this piece. If anything, Richard Whish may have occasionally fallen in the trap of applying the “per se / rule of reason” jargon to EU competition law, where it makes no sense.
    The sooner we start to exit the strictures of imported “per se / rule of reason” categories, and attempt to work with EU rules in their own system, the faster things will fall into place. Paul Nihoul’s article, cited by Whish, seems like a good starting point to me.
    In my experience, it is true that Domcos never put forward objective justification or efficiencies in Article 102 cases. Let’s be clear, because the commenters above may have missed this: it is not that efficiencies are being rejected or are “unsuccessful”; in most cases, they are simply not put forward at all. The only explanations I see are (first explanation) that DomCo has not been able to find a plausible efficiency story applying to their conduct, or (second explanation) that the DomCos and their advisors were betting on a home run, i.e. they thought that obviating an efficiency discussion was the best way to press for a major change in the law: a costly and irresponsible strategic gamble if you ask me.
    As regards research financed by interested parties, I am all for disclosures. When somebody like Richard Whish does not refer to any financing, I naturally understand that there is no financing. As regards the Hearing Officer, we can be pretty sure that his papers are never financed by anyone. I fail to understand why his allegiances and “biases” would be in favour of a “previous” shop rather than the hand that currently feeds him. That would not be economically rational.

    Niemand-ist-perfekt

    5 December 2014 at 6:33 pm

  4. Hi Niemand, I respectfully disagree (though I agree that no one is perfect, not even our god R. Whish). I am a big fan of R. Whish myself. But I was flabbergasted by this editorial, and the comments on this blog. If you write repeatedly in books and papers that you stand in favour of position X, and then that all of a sudden you stand against it, as a reader, you expect an explainer for the u-turn. Any peer reviewed journal – or by the same matter a court cross-examining an expert witness – would grill the author on a such an issue. Also, if I may, your point on objective justifications is a bit circular. If I understand, you reject the blame on Domcos, in the sense they would never raise efficiencies. But you could also argue that there is so little place for them in law and practice, that this explains why domcos not to raise them. What’s causal here? Lastly, you are probably right on the fact that the HO suffers home bias, in the sense that he works for an EU institution, and worked for it before. If I recall correctly, even the HO himself recognised this in a previous paper.

    No one is innocent

    9 December 2014 at 5:15 pm

  5. […] piece was followed by other equally interesting ones, like Richard Whish‘s (see here), and like my current co-blogger’s, which also received considerable attention (see here for […]

  6. For those who did not have the time to digest the big Intel decision. The Commission decision seems quite explicitly to endorse the Guidance Paper. See §916: “Consequently, the Commission considers that the guidance paper does not apply to this case. The Commission nevertheless takes the view that this Decision is in line with the orientations set out in the guidance paper”.

    Nicolas Petit

    17 March 2015 at 5:44 pm

    • I had stopped at § 15 in my reading (too boring) but I do not intuitively see why saying that something “does not apply” but the document is “in line with it” is an “endorsement”. The guidance paper on enforcement priorities was already “formally” adopted by the Commission, and therefore “explicitly endorsed”.

      joan

      19 March 2015 at 12:26 pm


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