Chillin'Competition

The amount of commentary to which the Intel ruling has given rise in less than six months is quite extraordinary. There is every reason to welcome the debate and exchange of views. Given the interest in the topic, I thought it would make sense to develop the ideas I sketched in a post published back in June. Click here to download the paper. Your comments would be most welcome (e-mail: P.Ibanez-Colomo@lse.ac.uk).

I started my LLM in Bruges in September 2003. A couple weeks into the programme, Michelin II came out. I remember vividly the discussions we had in class about it. Even for a postgraduate student with no experience it was easy to understand the significance of the judgment and its implications. 11 years have passed, I am now the one teaching LLM students, and the relevant case law continues to generate considerable controversy. It seems clear that the debate touches upon some fundamental questions in EU competition law.

The lack of clarity – in spite of the frequent and lively discussions – about the issues that are really at stake is what prompted me to write the paper. I argue that the controversy, while being of major importance, is far more limited in its nature and scope than commonly assumed. Upon closer scrutiny, it seems to me that the case law on exclusive dealing and rebates is criticised not so much because there is a disagreement about the objectives of EU competition law, but due to the tensions (or ‘frictions’, as I call them in the paper) that have arisen in the case law.

What the controversy is NOT about: This endless controversy has nothing to do with the so-called ‘more economic approach’ or ‘more economics-based approach’. I never liked these expressions. They suggest that economic analysis has been introduced by the European Commission from the top down in an attempt to change EU competition law. Nothing could be further from the truth. As I show in the paper. EU courts have always relied upon mainstream economic analysis to shape EU competition law (just think, among the many examples, of Woodpulp II or AKZO) and have frequently taken the lead in this sense. Tetra Laval and Airtours, both of which unambiguously embraced mainstream positions, are indispensable to make sense of the policy shifts observed in the course of the past decade.

Similarly, this debate is NOT about the objectives of EU competition law. As I explain at length in the paper, the current approach to exclusive dealing and rebates is not the only conceivable one under the Treaty. The prohibition, absent an objective justification, of exclusive dealing and loyalty rebates does not follow logically from the fact that the objective of EU competition law is to create a system of undistorted competition. Likewise, there is nothing in the said objective that is inimical to the use of efficiency considerations to shape the law, as rulings like AKZO, Deutsche Telekom, TeliaSonera and Post Danmark show.

How I see this controversy: EU competition law evolves and is shaped from the bottom up in an incremental manner. As a result, tensions in the case law are inevitably bound to arise. Some rulings may hint at a particular logic, while others at a different one. There is nothing wrong with that. Quite to the contrary, it is the very reason why law is fascinating as a scholarly discipline. Over time, doctrines are refined, and contradictions between cases addressed, through the interaction between (and disagreement between) judges, officials, lawyers and scholars. Nothing else is going on in relation to Intel. As I see it, the real (and only) issue at stake is that the case law on exclusive dealing and rebates is difficult to reconcile with Article 101 TFEU and Article 102 TFEU case law applying to the same or comparable practices.  Read the rest of this entry »