Chillin'Competition

I laughed when Alfonso asked whether there is an Article 102 TFEU decision adopted by the Commission that I like. I laughed in part because I understand why someone might come up with such a question, but also because the image of an academic curmudgeon grumbling from an ivory tower is undeniably comical. After the healthy dose of laughter, I realised the question was more interesting than I initially thought. As is often the case with jokes, it is one that raises pretty fundamental issues. The short answer, and the sad truth, is that I do not see Commission decisions that way. I will elaborate a bit to make sure Alfonso feels compelled to answer the question that I have for him and that you will find at the bottom of the post.

I am not interested in the outcome of individual cases. Really not. I am not even sure that it is possible or meaningful to like or dislike a particular decision examined in isolation. The many posts I have written in relation to the Google investigation would have been written in any other context giving rise to the same issues. When I wrote about the GC ruling in Intel, I never sought to argue that the company had not breached Article 102 TFEU. I am interested in the way in which the law is shaped and evolves over time, and not so much in the ‘who wins’ or ‘who loses’ a specific case. These questions are necessarily relevant for civil servants and practitioners, but matter little to me.

Just take a look at what Alfonso and I wrote about Intel to illustrate the above. He presents the ruling as a ‘victory’ for the Commission and explains how the General Court carefully crafted the judgment in anticipation of the appeal. My entry, on the other hand, was devoted to the key assumption underpinning 35 years of case law on exclusive dealing and loyalty rebates. After reading my paper on these issues, a friend told me, only half-jokingly, that the title was misleading, as it was not really about Intel, but about everything. Well, exactly.

The question is also valuable in that it provides an opportunity to emphasise the difference – that can never be emphasised enough – between law and policy-making. A case may well be sound from a policy standpoint, but this fact alone does not mean that it is necessarily justified from a legal one. It is not unusual to hear people say that a particular case ‘must be right’ because the company in question is superdominant or has done something that looks mischievous. Some people have reacted to my posts on the Post Danmark saga by saying that action by the Danish competition authority was justified because it concerned the behaviour of an incumbent in a recently liberalised industry. Again, this is not the point, and it is not the reason why I wrote about the case. More important, these are dangerous arguments.

Ignoring the law to focus on the outcomes of individual cases is, and has always been, a recipe for disaster. A particular rule may seem unproblematic, from a policy-making standpoint, if it is confined to an exceptional case arising in very particular circumstances. We know well by now that, once a rule is laid down, it is only a matter of time before it is expanded in other contexts that have little to do with the specific factual scenario in which it seemed appropriate and innocuous. Alfonso likes to quote Areeda emphasising the importance of defining sensible limiting principles to enforcement in competition law. As you can see, I like to do so too. It is indeed one of the most important lessons to draw from decades of enforcement.

Just think of Intel again. I never argued that the outcome was wrong. In fact, the case is particularly interesting in that it exemplifies the commitment of the Commission to devote its resources to cases where negative effects on competition are likely. As a result of this commitment, reflected in the Guidance, it may well be the case that the prima facie prohibition of exclusive dealing and loyalty rebates does not make a practical difference when action by the Commission is at stake. This fact does not mean, however, that the perpetuation of a rule that fails to capture the lessons of experience and economic analysis is unproblematic.

The Commission may carefully choose to intervene in clear-cut cases, but what if a national court is asked to intervene in a case where anticompetitive effects are implausible? In the era of private enforcement and decentralisation, it is simply no longer possible to rely alone on the expertise of the Commission and its ability to prioritise cases. Whether or not the authority ‘gets it right’ in a particular case is not the only relevant question anymore. As the Post Danmark saga shows, much has changed since Hoffmann-La Roche, and rules and standards need to be crafted to ensure that they are accurate and administrable. These are the concerns that prompted my paper on Intel and my many posts on Article 102 TFEU. Nothing to do, as you can see, with whether I like or dislike a specific decision.

In light of this extensive answer, I feel entitled to ask Alfonso whether he believes exclusive dealing should be prohibited absent an objective justification or whether, instead, Article 102 TFEU enforcement should follow the principles set out by the Commission in the Guidance and by the Court in Delimitis. Alfonso?