Relaxing whilst doing Competition Law is not an Oxymoron

Archive for April 2015

More on EU Courts: Ian Forrester to be appointed as GC Judge & the ECJ’s “Fight Club”

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We have just learnt that Ian Forrester -our first Friday Slot interviewee and actually the person who named the Friday Slotwill be a Judge at the General Court replacing Judge Forwood. The addition of a distinguished competition law expert to the Court is always good news; congrats to him. For his interview with us, click here.

The ECJ is again news due to the controversy surrounding the planned duplication of Judgments Judges at the General Court. The tension seems to have mounted and some internal documents have become public. For the Financial Times‘ piece on this topic, click here: “The 1st rule of ECF Fight Club is about to be broken“. And speaking of the FT, I was quoted in it today in a piece on the Apple State aid case (see here).

Written by Alfonso Lamadrid

30 April 2015 at 3:47 pm

Posted in Uncategorized

Bananas – Case C-286/13 P, Dole v Commission

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Bananas have traditionally been an important product in competition law. Among others, they provoked the peculiar market definition at issue in United Brands (vitiated by the toothless fallacy :“the banana has certain characteristics , appearance , taste , softness , seedlessness , easy handling , a constant level of production which enable it to satisfy the constant needs of an important section of the population consisting of the very young , the old and the sick”), and they also inspired Kevin Coates’ “exploding banana hypothesis”.

Most recently they were the subject of the ECJ’s Judgment in Dole. A few weeks ago Pablo commented on this case focusing on how the Judgment illustrates that the “object” label is not about formal categories nor about a presumption of effects. I don’t disagree with Pablo’s views, but I think that they only tell one part of the story.

The facts

In a nutshell, employees of companies active in the banana trade apparently had numerous bilateral calls to discuss/disclose pre-pricing information (namely factors relevant for the setting of quotation prices for the forthcoming week or price trends). These exchanges of views were in a sense pure gossip, and were not liable to affect real market prices because quotation prices were neither actual prices nor the basis for the negotiation of the actual prices. Moreover, the Commission had not contested that the employees taking part in these discussions did not have the authority to set the quotation prices.

The legal issue

Against this background, the legal question raised by Dole’s third ground of appeal was notably whether it is possible to characterize the information exchanges as an infringement by object. According to Dole, the information exchange was in no way capable of reducing uncertainty on the market regarding actual prices.

The ECJ validated the General Court’s conclusions in this regard, observing essentially that information had been exchanged, that the information could be relevant to infer “signals, trends or indications”, that accordingly the exchange of info created abnormal conditions of competition, and that a given practice may have an anti-competitive object even if it does not have a direct link with consumer prices.

Why I think this is bananas

Many of you may think that there’s nothing new here, and that all this was already present in T-Mobile (and partly in the guidelines on horizontal agreements), and you would be right. This is not so much a novelty as an additional (and particularly illustrative) step in a very wrong direction.

The point I want to make today is not about whether the object label was rightly applied or not (a matter on which I have doubts, particularly if one takes seriously the requirement on the “sufficient degree of harm” set out in para 58 of Cartes Bancaires).

My point is that even if the object categorization were correct, this should only entail a procedural consequence: that the Commission would be dispensed of the burden of proving effects.  In spite of my doubts, I can see how the Commission could regard these practices as being more restrictive than not and lacking a “legitimate objective” (which was the sensible point made by Pablo in his post on the Judgment).

In my view, the widespread misconception lies in the automatic identification of “object restriction” with “very serious infringement” and even with a “cartel”. In other words, the way I see it, “object” is about obviousness, not about gravity.

Even if the practices at issue were labelled as object and not considered objectively justifiable or redeemable under 101(3), they –apparently- were little more than gossip of irrelevant employees with regard to quotations far removed from actual prices. Is that really so serious as to deserve a 60 million euro cartel fine? I don’t think so. And would the Commission have characterized it equally had it not received a leniency application? I doubt it.

A cartel is something else and is subject to a whole different level of reproach (even criminal in some jurisdictions); companies and individuals know when they are engaging in a cartel, and do not engage in it unconsciously; a cartel does have effects; a cartel is the “supreme evil of antitrust” (I’m using Scalia’s words in Trinko), and an exchange of information like this, which appears as practically irrelevant at all levels, might not be right, may be a restriction by object, but it certainly is not a cartel deserving a quasi-criminal fine. It is a venial sin, not a mortal one.

Holding the contrary is not only at odds with traditional (pre-T Mobile) case law, it also is at odds with economic reality and with the principles underlying any sanctioning regime; it is, in sum, bananas.

For earlier and more developed related views on my part, see here and here.

Written by Alfonso Lamadrid

28 April 2015 at 2:27 pm

Posted in Case-Law

Competition Rules in Banking and Financial Services

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Financial services, including banking and payments, have been one of the preferred areas of enforcement on the part of the European Commission in recent times. The cases that have taken place in this area have moreover raised a variety of peculiar challenges and issues on which we have commented on this blog and that cannot be found in other sectors: there have been two sector enquiries, landmark “object-not object” cases (Cartes Bancaires; see here), effects-cases including a 101(3) assessment (Mastercard; see here), various commitment decisions (see here), infringement decisions related to 101 – including cartel decisions imposing record-breaking fines in hybrid settlement scenarios- as well as to 102 (i.e. the Standard & Poor’s and Thomson Reuters cases dealing with the issue of access to information necessary for securities trading). All very rare as you can see, and this in only a teaser.

Those interested in a comprehensive discussion on these issues should attend the upcoming ERA’s Workshop on Application of EU Competition Rules in Banking and Financial Services, to be held in Brussels on 3 June. It will feature three top-notch speakers, and then me.

The programme is the following:

– 14:15 Competition issues in the cards and e-payments sector

Alfonso Lamadrid (Garrigues); Cédric Nouel de Buzonniere (DG Competition’s Payment Systems Unit)

– 15:00 Questions and discussion

– 15:30 Trading platforms and competition

James Modrall (Norton Rose)

– 16:00 Questions and discussion

– 16:30 Coffee break

– 17:00 Competition issues with benchmarks and indexes

Viktor Bottka (European Commission’s Legal Service)

To register, click here.

Written by Alfonso Lamadrid

27 April 2015 at 6:55 pm

Posted in Events

How to distinguish between tying and refusal to deal cases (hint: it’s not just words)

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 What's your word

I hear very often that the outcome of Google depends on whether you call it a refusal to deal or a tying case. If one sees it as a refusal to deal case, then it would be necessary to establish, at the very least, that non-discriminatory access to the search engine is indispensable. If not, the threshold would be much lower (although the Commission committed to establish anticompetitive foreclosure in tying cases in the Guidance). This approach cannot be right. The legal test that applies to a practice should not depend on what one ‘sees’, or on picking the words that one prefers (and which, no surprise, tend to coincide with the legal test that one also prefers).

What should matter when thinking about the applicable legal test to a given practice is the underlying issue, and in particular whether it is closer in nature to those underlying refusal to deal cases or tying cases instead. How could one draw the line between one and the other? This is a topic that I discuss very often in class with my students. The easiest way to go about the question is to think backwards about the case. In other words, it makes sense to think first about the remedy and then about the legal test.

In technology markets, it is not always easy to distinguish between tie-ins and refusals to deal, in the same way that it is difficult to distinguish between vertical and conglomerate mergers. What is clear, on the other hand, is that remedies in tying and refusal to deal cases are very different in nature. This explains, in turn, why the legal test under Article 102 TFEU is also very different.

The typical remedy in a tying case is an example of the good old, unsophisticated competition law. The likely or potential anticompetitive effects of tying can be easily addressed by breaking the tie-in, that is, by preventing the dominant firm from conditioning the acquisition of one product to the acquisition of another. Once tying is prohibited, concerns about the ability of the dominant firm to extend (or strengthen) its position on the market for the tied product disappear.

The remedy in refusal to deal cases takes competition law out of its comfort zone. Remedial action is no longer about a one-off, proscriptive form of intervention but about positive obligations that require monitoring. If a refusal to deal is found to be abusive, it is inevitable that the remedy will regulate the conditions of access to an input or a platform owned by an integrated firm. Remedies will, as a result, greatly interfere with the way in which a company does business. These are some of the reasons why competition law has traditionally limited to exceptional circumstances the instances in which regulated access obligations are imposed on a dominant firm.

The fact that concerns are addressed by means of access obligations on regulated terms and conditions tells you something else about the underlying issues in a case. If the dispute relates to the conditions of access to a platform or input, it also means that it does not really involve two separate products, as is in principle required in tying cases (just take a look at the Guidance). The dispute, in other words, relates to a complex product that integrates different components and not to a tie-in of distinct products. What about the Internet Explorer case? Was it not about access and tying at the same time? Indeed, but bear in mind it also was a commitments decision, which did not address substantive issues. In fact, I fully agree with the view, taken by some authors, that it was a refusal to deal case in disguise.

Where does the above leave us in relation to Google? I have written several times in the blog that I suspect that the underlying issues in the case are closer to those at stake in refusal to deal cases (hence why I mentioned last week that I am not convinced that anticompetitive foreclosure would or should suffice). It seems now clear to me that the Commission does not challenge the integration of Google’s services into the search engine, which suggests that talking about distinct products would be entirely artificial. This issue became very clear when the different rounds of commitments were discussed. The Commission has now explicitly mentioned that the remedy should be non-discriminatory access to the platform.

One could wonder whether it has become meaningless to distinguish between refusal to deal and tying cases. If drawing the line between the two is so difficult in practice, would it not make more sense to require anticompetitive foreclosure across the board, and get rid of the indispensability/new product conditions? I think it would be a terrible idea. The reasons why the legal test in refusal to deal cases is so strict are in fact as compelling as ever given the shift of the discipline towards IP-intensive and technology-intensive markets.

A separate question is of course whether the indispensability and new product conditions will be watered down in EU competition law to the point that they are no longer reliable indicators of administrative action in the field. In one way or the other, and irrespective of what courts and authorities formally say, we may end up in a situation in which, for all practical purposes, the test applying to refusals to deal and to tying cases is the same. I am more inclined to agree with this question, which is not one of principle. This is a phenomenon in which I am interested and which I follow closely. Who knows, maybe I will teach my students in a few years’ time that the Microsoft saga was the first nail in the coffin of the refusal to deal doctrine and that Google was the definitive one.

Written by Pablo Ibanez Colomo

24 April 2015 at 11:03 am

Posted in Uncategorized

About the e-commerce sector inquiry

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The Google case has kept us distracted from other interesting issues. Of the recent developments that keep piling up (including this one), Commissioner Vestager’s proposal to launch a sector inquiry into e-commerce is arguably the most relevant. The expression e-commerce is used in a relatively expansive way in the Commissioner’s anouncement, as it encompasses a variety of activities that do not necessarily belong together (other than, I suspect, involving the use an electronic device like a smartphone or a computer).

The context behind the proposal is well-known, but is precisely what makes it particularly interesting. The new Commission has given priority to the so-called Digital Single Market. The (explicit) purpose of the sector inquiry is in fact to explore the contributions that competition law can make to the policy agenda of the institution. The use of competition law as a tool to explore the feasibility of initiatives that are, more often than not, eventually addressed via ad hoc legislation has become something of a tradition (and, as far as I am concerned, a research topic). Just think of roaming or energy. In this sense, it is remarkable that the announcement itself openly presents the sector inquiry as a contribution not only to EU competition law but to other policy initiatives.

I look forward to some of the findings. According to the announcement, the Commission will examine whether there are barriers to e-commerce that limit access to websites from other Member States, based on their location or the credit card details. One would have assumed that, following the adoption of the Guidelines on vertical restraints (in particular following the ruling of the ECJ in Pierre Fabre), these issues were clear for stakeholders. It will therefore be interesting to see whether soft law instruments are truly effective in changing business conduct. And, why not say it: there is so much going on in relation to vertical restraints that some enforcement action in the area would be exciting.

The issue of geo-blocking is trickier. The statements made by several Commissioners in recent months suggest that European consumers should be able to access the content of their choice from the website of their choice. From this perspective, subscriptions to pay TV services should be accessible from anywhere in Europe. The announcement insists on the idea that geo-blocking of websites or of content is plain unacceptable.

It is not that I would be opposed to such an outcome, it is simply that it is not obvious to say that the phenomenon of geo-blocking is the consequence of an infringement of competition law provisions (as opposed to an undesirable phenomenon from a policy-making perspective). In fact, it was accepted for a long time that granting exclusive territorial licences (which then may give rise to geo-blocking) does not amount to an infringement of Article 101(1) TFEU. The issue is far less clear now. What is more, removing geo-blocking across the board may itself raise major challenges. I have dozens on questions on this aspect of the inquiry, but I guess it is better to wait for the details!

Written by Pablo Ibanez Colomo

22 April 2015 at 3:34 pm

Posted in Uncategorized

Impossible is nothing (or some thoughts on the statement of objections in Google)

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Impossible is nothing

Today, just a few hours after the Commission sent a statement of objections to Google, I have received a book I ordered a couple of weeks ago, called Do Great Cases Make Bad Law? What a wonderful coincidence. The author addresses the question, profound and fascinating, in light of 22 landmark US Supreme Court rulings. This is definitely a research exercise one could replicate by examining Article 102 TFEU case law and administrative practice.

The statement of objections in Google has just been sent, but the case has already secured its place in the hall of fame. After more than four years speculating about the legal aspects of the case, the documents issued yesterday by the Commission (see here and here) finally give a more accurate idea of the reasons why the authority has taken the preliminary view that Google has breached EU competition law. The memo is remarkable in many respects. As Alfonso explained earlier this week, it makes little sense to take a guess at this stage, but, from what I can read, the case could transform the way we think about Article 102 TFEU. The underlying issues are so fundamental, and some of the tentative theories of harm so unprecedented, that its consequences are, at least potentially, far-reaching.

What is particularly interesting is that the underlying issue is a basic one. It is in fact strange that it has not been addressed many times already. The case seems to revolve around whether, and if so, under what circumstances, a dominant firm is entitled to discriminate in favour of its own services. The Commission memo seems to take the view that, indeed, such behaviour may violate Article 102 TFEU, but it is not very clear about the conditions under which this may be the case (which is not surprising; after all, it is just a memo). In any event, one can think of three possible legal approaches to the question:

Discrimination is prima facie prohibited absent an objective justification: At times, the memo suggests that favouring one’s services is abusive by its very nature. This would make Google a by-object case. Absent an objective justification, discriminating in favour of an affiliate would be prohibited under Article 102 TFEU. According to the Commission, the prominence and growth of Google’s service since 2008 do not reflect its relative quality or its relative relevance for end-users. The document suggests, in other words, that it is not the outcome of competition on the merits.

I have explained elsewhere that it is controversial to state that dominant firms are under a general duty not to discriminate against rivals. Discrimination of the kind outlined in the memo is ubiquitous (supermarkets may give more prominence to their brands, media groups favour their own outlets and electronic equipment is often designed in a way that it only works with affiliated products). More importantly, such discrimination is more often than not pro-competitive. Trying to thrive in the marketplace by exploiting one’s advantages is what competition is all about. Similarly, it is a banality to state that markets sometimes work better when different activities are integrated. I do not know whether the Commission intends to follow a by-object line of reasoning, but it is easy to think of the far-reaching consequences for the future of Article 102 TFEU if it does. The scope of the provision would expand very significantly. Just think of the many practices that could be labelled (or re-labelled) as exclusionary discrimination.

Discrimination is abusive if it leads to anticompetitive foreclosure: The Non-Horizontal Merger Guidelines are based on an idea that contradicts the above approach. Following a vertical merger, the new entity may have an incentive to favour its own services. This is not problematic in and of itself, even when one of the merging parties holds a dominant position (and Alfonso knows a thing or two about this). Favouring an affiliate by restricting access to inputs or outlets is only an issue if it leads to ‘anticompetitive foreclosure’. This is an approach that could also be followed in Google. It would not be entirely uncontroversial – I spare you the details of why I am not entirely convinced – but it would have the advantage of consistency. Like issues would be treated alike across competition law provisions. Arguably, it would also be the logical approach for the Commission to endorse. After all, the Guidance is a pre-commitment device intended to confine administrative action to instances where anticompetitive foreclosure is likely. In this sense, it is remarkable that the word ‘foreclosure’ is not used in the memo. Not even once. The rhetoric of foreclosure is equally difficult to find in the document. This conspicuous absence raises a number of questions. Does the Commission believe that the Guidance is not relevant in Google? Is the Guidance no longer a reliable indicator of the Commission’s approach to the enforcement of Article 102 TFEU?

Discrimination is abusive if it harms consumers and innovation: The memo suggests that foreclosure is not the only source of anticompetitive effects that can trigger the application of Article 102 TFEU. The Commission seems to imply that, even in the absence of anticompetitive foreclosure, administrative action could be justified if it can be shown that discrimination harms consumers and competitors’ incentives to innovate. If the Commission chooses to follow this third approach, it would be venturing into unchartered territory. Instead of inferring harm to consumers and innovation (these effects are typically assumed to result from the exclusion of rivals), harm would be established in a direct way. I can think of several reasons why, in theory, it would make sense to do so. The questions I have in this regard are more practical than theoretical, however. For instance, I wonder whether it would be possible for the Commission to provide cogent and convincing evidence of harm to innovation (as opposed to discussing the plausible mechanisms through which innovation could be negatively affected). Similarly, I am not sure whether a dominant company would be able to challenge or disprove claims that a practice is harmful to innovation.

As usual, we very much welcome your views on the above.

Written by Pablo Ibanez Colomo

16 April 2015 at 8:33 pm

Posted in Uncategorized

Anything is possible (on the anticipated Google SO)

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It has been reported today (see here) that Commissioner Vestager may announce tomorrow that the Commission will be addressing Google a Statement of Objections.

This move, that many (including ourselves) would not have anticipated only a few months ago, has been the subject of rumors for some weeks. We have been asked about our opinion a myriad times these past days, and, frankly, we cannot say much more than what we have said in our many posts on the subject (too many to be linked to now), all written in the light of the very scarce publicly available information.

The good news of this whole story is that the law may now take center stage. I wrote recently that this was a perfect case study to discuss the limits of Article 102 (see the end of this post for my own recent case study on the subject for the Brussels School of Competition), but it is also a perfect case study on the huge importance of non-legal factors in competition cases in which the law is unclear (as it’s arguably always the case, save in -some- cartel cases) (for our previous reflections on this, see here or here).

The decision to pursue the case, at least for now, is likely to bring to the fore some fascinating legal questions. The arguments of both parties are by know well known, but it will be interesting to see how the Commission will frame its theory of harm. The stakes couldn’t be higher for Google, for the complainants resorting to competition law as a major competitive tool, and for the Commission, which was left in an uncomfortable position by the last minute decision to halt the commitment negotiations, which generally has the winning hand in these cases and which has, until know, always succeeded in all its 102 cases, including all previous high-stakes tech ones.

Whereas the parties’ submissions will, in principle, not be made public, their arguments have recently been publicly championed by commentators who give us a good taste of what is to come. The latest round of comments has been made by two reputed experts who have held some of the highest possible roles in the competition community, namely President of the General Court (Bo Vesterdorf) and Emeritus editor of Chillin’Competition (Nicolas Petit).

Mr. Vesterdorf’s piece (based on research done for Google but expressing his own views) has very recently received a reply from Nicolas (his research has been financed by iComp, a complainant in the case, but he also expresses his own views). We suggest that you read both.

Pablo and myself -who, believe or not, for better or worse, and despite the hours invested, must certainly be among the few who haven’t made any money out of this case in over 4 years…- are most curious about the many conceivable scenarios that now open up, but we won’t give our take on what is to happen. Why? Because as the recent evolution of the case shows, in proceedings with so many non-legal ancillary factors, predictions are doomed to fail; anything is possible.

Written by Alfonso Lamadrid

14 April 2015 at 11:36 pm

Posted in Uncategorized

On appointments to the EU Courts, including some (this time real) breaking news

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A decent fiction or joke should generally aspire to have some element of truth in it. In our April Fools’ day piece on the appointment of Joaquín Almunia as new EU judge there were, at least, a couple of criticisms elements that had a significant link with reality, and there have been recent developments concerning the two of them:

-A first element of reality was contained in the paragraph that said that “[t]he appointment would take place within the timely addition to the Court of 12 more judges, just when the existing ones had managed to clear the backlog”.

That news could have been a joke in its own right, but it really wasn’t, it was criticism to  In fact, a piece published in today’s Financial Times “Judges multiply as EU states fail to agree on appointments” (by Duncan Robinson) is devoted to this reality. The piece does well explaining the poor job that Member States do when it comes to Court-related decisions. In a nutshell, after years of the Court asking for additional staff to clear the backlog in the face of a Council that could not take decisions because of national interests at play, it was decided to hire additional référendaires (clerks); between that and the increased productivity of the existing judges the General Court managed to half the time needed to decide cases. And now, when the problem seems to be solved, Member States are doubling the number of judges. The FT reports that some judges are unhappy (I bet). An arguably wrong and certainly extemporaneous decision to remedy their own inaction. Congrats to the Council for once again giving arguments to those who distrust EU institutions (please note the irony).

-A second reason why our hoax piece may have been taken seriously by some related to our references to how politics could play a role in the selection process adopted by the Spanish government despite the new introduction of a new merit-based appointments procedure. This was really feared by some. Concerns, fortunately, seem to have been misplaced, at least for now: Chillin’Competition is proud to be the first to report that the Spanish Government has made an excellent and truly merit-based choice for new Spanish Advocate General in the name of Manuel Campos Sánchez-Bordona, currently a Supreme Court Judge and formerly, among others, a référendaire at the ECJ. His track record at the Supreme Court, where he dealt, among others, with many competition cases makes him a highly reputed figure in the antitrust community. A great addition to ECJ and very good news for EU law, albeit possibly at the expense of the sound development of competition law in Spain.

Written by Alfonso Lamadrid

13 April 2015 at 6:19 pm

The one about bananas and credit cards: exchanges of information as restrictions by object

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We are back. This time, with a post that is not voluntarily humorous (nevermind the picture above). A good opportunity to prove ourselves, dear readers, that there is (some) room for (at least some) serious discussions in Chillin’ Competition. I have been meaning to write about the ECJ ruling in Bananas (hence the picture above). I am now out of excuses to avoid doing so given that I cannot (and really should not) keep myself busy forever discussing Alfonso’s posts.

The appeal judgment in Bananas is interesting in that it addresses the status of exchanges of information under Article 101(1) TFEU. Because the nature and the context of such exchanges may vary widely from one case to another, it is probably the practice that exemplifies better than any other the approach taken by the ECJ when drawing the line between restrictions by object and by effect. You know from previous posts that I find the relevant case law to be very sensible. More importantly, it is clear to me the Court has been consistent over time in its approach to the question.

The key arguments raised by Dole in its appeal are familiar ones. An exchange of information may not have an actual impact on future prices. For instance, as argued by Dole in the case, the employees discussing prices may lack the power to set them. It may also be the case that the nature of the exchange does not completely eliminate uncertainty about the behaviour of competitors. The Court clearly dismissed these arguments and held that the exchange at stake in the case amounted to a restriction of competition by object. What lessons can one draw from this case? A couple of them. Nothing, I am afraid, that you have not seen in one way or the other in the blog.

Formal categories are not particularly useful

Are exchanges of information restrictive of competition by object? Well, it depends. Sometimes they are, as in Bananas. Sometimes they fall outside the scope of Article 101(1) TFEU altogether, as in Asnef-Equifax. It all depends on the nature and purpose of the exchange in the context in which it is implemented. The formal category is as such not particularly useful. This has always been the problem with the so-called ‘object box’ and with similar attempts to capture the essence of the case law. Labels (‘exchange of information’, ‘price fixing’, ‘market sharing’) mean virtually nothing in themselves and can even be misleading.

Sometimes, an exchange of information is an ingredient in a cartel-like arrangement. In such a case, the exchange lacks pro-competitive virtues and is therefore deemed restrictive by its very nature. Sometimes, it can improve the functioning of markets and as such potentially beneficial for consumers and the economy. It is clear from the case law that the analysis of the nature and purpose of the agreement needs to be carried out on a case-by-case basis. This sort analysis is not about actual or likely effects (more on this below) but about the rationale behind the agreement.

Bananas provides an interesting example of the above. I welcome your views on the ruling, but it seems clear to me that the Court essentially considers whether the relevant exchange pursued a ‘legitimate objective’ (to take the expression found in Cartes Bancaires, which, unsurprisingly, is abundantly cited in the judgment). In this case, it was found that the purpose of the exchange was simply to remove uncertainty about the behaviour of rivals.

The ‘by object’ category is not a presumption of anticompetitive effects

It has become popular to present the ‘by object’ category as a presumption of anticompetitive effects. The likelihood of such effects is so high in the case of some restraints, the argument goes, that it makes sense to prohibit them irrespective of their actual impact on competition. This view is not unreasonable. The problem is that it is contradicted by the case law.

Bananas shows, again, that an agreement can be deemed to restrict competition by object even if it is not clear that it would have resulted in higher prices. In paragraph 123, the Court holds that ‘a concerted practice may have an anticompetitive object even though there is no direct connection between that practice and consumer prices’. Along the same lines, it is stated in paragraph 125 that ‘there does not need to be a direct link between [a concerted practice] and consumer prices’.

In light of the above, it seems clear to me that determining whether an agreement is restrictive by object has little to do with setting a presumption about its likely impact on competition. As explained above, this assessment is about something else. This also means that there is no real overlap between establishing the anticompetitive nature of the agreement (i.e. understanding its object) and showing its restrictive effects. The first test is about determining whether the agreement is plausibly pro-competitive; the second is about showing, in concreto, its negative effects. This is another major source of misunderstandings. I hope the clear statements of the Court in Bananas will prove helpful in this regard.

More on State aid and investments.

Remember my post on State aid and investment arbitration? The Commission has ordered Romania to recover the compensation to the investors following the award of an arbitration tribunal. More to follow, I am sure!

Written by Pablo Ibanez Colomo

10 April 2015 at 4:16 pm

Posted in Uncategorized

Post April Fools’ Day Special

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Yes, our last post –“Breaking News: Joaquín Almunia to be EU Judge”, was a spoof, a hoax, a “poisson d’Avril” as they say in Belgium, our contribution to April Fools’ day 2015. We improvised it after reading a couple of weird news stories that morning and realizing the date in which we were. Some people, and even some news agencies, took it seriously, and after a few hours Mr. Lucky Namoodia  Joaquín Almunia himself commented about it on Twitter (@AlmuniaJoaquin), confirming that it was a hoax and stating that “It’s a pity indeed”.

If anyone felt disappointed by our misinformation, we are sorry, and we apologize, like we have done before when needed (see here for an example of deficient coverage on our part).

In any event, this has helped us realize that people who read this blog care less about substantive issues (there are indeed very good reasons why no one should give a damn of what Pablo or I think about exclusivity arrangements), than about us posting nonsense (we are better at that, and competition law is a fertile ground to find nonsensical stuff). Point taken. In that spirit, we thought of offering you this post April’s Fools Day Special, with some of the best hoaxes and law or antitrust-related jokes of recent times:

Written by Alfonso Lamadrid

7 April 2015 at 2:06 pm

Posted in Uncategorized