Summertime developments in EU competition law (tax rulings, cement, Section 5 of the FTC Act and more on Google)
Lots of things happened while this blog was closed for holidays; here are a some comments on a selected few of those developments:
–The news: On 20 July the European Parliament issues its Draft Report on tax rulings unusually pre-concluding that “without prejudice to the outcome of the Commission’s ongoing state aid investigations” there has been a breach of State aid rules (MEPs appear to be getting into a habit of giving ex ante opinions in competition cases…) and –perhaps more understandably- suggesting the Commission to adopt guidelines on State aid and transfer pricing. A comment (and a bet): We have commented on these cases before, but this time I’m willing to bet a round of beers on the prediction that the Commission will not order any recovery in these cases and will rather use them to send a signal for the future. Any takers? [By the way, those interested in the subject should attend the Brussels School of Competition’s Morning Briefing about State aid and Tax Rulings on 16 October].
–The news: On Friday 31 July the Commission announced the closure of its longstanding investigation into the cement sector explaining that the evidence gathered was not “sufficiently conclusive”. A comment: As you might also remember some companies (including my client in the case) appealed the information requests sent out by the Commission. As explained in the Judgment, as part of the judicial proceedings in our specific case we managed to have access to, and to exceptionally lodge observations on, the Commission’s evidence at a pre-SO phase (for my comments on these Judgments, click here). Some parties appealed the General Court Judgments (not all, for, understandably, practical realities often trump theoretical interest) and the ECJ may say interesting things, so keep an eye open for those.
–The news: On August 13 the U.S Federal Trade Commission issued a Statement of Enforcement Principles that will guide its application of Section 5 of the FTC Act, a provision against “unfair methods of competition” that goes beyond the prohibitions in the Sherman or Clayton Acts. Essentially, the FTC has committed to align the enforcement of Section 5 with that of the Sherman Act, effectively adopting a rule of reason analytical framework. Comment 1: the Statement explains that the FTC is “less likely to challenge an act or practice as an unfair method of competition on a standalone basis if enforcement of the Sherman or Clayton Act is sufficient to address the competitive harm”. Well, isn’t that stating the obvious? Also, the language (“is less likely”) shows some convergence at both sides of the Atlantic when it comes to sort-of-soft law: the FTC seems to have learnt from DG Comp’s guidance in this respect… Comment 2: I always thought that Section 5 was the U.S. way of making up for a sometimes inconvenient strict interpretation of the antitrust rules that does not cover practices that could be challenged with a wider, also sensible interpretation. Just to give you to examples: the Ethyl case, concerning a Section 5 challenge against facilitating practices could perhaps have been brought under Section 2 if US antitrust law had a notion of individual abuse of collective dominance like we do in the EU following the Irish Sugar Judgment. Also, the Intel case under Section 5 would seemingly also have been equally possible to challenge if we had a more nuanced approach to refusals to deal concerning interoperability.
–The news: Google’s lawyers didn’t rest during the holidays either. A few days ago Google sent its response to the Commission’s Statement of Objections (and its General Counsel wrote a blog post about it, available here). All this generated yet another news cycle; journalists don’t get tired of this story, as don’t lawyers, who keep jumping in at the smell of possible blood. The non-comment: We have no real new info on the case so we have no comment beyond the many written in the past.
And now, a quick look to the future and to some forthcoming events:
- On Friday, 4 September, the Liège Innovation and Competition Institute is holding, in Brussels, an interesting event on the Huawei/ZTE Judgment (for my hasty first comments and some interesting, more well thought-out comments by others, see here).
- On September 29 a new edition of the 9 month LL.M course will start at the Brussels School of Competition. Registrations are still open and the program is available here.
- And on Thursday 24 September ERA and the European Data Protection Supervisor will be hosting a must-attend event (at least for me since I’m chairing part of it) titled Competition Law rebooted: Enforcement and personal data in digital markets“. For more, see here.
Chillin'Competition 
Hi Alfonso,
Thanks very much for your latest post and the continued possibility to ‘relax whilst doing competition law’ :).
I would like to react to your post by adding one – I should say five – ‘summertime development(s)’ affecting EU competition law: on 5 August 2015, the Commission published in the Official Journal (L 208/3 and C 256/1) a set of five texts amending, respectively, the Implementing Regulation, the Leniency Notice, the Settlements Notice, the Notice on the rules for access to the Commission file and the Notice on the cooperation between the Commission and national courts.
The primary purpose of these amendments was to adapt – at EU level – the legal protection against discovery which leniency corporate statements, settlement submissions and other documents drawn up in the context of antitrust proceedings already enjoy in Member States as a result of Directive 2014/104/EU on antitrust damages actions. However, the reform goes – I think – a bit further and contains interesting (worrying?) adaptations to the Leniency Program and the Settlement Procedure.
• The Leniency Program, first, now finds a regulatory legal basis in a new ‘Article 4a’ of the Implementing Regulation. Among other novelties, ‘[t]he Commission will only grant immunity from or a reduction of the fine […] if, at the end of the administrative proceedings, the undertaking has met the requirements and cooperation conditions set out in the leniency programme. Those may cover […] the further cooperation expected from the undertakings during the administrative proceedings’ (Article 4a(1), third subparagraph). The impact of that reference to ‘further cooperation’ is difficult to measure at this stage. One cannot exclude, however, that the Commission in practice use that condition as a leverage to ‘lock in’ leniency applicants in a settlement, during the administrative (settlement) proceedings.
• As regards, then, the settlement procedure, it seems that it will no longer be possible for the parties to unilaterally ‘withdraw’ their settlement submissions, even where the SO does not reflect these submissions. The revised wording in Point 27 of the Settlements Notice now provides that where the Commission adopts a SO which does not reflect the parties’ settlement submissions, ‘[t]he acknowledgements provided by the parties in the settlement submission will be disregarded by the Commission and cannot be used as evidence against any of the parties to the proceedings. Hence, the parties concerned will no longer be bound by their settlement submissions and will be granted a time-limit allowing them, upon request, to present their defence anew, including the possibility to access the file and to request an oral hearing’. Who decides on whether or not the SO reflects the settlement submissions? I don’t know, but this might be a point of contention in the future (parties claiming that the SO does not reflect their submissions, Commission refusing to ‘disregard’ the settlement submissions…). The revised wording of Point 29 raises a similar issue regarding the final decision.
One last point – about the method – which deserves a remark: I find it interesting that these five texts do not appear anywhere on DG COMP’s website. No press release, no update in the legislative section, or any of the other relevant sections (leniency, settlement, damages, etc.).
This discreet reform certain displays all the stigmas of a ‘summertime’ development…
All the best,
Marc
Marc Abenhaïm
3 September 2015 at 5:54 pm