Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

What’s with this obsession with the objectives of EU competition law?

with 8 comments

obsession

Bob Solow, a Nobel Prize laureate, once said the following of Milton Friedman: ‘Everything reminds Milton of the money supply. Well, everything reminds me of sex, but I keep it out of the paper’. I think very often of this superb quote (and of the money supply) when reading competition law scholarship.

It would seem that there is always a valid reason to discuss the objectives of EU competition law, or to explain a legal controversy by reference to them. Authors disagree about the substantive standard that should apply to a practice? It must be the case that they disagree about the objectives that should guide EU competition law. A discussion about, say, vertical restraints? Pondering whether consumer welfare should be the goal underpinning the enforcement of Article 101 TFEU is absolutely necessary.

What I find interesting is that, the more I dig into the case law and administrative practice, the more apparent it is to me that the objectives of EU competition law are of marginal relevance in the decision-making process. My own research efforts lead me to the conclusion that, with very few exceptions, this question plays a very limited role (if at all) when the Commission or EU courts consider whether, and in what circumstances, a given line of conduct should be prohibited. It is simply a mistake to assume that a specific substantive test follows logically from a particular objective, or that a disagreement about the objectives that should guide EU competition law necessarily results in a disagreement about the test to apply in the context of a particular case.

Against this background, I asked myself why this issue features so prominently in academic and non-academic discussions. I can think of the following explanations (as usual, I would very much welcome your thoughts):

  • Use as a rhetorical device: Challenging someone’s position by arguing that the arguments are only valid when a given objective is endorsed is often very effective. ‘What you say makes sense, but unfortunately consumer welfare is not the objective of EU competition law’, is indeed a powerful rhetorical device that can, moreover, prove useful to avoid addressing difficult questions.
  • It is relatively easier: abstract discussions about the objectives of EU competition law may not be very useful in practice, but they often require little effort, or at least much less effort than reading carefully the case law and administrative practice and inferring principles from them. It is probably the case that the latter, no matter how necessary, is also less attractive for many.
  • The influence of economics: It makes sense for economists to think about issues by reference to a benchmark against which the lawfulness of a practice can be established. The influence of economic analysis in the field may explain why even academic and non-academic lawyers display a tendency to go about questions in the same way. This is an additional reason why doctrinal analysis may be neglected.

For those readers who thought they would never see it, there you have it: I have just provided a clear example of why the influence of economic analysis might have proved negative in one important respect: it may have the effect of inducing legal scholars to engage in research that is not significant or that contributes little to the understanding of the discipline. I guess this blog can still bring surprises every now and then!

Written by Pablo Ibanez Colomo

17 September 2015 at 2:36 pm

Posted in Uncategorized

8 Responses

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  1. I bet to differ.
    To determine the objectives of EU competition law is of great importance, because it leads authorities and judges to adopt differents kind of “rule of law”, according to their findings. Whether it is per se rule/ rule of reason or restriction by object/effect, only determining such objectives can help.
    Sincerely, and thanks for the blog.

    What About

    17 September 2015 at 3:30 pm

  2. Are the objectives of competition law the first things on judges’ or practitioners’ minds when they work on a case? Probably not. So their relevance may sometimes be exaggerated.

    Are they useful rhetorical devices? Absolutely. We use them to tell people they got something fundamentally wrong.

    What is the trouble with them? Maybe that they are vague and susceptible for use and abuse.

    What are they good for? The objectives – however construed – might function as a sort of “über ich” forcing us to check whether what we write is in line with – what(ever) we believe to be – the fundamental values of the EU competition regime.

    What’s with this obsession with the objectives of EU competition law? They can tell us we are right even when the court says we are wrong.

    RG

    17 September 2015 at 6:27 pm

  3. Thanks to both for your comments!

    @What About: your example illustrates the point I tried to make very well. Think of the recent cases where the object/effect divide was at stake, such as Cartes Bancaires. Did the Commission and the Court disagree about the qualification of the agreement as restrictive by object because they disagreed on the objectives of EU competition law? I do not think so.

    Think also of the possible legal approaches to selective price cuts under Article 102 TFEU, This issue was at stake in Post Danmark I and was examined at length by the Advocate General Mengozzi in his opinion. Would you say that each of these legal approaches reflects an objective of EU competition law? Again, I do not think so.

    @RG: A discussion around the objectives of EU competition law could be useful when it is conducted from the bottom-up, that is, after a careful reading of individual cases and in an attempt to find commonalities and tensions between them. This is how the debate was originally introduced in the discipline, and when it may be meaningful. Unfortunately, it is often forgotten and top-down discussions are favoured, even if they are meaningless (at best) and misleading (at worst).

    Pablo Ibanez Colomo

    18 September 2015 at 10:15 am

  4. I think that legal scholars do well in pointing out assumptions and contradictions in the case law for the sake of enhancing legal certainty. It is true that lawyers who practice (including judges and officials) might not be aware all the time of the assumptions they bring to the table in a case, but it is those assumptions that sway cases. Scholarship (supposedly) has that time to reflect on cases and consider what the assumptions are. Those assumptions, values, goals,… might not only be consumer welfare, ordoliberalism or market integration. They may also be, speedy process, attracting media attention, or many others. But cases are always decided on assumptions.

    In the long-run, pointing out those will improve the legal certainty of the system.

    If legal scholarship is not there to unravel broader questions, what do you suggest scholarship should do?

    Carlos Arrebola

    21 September 2015 at 12:20 pm

  5. I think that academics – lawyers and economists alike – are inherently predisposed towards imposing a systematic narrative on what may in practice be quite ad hoc. While competition law enforcers and judges have different pragmatisms, it is only the scholar who retroactively invents a story to explain how different cases are linked. That fits with a long tradition of common law scholarship: it’s the scholars who trade in high abstract principle, not the judges.

    Martin Holterman

    21 September 2015 at 12:25 pm

    • Isn’t that “pragmatism” that you are talking about how you link cases? Inadvertently you were also making a systematic narrative of how law enforcement and judicial decision making works.

      Carlos Arrebola

      21 September 2015 at 12:28 pm

  6. Hi Carlos and Martin

    Thanks a lot for this exchange.

    @Carlos: The role of legal scholars is indeed to unveil the logic underlying cases and to pinpoint commonalities and tensions between them. We fully agree. I did not intend to suggest the opposite in my post. This sort of doctrinal research is much needed in EU competition law. My point is instead that an obsession with the objectives of competition law may lead scholars to move away from meaningful doctrinal scholarship.

    @Martin: In a way, what you are saying is in line with the above. There is some research that has a tendency to see the objectives of competition law everywhere, and therefore ignores how cases are decided in practice. Posner, in his How Judges Think, has an interesting discussion on pragmatism (he is after all a judge) and doctrinal legal scholarship (which he believes is very necessary).

    Pablo Ibanez Colomo

    21 September 2015 at 1:48 pm

  7. I am not sure I agree. I think all legal decision-making -especially, I’d assume, in continental legal systems where systematic, conceptual explanations are favoured- are conditioned by perceptions (sometimes neither express nor conscious) about what the law seeks to achieve. I also think that understanding such perceptions is of some importance in order to understand how Articles 101 and 102 have been applied in Europe. Antitrust is, obviously, not a natural science and it is possible that we should not seek a “single unified theory”; but even if we accept that there are multiple and sometimes conflicting goals, the discussion about goals is still relevant, and not only to lawyers schooled in the “Begriffsjurisprudenz” tradition!

    Madrid lawyer

    21 September 2015 at 7:54 pm


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