Chillin'Competition

I spent last Friday afternoon reading and re-reading books and old case law (yep, and you are paid to do exactly that when you are an academic). At some point, I found myself reading Ideal Standard, one of the classics on the interface between intellectual property law and free movement principles. I spare you of the substantive issues. What matters here is that, at some point, I found myself thinking: ‘wow, that is really clever, who was the rapporteur again?’ René Joliet. Of course! One does not become a legend of EU law for no reason.

There is a single paragraph on competition law in Ideal Standard. Needless to say, it is correct and pertinent as the rest of the judgment. It made me think of a recent Toshiba judgment. The Toshiba case was fairly straightforward. It was a plain vanilla market-sharing cartel that was examined as any other plain vanilla market-sharing cartel. Toshiba, however, attempted to argue that the Commission had not established that it was a potential competitor in the EEA market and thus that the agreement was restrictive of competition by object. On the facts, it looks like there were sufficient direct and indirect indicators suggesting that Toshiba was a potential competitor on the relevant market.

If it is established that Toshiba is a potential competitor: is the agreement restrictive by object? Both the Court and the Advocate General took a reasonable position on this question. We have always known that market sharing cartels are restrictive of competition by object. As a result, it makes no sense to show every time that these agreements are prohibited, by their very nature, under Article 101(1) TFEU. This approach is also in line with Cartes Bancaires. The analysis of whether an agreement is ‘by object’ must consider the experience acquired over the years, and be modulated accordingly.

When one reads the judgment, it is clear that the Court has market sharing cartels in mind. All the cases to which it refers in support of its conclusions are indeed cartel cases. However, the Court refers to ‘market sharing’ alone, which might be confusing. This is in contrast with Cartes Bancaires, where the Court was more precise and referred to price-fixing by cartels.

Does the nuance matter? Most of the time it does not. Typically, a horizontal market sharing agreement is a cartel. As Ideal Standard shows, however, sometimes it is not. Ideal Standard was about the assignment (sale) of a trade mark in France. Market sharing was the inevitable consequence of the agreement. However, the Court was careful to point out that not every trade mark assignment is restrictive by object. True, a cartel is sometimes implemented by means of a trade mark assignment. Sometimes, however, it has absolutely nothing to do with a cartel. This makes it necessary to consider (you guessed it) the nature of the agreement and the context of which it is part before jumping to conclusions.

Against the background of the above, I would add a nuance to the opinion of AG Wathelet in Toshiba. Experience teaches us that market sharing by cartels is restrictive by object. If this is what he wanted to express, I agree. Experience also teaches us – here comes the nuance – that not every agreement that amounts to market sharing is a cartel. Thus not all of them should be treated as such. Ideal Standard is there to provide a concrete example of our past experience in this sense!

By interesting coincidence, AG Wathelet issued last week an opinion on one of the big intellectual property issues of the day: the status of hyperlinks in copyright law. As not every reader of this blog is an IP aficionado, I will just mention that AG Wathelet defends a position that appears to be at odds with the relevant precedents, namely Svensson. In this sense, it is not certain that the Court will follow. I look forward to spending a Friday afternoon reading the judgment when it comes out!