Chillin'Competition

I arrived yesterday from a pretty long conference tour (probably my longest one to date): in the course of a week I have been in Athens, Amsterdam and Bruges. This is the definitely the last time I do this… until next time I do this. The conferences were all very interesting and, more importantly, very varied in their context and approach.

IMEDIPA Conference (Athens)

In Athens, I attended the 9^th IMEDIPA Conference, organised by the London-based Ioannides (Kokkoris, from Queen Mary; and Lianos, from UCL). Those who have attended their events know well they are amazing hosts. I was invited to take part in a panel discussing the rise (and demise?) of the effects-based approach in EU competition law.

Victoria Mertikopoulou and Lia Vitzilaiou gave an overview of recent Article 102 TFEU case law from different perspectives. See here for Victoria’s presentation and here for Lia’s. After the presentations I took part in a panel, chaired by Ioannis Lianos (the other speakers were Damien Gerard, Yannis Katsoulacos, Giorgio Monti and Renato Nazzini).

The fundamental idea I sought to emphasise is that the purpose of the effects-based approach is to preserve values that are dear to lawyers. This approach is indeed first and foremost about ensuring legal certainty and consistency (treat like practices alike). Economic analysis is only an instrument that serves these aims. In the same vein, I reminded the audience that the form-based approach came under attack primarily because it failed to provide a set of stable and predictable legal principles.

European Competition and Consumer Day (Amsterdam)

In Amsterdam, I took part in the European Consumer and Competition Day, organised in the context of the Dutch EU Presidency. A different city and a wholly different event, albeit not necessarily because of the speakers. President Bruno Lasserre and President Jacques Steenbergen, who were also in Athens, took part in the panel in which I shared my thoughts (see here) on the application of EU competition law to online platforms. The other participants were Thomas Kramler (aka Mr Digital Single Market) and Guido Lobrano (Business Europe).

The point of my presentation is quite simple. I tried to show how relying on fairly simple and well-established principles of EU competition law can take us a long way in the analysis of restrictions in the online world. One of this basic principles is the counterfactual (does the practice restrict competition that would have existed in its absence?), which is particularly relevant to scrutinise concerns with geo-blocking. I also explained that, following Cartes Bancaires, it is clear that, as a rule, restraints that are a plausible means to address free-riding are not restrictive by object. This principle is key to understand the approach of the French authority in Booking.com.

To be sure, our panel was not the high point of the European Consumer and Competition Day. That was instead Commissioner Vestager’s speech in the morning. The Commissioner hinted at what was going to happen on Wednesday (and which Alfonso reported, as usual, on the very day) and gave a good sense of future reforms in the field of merger control.

The Division of Competences in the EU Legal Order: a Post-Lisbon Assessment (Bruges)

The tour ended at my second academic home, the College of Europe in Bruges. Sacha Garben and Inge Govaere managed to attract a truly impressive line-up of senior academics, judges and officials. It is pointless to mention any of them because I would have to mention them all, but you can take a look at the programme here. The conference was the most academic of the three, and the one that was emphatically not devoted to competition law. Still, the organisers were able to find two competition lawyers interested in institutional and constitutional matters. Damien Gerard, another member of the ‘flying circus’ (to use Jacques Steenbergen’s expression), was invited to take part in a panel discussion. The presentation I gave can be found here.

Have a great weekend!

It has just been announced that Paramount Pictures has offered commitments to address the Commission’s concerns in the context of the high-profile Pay-TV investigation (in which, for full disclosure, I represent a third party, PACT -British Independent Producers-). Pablo has also in the past commented on this case in some detail (see here and here).

This looks like surprising news, as until now Paramount, like every other affected party, strongly disputed the Commission’s allegations. As you may remember, the allegations in this pilot case (with potential huge ramifications) relate to clauses present in bilateral agreements between Hollywood majors and Sky pursuant to which Sky must ensure that content is not broadcast outside of the territory covered by its license. The case relates both to satellite transmission and to online transmission, even if the two are subject to different copyright regimes (more on this in a second).

This is being portrayed as big news in the press, but is it really that relevant? Let’s see:

-For Paramount: I can’t judge on whether yielding makes business sense for Paramount. Surely they have their reasons (which are seemingly financial rather than legal). They are paying a price but they’re the only one who can judge whether the compensation is worthy from a business standpoint. Thus, logically, no comments on our part.

-For other companies: If this were a standard poker game appearances could suggest that Paramount is folding in the light of a strong hand on the part of the Commission. I doubt this is the case given the specificities of Paramount’s situation, but arguably that’s only an outsider’s impression. The only objective, legally relevant fact is that commitments do not imply the admission of an infringement, so the debate remains entirely open and this does not legally place others in a worse position.

Much to the contrary, it could even be argued that once the Commission has accepted commitments with regard to one undertaking, it could now not impose fines on others for exactly the same practices.  This is because, as you know, commitments are only appropriate in cases where the Commission does not intend to impose fines. In fact, unless I’m mistaken there has never been a case or cases involving the same practices where the Commission accepted commitments and imposed fines. Last time a “hybrid” comparable scenario arose (in the Samsung and Motorola cases; see here for my comment on this point), the Commission decided not to impose fines on Motorola but rather to limit itself to declaring an infringement.

 -For the Commission: For the Commission this means good press (it did get something out of the case), a bit less work (but not that much less since most of the work was done). As explained, it also arguably could mean that perhaps it cannot now impose fines on others. At the same time, it could also be argued that this move would somehow set the Commission on a pre-judged inevitable path (as it would appear odd that charges were withdrawn with regard to others after one has yielded), but in my personal view that would be a great mistake, as cases are not to be decided on the basis of a company’s strategy, but rather on the merits, and the Commission should continue examining the feedback it received in the replies to the SO and at the hearing, as I’m sure it is doing.

But forget about PR, and about winning or losing a specific case; is this offer something that changes anything in the marketplace or that achieves the Commission’s wider objectives? I’m not so sure.

Even if every major studio (or even every copyright holder in the world) were to offer similar concessions -which imply renouncing to given clauses that enforce their IPRs in a given way- the copyright legislation would still be in place (unless changed by the legislature, which is unlikely). This means that even if all geo-blocking clauses were suppressed, the “passive sales” that the Commission would like to see would not exist, because they would still be precluded by the regulatory framework (which in the online world grants copyright holders the right to authorize or prohibit communications to the public in every territory of broadcast; see Art. 3.3 of the Copyright Directive). I already hinted at this here.

That is why, at least in my view, the only concessions with which the Commission could achieve something meaningful in this case would be those of Member States in the context of the legislative process.