Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

NEW PAPERS: on market integration, Article 102 TFEU and network industries

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Three new papers of mine have just been made available on ssrn. They touch upon some of the issues I discuss regularly on the blog, so they will not surprise frequent readers. As usual, I would very much welcome your comments (e-mail: P.Ibanez-Colomo@lse.ac.uk).

Article 101 TFEU and Market Integration: Entire libraries have been written about EU competition law and parallel trade. Some of the landmark judgments were handed down more than three decades ago. I wrote this paper because I realised that, in spite of the above, there is still considerable confusion about some key aspects of the case law. Has the Court of Justice ever ruled that absolute territorial protection is NOT restrictive by object? It has, for instance in Coditel II. Why did the Court rule that absolute territorial protection is acceptable in Coditel II but not in Nungesser? The two judgments were delivered at pretty much the same time, is there a contradiction between the two? If the Court confirmed Coditel II in Murphy, why do the two judgments seem to contradict each other?

My paper, forthcoming in the Journal of Competition Law & Economics, seeks to explain the case law and gives an answer to the above questions. I develop a framework based on the counterfactual. I find the approach of the Court of Justice to be consistent and persuasive. Agreements aimed at partitioning national markets are deemed restrictive by object except when the analysis of the counterfactual shows that they do not restrict competition that would have existed in their absence. This simple framework explains cases like Coditel II and Murphy, mentioned above, and provides insights for ongoing ones. I test the framework against leading rulings, including Glaxo Spain, Nungesser and Micro Leader.

Beyond the ‘More Economics-Based Approach’: A Legal Perspective on Article 102 TFEU Case Law: It might sound strange to provide a legal perspective on Article 102 TFEU case law. But scholars and practitioners have focused so much on economic considerations that many of them are no longer interested in what the Court of Justice actually does. My article seeks to identify trends in the case law and provides a framework to address the frictions that have emerged over the years. Some authors like to think about Article 102 TFEU as an epic battle between good and evil. My paper shows that ongoing controversies are more modest. They relate to minor inconsistencies that can be addressed as such. Cartes Bancaires provides a most useful template in this regard.

The paper, forthcoming in the Common Market Law Review, consolidates many of the ideas that I have published here and in the form of working papers. The first key idea I wanted to develop is that the object/effect divide exists also in the context of Article 102 TFEU. It is important that this reality is acknowledged in the literature. It is now clear that some practices, like exclusive dealing, are put on a par with cartels. The implementation of these practices is sufficient to trigger the prohibition. Other conduct is put on a par with ‘by effect’ agreements. This makes it necessary to show not only that the practice has been implemented, but also that it is likely to have an anticompetitive effect.

There are frictions in Article 102 TFEU case law. Again, this is a reality that cannot be denied. Some legal inconsistencies have emerged in the case law. Like practices are not always treated alike within Article 102 TFEU. Similarly, the same practice is not always treated in the same way across provisions. Suffice it to think of the 2007 GC ruling in Microsoft (Article 102 TFEU) and its 2013 ruling on the Microsoft/Skype transaction. These frictions are natural and inevitable in a field like EU competition law. More importantly, they are not fundamental ones. They can be addressed on an incremental basis, drawing from the lessons of experience and economic analysis.

EU Competition Law in the Regulated Network Industries: This piece is a contribution to a collection put together by Jonathan Galloway (Newcastle) that is forthcoming with Oxford University Press. The volume examines the intersection of competition law with other disciplines. My contribution focuses on the interface with the network industries, which is a topic in which I have long been interested. It examines three dimensions of the interaction between the two fields: (i) convergence (the two fields pursue compatible objectives); (ii) tension (the objectives may be compatible, but are not identical); and (iii) complementarity (EU competition law can achieve what sector-specific regulation alone may not be able to achieve).

Have a great weekend!

Written by Pablo Ibanez Colomo

6 May 2016 at 4:45 pm

Posted in Uncategorized

One Response

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  1. And the new Chief Economist is…. TOMMASO VALLETTI (http://www.imperial.ac.uk/people/t.valletti). On O2/three prohibition day, interesting to note that his empirical research in telcos suggest positive correlation between market concentration, prices and …. investments: http://cerre.eu/sites/cerre/files/150915_CERRE_Mobile_Consolidation_Report_Final.pdf

    Nicolas Petit

    11 May 2016 at 3:21 pm


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