Chillin'Competition

I look back at the past few posts I have written and realise (well, I sort of knew that already) that they tend to be critical. In a sense, this is inevitable. We pick controversial matters and, as an academic, I instinctively focus– and always will – on the issues which I find to be inconsistent with my understanding of the law.

As positive thinking is in vogue at this time of the year, however, I thought the first post of 2017 would be devoted to three aspects of EU competition law that are seen by many as controversial and that are often criticised (or have often been criticised)… but with which I have no problem at all. Before I forget about it in the next couple of weeks in the same way others (not me!) forget about dieting and exercising, here’s to the power of positive thinking:

Market integration as an objective of EU competition law. This is a classic. Many people believe that EU competition law should not be enforced to achieve market integration, as it has been since Consten-Grundig. This policy goal, the argument goes, is not really about competition; it is a political one. I do not see things this way. Market integration is in fact where we come from, and the very reason we have a competition law system in Europe. Does it mean that our competition law is less ‘pure’ – whatever that means – as a result? Maybe, but I can certainly live with that.

Recoupment and predatory pricing: It is sometimes criticised that predatory pricing can be an abuse without evidence of the ability of the dominant firm to recoup its losses. I have little trouble with this rule. Pricing below average variable costs is in principle an irrational strategy for a firm to adopt. In this sense, it is the closest we can get to a ‘by object’ infringement in the context of Article 102 TFEU. And we know that it is not necessary to show the effects of a practice when it is restrictive by object.

Information exchanges under Article 101 TFEU: T-Mobile is a more recent judgment, but it has attracted a great deal of criticism. Does it make sense to prohibit as restrictive by object an exchange of information in the circumstances of that case, or in a situation like the one at stake in Bananas? Of course. There is no good reason why companies would get together to engage in such discussions. This is something that, as a company, you just do not do. It is true that fines, if imposed at all, should be proportionate to the gravity of the infringements (which means that in cases like T-Mobile and Bananas they should be modest). However, the fact that such exchanges are unlikely to have anticompetitive effects should not influence their qualification as ‘by object’ infringements.

Happy 2017 to all!