Chillin'Competition

One of the most popular mantras in the EU competition law community is the idea that the Commission ‘always wins’ Article 102 TFEU cases, and that it is all but impossible to see an abuse decision annulled before the EU courts.

I have spent quite a bit of time examining this question (and related ones) lately. I have concluded that there is perhaps a grain of truth in this mantra. As often happens, however, the grain of truth has been distorted so much that it is barely recognisable. Even worse, most claims these days are made without much evidence to back them up.

What do the figures tell us when we look at them?

If you look at the figures about which most people care (challenges brought against Article 102 TFEU decisions and rate of annulment of these decisions) you are likely to be surprised.

You will realise that seeing a Commission decision annulled was actually quite commonplace in the early years (that is, until the late 1980s); much more so, in fact, than conventional wisdom would suggest.

Then, something happened when the General Court was created. It is true that the annulment of Commission decisions became significantly less frequent at the time. This is certainly the origin of the mantra, and the underlying (and possibly only) grain of truth of some narratives.

However, these figures do not mean, in and of themselves, that the EU courts became unduly deferential to the Commission, or that its attitude to judicial review of abuse cases changed. This is the point at which we enter the realm of speculation.

What do the figures fail to tell us?

I keep insisting on this point, but I do not think I can emphasise it enough: the annulment of a Commission decision may be a popular proxy for curial deference, but it is actually a very poor one. The fact that a decision is annulled, or fails to be annulled, does not say anything about the intensity of judicial review.

Why is it that annulments fell when the General Court was created?

The undue deference story is only one possible explanation of the  phenomenon. The observed shift in the rate of annulments is also consistent a scenario in which the authority became increasingly risk averse and its decisions became subject to tight scrutiny by the review courts – I am not saying this is what happened, it is just that it is also perfectly plausible.

In fact, if the early years were marked by frequent annulments in Article 102 TFEU cases, it would be reasonable for the Commission to become more risk averse over time, and to pursue only the cases that it is certain to win. With risk aversion, annulments inevitably become less frequent, even if judicial scrutiny is as intense as it can get.

Conversely (and equally importantly), the frequent annulment of Commission decisions is not evidence, in and of itself, that judicial review is intense. Many of the biggest victories for the authority originated in decisions that were annulled.

Just think of Kali & Salz: the individual decision may well have been annulled, but the Commission won on a major issue of principle (what matters for a repeat player): collective dominance was found to fall under the scope of the Merger Regulation.

Bottom-line

The bottom-line of the above is clear: examining the substance of individual decisions is inevitable if one wants to come to meaningful conclusions about whether the annulment (or the absence thereof) is a reliable proxy for deference to the analysis of the Commission.

In particular, it is necessary to develop a way of checking whether the Commission is risk-prone or risk-averse when adopting Article 102 TFEU decisions. This is one question that has kept me nicely busy. Answers? Soon! But I can say that the truth, as far as I can tell, is (surprise, surprise) complex and does not quite fit one particular story or narrative.

The pace of the law

I was thinking, while drafting this post, that some of those who claim that the EU courts are unduly deferential are just impossibly impatient people. These people would like to see the complete overhaul of the EU competition law system from one day to another.

This is not how the law works, and for good reasons. The pace of the law is – and can only be – slow and incremental. It is a mistake to think that courts are deferential simply because their attitude towards legal change takes into account factors beyond the specific case at hand. Predictability and stability also matter.

Legal change may seem slow; eppur si muove: just think of Intel.

And as I write this, I am reminded of the excellent Rebecca Haw Allensworth, who has written (much more) eloquently about these questions. You may want to take a look, for instance, at this paper.

The Global Competition Law Centre will hit a significant milestone on 22 May: 100 (!) lunch talks. And for some of us it feels like yesterday when the first one was announced…

To mark the occasion, the event, devoted to Brexit and its implications for EU Competition, will be a tad longer than usual. It will feature an opening address by Luis Romero Requena (Director General of the Legal Service at the Commission), a keynote speech by Margaritis Schinas (Chief Spokesperson at the European Commission) and some closing remaks by Judge Ian Forrester QC (General Court).

I am honoured to have been invited to take part in the second panel, which will address the tricky issue of State aid control post-Brexit

More info on the event (to take place at The Hotel), and on how to register, can be found here.

The GCLC lunch talk will be over at around 4pm. An hour later, at the Solvay Brussels School Economics & Management, an event on corporate (and other) sponsorship of academic research will kick off. It is organised by Ioannis Lianos, who has been working on a code of conduct for the members of the Academic Society of Competition Law (ASCOLA).

The event, which is great news for the EU competition law community, is jointly hosted by ASCOLA, the Association of Competition Economists and UCL. In addition to Ioannis Lianos and yours truly, confirmed speakers include Damien Geradin, Penelope Papandropoulos, Alexis Walckiers and Wouter Wils.

More info here.