Chillin'Competition

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Archive for September 2018

The Challenge of Digital Markets: First, Let Us Not Forget the Lessons Learnt Over the Years (a JECLAP editorial with Gianni De Stefano)

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JECLAP

[An advance version of a piece jointly written with the better general editor of JECLAP, Gianni De Stefano, has recently become available online (see here). It is on online markets, and it gives you a flavour of how I will be responding to the Commission’s consultation. In short: my main fear, shared by Gianni, is that, when it comes to digital markets, we develop amnesia and we forget the very sensible principles that are enshrined in the case law and that are as valid today as they were when they were introduced. We hope you enjoy it. And please let us know your thoughts!]

Pleas for the reinvention of EU competition law in the digital age have become popular – so much so that they feature in the generalist press (and the pages of this journal). It is regularly claimed that efficiency and/or consumer welfare are poor guides to address the emerging challenges for the discipline. A whole new approach to competition law (labelled ‘New Brandeis’) defines its identity around this key tenet.

Such claims are also made in relation to specific practices or markets. The rise in the use of algorithms, some commentators argue, is a new threat that requires the refinement of existing doctrines. Similar arguments have been advanced in relation to the prominence of online platforms, which are deemed too mighty to leave legal principles untouched.

There is no reason to exclude digital markets from the reach of EU competition law. What is more, some of the economic dynamics of online markets may, in some circumstances, justify vigorous intervention. This said, it is far from clear whether there is something truly unique about the digital world that warrants a fundamental
rethink of the law as it stands.

This editorial suggests that the main risk for EU competition law, at this juncture, is not so much its alleged failure to adapt to new circumstances, but its tendency to forget the lessons learnt over the years.

A blank-slate approach to enforcement that ignores precedents and falls into the trap of well-known fallacies inevitably leads to enforcement errors – both type I and type II.

An overview of recent cases gives an idea of the sort of lessons that cannot be emphasised enough when applying EU competition law in digital markets.

One of these lessons is that price is not the only parameter that matters in EU competition law. More and more, firms compete on other parameters – such as quality and innovation. Some of the most successful technology giants have been able to achieve a strong position while keeping prices significantly above those of rivals.

What are the practical consequences of the above? It means, essentially, that conduct may have a significant impact on prices and still be lawful – even prima facie compatible with Article 101 TFEU and/or 102 TFEU.

This conclusion became apparent in the context of last year’s judgment in Coty. The argument against online marketplace bans is superficially persuasive. By limiting the ability of distributors to appear on major platforms like Amazon or eBay, such bans limit the intensity of intra-brand competition, thereby bringing up prices.

In its Metro I judgment of 1977, the Court pointed out that selective distribution, by its very nature, leads to less intense intra-brand rivalry on prices. In spite of this fact, it held that, under certain circumstances, this distribution method falls outside the scope of Article 101(1) TFEU altogether.

The Court acknowledged – in this and subsequent judgments – that, while restricting the intensity of price rivalry, selective distribution promotes competition in other ways, for instance by allowing a specialist trade capable of providing specific services, or, more generally, rapid market entry and expansion by manufacturers.

A second key lesson learned after years of enforcement is that restrictions of competition cannot be examined from an ex post perspective alone. As far back as 1966 – in Société Technique Minière – the Court clarified that competition must be understood as such competition that would have existed in the absence of the practice.

This is an aspect that is also central in selective distribution cases – including Coty – and cases relating to other vertical restraints – such as franchising.

One of the fundamental questions in Coty was whether the protection of the luxury image of a product justified the creation of a selective distribution system. The Court of Justice answered in the affirmative, even though it leads to ex post restrictions – such as an online marketplace ban.

The logic underlying the Coty ruling seems clear. Had a manufacturer been unable to protect its brand image, it would not have resorted to a selective distribution system in the first place. In other words, the transaction would not have taken place in the absence of clauses seeking to achieve that objective. In relation to franchising, the Court understood that, if effective contractual mechanisms to protect the franchisor’s know-how and reputation were not available, such a method of distribution would simply not exist.

This is an issue that has featured prominently in cases relating to credit card arrangements – including MasterCard and the damages litigation that followed.

Courts understand, on both sides of the Channel, that it is not sufficient to point to the allegedly high prices that, seen ex post, a practice produces. Coming back to the expression used in the European Night Services judgment of 1998, it is necessary to consider whether there would have been ‘real, concrete possibilities’ for the parties to the agreement to achieve the same objective in its absence.

The third lesson is that legal tests should be shaped in a way that incorporate the above insights. Conduct, in EU competition law, falls somewhere in a spectrum that ranges from the prima facie unlawful to the prima facie lawful, with practices requiring a case-by-case assessment falling in between.

Prima facie unlawful practices are presumed to have net negative effects on competition. Prima facie lawful practices, on the other hand, can be safely presumed to be pro-competitive without it being necessary to engage in the case-by-case assessment that is required for other conduct.

Many enforcement errors would be avoided if courts and authorities, when evaluating the lawfulness of a new practice, considered where, and why, it falls in the abovementioned spectrum. Understanding the rationale behind the legal treatment of comparable practices is likely to achieve much in terms of consistency.

To conclude, the real threat of digital markets is that they may lead to the incorrect conclusion that innovation is also required in relation to legal analysis. The opposite is true. The legal edifice built incrementally over the years, broad and rich in insights, remains not only a useful guide to sound and consistent enforcement, but a valuable safeguard against enforcement errors.

Written by Pablo Ibanez Colomo

28 September 2018 at 11:12 am

Posted in Uncategorized

On the Amazon probe: neutrality everywhere (or the rise of common carrier antitrust)

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Amazon probe

Commissioner Vestager announced, last week, the launch of a preliminary probe into some of Amazon’s practices. According to the information that has been made available, the probe has been triggered by Amazon’s use of data coming from merchants using its marketplace.

Because the users of the marketplace are also Amazon’s competitors, the practice would create an uneven playing field that would be tilted to Amazon’s advantage (Amazon would benefit from all the insights coming from the data). As far as I can gather, this is what the case is about.

As soon as the probe was announced, I received a call from Bloomberg’s Aoife White (see here). I told Aoife that this trend seems to mark the rise of what I called ‘common carrier antitrust’ (the concept did not make it, alas, into the piece).

What do I mean by that? I mean that vertically-integrated online platforms are expected not to discriminate against rivals that are also their customers.

The wind seems to be blowing in a clear direction: we may be reaching the point where it is problematic, in and of itself, that an online platform’s affiliate is treated more favourably than third parties. This trend has been going on for a while: it is not by chance that Neutrality Everywhere? was the topic of our 2nd Chillin’ Conference.

If discrimination indeed becomes an antitrust problem in and of itself, online platforms may soon be subject, across the board, to the same sort of access, non-discrimination and accounting separation obligations to which incumbent telecoms operators are already subject (i.e. common carrier).

Is common carrier antitrust new? Is it business as usual?

This trend, if it wins the day, will change the shape and scope of EU competition law. So in short: no, I do not think it is exactly business as usual.

  • In essence, common carrier antitrust involves the extension to all dominant companies of some principles that originally applied in a relatively narrower context.
  • Strict common carrier obligations make sense in the context of Article 106 TFEU (companies that benefit from exclusive or special rights). GT-Link is a wonderful example in which strict non-discrimination obligations are uncontroversial.
  • It is not unreasonable to extend common carrier principles to dominant companies that control an indispensable input (as in Commercial Solvents and Telemarketing). This is a point that was also made by the Court of Justice in Deutsche Telekom (see paras 230-233).
  • The Amazon probe is one of many recent examples that signal the likely expansion of common carrier obligations in relation to non-indispensable inputs – Google Shopping is probably in the mind of everyone reading this; but Android, at its heart, is also about a vertically-integrated firm favouring its affiliates through various contractual devices. The Internet Explorer case was closed in a very ‘common carrier’ way: a must-carry obligation placing Microsoft’s and competing web browsers on an equal footing vis-à-vis the platform (operating system).
  • Amazon might (only might, we do not even have a formal investigation) signal a step forward in the expansion of common carrier antitrust. If discrimination is deemed problematic in and of itself – that is, absent actual or potential foreclosure, then the practice would have become prohibited by its very nature (that is, by object). The same would happen, for all practical purposes, if the threshold of effects were set at a low level.
  • If so, the case would mark the expansion of common carrier antitrust all the way through the legality spectrum: the scope of common carrier antitrust would have extended from Article 106 TFEU firms –> to indispensable inputs –> to dominant firms (subject to an effects analysis) –> to dominant firms (by object).

If we accept that there is, in some respects, a friction between common carrier antitrust and the case law, the next question is whether this trend, under which discrimination may end up being perceived to be a problem in and of itself, is desirable.

My view is that we should have an open and explicit debate about the merits and consequences of common carrier antitrust (for competition law and for markets), and about the range of legal tests that can be used to address discriminatory conduct. It would be a bad idea to just pretend that it is business as usual.

In this regard, I guess my point of view is well known:

  • EU competition law never saw vertical integration, or favouring an affiliate in a vertical integration setting, as a problem in itself. On the contrary. It has long been accepted as undisputed that discrimination by vertically-integrated firms is not only pervasive but is often actually pro-competitive.
  • In many instances, discrimination (which manifests itself in many ways) paves the way for competition; sometimes, it is what makes competition possible in the first place. Some products and some innovations exist only as a result of a vertically-integrated firm favouring an affiliate.
  • I can think of many examples, some of which I discussed with Aoife:
    • HBO, which has transformed TV for the (much) better, is a child of discrimination. Cable companies expected to attract subscribers to a nascent technology by keeping attractive programming to themselves, and by giving it more favourable treatment within the platform.
    • Supermarkets favouring their private labels has not only done wonders for the competitive process, but has also brought prices down and improved the shopping experience of ordinary people.
    • I have discussed the example of the Tour de France on the blog. The Tour de France was created by a newspaper to attract new readership. The point of creating the event was to favour its affiliate so it could give better and more exhaustive coverage.

Some people may argue that the Amazon probe is addressing Amazon’s incentive to favour its own service. Commentators have spoken, in this regard, of a ‘conflict of interest’ (that is, an incentive to foreclose), which would be the real problem (see here, for instance).

Again, the said conflict of interest cannot be – at least, it has never been – a problem in and of itself. And this in spite of the fact that the incentive to foreclose will in many cases be real and difficult to dispute.

Why do firms refuse to license their intellectual property rights? Because they have an incentive to keep the downstream activity for themselves (i.e. they have an incentive to favour their own downstream services over those of rivals). There is probably not a much better example of a conflict of interest.

Taken to its logical consequences, the claim that the conflict of interest is in itself a problem, would mean that dominant firms should not be entitled to refuse to give access to their own tangible or intangible property.

And, of course, that would be a major departure from competition law as we know it – if there is something that we know for sure is that, no matter how undisputed the conflict of interest, only in exceptional circumstances are firms required to license their intellectual property under Article 102 TFEU.

***

I guess the many words I have written above can be summarised fairly easily: common carrier antitrust would entail, in some respects, a departure from EU competition law as we know it.

If this is the direction of travel, let us have a long deep thought about the major consequences that come with this new way of conceiving competition law. In this sense, the consultation launched by the European Commission on this question comes across as the right thing to do (and note that you still have time to submit your views).

Written by Pablo Ibanez Colomo

25 September 2018 at 10:29 am

Posted in Uncategorized

4th Chillin’Competition Conference (20 November 2018) – The Programme

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empty-conference

We are exactly two months away from the annual Chillin’Competition conference. This time it will be bigger and better than ever.

  • The conference (with thanks to the IEE) will take place at the Auditorium of the ULB (Salle Dupréel, Avenue Jeanne 44, Brussels); it will kick off at 9.15 am.
  • Registrations will open on Friday 19 October at 10 am Brussels time via a link that will be made available on the blog. As you know, in the past three years all tickets were gone within just a few minutes, so hurry up!
  • If you are travelling over 1,000 km and need to plan in advance, drop us a line and we will secure you a spot in exchange for the effort;
  • The conference will be free thanks to the sponsors that make the multi-sided business model possible. If your organization would like to contribute as a sponsor, please drop us a line;
  • Last year we gave out one of these mugs to all attendees. This time we will try to top that. 
  • Here is the programme:

THE CHILLIN’COMPETITION CONFERENCE 2018

Opening Introductory remarks featuring some substance but mostly bad jokes

Alfonso Lamadrid (Garrigues and Chillin’Competition)

Panel 1: Competition law in its economic and political context

Isabelle de Silva (Autorité de la Concurrence)
John Fingleton (Fingleton Associates)
Luis Garicano (IE Business School)
Philip Marsden (CMA and College of Europe)
Tommaso Valletti (European Commission)

Moderator: Lewis Crofts (MLex)

Keynote Speech by Commissioner Margrethe Vestager

Panel 2: And so what? Procedural violations in EU Competition Law

Jérémie Jourdan (White & Case)
Stephen Kinsella (Sidley)
Jenny Leahy (Freshfields)
Jürgen Schindler (Allen & Overy)
Wouter Wils (European Commission and King’s College London)

Moderator: Kyriakos Fountoukakos (Herbert Smith Freehills)

Syrian Lunch 

Panel 3: Market Power Revisited
Avantika Chowdhury (Oxera)
Eliana Garcés (The Brattle Group)
Bojana Ignjatovic (RBB Economics)
Oliver Latham (CRA)

Kirsten Edwards-Warren (Compass Lexecon)

Moderator: Alexandre de Streel (Université de Namur)

Ted@Chillin’Competition (“Concepts”)

Christian Ahlborn (Linklaters)
Peter Alexiadis (Gibson Dunn)
Fiona Carlin (Baker McKenzie)
Pablo Ibáñez (LSE and Chillin’Competition)
Andriani Kalintri (City Law School)
Catriona Hatton (Baker Botts)
Sarah Long (EUCLID Law)
Robert O’Donoghue QC (Brick Court Chambers)
Rich Pepper (Cleary Gottlieb)
Randy Picker (University of Chicago) Denis Waelbroeck (Ashurst and Université Libre de Bruxelles)
Johan Ysewyn (Covington)

Drinks

Written by Alfonso Lamadrid

20 September 2018 at 12:14 pm

Posted in Uncategorized

Forget about consumer welfare: it’s the law vs discretion divide that will mark the future of competition law (my presentation at the IEE in Brussels)

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The quadrants

Considerable energy has been devoted to attack (and defend) the consumer welfare standard on both sides of the Atlantic.

There is a real (perhaps growing) divide in the competition law community. Now that we are at a crossroads, this divide matters. It will mark the field for the years to come.

The above said, I think defending the consumer welfare standard is a waste of energy. For those who challenge it, consumer welfare is just a proxy war. Their end destination is not to embrace an alternative standard, but to change the shape and understanding of competition law.

(EU) competition law has progressively become a legalist discipline. Competition authorities are subject to constraints coming from the law and coming from mainstream economics. In the same vein, effective judicial review is known to be an indispensable ingredient in the system.

Under a legalist approach, consistency and predictability are paramount (for could we say that competition policy is implemented through law if enforcement were not consistent and predictable?). It is accepted that these values may occasionally lead to under-enforcement.

Those who attack consumer welfare, as much as those who say to endorse fairness or a wider range of values are, in essence, pleading to move away from legalism to embrace a discretionalist approach to competition law.

A discretionalist approach does not feel bound by consensus positions in economics, and is characteristically sceptical of them. Disregarding mainstream economics is not seen as a big deal. In fact, it may even be desirable – the consensus may be flawed for a variety of reasons.

What matters, under a discretionalist approach, is to reach the outcome that is deemed optimal in any given case. This is something that I explained already in the blog a while ago. Avoiding under-enforcement, accordingly, matters more than the consistency and/or predictability of the system. And avoiding under-enforcement may occasionally involve introducing a plurality of values or considerations.

These are the ideas I presented on Friday of last week in Brussels. My slides can be found here. I try to explain why people tend to develop a fascination with the goals of competition law, and why this debate is, by and large, irrelevant (or overly superficial).

I then move on to explain why law vs discretion is the real divide in the competition law community. As I already explained here, economic analysis can be legalism’s best friend, in the same way that formalism is often its worst foe.

I look forward to your comments!

Written by Pablo Ibanez Colomo

13 September 2018 at 10:49 am

Posted in Uncategorized

On Ping: the CAT reinvents economics in a paragraph – will cartels now be allowed?

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ping logo

The provisional judgment of the Competition Appeal Tribunal in Ping is now out. Most of you will remember that the case is about the status of (outright) online sales bans under Article 101(1) TFEU.

The CAT has upheld the CMA’s decision: such bans are restrictive by object. However, it departs in some crucial respects from the authority’s analysis.

In the post I wrote back in May, I explained that the CMA had conflated the question of whether an agreement is restrictive by object with that of whether it is objectively necessary.

The CMA’s decision indeed suggested that companies can only escape the by-object qualification if they can show that there are no less restrictive means to attain the legitimate aim they seek.

The CAT concluded, in line with what I suggested, that the CMA erred in law in that respect. If the CMA’s analysis was incorrect, you may be asking why (and, more importantly, how) the decision was nevertheless upheld.

The CAT did so through a somewhat heterodox interpretation of the case law and, more controversially, by coming up with a surprising statement that questions everything we thought we knew about cartels.

Restrictions by object, pro-competitive rationales and cartels

Ping argued (para 101) in the proceedings that an agreement is restrictive by object only if it lacks a plausible pro-competitive rationale. As Alfonso and I have explained many times here, this is the most sensible way to make sense of the case law (with the exception of cases that relate to market integration, where the bar is higher, and vertical price-fixing).

Ping’s arguments are in line with AG Saugmandsgaard Øe’s opinion in F Hoffmann La Roche v AGCM (which is not cited by the CAT).

Cartes Bancaires is an example that illustrates the Court of Justice’s approach well. In the relevant economic and legal context, the agreement was understood to be a plausible means to address genuine free-riding concerns. As a result, it was found not to have an anticompetitive object.

The CAT does not read Cartes Bancaires in this way. However, it fails to explain what methodology, if any, the Court followed to ascertain the object of the agreement in that case. Interestingly, the CAT also refers to Delimitis, in which the Court’s approach to by-object infringements (paras 10-12) could not be more transparent (and more in line with Ping’s arguments).

The most interesting bit of the Ping judgment comes immediately afterwards (same paragraph). The CAT argues that Ping’s approach to identify by-object infringements (is the agreement a plausible means to attain a pro-competitive objective?) cannot be right because it contradicts the Court’s judgment in BIDS.

BIDS, the CAT acknowledges, was a cartel case (a cartel of well-meaning people, as I like to say, but a cartel nonetheless). And because it was a cartel, the Court could only conclude, as it did, that the agreement was restrictive by object (I never understood why such a straightforward case generated so much interest).

Cartels can take many different forms and can be concealed in all sorts of ways. The defining feature of cartels, their essence, is the fact that they lack a plausible pro-competitive rationale. This is what makes them stand apart from other horizontal agreements – and the reason they are the enforcement priority of competition authorities around the world.

And because cartels lack a plausible pro-competitive rationale, firms rarely ever try to come up with a justification under Article 101(3) TFEU. And when these justifications are advanced, they are irrelevant because they lack credibility. This is the – very sensible – point the Court made in BIDS: once it is established that the agreement is restrictive by object, it does not matter whether it is alleged to pursue other objectives.

For instance, pharmaceutical companies may attempt to claim that the point of their cartel is to devote the additional profits to enhance their research and development capabilities. Or book publishers may try to claim that their cartel seeks to expand the range and diversity of their titles. These arguments can be disregarded precisely because they are implausible.

Or so we thought.

The CAT points out in its judgment that it was ‘obviously plausible’ that the cartel at stake in BIDS ‘might be pro-competitive’. You read it right.

The consensus about cartels (what authorities, courts and international organisation have been saying for decades), the foundations of contemporary competition law and policy, casually questioned in a paragraph. Not only is the consensus wrong; it is ‘obviously’ wrong.

There is much debate about unilateral conduct, mergers, and vertical agreements. We thought cartels was the one area where there was no disagreement. Until Friday of last week.

What explains the CAT’s argument? Was there another way?

I can think of a (plausible) reason behind the CAT’s reasoning in Ping. On the one hand, it may have felt that Ping’s aims were legitimate. On the other, it may have felt that the outcome of the CMA’s decision was correct. Accordingly, it concluded that, even though the object of the agreement could be pro-competitive, the agreement had an anticompetitive object (I am paraphrasing).

One can come to the conclusion reached by the CAT without so many contortions, and without casually reinventing economics along the way.

The reason online sales bans are, in principle, restrictive by object has to do, I believe, with market integration in the EU. This is clear from the Guidelines on vertical restraints and the Digital Single Market Strategy. E-commerce is a powerful tool to enhance cross-border trade and integrate Member States’ economies.

One cannot be surprised, accordingly, that outright bans on online sales are treated more strictly than most other vertical restraints. It is one of these areas where it makes sense to apply the logic of Consten-Grundig. Because market integration is at stake, even a clause that is plausibly pro-competitive is deemed restrictive by object.

I have already explained that I do not have any problem with the introduction of market integration considerations in EU competition law. So long as courts and authorities are explicit about the fact that such considerations guide the outcome in the case, I fail to see why it would be controversial to rely upon consistent case law dating back to 1966.

Why the CAT’s judgment may be a problem

One could argue that the CAT’s judgment is just an anecdote to be mentioned in passing at conferences and in the classroom.

I am not so sure.

We live in times of change. It is not a secret that some sectors of the economy are trying to justify the creation of cartels in the current (disruptive) environment. And, as the Ping case shows, there may always be an astute lawyer able to persuade courts and authorities that cartels are good after all.

Creating the perception that cartels may be a plausible means to attain the objectives advanced by their members may eventually pave the way for sector-specific exemptions aimed at extracting rents from powerful suppliers and/or customers.

And (sorry to end on a gloomy note) the moment cartels start to get exemptions, (EU) competition law and policy would be over. This, I guess, is one of the battles for the years to come.

Written by Pablo Ibanez Colomo

11 September 2018 at 11:52 am

Posted in Uncategorized

Grillin’&Chillin’: Two new entrants in the competition press segment

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Grillin'andChillin'.PNG

Competition is thriving in the chilling competition market. This blog always stood for the proposition that it’s possible to cover competition law in an informative, serious manner, yet with a relaxed or even purportedly fun tone. We are glad to see that apparantly there is increasing demand, and supply, for this. A number of new outlets have emerged and are doing a great job at chillin’ while grillin’ the real issues [I know it’s a bad one but, hey, I needed something to fit the image…] Instead of seeing them as rivals in attracting the short time span attention precious time of slacking  busy ompetition professionals, we see them as complementary goods. They also complement the excellent media services that for very good reasons have long dominated this field.

Two examples (that also share the odd commonality of featuring fishes in their logos) are these:

[Intermission: if any if you can identify a law firm and a department of an institution that also featured marine creatures in their logos, you get one of the last remaining Chillin’Competition meme-coffee mugs]

-Competition Lore, a podcast series run by Prof. Caron Beaton-Wells (University of Melbourne) where she seeks to engage guest in a debate about the role of competition in a digital economy and society.  To get more info, suscribe or listen to the 7 episodes available thus far, click here. Btw, Nicolas Petit (founder emeritus), who’s a big podcast fan, also recently appeared on a different series where he also touched on these issues (see here).

-POLITICO is taking a new approach to covering competition with two weekly publications: Fair Play, a briefing on what’s driving the competition world, and Competitive Edge, a column that analyzes and challenges ideas about mergers control, antitrust, state aid policy and more. Politico has been a very successful entrant in the EU media market, and has made an ambitious bet to cover competition policy too, with a team of expert senior journalists (Simon van Dorpe and Christian Oliver) and, unusually (for the good), a competition economist (Thibault Larger).

Their mandate is to explain how competition is increasingly the weapon used to shunt the policy through, whether it be in the digital single market, the energy union or any other enforcement area. Their primary focus centers on the politics, economics and personalities behind the cases, but they are also keen on op-eds and will soon also be giving subscribers data tracking and case monitoring. The tone is meant to be fun and thought-provoking, but they certainly are not afraid to touch on challenging or uncomfortable issues.  More info on their services is available here [pro@politico.eu]

Below we give you an example of their work, and we also use the occasion to recycle some of the quotes that weren’t finally used  throw some ideas out there that we did not discuss here. Since they are good media professionals, their articles give you quotes from all sides. Since we are (I am) a biased, conflicted, non-neutral lawyer, below I only reproduce only mines 😉

These hyperlinks enable you to read the full pieces which would otherwise only be available to subscribers:

MULTI-SIDED MARKES AND AMEX. Politico ran a very good piece explaining the arguments on the multi-sided discussion on the SCOTUS decision in Amex. For that piece, we contributed with views that I had already advanced on the blog. This is what I sent Thibault for that one (including a couple of quotes that did not make it to the article, but that I still think may be of interest): (i) “The Opinion effectively holds that complex, multi-faceted market realities cannot be examined in silos. Requiring that the full picture be considered is sensible and in line with established EU case law“; (ii)  “The only practices that this Opinion exempts from antitrust liability are those that are necessary for the operation of business models that overall do not restrict but foster competition“; (iii) “The case in no way immunizes multi-sided platforms, nor should it. The case is however a blow to the Nirvana fallacy that one can challenge piecemeal a complex business model under the assumption that only positive things will follow“; (iv) “In reality, this all boils down to the burden of proof. It may be hard to show with empirical evidence that a given practice is, or is not, necessary for a platform to deliver established procompetitive benefits. Very often one simply does not know. But holding that uncertainty plays against the accused would be problematic on many levels“.

POLITICS IN COMPETITION. Politico recently inquired into the real role of politics in competition policy and cases.. My quoted view was that “Political principles guide competition policy. There’s nothing inherently wrong about that.” The problem comes when politics impacts not on policy the outcome of specific individual cases. My additional views on these question avoided recent big cases and mostly focused on State aid cases, where “politics plays a particularly evident and crucial role“. This is because “the institutional set up for State aid cases puts the center of gravity on Member States, so politics inevitably plays a much more important role”. In my view, “a way to make State aid control less political and more objective would be to grant more rights and a greater role to companies (beneficiaries and complainants)”.  In any event, “Courts are however well placed to identify and correct any undue influence of short-term politics”.

HR RULES AT DG COMP. A recent piece crunched through which big players at DG COMP would soon have to move according to HR rules. My take was the value of these rules to the EC is arguable and, in addition, DG Comp is a different animal (there are others, like the Legal Service). Officials deal with cases that require time, familiarity with the law, with the files and industry knowledge. In my personal view, doing away with experience and with some of the DG’s top assets could be counterproductive.

Written by Alfonso Lamadrid

6 September 2018 at 8:48 am

Posted in Uncategorized