Chillin'Competition

For several months now every conference and journal in our small world has featured a panel and a few articles on the Intel Judgment, on how to interpret it and on the impact it will have on enforcement and on judicial review going forward. But the most authoritative view has been written by the very Judge in charge of the case.

Judge da Cruz Vilaça was President of Chamber at the Court of Justice of the EU until a few weeks ago, when his term ended. He had also been the first President in the history of the General Court. He is one of the people that has most influenced the course of competition law in recent years, and also (now that he’s not at the Court we can say it) one of the nicest people in the world of EU Law (with a talent for surrounding himself with competent and nice people too). Focusing only on the Intel Judgment doesn’t do justice to his contribution to EU Law and to competition law. But doing justice to that would require much more than a blog post.

Back in August, Judge da Cruz Vilaça published a piece –that has only now come to our attention- titled “The intensity of judicial review in complex economic matters—recent competition law judgments of the Court of Justice of the EU”. It has been published in the Journal of Antitrust Enforcement.

This is a reflection on the role of the Court in competition cases, and in particular on how Intel fits within that case law and on how it is to be understood and interpreted. It does not represent the view of lawyers trying to push things in a given direction or of academics. It is an objective account by the most authoritative person possible. And it engages with academic commentary and is kind enough to cite our blog posts at different points..

We recommend you to read the full piece, but here are just some ideas that stand out:

Intel as an important yet limited step: “the two EU courts have progressively strengthened the conditions of their review and developed a more intense scrutiny in competition cases (…) [the Intel] judgment constitutes an important—albeit limited—step made by the Court in strengthening its judicial control as regards the application of Article 102 TFEU”.

Evolution in the case law: “The way the Court necessarily operates helps to explain why one may sometimes feel that the Court did not always follow an unambiguous line of reasoning in judgments concerning the same field of competition law. It may simply happen that time have not yet come for certain developments (…) But in a fast moving world, judges must also permanently listen to changes in the social, economic, technical, and political environment. How could it be different in the digital age, in a time of globalization and in a knowledge and information-based society?”

On the lessons to be learnt by the Commission: “the regulator would be well advised in the future not to expect any special indulgence for relying on a presumption of any kind of infringement per se of Article 102 TFEU when seeking to prove the anticompetitive character of such a system. Indeed, it would be odd to submit the European Commission to a stricter test when it carries out an analysis of all the circumstances than if it simply had relied on a per se infringement approach!”

Consumer welfare as a useful reference point: “not every exclusionary effect is necessarily detrimental to competition, as a result of which less efficient and less attractive competitors may be forced to leave the market. I believe such statements are useful for clarifying what the Court considers to be the major goal of EU competition rules, which the Commission has articulated as being ‘to protect competition on the market as a means of enhancing consumer welfare and of ensuring an efficient allocation of resources” As Professor Jones put it, ‘the case-law of the EU courts does not unambiguously endorse’ that view. Rather it sometimes also placed emphasis on the interests of competitors or individual undertakings. I do not think this a serious defect: although perhaps not always 100 per cent consistent, the case-law places in general sufficient emphasis on consumer welfare as a goal”.

Making life harder for rivals is not the same as foreclosure [you will have heard me say this a few times..]: “Of course, the objective (or the result) of the competition process is to make life harder for any operator on the market, forcing it to be more efficient—which in general does not happen with monopolist”.

It is all about correctly allocating the burden of proof: “the ECJ also made it clear that the balancing of favourable and unfavourable effects on competition of the practice in question can be carried out only after the analysis has shown the intrinsic capacity of that practice to foreclose competitors that are at least as efficient as the dominant undertaking. I think this is nothing more than the correct apportionment of the burden of proof between the Commission and the defendant. The specificity of a system of rebates that includes an exclusivity clause is that once the Commission has discharged its duty to establish the likelihood of anticompetitive conduct, the hurdles will be particularly high for the latter when trying to rebut the Commission’s finding”

(…)

“the dividing line between margin of appreciation and duty to review is sometimes very thin, which makes it more difficult to maintain the consistency of the case-law in all circumstances. Courts, however, have an arsenal of legal weapons available to them in this challenge. The most obvious are the rules on the burden of proof. A fine example of how to use them is given in paragraphs 66 and 67 of the judgment of the General Court in Intel”.

[By the way, that last bit makes exactly the same point as that made by General Court Vice-President in the abstract of an article to be published soon in JECLAP. He also says that, following Cartes Bancaires and Intel, the key to striking the right balance between the Commission’s margin of discretion and the Court’s in-depth review “can be found in the burden of proof that rests upon the Commission pursuant to Article 2 of Regulation 1/2003”. We couldn’t agree more]

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The article contains much food for thought. And, incidentally, as frequent readers of the blog will have already noticed, it confirms the understanding of the case that we had been positing here and elsewhere for a while..