Chillin'Competition

If you follow us, you will know that Chillin’ organised its first State aid event on 14 June. We thoroughly enjoyed the day, and the encouraging feedback we received suggests that it would be a good idea to repeat the trick.

Whether you were able to make it or not, we are sure many of you are interested in the materials used at the workshop.

Selectivity

My presentation (see here) opened the first discussion, devoted to selectivity issues. I had the privilege to share this panel with José Luis Buendía Sierra, Jacques Derenne, Penelope Papandropoulos and Christina Siaterli.

As an academic, this area of the law has become genuinely fascinating, and this was a dream occasion for me to raise (finally!) some questions that have been at the heart of my discussions with students over the years (I was, in fact, glad to see some of them in the audience).

I structured the discussions around three main points:

The co-existence of two approaches to selectivity

One of the most intriguing issues in this area has to do with the co-existence of two different approaches to selectivity. There is a form-based approach that revolves around the famous ‘three-step test’ and there is an effects-based approach in which the only question that matters is whether, in effect, undertakings in a comparable factual and legal situation are treated in the same way (the Gibraltar approach).

We discussed how panellists saw the co-existence of these two approaches – one of the panellists labelled it the Marxist (as in Groucho) approach to selectivity (‘this is my approach to selectivity, but if you do not like it to I have another one’).

My own take? The co-existence of these two approaches (with all the legal and policy implications that follow) is alive and well, as evidenced by the GC judgment in the Polish Retail Tax case.

Undertakings in a ‘comparable factual and legal situation’

This has emerged as a central question in many recent cases. Whether or not a measure amounts to a selective advantage (and thus whether it qualifies as State aid) depends on the equal treatment of ‘undertakings in a comparable factual and legal situation’.

Alas, how to identify, in practice, the undertakings that are in a comparable factual and legal situation? The question is tricky, and the case law still developing.

It is clearly not about defining the relevant market in an antitrust sense. What is it then? Can the exercise be conducted in a meaningful and predictable way? It is reasonable to argue that large and small undertakings in case like Polish Retail Tax are not in a comparable situation; but it is equally reasonable to argue that they are.

What will the future bring? Some panellists were more optimistic than others about the situation, which will in any event remain a central one.

What if it is all about the objectives?

I finished the panel with a question on which a PhD student of mine has been working hard for a while already: what if the finding that a measure is selective depends in reality on the underlying objective of the measure?

What if, in other words, it all depends on whether the objective is deemed commendable or not? This interpretation would allow us to reconcile seemingly contradictory judgments such as World Duty Free and Gibraltar.

This suggestion raises an immediate follow-up question: would two formally identical measures, one pursuing a commendable objective and one pursuing a questionable one, be treated in the same way?

This fundamental debate could hardly be more topical. As I was giving the final touches to this post the General Court announced the annulment of the Commission decision in the Hungarian advertisement tax case, and there is growing talk about the so-called digital taxes (to which one of the panellists referred). Interesting times ahead!

Procedural and institutional issues

Alfonso chaired the second panel, which featured Natura Gràcia (see here for her presentation), Massimo Merola, María Jesús Segura Catalán (presentation here) and Andreas von Bonin (presentation here).

This second panel touched upon eternal questions on procedure that have not lost a bit of their topicality. We were lucky that the knowledgeable audience allowed for meaningful discussions.

One of these eternal questions relates to the status of third parties in State aid proceedings.

A second question concerns the powers and obligations of national courts. Is a national court required to order recovery pending a Commission decision, even when there is a reasonable prospect that the aid will be deemed compatible? Some argued it is, some took the view that the Treaty allows for more flexibility.

Finally, the issue of judicial review has raised eyebrows in recent times. There is a perceived rise in the rate of annulments before the General Court. Does this perception reflect reality (sorry, I am an academic and have to ask this)? Assuming it does, what may be driving it? María Segura gave some valuable insights in this sense.

State aid beyond the EU

We did not want to turn the last panel into one focused on Brexit issues alone. In my introduction (see here) I tried to emphasise the trade-offs at stake when a State aid system between two trading partners is designed.

In particular, I showed how, a purely national system (e.g. the CMA controlling aid granted by UK public authorities) comes at the price of an asymmetric relationship with supranational authorities – some of the wording used in the Withdrawal Agreement is reminiscent of the relationship between the European Commission and national competition and/or regulatory authorities in the telecoms sector.

My introduction was followed by a presentation by Vincent Verouden who addressed the rationale for State aid control between trading partners (see here, and note that he also addresses some of the features of the future EU/UK relationship); Nicole Robins (see here), who addressed, why and how frictions between the EU and the UK might arise and – faithful to the objective of the panel – Christian Jordal addressed some features of a symmetric system (that are enshrined in the EEA Agreement, as shown here).

Our keynote speaker: Viktor Kreuschitz

We were privileged to have Viktor Kreuschitz, judge at the General Court and renowned State aid specialist, who provided a wonderful overview of some recent developments that were not covered in the previous panels. I frantically took notes on issues that ranged from the notion of State resources to the status of the GBER. And learnt a lot!

Pablo and I were both speaking at the College of Europe’s ELEA Symposium last week, which was great. We actually did the full College experience, attending the last student bar of the academic year (the picture above is of my panel; hopefully no pictures were taken at the bar).

In the course of next month, I’ll also be participating in the College’s various summer courses on competition law. These include the courses for competition officials from China, India, Japan, Korea and ASEAN countries (which are not very likely to be of interest to you), but also the 1 week course on EU Competition Law and a 3-day course on Competition Policy & High-Tech markets.

You can still sign up for these (if you do, you’ll get a free beer from me in Bruges at the best beer pub you will have ever visited…) 😉

On Thursday of last week, I had the privilege to present parts of my research with the Amicale des Référendaires (the association of current and former law clerks of the CJEU).

My (animated) presentation, available in French here, addressed the issue of judicial review of administrative action in EU competition law.

As far as I am concerned, it was a wonderful opportunity to reflect on the respective roles of judges and academics when trying to make sense of the law (and there is hardly a better audience for an academic).

Court judges invariably emphasise at conferences that their role, at the end of the day, is to provide an answer to a given dispute in a specific factual and legal context. I always try to bear this idea in mind.

What is the role and potential contribution of academics, against this background? I see it as taking distance from concrete cases and trying to figure out whether there are patterns in the behaviour of the relevant actors (which explains the choice of cartoon for my presentation).

The importance of judicial review

Discussing the importance of judicial review before people who deal with it on a daily basis and know the intricacies of the subject much better than I do may come across as strange. What was my point? To explain that, as a result of my research, I am better able to understand, in a concrete way, the potential negative consequences of undue deference.

One needs to move away from a static perspective of administrative action and judicial review, which sees disputes as a one-shot game. We should always bear in mind that (i) law is, by definition, a dynamic phenomenon and that (ii) administrative authorities like the Commission are repeat players.

Two conclusions follow from these insights. First, administrative authorities may behave in a way that takes long-term considerations into account. By the same token, it may be possible to identify patterns in the behaviour of such authorities. Second, deference by courts can be expected to negatively impact the consistency and predictability of the law.

Are there distinct patterns of behaviour on the part of the Commission?

One of the most important lessons I have drawn from the systematic study of the EU competition law system is that one can identify distinct and persistent patterns of behaviour by the Commission as a competition authority. These patterns last to these day, and are useful to identify the source and likelihood of errors of law.

A central question in this sense relates to the way in which the Commission engages with the case law. Is it risk averse, as a frequent narrative suggests, or is it risk prone? My research findings do not provide much support for the risk aversion narrative.

Across provisions and over time, the Commission tests and has tested the boundaries of the case law, occasionally departing from it. It is not difficult to think of examples of this pattern of conduct (Irish Sugar, Langnese-Iglo, Microsoft, IMS Health, O2), which one should acknowledge when thinking about judicial review matters (and the related issue of legal consistency).

Expert consensus and judicial review

I was interested to find, in my work, that the likelihood of annulment rises where the Commission departs from, or fails to acknowledge, the experts consensus in its decisions. Suffice it to think in this sense of Airtours and Cartes Bancaires.

This is, I would say, a natural and expected reaction in a judge. Ignoring the expertise developed incrementally over the years comes across as arbitrary and capricious. As I explained in the past (see here), it is difficult to see how judicial review can be meaningful if we allow an administrative authority to choose what to believe.

From a normative perspective, I see the expert consensus as the basis on which administrative action should take place. From a positive perspective, I believe this is also the EU courts’ position (in a way, the Tetra Laval formula appears to capture this idea).

The issue of expert consensus and its relationship with administrative action and judicial review is fascinating. I look forward to digging deeper into it and (if there was any doubt) sharing my findings here.

[UPDATE: Since I have received the request from some of you to get an English version of the slides, you can find here the presentation I gave when I launched my book last year. There is quite a bit of overlap between the two presentations.]

The June issue of The Lawyer  magazine includes a short piece featuring my views on the current debates surrounding competition law, its alleged insufficiencies and its possible reform.

The piece posits that these debates relate not only to the moral underpinnings and ultimate justifications of competition law, but also to wider questions that cut across other areas of law. These have to do with legal certainty, objectivity, the role of expertise in decision-making, the virtues of rule-based system and non-negotiable legal principles.

With The Lawyer’s permission, it is available here. Comments welcome!

Competition law at a crossroads (The Lawyer_Lamadrid)

The famous Mardis de la concurrence (run by Jean-François Bellis and Denis Waelbroeck) are one of the most venerable institutions in the Brussels competition law community.  

It is wonderful that the closing address of this year’s Mardis will feature Commissioner Vestager, who will share her thoughts on Merger Control: The Road Ahead.

The event, which could hardly be more topical, will take place in a week’s time (Tuesday 18 June) at 7pm.

The venue will be the superb Auditorium of the ULB (Salle Dupréel, Avenue Jeanne 44, Brussels), which many of our readers will remember from last year’s conference.

Attendance will be free of charge, but those interested are expected to sign up for it here.

More info can be found in the event’s flyer. We hope many of you will be able to make it!

As you know, our State aid aid event will take place on Friday of next week – 14 June, @ Fondation Universitaire in Brussels (rue d’Egmont 11). We look forward to seeing many of you there!

You can check the final programme below. If you have not signed up yet: the event is unfortunately full but the waitlist is still open: do sign up for it here.