Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Interim Measures: The Revival

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broadcom

Last week the Commission announced the issuance of a statement of objections to adopt interim measures in parallel to the opening of an investigation against Broadcom (see here). The Financial Times published a piece about it that features some of my views on this development (see here).

A few more developed thoughts are in order:

  1. This is the first time since the adoption of Regulation 1/2003 that the Commission intends to adopt interim measures under Article 8. As you know, this power was not expressly foreseen in the previous procedural regulation. In fact, for some time the Commission held the view that t it did not enjoy the power. In Camera Care, however, the Court confirmed that it did because it was indispensable for the effective exercise of its functions. So in a way the Commission obtained a power it did not want.
  2. This is hardly a surprise. Many independent and not-so-independent commentators had been asking for the application of interim measures, particuarly in fast-moving sectors. Commissioner Vestager had publicly stated that the Commission was looking for a test case. This is it.
  3. For many years the Commission didn’t have an appetite for interim measures. These cases were always exceptional (pretty much confined to ports and ice creams), but trickled out after several Court losses. The scare from the last defeat (in IMS) has finally lasted 18 years.
  4. The reasonable appetite to bring this tool back to life does not mean that one should forget the lessons from the past. The main one being that interim measures may be appropriate in clear-cut cases, but not where the law is unclear. This is both as regards the theory of harm and the remedy. As IMS shows, interim measures might not be appropriate in cases where a company may be forced to relinquish for good core elements of its business model (admittedly, that would hardly be the case with regard to exclusivity agreements).
  5.  In policy terms, the news that this power is back in the game is a positive one  (btw, I wish the same happened with declarations of inapplicability and guidance letters, which were also foreseen in the Regulation and that are yet to be used).
  6. The Commission’s change of attitude, however, is that: a change of attitude. That does not alter the strict legal conditions to justify interim measures nor does it have a bearing on what really matters: the relevant factual circumstances of each case. In other words, the Commission cannot simply order interim measures because it wants to revive them. This is one of these things that you do when you have to, not when you want to.
  7. In that regard, whether interim measures were or not justified in this particular case is something on which we can’t have a view, as it depends only on factual and complex market information that we ignore.
  8. Complainants are likely to insist even more on interim measures, but these can only be adopted ex officio; complainants cannot force the Commission to adopt them and cannot appeal their non-adoption.
  9. A very positive implication of this development is that parties contesting the measures may get a chance to bring matters to Court from an early stage (in the past several applicants have successfully sought interim measures from the Court to suspend interim measures ordered by the Commission). Greater and earlier judicial scrutiny is always good, and certainly preferable to informal pressure on companies to do or not do something without the possibility of review.
  10. There is no reason for the Commission not to adopt interim measures when there is a real risk of “serious and irreparable harm”. At the same time, however, this remains an exceptional power that should not be forced upon a particular sector/set of cases.
  11. The Commission’s view of the circumstances in which interim measures may be necessary at the administrative stage may perhaps also have an impact on the Court’s view of the circumstances in which they are necessary at the judicial stage. Both were very restrictive. If the Commission becomes more flexible ordering interim measures on companies, the Court may perhaps also become more flexible in granting interim measures against Commission decisions…
  12. If we are concerned about timing remedies, perhaps we should also think about some way of limiting the, at times excessive, duration of investigations.

Written by Alfonso Lamadrid

3 July 2019 at 12:54 pm

Posted in Uncategorized

One Response

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  1. At the same time in the UK, the CMA’s digital markets strategy published last week seeks to promote the use of interim measures (in line with the Furman report and Lord Tyrie’s reform proposals). A revival indeed!

    Carlos Arrebola

    12 July 2019 at 9:07 am


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