Relaxing whilst doing Competition Law is not an Oxymoron

Meeting and Shifting- The Burden of Proof (in Digital and Beyond)

with 2 comments


This is the title of the last panel we will be hosting at our upcoming Chillin’Competition conference. The proposals floated to shift the burden of proof in relation to certain companies and practices were also the subject of a topical piece published yesterday in the Financial Times.

They were also the main issue I discussed in this recent piece for Competition Policy International: Shortcuts and Courts in the Era of Digitization” (accessible to CPI subscribers; in a few days we will also make it freely available here). And it was also the topic on which I focused my intervention at a talk that Pablo and I had a couple of weeks ago with the great staff of the EFTA Surveillance Authority.

In spite of recent case law, talks like this one, books like this one, and papers like this one [note the relevant contributions from two brilliant young women in academia], there’s still a surprising amount of confusion as to what this burden entails, and as to when it falls upon the authority/plaintiff and on the defendants. These are questions we will address at our conference.

I say that the reigning confusion is surprising because most complex cases eventually hinge on this question. This is THE obstacle that authorities/plaintiffs need to satisfy in any given case. At times this has not seemed to be an issue, because enforcement has traditionally focused on clear-cut cases, and because in those cases we resort to presumptions that alleviate the burden (e.g. the “by object label”).

But the greater the complexity and the competitive ambiguity of the practice, the greater the importance of the burden of proof. Indeed, a number of decisions have been annulled with regard to more ambiguous practices (e.g. for failing to properly assess the relevant legal and economic context or the counterfactual or, in other words, for trying to shift the burden too soon).

It is certainly no coincidence that there are currently two opposite trends in our field, and that these changes are being suggested precisely at the time where EU Courts are placing greater emphasis on the Commission’s obligations in this regard (this was actually the lesson of Intel and Cartes Bancaires). And it is not surprising that many of the people suggesting these changes also advocate “Taking antitrust away from the Courts” (that is actually the name of the piece!).

And it is by no means an accident that the current proposals relate to practices that have ambivalent effects (my take on that is available here). This would not be necessary in situations (e.g. cartels) where a practice can only do harm. This is not about presuming harm in the light of clear lessons from economics and experience. It is about presuming harm absent those lessons, or against those lessons. It is about a dogma, believing in what we cannot see or prove. It may be somehow contradictory to argue that there is an abundance of obvious anticompetitive practices in the digital sector, but then recommend that their existence and anticompetitive potential be presumed, not shown on the basis of evidence. If a practice is truly anticompetitive, the evidence will be there.

But, of course, in the era of digitization we cannot bother with complexity, we have grown accustomed to immediate solutions and easy fixes that address our impulses.

The problem, however, is that the law doesn’t really work like that. As observed by President van der Woude in in this must-read JECLAP piece:

“[W]here the contested conduct of the public authorities is repressive in nature, it is hard to conceive, at least in free democratic societies, that citizens and firms can be condemned on the basis of estimates, approximations or guesses, even if they are informed ones. Uncertainty must then be balanced against the requirements of the presumption of innocence […]. [T]his balance is struck by relying on legal concepts, such as the burden of proof”.

Shifting the burden of proof in a quasi-criminal context is unheard of in jurisdictions subject to the rule of law and would set a first and dangerous precedent. Would the European Court of Human Rights, the EU Courts and Courts from Member States ever accept overturning the presumption of innocence? And, in the most unlikely scenario that they did, how could one confine ripple effects beyond digital platforms, and indeed beyond competition law?

Implementing these changes would certainly make enforcement much easier. No need to bother with foreclosure, effects, indispensability or causality. We could do away with those (and, in passing, with lawyers and judges too, as they also are annoying). I guess I have more trust in competition authorities: they don’t need this to bring up good cases.

Implementing these proposals would radically transform competition, but at a cost to basic legal principles that is just too high.

Written by Alfonso Lamadrid

31 October 2019 at 5:54 pm

Posted in Uncategorized

2 Responses

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  1. Alfonso, this debate is perhaps a showcase for a more fundamental debate about competition policy that is taking place in the US and will sooner or later reach Europe. What is/are the goal(s) of competition policy? Let’s take consumer welfare (innovation, quality, variety and price) and, for example, a demonised practice in the EU (RPM): EU competition authorities only look at short-term price effects and disregard incentives to innovate, increase quality and variety. if we take the “competitive process” (as per the battery purchasers’ cartel) the scope for different choices is as large. Competition lawyers have learnt that for any given competition issue we will always find compelling economic and econometric evidence supporting its pro/anti competitive effects based on the variables (values) used by the economists. Maybe the big question not raised in the EU is whether competition policy is about values/choices and, once accepted it is the case, identify this values/choices in every case. Certainly, it means accepting that competition policy is not infallible nor even an economic science and that the values of an enforcer shape the outcome of cases. We see that in the US with the divide between republican and democrat FTC members in several cases.This “weakness” seems to me more sincere than the self-delusion and empty policy statements of every DG COMP Commissioner and high ranking official about “competition policy protecting consumer welfare/competitive process” or “ensuring consumers get lower prices and innovative high quality products”. Toma ya del frasco Carrasco…


    6 November 2019 at 12:21 pm

  2. Hi everybody. I guess there is another argument to claim against the shift of the burden of the proof in cases where the economic rationale is not well established against the allegedly anti-competitive conduct. In Italy, the freedom to conduct business is a constitutional right (Article 41). I would like here to highlight the word “freedom”. This said, in my humble view a shift on the burden of the proof (in the framework of an administrative procedure such is the one before the Commission / NCA) would implicitly amount to a request for an authorization to conduct a certain business in a given way. If you are the legislative power, you may require such authorizations and provide relevant rules for it, but were Articles 101 and 102 TFEU made for it? I don’t think so. Partially, this observation is related to the comment above. Here you have already a choice made (by the constitutional power) and only a judge may find a balance between different constitutional values, not the public enforcer, since the public enforcer has one mission only: to look at the specific area of law enforced, (which will always prevail). What do you think about it? Regards from a cold and foggy Milan.

    Pietro Missanelli

    14 November 2019 at 7:52 pm

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