Chillin'Competition

Last week’s decision by the Autorité de la Concurrence is remarkable for several reasons, in particular because it provides for interim measures and it is about exploitative conduct. In that sense, it is an excellent example of what the new competition law will bring.

Traditional competition law was reluctant to engage with practices involving the administration of complex, prescriptive remedies (such as the redesign of a product or the determination of the terms and conditions under which firms are to deal with rivals and/or customers).

The decision reveals how much things are changing. As summarised in the picture above, the Autorité does not hesitate to mandate that Google set up a framework for its negotiations with press publishers and their remuneration.

At the same time, the decision feels like a déjà vu. When reading it, I could not avoid being reminded of the interim measures adopted by the Commission in IMS Health back in 2001 (and the subsequent developments before the then Court of First Instance).

As an instrument that invites us to ponder both the past and the future, it is a good starting point for a serene debate about the European competition law system and its evolution. Your thoughts and comments would, as usual, be most welcome.

Interim measures: IMS Health, Broadcom and Google

It is worth reading (or re-reading) the Order in IMS Health. As I understand it, there were two main reasons why the President of the CFI suspended the implementation of the interim measures decision in that case.

First, the Order explains that the Commission’s interpretation of the existing case law (in particular Magill) was, at best, controversial. Second, the President concluded that, rather than preserving the status quo (interim measures are known as mesures conservatoires for a reason), it sought to alter the market structure by means of proactive remedies changing the firm’s business model.

Following this experience, it would have been reasonable to anticipate that any new interim measures decision would be more risk averse than IMS Health. The European Commission’s decision in Broadcom (which concerned a well-established category of conduct, and involved a plain vanilla cease-and-desist obligation) comes across as the model of what one could have expected.

The Autorité’s decision shows that, contrary to this view, the days of ambitious action by means of interim measures, IMS Health-style, may not only not be over, but about to start.

Reasonable people can disagree about the legal analysis underpinning the decision. Whether or not the said analysis is correct is not the point. Instead, the fascinating issue – at least from the perspective of an independent academic – is that it breaks new ground, and does so by means of an unusual instrument.

At least in part, the assessment revolves around the idea that Google, when dealing with press publishers, has used its dominant position to frustrate the objective of the legislature, which was to allow press publishers to receive adequate remuneration for the exploitation of their sui generis rights. In this regard, Article 102 TFEU seems to be applied as a ‘safety net’ that assists and completes another area of economic regulation (a growing trend in contemporary enforcement).

A second, equally fascinating, point is that the interim measures decision only seems to make sense insofar as, and for as long as, Google displays protected content (one of the interim measures in fact requires the firm to keep displaying protected content).

Alas, copyright legislation merely provides for a right to authorise or prohibit the use of content. It is not a right to receive adequate remuneration (some rights are configured as such) and it does not provide for a right to have the said content displayed. In this sense, there seems to be a limit as to what the Autorité can achieve (at least under the theory of liability on which the decision is based).

As a result, the endgame is uncertain. Much depends, it seems, on how the various stakeholders react to intervention. I cannot avoid wondering whether the Autorité would go as far as to introduce a duty to display protected content. That would involve, again, breaking new ground, in more ways than one – but would also be consistent with the new competition law. An external observer could hardly ask for more.

Judicial review and the public interest

The Autorité’s decision exemplifies a key feature of the European competition law system. As I have been able to gather through my research, competition authorities in the EU are not paralysed by fear of judicial review. Unlike their US counterparts, they take risks when pursuing their policy objectives (which sometimes involves departing from the case law).

Inevitably, the higher the risk taken, the more likely it is to see a decision annulled by a review court. And such an outcome is a good thing and a positive indicator: I read somewhere, not long ago, that, if the rate of annulments is too low, it probably means that an authority is not doing its job properly. In this sense, I hope that the attitudes to judicial review will not change in the new environment (in spite of growing anxiety among some stakeholders, which I fully understand).

The public interest is advanced through the correction of errors of law and of fact and through the definition of the boundaries of the system. By the same token, the annulment of a decision is not a ‘blow’ or a ‘defeat’ (words I always disliked). It is not a sign of judges ‘not getting it’ or of existing doctrines being flawed and in need of change, either. It is, instead, the sound of the system working.