Chillin'Competition

I have just uploaded on ssrn (see here) a new version of my paper on ‘Anticompetitive effects in EU competition law’. I am really grateful to Fernando Castillo de la Torre, Andriani Kalintiri, Gianni De Stefano and Alfonso Lamadrid de Pablo for their helpful comments on the previous versions. Their thoughts greatly improved the piece.

What is new about the piece? Some aspects had to do with recent developments. As you all know, CK Telecoms came out a couple of weeks after I finished the first version. The implications of the judgment are now considered (in particular in relation to appreciability and unilateral effects).

I have also worked hard on some bits, where I thought the ideas could transpire more clearly. In particular, I sought to emphasise a key aspect of the case law, which is that a limitation of a firm’s freedom of action and/or a competitive disadvantage do not in themselves amount to anticompetitive effects.

Experience leads us to these conclusion: cases like Microsoft/Skype or Post Danmark I show that a competitive advantage, even an unparalleled one (as in Microsoft/Skype), does not necessarily affect firms’ ability and/or incentive to compete. In fact, it may actually spur competition.

Remember Post Danmark I? The dominant firm’s rival lost market share, but was able to gain back two customers. On those grounds, the Court of Justice concluded that the practice did not amount to a breach of Article 102 TFEU.

I have also expanded the section devoted to frictions. Following conversations with the great people acknowledged above, I realised that there tends to be a confusion between the time dimension (actual or potential effects) and the threshold of effects (capability, likelihood and so on).

According to the case law, considering the ‘actual’ effects of a practice means taking into account the actual context in which it took place: what actually happened, and how the market operated, during the implementation of the practice. However, it is sometimes assumed (both by claimants and defendants) that it means ‘certainty of effects’.

Finally (and this will not come as a surprise to those following the blog, who know already I am a visual person), I have added a few figures to ensure that some ideas transpire as clearly as possible.

A figure concerns the role of anticompetitive effect in ‘by object’-style conduct (that is, conduct prohibited irrespective of its effects). As you see below, conduct of this nature is presumed to be capable of having anticompetitive effects (both under Articles 101 and 102 TFEU).

The presumption can be rebutted in three ways. A firm can show that the absence of competition would be attributable to the regulatory context, not the practice (the ‘Generics/Toshiba defence’); that the practice is objectively necessary to attain a pro-competitive aim (the ‘Société Technique Minière defence’); or that anticompetitive effects are implausible in the relevant economic context (the ‘Intel defence’).

I also have another figure addressing the relevant steps to evaluate the effects of a practice or transaction.

I very much look forward to your comments on this new version. Something has not changed since May: I did not have anything to disclose then, and do not have anything to disclose now.