Chillin'Competition

Issue 7 of this year’s volume of the Journal of European Competition Law & Practice was published a few days ago. It comes with several exciting pieces, including a fascinating one on cartels (see here) by Carolina Abate (OECD) and Alexis Brunelle (Autorité de la concurrence). Carolina and Alexis take an interdisciplinary perspective on cartel formation and suggest that male dominated informal networks (the proverbial ‘boys’ clubs’) could explain cartel conduct.

This time around, I contributed an editorial to the issue (the editorial is available for free here). It addresses a question that has kept me busy in the past few months, namely judicial review in EU competition law and how it relates to substantive law.

We all agree that effective judicial review is an imperative in competition law regimes. What is less appreciated is that effective judicial review does not necessarily emerge in every system. It is the consequence of conscious choices made by courts, which allow for the meaningful scrutiny of administrative action.

In particular, whether or not judicial review is effective depends on how substantive law is interpreted. The EU courts have consistently expressed a preference for structured legal tests, which define a fixed set of conditions against which the lawfulness of Commission decisions can be assessed.

From the early days to the most recent developments, examples abound in the case law. The tests laid down in AKZO and Airtours are examples that come to mind immediately. The trend has continued to this day. It is sufficient to think of the five factors identified by the Court of Justice in Intel to realise the extent to which EU judges are attached to legal tests with definite boundaries.

This preference is easy to rationalise. Effective judicial review is difficult when tests are ‘liquid’ and/or unstructured (that is, when the applicable conditions are allowed to vary from one case to the next). In such instances, the control of administrative action would inevitably be confined to manifest errors. The law, in effect, would be delegated to the authority.

The above said, I can see the appeal of ‘liquid’ or unstructured legal test. They allow for greater flexibility and sometimes might be more accurate. If a practice is very obviously unlawful, is it really necessary to show that every single one of the conditions is met?

This position, the point of which I see, risks missing the trees for the forest. The conditions set out in legal tests are typically the crystallisation of decades of experience, not capricious hurdles.

For instance, we have long understood (and the Court has emphasised the point since Delimitis) that a practice is incapable of having actual or potential anticompetitive effects if the coverage is insignificant. Therefore, it would make little sense to ignore this factor (or pretend it is not relevant) in a particular case.

I see the value of flexibility and accuracy. This said, competition law is so exciting precisely because it requires authorities and courts to balance these aspirations with the need to ensure that the system is administrable and predictable. We should therefore aspire to minimise enforcement errors, but we will never be able to avoid them altogether (and that, if there was any doubt, is fine).

I would very much welcome your comments.