Chillin'Competition

We had a great discussion on exclusionary abuses last Tuesday at LSE. We were delighted to see how many of you joined us online to what was (at long last) a Chillin’ event (rest assured there will be many more to come).

During the event, I shared a presentation outlining my main ideas, which you can find here. I would very much welcome your thoughts on the main points I made, which I can summarise as follows:

Enforcement under the Guidance is in a much better shape: the days of Michelin II and British Airways are long gone, which is why we tend to forget how much in need of reform Article 102 TFEU policy was at the time.

In the years that have followed the Guidance, enforcement has remained robust (both in qualitative and quantitative terms), and has become wiser (in the sense that the intellectual foundations are much more solid) and more predictable (again, we tend to forget how unpredictable enforcement was in the old days).

The analysis of effects is not a luxury or an indulgence from which we can dispense. It is the key tool to distinguish between conduct that is on the whole pro-competitive and behaviour that can be expected to harm the competitive process. One should not forget that the majority of practices potentially caught by Article 102 TFEU are, most of the time, normal expressions of competition on the merits.

The above said, it is worth reflecting on some of the criticisms that have been directed at enforcement under the Guidance. Is the analysis of effects overly cumbersome? Is intervention difficult to tell in advance?

Structured legal tests could be part of the answer to these concerns while preserving the essence of the Guidance. From this perspective, the forthcoming Gudelines provide a good opportunity.

Contrary to what is sometimes said, the evaluation of the actual or potential anticompetitive effects of a practice need not be open-ended or all-encompassing. It can be structured around a number of solid proxies and finite lists of criteria. This, in fact, is what the Court of Justice has been doing over the past decade (just think of Intel).

The case law could be codified in line with this principles. For instance, there is little doubt that the coverage of a practice is central to the assessment of the actual or potential impact of a potentially abusive practice. Why not rely on a bright line (say, 30% coverage) to define the instances in which effects are more likely?

If effects can be established always and everywhere, then the test of effects is a bad one. Any attempt to recalibrate policy should not come at the expense of predictability. If the test is reconfigured so that the analysis of effects becomes little more than a formality, it will not be possible to anticipate enforcement (the Commission would always find a way to show an impact on competition).

In the same vein, I explained that the hard questions cannot be avoided. These hard questions include:

• The meaning of effects.
• The threshold of effects. We all agree that Article 102 TFEU is concerned with actual or potential effects. But the notion of potential effects does not answer the question of what threshold applies. AG Kokott suggested that the case law demands a threshold of likelihood (probability of >50%) when looking at potential effects. I agree with her understanding of the relevant rulings.
• Causality: The difference between competition law (understood as a system aimed at protecting the competitive process) and economic regulation aimed at restructuring markets so that they conform to the particular vision of an agency is the issue of causality. As emphasised by the EU courts in recent years, Article 102 TFEU is only triggered when the actual or potential effects are attributable to the behaviour of the dominant undertaking.

I very much look forward to your comments. As you know, I have nothing to disclose.