Chillin'Competition

In Superleague, the Court held that ‘Articles 101 and 102 TFEU must be interpreted consistently’. It is difficult to claim that this statement is novel or groundbreaking. After all, both provisions are parts of a ‘system ensuring that competition is not distorted’.

It is therefore only natural that the various components of the legal order are construed in the same way: if they were not, there would not even be a system worthy of the name. In this sense, the EU treaties require the consistent interpretation of Articles 101 and 102 TFEU.

This idea may well be evident, but its implications are not discussed particularly often in EU competition law circles. Fortunately, it was addressed at the beginning of the month during the annual conference of the Global Competition Law Centre.

One of the implications that was discussed in Bruges is one that has been touched upon relatively regularly on this blog, which is the fact that some practices are abusive by object under Article 102 TFEU.

This conclusion is apparent not only when one considers the reality of the case law, but as a matter of consistency. If, in a given economic and legal context, a practice is found to restrict competition by its very nature under Article 101(1) TFEU, it would make little (or no) sense to require an analysis of its effects under Article 102 TFEU.

A second implication of the consistent application of Articles 101 and 102 TFEU follows from the first one. ‘By object’ conduct is presumed to be capable of having restrictive effects.

This presumption can be rebutted. This point was made explicit in Murphy (as far as Article 101(1) TFEU is concerned) and Intel (and then Servizio Elettrico Nazionale and Unilever; as far as Article 102 TFEU is concerned).

A third implication relates to the methodology to assess anticompetitive effects. Again, it would make little sense to follow a different approach (or to rely on different benchnmarks) to evaluate the impact of a practice.

In the context of Article 101 TFEU, it is well established that the effects of an agreement must be assessed by reference to the relevant counterfactual (the Court’s judgment in Generics addressed this requirement at some length).

It would be difficult to justify the application of a different methodology under Article 102 TFEU. There are, after all, practices that can be assessed under either Article 101 or 102 TFEU and (as Generics itself shows), in some instances, both provisions can apply together to the same set of facts.

This is a point that was addressed by Advocate General Kokott in her Opinion in Google Shopping. The Opinion identified an erroneous interpretation of Article 102 TFEU in the first-instance judgment (see para 172).

The General Court, Advocate General Kokott explained, incorrectly conflated the temporal dimension of the analysis (actual vs potential effects) and the issue of the counterfactual. This is so insofar as the first-instance judgment claimed that assessing anticompetitive effects against the counterfactual is tantamount to requiring evidence of actual effects.

Advocate General Kokott, by contrast, did not question, generally speaking, the relevance of the counterfactual when assessing effects under Article 102 TFEU.

She simply noted (wholly uncontroversially) that Google’s argument artificially focused on one aspect of the analysis and was therefore incapable of substantiating the claim that the General Court had erred in law.

A fourth implication has to do with the very meaning of the notion of effect. Landmark Article 101 TFEU rulings such as Delimitis make it clear that a restrictive effect is more than a competitive disadvantage and more than a limitation of a firm’s freedom of action.

As already suggested, it would be very difficult to justify construing the notion of effect differently under Article 102 TFEU (by arguing, for instance, that a mere competitive disadvantage is sufficient to trigger the prohibition).

A fifth implication is one that captures well the central idea behind this entry. The Court has repeatedly held that, in an Article 102 TFEU case, a dominant firm can show that the efficiency gains resulting from a practice outweigh any actual or potential anticompetitive effects.

This possibility is not supported by the letter of Article 102 TFEU, but makes perfect sense if one considers that it mirrors Article 101(3) TFEU, thereby suggesting, in line with the above, the idea that both provisions, which are part of the same system, must be interpreted consistently.