Chillin'Competition

I am delighted to announce that the Comisión Nacional de los Mercados y la Competencia will host an event around The New EU Competition Law on 28th May (the reception will start at around 3.30pm and the event as such, at 4.30pm).

You can register for it here.

Presenting the book in my hometown, and at the competition authority, will be a highlight of the book tour. I am really grateful to the staff at the CNMC for making it happen. I am also grateful to the speakers who have managed to make some time for the occasion:

Cani Fernández, President of the CNMC, will deliver the opening address at 4.30pm.

Her speech will be followed by a round table discussion with Beatriz de Guindos (AECID), Javier García-Verdugo (CNMC) and Alfonso Lamadrid (Garrigues and, to be sure, Chillin’).

Marisa Tierno, Director for Competition at the CNMC, will share some thoughts at the end.

If you happen to be in Madrid on the day, please pass by!

The Journal of European Competition Law & Practice (of which I am the Joint General Editor with Gianni De Stefano) is proud to announce that it will be publishing, later this year, a Special Issue devoted to EU merger control (and the changes it is undergoing).

Major developments are taking place on every front, from the jurisdictional to the substantive. We would be delighted to consider proposals on any major topic, including, but not limited to, the following:

• Market definition, and the impact of the recent Commission notice on the field.
• The application of Article 102 TFEU to merger control following the Towercast judgment.
• The meaning and scope of Article 22 of the EU Merger Regulation.
• Ecosystem theories of harm in the wake of Booking/eTraveli.
• Remedies in EU merger control.
• 20 years of the ‘oligopoly gap‘: where do we stand after the appeal in CK Telecoms?
• Judicial review in EU merger control.
• Interaction between EU merger control and other systems.

If you have an idea for a paper, please email Gianni (Gianni.De-Stefano@ec.europa.eu) and/or myself (P.Ibanez-Colomo@lse.ac.uk) by Friday of next week (3 May) with your proposal.

This proposal should take the form of an abstract of max. 250 words in which you outline:

• The issue you would like to address;
• The angle you intend to take;
• The contribution your piece is expected to make; and
• Whether you have any actual or potential conflicts of interest.

If your abstract is accepted (we will let you know immediately), we expect the final article (of around 7,000-10,000 words) to be submitted by mid-June at the latest.

We will select abstracts to maximise diversity and balance in the Special Issue. We are, as ever, keen to give a voice to new authors and different approaches. If there was any doubt: we welcome legal and economic perspectives (and, to be sure, papers that combine both).

In the meantime, do not hesitate to get in touch with any questions or suggestions!

Super Bock was one of the major developments of the past year. It is not immediately obvious to draw this conclusion. On its face, the judgment is brief and an Advocate General Opinion was not even deemed necessary.

The substance of the ruling is not any more auspicious: the Court does little more than reiterate the consistent line of case law since Cartes Bancaires (and subsequently refined, inter alia, in cases like Maxima Latvija, Generics and Budapest Bank).

Alas, the significance of Super Bock has to do precisely with the fact that the Court held, unceremoniously, that resale price maintenance is examined in accordance with the orthodox methodology that applies to the rest of agreements.

One should bear in mind that, before Super Bock, vertical price-fixing was deemed restrictive of competition always and everywhere (that is, irrespective of the economic and legal context and irrespective of the aims of the agreement at hand).

Such was the position taken by the Court in Binon. One of the consequences of this sui generis line of case law was that the pro-competitive benefits resulting from the agreement could only be considered under Article 101(3) TFEU.

In this regard, Binon was at odds with contemporary case law, where the pro-competitive potential of an agreement is crucial in the analysis. It is, in fact, the single most relevant factor allowing the Court to identify agreements with a restrictive object.

For instance, the fact that the contentious restraints sought to address free-riding concerns was central in Cartes Bancaires. In Budapest Bank, the Court went further, in the sense that it held that evidence that the agreement is capable of improving the conditions of competition means that its object is not anticompetitive.

If anything, the ECJ was more explicit in Generics, where it held that the parties may rely on the pro-competitive effects of a practice to cast a ‘reasonable doubt’ on its object. Such effects must be ‘demonstrated, relevant and specifically related to the agreement concerned‘.

Crucially, this aspect of the case law was reiterated in Super Bock.

In fact, Generics is particularly important in relation to resale price maintenance. Unlike cartels, which lack any redeeming virtues, vertical price-fixing is known to be potentially pro-competitive. As a result, it is at least possible for the parties to an agreement to argue that, in the relevant economic and legal context, it leads to pro-competitive gains.

An example of what such evidence may look like in practice was provided by a paper by Rhys J. Williams and recently published in the Journal of Competition Law & Economics (available in Open Access here). The study, initially conducted on behalf of DG Comp, finds that regulation fixing the price of books leads to increased sales (without having a noticeable impact on price levels).

Where evidence in this sense is produced in a given case, it would be sufficient to cast doubts about the object of the agreement. As a result, an authority would only be able to establish an infringement within the meaning of Article 101(1) TFEU by considering its actual or potential effects in the relevant market.

One must remember that, if the agreement is capable of improving the conditions of competition, it is (at the very least) questionable that it pursues an anticompetitive object (for how can its objective purpose be restrictive, if it improves the competitive process?).

To sum up, the significance of Super Bock is twofold. It departs from prior case law in that the Court held that resale price maintenance is not necessarily, or not always, restrictive by object. Second, the pro-competitive effects of the practice may lead to the conclusion that, in a particular economic and legal context, its object is not restrictive.