Understanding the significance of Super Bock
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.
Chillin'Competition 
Pablo, I see that you really like this Super Bock judgment. You have written a lot about it in the past in this blog.
The link to the paper (and to the author) does not work. Also, papers are never written (or research conducted) “on behalf of DG COMP”, at most they are commissioned by DG COMP in the context of an evaluation (like here) but they do not necessarily reflect the views of DG COMP.
In general, for “casting doubt” on the anti-competitive object, so that the practice would move away from the “by object” box (and must be examined “by effects”), the case-law has been very demanding. It is not enough for it to be somehow “plausible” (as you have repeatedly written in past blogposts). The undertaking must meet the demanding standard set out in Generics and repeated in EDP and HSBC. The pro-competitive effects must be “demonstrated and relevant”, “specifically related to the agreement concerned”, and “sufficiently significant”. The ECJ went further in EDP on the second element: for the procompetitive effects relied on to be relevant they must be “specific to that clause and not simply connected with that agreement”.
Finally, it would have been informative to add what happened with the case at national level: the fine was confirmed (and the qualification “by object” -apparently- untouched).
https://www.concorrencia.pt/pt/artigos/tribunal-da-relacao-de-lisboa-confirma-infracao-da-super-bock-condenada-pela-adc
Joan
4 April 2024 at 9:13 pm
Dear Pablo, in addition to what Joan has commented, I would like to add that the more recent Super League judgment in good part denies what could have been concluded on the basis of Generics and Super Bock.
The latter two judgments gave the impression that positive effects of a particular agreement could be relevant for establishing whether that agreement is by object or not. As you put it, where evidence of pro-competitive effects is produced, this would be sufficient to cast doubt about the object of the agreement. However, the Court in Super League, when recapitulating the case law in Grand Chamber, has made it clear that, for the assessment of an individual agreement, positive effects can only come in under Article 101(3) (see §166 together with §187). I see this as a good clarification by the Court, because taking (positive) effects into account at the level of an individual agreement would mix up and blur the concepts of by object and by effect.
This does not mean that, when answering the question whether a particular type of restriction is by object, the potential to create efficiencies should not play a role. It is indeed at that stage, when considering which types of restrictions are generally considered by object, that not only the potential and likelihood to create negative effects but also the (lack of) potential and likelihood to create positive effects should be considered.
That is what the Court did in Cartes Bancaires, when it made the useful distinction between naked price fixing (by object) and price fixing in the context of a wider cooperation, in this case price fixing as an integral part of the creation of a bank card system (not by object).
This leaves the question how RPM will/should be classified. Given the enforcement experience, in many cases, of RPM expected to have negative effects without redeeming efficiencies, in conjunction with the argument that other vertical restraints are arguably more effective than RPM to produce possible efficiencies such as addressing free riding behaviour, I guess it will remain, as a type of restriction, for good reasons in the by object box.
Luc Peeperkorn
5 April 2024 at 12:36 am
Thanks so much, Luc, Your comments are always appreciated
I fail to see a contradiction between Super Bock and Superleague. More importantly, the Court does not appear to see a contradiction. After all, para 166 explicitly refers to Super Bock, thereby showing that nothing in that passage is at odds with the principle introduced in Generics.
Why is there no contradiction? First, because Superleague confirms that the object of an agreement must be assessed in the relevant economic and legal context. And Generics mentioned that the possibility for the parties to advance arguments pertaining to the pro-competitive gains resulting from an agreement is part of the assessment of the economic and legal context.
Second, because the pro-competitive potential of agreements has been central to the identification of the object of an agreement in the most recent case law. I do not believe the Court casually brushed aside, in a single paragraph, 15 years of consistent case law.
Third, because the Generics-Super Bock principle is something that the parties can advance (which is not what para 166 addresses).
As far as para 187 is concerned, I do not see the relevance here. That passage refers to an instance where the object has already been established, not one where the object has not yet been figured out (which is what Generics and Super Bock are about).
Pablo Ibanez Colomo
5 April 2024 at 9:22 am
Dear Pablo, the Court refers in §166 of Super League indeed to Super Bock, but it refers to §31 of Super Bock, where it is said that a restriction is either by object or by effect, and does not refer to §36 of Super Bock, where it is said that if the parties to the agreement rely on its procompetitive effects, those effects must, as elements of the context of that agreement, be taken into account when assessing whether it is by object. Similarly, the Court at places refers to Generics, but not to the paragraphs (§103, 105 and 107) where the relevance of taking positive effects into account are mentioned.
What the Court does in Super League is the opposite, going back to previous case law, which avoids blurring the distinction between by object and by effect. In paragraphs 144 and 175 the Court refers to possible pro-competitive effects of rules on prior approval in the context of sport competitions, but these are to be assessed under Article 101(3). The absence of substantive criteria and detailed procedural rules suitable for ensuring that the prior approval rules are transparent, objective, precise and non-discriminatory is considered by object, no matter how important possible pro-competitive effects.
As said, this avoids blurring the by object vs by effect classification when assessing an individual agreement, but does not mean that, when answering the question whether a particular type of restriction is by object, the potential to create efficiencies should not play a role.
Luc Peeperkorn
6 April 2024 at 12:20 pm
Thanks so much again, Luc!
I do not believe we disagree all that much. The key part is the relevance of the pro-competitive potential of the agreement when figuring out its object. As you say, it is a decisive consideration when drawing the line between object and effect. In that regard, we seem to be in full agreement. The corollary to this, in my view, is that Generics necessarily remains good law (it is an inevitable manifestation of this idea).
We do not seem to see fully eye to eye in relation to the blurring of object vs effect. The assessment of effects under Article 101(1) TFEU is always about the negative effects, not the pro-competitive gains that may result from the agreement. Accordingly, there is no blurring and no substantive overlap between the two stages.
The impression I get from Superleague and other recent cases (and you probably agree with me) is that the Court has become aware of the fact that the object stage risks becoming overly complicated. I greatly sympathise with the Court in that regard. What is more, I do not believe the evaluation of the object of an agreement has to be overly demanding or complicated.
Pablo Ibanez Colomo
6 April 2024 at 12:32 pm