Chillin'Competition

To say that the mardis du droit de la concurrence are a classic of the conference arena in Brussels is an understatement. They have become nothing short of an institution thanks to their unique format, which allows for in-depth presentations by leading experts and meaningful exchanges afterwards.

The expert hands of Denis Waelbroeck and Jean-François Bellis have kept the sessions invariably topical and fascinating over the years. The 2024/25 vintage is not an exception, as you can see from the superb programme below:

15th October | Opening Speech, by Advocate General Athanasios Rantos (Court of Justice).

21st November | The Foreign Subsidies Regulation, by Andreas Reindl (Van Bael & Bellis).

10th December | Recent Developments on Abuse of Dominance, by Massimiliano Kadar (European Commission).

28th January | Recent developments in EU merger control, by Guillaume Loriot (European Commission).

20th February | La jurisprudence récente en matière de cartels, by Fernando Castillo de la Torre (European Commission).

12th March | Recent developments in State aid policy, by Jose Luis Buendía Sierra (European Commission).

16th April | Private regulation and competition policy, by Donald Slater (Ashurst).

20th May | Competition policy and growth in Europe: an economist’s perspective, by Adina Claici (BRG and College of Europe).

I understand there might be an additional seminar to top it all off in style. We will make sure to inform about it on the blog!

For more information on the mardis, and on how to register, see here.

Last week, the Court of Justice delivered its much-awaited judgment in Google Shopping. The ruling comes across as carefully crafted. The case raised a number of novel and complex points of law, for which the Court finds clean, elegant solutions.

This outcome was not a given. Google Shopping is undoubtedly a landmark in EU competition law, and it is well known what received wisdom has to say about so-called great cases.

What stands out, above all, is the balance that the Court strikes between coherence and effective enforcement.

Ensuring that there is a coherent approach to the interpretation and application of Articles 101 and 102 TFEU is a must when private enforcement is very much on the rise (reshaping the legal and institutional landscape in the process). Effective enforcement by competition authorities, on the other hand, is as important as ever.

The Court achieves this balance mainly by placing workable demands on the Commission, all while offering the opportunity to the dominant firm to provide additional evidence in the course of the proceedings. The technique to achieve this balance is, in essence, the one relied upon in Intel.

This post will focus on the four most salient aspects of the judgment, namely (i) indispensability; (ii) competition on the merits; (iii) causality and the counterfactual; (iv) the ‘as-efficient competitor’ test.

Indispensability

The discussion around indispensability was probably one of the most awaited aspects of the judgment (even more so, one could argue, after the General Court’s ruling, which had introduced a number of innovations, none of which have made the cut).

The Court’s reasoning does not depart from the orthodoxy encapsulated in Slovak Telekom and ensures the survival of the Bronner doctrine. Thus, evidence of indispensability is required where intervention would interfere with a firm’s right to property and freedom of contract (para 91).

This approach acknowledges something that has always been apparent from the case law: the outcome of intervention (that is, a remedy mandating the dominant undertaking to deal with third parties) is inextricably linked to the question of whether there is an infringement in the first place.

The Court applies the case law to the facts of the case and concludes that the discriminatory conduct at stake was not one that involved a duty to deal with third parties, and was therefore not subject to the indispensability condition (para 99).

It also notes that the remedies imposed by the Commission did not require Google to deal with rivals (that is, give access to the ‘shopping boxes’). Instead, the authority required the dominant undertaking to apply the same processes and methods to third parties (para 98).

There is more to write on the future of indispensability (and the Court’s choices in the judgment), which requires a longer entry (or set of entries), along with an analysis of Android Auto (which is potentially more consequential in this sense).

Competition on the merits

The victory of the broad understanding of the concept of abuse

The notion of competition on the merits is, as explained elsewhere, an irritant in the case law. It is the bridge that connects the original and the current understandings of the concept of abuse. As such, it is bound to create frictions and give rise to misunderstandings.

Google Shopping illustrates well why competition on the merits has made an unlikely comeback after more than a decade confined to irrelevance. As the case shows, the notion may be used strategically as a shield by dominant undertakings. By claiming that only ‘improper’ or ‘abnormal’ conduct falls within the scope of Article 102 TFEU, it was hoped that proving an abuse would be made more difficult.

This narrow understanding of the concept of abuse has been unambiguously rejected in Google Shopping. On this point, the Court held that the categorisation of a practice as not falling within the scope of competition on the merits can rely on a number of extrinsic factors, including the market(s) covered by it and the dynamics of competition (para 166).

Whether or not a practice falls within the scope of competition on the merits, in other words, is a context-specific exercise that can rest on considerations other than the conduct itself. The concept of abuse, by the same token, encompasses practices that are not inherently ‘improper’ or ‘abnormal’.

For instance, the Court is careful to clarify that discriminatory conduct is not inherently at odds with competition on the merits (para 186). There is no such thing as a principle of ‘equality of opportunity’ applying across the board to private undertakings.

Accordingly, discrimination (which may be manifested in a number of ways) may or may not amount to an abuse depending on the circumstances of the case.

Competition on the merits in practice

Google Shopping provided an opportunity for the Court to address an additional, related question: is it necessary to show that a practice departs from competition on the merits in every instance? The Court answers in the negative in para 165:

‘In order to find, in a given case, that conduct must be categorised as “abuse of a dominant position” within the meaning of Article 102 TFEU, it is necessary, as a rule [en règle générale], to demonstrate, through the use of methods other than those which are part of competition on the merits between undertakings, that that conduct has the actual or potential effect of restricting that competition by excluding equally efficient competing undertakings from the market or markets concerned, or by hindering their growth on those markets, although the latter may be either the dominated markets or related or neighbouring markets, where that conduct is liable to produce its actual or potential effects‘ (emphasis and translation added).

Accordingly, there may be instances in which it is not necessary to show that the practice departs from competition on the merits and, similarly, instances where it is not necessary to demonstrate the actual or potential effects on competition (that is, ‘by object’ infringements).

The judgment goes on to explain why one need not demonstrate, always and everywhere, that the practice is not an expression of competition on the merits. As the Court points out in para 166, the issue of competition on the merits is sometimes subsumed into the legal test (or ‘analytical template’).

By showing, for instance, that the Bronner conditions are met, an authority or claimant will have shown (implicitly) that the practice departs from competition on the merits, without the need to clear any additional hurdle.

Causality and counterfactual

Questions around the need to establish a causal link between the practice and any actual or potential effects are particularly likely to give rise to tensions between coherence and effective enforcement.

On the one hand, establishing a causal link between the practice and its alleged impact makes it necessary to identify, by definition, the ‘but for’ world that would have unfolded in its absence (this is a point expressly acknowledged by the Court in the Servier saga).

On the other hand, requiring an authority to define the relevant counterfactual may occasionally represent a significant burden.

The Court solves this tension by ruling, first, that the ‘causal link [between the practice and any actual or potential effects] is one of the essential constituent elements of an infringement of competition law‘ (para 224); and, second, that the dominant undertaking may rely on the counterfactual to dispute the findings of the authority (para 227).

In so doing, the Court distinguishes between the legal burden of establishing the causal link, which lies with the authority or claimant, and the evidential burden of putting forward a counterfactual showing the absence of such a link, which lies with the dominant undertaking.

This solution follows the logic of Intel (and, one assumes, operates in the same way in practice, thereby triggering an obligation on the authority when the dominant undertaking provides ‘supporting evidence’ to the requisite legal standard).

The ‘as-efficient competitor’ test

Finally, the Court makes it clear that it is not necessary to evaluate whether the rivals of a dominant firm are as efficient as the dominant firm when demonstrating the exclusionary effects of a practice (para 264).

The Court’s conclusion on this point is difficult to dispute. The idea that the analysis of the exclusionary effects involves (or requires) assessing the relative efficiency of rivals does not capture what the ‘as-efficient competitor’ test is really about (and, similarly, the purpose it serves).

The rationale behind that test is to ascertain whether the dominant firm would be able to withstand its own practice if it were subject to it (for instance, whether it would be forced to sell at a loss if it were subject to its own wholesale prices or to its own conditional rebate schemes), not whether third parties are as efficient it is.

Crucially, nothing in this section of the judgment (and, indeed, the rest thereof) appears to question the relevance of the ‘as-efficient competitor’ principle. It is expressly upheld in para 263 (which refers, in turn, to paras 163-167) and, above all, implicitly endorsed in the passages that expressly acknowledge the need to establish a causal link between the practice and any actual or potential effects.

The Journal of European Competition Law & Practice is proud to announce that it plans to publish a Special Issue on “Competition Law and Gender Perspectives”.

The interplay between Competition Law and Gender Perspectives is a growing focus across various domains – legal (procedural, substantive), economic and policy – such as in the OECD Gender Inclusive Competition Toolkit.

We would be delighted to consider proposals on aspects relating, but not limited, to the following:

• The influence of gender on market definition
• The role of gender in facilitating and investigating cartels
• Gender lens and anti-competitive effects, e.g. market power’s gendered effects such as gender-based price-discrimination, gender-based effects of mergers
• Exploring gender (equality) and public interest justification
• The influence of gender on competition procedures, e.g. gendered data in market studies, gender conscious surveys, gender conscious remedies, gender lens in ex-post evaluations, gender inclusive stakeholder engagement
• Gender considerations and industrial policies
• Institutional gender diversity at competition authorities
• Methodological interaction of competition policy with gender research
• Historical perspectives of gender’s impact on competition policy and enforcement

If you have an idea for a paper, please email JECLAP editor Lena Hornkohl (lena.hornkohl@univie.ac.at) by 15 September 2024 23:59 CET with your proposal.

Lena Hornkohl will work together with members of the DG COMP Equality Network.

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

• the substantive issue you would like to address;
• the contribution your piece is expected to make for the future;
• the point of view you intend to take. As usual, please clarify in your proposal
  whether you have any conflicts of interests.

If your abstract is selected for publication, we expect the final article (of around 7,000-10,000 words) to be submitted by end November 2024.

We will select abstracts to maximise diversity and balance in the Special Issue. We would be particularly keen to publish new voices and perspectives.

We will contact all authors whose abstract has been selected in due course (if there was any doubt, do not hesitate to contact Lena with any questions, as some of you have already done).

The fourth edition of the Short Course on Advanced EU Competition was organised, as always, last spring. There was so much interest in the programme this time around (thanks so much!) that we are organising a second iteration this coming November.

As it happens, the timing could not be better, given recent and expected major developments with which you are all familiar (including Illumina, Google Shopping, Booking, Intel, and, to be sure, the Draft Guidelines on Article 102 TFEU). I look forward to discussing these with participants (as usual, limited to around 25 to maximise interaction).

Just like the preceding ones, this iteration is designed with full-time professionals in mind. The course (16 hours in total) takes place online on Friday afternoon over four weeks (2pm-6pm London time; 3pm-7pm continental time).

The dates for this edition are the following:

• 8 November (agreements)
• 15 November 2024 (abusive practices)
• 22 November 2024 (digital issues)
• 29 November 2024 (merger control)

More information on how to sign up for the course can be found here.

If you were wondering, an LSE Certificate will be available upon completion, along with CPD points for practitioners.

If you have any questions about the organisational aspects of the two courses, do not hesitate to contact my colleague Amanda Tinnams: A.Tinnams@lse.ac.uk.