Chillin'Competition

The edited ‘version of record’ of the paper on Remedies in EU Antitrust Law has now been published and is available for download in Open Access here.

As explained in a previous post, the paper addresses the mismatch between the centrality of remedies in the current landscape, on the one hand; and the ‘law in the books’, on the other. More than ever before, effective enforcement depends on the adequate design and implementation of remedies. However, they remain relatively misunderstood.

One of the main ideas developed at length in the paper is that ‘principles-based’ remedies, which have featured so prominently in some recent landmark cases, are unlikely to deliver on their promises and could sometimes even undermine effective enforcement.

The first, and arguably most important point I make is that a ‘principles-based’ approach to remedies is not in any way mandated by law, as sometimes suggested or implied. It is true that an authority cannot require firms to cease the infringement in a particular way if there is more than one route to achieve compliance. It does not follow from this doctrine, however, that the said authority must refrain from specifying a remedy.

The second idea that the paper advances in this regard is that the alleged advantages of a ‘principles-based approach’ are a mirage. It is often claimed that it makes sense to follow this approach insofar as it dispenses competition authorities with the need to engage in the complex technical assessments that the adequate design and implementation of remedies demands.

The experience of the past decades suggests that, sooner or later, competition authorities are likely to end up dealing with the complex issues this approach was meant to spare. Consider the Microsoft saga, where the Commission, by means of a series non-compliance decisions, had to eventually engage with thorny questions, such as what amounts to a reasonable and non-discriminatory price.

This saga is also useful in that it is a valuable reminder that a ‘principles-based’ approach can affect the effectiveness of remedies and might significantly delay compliance. This fact, alone, would negate any of its supposed advantages.

More recent developments have exposed other drawbacks of ‘principles-based’ remedies. Since they do not specify the way in which the firm is to bring the infringement to an end, the issue of compliance is left permanently in limbo (at least for as long as the authority does not issue a non-compliance decision).

As a result of the built-in uncertanty that the approach creates, the compliance question may linger long after the adoption of the decision. It is submitted that such a reality does not benefit any of the actors in the system.

‘Principles-based’ remedies may not work for third parties benefitting from the decision, as they might find themselves unable to meaningfully evaluate compliance. It may not work for firms subject to the obligation either, as the may never be fully certain that their efforts bring the infringement effectively to an end

In fact, this approach may not be in the interest of competition authorities, which (understandably) may be willing to turn the page on the case and devote their resources to new questions but may find themselves caught in limbo.

The paper submits that ‘principles-based’ remedies may not provide the optimal approach to ensure compliance. It submits, in addition, that the current reality may require some tweaks to Regulation 1/2003 (which is not surprising, given that the sort of complex, regulatory-like remedies that are all the rage today are mostly a novelty and had never played an important role under Regulation 17).

What these tweaks are is something I will address in a future instalment of this series. In the meantime, it would be wonderful to get your comments (on the above or the paper at large).