Chillin'Competition

I have spent the past few weeks (re-)reading in detail the case law and administrative practice on disparagement and related issues, including landmark rulings such as (the other) Hoffmann-La Roche and AstraZeneca. The Commission decision in Teva-Copaxone is a fascinating read that builds on the extensive experience acquired at the national level (see here for a discussion of the some recent developments in France, where disparagement has long been a priority).

The reasons why I became interested in these cases will be apparent in a few weeks’ time. I will explore a different set of questions for the time being. As I was reading judgments and decisions, I realised they provide valuable lessons for the interpretation of Article 102 TFEU and the forthcoming Guidelines on exclusionary abuses.

My first thought was that disparagement cases perfectly illustrate why the Court of Justice is right to have crafted a ‘by object’ category of abuses. If conduct is restrictive by object under Article 101(1) TFEU, it stands to reason that it is also prohibited under Article 102 TFEU by its very nature (that is, without the need to show that it is capable of having anticompetitive effects).

In (the other) Hoffmann-La Roche, the Court held that an agreement aimed at disseminating misleading information with a view to reducing the competitive pressure that one product puts on another is restrictive by object. Nothing would justify requiring a case-by-case analysis of effects where the same practice is unilaterally implemented by a dominant firm.

The Commission was cautious in its analysis in Teva-Copaxone, and took the care of looking at the exclusionary capability in the relevant market. While this approach is easy to rationalise from the authority’s perspective, treating disparagement conduct as a ‘by object’ infringement under both Articles 101 and 102 TFEU would be preferable.

In this sense, it seems to me that the Commission would have discharged its burden of proof after showing that the behaviour is objectively aimed at disparaging a rival. From this perspective, the analysis of the anticompetitive effects would be superfluous as a matter of law – but might make sense as a safeguard from a policy-making perspective.

Since the decision in Teva-Copaxone has been challenged before the General Court, we may get an answer on this crucial point of law.

Consistency also demands that abuses by object are called by name, as opposed to say, ‘naked restrictions’ or ‘per se abuses’ (remember there is no such thing as a per se infringement in EU competition law).

The latest iteration of the Draft Guidelines on exclusionary abuses resists the idea of calling a spade a spade, thereby adding unnecessary clutter to law and policy. It would be preferable if the final version streamlined the issue by embracing the Court’s case law (which is, after all, the goal of the project).

My next post will explain why reluctance to accept the case law as it stands is unwarranted. In the meantime, I look forward to your comments on these questions.