Author Archive
The Saturday Morning Slot?
Woke up all too early this Saturday morning, cannot understand why.
As the summer quietness was interrupted yesterday by a raft of breaking news (Breivik’s 21y sentencing, the NY shooting, Armstrong’s decision to throw in the towel, and the death of JL Delarue), several pieces of information of AT interest reached my mailbox/ears last night:
- Ben Van Rompuy’s book is finally out. Ioannis Liannos (UCL) will give a speech on 28 September at the book launch reception.
- I will be finally flying to Hong Kong in October for this conference. Cannot wait.
- Edward Elgar has penetrated the blogosphere. Their blog has a section entitled “law” with good posts on antitrust (by Mark Furse) and intellectual property.
- Covington’s associates are better compensated than Cleary’s (I find this one hard to believe though).
To all, a very good WE.
On my side, I’ll be busy completing the move to my new place. And I’ll be eating pasta prepping for the 25K next week in Liege.
Facts of Life
Yesterday at Ashurst, the receptionist: “You must be the student taking the exam with Professor Waelbroeck right?” => I enjoyed this one.
Heard through the grapevine, two days ago, : “Nico still needs a breakthrough article” => liked this one a little less, but there must be some truth to it.
Last but not least. Despite my young age, I almost had a heart attack when I realized that the publisher of the latest issue of the Journal de Droit International had been published, and that virtually all the corrections that my assistant and I had made on the proofs or our paper had been ignored.
Brussels School of Competition
I had drinks last night with my good friend Charles Gheur from the Brussels School of Competition (“BSC”).
It sprung to mind that I had not yet advertised that the registration process for the 2012-2013 edition of the LL.M was opened .
There’s a bunch of new things for this third edition of the programme, not the leasts that (i) Fred Jenny stepped in and will co-teach the module on abuse of dominance, and that (ii) señor Lamadrid de Pablo has officially been drafted (he is a basketball fan) to join the team that teaches procedural matters.
Together with the fact that our studs are primarily in-house lawyers from large corporations (Microsoft, Umicore, Toyota, Mastercard, Basf KBC, Bayer, Distrigas, Verizon, etc.) this should convince young Brussels lawyers to relocate towards us instead of following the painful King’s College long distance programme.
Chuck Norris Antitrust Facts (3)
- The most stable cartels are those to which Chuck Norris participates. No one cheats for fear of Chuck’s retaliation.
- Chuck Norris is both a structural and a behavioral remedy. He can break a leg (the structural component) just by turning to a mean face (the behavioral component).
Chuck Norris AT Fact of the Day
Antitrust agencies can eliminate all consumer harm. Except those inflicted by Chuck Norris.
Can Do Better
Whilst seating on the beach, I read last week’s (now) famous Economist piece on fines.
I was quite astonished to read that The Economist supports further increases in corporate fines. The conclusion of the paper speaks for itself: “To deter bad behaviour fines need to rise. The watchdog are biting, but some need sharper teeth“.
That said, I found the paper a little weak. Strangely enough, it says nothing of most issues that currently matter in respect of corporate fines:
- No word on sanctions for individuals, in the form of director disqualification orders;
- Some references to theoretical studies, including references to the economics of crime (G. Becker) and cartel overcharges (O’Connor & Helmers), but no word on principal-agent problems in large multinational corporations;
- No word on the issue of fines in times of economic crisis;
- No word on compliance programmes.
Is there a hidden agenda there or am I again reading newspapers like the devil reads the bible?
Arguably, those omissions may be explained by the fact that the paper is not antitrust-related only (quod non). The paper opens with some words on the economics of corporate fines, and follows with a brief discussion of the penalties inflicted to Barclays a few weeks ago. But after this, the meat of the paper really is a discussion of antitrust fines. And even if it were true that the paper takes a larger focus, it remains silent on a number of key issues. Think, for instance, to the trade-off that regulators are now facing, i.e. sanctioning banks with hefty fines v. ensuring banking stability with subsidies.
The bottom-line: The Economist can do better…
Microsoft v Commission (T-167/08) – The Magill-IMS Health Re-Animator?
I was about to fall asleep reading the Microsoft judgment of last week (T-167/08), when I stumbled into paragraph 139.
This paragraph implicitly reverses the CFI’s Microsoft I ruling on the legal standard of abusive refusal to supply (CFI, Case T-201/04, Microsoft Corp. v Commission, ECR [2007] II-3601).
Remember, in this judgment the CFI had departed from the IMS Health and Magill “new product” condition.
It had held that:
“§647. the circumstance relating to the appearance of a new product, as envisaged in Magill and IMS Health . . . cannot be the only parameter which determines whether a refusal to license an intellectual property right is capable of causing prejudice to consumers within the meaning of [Article 102(b) TFEU]”.
The CFI further added that it was sufficient for the Commission to prove that the refusal to supply interoperability information gave rise to a “limitation […] of technical development”.
This new concept was (and still is) rightly criticized by scholars and practitioners as a loose, elusive and murky legal standard. Many expressed regrets over the disappearance of the simple three-pronged Magill-IMS Health test. Others argued that the CFI’s “technical development” standard was wholly inapplicable, and advised to rely on the Magill and IMS Health judgments of the upper ECJ. Finally, some practitioners (amongst others, D. Waelbroeck) talked of a lex specialis Microsoft.
Interestingly, the latest Microsoft judgment no longer talks of the “limitation of technical development“.
Rather, in what reads like an obiter dictum, the GC explicitly refers to the “new product” condition, and quotes IMS Health as the sole source of precedent on refusals to supply involving IPRs.
“§139. In that regard, it should be recalled that, in order for the refusal by an undertaking which owns a copyright to give access to a product or service indispensable for carrying on a particular business to be regarded as abuse, it is sufficient that three cumulative conditions be satisfied, namely that that refusal is preventing the emergence of a new product for which there is a potential consumer demand, that it is unjustified and that it is such as to exclude any competition on a secondary market“
Of course, the Court would not acknowledge that it applied a wrong legal standard in 2007.
It thus goes on to state at §140 that those three conditions were met in the Microsoft I case (they were not).
That said, paragraph 139 marks a welcome evolution of the case-law on abuse.
Chuck Norris Antitrust Facts
- If Chuck Norris had been Commissioner for competition in the 1980s’, Microsoft would have never achieved dominance
- Chuck Norris can dismantle barriers to entry with a roundhouse kick
- Areeda and Turner did not invent the price-cost test for predatory pricing cases, Chuck Norris told them to do so
If you think of more Chuck Norris Antitrust Facts, pls send them to us.
Do Fast Moving Markets require Fast (and Furious) Competition Authorities?
In support of his aggressive move against Google on 25 May 2012, Commissioner Almunia declared:
“I believe that these fast-moving markets would particularly benefit from a quick resolution of the competition issues identified. Restoring competition swiftly to the benefit of users at an early stage is always preferable to lengthy proceedings, although these sometimes become indispensable to competition enforcement“.
Later in June, he again said:
“I strongly believe that users and competitors would greatly benefit from a quick resolution of the case; it is always better to restore competition swiftly in fast-moving markets, provided of course that the companies concerned are ready to seriously address and solve the problems at stake“.
Commissioner Almunia, and his advisers, must have read Judge R. Posner who warned 10 years ago that:
“Antitrust litigation moves very slowly relative to the new economy. Law time is not real time. The law is committed to principles of due process that limit the scope for summary proceedings, and the fact that litigation is conducted by lawyers before tribunals that are not technically trained or experienced inevitably slows the process.
The mismatch between law time and new-economy real time is troubling in two respects. First, an antitrust case involving a new-economy firm may drag on for so long relative to the changing conditions of the industry as to become irrelevant, ineffectual. That was a problem even in the old economy. One recalls for example that by the time the monopolization case against Alcoa completed its journey through the courts, Alcoa had lost its monopoly for reasons unrelated to the litigation; as a result, the decree finally entered against Alcoa offered little more than nominal relief (the divestiture of Alcoa’s Canadian subsidiary). This type of problem is likely to be more frequent in the new economy.
Second, even if the case is not obsoleted by passage of time, its pendency may cast a pall over parties to and affected by the litigation, making investment riskier and complicating business planning“.
Does this call for novel enforcement tactics, with increased recourse to settlements and interim measures?
Or, in evidentiary words, does this require doing away with “cogent evidence” in exchange for “serious doubts“? I have my own doubts.
And Posner too. As he, very humbly, recognizes: “This problem will be extremely difficult to solve; indeed, I cannot even glimpse the solution“.
If God Posner cannot find it, we are indeed all doomed.
Interesting New Book
Hart Publishing has a new volume which looks very interesting. Hart Publishing has offered to send a free copy in exchange for ad placement. Given my current research focus on IP and Antitrust, I have decided to accept the offer.
Intellectual Property, Antitrust and Cumulative Innovation in the EU and the US
By Thorsten Käseberg
For decades, the debate about the tension between IP and antitrust law has revolved around the question to what extent antitrust should accept that IP laws may bar competition in order to stimulate innovation. The rise of IP rights in recent years has highlighted the problem that IP may also impede innovation, if research for new technologies or the marketing of new products requires access to protected prior innovation. How this ‘cumulative innovation’ is actually accounted for under IP and antitrust laws in the EU and the US, and how it could alternatively be dealt with, are the central questions addressed in this unique study by lawyer and economist Thorsten Käseberg.
Taking an integrated view of both IP and antitrust rules – in particular on refusals to deal based on IP – the book assesses policy levers under European and US patent, copyright and trade secrecy laws, such as the bar for and scope of protection as well as research exemptions, compulsory licensing regimes and misuse doctrines. It analyses what the allocation of tasks is and should be between these IP levers and antitrust rules, in particular the law on abuse of dominance (Article 102 TFEU) and monopolisation (Section 2 Sherman Act), while particular attention is paid to the essential facilities doctrine, including pricing methodologies for access to IP.
Many recent decisions and judgments are put into a coherent analytical framework, such as IMS Health, AstraZeneca, GlaxoSmithKline (in the EU), Apple (France), Orange Book Standard (Germany), Trinko, Rambus, NYMEX, eBay (US), Microsoft and IBM/T3 (both EU and US). Further topics covered include: IP protection for software, interoperability information and databases; industry-specific tailoring of IP; antitrust innovation market analysis; and the WTO law on the IP/antitrust interface.
Link to table of contents http://www.hartpub.co.uk/pdf/9781849463065.pdf
The Author
Dr Thorsten Käseberg, a lawyer and economist, was a case-handler at the European Commission’s Directorate-General for Competition between 2009 and 2011. He is currently working in the competition policy unit of the German Economics Ministry and was previously a lecturer in the Faculty of Law and Faculty of Economics at the Humboldt University Berlin, and a research assistant at the law firm Cleary Gottlieb Steen & Hamilton in Brussels.
June 2012 330pp Hbk 9781849463065 RSP: £75 / US$150
20% Discount Price: £60 / US$120
If you would like to place an order you can do so through the Hart Publishing website (links below). To receive the discount please mention ref: ‘CCB’ in the special instructions field. Please note that the discount will not be shown on your order but will be applied when your order is processed.
UK, EU and ROW: http://www.hartpub.co.uk/books/details.asp?isbn=9781849463065
US: http://www.hartpublishingusa.com/books/details.asp?isbn=9781849463065
Chillin'Competition 