Author Archive
Thoughts on Transfer of Technology, and More
At today’s GCLC lunch talk on transfer of technology agreements, a number of thoughts sprung to mind. Here they are.
- As part of our professional ethics, we competition lawyers should stop saying that IP confers a form of “monopoly” on its owner. Like property rights over tangible goods, IP – I talk here essentially of patents – confers property. A patent confers property over the usage of technical specifications, full stop. But – and this is a big But – IP does not imply, as the term monopoly suggests, the absence of alternative technical specifications. On many markets, several IP compete for a given product, service, functionality.
- Aren’t we over-regulating the issue of standard-essential patents? There’s no robust evidence that patent thickets are a widespread + harmful phenomenon. However, as a result of the mass-mediatization of several cases, and of the possible inability of the Commission to deal with those cases swiftly and thoroughly, we are heading towards the adoption of general rules in a range of soft law instruments. Last year, we got a new section on standardisation in the Guidelines on Horizontal Cooperation Agreements. The upcoming revised TTBER and its set of accompanying Guidelines may just bring about more rules. As a matter of principle, I would question such an approach, absent empirical case-related evidence.
- The use of “double negatives” in the list of hardcore restrictions should be avoided. D. Woods said the Commission would make some thinking on this. And I trust most EU competition law students would be grateful if the Commission made progress on this.
- The SEP=SMP shortcut is misconceived. It fails to grasp that several standards, or non-standardized technologies can compete for a given functionality, product, service. Moreover, standardization is a repeated game, so any attempt by a SEP holder to raise fees may be sanctioned at a later stage by other standard participants. And finally, SEP holders must often obtain licences from other SEP holders.
- A speaker made the point that it would be counterintuitive if participants to patent pools had to pay experts to determine on an ongoing basis whether the patents are valuable (or not) and in turn should (or not) stay in the pool. It is indeed a little weird to pay someone and entrust him with the mission, and power, to kick you out. And there are other risks: conflict of interest, bribes, etc. But aren’t most trade associations paid by their members, and yet keep a right to exclude participants if the membership conditions are no longer met?
- A popular policy argument to discard the need (and legitimacy) of antitrust intervention is that contemplated market failures are caused by regulatory frameworks. And the argument logically follows that regulatory defects should be solved by bringing changes to the regulatory framework, not by applying the competition rules. This argument has been made in virtually all sectors of the economy that have attracted antitrust scrutiny in the past decades, e.g. pharma, financial markets, telecoms, etc. I have, myself, made this point in a number of papers, but I have second thoughts on it now. Whilst I still believe that pieces of legislation adopted under a fully democratic procedure should not be undermined by ex post bureaucratic competition enforcement, I am also a pragmatist. In this respect, I tend to consider that antitrust enforcement may bring quicker, and better fixes, than protracted regulatory action (for instance, a reform of the IP system in the case of patent thickets). Plus antitrust enforcement is more reversible than regulatory action (in case of mistake). And finally reforms of regulatory regimes just have corrective effects for the future, and do not address existing problems…
Apologies
Alfonso and I owe a big apology to Francesco Carloni (Shearman & Sterling), Luca Crocco and Gianni de Stefano (Latham & Watkins).
Our friends organized yesterday an anniversary cocktail to celebrate the first year of existence of Italian Antitrust Association antitrustitalia.
I came back late from Bruges, where I gave a presentation at the 8th ELEA seminar. I learned there that Phedon Nicolaides will take over Jacques Pelkmans as the head of the economics department.
Alfonso had other, very good reasons.
PS: I just fixed the link to the BSC brochure.
Self promotion
We like to self promote at chillin’competition.
For instance, you will have noticed from yesterday’s post that Alfonso likes to incidentally recall that he works on a pending case against a giant US corporation.
So I take my turn to self promote a little, with a recap on recent and forthcoming chillin’competition-related activities:
- I was in Helsinki with my friend Miguel Rato (Shearman & Sterling). We were invited to deliver a presentation at the 11th Annual Conference of the Association of European Competition Law Judges (AECLJ). With 60 judges from accross Europe in the room (including judges from Luxemburg), Richard Whish, Alexander Italianer and Nick Banasevic on the podium, this was a very challenging talk. I attach the presentation here: Slides – Petit & Rato – Abuse in Technology-Enabled Markets – 11th AECLJ Conference (14 06 12. A paper on “Abuse in Technology-Enabled Markets” is in the making;
- The registration process for the 2012/2013 edition of the LLM in Competition Law & Economics at the Brussels School of Competition is now opened. We have a new brochure in which you will find a number of changes. A teaser: F. Jenny will teach on abuse with JF. Bellis, Alfonso’s existence is now official and several ***** economists have joined;
- We have a GCLC lunch talk this Friday, on the Commission’s review on the rules on technology transfer agreements. Our speakers are Donncadh Woods (DG Competition), Frédéric Louis (WilmerHale) and Paul Lugard (Tilburg Institute for Law and Economics (TILEC) and ICC Commission on Competition);
- Ana Paula Martinez (Levy & Salomao) is the editor of a new, impressive volume entitled Temas Atuais de Direito da Concorrencia with written contributions (in English) from S. Salop, E. Elhauge, D. Geradin, Mariana Tavares de Araujo, Ian S. Forrester and Francisco Enrique González-Díaz. Here’s the leaflet and table of contents: GED_LS-#845180-v1-2012_Brazil_Competition_Book
- I was in Strasbourg yesterday to lecture on IP and competition law at the CEIPI and I will be in Bruges tomorrow to give a presentation at the 8th ELEA symposium. It is a very busy week, like last week… and hopefully unlike next week.
Antitrust Parable (2) – The Kroes and The Almunia
A well-inspired friend sent us a new version of yesterday’s Antitrust Parable. We liked it, so we post it:
The Kroes. The Kroes’ job was to catch as many fish as possible, and the bigger the better. Every fish she caught she showed it off and was very proud. When she caught a really big fish the press would report in wonderment about Kroes’s great prowess. If another NCA got a bigger fish, she was embarrassed and immediately went after a fish that was even bigger. Smaller fishes she threw back because she wanted more fish. She saw to it that there were plenty of places for fish to breed and plenty of sources of food for them. Anything that prevented the fish from thriving and multiplying she opposed, because she wanted more and bigger fish.
The Almunia. The Almunia hated cases and wanted only to protect the business. He did not want to catch cases, but caught any he discovered. But he also encouraged staff to scare away cases [settlement?]. He sealed up the holes where cases could hide. He looked for any technique anywhere that would scare away cases [press releases, speeches, RFI…]. If something worked against having cases, he used it. If he caught a case he apologized to the townspeople because one had gotten through. He did everything he could so there would be no cases now or in the future. He wanted to protect the grain for the townspeople.
Antitrust Parable – The Fisherman, the Miller and DG Comp
Here is a little story about the fisherman, the miller and DG Comp (courtesy of a source that we will keep confidential):
The fisherman. The fisherman’s job was to catch as many fish as possible, and the bigger the better. Every fish he caught he showed it off and was very proud. When he caught a really big fish the press would report in wonderment about the fisherman’s great prowess. If another fisherman got a bigger fish, he was embarrassed and immediately went after a fish that was even bigger. Smaller fishes he threw back because he wanted more fish. He saw to it that there were plenty of places for fish to breed and plenty of sources of food for them. Anything that prevented the fish from thriving and multiplying he opposed, because he wanted more and bigger fish.
The miller. The miller hated rats and wanted only to protect the grain. He did not want to catch rats, but caught any he discovered. But he also encouraged cats to scare away the rats. He sealed up the holes where rats could hide. He looked for any technique anywhere that would scare away the rats. If something worked against the rats, he used it. If he caught a rat he apologized to the townspeople because one had gotten through. He did everything he could so there would be no rats now or in the future. He wanted to protect the grain for the townspeople.
DG Comp. DG Comp views its job as catching as many cartels as possible, and the bigger the better. Every cartel it catches it shows off and is very proud. When DG Comp catches a really big cartel the press reports in wonderment about DG Comp’s great prowess. If another government gets a bigger cartel, DG Comp is embarrassed and immediately goes after a cartel that is even bigger. Compliance programs it ignores because it wants to find more cartels. Compliance programs can seriously harm the places where cartels breed and endanger the sources of conspirators necessary for cartels. Company in-house lawyers can help prevent cartels from thriving and multiplying, so DG Comp opposes their professional privilege. Anything that prevents a cartel from thriving and multiplying DG Comp opposes, because it wants to catch more and bigger cartels.
The Price of Secrecy
Chatham house is throwing a very cheap conference on what looks like a very well-thought, and focused topic: “Competition policy in global markets“.
Here’s the price menu for the conference:
| Standard Rates | ||
|---|---|---|
| Commercial Organizations: | £895 (£1074 inc VAT) | |
| Government Departments: | £650 (£780 inc VAT) | |
| NGOs and Institutions: | £395 (£474 inc VAT) | |
The bottom-line:
I still fail to understand how officials from competition authorities can accept to participate to such events.
Mixed Bag
Alfonso must be busy dealing with the negative externalities inflicted by my previous posts (with which he had nothing to do, btw),
It is thus my task to run the blog today. In brief, I have also inflicted a negative externality to my poor self 😦
A mixed bag of things:
- The spirit of emulation within the ECN is amazing. The endives saga is just over. But the veggie decisional roulette keeps spinnin’. A few days ago, the Dutch competition authority slapped a €14,000,000 on bell pepper and onion growers for unlawful cartel. With this focus on agricultural products, the conspiracy theorist that sleeps in me cannot help but thinking that the MS are trying to get their CAP money back. Thanks to D. Mamane (Schellenberg Wittmer) for the pointer;
- Some more results, of EU officials this time, at the 20K: An Renckens (1:26:35); Oliver Stehmann (1:32:09); Sébastien Thomas (1:35:20); Anthony Whelan (1:50:36); Guillaume Loriot (1:52:06); Piet Van Nuffel (1:54:50). I stopped under 2 hours, as the list was pretty lenghty. Please send me your time if you want to appear on this post;
- Dan Sokol (University of Florida and Ioannis Liannos (UCL) new book The Global Limits of Competition Law is out. Looks really nice. Chillin’Competition would welcome a review copy;
- The American Antitrust Institute has put together The International Handbook On Private Enforcement Of Competition Law. Same here, a review copy would be appreciated;
- Who monitoring trustees really are? I thought until now that they were specialised consultants. But in reading a commentary on Intel/McAfee this morning, I learned that former CEOs also make good candidates. In this case, Mr. Olli-Pekka Kallasvuo, former CEO of Nokia, was appointed as Monitoring Trustee;
- Our friend David Mamane (him again) made my day in sending me a picture of today’s St Gallen competition conference. Apparently, my name was high on the screen (see picture on top of this post). Thanks to him, and to Tom Hoehn (the speaker), who quoted me in public;
- I was interviewed today in a local Belgian newspaper on what the concrete impact of the EU on Belgian’s daily life. A tricky question, which demanded quite some thinking. See the result here: Sudpresse – 7 juin 2012;
- Turning to less serious press, I was quoted in the LA Times on the Google case. From what I read, I disagree with Dennis Oswell (Oswell and Vahida). To me, the Commissioner’s move sends the signal that COMP’s case is weak. In line with past practice, the Commission could have simply requested a settlement behind closed doors it if it had had a strong case. My best scientific explanation of why the Commission departed from conventional practice? => it is trying to play some sort of poker game: with strong hands, try to look weak; with weak hands, try to look strong. And BTW, Regulation 1/2003 does not entitle the Commission to formally request Article 9 commitments. They must be proposed by the parties.
| 1:26:35 |
The Economist Corner (4) – Are Cartel Fines too Low?
Given today’s announcement, I suspect Alfonso has better to do than posting on this blog. Run, Alfonso (on the banks), run!
With this, it is thus my duty, and honour, to introduce the 4th edition of the Economist Corner. For this edition, Benoît Durand (RBB Economics) has sent us a good piece on a money-related issue, i.e. fines for cartel infringements. Enjoy!
In the last decade the European Commission has imposed higher fines on cartels, in particular under the helm of Neelie Kroes. The stated purpose for this increase was that fine levels were not sufficiently high to deter the formation of cartels.
In general, the deterrence property of sanctions is a key aspect of law enforcement. Becker (1968), who was the first to apply economic principles to crime and punishment, explains that the level of sanctions should be set so as to deter crime. A high level of sanction in turn contributes to minimise the costs of enforcing the law.[1]
Firms consider the expected benefits and costs of participating in a cartel. Under this logic, if the expected sanctions are higher than the collusive gains, then firms will not take the chance. Because there is always a significant probability that cartels slip through the net, the penalties should be several times larger than the gains such that no firm would dare try fixing prices. By way of example, consider that a cartel member expects to pocket 50 million euros extra every year for about 6 years, whilst the probability of being caught is 1 out of 5. In this setting, it would take a massive fine of slightly more than 1.5 billion euros to convince a firm not to collude.[2]
As cartels continue to exist, it must be the case that the current level of sanctions is ineffective. This is the conclusion that Combe and Monnier (2011) draw after reviewing the fines for 64 EC cartel decisions between 1979 and 2009. They show that in virtually all cases fines were set below the optimal deterrence level; i.e. in spite of the sanctions, the cartels were profitable.[3]
Is it therefore necessary to raise corporate fines above the current levels to deter the formation of cartels? It is hard to say, but to achieve full deterrence, competition authorities need not increase fines at stratospheric levels as suggested by the logic described above. First, they could adjust sanctions to give cartel members the incentive to undercut each other, which would trigger the collapse of cartels. Second, in complement to corporate fines, competition authorities could consider applying measures targeted at company officers who have brokered the cartel agreement.
More 20K results
More results, including several IP lawyers.
- Matthew Levitt (HoganLovells): 1:46:25
- Jean-Jo Evrard (former University of Liege and Darts IP): 1:47:31
- Enrique Gonzalez Diaz (Cleary): 1:48:44
- Norman Neyrinck (University of Liege): 1:48:52
- Alain Strowel (University of Liege): 1:49:01
- Thomas Wiese (Ashurst): 1:50:52
- Valentijn de Boe (Allen&Overy): 1:51:56
- Tom McQuail (Morrison Foerster): 1:54:59
- Damien Gerard (Cleary): 1:57:30
- Philip Bentley (Mc Dermott): 1:56:49
- Dirk Auer (Herbert Smith, former ULg student): 1:58:29
- Cedric Burton (Hunton & Williams): 2:01:45
- Maarten Meulenbelt (Sidley): 2:02:10
- Geert Zonekeyn (Ronse): 2:07:10
- Kristina Nordlander (Sidley): 2:10:05
- Philip Werner (Mc Dermott): 2:13:36
- Sarah Ashall (Shearman): 2:57:53
PS: I just selected the people I know. Apologies to those that I missed.
Job advertisement
Job Vacancy – Professor (100%) in the Department of European Legal Studies at the College of Europe (Bruges campus)
The College of Europe (Bruges campus) is seeking applications for the position of a full-time professor in the Department of European Legal Studies (www.coleurope.eu/law), starting on 1st September 2012.
Essential requirements are:
- a Ph.D. European Law with an excellent result
(applications of candidates who have already formally submitted but not yet defended their Ph.D-thesis at the date of application are also admissible ; however, the doctorate needs to be obtained before taking up duties on 1 September 2012) - a proven interest in European Law, demonstrated by a list of publications,
- university-level teaching experience,
- a very good command of English and French,
- the ability to work as part of a team,
- good organisational skills and a high measure of flexibility (working time can include evenings and week-ends).
Tasks include:
- teaching an LLM course in the field of European Law, including the supervision of Master’s theses,
- research and publication in the field of European Law, and
- assisting the Director of the Department in leading and supervising a team of assistants, the organisation of conferences, the management of the study programme (including the ELEA-specialization), and the selection of prospective LLM students.
The College offers:
- an excellent academic setting,
- the possibility of teaching and interacting with high-level graduate students,
- a stimulating and international working environment,
- a four-year contract under Belgian law, renewable, and
- remuneration in relation to qualification and experience of the successful candidate.
Mail or e-mail applications, either in English or French, comprising a detailed curriculum vitae, transcripts, a list of publications and courses taught as well as a letter of motivation and contact details of two references should be submitted at the latest by 1st June 2012 to
Professor Paul Demaret
Rector
College of Europe
Dijver 11, BE-8000 Bruges
Belgium
e-mail ann.verlinde@coleurope.eu
Successful applicants will be invited for an interview. Should you require any further information, please contact the Director of the Department, Professor Govaere (inge.govaere@coleurope.eu).
Chillin'Competition 