Author Archive
The Friday Slot (4) – Richard Whish
For this fourth edition of the Friday Slot, Prof. Richard Whish has taken the time to address our questions. As everyone knows, Prof. Whish is the author of the ultimate EU competition book, a book with a big B which is a model of clarity and accuracy. Amongst other things, in this ITW, Prof. Whish takes distance with the dominant view on Tomra and TeliaSonera and alludes to encounters with mutant economists. Thanks to him for accepting to appear in the Friday Slot. A great honour for chillin’competition.
“Oscar” of the best competition law book? And of the best non-competition law book?
Well, obviously I cannot say Whish on Competition Law! I greatly admire Oke Odudu’s The Boundaries of EC Competition Law for incisive and original thinking and for in-depth research. On procedure there is nothing to match the series of essays written by Wouters Wils and published in a series of books since 2002. As for other books, where to start! I suppose if it had to be just one I would go for George Eliot’s Middlemarch for a view of all things English (good and bad). I am not aware of a finer character in literature than Dorothea Brooke.
“Oscar” of the best case-law development in the past year? “Oscar” of the worst case-law development?
I very much liked the judgment of the Court of Justice in TeliaSonera, a view that is not widely shared, it would seem. To suggest that a margin squeeze cannot be an abuse in the absence of a duty to deal, to my mind, would emasculate Article 102 and to limit it to the control of monopoly rather than dominance.
Let’s do it like economists => assume that you could change 3 rules, principles, judgments, institutions in the current EU competition system. What would you do?
I wish that we could start over again on refusal to supply and on rebates. I am not a critical as some commentators about the current law in these areas, but I do think that it is difficult to explain quite how we got to where we now are. I have difficulties with Commercial Solvents, which is where the law on refusal to deal started: to what extent was the Court really concerned that Commercial Solvents had discontinued a customer who had become dependent upon it? The national laws on economic dependency do not, to my mind, qualify as ‘competition’ laws, but their existence has percolated into the competition rules. As for rebates, some of the judgments contain statements that suggest per se illegality, which cannot be correct. Tomra and Intel will be very important judgments on this: to what extent, I wonder, will the Commission’s Guidance document have an influence on the Courts dealing with those appeals?
A different point is that I think that changes are needed at the General Court as to the way that it conducts its review of Commission decisions: I am not thinking so much of the intensity of the review as the actual procedure.
Strike Party
A non competition related post.
Yesterday, Belgium was on strike (and so was lazy Alfonso, who did not post on the blog).
Guess what, this was a Monday. That is the day after Sunday, which itself is the day after Saturday.
Intriguing. I cant help but thinking that strikes are often a far cry from their purpose, i.e. genuine social protest, and in turn that they are a convenient means to make week-ends longer (or earlier).
The low turnout in the streets yesterday actually confirms this (in particular when the temperature comes close to 0°C).
I made a quick and dirty research on strikes in Belgium over 2011:
- The 4 March general strike took place on…. a Friday
- The 13 May strike in railways took place on … a Friday
I’d be interested to see a more comprehensive body of evidence, but my gut feeling is that there are many other examples.
The next question, obviously, is, how to handle this? After all, in several Member States the freedom to strike is protected by the law.
My take: maintain the freedom to strike, but prohibit 1-day strikes on Fridays and Mondays.
Disclaimer
We have already talked of the Commission’s somewhat confusing disclaimers in official documents.
Think of §3 of the Guidance Communication on exclusionary abuses under Article 102 TFEU : “This document is not intended to constitute a statement of the law”
Or of the good old “The opinions expressed in this document are those of the author and do not represent the views of the European Commission nor of its services“.
Antitrust lawyers often make jokes about the Commission for those disclaimers. But should they?
During the consultation process on the settlement notice, a famous law firm inserted this courageous, delicious footnote in its position paper:
“These comments do not represent the views of the Firm or of its clients.”
So whose views are these? Please help me, because I am lost.
I am even more puzzled given that a few lines above, the same document explicitly mentioned that:
“These comments are offered by the Brussels office of __ & __ LLP in response to the Commission’s invitation to comment.”
Given our track record on this blog, we cannot be suspected of trying to stigmatize this particular law firm. We have very good friends there and they are all stellar professionals.
This is just to show that no one’s perfect in this business, and that it is quite easy to make fun of those who make fun.
PS: Thanks to my assistant N. Neyrinck for the pointer.
PS2: In a paper written with my esteemed colleague Miguel Rato (Shearman & Sterling), we stressed that regardless of those disclaimers, oral statements may to some extent limit the enforcement discretion of the Commission and, as a result, be relied upon by affected parties to challenge a formal Commission decision. In Case T-25/99, Roberts and Roberts v. Commission, the GC for instance reviewed the substance of a public speech given by a Commission official on specific aspects of the application of competition law to pub contracts (§§128-129).
PS3: Picture taken from a very good LP, if you do like post grunge music.
Chinese Antitrust Law – The Year of the Rabbit in Review (1)
The Year of the Rabbit is over, and the Year of the Dragon just started today in China. This is thus a good moment to look at the rabbit in the rearview mirror, and reflect on what has been achieved in Chinese antitrust over the past year. Our colleague and friend Adrian Emch from Hogan Lovells Beijing has proposed us a series of posts on the Year of the antitrust Rabbit. If time allows, Adrian has promised a “trilogy!”
For this first post, let’s just review the main developments in Chinese antitrust law over the year of the rabbit (the description is not meant to be exhaustive)? The year started with a bang: on 1 February 2011, a total of five new regulations implementing the Anti-Monopoly Law came into effect. Two of them were released by the National Development and Reform Commission (NDRC), and three of them issued by the State Administration for Industry and Commerce (SAIC). (For in-depth analyses of these regulations, see here.)
Besides this, and focusing on case-work, here’s a flavor of what Chinese agencies and Courts have been busy working on.
NDRC. As already reported, one of the highlights in NDRC’s activities was the Unilever decision in May. In November, NDRC also adopted a decision against two domestic pharmaceutical companies, with the highest fines ever imposed for an infringement of competition law. The case was about two of only a handful of distributors of a drug (promethazine hydrochloride) that entered exclusive supply arrangements with the two only domestic producers of the drug. The result was rather obvious – significant price increases. The legal reasoning in NDRC’s public announcement of the case, in turn, was less clear. Press reports indicated that the two distributors were affiliated, so a possible theory that the two distributors had engaged in cartel conduct would not make much sense if one were to accept the “single economic entity” defense (which is not explicitly in the law inChina, though). It seems that NDRC, instead, held that the distributors had abused their dominant position. But there is no explanation on this in the announcement, so one can only speculate whether the dominance was found pre- or post-agreement, and whether it was single or collective dominance.
Finally, in December, NDRC officials told the domestic press that they were investigating a potential abuse of dominance by two ofChina’s three large telecoms companies, China Telecom and China Unicom. In the absence of an official decision or announcement, the exact facts of the case are not fully clear. For example, it is, again, not entirely clear whether the dominant position would be each company individually (China Telecom is strong in the South of China, and China Unicom in the North) or jointly (collective dominance can be presumed if the aggregate market share of two companies is two-thirds or more). As for the alleged abuse, it seems it consisted of making difficult access to the broadband network. The particular allegation may be that the two companies granted access on a discriminatory basis, with higher access charges for companies that compete with them downstream.
Finally, in terms of human resources, NDRC has started restructuring its antitrust team in 2011. In July, the main body was re-named Price Supervision and Anti-Monopoly Bureau (in English), and the antitrust team inBeijingis scheduled to grow from half a dozen to over 20 in the coming months.
The Friday Slot (3) – Antoine Winckler
For this third edition of the Friday Slot, Antoine Winckler (Cleary Gottlieb, Brussels) has taken a shot at our questions. I met Antoine five years ago at a conference on “Non-competition concerns under the EUMR”. He made a great impression and since then, with my competition friends, we refer to him as the “Tribun”. A full biography of Antoine can be found here. I also know for a fact that Antoine reads our blog regularly. It is a great honor that he took the time to answer to our questions.
“Oscar” of the best competition law book? And of the best non-competition law book?
Judge Bork’s Antitrust Paradox
Boccacio’s Decamerone
“Oscar” of the best case-law development in the past year? “Oscar” of the worst case-law development?
Worst : CJEU, C 439/09, Pierre Fabre Dermo-Cosmétique SAS v Président de l’Autorité de la concurrence and Ministre de l’Économie, de l’Industrie et de l’Emploi (another move away from the effects theory)
Best: Advocate General Sharpston’s Opinion in CJEU, C-389/10 P, KME v. Commission
Let’s do it like economists => assume that you could change 3 rules, principles, judgments, institutions in the current EU competition system. What would you do?
I would transform DG COMP into an EU Prosecutor and give the General Court the power to make all antitrust decisions (but only after making sure judges have all followed economics 1.01).
Average working time/week?
When does work really stop?
Why do you work in competition law? How did you first get into it?
You get to work with non-lawyers a lot.
I really wanted to work in Brussels – just kidding.
Most interesting, intense or funny moment of your career?
Watching Judge Vesterdorf being shown a streamed James Bond movie (James Bond in his Aston Martin) during the Microsoft v Commission hearing.
Hearing my learned colleague/partner/dear friend Mario Siragusa and his opponent Antonino Abate from the Legal Service – both pure Sicilians – plead a State-aid case in re-invented French.
Your role model (if any) in the competition community? And outside of it?
Don Holley and Mario Siragusa (my mentors at Cleary)
Winston Churchill
What do you like the least about your job?
Difficult clients
What do you like the most about your job?
Difficult clients
What you like the most about economics in competition law?
Finding an economist coming up with the right answer
What you like the least about economics in competition law?
Economists who repeat what lawyers say
What career/personal achievement are you most proud of?
Having had fun (most of time) working
A piece of “counterfactual” analysis: what would you do if you weren’t in your current position?
Teaching philosophy/literature/history or riding horses
Besides being a “competition geek” (sorry for this one, but we all are), what are your hobbies?
Philosophy and horses
Favorite movies?
Gilda, The Night of the Iguana, Hitchcock and Marx Brothers generally
Favorite music style in general?
Opera
Your favorite motto?
Work is the curse of the drinking classes (Oscar Wilde)
Websites that you visit the most (besides Chillin’Competition)?
Google of course
A piece of advice for junior competition professionals?
Have fun
For real?
In the last weeks, France lost its triple A, but gained a fourth operator in the mobile telephony sector.
The chronology of events that led to the entry of Free Mobile brings a good illustration of what may constitute retaliation tactics amongst semi-collusive oligopolists. A reminder of what happened:
- Since last year, rumour has it that a new operator contemplates entering the French mobile telephony triopoly;
- In the summer 2011, the 3 incumbent oligopolists introduce low cost subscriptions in a bid to possibly dissuade the new entrant;
- As the threat of entry grows in the first days of 2012, the incumbents make statements in the press that they are ready to throw heavy artillery at Free mobile;
- On 10 January, Free Mobile launches its mobile telephony service, cutting the incumbent’s mobile offers by several €s, and outcompeting them on voice, sms and the Internet;
- In the following days, all three incumbent players align their offers on Free, with Bouygues Telecom even applying similar prices as Free ;
- Yesterday, one incumbent send bailiffs to witness that Free’s network is dysfunctional, in violation of a number of contractual obligations.
Looks to me as if 2, 3, 5 and 6 are clear examples of ex ante and ex post retaliation tactics. Thanks to Free Mobile for offering an opportunity to put pictures on theory. Will likely use this as a case-study with my students.
Now, the theoretical question is: can Free Mobile rely on the competition rules to block incumbents’ retaliation tactics? As a matter of theory, retaliation practices of collectively dominant oligopolists could fall within the scope of Article 102 TFEU’s under-used abuse of collective dominance doctrine (O’Donoghue and Padilla, 2009, p.158).
That said, traditionnally, the economics of oligopolistic retaliation are still seen as too equivocal to be imported into a legal standard. Economists for instance disagree on the magnitude of retaliation measures. Whilst some believe that only measures akin to predatory pricing constitute an effective retaliatory mechanism, others view a mere temporary breakdown of collusion as a sufficient deterrent mechanism. Moreover, economists still disagree on whether retaliation must be specifically targeted at the cheating firm or whether general retaliation through market-wide price reductions is a sufficient disciplining factor.
Now, what is interesting in the Free Mobile case, is that retaliation is not just confined to prices. Incumbents seems to be engaged in a broadening pattern of retaliation tactics, the purpose of which is to force Free Mobile off the market. Those include the sending of anticompetitive signals through the press, agressive price competition, and possibly judicial/contractual harassment.
If things go on this way, and new retaliation measures are taken by incumbent oligopolists, Free Mobile may well solicit the protection of competition authorities under Article 102 TFEU. The fact that there are additional retaliation measures in addition to aggressive price competition could indeed make a strong case of abuse, under a Karate-competition law approach. Moreover, the incumbents might have coordinated their response to Free Mobile’s entry, as they did back in the day when they organized a Yalta on mobile telephony.
A last reason to believe: at the press conference announcing the launching of Free Mobile’s offer, X. Niel, the CEO of Free Mobile praised Bruno Lasserre, the head of the French CA, for his support in the last few years. And in reading Bruno Lasserre’s own words about free, it seems the French CA is quite enthusiastic with the entry of a fourth player in the market.
Costs Conference
A reminder for our readers: the Brussels School of Competition (BSC) will hold to organize on 25 January in Brussels a half-day compliance seminar entitled “Costs in Competition Law”.
In line with the interdisciplinary spirit of the BSC, this event attempts to “blend” competition law and economics. Under each selected topic (see link to the agenda below), it thus brings together a team of one lawyer and one economist, who will seek to provide an integrated perspective on the issue.
The programme can be found at the end of this post. In recent days, we have made several significant additions to it.
Costs in competition law – Compliance Seminar – 25012012 – Programme
The B******t Test
As demonstrated by H.G. Frankfurt, we are surrounded by b******t.
One of the methods for spotting b******t it is the “not test“. As explained here and there, this test checks whether “it is possible to negate the statement and create a sentence that any sane person would utter in public“.
The “not test” has been applied by development economists to G20 declarations.
In concrete terms, the idea is to take a speech and turn its sentences to their opposite, i.e. turn all positive sentence to negative and vice versa. If the revised sentence makes sense and could equally be voiced by the speaker, then it enshrines worth content. If, on the other hand, the changed sentence makes no sense and would never possibly be pronounced by the speaker, then it is a vacuous statement which conveys b******t.
Now let’s see whether b******t is also pervasive in the antitrust field.
To apply the “not test“, I have chosen a policy speech of former Competition Commissionner Neelie Kroes. I apply it to bits and pieces of the speech which seem to convey opinions rather than descriptions. Instead of systematically using the “not” word, I occasionally apply antonyms.
“Together with the Court of Justice, the Commission has been an independent driving force to promote antitrust compliance to bring better products, greater choice, and lower prices to the citizens of Europe” gives => “Together with the Court of Justice, the Commission has been a biased inefficient force to promote antitrust compliance to bring better products, greater choice, and lower prices to the citizens of Europe” => b******t
“this is an impressive record, I still believe that more can be done” gives => “this is an unimpressive record, I believe that more cannot be done” => b******t
“Let me be very clear. These discussions are not about bargaining or negotiating. The Commission will not bargain about evidence or objections” gives => “Let me be very clear. These discussions are just about bargaining or negotiating. The Commission will bargain about evidence or objections” => no b******t
“We have a lot to be proud of. But as you can see, we are not resting on our laurels: our commitment to designing ever better competition policy and enforcement is as strong as it was fifty years ago” gives => “We have a lot to be ashamed of. And as you can see, we are
notresting on our laurels: our commitment to designing ever better competition policy and enforcement is as weak as ever” => definitely b******t
I leave it to our readers to draw their conclusions on this. But it seems we’d save a lot of time and paper if speeches were better drafted…
A disclaimer: this post was inspired by Alfonso’s last post + drinks yesterday with my LL.M students…
PS: I suppose only die-hard fans of AC/DC-like sound will know the LP that illustrates this post. Jackyl was a great band, and their titles are worth re-listening.
Best Conference in Early 2012 – Costs in Competition Law
With the dissemination of the “more economic” approach in all areas of EU competition law, costs have become a key concept in antitrust proceedings. But to most lawyers and in-house counsels, the very notion(s) of costs remains cryptic.
Against this background, the Brussels School of Competition (BSC) has decided to organize on 25 January in Brussels a half-day compliance seminar entitled “Costs in Competition Law”.
In line with the interdisciplinary spirit of the BSC, this event attempts to “blend” competition law and economics. Under each selected topic (see link to the agenda below), it thus brings together a team of one lawyer and one economist, who will seek to provide an integrated perspective on the issue.
This event is a joint initiative of the BSC and of the Institute for European Legal Studies (IEJE) of the University of Liege (ULg). I owe a big, huge, enormous thank you to Elise Provost, for her great assistance in the organisation of this event.
Costs in competition law – Compliance Seminar – 25012012 – Programme
A registration form can be found here.
Chillin'Competition 