Author Archive
Forthcoming Events
A quick post to update our readers on forthcoming events:
- GCLC Evening Policy Talk on 1 December with B. Kovacic (former US FTC Commissioner);
- A set of three BSC seminars on the Law & Econ of Horizontal Cooperation Agreements (incl. recent developments) with M. Bennett (OFT), A. Lofaro (RBB Econ) and S. Völcker (WilmerHale);
- A half day conference on the future of Belgian Competition Law on 12 December (in the framework of the BSC);
- GCLC Lunch Talk on 8 December on the ECtHR Judgment in Menarini Diagnostics v. Italy (with M. Bronckers and C. Bellamy).
Boutique
On the market for antitrust economics consultancy, a bunch of solo practictioners have embraced the “boutique” business model:
- Some time ago, Juan Briones founded the firm e-Konomica (a strange name, true, for a field of business where free market economics are king);
- More recently, David Spector founded MAPP;
- And even more recently, Paul Höfer created AMC economics.
There’s no way, but the hard way
The Commission’s Draft Proposal for a New Regulation on Credit Rating Agencies (“CRAs”) is just out.
It enshrines a whole host of competition-related remedies (see text at the end of this post). Amongst the proposals on the table:
- A limitation of the duration of CRA-issuers business relationships to a maximum of 3 years (article 6b);
- Injunctions on outgoing CRAs to exchange information with incoming CRA (article 6b);
- A 10 years general ban on merger and acquisitions, that applies to CRAs holding a market share > 20% (article 6c);
- Remedies including fines, which bear intriguing resemblance to penalties for competition infringements.
The proposal however abandons the option of creating a publicly funded European rating agency, given “concerns relating to conflicts of interest and its credibility, especially if such CRA would rate sovereign debt”.
In light of this, a question springs to mind: if (i) the problems that plague the rating industry are competition related; and (ii) similar remedies can be ordered on the basis of the competition rules, why follow a cumbersome legislative approach, rather than using the good old, flexible Articles 101 and 102 TFEU?
The answer is relatively straightforward: the competition rules only kick in in the presence of a competition infringement in the form of an unlawful agreement or an abuse. To date, no such conduct has been reported in the ratings industry (that said, I have argued elsewhere that cooking an Article 101 or 102 TFEU case might not be that difficult).
Because all competition problems cannot be solved with the competition rules, there is thus a “gap” in the competition toolbox of the TFEU.
In some Member States, like the UK, this gap is filled with the possibility to launch “market investigations” and possibly order intrusive remedies where “any feature, or combination of features, of each relevant market prevents, restricts or distorts competition“.
It is certainly about time for the EU to enjoy similar powers. The sector inquiries found at Article 17 of Regulation 1/2003 only provide an imperfect substitute.
Otherwise, the EU might have no other choice but to follow the “hard way” with competition issues subject to political maneuvers of all sorts and endless, protracted negotiations (but true though, in Airbourne’s lyrics “there’s no way but the hard way“).
Draft_Regulation_CRAs_20111104 clean FINAL-1 (1)
11/11
Today is a day off in Belgium and France. A quick post though.
A group of Phd students from University College Dublin is organising a Postgraduate Workshop (in March 2012) on competition law enforcement.
Hereafter the link to the call for papers.
The Italian Way
A message of hope, for our Italian readers.
In Italy, competition experts face promising career prospects:
- Giulanio Amato, once Chairman of the Italian competition authority, twice held the position of Prime Minister – albeit for an ephemeral period;
- Mario Monti, once EU Commissioner for Competition is poised to become the next Italian Prime Minister.
Assorted links
- Wouter Wils has a new paper on recidivism. I understand it will appear in World Competition. A question: Does Wouter have an exclusive supply agreement with Kluwer?;
- At the GCLC we are DESPERATELY looking for a Commission official to come present the best practices on the conduct of proceedings in antitrust cases (101 and 102 TFEU) at a forthcoming lunch talk;
- I gave a presentation on standardisation agreements, IP and competition law. See link thereafter for the ppt. Droit des brevets et droit de la concurrence – Accords de normalisation A paper is in the making;
- A good New Yorker paper on why the current laudative discourse on small business is misguided;
- And a rumination/question: what makes it that in some markets, the supplier pays for distribution (publisher-search engines, airlines-travel agents), and in other markets, the supplier sells to distributors (consumer goods-supermarkets)?
General Interest
A few weeks ago, I have been asked to make conclusive remarks at a conference on “Competition law and the general interest” (BTW, the picture above shows Paris Hilton serving “general interest” works after having been found guilty of unlawful drug possession).
I attach my text below. This is far from ground-breaking, and if anyone has suggestions on how to improve the text, I’ll surely take them on board.
That said, it was the first time I was asked to do this, and it was a lot of fun.
The proceedings of the conference (in French), will soon be published by Larcier.
Droit de la concurrence et intérêt général – Final (03 11 11) NP
Help
Apologies for the self-promotion – it is actually not the purpose of this post – but next week, I have to give a speech on standardization a this conference.
To prepare for the conference, I have read a LOT of stuff including complex books on the ISO, patent law, etc.
Yet, there’s one little piece of information that I am still missing. I heard last week from a secret informant that there is currently a Dupont case in COMP’s pipeline, but I cannot find any trace of it. Any information on this case would be most helpful.
More generally, I welcome any input, remark, comments, sources on standardization. As usual, your help will be acknowledged in the first footnote of my paper.
JD
Jones Day Paris announced recently that they had hired Eric Barbier de la Serre (formerly Latham & Watkins, Brussels).
He will join there Eric Morgan de Rivery, who is the resident partner in charge of competition cases.
I knew, as many, that Jones Day applied strict standards when it comes to appointing new partners. But that strict???
I mean, unless you are (i) a superstar antitrust lawyer; and (ii) you’re called “Eric ___ de____”, the odds that you’ll make partner in Paris seem pretty low.
The bottom line: when it comes to HR, Jones Day clearly is no joker.
“Canada Dry” Decisions
The ECJ ruling in Tele2 Polska is a joke (actually a bad one).
I’ve already blogged on the nefarious effects of this ruling. Today, I’d like to make a few more points.
Remember: the judgment states that National Competition Authorities (“NCAs”) cannot, under Regulation 1/2003, adopt declaratory decisions stating that there has been no breach of Article 101 and/or 102 TFEU (on the merits).
This judgment is likely to have far reaching consequences. As written in a paper below, and confirmed by a number of colleagues at the GCLC lunch talk yesterday, it means that NCAs cannot adopt individual exemption decisions under Article 101(3) TFEU.
Since the inception of Regulation 1/2003, however, many – including me – have repeatedly stated that decentralisation was all about empowering NCAs to take Article 101(3) TFEU decisions. More importantly, several NCAs have taken exemption decisions over the past 7 years. Is this decisional practice now unlawful?
The Commission’s response to this is that the ruling does not change much. Rather than taking a negative decision under 101(3) TFEU, the NCAs can still adopt decisions that “there are no grounds for action on their part” pursuant to Article 5 of Regulation 1/2003.
Now, is this really true? As noted by F. Zivy yesterday, could a NCA conceivably write in a decision: « The impugned practice infringes Article 101(1) TFEU. There is strong evidence that it is nonetheless justified under Article 101(3). But we are sorry, the only thing we can do is to say there are no grounds of action against this infringement”?
Or to be even more extreme: “The impugned practice constitutes an infringement of Article 101(1) TFEU. Hence, there are no grounds of action on our part“? Come on..
To me, decisions that there are no grounds of action are like Canada Dry to “negative decisions”: they look like negative decisions, they taste like them, but they are not like them.
In practice, rather than making such paradoxical statements, NCAs willing to exonerate anticompetitive agreements are likely to reason within Article 101(1) TFEU, under a “rule of reason“-like approach (which BTW has been consistently held alien to EU law by the ECJ).
A last remark: the judgment is primarily based on a litteral reading of Article 5 of Regulation 1/2003 which sets the powers of NCAs, and is supposed to be exhaustive. Article 5 says nothing of inapplicability decisions. hence, NCAs cannot take them.
Now, has the ECJ really read Article 5 of Regulation 1/2003?
I mean had it done so, it would have realised that this provision is all about the decisions taken for the application of Article 101 and 102 TFEU (“The competition authorities of the Member States shall have the power to apply Articles 81 and 82 of the Treaty in individual cases“). Hence, it is somewhat unavoidable that this provision is silent on negative decisions, that DO NOT apply Articles 101 and 102 TFEU.
Hereafter a paper that I have written with my assistant (in French) + the slides presented at the GCLC lunch talk yesterday.
Commentaire Tele 2 Polska – Petit et Lousberg – Final
Chillin'Competition 