Author Archive
Morning readings
In reading Commissioner Almunia’s latest speech, I thought to myself: did he changed jobs?
Or is he already campaigning for a position as Internal Market Commissioner ahead of the European elections?
I mean half of the speech is devoted to the banking union and other regulatory issues in the banking sector.
I also read Commissioner Almunia’s antepenultiam speech on the digital economy.
And here I thought to myself: some things never change.
In particular, the sticky, erroneous perception that patents are akin to monopoly.
The reasoning is not straightforward. It comes in two stages.
Stage 1. Introduce an exotic concept (here “gatekeeper“):
“We can distinguish different types of gatekeepers in the online world: search engines, patent holders, network operators, and operating systems”.
Stage 2. Equate the new concept with “dominance”:
“One of the priorities of competition control is to ensure that dominant firms and gatekeepers do not abuse their positions”
A reminder: this is nothing new. In 2004, Microsoft had already been labelled a gatekeeper.
ChillinLeak (for real)
There’s competition law everywhere,
Even in the stockpile of US diplomatic cables revealed by Wikileaks.
A document published by Wikilieaks reveals that in 2009, the US were concerned of the influence of the EU on the shaping of competition policies in Africa (through the Africomp programme).
“The United States may wish to consider becoming a donor member of AFRICOMP in terms of providing in-kind donations in the form of expert advice. Such advice could support the development of effective competition policies in Africa and ensure that European views on competition policy are not the only ones heard by AFRICOMP”
Thanks to my assistant Norman (and now fellow blogger) for the pointer.
The Golden Rule
In the new yesterday: Microsoft and Apple have opened another war front by seeking injunctions against Google and Samsung (and other Android players) in the context of patent infringement proceedings.
Ahem: aren’t those guys meanwhile complaining of abusive injunction seeking by Motorola Google before the Commission?
And in the news today: the hedge fund SAC Capital agreed to pay $1.8 billion in fines. You read well: $1.8 billion, or more than a repeat offender like MSFT… Who said stellar antitrust fines have something special…
And there’s more: they also agreed to close their investment advisory business!
With this background, I’d just love to hear more on the welfare losses inflicted by insider trading v. those attributable to cartels.
Best Conference on Antitrust Damages to Date
Antitrust Damages in EU Law and Policy
Brussels, 7 and 8 November 2013
Join the GCLC for its 9th annual conference and get first-hand guidance on the interests at stake at a crucial moment of the decision-making process before the European Parliament and the Council.
Vice-President Almunia, academics, DG COMP and Legal Service officials, national civil servants, national and EU judges, business people and competition specialists will debate, comment on their expectations and how they hope to overcome the final hurdles.
Location:
Residence Palace
Rue de la Loi, 155
Latest ECJ features a bunch of very good papers
EUROPEAN COMPETITION JOURNAL
Volume 9 . Number 2 . August 2013
ONLINE ACCESS
To access this issue online and purchase individual papers please click here
SUBSCRIPTIONS
To subscribe please click here
CONTENTS
Vertical Antitrust Enforcement: Transatlantic Perspectives on Restrictions of Online Distribution under EU and US Competition Laws
Gabriele Accardo
Abstract: This article looks at how EU and US competition laws deal with restrictions of online sales in distribution agreements, respectively. The growing importance of online commerce highlights how vertical competition law enforcement is still an important building block of competition law policies, both in the US and in Europe. Businesses who are either engaged in online activities or deal with online intermediaries in the US and EU should be aware of the rules of the game, since vertical antitrust issues are generally subject to different principles on the two sides of the Atlantic. The European Commission recently adopted new competition rules that specifically target restrictions of online sales in distribution agreements, acknowledging the importance of e-commerce for consumers and its instrumental role in achieving the paramount goal of a single internal market in Europe. Conversely, unlike in the EU, several factors, such as the existence of a developed online market, the absence of single market considerations, the paramount importance of freedom to contract and the role of inter-brand competition under US antitrust law, arguably explain why US antitrust doctrine is less concerned about the need to adopt specific rules applicable to restrictions of online sales.
Alternative Approaches to Sentencing in Cartel Cases: The European Union, Ireland and the United States
Paul K Gorecki and Sarah Maxwell
Abstract: The paper examines the approach used in sentencing in hard core cartel cases in the European Union, Ireland and the United States. These approaches are not considered in a vacuum, but rather use the facts of the successful prosecution of the Citroen cartel in Ireland. While the EU and the US both use sentencing guidelines, the US guidelines are more evidence based and transparent. In contrast, the judiciary in Ireland has yet to develop a systematic clear policy for determining sentences in cartel cases. Applying the EU and the US sentencing guidelines to the facts of the Citroen cartel suggests that, in any event, the sentences imposed in cartel cases Ireland are too low. Some suggestions for rectifying the situation are discussed.
Sad but true
I love commitments decisions because they are a quick read.
But I also hate dislike them because they leave the reader angry hungry for more.
Some evidence: in the E-Books case, the effect on trade condition was deemed fulfilled under the simplest possible sort of analysis:
(91) The Commission’s preliminary view was that the effect on trade of the concerted practice was appreciable given that the conversion to the agency model by the Four Publishers and Apple formed part of a global strategy that was intended to be,andwas,implemented in the EEA.(92) In particular,given the nature of the product in question, the position and importance of the undertakings concerned and the scope of the agency agreements entered into between each of the Four Publishers and Apple in the United Kingdom, France and Germany, the pattern of trade was potentially affected by the concerted practice which covered a substantial part of the EEA.
With this kind of reasoning, everything may affect trade between Member States (though I understand Alfonso has a dissonant view on this).
The reference to the “nature of the product” is in particular inconsistent with previous findings that geographic markets for books are national or subnational (see Case No COMP/M.2978 LAGARDERE/NATEXIS/VUP, §296).
But there’s other fish in the sea: the E-Books decision is fascinating in that it exemplifies how, with parties’ consent, agencies manage to bypass the most basic evidentiary hurdles required for antitrust intervention.
Beyond the effect on trade condition, the decision adduces only light proof of the alleged horizontal “concerted practice” amongst publishers. I doubt this is Woodpulp or CISAC’s proof. As the Court recalled in those cases, heavy evidentiary thresholds apply in concerted practice cases.
More importantly, the Commission’s theory of harm is incomplete. In particular, the Commission does not explain if, and how, the publishers could have boycotted Amazon – their biggest client – under a collective refusal to supply (in Bronner sense) and reserved E-Books to Apple. And this is important, because absent this, the MFN scheme could not possibly have the anticompetitive effect foreseen in the decision.
Last but not least, the decision is a good example of antitrust sorcellery, in that it it turns the adoption of agency agreements, i.e. practices that are per se lawful practices by 101 TFEU standards, into a theory of anticompetitive harm.
To the Commission, article 9 decisions sound like Hetfield’s epic lyrics:
“I’m your truth, telling lies
I’m your reason alibis”
Competition v IP
I attach a presentation I gave yesterday at the University CEU San Pablo in Madrid.
The presentation adresses wether competition policy contributes to investment in innovation.
I slightly reframed it though, to envision it under the competition v IP angle.
The picture above says it all of my views on this issue.
Comments welcome.
Game Changer: Wathelet’s Opinion in Telefonica
And today, the best of the CJEU’s recent output: AG Wathelet’s Opinion in Telefonica v. Commission, C‑295/12 P (in French):
24. Un argument est souvent soulevé à l’encontre de l’approche préconisée dans les présentes conclusions, à savoir que Tribunal ne doit ou ne peut pas «s’immiscer» dans la fixation de l’amende, et de ce fait dans la politique de la concurrence, qui relève de la seule responsabilité de la Commission. Je ne partage pas ce raisonnement dès lors que le Tribunal ne se prononce que sur une affaire particulière. La Commission garde donc toutes ses compétences pour définir et appliquer sa politique générale dans d’autres dossiers.
125. Je déduis de ce qui précède et plus particulièrement sur la base des points 62 de l’arrêt Chalkor/Commission, précité, et 129 de l’arrêt KME Germany e.a./Commission, précité, que, à mon sens, lors de son contrôle, le Tribunal ne saurait s’appuyer sur la marge d’appréciation dont dispose la Commission ou la seule erreur manifeste d’appréciation qu’elle aurait commise en ce qui concerne le choix des éléments pris en considération lors de l’application des critères mentionnés dans les lignes directrices de 1998 ou l’évaluation de ces éléments, pour renoncer à exercer un contrôle approfondi tant de droit que de fait ou ne pas exiger que la Commission explique le changement de sa politique d’amende dans une affaire spécifique.
126. En tout état de cause, selon la jurisprudence de la Cour – même si le Tribunal peut à la limite, le cas échéant, se référer «au ‘pouvoir d’appréciation’, à la ‘marge d’appréciation substantielle’ ou à la ‘large marge d’appréciation’ de la Commission [ce que selon moi il ne devrait plus faire], de telles mentions [ne peuvent] pas empêch[er] le Tribunal d’exercer le contrôle plein et entier, en droit et en fait, auquel il est tenu» (63) (c’est moi qui souligne).
127. Au point 78 de son arrêt Chalkor/Commission, précité, la Cour juge que «le Tribunal ne s’est pas limité à ce contrôle de conformité aux lignes directrices, mais a contrôlé lui-même, au point 145 de l’arrêt attaqué, l’adéquation de la sanction».
128. La Cour a aussi rappelé dans l’arrêt SCA Holding/Commission (64) que «le Tribunal est compétent pour apprécier, dans le cadre du pouvoir de pleine juridiction qui lui est reconnu par les articles 172 du traité CE [désormais article 261 TFUE] et 17 du règlement n° 17 [article 31 du règlement n° 1/2003], le caractère approprié du montant des amendes. Cette dernière appréciation peut justifier la production et la prise en considération d’éléments complémentaires d’information dont la mention dans la décision n’est pas comme telle requise en vertu de l’obligation de motivation prévue à l’article 190 du traité [désormais article 296 TFUE]» (c’est moi qui souligne).
129. Le Tribunal doit donc estimer par lui-même si l’amende est adéquate et proportionnée et est obligé de constater par lui-même que tous les éléments pertinents aux fins du calcul de l’amende ont été effectivement pris en considération par la Commission, étant entendu que le Tribunal doit également être à ce titre en mesure de revenir aux faits et aux circonstances avancés par les requérants devant lui (65).
Flatline
I recently had the opportunity to sift through the recent case-law of the Court.
The CJEU ruling in Allianz Hungary, C-32/11 stands out.
Our Lords again blurred the object/effect distinction.
The Court held that “object” restrictions can be established by proof of anticompetitive effects:
“§34. Accordingly, where the anti-competitive object of the agreement is established it is not necessary to examine its effects on competition. Where, however, the analysis of the content of the agreement does not reveal a sufficient degree of harm to competition, the effects of the agreement should then be considered and, for it to be caught by the prohibition, it is necessary to find that factors are present which show that competition has in fact been prevented, restricted or distorted to an appreciable extent […]
§36. In order to determine whether an agreement involves a restriction of competition ‘by object’, regard must be had to the content of its provisions, its objectives and the economic and legal context of which it forms a part […]. When determining that context, it is also appropriate to take into consideration the nature of the goods or services affected, as well as the real conditions of the functioning and structure of the market or markets in question […]“
Of course, my positivist friends will not fail to remind me that the Court had already said this in previous cases.
But let’s call a spade a spade: the Court’s insistence on reaffirming bad precedent reveals that the virus of legal non-sense is deep ingrained.
The upshot of Allianz Hungary is to unduly expand the “object” box, meanwhile creating much legal uncertainty.
In a recent speech, A. Italianer implicitly confirmed this, by saying that restrictions by object are serious, but “not necessarily obvious“.
In practice, parties lose the ability to articulate “effects-based” (and other) defenses, and face a considerably tougher task under 101(3) TFEU.
But the most bizarre statement is elsewhere. At §44, the Court held:
“With regard to determining the object of the agreements at issue in the main proceedings with respect to the car insurance market, it should be noted that, by such agreements, insurance companies such as Allianz and Generali aim to maintain or increase their market shares“
You read well: for the Court it is unlawful to cast agreements with purchasers with a view to maintain or increase market shares.
My practitioner friends often complain that it becomes impossible to advise on Article 102 TFEU. I guess that with such judgments, it is becoming equally complex to provide antitrust counseling under Article 101 TFEU.
Or is it the contrary? With such basic, formalistic reasoning, providing competition law advice under 101 and 102 TFEU is increasingly simple, since most inter-firms agreements and dominant firm conduct are unlawful as such.
Or the Court’s contribution to undermining the market for specialist competition law advice.
For more, see the excellent analysis of http://europeanlawblog.eu/?p=1664
Chillin'Competition 