Chillin'Competition

It’s quite frequent in our line of business to hear accusations against the Commission for acting as investigator, prosecutor, judge and executor at the same time.

Well, in a case decided the day before yesterday by a Brussels Commercial Court, the Commission acted as all those, and also as a complainant…. and lost.

You read well

As some of you may remember, after fining the companies involved in the elevator cartel with 992 million back in 2007, the Commission tried to show the world that it is feasible to go before a national Court and ask for damages, so it went to a Belgian Court to ask for compensation for the damages allegedly suffered by the Institution (estimated at 6 million), given that it had to pay a cartelized price for the elevators installed in its buildings.

[Btw, I remember hearing Richard Whish saying once that if the Commission really wanted to pick the case that had caused the greatest harm to its officials, then it should have targeted the beer cartel (I confess I’ve used this joke a couple of times…)].

The Belgian Court has ruled that “on sait pas faire ça” and that “ici c’est pas l’ Europe, c’ est la Belgique” rejected the Commission’s contention that there is a legal presumption that every cartel causes damage, and held that the Institution had failed to prove the overcharging and the causality link.

No comment.

Actually, I have one: unlike their EU counterparts, national Courts lately seem to be getting increasingly less deferential to the Commission, and to EU Law for that matter (a topic interesting enough to deserve an ad hoc post)

P.S. A due acknowledgement: I became aware of this development thanks to a Lewis Crofts’ piece for MLEX, not the greatest Lewis in the UK, but close (like in the case of Prof. Whish above, I’m also copying this joke from another big guy in the competition world).

P.S. 2: The pics above are actually of the engraving that decorates my living room, A Caucus Tale and a Long Race, by Salvador Dali, inspired by the work of another famous brit named Lewis. The back of the painting reads as follows:  “Fury said to a mouse, That he met in the house, “Let us both go to law: I will prosecute you. –Come, I’ll take no denial; We must have a trial: For really this morning I’ve nothing to do.” Said the mouse to the cur, “Such a trial, dear Sir, With no jury or judge, would be wasting our breath.” “I’ll be judge, I’ll be jury,” Said cunning old Fury: “I’ll try the whole cause, and condemn you to death.”‘

The Competition Law Course that Luis Ortiz Blanco and I direct at the IEB in Madrid is turning 18 this year.

It’s not the first time that we say this here, but the line-up of more than 50 high-profile guest speakers who come every year from all over Europe to enjoy Madrid lecture in Madrid is a true Who’s Who of EU competition law experts. Moreover, the 115 hours of scheduled classes allow for a more detailed coverage than that offered by many other competition law courses on the market. About half of the course is lectured in English. Price wise the course is unbeatable: full registration is available for 3,000 euros.

The final program for each module and seminar has yet to be confirmed, but the overall structure and dates have been set, so I’ve included the info below.

The 2015 program will be structured as follows:

– An inaugural/introductory session by the former-blogger-now-full-time-Professor-Monsieur-Nicolas-Petit will take place on January 9.

– A module on cartels (coordinated by Luis Ortiz Blanco, Garrigues) will be held on 12-14 January.

– A module on other restrictive agreements and practices (coordinated by Juan Andrés García Alonso; Peugeot) will take place on 19-21 January

– On 30 January there will be a seminar on recent developments in relation to Art. 101 (coordinated by Fernando Castillo de la Torre and Eric Gippini Fournier, both from the Legal Service of the European Commission).

– A module on abuse of dominance (coordinated by myself) will take place on 3-5 February.

– A module on merger control (coordinated by Jerónimo Maíllo; San Pablo CEU University) will be held on 10-12 February.

– A seminar on recent developments in abuse of dominance and merger control coordinated by Cecilio Madero (Deputy Director General, DG Comp), Nicholas Banasevic (Head of Unit at DG COMP) and Milan Kristof (Référendaire at the ECJ) will be held on 20 February.

– A module on competition law and regulation in network industries (coordinated by my co-blogger Pablo Ibañez Colomo, LSE) will be held on 2-4 March.

– A module on the application of competition and state aid rules to public entities (coordinated by José Luis Buendía -Garrigues- and Jorge Piernas -Universidad de Murcia-) will take place on 5-6 March. State aid seminar: Seminario Ayudas de Estado

– A seminar on Competition Law in the Technology Sector (coordinated by Alvaro Ramos -Cisco Systems- and myself) on 13 March.

– A seminar on competition law in non-adversarial scenarions  (coordinated by Juan Andrés García Alonso; Peugeot) to be held on 27 March.

Anyone interested can register both for the full program or just for specific module/s or seminar/s. If you’re interested, feel free to drop me a line at alfonso.lamadrid@garrigues.com

For more info, click here: competencia2015.

P.S. Thanks go to Araoz y Rueda, Clifford Chance, Compass Lexecon, Cuatrecasas Gonçalves Pereira, Garrigues, Gómez-Acebo y Pombo, MLAB, NERA and Uría Menéndez for agreeing to sponsor the course.

Some of you will recall that a while ago, in this post, I announced that I’d be speaking about the Android investigation (which I did already, as explained here) and that I would welcome any views anyone could send my way. Geoffrey Manne then sent us the post he’d publish on this topic in Truth on the Market and asked whether it’d be possible for us to republish it for it to have a greater EU audience. We did re-publish it because we thought it was topical and provocative even if it could be seen as one sided, and because it saved us from thinking about what to write for one day.

The post seems to have had more impact than expected. The piece was first subject to criticism by Trevor Soames (Microsoft’s lawyer in the case) in the course of the panel in which I participated (this, by the way, led one of my new associates to comment that he had been surprised at how people actually read what is published on this blog…). And yesterday, ICOMP also published its own equally harsh rebuttal to Manne’s post, purporting to provide information on issues that “many of the ChillinCompetition readers may not be aware” of.

Against this background, in the light of ICOMPs previous legal actions, and in order to preempt any claim that we’re dominant on a competition law blogging market (which we’re not according to revenue-based shares, we can assure you) and should hence be subject to a blogging neutrality principle, we are also linking to ICOMP’s piece and giving it a level of visibility comparable to the one we gave to Manne’s post.

We only have three additional puns comments on this story:

• We are grateful to ICOMP for sending us increased traffic and take no issue with any scraping from content published in Chillin’Competition;

• We frankly have no interest whatsoever in the who-pays-who debate (unless anyone paid us, which very unfortunately isn’t the case) and only regret that academic writing on economically relevant issues these days is suspect (with reason or not) of being paid for. Since we are rather interested in the substance of things, my co-blogger Pablo –who should be free from all suspicion- has committed to writing about some legal issues relevant to the Android investigation before the end of the week (in what seems like a déjà vu, I agreed with this proposed commitment but I may change my mind if a substantial number of you disagree…) [By the way: I’m sure that post will have more readership than his most recent one on two intricate issues such as State aid and string theory J; forgive him, he’s new to this… 🙂 ]

• ICOMP’s piece states the following: “If Manne doesn’t have a basic understanding of European competition rules, why should he be featured on the ChillingCompetition blog?”.                                                  Well, just to clarify a possible misunderstanding: it should be apparent to any usual readers that having a basic knowledge of EU Competition rules was never really a requisite for writing on this blog; we’re the living example.

Over the weekend I was able to catch up with some readings (notably on two-sided markets in anticipation of this conference), but also on recent case-law that I hadn’t yet had the chance to read. Thanks to this exercise I was able to become aware, among other things, of the content of an ECJ Judgment of 4 September 2014 on which I have read no comment whatsoever. This may be understandable because the case only deals with interesting legal issues, and not with high-stakes matters where the law is seemingly absent, which are lately the only ones grabbing commentators’ attention…

The Judgment at issue – Anonima Petroli Italiana (“API”)– is a preliminary ruling responding to questions posed by an Italian Court in relation to an Italian law pursuant to which the price of road haulage services for hire and reward cannot be lower than minimum operating costs, which are in turn fixed by a body composed mainly of representatives of the economic operators concerned.

The Italian Court asked, in essence, whether any such legislation was compatible with Article 101 read in conjunction with Article 4(3) TEU as well as with the Treaty provisions on free movement of services.

As some of you may recall, the possibility of applying Article 101 to State behavior  pursuant to its joint application with other Treaty rules was born in Inno Attab in 1977 [btw, I just found this little jewel commenting on the earlier case law on the subject]. The reasoning used back then by the Court was that Art. 4(3) TEU (at the time 10 TCE) prohibited Member States from depriving Treaty rules of their effet utile; given that former Article 3.g) (deleted from the Lisbon Treaty at the behest of Mr. Sarkozy; remember?) established undistorted competition as one of the goals of the EU, it was held that Member States could not adopt measures depriving competition rules of their effect utile. This doctrine was considered potentially huge at the time, but never lived up to its promise due in part to the restrictive interpretation endorsed by the Court in the November Revolution of 1993 in the Reiff, Ohra and Meng cases), according to which a State measure could not by itself run counter the Treaty rules in the absence of a certain behavior on the part of the undertakings (unlike, by the way, what happens with Art. 106 as recently re-stated in the Greek Lignite case).

The ECJ’s recent Judgment concludes that by delegating the power to fix minimum tariffs on a committee composed of a majority of representatives of the economic operators who are not bound to observe public interest criteria in their (non-reviewable) decisions, the legislation at issue runs counter the effet utile of Article 101 by preventing undertakings from setting lower tariffs (the Court doesn’t however clarify whether the restriction is “by object” or “by effect”).

My 3 comments:

• The Judgment shows that this doctrine is well alive, even if it isn’t kicking, and this regardless of the elimination of former Article 3.g). A lot could be done with this doctrine if competition authorities took it seriously. But instead of using the well-developed tools at their disposal (like this one or like Art. 106), competition authorities are busy stretching the interpretation of others (like the one of selectivity in State aid, as seen in the recent openings of proceedings in relation to tax rulings).
• Regarding possible justifications, that the ECJ seems to apply the “objective justification” test developed in Wouters, Meca Medina, etc. very naturally and not as anything exceptional, very particularly when it deals with conduct adopted by regulatory or quasi regulatory authorities (albeit not only in those cases, as shown by Pierre Fabre). Some of you may legitimately observe that this fits oddly with the Judgment in Irish Beef, where the ECJ held that “[i]t is only in connection with Article [101(3)] that [other legitimate interests] may, if appropriate, be taken into consideration for the purposes of obtaining an exemption from the prohibition laid down in Article[101(1)]”.
• Quite strikingly, the ECJ does not include a single mention to Article 101(3) (and this despite the fact that the questions referred to it cited Article 101 in its entirety and not to 101(1) alone). It basically states that since the measure falls within 101(1) TFEU then Article 101 prohibits it. In my view, under normal circumstances, and in proper application of the Court’s case law, the Court should have said that it was up to national Courts to assess whether the conduct at issue could benefit from Article 101(3), the assessment of which is mandatory. This error bypassing of Article 101(3), not only at the practical but also at the theoretical level (and on the part of the only institution that took it seriously in the wake of Regulation 1), further confirms the point I made some time ago (and have subsequently cited many times) about the slow death of this provision.