Author Archive
Random thoughts
In the past few days I haven’t been very diligent at keeping up with posting. My bad conscience has led me to write the hastily written random thoughts below. I might come back to develop some of them in posts to come:
1) On joint v individual assessment of (incriminatory v exculpatory) evidence in cartel cases. For some time now I have been (intermittently) attempting to finish a lengthy piece about evidence in cartel cases (surprisingly enough, there are only a handful of publications worth reading on this subject). One of the interesting things I’m observing is that EU Courts and the Commission [please note that I’m being critical with them; as some of you have reproached me, that doesn’t happen so often] is that whereas the principle of “joint assessment of evidence” is consolidated and very much followed when it comes to assessing the evidentiary value of incriminatory items, the same cannot be said about exculpatory ones.
In most cases, a bunch of elements are put together and assessed jointly in order to declare that an undertaking has committed an infringement. I’ve nothing to object to this logical approach (even more so in cartel cases otherwise these could hardly be brought). My concern on this particular point is limited to the fact that [in another illustration of the tendency of many legal principles to expand themselves until a point of absurdity that eventually must lead to their nuancing] the principle of joint assessment of evidence is often resorted to as an easy escape to avoid discussing individual evidential items that the parties consider worth discussing. In my view, the Commission and the Courts should always first engage in the individual assessment of each evidentiary item, and only then (once the value or lack thereof of every standalone item is established) move on to the joint assessment of all available evidence.
Interestingly, the contrary tendency can at times be observed regarding the assessment of exculpatory evidence. I’ve come across a few Judgments that address exculpatory items one by one concluding that “x is not in itself sufficient to rebut whatever”, that “y is not sufficient to prove whatever” or that “z cannot on its own lead to whatever conclusion”. The “joint assessment” of x, y and z as exculpatory items sometimes just doesn’t happen. For some examples, take a look at recent cases in which parties tried to rebut the AEG (parent liability) presumption (which, btw, turned 30 a few days ago). I hope to develop –and substantiate- my thoughts on this soon.
2) A suggestion to improve the Court’s rules of procedure. Nicolas has lately pushed for reform of EU Courts’ rules of procedure regarding conflicts of interest. We have not agreed much on that issue, but I too have a suggestion to improve the rules of procedure. Unless I’m wrong, the current rules do not envisage any sanctions nor any other sort of legal consequences for parties that provide the Courts with false information to (let’s leave misleading aside, for the concept is arguably too wide, for lawyers at least). Most legal systems do envisage such rules. Imagine the Court were to ask a question (written or oral) to a party, and that the information given in response were not only inaccurate, but untrue; should that not have any consequences?
3) A solicited response to Nico’s views about the effect on trade between MS criterion. In a recent post Nico referred to the effect on trade criterion, complaining that in the eBooks case the Commission had not undertaken any serious assessment, and had swiftly concluded that the conduct at issue did affect trade between Member States. He wisely noted that I’d probably have a divergent view, and I do (he knows me well…). If you ask me, in that case the effect on inter-State trade was crystal clear, as the Commission’s reasoning in paras. 91 and 92 (noting that the conduct at issue was implemented in the whole of the EEA and that agency agreements covered UK, France and Germany) sufficiently shows. Nico says that “[w]ith this kind of reasoning, everything may affect trade between Member States (though I understand Alfonso has a dissonant view on this”. Since I’m asked, my view is that with that reasoning, practices that are implemented throughout the EEA and that manifest themselves with a certain intensity in 3 Member States will be deemed to affect trade between Member States, which, to me, could not be more logical. In fact, as the Decision shows, no party ever challenged this specific point.
4) A great read. Finally, I confess my (very) geekish action of the month: I’m currently reading R.Odonoghue and J. Padilla’s book on The Law and Economics of Article 102 from beginning to end, as if it were a novel (in my defense: I hadn’t done that in a very long time). The book is a monument; it’s smart, balanced, exhaustive, very well thought and written and deserves (although doesn’t need) all possible publicity. Hats off to the authors. In fact, as soon as I’m done publishing this post I’ll send both authors an invite to participate in our currently lethargic Friday slot section.
Interesting statements
The past few days have left us some interesting statements on the competition front. Here’s a personal selection. Happy to add any others any of you might have.
A) The French Industry Minister said last week that EU’s competition rules are “stupid and counter-productive“. I can understand part of the point, but the view that ”Europe organized the balkanization of its companies by chasing down state aid” is peculiar, given that the State aid control regime seeks precisely to eliminate barriers to inter-State trade. As put by José Luis Buendía in another often quoted statement, “State aid ‘DNA’ shares more chromosomes with internal market rules than with antitrust rules“.
This disrespect towards misunderstanding of competition law seems to be a non-partisan feature of French politics. Many of you might remember Sarkozy’s comments about endive producers not being Apple or Microsoft (see here) (the statement was not without consequences: it led our friend Mark English to stop wrapping his iPhone in ham).
B) Slow, ignorant’ lawyers charge by the hour to inflate bills, says President of British Supreme Court. A statement that adds up to a controversy we’ve often echoed regarding billable hours (see our previous post “Is associate lawyer the unhappiest job?“)
C) Have law blogs surpassed law reviews? That’s not really a statement, but rather an interesting (and interested) read.
D) The tone of the comments regarding Google’s proposed commitments has increased and reached new heights. A few days ago, an “anonymous” (no wonder!) lawyer representing one of the complainants said: “All we have to go on at the moment is what Almunia has said and it is absolutely not encouraging. Putting lipstick on a pig does not mean it is not a pig (…). “It’s starting to look like he just wants to get a deal before his term as Commissioner is up next year.”
Samsung offers commitments to appease DG Comp
The most important (antitrust-related) news last week was the European Commission’s announcement that it will market test a commitment proposal submitted by Samsung regarding the enforcement of its SEPs (Standard Essential Patents) related to mobile communications.
As you know, the Commission considered in its December 2012 Statement of Objections that the seeking of court injunctions by Samsung in relation to SEPs which it had committed to license on FRAND terms, or that third parties (i.e. Apple) were apparently willing to agree to license on FRAND terms, could amount to an abuse of dominance, because “access to patents which are standard-essential is a precondition for any company to sell interoperable products in the market” (press release dixit; we’ll come back to this phrase at the very end of the post). The theory goes that the challenged enforcement of SEPs could allow Samsung to obtain licensing terms that the licensee wouldn’t have agreed to absent the threat, and that this “undue distortion of licensing negotiations” would harm consumers in a number of different ways.
[Query 1: is this an exclusionary abuse? an exploitative one? both?; Query 2: Would an alleged abuse of this sort lend itself to the application of the Guidance paper?; Query 3: If the answer to query 2 is “no”, then what are the criteria to undertake a legality assessment of a situation like this? Query 4: How does one assess the likelihood of anticompetitive effects in a situation like this?; Query 5: can you distinguish a willing licensee from a non-willing one without taking a view on what’s FRAND? (I guess the proposed solution arguably gives an answer to this 5th question; if someone’s willing to accept the proposed framework… ); Query 6: Was Apple -the de facto complainant- a willing licensee in this case?].
Samsung (which just before receiving the SO had unilaterally withdrawn all its European SEP-based injunction claims) has now offered to refrain from seeking injunctions for past, present and future mobile (smatphone and tablet) SEPs for a period of five years againts any company adhering to a given licensing framework. As explained by the Commission itself (and here I’m “scraping” its Press release) “the licensing framework consists of: (i) a negotiation period of up to 12 months and (ii) if no agreement is reached, a third party determination of FRAND terms by either a court or an arbitrator, as agreed by the parties. If the parties cannot agree on either submitting to court or arbitration, the parties will have to submit to arbitration“.
The Commission has also published a Q&A document. The full version of the proposal is available here.
Some well known commentators in the patent blogosphere swiftly commented on the proposal in a critical manner (see “EU Commission market-tests totally insufficient FRAND commitments offered by Samsung“). My preliminary take is that, even if some issues may (inevitably?) be left open, this proposal would shed some welcome light on a much contentious subject.
We’d be happy to host a discussion in Chillin’Competition, and welcome the views that any of you might have with regard to both the case and the commitments proposal.
Let me get the ball rolling:
Nico wins best legal book of the year award
First it was the Jacques Lassier prize for his PhD thesis (see here).
Then the Antitrust Writing Award (thanks, btw, to the campaign I so well managed… ; see here).
And now (actually, last Saturday) Nico got the “Prix du livre juridique” to the best legal book published in France (see here), for his new textbook Droit européen de la concurrence.
The prize was awarded at the Constitutional Court in Paris; prestigious setting for a prestigious prize (see pic above; in case you were wondering, Nicolas is the one posing).
Judging by his mother’s comment on his Facebook wall, the prize has made the family happy. You know, there haven’t been so many ocassions to feel proud of the chap 🙂
Congrats to Nico for the prize and for his contribution to spreading the competition gospel in France. Hopefully new generations of French will gain a better understanding of competition law and, unlike the jury in this case, will be able to tell what’s sound legal competition reasoning and what’s not !
P.S. Contrary to what you might think, I’m not writing this simply to promote my co-blogger’s achievement. I’m doing it because the a****** said he won’t give me a free copy, so I’m hoping that some advertisement will earn me one from the publisher.
The Procedural Bible is out
The 3rd edition of EU Competition Procedure (Oxford University Press) is out.
I’m the least objective reviewer, because its editor is Luis Ortiz Blanco, who, among many other things, is the person because of whom I work in competition law (he essentialy planned my whole professional career the very first day he interviewed me for an internship, when I was only 20).
For this third edition Luis has brought together a truly exceptional team. In addition to my colleagues Konstantin Jorgens, Marcos Araujo and José Luis Buendía, who, together with Kieron Beal, Gordon Blanke and Jean Paul Keppenehad already contributed to the 2nd edition, there have been very notable additions from the Commission’s Legal Service and DG Comp, namely: Carlos Urraca, Ralf Sauer, Corneliu Hodlmeyr, Manuel Kellerbauer, Nicolas von Lingen and Maria Luisa Tierno Centella.
The book (a short read of over 1,200 pages) deals in more depth than any other source with procedural issues in antitrust, merger control, State aid, public undertakings and exclusive/special rights, competition enforcement in the EEA and arbitration. It’s a must-have.
I’ll do my best to get you an invite for the launching party, like last time.
Antitrust tidbits
– On Friday Brazil’s CADE announced that it’s also investigating Google pursuant to a complaint filed by Microsoft (see here). The investigation appears to address the very same practices previously investigated by the FTC and DG Comp, on which we’ve already commented ad nauseam. I may reduce my coverage of all Google-related issues (despite the attention we’ve paid to that case in recent times, there’s world beyond that in antitrust), but given that my firm is finally! currently betting big in Latin America (see here), I’ll now be spending more time looking at competition law developments over there, and possibly commenting on them here. Btw, if you’re interested, there is a very good blog on competition law in Latin America.
– Some of you may have wondered about how the Federal Government shutdown in the States is affecting antitrust enforcement. If that’s the case, here are the contingency plans set up by the DOJ and the FTC. On a non-antitrust related note, I’d strongly recommend you to check out Jon Stewart’s hilarious coverage of the shutdown: Rockin’ Shutdown Eve
– Headhunting season remains open in the Brussels legal market, with David Hull also leaving Covington (third partner to leave in recent weeks following Lars Kjolbye and G.Berrisch) to join VanBael & Bellis. Speaking of headhunting, for some interesting thorughts on the Brussels recruiting world, check out Steve Meier’s blog.
– A friend sent me this piece from abovethelaw.com on 10 Reasons to Leave BigLaw. Don’t think that a good part of what it says applies to everyone, but it’s always good to measure your choices against a contrarian -even if arguably exaggerated- view.
– Certainly the most relevant thing that happened in the antitrust field in the past few days (or maybe not) was my presentation about Interoperability in the payments industry last Thursday in Brussels 🙂 Here’s my presentation: Interop_Payments_Lamadrid (only makes sense if you click on slideshow).
Until I was invited to do this I’d frankly never paid much atention to the much-hyped mobile payment fever, but have now discovered a most interesting area. As I explained at the conference, if smartphones and payments have received so much antitrust scrutiny on their own, their marriage will be something like an antitrust lawyers’Nirvana!
The sector shares all the interesting features of high tech (multi-layered, multi-sided, strong network effects, rapid evolution, etc.) but has the peculiarity to feature both strong incumbents and stong entrants (traditional payment service providers, mobile network operators, tech companies…), all of which enjoy some degree of market power that they’re trying to leverage. The business strategy aspects of it are most interesting: everyone is setting up alliances (often with natural competitors), often betting on multiple horses, and at the same time acting unilaterally not to renounce the opportunity to reign the market (hence the Game of thrones slide). At the same time, we’re told that all players will end up holding hands and competing happily in an interoperable candyland where consumers’ life will be made easy and pleasant (hence the following slide). My bet is that on that road a number of interesting competition issues will arise, notably concerning access to the “secure element” (which is the key to the provision of m-payment services).
Must reads
I’ve been rather inactive here in the past few days due to work-related obligations, and my sense of guilt has been increased by the merits of other competition law bloggers:
– In the past few days the main media outlets in Spain have echoed a controversy related to creation of the new competition authority (see here and here for my take on the reform; btw, the new competition watchdog is operative since yesterday) that has unfortunately culminated in the stepping down of a very able Director of Investigation. A voice that has resonated very specially has been that of a fellow-blogger (and frequent commentator on this blog), Jesús Alfaro. You may or may not agree with everything or anything of what Jesús says, but you certainly won’t read anything as bold and fearless as his blog post and his article on the subject (in Spanish though). Only for that it deserves that we bring it to your attention. See here and here.
– On another front, one of the most worthy people I’ve come to meet thanks to this blog has started his own: http://www.twentyfirstcenturycompetition.com/ (not saying the authors’ name to force you to satisfy your curiosity by clicking the link…). Congrats to him (and compliments to DG Comp for having authorized him to do it). We’ll try to maximize cross-fertilization of ideas (and possibly charge an interchange fee, given that, according to basic economics, the ideas in Chillin’Competition -needless in a haystack- should be more valuable due to their scarcity) 🙂
The ultimate competition law quiz
It’s been quite a while since our last quizz (see here, here or here for some of them).
In a recent book review I wrote: “Ask most competition specialists about what a “restriction of competition” is and you will get a surprising variety of theories, and most likely some striking silences“.
So this is an empirical test. The question should be simple for anyone geek enough to read this blog:
WHAT IS A RESTRICTION OF COMPETITION?
The best one paragraph response wins. You can write your definitions as comments to this post. The one who gets the most “likes”/”thumbs up” by October 1st wins (and this includes both the blog’s homepage and the LinkedIn group.
This time we’re raising the stakes: instead of a round of beers, we offer to invite the winner of this quiz (+ a guest) to either lunch, dinner or an open tap of beers.
Low participation confirms my point (that’s a smartass way of turning this into a win-win situation) 😉
Android, Google and bundling: some follow-up thoughts
[By Pablo Ibañez Colomo (LSE)]
The following thoughts were inspired by Alfonso’s recent post on bundling allegations against Google. As usual, it is tightly argued and persuasive. I wish competition authorities took such points into consideration when assessing tying and bundling claims. My objections are of a different nature. The fact that I agree with most, if not all, of what he writes does not mean that his points would be conclusive or even relevant in practice after the Microsoft saga. More than anything, Alfonso’s post reminds one (or at least me) of the uncertainties that remain in the field of Article 102 TFEU even after the adoption of the Guidance Paper.
Alfonso starts by wondering whether the complaint brought by Google’s rivals involves a bundle in the first place. Following the GC judgment in the first Microsoft decision, I would be tempted to reply by saying that anything under the sun can be constructed as a bundle or, put differently, that the legal construction around third party claims need not make sense for Article 102 TFEU to apply. If a tying claim is valid even when nobody wants an operating system without a media player or a web browser, it probably follows that the plausibility of the bundling claim would not be – unfortunately, may I add – a conclusive aspect in the hypotheticals he discusses.
He goes on to argue that Google Play is not the only means through which one can download applications. I am sure more than a reader reacted to this argument in the same way I did. Could not one also claim that it is possible to download web browsers or media player and that the tying of these applications with an operating system are unproblematic as a result? Well, of course, but this fact did not prevent the Commission from taking action against Microsoft not once but twice. All that remedial action would require is an analysis of consumer behaviour allegedly inspired in behavioural economics (the flavour-of-the-month that I fear most, by the way).
If the above arguments are not decisive, we are left with the issue of foreclosure (the ‘everybody does it’ and the ‘business rationale’ arguments would not be relevant even before the wisest of competition authorities, as what matters in contemporary competition law, or so I want to believe, is not the motivation behind the behaviour, but its effects on the market). Besides the fact that foreclosure is plain irrelevant in tying cases according to the General Court, I will mention that, according to what I read the other day, Android’s market share is approaching 80%. This does not mean in any way that Android is dominant, let alone superdominant (and, again, very sensible arguments can be developed to show why this is not the case). But we all know strange things happen to law and policy when firms reach such market share levels.
What conclusions do I draw from the above? It seems to me that self-restraint is the only limit to the ability of the Commission to interfere with product design in high-technology industries. The second reflection relates to the behaviour of complainants. They cannot be blamed for taking advantage of the confusion created by the Microsoft saga around tying and bundling (i.e. for behaving opportunistically). One could even go as far as to claim that this saga created the expectation that the Commission will intervene when a firm’s market share approaches or exceeds 80%.
A true Belgian story
When did the new Belgian competition Act enter into force?
If you run a Google search most results (notably a few dozen law firm’s newsletters saying exactly the same things) will tell you that it did on September 1st, 2013.
Wrong answer.
You can’t blame them, though. On August 30th The Belgian official journal (Moniteur Belge) published a Royal decree providing that the new Act would enter into force on the first working day following the said publication (that is, on September 1st).
However, it seems that the Royal decree wasn’t really Royal, because no one realized that the King had not yet signed it (apparently he was on holidays, elephant hunting, or doing whatever it is that Belgian Kings do), and that therefore it was devoid of legal effects.
That’s why on September 4th a new Royal decree was published on the official journal stating that the publication of the previous Royal decree (actually there were two of them) shall be considered null and void (“il y a lieu de considérer la publication des deux arrêtés royaux susmentionnés comme nulle et non avenue. Ces arrêtés ont été retirés avant leur signature”).
And then, on September 6th, yet another Royal decree was published providing that the Act would enter into force on that very same day.
So, between September 1st and September 4th people thought that the Act had entered into force, when in reality that wasn’t the case.
We hear there were hearings held in those days in which lawyers were pleading on the basis of the new Act, but were told that they were misinformed.
True story.
Chillin'Competition 