Author Archive
Beach reads 2012
In order to stand up to our reputation of “competition geeks”, and following our own advice on the usefulness of “reading, not just consulting, competition law books“, both Nicolas and myself included some “professional readings” within our beach-reading-material [I also took some non-competition readings with me (American Pastoral and Soldiers of Salamis) and they were simply excellent, and perhaps a bit more fun…].
I chose to read several network-effects related pieces (which are useful both for my halted PhD research and for my current work). Some of what I read was crap perhaps not so useful (what’s going on with peer reviews these days?), but other pieces were very good. I’ll share some views on them (assuming that you don’t give a damn about what we read, but in the hope that we can help anyone interested on these matters to “sepparate the wheat from the chaff)”.
For instance, I re-read Pierre Larouche’s article “The European Microsoft Case at the Crossroads of Competition Policy and Innovation” and -regardless of whether one agrees with everything that is in it or not- I thought that it is a model of what a serious, balanced, well-though and well-written comment of a Judgment should be like. I also re-read (or read seriously for the first time) a somehow more difficult (given its economic nature and its lenght) but brilliant piece by J. Farrell and P. Klemperer “Competition and Lock-In: Competition with Switching Costs and Network Effects“. And I read for the first time a paper entitled “Monopolization via Voluntary Network Effects“, by Adi Ayal, that is both original and quite sensible.
Finally, I finished reading Competition Law and Regulation of Technology Markets, by Kevin Coates. In a previous post I said I would write a short review on it here, so here it goes. It may, however, come a bit late, since it’s most likely that you are already familiar with the existence of this work. Anyway…. Kevin Coates has produced a truly excellent book, and one that focuses on what is possibly the most timely subject in worldwide antitrust these days. The book deals with the application of competition law, intellectual property law, telecoms regulation, and data protectition law “accross the different layers of the value chain, from the underlying technology, through the networks and into services and applications in light of the disciplines“.
The book does a great job in presenting the reader with the particular features of technology industries (e.g. its rapidly evolving and innovation-driven nature, the existence of network effects, the multiplicity and complexity of market relationships or the crucial role of technical compatibility), and, most notably, in addressing the particular challenges that these features pose to antitrust enforcement.
The book’s analysis is lucid, its scope is comprehensive, its language is fresh and lively; it expresses some personal views, but objectively presents all possible sides to every debate. In no other book will you find a comparable coverage of the breadth of technology-related issues covered in this one. In sum, it’s a book that I would’ve loved to write myself, and that I would’ve been proud to write in the way it is written.
P.S. We have asked Kevin to develop in a guest post in Chillin’Competition some of the ideas that we found more interesting. We’ll let him rest for a few days, but we hope to have him here soon.
Office supplies for the new academic year
We don’t know if you ever had the same feeling, but when we were students we kept on buying new notebooks, pens, folders, etc at the beginning of each academic year under the reasonable assumption that they would make us smarter..
I had a reminiscence of that last week. I was in London for the basketball games of the Olympics (where Spain was very close to beating the U.S. Dream Team!) and after visiting Pablo Ibañez’s office at LSE (btw, he has been awarded the Departmental teaching award; congrats!) I passed by a legal bookshop called Hammicks where I remembered having spotted some fun stuff. I couldn’t resist purchasing some office supplies for the new year:
A note pad
A cushion
And a new book for my shelf: What Every Lawyer Thinks About Apart from Sex? (it’s 200 blank pages are a must-read!)
On competition and blogs
Competition seems to be moving moving to the blog arena.
Some of you may recall that a while ago we discussed the case of a Spanish professor who had been sued for accusing a Promusicae of anticompetitive behavior (see here). We are glad to report that the blogger has won the case, thereby establishing a good precedent to shield Nico and myself from possible similar attacks 😉
Another interesting blog-related development has taken in the U.S. In the context of a high-profile patent infringement case between Google and Oracle, district court judge Alsup has ordered these companies to diclose the identity of bloggers, journalists and consultants that they pay for favorable opinions or consultancy work (for more, see here or here).
This decision has been triggered by the revelation that Florian Müller a well-known IP blogger (from the blog FOSS Patents) had been hired by Oracle shortly after the trial begun.
This unprecedented move should cast light upon the problem related to the lack of transparency surrounding blog content. As the influence of certain blogs grows, it is necessary to start thinking whether the ethical rules governing traditional journalism should also apply in this area. It has certainly led Nicolas and myself to reflect on the way we want to do things.
In our case, we don’t pretend to be impartial informers. We are simply two young professionals who voice out subjective opinions in public to entertain and/or to spur some hopefully interesting debates. We see Chillin’Competition more like a diary than like a newspaper story or an academic paper, and therefore don’t feel under the pressure of being always perfectly informed, accurate, exhaustive and objective about what we write. Of course we try to do our best and to be as technically rigurous as possible, but we’re not afraid of posting first thoughts on some topics, even if our views may evolve afterwards (remember our disclaimer?) 🙂
The small dimension of the competition law community makes it practically unfeasible to continuously disclose personal links. We often know quite well, or are friends with, in-house counsel, external counsel, Commission officials, clerks or Judges involved in all sides of the cases on which we comment here. Disclosing friendship or other informal ties with the people involved in the cases on which we comment would be tremendously burdensome (and it would look a bit weird too…). As said above, we don’t pretend to be always objective. In fact, we generally try to be subjective, but we develop our reasons and we expose them to public criticism. For the time being, our policy is to indicate only the cases in which we are personally involved. Also, where we have written about a case and have later become involved in it, we have also publicly stated it. However, we are, as always, open to comments and suggestions on how to better do what we do.
Blogging law is getting increasingly complicated. Nico: we need a lawyer.
Light menu
Since these days we’re read mostly by those unfortunate people not enjoying August holidays, we’ve decided to publish a few light posts. This one is particularly light:
Some of you have conveyed to us your surprise about the fact that -despite our frequent attention to food cases (an attention which was prompted by the landmark endives case)- we missed the news about confectionery manufacturer Haribo being sanctioned by the Bundeskartellamt for exchanging competitively relevant information (see here).
The case actually appears to be a very interesting one (thanks to Gavin Bushell for pointing our attention to it). Not knowing more about it than what the press release says, the Bundeskartellamt’s application of two instruments developed for cartel cases (i.e. leniency and settlements) in a stand-alone exchange of information case appears to confirm the concerns I (I use the singular because Nico and I disagree on this) expressed in previous posts (see here) about the possibility of stand-alone information exchanges suddenly being treated as cartels. I stick to what I said back then: “enlarging the legal concept of cartel so as to encompass information exchanges, thereby applying to them all the instruments that were developed and justified in the framework of the fight against cartels is bad policy and a dangerous development”.
In our defense, we have to explain that there is actually a reason why we missed these news: it’s bikini time. We’re healthy guys, and therefore a few weeks ago we decided to get sweets and carbohydrates out of our enforcement menu saga. You may remember that the last of our post on competition and food related to shrimps; today we have a mushroom side complement (all very proteic and Dukan diet compliant as you can see): last Wednesday a U.S. federal judge sanctioned a company in multidistrict litigation alleging a conspiracy to hike mushroom prices, holding the mushroom seller liable for an affiliated distributor’s destruction of documents sought by the plaintiffs (see here) (Thanks to José Carlos da Matta for the pointer!).0
By the way, one our readers particularly liked the shrimp post; Eva, if you like mushrooms too we suggest you try this (pictured above).
Getting serious now, the fact that we’re recurrently joking about food cases is not only a consequence of the limited scope of our sense of humor, but is made possible by food having become an enforcement priority for competition authorities. I, for one, am currently involved in a few food-related cases. In fact, European competition authorities seem to be competing as to which one is toughest on food. The evidence: check out the European Competition Network’s very interesting report on its members activities in the food sector.
Competition pills
[This is not a joke]
The Spanish Competition Authority (“CNC”) has entered the “pharma” business by launching a new product: “Competition pills”.
You read well. The CNC is giving away packages that ressemble medicine packages (in reality they’re full of sweets…). The packages include an informative leaflet of the sort that one also finds accompanying pharmaceutical products; this is one example of what these leaflefts say:
Competition “alleviates the symptoms derived from the congestion of the economic system, by eliminating monopolies and barriers to entry“.
“Especially recommended for cases of economic limpness and ciclical crisis“.
“Thanks to its formula and active principles, Competition produces beneficial effects on the consumer under the form of inferior prices or greater abundance, variety and quality of products, with the ensuing improvement the welfare of society’s organism“.
The leaflets included inside the “medicine package” also explain what the functions of the CNC are and what it its that the institution does in practice for the protection of competition. They advise to “maintain the product at the reach and sight of public administrations, public organisms, private companies and consumers”. They also warn about the possible side-effects of Competition: “it is foreseeable that it may cause reactions on the part of pressure groups and lobbies”, for those cases, the CNC recommends to “increase the dosis of Competition“.
In sum, the leaflet emphasize that “without Competition, the health of the economic system is at risk“.
Interestingly, the CNC’s [looking for the right adjective…….] “original” initiative is aimed at increasing its visibility and intends to make known the importance of its functions precisely at a time where a draft new law that could radically change the institutional model is in the pipeline.
Interviews with Commissioner Almunia
By the time you read this Nicolas and I should hopefully be away on holidays. We have scheduled this “lazy” post for those interested in watching the series of video-interviews with Commissioner Almunia published by the independent EU policy broadcaster viEUws.
In these interviews (you can click on the hyperlinks to watch the videos) Commissioner Almunia talks about the Google investigation, Microsoft’s lack of compliance with browser choice, Standard Essential Patents (Apple vs. Samsung, Motorola vs. Apple & Motorola vs. Microsoft), State aid & cross-border mergers in the European banking sector as well as about the Libor / Euribor case.
After the holidays we will do our best provide you with our very own interview with Joaquín Almunia. Any suggestions as to possible questions that you would like him to respond to?
Reform of UK competition law- Part 2: facilitating private redress
[Note by Nicolas and Alfonso: In the second of his guest posts on reform of UK competition law and enforcement, Christopher Brown looks at potential reform of private redress mechanisms]-
On 24 April 2012, just weeks after announcing the Government’s intentions in respect of reforms to the public enforcement regime, BIS launched a Consultation on reform to the private enforcement of competition law in the UK. Such reform might be said to be long overdue: it has been some five years since the OFT made recommendations to Government stressing the desirability of changes to facilitate private redress.
The Government’s stated objective is to encourage private-sector challenges to anti-competitive conduct to complement public enforcement. Elsewhere in the document, it is said that the aims of the reform proposals are (i) to increase growth, by empowering small firms to tackle anti-competitive behaviour which is stifling their business, and (ii) to promote fairness, by enabling those who have suffered loss as a result of such anti-competitive conduct to obtain redress. The principal proposed reforms are:
- to increase the role of the Competition Appeal Tribunal (CAT) as a forum for private actions, by allowing it to hear ‘standalone’ claims as well as ‘follow-on’ claims;
- controversially, to introduce an opt-out collective actions regime;
- to protect the leniency regime by preventing at least certain leniency documents from being disclosed to claimants bringing private law claims and protecting at least immunity applicants from joint and several liability.
These 3 proposed innovations are touched upon below.
(a) The role of the CAT
The proposals to make the CAT a major venue for private litigation based on competition law have been broadly welcomed. In its twelve years of existence, it has built up a strong reputation in its handling of appeals under the Competition Act 1998 (and other legislation) and follow-on private actions under section 47A of that Act. It is widely regarded as efficient, fair and competent. It makes eminent sense, in principle, for the CAT’s jurisdiction to be extended so as to make most efficient use of the resources at its disposal.
Some of the detailed proposals in relation to the CAT are, however, more controversial. In particular, the Government proposes the introduction of a “fast-track” system for claims brought by SMEs (which, as part of its growth agenda, the Government is very keen to support). The Government is particularly concerned that SMEs are in practice prevented, or substantially deterred, from seeking redress for loss caused to them as a result of competition law infringements. It points, with some justification, to the considerable cost of litigating in the UK and the length of time cases take to reach resolution. What they need, the Government seems to think, is a quick and easy way of getting their complaints in front of a court. The fast-track proposal is the Government’s suggested way of improving matters. So what is it?
Reform of UK competition law- Part 1: public enforcement
[Over the course of two posts, Christopher Brown (Matrix Chambers) blogs on the substantial reform agenda in the UK. The first post looks at the reform of the public enforcement regime; the second will consider the recent proposals to reform private enforcement].
As readers will probably know, back in March 2011 the UK Government, through the Department for Business, Innovation and Skills (“BIS”), launched a consultation on potential reform to the UK competition law landscape (see my earlier post here). It contained a number of bold suggestions for redesigning the domestic regime. After a 3-month consultation period and, seemingly, much head-scratching, BIS announced its concrete proposals for reform on 15 March 2012. Those proposals are now contained in the Enterprise and Regulatory Reform Bill, which is currently making its way through Parliament. Then, as if the Department didn’t have enough on its plate already, it launched a consultation on reform to private actions in the UK. In these posts, I touch on the main aspects of both proposals and offer some limited comments.
Reform of the public enforcement regime
Given space constraints, this section touches on just three of the reform proposals, relating to institutional architecture, enforcement model and the cartel offence.
The post of a summer day
Today is not only busy but also extremely hot in Brussels (no kidding). An ideal day for a fresh summer story.
Italian beach owners have called a lockout on 3 August to protest against the obligation imposed by the Services Directive to open up beach concessions to competition (for more, see here). Actually, it seems that the application of this Directive to beaches has been the source of some concern at the European Parliament (see here).
The reader who has sent us this information adds that the current lack of competition is evident to anyone visiting private beaches this summer. We have been provided with evidence that shows that the prices applied in Knokke (Belgium) are supra-competitive, and it seems that this is the case throughout the EU [which is why you should all spend yor holidays in Spain, where beaches are great and public 😉 ].
A week ago another friend/reader from DG Comp wrote to us complaining about the every day cartels that he had identified in beaches, including the renting of hammocks, pedal boats and drinks.
All these reports have generated widespread concern at DG Comp. We are told that many officials have volunteered to conduct in-depth on-site investigations. Hords of DG Comp’s staff are leaving Brussels these days in order to conduct extenuating beach inspections which, in some cases, may last for over a month. They can be spotted at airports flying to almost every beach destination in Europe.
I had lunch at the Commission’s canteen today and was told by insiders that during August the Commission will be giving absolute priority to this sector investigation. In fact, and this is an exclusive from Chillin’Competition: we are told that Commissioner Almunia has decided to settle the investigation on Google in order to free resources for this programmed massive beach inspections. One of the officials heading an inspection team has sent us the pic that illustrates this post and that proves the Commission’s zealousness.
We owe you an apology
We apologize. We have always stood up for the proposition that whenever an error is made one has to publicly admit the blame, apologize and carry on.
We do not know how it happened, but we have fallen short in our responsibility to inform/entertain readers of this blog as we should have.
In sum, we are very sorry to have missed this story for over a month:
On June 25, the Federal Trade Commission closed its investigation into whether Church & Dwight Co., maker of Trojan-brand condoms and other consumer products, had attempted to monopolize the U.S. condom market. (see Closing Letter here).
“Monopolize the U.S. condom market“; isn’t that something? We are told by insiders that the FTC had undertaken action on this market given its special characteristics. Aside from the well-known elasticity of the condoms market, there are apparently other features that incentivize market players to engage in hard-core practices/naked restraints. Some stakeholders are said to be disappointed by what they perceive as a premature climax.
Chillin'Competition 