Chillin'Competition

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”

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.

Presentation – Does EU Competition Policy sufficiently promote companies investment and innovation – N PETIT

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

Lucky me, I am in London today invited to a conference entitled “C5 Managing Competition Risk and Compliance“:Conference – 612L14_Managing Competition Risk Compliance_S)

The topic is “Key EC reforms and the expected impact on regulatory enforcement“, or “what will be the focus of EC regulatory enforcement in the coming year“.

Unlucky me: I had to take a try at antitrust astrology.

Hereafter is the best I could come up with: Managing Competition Risk & Compliance – N PETIT

Many competition bibles are released lately.

Today’s bible is clearly, and without the shadow of a doubt, THE reference on Article 102 TFEU.

I guess everyone should thank Robert O’Donoghue and Jorge Padilla for the assistance they have provided to the competition community since the 1st ed.

There is a world before and a world after “The Law and Economics of Article 102 TFEU“.

Clearly, this book should be compulsory reading for anyone approaching the law of abuse of dominance.

I guess it should even be subsidised by agencies.

I paste below the official announcement on Hart Publishing’s website.

The bottom line on what the publishing market tells us: a good bible needs a Spanish author (with the possible exception of this one :)).

New 2^nd Edition

The Law and Economics of Article 102 TFEU

By Robert O’Donoghue and Jorge Padilla

The Law and Economics of Article 102 TFEU is a comprehensive, integrated treatment of the legal and economic principles that underpin the application of Article 102 TFEU to the behaviour of dominant firms. Traditional concerns of monopoly behaviour, such as predatory pricing, refusals to deal, excessive pricing, tying and bundling, discount practices and unlawful discrimination are treated in detail through a review of the applicable economic principles, the case law and decisional practice and more recent economic and legal writings. In addition, the major constituent elements of Article 102 TFEU, such as market definition, dominance, effect on trade and applicable remedies are considered at length. Jointly authored by a lawyer and an economist, The Law and Economics of Article 102 TFEU contains an integrated approach to the legal and economic principles that frame policy in this major area of competition law.  Although written primarily with practitioners and in-house lawyers in mind, it is essential reading for anyone with an interest in competition law enforcement against monopoly behaviour.

Robert O’Donoghue is a barrister at Brick Court Chambers, London and Brussels.

A Jorge Padilla is Senior Managing Director and Head of Compass Lexecon Europe.

October 2013   1078pp   Hbk   9781849461399

RSP: £145 / €188

20% Discount Price: £116 / €150.40

Order Online in the UK, EU and Rest of World

UK, EU and ROW : http://www.hartpub.co.uk/BookDetails.aspx?ISBN=9781849461399

If you would like to place an order you can do so through the Hart Publishing website (link above). To receive the discount please type the reference ‘CCB’ in the voucher code field and click ‘apply’.