Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

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In the course of the past few days and weeks some friends have asked us to advertise a few upcoming Competition-related happenings. We’ve taken our time, but here’s a compilation of stuff worth knowing about:

The 3rd edition of Concurrence’s Antitrust Writing Awards is now ongoing.  You can vote for your favorite piece before the 1st of March.

Harvard’s European Law Association (HELA) has scheduled its first Antitrust conference, to be held on 24 March. It will deal with the informal application of  competition law in the U.S. and the EU. Click here to check out the call for papers and to find out more info: Hela_Call_Abstracts_updated (and apologies to Zena Prodromou for not having done this before!)

On 30 January the ABA’s Section of Antitrust Law will be holding a networking reception + a panel (Inquiries into Competition and Alleged Misconduct in UK Financial Services) in London. Click here for more info.

The annual junior competition lawyer’s conference will take place on 31 January. This is an initiative that we’ve always supported and that would be nice to see replicated in places other than the UK. Click here for more info.

And also on 31 January we will be hosting the first seminar within the competition law course that Luis Ortiz Blanco and I co-direct in Madrid. It will be devoted to Recent developments regarding the application of Article 101 TFEU (including damage claims, anti-competitive agreements in the pharma industry and the fight against cartels in a context of economic crisis), and will feature Fernando Castillo de la Torre (EC’s Legal Service), Eric Gippini Fournier (EC’s Legal Service), (Carlos III University, EAGCP and CEPR), Mario Mariniello (Bruegel), Helmut Brokelmann (MLAB), Maria Luisa Tierno (DG Comp), Natalia Fabra (Universidad Carlos III, EAGCP), Flor Castilla (EC’s Legal Service), Borja Martínez (Uría Menéndez), Antonio Martínez (Allen&Overy), Jesús Alfaro (Linklaters) and Gerald Miersch (DG Comp). I’ll post the final program here as soon as it’s ready.

Very importantly, a reminder is in order: on February 7-8 AIJA and the College of Europe will be holding the not-to-be-missed conference Antitrust 2.0 Competition Law and Technology.

P.S. We’ve also been asked to mention that the Swedish Competition Authority is taking steps to publish decisions in English. Our source suggests to present this as one of the major 10 developments on the year, which I’m a bit hesitant to do 😉 However, the Swede’s move is commendable, particularly when compared to what other national competition authorities do (the new Spanish authority doesn’t even have an English version for its webpage…)

Written by Alfonso Lamadrid

8 January 2014 at 5:49 pm

Cartel fines (an illustrative graph)

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These are the stats available in DG Comp’s webpage for cartel fines imposed in the period 2009-2013.

Do you see anything remarkable?

CartelFines

After years of lawyers whining about sky rocketing fines, will we now see a reverse trend of lawyers whining about too few cartel decisions and too small fines??  We are funny whining beings…

In spite of temporary appearances, though, one should not expect these figures to remain as they are. The upcoming LIBOR decision will certainly inject some significant (record breaking?) “capital” into this years’s numbers.  On top of that, there appear to be a number of cartel decisions stuck somewhere in the pipeline (interestingly, only one cartel decision has so far been adopted in 2013).

P.S. For the one true masterpiece on cartel fines –Fine Arts in Brussels-  click here (the fact that I co-wrote it doesn’t of course compromise my objectivity…).

 

Written by Alfonso Lamadrid

20 November 2013 at 12:37 pm

Random thoughts

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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.

Written by Alfonso Lamadrid

6 November 2013 at 7:20 pm

Interesting statements

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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.”

Written by Alfonso Lamadrid

29 October 2013 at 6:44 pm

Samsung offers commitments to appease DG Comp

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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:

Read the rest of this entry »

Written by Alfonso Lamadrid

23 October 2013 at 10:19 am

Must reads

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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) 🙂

Written by Alfonso Lamadrid

8 October 2013 at 5:44 pm

A true Belgian story

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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.

Written by Alfonso Lamadrid

12 September 2013 at 11:58 am

Posted in Hotch Potch, Jokes

April Fools Day hoax triggers a DG Comp request for information (no kidding)

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On April 1st 2013 a Belgian website (Pagtour.net) published the news that there was a project to expand Charleroi’s airport with a second runway (see here).

The piece explained that secret plans to expand the airport had been found in a secret chest, and that they had been drawn up by a secret Commission whose members only drank Spa water and met at restaurants specialized in fish and zinc. It was -some would say obviously- an April’s fools day hoax (or, as they’re called here, a “poisson d’avril” (April’s fish).

However, as reported in a bunch of Belgian news outlets (see l’Echole Soir, la RTBFmsn actualité 7sur7, la DH, le Morgen, RTL, La libre,) DG COMP apparently swallowed the fish whole (!!)

Belgian authotities are reported to have received a request for information dated on 31 July (just like April’s fools hoaxes are done on April 1, the EC’s jokes information requests in the EU are sent out on 31 July to spoil some poor lawyers’ and company employees’ vacations..) asking about the reported plans , and referring to the hoax piece at issue as a source  🙂

The Commission is reported to have stated today that information requests are supposed to be of a confidential nature.

Many of you may not know that there’s actually (or, rather, there was until 2011; pity) an established tradition of antitrust-related April Fools Day jokes published by the American Antitrust Institute. They’re all available here, my favorite ones being:

Antitrust Controlled by Jerks, Says New Evolutionary Biology Report  (I bought that one; thought it made a lot of sense..)

and

As US Attorney General Gonzales Confidentially Reports, There’s Nothing Funny About Antitrust

By the way, what has happened with the joke on Charlerois is not a first; some journalists in the States also picked up the AAI hoax on President Bush’s proposal to merge antitrust agencies with the Department for Homeland Security..

Written by Alfonso Lamadrid

19 August 2013 at 7:36 pm

A handy copyright infringement

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Capture

(Warning: this is a fairly uninteresting post with no legal content whatsoever, so feel free to skip it. The reason why I’m posting it comes at the last paragraph)

I’d anticipated another post on reverse payments today, but it will have to wait until Monday. With only one week to go before the holidays I’m swamped at work and accumulating significant delays on a bunch of non-work stuff (several articles, book reviews, paper grading, etc.) which, for some reason, I had committed to do before the holidays.

It makes you reflect. This is one of the peculiar features of private practice; you try to do your best in work-related matters and you end up doing all other stuff hastily and sometimes badly. It’s never bothered me that much, but it probably bothers others (the ones you pay less attention to, or the ones that suffer your delays). I don’t know to what extent this is inherent to the profession or to my irrational tendency to embark in all sorts of projects (or most likely both), but it clearly is an area in need of improvement, at least in my case. Tips welcome!

I won’t bore you with details on what keeps me busy and what I’m being unable to do (it actually was my initial plan, but I then I realized that with a too personal post I’d risk ending up appearing as another whining-while-at-the-same-time-bragging lawyer). Actually, even this actual post may be enough to convey that impression, but that’s not the intention. Anyway, let me give you an example of me doing non-work things at the last minute badly and how I resorted to Nico to fix it.

I spent this whole week travelling because of work (right now ,Friday at 16.20, I’m writing from the Court’s library in Luxembourg; by the way, the food was worse today…) and had to lecture yesterday at ERA (Academy of European Law) on the interface between Intellectual Property Article 101. It’s always a challenge to explain the Technology Transfer BER in a way that doesn’t induce people to suicide, but I think I succeeded: only two people tried, one by jumping out of the window, the other by attempting to read the actual guidelines on technology transfer (despite my warnings) 😉

As usual, preparations were done at the last minute. The problem, however, is that I was asked to deliver a fairly detailed ppt in advance (smart trick to force speakers to prepare in advance..). And that was a bit of challenge; so I resorted to Nico.

He has an excellent and incredibly detailed power point presentation on IP and competition law (I hate using power point, and not only because of its lack of interop with 3rd party applications… yes, cheap pun, but I couldn’t avoid it..) so I basically copy-pasted it in a Garrigues template ppt and used it (actually, I didn’t even do the copy-pasting myself; I’ve to thank Rocío de Troya for that).

It ended up being a good idea, as I explained to the students, my use of Nico’s materials was useful to illustrate several concepts that are very relevant to IP law, such as a copyright infringement, free-riding and follow-on innovation (btw, the term “based” that you see in the slide above -the 2nd in my (his) presentation was actually a euphemism).

You most likely don’t give a damn about this story, but put yourself in my shoes: I had to (i) thank Nico and acknowledge his authorship of the materials; (ii) write something quick and light for a summer Friday afternoon; and (iii) minimally and superficially  reflect on the absorbent (for good and for bad) aspects of the profession.. Have a good weekend!

Written by Alfonso Lamadrid

5 July 2013 at 4:39 pm

Cases that never will be (I) – Hynix (Case T-148/10)

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Last week one of the most knowledgeable people in the EU competition law world (Commission official whose name I can’t disclose) tipped me to a new series of blog posts:

His words were “someone should one day write on a blog the story of competition cases that could have had a significant impact on the law had they not been withdrawn”. Since the number of competition law bloggers is not that high (even though it’s rapidly increasing…), and since I was the addressee of the message, I sort of got the point.

Actually, I very much like the idea of writing about cases that never were or, rather, that never will be.

There are a few candidate cases to be discussed; a non-exhaustive tentative list of non-cases could include: Siderca, Chi Mei, Suez-Environment, Formula One, Oulmers, BIC Deutschland, Balog or Van der Weerd. [Additional suggestions would be welcome].

Today we’ll start with Hynix (Rambus), a case in which the hearing was scheduled for 2 July but that was withdrawn a few days ago following a settlement.

The Judgment that will never come to light in this case would have constituted a most important precedent in relation to some important general enforcement issues, as well as in relation to an eventual judicial review of the current investigations concerning Google or Samsung.

A bit of background:

In 2002 Hynix filed a complaint alleging that Rambus had engaged in deceptive conduct in a standard setting procedure in relation to DRAM chips by not disclosing the existence of the patents and patent applications which it later claimed were relevant to the adopted standard, and that it had later charged excessive royalties for the use of those patents (i.e. royalties higher than those that it would have been able to claim had it not engaged in deceptive conduct). This is what is generally referred to as “patent ambush”.

The case was interesting because the deceptive conduct at issue had made Rambus acquire dominance (it preceded dominance), and the charging of high royalties could be regarded as the natural consequence of such dominance. Given that EU law does not target “monopolization” practices (those use to achieve dominance), the Commission had attempted to close this enforcement gap by targeting exploitative pricing under Art. 102 under the argument that dominance had been unlawfully attained. This was a brave and controversial move on the part of the Commission.

On 27 July 2007 the Commission adopted a statement of objections setting out its concerns. Rambus responded to the SO and a hearing was held.

Almost two years later, however, Rambus submitted preliminary commitments, those were later market-tested, revised, and eventually made binding on December 2009 (in a nutshell, Rambus committed (i) not to charge royalties for the two standards adopted while Rambus engaged in the deceptive conduct; (ii) to set a maximum royalty of 1,5% for the later generation of standards and to offer thus maximum rate to all market participants). (Note that the commitments concerned only future payments, not those already made).

As you know, in a case like this (or in a case like Google’s), once the Commission accepts commitments it must (a) adopt an Article 9 decision making them binding; and (b) adopt a decision rejecting any complaints stating that there are no longer grounds for action.

Hynix appealed both of these decisions.

In essence, Hynix argued that the Commission violated Article 9 of Regulation 1/2003 by choosing the procedure envisaged in that article where its concerns related to a serious violation of Art. 102.

In its SO, the Commission had envisaged a finding that the charging by Rambus of capped royalties is incompatible with Article 102 (82 back then). However, the corollary of the commitment decision was to make royalty caps binding, thus endorsing their legality.

The Judgment that will never on this case would have shed light on some of the hottest current topics in EU competition law (abuse of dominance in high-tech sector, misuse of patents, the circumstances in which the Commission can or cannot adopt commitment decisions…).  In the past we have devoted lots of ink pixels to discussing these issues, and it’s a pity for the law that questions like the following will, for the time being, remain unaddressed:

 What constitutes an abusive practice with respect to standardization, in particular so far as concerns patent ambushing?

Were commitments in the form of future royalty caps sufficient to eradicate the competitive problems found by the Commission?

What guiding principles (beyond Alrosa) are to be taken into account when assessing the appropriateness and adequacy of commitments? 

Can the Commission address what it had perceived as a serious violation by means of a commitments decision? In that context, may the Commission adopt remedies which are only prospective in nature? Is the Commission entitled to have recourse to a commitment (Article 9) decision after having adopted a Statement of Objections? And in this case, can a Statement of Objections be considered as a valid “preliminary assessment” for the purposes of Art. 9 of Regulation 1/2003?

Written by Alfonso Lamadrid

21 June 2013 at 10:00 am