Archive for the ‘Archive’ Category
OFT goes to Hollywood
Remember our Antitrust Oscars?
We have a new and excellent candidate for the category of “Best Film by a Competition Authority”.
Check out the Compliance Film that the OFT has just released and which includes a dramatised dawn raid and special guest appearances from the likes of Prof. Richard Whish. A cool initiative within the OFT´s wider compliance project.
(Thanks to Christopher Brown and Luis Ortiz Blanco for drawing our attention to it!).
And coming soon to a blog near you…we have a truly excellent film in the pipeline with very special actors and a very special director. We´ll post it here as soon as we can overcome some technical issues.
PS. For those of you who haven´t already heard, Damien Neven (former Chief Economist at DG Comp) is joining Charles River Associates. Stay tuned, there might just be some more related news coming up soon.
Inside Job
Yesterday was a public holiday in Brussels and I took part of the day to watch Inside Job, the Oscard winning documentary which attempts to trace back the origins of the financial crisis. The documentary is certainly controversial, but I believe worth watching. It is a strong critique of the deregulatory policies that had prevailed in the US since the years of the Reagan admministration. For our purposes, it suffices to realize that the rationale underlying those policies is exactly the same as the one driving those who advocate loosening or even repealing antitrust enforcement. In fact, Alan Greenspan, who is blamed in Inside Job as one of the individuals responsible for these policies, authored some years ago an article on antitrust law. Many of his views on economic policy have recently been proven wrong; could the same be said of his ideas on antitrust? I would say the answer is quite obvious. For all its initial incoherences and its current flaws, antitrust enforcement is as indispensable as financial regulation; hopefully we won’t have to learn this the hard way.
In any case, if you can, I very much recommend taking some time off to watch this movie and to read Greenspan’s very brief piece so that you can arrive to your ouwn conclusions.
Rock and Law + The Legal Run
In the past few days we have posted stuff on Competition Parties, Competition Tourism , Fine Arts in Brussels and even on competition law manga. To complete this string of posts on competition law and leisure time we wanted to publicize and praise a couple of worthy initiatives undertaken by some law firms and in which a more than fair representation of competition lawyers (as well as a handful of readers of this blog) are participating:
The first one is “Rock and Law” a beneficial concert night which will take place in Madrid on the 16th of June with the participation of rock bands from Garrigues, Clifford Chance, Freshfields, Uría Menéndez, Ashurst, Cuatrecasas, Gómez Acebo &Pombo, CMS Albiñana, and Baker& McKenzie. Last year this event was a tremendous success, and I bet that this edition will top its predecessor.
Competition lawyers will be very well represented in Rock and Law with the band “The members of the Bar” (also called “The Whistleblowers” when under a different formation); two of their components , Carlos Vérgez and Enrique Carrera , are (apart from readers of this blog and good friends) almost as good with the guitar as they are with competition law (and I mean this as a compliment!)
The second initiative I was referring to is “The Legal run”, a fundraising activity organized by the Brussels in the framework of the Brussels 20 K, which will be taking place next Sunday. Although not necessarily registered through the Legal Run, a good bunch of competition lawyers will be taking part in this race (although fewer than expected; a number of ex-Howreys had reportedly been registered by the (ex)firm but their entries were subsequenlty withdrawn without notice. What are liquidators for if not for these things?). We´re willing to offer one of our already famous prizes to the fastest competition lawyer taking part in the race, so feel free to send us your times.
Competition Law and Sport (VI) The NFL Lockout
Our “competition law and sport” series (see posts I, II, III, IV, and V) was born out of our belief that the application of competition law to the world of sports has a tremendous potential that still today remains to a great extent unexplored in the EU. As I´ve said before, not only are sports-related cases some of the most visible ones at the EU level (for the general public Bosman is very likely the best known ECJ Judgment of all times), but given the peculiar features of the activities and markets at stake they also raise particularly interesting issues that push competition law outside of its comfort area, some of which we´ve previously discussed here.
In the US they were much quicker than us to realize that. In fact, the application of the antitrust laws has shaped much of the current organization of professional sport. A good and very hot illustration of this influence is the controversy surrounding the NFL lock out, which was recently challenged on antitrust grounds by several NFL players, including superstars Tom Brady, Peyton Manning and Drew Brees (Read their complaint here). The players also asked for an injunction to freeze the lock out that was finally granted last Monday.
Background and issues in a nutshell: the activities of all major leagues have enjoyed until now some degree of inmunity to the application of antitrust laws. The clearest example is baseball, which enjoys a controverted antitrust exemption that was ratified by the Supreme Court in Flood v Kuhn (1972) on the basis of a really absurd reasoning that put a curious interpretation of stare decisis before sound legal reasoning and common sense. Other sports have not been treated with so much deference, and so they have resorted to collective bargaining so as to escape the application of the Sherman Act. That was the case of the NFL, which, until now, had always negotiated all sorts of issues with the players union (NFLPA).
On March 11th, and in light of the unlikelihood of reaching a satisfactory deal on how to divvy up the $ 9.3 billion that the NFL makes, franchise owners announced a lock out (which, amongst others, implies no salary, no hiring, and no access to training facilities) (btw, it seems that the NFL´s tactics are somehow similar, and coincidental in time, to those of the Republican party..) and players decided to decertify their union and cease the collective bargaining process in order to deactivate the non-statutory exemption and lodge an antitrust complaint (see the link above for the content of the complaint).
The complaint challenges the compatibility with Section 1 of the Sherman Act some of the NFL´s basic arrangements, namely those related to salary caps, drafting of new players and free agent restraints, as well as of the lock out itself.
On Monday, Judge Nelson (District Court for the District of Minnesota) issued an order granting an injunction which freezes the lock out (finding that players/plaintiffs have a fair chance of prevailing and that absent the injuction they would suffer irreparable harm). The order, however, does not deal with the merits of most of the players´claims, and rather states that “[r]esolution of the issue of whether the exemption precludes relief on the NFL’s various Player restraints must await another day”. (Click here to read the order).
If the litigation were to reach an outcome in the form of an Opinion on the merits (which is not so obvious in light of the White v NFL precedent and of the ongoing court-ordered mediation talks) that would mean that a court would undertake a competitive assessment of several practices that have never carefully scrutinized so far. This could most certainly have an impact on the debate surrounding the possible implementation of salary caps and other similar arrangements in European sports and particularly on their assessment under EU competition rules. We´ll deal with those in future posts.
Jonathan Levin wins John Bates Clark Medal
One of our friends/readers -and former Stanford affiliate- has pointed us to some other news that we missed in the past few days:
The John Bates Clark medal -a sort of Nobel Prize for economists under 40 (in fact, a significant majority of its awardees have later received the Nobel)- has been awarded to Jonathan Levin .
For those who don´t know him, Levin is a Stanford Professor who has written extensively on industrial organization and whose research interests are now mainly focused on the internet and online markets. For a list of his publications and ongoing research check out his impressive CV.
Other curious facts: Levin is the son of Yale University President Richard Levin, and earned his PhD at the MIT, where he belonged to the same PhD class as the two other most recent awardees of the Bates Clark medal: Emmanuel Saez and Esther Duflo.
RE: Information exchange=cartel?
Some days ago I wrote a post on the change of approach towards exchanges of information set out in the new EU horizontal guidelines, in which I challenged the assertion that this practices should (or could) be equated to cartels (an assertion which, as I see it, has come out of the blue) and expressed my concern over the possibility that the statements made by the Commission in that document could be interpreted in a excessively wild wide manner by overzealous enforcers.
Since then, I have received various comments on that post. Since we´ve always liked the idea of fostering as much interaction as possible on this blog and most of those comments are not visible here, I´ve decided to provide an overview of what some of them said (other must be kept confidential) and, where necessary, to reply to some of the questions they raise. I have checked with their authors and have only mentioned their names where theu have given their express consent.
This will be lengthy, so, if interested, click here to keep reading.
The US Senate´s Antitrust Agenda (and a false debate)
Herb Kohl, the Democratic Senator chairing the US Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights announced yesterday the Subcommittee´s agenda for the next session of Congress.
The leitmotiv of the agenda is the idea that vigorous antitrust enforcement plays a vital role in ensuring consumer welfare. In particular, it appears that the Senate has its eyes set on the freight railroad industry; prescription drugs; gasoline, natural gas and oil markets; agriculture; media/Cable/satellite; airline competition; the broadband industry; and health care organizations.
In addition to those, some of the items in this agenda might affect EU competition law:
First, Kohl insists on the necessity of a statutory prohibition of resale price maintenance, arguing that the Supreme Court´s decision in Leegin “has the potential to seriously harm discount pricing and retail competition“.
Second, there is a specific mention to online markets and internet search issues. The Senate appears to be ready to conduct hearings on Google´s allegedly discriminatory practices in parallel to the investigation conducted by the European Commission (which we´ve covered here, here, or here), and, in clear reference to the Google/ITA Software controversy, also asserts its willingness to “closely examine the impact of further acquisitions in this sector“. It could be interesting to see how these two investigations overlap and affect each other.
Thirdly, and somehow related to the last point, is the Senate´s committment to “continue to examine closely how U.S. multinational companies have been affected by different antitrust regimes in various countries“. This is also a debate with which we´ve dealt before and that, to be frank, still perplexes me. I will explain why in a second.
But first, let´s make clear that, to be sure, Kohl´s agenda appears to be fair in referring to the varios viewpoints that have been expressed on this issue. The document reads as follows:
“Complying with the antitrust laws of different countries, which often have differing substantive and procedural rules, is increasingly becoming a burden on U.S. businesses. Over the past several years, foreign and in particular European regulators have been aggressive in their review of American companies’ business practices. Some have argued that these same foreign regulators have unfairly used their power to discriminate and hinder American corporations. On the other hand, many times those bringing complaints regarding the business practices of American companies to foreign antitrust enforcement agencies have been other American companies. Further, advocates of aggressive international enforcement argue that this enforcement is warranted. Exploring the validity of these claims will be an important priority for the Subcommittee”.
It´s shocking to see how widespread this idea that the Commission only targets US firms is, and how little factual support it has. Here are some reasons why I think that this whole debate should be a non-issue:
– It is a fact that in recent years the European Commission´s stance in some areas, particularly on abuse of dominance cases, has been tougher than that of US agencies (especially under the Bush administration). You may or may not agree with the Commission´s viewpoints ( I, for one, certainly don´t share a lot of the reasoning behind the Microsoft cases and the Google investigation), but it´s clear to me that if US firms are the main targets of such investigations it´s mainly because in most cases US firms are the dominant players worldwide. In fact, I wish more European firms were in a position to be subject to similar investigations in the US…
– European companies have to live with the precedents set by the Commission and the EU Courts and shape their strategy according to it. Consequently, if the law were really irrational or established excessively low thresholds for competition law intervention, as some claim, that would mainly be to the detriment of the competitiveness of EU companies.
– In spite of what the record fines on abuse of dominance cases may suggest, the reality is that fines on foreign companies, and US companies for that matter, represent a very small percentage of the total fines imposed by the Commission.
– In contrast to the above, fines on non-US firms represent nowadays the lion´s share of the the total fines imposed by US agencies. An illustration: it has been reported that in the past few years 80% of the fines above $ 10 million have been imposed on foreign firms.
– On the merger side, everyone recalls all the fuzz related to the prohibition decision in GE/Honeywell. But has anyone checked how many other acquisitions by US companies have been prohibited by the European Commission?
– Lastly, if many US antitrust lawyers believe that the Commission only goes after US companies that may be due to the fact that they only mostly pay attention to cases concerning US companies. One should remember, for instance, that the Commission has not only sanctioned Microsoft and Intel for abusive conduct, but also Tomra, Astra Zeneca, Deutsche Telekom, Telefónica, British Airways, to name only a handful of the most recent ones.
Re: I love my job
I recently took some time off to put to put an end to my stay in the US, and during those days I gave some thought to Nicolas’ recent post about competition lawyers disliking their job. Since I’m told that he had me in mind when referring to the 1% of lawyers that do “love their job”, I feel I should share my views on the issue:
It’s true that after a yet very brief experience I can say that I enjoy what I do (and apparently this turns me into a weird specimen..). I must however admit that I have been enormously fortunate with regard to the people with whom I’ve worked and the cases that I’ve dealt with, and so I cannot fully rule out that my opinion might change in the future. I would like to think that I’d quit if this ever happened, or if I eventually felt that I could make a wider positive contribution elsewhere.
The way I see it, practicing competition law at a law firm offers constant and varied challenges as well as a privileged insight into a wide array of markets and business practices or strategies. It also generally implies working closely with a multinational group of highly skilled colleagues to an extent that can hardly be matched by any other jobs outside international institutions. Moreover, in parallel to the strictly legal stuff there is a great business component to working at a firm (finding, managing and preserving clients) that distinguishes this job from other law-related jobs and that I find most appealing. Finally, the job is generally quite well paid too.
Of course there are downsides to it, but I agree with Nicholas that us lawyers are, to a certain extent, part of the problem. We have a noticeable tendency to believe that our job is the most important thing in the world (and it surely is important, it’s challenging, it’s interesting, and sometimes is very visible, but no doubt there are many more important things), and we also often tend to talk about how stressed and busy we are (if what we do is soo important and we are soo busy, then we should be really important people, right?) Nonetheless, the world is much larger than a lawyer’s desk, and passion for our job should not make us lose focus. Greater consciousness about this could perhaps contribute to mitigating what seems to be a constant competition about who’s busier.
To be sure, I do think that long hours or lack of flexibility do pose a significant problem that is yet to be satisfactorily addressed by many law firms. Failure to do so implies turning the back to brilliant people who could love their job but who also value other aspects of life (precisely the people with whom most of us would be more comfortable working with). In my view, the best example of this can be found in the limited number of women making a career in law despite the fact that they tend to perform better academically (and, in my view, often have a greater common sense…). Favoring unhappy and narrow-minded “robots” over brilliant and motivated people can hardly do any good. One should avoid thinking that a client is better served by people who execute tasks without any engagement, no matter how many hours they devote to their work. Most of us would agree that firms which strive to keep their lawyers happy and motivated are better positioned to attract talent and to thereby excel in their service. At the end of the day, whether we’re talking about lawyers or about their firms, there can be no real success without satisfaction.
Chillin'Competition 