Chillin'Competition

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Archive for the ‘ChillinLeaks’ Category

Conflicting views on the Google/ITA Software deal

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Last week I mentioned here the White Paper issued by the American Antitrust Institute on Google´s proposed acquisition of ITA Software. As you will recall, the AAI concluded that the deal would give rise to competitive concerns that made antitrust intervention necessary. As practically all Google-related debates, this one is fast getting huge, and extremely interesting.

On the one hand, the anti-Google “Fair Search” coalition has created a web page stating all the reasons why the deal would harm consumers in every conceivable way. You may or may not agree with it, but one must admit that they´re doing a pretty good job in speading their message around (this is a consequence of what I meant when I said here that Google has tough and very powerful competitors, who have the incentives and the means to present a fierce battle in as many fronts as possible). 

We´ve given you the link to the AAI´s White Paper and to the Fair Search web page, both of which favor close scrutiny of this transaction. The picture would not be complete if we didn´t direct you to some of the arguments explaining why the acquisition of ITA by Google would actually be procompetitive. Daniel Crane, a Professor at Michigan Law School, has just written a guest post on the blog Techcrunch.com in which he does that exactly; he also sends a very clear message: “Let´s calm down on the Google-ITA deal” (thanks go to George Pedakakis for pointing us to it).    

Crane´s main point is that “Google’s competitors naturally fear Google’s emergence as a formidable rival in travel search, but that is hardly a reason to block the transaction. Indeed, it’s a reason to approve the deal. The most likely scenario is that Google’s acquisition of ITA would allow Google a quick and efficient entry point into travel search that would expand consumer options and increase rather than decrease competition“. His post also responds to the main allegations put forward by those opposing the deal.

Now that you´ve a complete picture of the main positions in this debate we´d be happy to know about any thoughts our readers may have on this matter. Anyone? 

Unrelated: We are also reporting more and important moves in the Brussels legal market: a bunch of great associates have also left Howrey to join Shearman&Sterling. Amongst them are some of the brightest young lawyers around (some of whom are also very good friends of ours), such as Mark English, Elvira Aliende, Louise Rabeux, or Marixenia Davilla.      

And a chillin´leak: Julian Joshua is apparently headed to Steptoe & Johnson

It´s shocking to see how what until very recently was a top-notch practice at Howrey´s has disintegrated so quickly. Looking at the positive side: there will be more empty tables at L´arte di, which is were we constantly ran into each other at lunchtime..

Written by Alfonso Lamadrid

2 March 2011 at 3:26 pm

Chillingleaks: European Commission investigates Telefónica and PT

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It appears that DG Comp has initiated a formal investigation in relation to a possible non-compete agreement between Telefónica and Portugal Telecom. The two companies have now unofficially confirmed this news, which could become public in the next few hours.

People involved in the case have  indicated that the agreement could have been entered into last July, at the time Telefónica bought PT´s shares in Vivo (a reminder: the Portuguese government had opposed this acquisition by virtue of its “golden share” in PT. Although the ECJ recently declared that the existence of such “shares” infringes the Treaty provisions on freedom of establishement, the golden share on PT  is still there).  The agreement  is suspected to have consisted of a commitment not to compete in each other´s “home” market  until December 2011.

Similar “ancillary restrictions” have also been subject to recent investigations by the Commission.

Written by Alfonso Lamadrid

24 January 2011 at 9:51 am

ChillinLeaks (or kind of)

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There’s been a bunch of significant antitrust news in recent days.

Since they have already been revealed on other websites, they are not genuine ChillinLeaks.

  • We learned today that the august Trevor Soames had left Howrey Brussels. We wish him luck for his new ventures. We do also wish luck to our good friend Miguel Rato who, in addition to being one of the brightest young competition lawyers in the market, was recently made partner there (and to other friends who have left/stay with the firm).
  • Very many thanks also Geoffroy Van de Walle de Ghelcke who informed us that the European Google Antitrust Questionnaire had been posted on the Internet (and on the excellent antitrust review).
  • Finally, I have been interviewed yesterday on Apple’s threats to remove free newpapers’ applications from AppStore . Apple apparently wants to push newspapers to sell (read in exchange for a price) online subscriptions for iPads exclusively through iTunes (and not for free through other platforms or in connection with paper subscriptions). The Belgian Minister for economic affairs – yes, there is a government in Belgium, though it is well beyond use-by date  – has requested the Competition Directorate General to open an investigation for abuse of dominance. According to the Minister, this issue, which seems to arise in other Member States, should be dealt with at the European level. Until recently, Apple has enjoyed a relative degree of immunity in so far as EU competition law is concerned. 

Written by Nicolas Petit

20 January 2011 at 2:13 pm

ChillinLeaks

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We were the firsts to report on the replacement of N. Calvino and on the whole reshuffling of DG COMP a while ago.

We got a fresh hand on the draft horizontal guidelines, and provided some hints on their contents.

10 days ago, we were the ones to announce that the Commission is attempting to cook a cartel case on the exclusive basis of economic evidence.

Given our proven ability to chill competition on the market for breaking antitrust news, Alfonso and I have decided to formally start a ChillinLeaks column. We simply hope not to be accused of serious criminal offenses in Sweden.

Should you wish to contribute to the free flow of AT-related information, and send us revelations and stories for disclosure on this blog, please note that we apply the highest standard of confidentiality to our sources. You may also reach us by phone, should you prefer this communications means.

To inaugurate this new column, here’s the big news (still unofficial):

Kai-Uwe Kühn (University of Michigan) will be the next Chief Economist of DG COMP, and will replace D. Neven who’s supposed to step down shortly. Kühn is a specialist of collusion, collective dominance and hi-tech industries (read Microsoft and interoperability issues). He has consulted, if our information is correct, for CRA International. He holds a Phd in economics from Oxford University. Congrats to him.

 Alfonso and Nicolas

(PS: Image possibly subject to copyrights. Source here)

Written by Nicolas Petit

9 December 2010 at 3:52 pm

The beginning of an enforcement paradigm?

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As noticed yesterday by Nicolas, the Commission´s stance with regards to 102 TFEU cases has certainly evolved under Almunia, in the sense that the Commission is nowadays more cautious in pursuing cases where it may lack sufficiently convincing evidence. Nico referred to this as “the end of an enforcement paradigm”.

However, it seems like this approach could be confined to cases related to alleged abusive conduct.  The reason: rumor has it that the Commission may be thinking about initiating  a “test case”, in which it would attempt to prove a cartel by virtue of economic evidence. The Chief Economist and its team would be playing a major role in the case. Could this be the beginning of an enforcement paradigm?

Such approach is certainly not  unheard of (it was in fact trendy in the 70s given the influence of the Chicago School), but managing to prove a cartel by resorting exclusively to economic analysis is far from being a piece of cake. Discussions on the possibility to follow this path have previously been held, for instance, within the framework of the OECD  (a policy brief is available here). In the course of those discussions, the Commission acknowledged that its “past experience has shown that it is very difficult to base a decision imposing fines on undertakings relying exclusively or in a large  extent on economic evidence” (see here).

If the opening of such case were to be confirmed, it could be a clear indicator of the fact that the Commission´s self-confidence is not at all at its lowest.  Whereas I acknowledge that economics could possibly play a greater role regarding the detection of cartels (an interesting presentation by DG Comp´s staff on this issue is available here), I´m somehow more skeptical in relation to the sufficiency of economic evidence to prove their existence.

It´ll be interesting to see whether this rumour actually turns into a reality or not. And in case it does, would the Court be prepared to undertake a proper review of the Commission´s economic assessment in such a case?

PS. For anyone interested on these matters I recommend a brilliant article by G. Werden: “Economic Evidence on the Existence of Collusion: Reconciling Antitrust Law with Oligopoly Theory”, 71 Antitrust Law Journal 719 (2004).

Written by Alfonso Lamadrid

25 November 2010 at 5:15 pm

The Least Well Kept Draft Competition Text

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Lucky me, I have seen the latest version of the mammoth draft horizontal guidelines currently circulating within the Commission.

The text comprises:

  • 95 pages(!)
  • Loads of examples
  • Some wording on standardization agreements. The draft also dedicates two §§ to the methods for assessing whether IPR fees are FRAND or not (they refer in particular to the ex ante v. ex post comparison method)
  • A full section on information exchange agreements, with an appreciable reference (in a footnote) to Airtours and Impala

Looks promising. My only concern is elsewhere. Environmental agreements are no longer discussed in a stand-alone section, but are now part of the section on standardization agreements. With the increased influence of green propaganda ideas, I am surprised that Brussels officials did not actually decide to give more exposure to environmental agreements.

Written by Nicolas Petit

11 November 2010 at 6:40 pm

Guidance (and some other stuff)

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The OFT keeps doing interesting stuff. They have now published two concise and useful guidance documents aimed at ensuring compliance by small and medium companies as well as by company directors.  (The Spanish CNC also did a good job in releasing guidance for associations not so long ago).

Btw, for those of you who have not yet heard about it, one of the members of the OFT´s Board, Philip Marsden, is the new competition law Professor at the College of Europe, where he´ll be replacing Richard Whish.

Unrelated:

-Rumour has it that  next week the Commission will finally announce its long-awaited decision in the air cargo cartel. You can expect truly huge fines.

-Also, yesterday I attended part of the sessions of the FIDE Congress in Madrid, and it was really a privilege  to see such an unusual concentration of great legal minds.  I could only attend the discussion on competition issues (excellentely chaired by Judge Lenaerts), but I hear that all three panels were of great interest.

Written by Alfonso Lamadrid

5 November 2010 at 7:56 pm

New appointments in DG COMP

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I believe that we´re  the first ones to report the following changes within DG COMP  (approved today by the Commission and effective from 1 November):

Nadia Calviño has been appointed Deputy Director General in DG Market. In order to replace her, Cecilio Madero has been appointed Acting Deputy Director General for Antitrust & Mergers.

In addition, Joachim Luecking will be acting as Director of C; Eduardo Martinez will act as Head of C/1; and  Gert-Jan Koopman will become Deputy Director General for State aid.

 

Written by Alfonso Lamadrid

27 October 2010 at 8:37 pm

Thoughts

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Living and working in Brussels offers the opportunity to talk and meet with practitioners from all sides. In this context, a lunch with colleagues may help bring new perspectives on issues.

On second thoughts, and as a matter of principle, one may question whether the appointment of a former official of the Commission’s legal service as hearing officer is as appropriate as mentioned in my tweet two days ago. Nothing to do with Wouter Wils’s brilliant legal skills (I am a great fan of his academic work). But in terms of neutrality, it is somewhat odd to appoint as a referee someone  who spent years defending the Commission’s decisions in Court against companies. I guess this may create a bias (or am I the one with a suspicious bias )? Much to the advantage of the companies facing Commission proceedings, however, is the fact that this particular hearing officer knows the case-law on fundamental rights inside out.

Written by Nicolas Petit

14 September 2010 at 8:04 am

Heard on the Grapevine

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Our friend Pablo Ibanez Colomo was apparently appointed as a lecturer at the London School od Economics (“LSE”). TBC, but congrats already.

For those of you who do not know him, Pablo is a promising competition lawyer, who recently defended a Phd at the EUI in Florence. The subject of his Phd was: “European Communications Law and Technological Convergence. Deregulation, Re-regulation and Regulatory Convergence in Television and Telecommunications“.

Written by Nicolas Petit

6 September 2010 at 6:14 am