Archive for the ‘Breaking – Antitrust – News’ Category
Crystal Ball Gazing
I must have been over-optimistic when talking, a few days ago, of “the end of an enforcement paradigm”:
Last week, the Commission
1. opened a formal investigation against Google against what looks like a classic “secondary line injury” abusive discrimination case.
2. raided a bunch of pharma companies, as in the good old days of the Kroes mandate.
Now, Google has already made clear it was willing to cooperate. The case will most likely follow the Article 9 road, which may confirm my point.
The beginning of an enforcement paradigm?
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).
What’s wrong with French Politicians?
You liked the Alstom saga?
You loved President Sarkozy’s assault against article 3(1) g) EC?
Now you will surely adore the latest anti-Brussels protests voiced by the French government. Yesterday, several French Ministers lambasted the Commission’s decision in the air freight cargo case as “disproportionate“. Air France was fined €380 millions.
50 years after the entry into force of the EU Treaty, the declarations of those politicians – who seem to have just discovered the existence of EU anti-cartel provisions – are pathetic.
Beyond the ridiculous political gesticulations, a number of other things strike me as odd. After all, the victims of the cartel (air freight cargo customers) include probably a large number of French companies. Rather than siding here with Air France, the Government could have congratulated the Commission for protecting the interests of French customers. Yet again, French politicians decided to play Brussels v. Paris.
But there’s even worse. Buckle up and seat tight: the European affairs minister argued that the decision was discriminatory. Believe it or not, the alleged discrimination lies in the fact that some companies got off the hook in exchange for cooperation with the Commission. Obviously, our chap needs a crash course on leniency. Happy to offer my services (there is obviously no discrimination, as long as all companies can in principle equally receive immunity in exchange for cooperation). For more, see the post hereafter by Jean Quatremer (in French).
In the same vein: François Lévêque has sent us last week a paper about the new French electricity act. According to the author, this Act is (i) detrimental to competition; (ii) entails heavy handed State regulation; and (iii) is prone to regulatory capture and rent seeking behaviour. Scary. See link hereafter.
The Least Well Kept Draft Competition Text
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.
Guidance (and some other stuff)
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.
The Distance between Brussels and Paris
… seems far bigger than 300 kilometers. See press article at the end of this post.
What constitutes almost standard lobbying practices in Brussels is perceived in Paris as a large-scale conspiracy from the private sector.
The Canard Enchaîné reports that the International Chamber of Commerce (ICC) in Paris has arguably (1) sponsored a biased study on fines (and their alleged excessive level); and (2) invited a Judge of the Paris Appeals Court to a secret meeting, in an attempt to persuade him that some recent investigation techniques of the French Autorité de la concurrence are illegitimate.
In reading this, and in particular (2), I realize that we in Brussels are possibly a little too lenient and naïve in relation to lobbying strategies in competition matters. Of course, (1) raises no ethical issues, as long as the ICC sponsoring is made public. However, secret attempts to influence judges and officials are almost akin to corruption practices, and deserve to be fiercely combated.
New appointments in DG COMP
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.
Paul the Octopus dies
This is really (heart)breaking antitrust news. Paul the Octopus died yesterday at the Sea Life Centre in Oberhausen.
This is dramatic news for the competition community: precisely yesterday I saw that the market intelligence company Mlex had very recently referred to Paul as Damien Neven´s replacement (see the great picture above, extracted from the October-December 2010 issue of Mlex magazine).
The aquarium has announced that Paul´s body is in cold storage while decisions are made on “how best to mark his passing”. Paul will be given his own small burial plot and a permanent shrine would be erected in his memory”. For a modest idea from chillingcompetition as to how Paul could better rest in peace, see here
Belgian Competition Day
My way of celebrating the Belgian competition day: I am off to France for the day.
I’ll be presenting my recent papers to Frederic Marty and his fellows from GREDEG (in Nice Sophia Antipolis).
In addition, I have been told I would have the opportunity to meet a legend of French competition economics, Prof. Michel Glais.
OFT and Competition Commission to merge
There had been rumours about it in the past few weeks, but it now appears to be confirmed: the Office of Fair Trading and the Competition Commission will be merging as part of the British coalition government´s plan to cut costs (the monopoly in the enforcement of the competition rules is justified on the basis of its alleged efficiencies).
Despite its apparent complexity and notwithstanding certain duplication of tasks between the two agencies, the British enforcement system has until now worked extremely well. According to press reports, some regard this move as a negative one, fearing that it will endanger the reputation of the system. I (obviously not an expert on British competition law ) see no major objections to it. Does anyone have strong feelings about it?
Unrelated: I´ve just learnt via a communication from the ABA that you run the risk of being disbarred if you charge $3.500/hour fees, call a court clerk a “f…. bitch” and suggest that the judge in front of you is a pedophile. I suppose we´ll all have to adapt and change our argumentative techniques..
Chillin'Competition 
