Archive for the ‘Guest bloggers’ Category
Breaking news! Real Madrid´s antitrust case against F.C Barcelona
Surprising competition authorities as well as its own players –who have just started the pre-season in Los Angeles- Real Madrid C.F. (hereinafter “RM”) has apparently lodged an antitrust complaint against FC.Barcelona(“FCB”). RM alleges that FCB has abused the dominant position it has enjoyed in the European and Spanish football market for the past 3 years.
Some rumors point at a charismatic RM employee as the mastermind of this complaint, which was submitted on the same day he returned from his holidays in his hometown of Setúbal (Portugal).
The complaint is based on the following grounds:
Dominance. The complaint alleges that FCB is dominant in as much as it enjoys a 77% market share (having won 10 out of the 13 titles in play in the past 3 years). A more detailed analysis reveals that FCB controls 75% of the Spanish market (having won 6 out of 8 competitions) and 80% of the EU market (having won 4 out of 5 competitions).
Barriers to entry-Vertical Integration. According to RM´s complaint, FCB´s vertical integration makes it impossible for other clubs to gain a foothold on this market. The complaint explains that for the past 20 years a subsidiary of FCB (La Masía) has produced players (e.g. Messi, Iniesta or Xavi) with such features that enable them to correctly interoperate/play only with other FCB players and not with those of competitors. Besides, injured or retired FCB players can be constantly replaced by a new folk from La Masía, thus guaranteeing an unfair market control by the alleged abuser.
Abusive Behavior. According to the complaint, the misconduct of FCB also includes “acting and faking”. Such conduct would have allegedly led regulators and referees to incur in errors in the events where a direct competition between RM and FCB has taken place. In this sense, the complaint appears to be based on the General Court´s Astra Zeneca Judgment.
The complaint – in which the word “why” is repeated 17 times– also mentions the reinforcement of the situation by international organizations such as Unicef and the reputed publication The Economist, which recently published an article entitled The Catalan Kings, where FCB virtues were praised but its misconduct was not denounced.
Remedies sought. RM seeks the cessation of the allegedly anti-competitive conduct as well as the reparation of the damage suffered during these years. In particular, RM has asked the competition authorities to impose both structural and behavioral remedies on FCB.
Some suggested structural remedies would consist of divesting some of the most decisive assets of FCB (“primarily FCB should get rid of Lionel Messi or, subsidiarily, the binomial Xavi – Iniesta should be somehow split”). Possible behavioral remedies would include “restricting the possession of the ball to no more than 50% in any game” or “sharing of know-how with rivals before, during and after any game”.
[Note by Alfonso: César Chaparro (a very good friend, a former antitrust lawyer, and currently an official at the World Bank –based in Washington DC and Nairobi-) has sent us this report about a competition case that could bring about a revolution in world football. As you have seen, it´s a joke with which César –who is a great guy but happens to support Barça (nobody is perfect) wanted to tease me. Given that the lawyer who represents Real Madrid in competition related matters is a subscriber of this blog it would also be interesting to find out about his opinion on this “news” too..) And if you really want to know how FC Barcelona trains, watch this]
Death in Venice: The end of a Commission’s locus standi theory in State aid cases?
[Note by Alfonso: Once again, it´s a pleasure to have our friend, State aid expert, and colleague of mine Napoleón Ruiz (don´t be fooled by the picture, he´s real) informing us of what´s new in the world of State aids. We leave you with him].
Thanks again to Nico and Alfonso for inviting me to write a post on State aid matters. My previous post was devoted to explaining how “vaporous” some of the legal concepts which make up the notion of State aid are.
As a sequel of my previous post, I would like to briefly refer to another interesting battlefield within the State aid area: the locus standi of the beneficiaries of aid schemes ( think, for instance, of tax measures) to challenge negative decisions of the Commission. In contrast with antitrust practice where undertakings are always the addressees of the Commission’s decisions, in State aid cases the addressees of Commission decisions are –in theory- exclusively member States.
State aid cases brought before the European Courts by recipients of the aids usually begin with ferocious debates with the Commission on whether the appellants fulfill, or not, the famous Plaumann test. Needless to say, the Commission is not precisely enthusiastic when it comes to accepting undertakings appealing its Decisions; that is true to such an extent that one could attribute it the nickname of “Dr. No” (which is the answer one –almost- always gets when asking whether an aid beneficiary is individually concerned by a negative decision). The Commission’s argument in this regard is simple and sharp: in order for an undertaking to be individually concerned, it needs to prove that it has actually benefited from the aid, and that can only be demonstrated when the applicant has been addressed a recovery order from the Member State before lodging the appeal (and that does not happen so often). Otherwise, that undertaking must refer to the national judge and pray request: (i) that the Court declares itself competent to rule the case and (ii) that it raises a preliminary reference of validity of the Commission´s decision (which does not happen frequently either ).
Frankly, one does not need to be a constitutional law expert to find this argument at odds with the most basic conception of the right to access to justice under article 6 of the ECHR.
That was indeed the state of play in State aid cases until just a couple of weeks ago, when the ECJ issued an important ruling which has gone relatively unnoticed. I am referring to the so-called Hotel Cipriani (a very recommendable place to stay in Venice if one can afford it…) case (C-71/09 P). In that case, the ECJ upheld the GC’s ruling, dismissing the Commission’ pleas on admissibility and clarifying the boundaries of the Plaumann test in such cases. In particular, the Court states in paragraphs 55-57 of the Judgment that:
“The Court must dismiss at the outset the argument that the recovery obligation imposed by the contested decision did not sufficiently identify the applicants at the time that that decision was adopted. (…)
As the Advocate General has pointed out (…), the order for recovery already concerns all the beneficiaries of the system in question individually in that they are exposed, as from the time of the adoption of the contested decision, to the risk that the advantages which they have received will be recovered, and thus find their legal position affected. Those beneficiaries thus form part of a restricted circle (…), without it being necessary to examine additional conditions, concerning situations in which the Commission’s decision is not accompanied by a recovery order. Moreover, the eventuality that, subsequently, the advantages declared illegal may not be recovered from their beneficiaries does not exclude the latter from being regarded as individually concerned.
The Court must also dismiss the Commission’s argument that recognition of the admissibility of actions against a decision of the latter ordering the recovery of State aid had the ‘paradoxical and perverse’ effect of requiring the beneficiaries of the State aid to challenge that decision immediately, before even knowing whether it would lead to a recovery order concerning them. (…)”
It seems to me that the wording of the Judgment leaves little room for interpretation: the Court finds that the order for recovery imposed by the Decision is, by itself, sufficient to individually concern a beneficiary without any further requirements (i.e. individual order of recovery addressed to the beneficiary by the Member State). Thus, the ECJ definitely quashes the Commission’ position regarding the locus standi of beneficiaries and, in my view closes the debate.
In conclusion, although I would not insinuate that the Commission was as “fond” of the argument as was the character of Dr. Von Aschenbach of young Tadzio in Thomas Mann’ tale (masterly brought to the screen by Luchino Visconti), it is however true that this Judgment strikes a serious blow to the procedural strategy of the Commission, which from now onwards will have to focus much more on substance and less on admissibility.
The ECJ rules the ECJ Rules
(Note by Nicolas: We have received a funny and interesting competition-related post from the Blogbuster (who is also a good friend of ours). In this guest post, the blogbuster makes a number of original points on IP and competition, a possible exclusionary abuse committed by the Court of Justice of the EU, and judicial review under Article 102 TFEU).
Remember 28 November 2008? On that day, the European Commission published the preliminary report on its inquiry into the pharmaceutical sector. The preliminary report found pretty much everything to be wrong in the sector. There was still some time before the Commission would release the final report. Yet, all seemed to indicate that the Commission would adopt far-reaching measures to bring back life to the life sciences sector. But things eventually turned out differently.[1] In the end the final report was pretty tame, if not lame, compared to the preliminary report. One of its main recommendations was, however, that the EU should create a EU-wide patent –at the moment, there are only national patents, even though the EPO provides for common procedures and recognition across Europe.
Draft rules for a EU patent have floated around Brussels for some time and on 8 March Luxembourg had a word to say, too. Upon request by the Council, the European Court of Justice examined whether the proposed establishment of a European patent court was compatible with EU law. The background was that the new patent court would (technically speaking) be an international, not EU, tribunal because – oh, horrors! – non-EU members such as Croatia, Norway or Switzerland would also be subject to the patent court’s jurisdiction.
The question was a tough one for the ECJ, which had in the past objected to making the EU and member states subject to an international tribunal –that’s clear from the Laying-up Fund and EFTA decisions. What made the new case difficult was that, unlike the Laying-up Fund and EFTA cases, the EU acquis was not directly affected. Precisely, the main problem with the patent law saga is that this is not an EU, but member state, competence. In addition, the draft patent court treaty lays out a few rules to address some of the concerns the ECJ had in those previous cases –for example, the requirement upon the patent court to apply EU law, and the possibility for the patent court to refer a case to the ECJ, being bound by the ECJ’s ruling in that scenario.
Still, the ECJ killed the patent court initiative. It did so on the basis of a line of reasoning reminiscent of the US Supreme Court’s decision in the case of The U.S. Supreme Court v. Everyone Else.[2] The ECJ found the establishment of the patent court to be unlawful as a matter of EU law because, well, it ruled itself:
“80. While it is true that the Court [ECJ] has no jurisdiction to rule on direct actions between individuals in the field of patents, since that jurisdiction is held by the courts of the Member States, nonetheless the Member States cannot confer the jurisdiction to resolve such disputes on a court created by an international agreement which would deprive those courts of their task, as ‘ordinary’ courts within the European Union legal order, to implement European Union law and, thereby, of the power provided for in Article 267 TFEU, or, as the case may be, the obligation, to refer questions for a preliminary ruling in the field concerned.”
In a separate but related development, Nicholas Forwood[3], judge at the ECJ’s subordinate court –the General Court– spoke out in favor of a specialist competition court at the EU level. At first sight, this proposal may be surprising, as one of the main reasons for creating the GC, despite its name, was to have a court more specialized in competition cases than the ECJ.
The proposal is also surprising because the GC’s track record in some types of competition cases is remarkably good. In cartel cases, the GC subjects Commission decisions to scrupulous scrutiny; around half of all cartel decisions that are appealed are at least partially annulled. In the merger arena, too, the GC puts the Commission under intense oversight. You will surely remember the Sony/BMG and Schneider/Legrand sagas where the Commission’s merger decisions were annulled by the GC. So the only area ‘under construction’ is abuse of dominance (for more, see the recent paper of one my host bloggers). An ‘under construction’ might even be an understatement. Just take a read at the latest ‘margin-squeeze’ judgment in TeliaSonera (an ECJ ruling though):
“54 TeliaSonera maintains, in that regard, that, in order specifically to protect the economic initiative of dominant undertakings, they should remain free to fix their terms of trade, unless those terms are so disadvantageous for those entering into contracts with them that those terms may be regarded, in the light of the relevant criteria set out in Case C‑7/97Bronner [1998] ECR I‑7791, as entailing a refusal to supply.
55 Such an interpretation is based on a misunderstanding of that judgment. In particular, it cannot be inferred from paragraphs 48 and 49 of that judgment that the conditions to be met in order to establish that a refusal to supply is abusive must necessarily also apply when assessing the abusive nature of conduct which consists in supplying services or selling goods on conditions which are disadvantageous or on which there might be no purchaser.
56 Such conduct may, in itself, constitute an independent form of abuse distinct from that of refusal to supply.”
Compare this to the US Supreme Court’s finding in linkLine, in very similar circumstances (ie, local loop access for telecom services):
“[A] firm with no duty to deal in the wholesale market has no obligation to deal under terms and conditions favorable to its competitors. If AT&T had simply stopped providing DSL transport service to the plaintiffs, it would not have run afoul of the Sherman Act. Under these circumstances, AT&T was not required to offer this service at the wholesale prices the plaintiffs would have preferred.”
Which of these two statements makes more sense?
The TeliaSonera decision is not an isolated case, of course. In British Airways, the ECJ (in)famously found exclusionary conduct to exist, even though the rivals supposedly being foreclosed gained market share during the relevant period. And, in Deutsche Telekom, the GC’s and ECJ’s rulings effectively ‘ordered’ DT to raise retail prices –although there was no claim that they were below cost– and the German telecoms regulator had actually signed off on DT’s pricing structure.
The ECJ’s failure to grasp the basics of abuse of dominance cases is all the more striking as, by eliminating its rival in the market for court adjudication –the patent court–, it showed it knows very well what exclusionary conduct is all about!
In this light, therefore, let’s take up Judge Forwood’s proposal but establish a specialized “abuse of dominance court”, not a competition court. Still– it’s a pity that the patent court deal was killed. Otherwise, transferring jurisdiction over abuse of dominance cases to an international tribunal might also have been a –perhaps safer– option!
The Blogbuster
TV and events of ‘major importance for society’
(Once again we have the pleasure of publishing a contribution by Pablo Ibañez Colomo. It seems that the future of broadcasting rights is being decided in Luxembourg, and as he did last week when Kokott´s opinion was issued, Pablo is sharing with us his views on the latest Judgment in this area).
More on TV rights this week. In Cases T-385/07, T-55/08 and T-68/08, the General Court dismissed an annulment action against a Commission Decision declaring the compatibility with EU law of national measures concerning the broadcasting of events of ‘major importance for society’ (read: the FIFA World Cup, the Euro, the Olympics and similar sports events). In accordance with Article 3 of the Audiovisual Media Service Directive, Member States may require that these events are offered on subscription-free TV channels.
Given the way in which the said provision is worded, the outcome of the action is as unsurprising as it is uncontroversial. Some bits of the judgment raise some interesting issues:
Freedom of information: I have always been surprised by the lightness with which freedom of expression issues are addressed in TV rights-related cases. The General Court (as does the Preamble to the Directive) argues that these measures are justified by Article 10 ECHR, which includes the ‘freedom to receive information’. It is far from clear that the freedom of speech encompasses a right to access an event offered by a private actor on a subscription-free basis . Does this mean that publishers breach the freedom of information of their readers when they charge for their newspapers informing about events of ‘major importance for society’?
Have your cake and eat it?: When reading about Article 3 of the Audiovisual Media Services Directive, I cannot help thinking about the hybrid situation they create. Sport has become a multi-million business benefitting its governing bodies. If governments do not object to these developments (and I am not suggesting that they should), I do not see why they interfere downstream in the value chain to create market distortions at the level of broadcasters (which very often means, moreover, that public broadcasters end up paying for the rights).
Everything antitrust lawyers should know about State aids (but were afraid of asking)
Note by Alfonso: We are inaugurating our new section on “Everything Competition Lawyers should know about State aids” with a contribution by Napoleón Ruiz, a great friend and a great State aid specialist at Garrigues´ Brussels office. We asked him to write about a sexy topic and, well, this is what we got..
Everything antitrust lawyers should know about sex State aids (but were afraid of asking)
Thanks to Nicolas and Alfonso for giving me the opportunity -and the honor- of inaugurating this new section of their blog (which actually reminds me of the title of a well-known movie of Woody Allen…).
I believe that creating a new section devoted to State aid issues is indeed a good idea. Firstly because despite the fact that they target member States –and not companies- State aid rules play a fundamental role in addressing restraints of competition. Secondly, because State aid control has lately become the “rising star” of the Commission’ competition policy. Since the beginning of the crisis, State aid practice has boomed within DG Comp in the attempt to control that the fabulous amount of money (around 4 trillion euros mainly in the financial sector) poured by member States into their economies does not distort -too much- competition. Quite a herculean task, I’d dare to say…
One of the first things that antitrust lawyers should know is that, perhaps even more than antitrust or merger control, State aids is an incredibly dynamic practice, given that some of its main legal concepts have not yet been completely fixed. Many State aid lawyers would agree that one of the most (probably the most) raging debates amongst scholars, practitioners and enforcers, which has been going on for years now, concerns the notion of selectivity:
According to article 107 TFEU, a measure is deemed to constitute a State aid if it favours “certain undertakings or the production of certain goods”; in other words, whether the measure constitutes an exception deviating from the general rule.
Even though the concept appears to be conceptually clear -in theory-, in practice it has proven to be diabolically difficult and so far its boundaries remain unclear. In general (but not always), while member States and companies seek to clarify and restrict the application of selectivity, the Commission tries to expand its scope. Obviously, the larger the concept of selectivity, the easier it would be for the Commission to qualify as State aid virtually any State measure.
We, antitrust lawyers, are used to expansive, non-determined, concepts, but this one is, in my experience, the most nebulous one of those with which I´ve worked.
Actually, one of the current cases regarding selectivity that may lead to a clearer definition of the concept is one in which I have the fortune of being involved. The case, currently pending before the General Court (the Commission´s decision was appealed by a significant number of Spain´s flagship companies), concerns a provision in Spanish corporate tax law laying down the amortization of financial goodwill for the acquisition of significant shareholdings in foreign targets (a.k.a 12.5 TRLIS). Although the subject sounds like ancient Sanskrit for many non-tax lawyers, I believe it has the ingredients to become a landmark case, for instance:
The case concerns the very substance of selectivity, since the appeal challenges not only the methodology used by the Commission to define the general rule and its exception, but also the interface drawn by the Commission between selectivity de iure and de facto; and
Since tax provisions are selective by nature, the judgement to be delivered by the Court will likely determine how much room for intervention the Commission has regarding member States’ tax systems. Taxation has been -and remains- one of the few fields where unanimity between member States is required in order to legislate. Therefore, many think that in case the ECJ “expands” the notion of selectivity, it will be difficult for the Commission to resist the temptation of using its broad powers as competition watchdog in order to intervene in member States taxation (especially now when voices requesting deeper tax harmonization in the EU are growing).
In any event, it would be desirable that the European Courts –be it in this one or in another case- shed some light into the debate, so that I don’t find myself quoting –again- the great Allen in the above said movie to [sadly] declare that: “When it comes to sex State aids there are certain things that should always be left unknown, and with my luck, they probably will be”.
I Started Something and Now I’m Not Too Sure? (or The Commission and Google)
(Note by Alfonso: Last week I announced that Pablo Ibañez, a great friend of ours, a co-author of mine, and a truly brilliant legal mind, would be writing a post on the Google investigation. Here it is. As lucid as always).
Thanks very much to Nicolas and Alfonso for giving me some space to share a few quick thoughts with their (numerous and growing in number) readers on the nascent Google case! I was looking forward to posting something as soon as I read the press release. For the many readers who do not know me, I am a Lecturer in Competition Law at the LSE (P.Ibanez-Colomo@lse.ac.uk).
My concern with the ongoing proceedings has less to do with the technicalities of the case, very well outlined by Alfonso a few days ago, and more with the future of Article 102 TFEU. More precisely, I wonder whether this investigation is in line with the spirit and purpose of the 2009 Guidance or whether it represents, again, a step back to the pre-Discussion Paper era.
Even though it is an imperfect document, the 2009 Guidance represented a great victory in at least two important respects: it promised consistency (i) across competition law provisions and (ii) within Article 102 TFEU itself. Put differently, the Guidance Paper gave us the hope that the standards of intervention would be the same regardless of the provision (in particular, Article 101 vs. 102 TFEU) or the formal label with which the case is brought. This means, for instance, that a ‘margin squeeze’ will from now on be treated as a ‘constructive refusal to supply’ (and, as a result, it will in most instances be necessary to establish that the access to the input in question is ‘indispensable’ within the meaning of the Bronner and Magill cases).
Why is the ongoing investigation in Google problematic from this perspective? Because the European Commission seems to suggest that it is justified to open an investigation on grounds that Google may be discriminating against its rivals in web searches.
– Is secondary-line discrimination a problem in and of itself under Article 102 TFEU? Clearly not, it would seem, in the light of the logic underlying the 2009 Guidance and the Non-Horizontal Merger Guidelines. What is more, secondary-line discrimination is not even an ‘enforcement priority’ for the European Commission (try to find the word ‘discrimination’ in the 2009 Guidance using Microsoft Windows’ built-in search engine!).
– Is a dominant undertaking obliged to provide non-discriminatory access to its inputs in the first place?
o Maybe, if, as in the case of a ‘margin squeeze’, the conditions set out in Bronner are fulfilled (i.e. if non-discriminatory access is indispensable to compete and non-discrimination is necessary to avoid foreclosure on the neighbouring market).
o Maybe, if it is a recently liberalised market (a decisive factor in the few precedents on secondary-line discrimination cases).
o Maybe, if there are concerns with market integration and nationality discrimination (the second crucial factor explaining the outcome of these precedents).
None of these ‘maybes’ seem to apply in the Google investigation. Suggesting that non-discriminatory access to Google (however powerful and dominant its search engine) is indispensable to avoid foreclosure in a neighbouring market is hardly a credible claim. In addition, Google has emerged as a market leader in a deregulated and fast-moving market.
In view of the above, I hope that, it the case is not dropped, the European Commission explains convincingly and at length (even though this seems to exclude the kind of reasoning displayed so far in ‘commitment decisions’) why secondary-line discrimination may in and of itself constitute an abuse of a dominant position in the specific circumstances of the Google proceedings (or, alternatively, that the conditions set out in Bronner are met). If this is not the case, the promise of the 2009 Guidance will not have been fulfilled (and this, only a year after its adoption).
To be honest, I also hope that, if the European Commission adopts a prohibition decision, Google decides not to appeal this decision before the General Court. I can already imagine the General Court stating, in a terse and unreasoned paragraph, that secondary-line discrimination is not a form of ‘competition on the merits’ and is therefore caught by Article 102 TFEU by its very nature (i.e. à la AstraZeneca).
How are we doing?
For the first time ever, DG COMP has posed this question to stakeholders and citizens by carrying out a comprehensive survey about the perception of its activities.
In the framework of this exercise, two independent companies have undertaken both a qualitative survey targetted to professional stakeholders and a quantitative survey of EU citizens from all Member States.
The aggregate stakeholder report is available here, and the individual reports for the various collectives interviewed are available in the following links (companies, lawyers, economic consultancies, consumer associations, national ministries, and national competition authorities). All of these reports cover issues such as legal and economic soundness of decisions, integrity, economic effectiveness, and external communication. There are tons of interesting comments on DG COMP´s activities, too many to be summed up here. I very much recommend taking a look at these if you find time.
The survey on citizen´s perceptions about competition policy can be consulted in its full version, as well as in an abbreviated one. The results, once again, are also extremely interesting (and sometimes shocking; e.g: did you know that 29% of the Spaniards interviewed doubted that price agreements should be prohibited?).
Some curious data: in practically all Member States the percentage of citizens who believe they are sufficiently informed about competition policy is below 5%; more than 25% of Bulgarian, Slovak, Polish and Estonian citizens have no whish whatsoever in becoming more informed about this stuff; the proportion of citizens who gave a “don´t know answer or who did not consider themselves qualified to reply was highest in…Belgium!). When asked in what sector the lack of competition was causing problems for consumers, citizens pointed out at energy (44%), pharmaceutical products (25%), telecommunications and internet (21%), transport (19%), financial services (18%), and food distribution (16%).
PS. We´re not ignoring the elephant in the room (the opening of a formal investigation about Google´s allegedly abusive practices); there´ll be plenty to come on this case.
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).
An Antitrust Challenge to God
Almost 9 years ago a U.S. district judge issued a divesture order that, to my knowledge, has not yet been executed. As reported by The Onion, District Judge Elliot Schofield ordered God to break up into smaller deities arguing that HE had “willfully and actively thwarted competition from other deities and demigods, promoting His worship with such unfair scare tactics as threatening non-believers with eternal damnation (…) In the process, He has carved out for Himself an illegal monotheopoly.”
For more info on this case see here http://www.theonion.com/articles/judge-orders-god-to-break-up-into-smaller-deities,404/
It is not the first time that God faces a trial in the US. Some time ago a State Senator from Nebraska lodged a suit againts God arguing that he was responsible for a wide array of catastrophes. You can read the actual suit here, it´s hilarious. http://www.wired.com/images_blogs/threatlevel/files/chambersversusgod.pdf
But legal threats not only come from the States. Within the EU an earthly subsidiary of the ABOVE-mentioned was also sanctioned for abusing its dominant position in the market for funeral services. See here http://www.concurrences.com/abstract_bulletin_web.php3?id_article=520
Strikingly, no one seems to have considered the possibility of challenging God under Article 106. Pursuant to the “automatic abuse” doctrine stated in Hofner-Elser it could be argued that God has attributed himself exclusive rights and is manifestly unable to satisfy demand or prevent catastrophes.
Moreover, and according to Stephen Hawking´s new book that posits that God is not necessary to explain the creation, the conditions laid down in Article 106(2) would not be satisfied! http://www.usatoday.com/tech/science/columnist/vergano/2010-09-06-hawking-book_N.htm
The CNC and the Prisa/Telefónica/Telecinco/Digital+ merger
The Spanish Competition Authority decided last week to close the file related to the acquisition of joint control of Digital+ (the main satellite pay-tv platform in Spain) by Prisa (one of the largest media groups in Spain which prior to the merger enjoyed sole control of Digital+), Telefónica (you know this one) and Telecinco (a TV channel whose largest shareholder is Berlusconi´s Mediaset).
The CNC´s decision has made big news in the press in the past few days, and many have accused the Competition Authority of having been too sensitive to the government´s wish (yes, that was an euphemism) to avoid the bankruptcy of Prisa, which allegedly could have been declared had the merger not been authorized.
To make a long story short: The merger was initially notified to the European Commission, which, following the parties´request, decided to refer the case to the CNC. In its referral decision the European Commission expressed its fears that the merger could strenghten Telefonica´s position in broadband related markets. The CNC issued a Statement of Objections alleging that the merger could significantly impede effective competition. However, the Council of the CNC confirmed a change of views after the parties committed to modify the shareholders´agreements and other covenants in order to remove the veto rights that gave them the ability to exercise a decisive influence over Digital+. Technically, the operation would therefore cease to be a merger within the meaning of the competition rules (Prisa will retain sole control), so nothing to object…in principle.
The problem after the withdrawal of the notification in scenarios such as this one is that there could theoretically exist the risk that the parties who formally intented to exercise control could now do so informally. Query: How should a competition authority address these sort of situations?
From an ex ante perspective, the resort to the notion of de facto joint control may seem like too much of a long shot given its exceptional nature. And ex post control does not look like an easy path neither. In this case, the CNC has committed to remain vigilant with regards to any future agreements between these companies, but other operators (namely Mediapro) have argued that there is a most serious risk of coordination that will turn the audiovisual market in Spain into the least competitive in Europe. Mediapro has announced its intention to fight this decision on every possible ground and has asked for the European Commission´s immediate intervention. It will certainly be interesting to see how this evolves.
My take: a reliable indicator could be whether Digital+ will supply its channels to other competitors (which was, by the way, a commitment that apparently Telefonica was reluctant to accept).
Any opinions?
Remember: comments are anonimous.. 🙂
Chillin'Competition 
