Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for the ‘International Antitrust’ Category

An announcement and a nomination

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bestes jurablog 2014 sonderpreis ausland

The announcement:  On 15 February my co-blogger Monsieur le Professeur Nicolas Laurent Max Petit (no kiddin’) will be joining DG COMP for a 6-month stint.  I’m curious as to how this experience will impact his views on the Europen Commission’s work.

Btw, Nico took care of the inaugural lecture at the IEB course in Madrid on Friday and did a great job. Tomorrow he’ll be delivering a must-attend presentation on Art. 102 at Les Mardis de la Concurrence in Brussels (the PPP will be made available here).

The nomination: Chillin’Competition has been nominated as one of the best foreign legal blogs in a competition ran by our favorite German site (Kartellblog) (as if we were able to read German…). Thanks to Johannes Zöttle and to whovever nominated us. Since it’s always nice to win something (or so I’m told  😉 ) you can vote for us here: http://kartellblog.de/2014/01/06/poll-beste-jurablogs-2014/

Written by Alfonso Lamadrid

13 January 2014 at 9:09 pm

Antitrust tidbits

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– On Friday Brazil’s CADE announced that it’s also investigating Google pursuant to a complaint filed by Microsoft (see here). The investigation appears to address the very same practices previously investigated by the FTC and DG Comp, on which we’ve already commented ad nauseam. I may reduce my coverage of all Google-related issues (despite the attention we’ve paid to that case in recent times, there’s world beyond that in antitrust), but given that my firm is finally! currently betting big in Latin America (see here), I’ll now be spending more time looking at competition law developments over there, and possibly commenting on them here. Btw, if you’re interested, there is a very good blog on competition law in Latin America.

– Some of you may have wondered about how the Federal Government shutdown in the States is affecting antitrust enforcement. If that’s the case, here are the contingency plans set up by the DOJ and the FTC.  On a non-antitrust related note, I’d strongly recommend you to check out Jon Stewart’s hilarious coverage of the shutdown:  Rockin’ Shutdown Eve

– Headhunting season remains open in the Brussels legal market, with David Hull also leaving Covington (third partner to leave in recent weeks following Lars Kjolbye and G.Berrisch) to join VanBael & Bellis.  Speaking of headhunting, for some interesting thorughts on the Brussels recruiting world, check out Steve Meier’s blog.

– A friend sent me this piece from abovethelaw.com on 10 Reasons to Leave BigLaw. Don’t think that a good part of what it says applies to everyone, but it’s always good to measure your choices against a contrarian -even if arguably exaggerated- view.

– Certainly the most relevant thing that happened in the antitrust field in the past few days (or maybe not) was my presentation about Interoperability in the payments industry last Thursday in Brussels 🙂  Here’s my presentation: Interop_Payments_Lamadrid (only makes sense if you click on slideshow).

Until I was invited to do this I’d frankly never paid much atention to the much-hyped mobile payment fever, but have now discovered a most interesting area. As I explained at the conference, if smartphones and payments have received so much antitrust scrutiny on their own, their marriage will be something like an antitrust lawyers’Nirvana!

The sector shares all the interesting features of high tech (multi-layered, multi-sided, strong network effects, rapid evolution, etc.) but has the peculiarity to feature both strong incumbents and stong entrants (traditional payment service providers, mobile network operators, tech companies…), all of which enjoy some degree of market power that they’re trying to leverage. The business strategy aspects of it are most interesting: everyone is setting up alliances (often with natural competitors), often betting on multiple horses, and at the same time acting unilaterally not to renounce the opportunity to reign the market (hence the Game of thrones slide). At the same time, we’re told that all players will end up holding hands and competing happily in an interoperable candyland where consumers’ life will be made easy and pleasant (hence the following slide). My bet is that on that road a number of interesting competition issues will arise, notably concerning access to the “secure element” (which is the key to the provision of m-payment services).

Written by Alfonso Lamadrid

12 October 2013 at 5:17 pm

A competition authority closed for business

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A friend kindly pointed us to this “We’re-at-the-beach-so-dont-bother-looking-for-us-sign” with a comment:  “Transparency and vacation should be the unrenounceable principles of any public authority“.

Capture

 

 

 

Written by Alfonso Lamadrid

2 September 2013 at 11:10 am

Reverse payments (Pay for delay settlements) in EU and US antitrust law (Part I)

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I’ve somewhat of a bad conscience for not having been able to cover this topic before (not least because one of you has been pestering me with emails asking when I’d write about it…)(btw, the same person has also gently and repeatedly reminded me to post a link to his new –and actually very interesting (really)- paper, so here it is; titled The Law of Abuse of Dominance and the System of Judicial Remedies).

As you may have read, within a lapse of two days the US Supreme Court (SCOTUS) and the European Commission issued, respectively, an opinion (in FTC v Actavis) and a decision (against Lundbeck and others) addressing reverse payments.

Most of the superficial client alerts analyses I’ve seen merely note the time coincidence and suggest a certain convergence in the US and EU approaches to the issue. The headline goes that the Commission imposed its first fine for this practice, and that the SCOTUS reversed a Circuit clash, holding that reverse payments are subject to the rule of reason and dismissing the “scope of the patent test”. In my view, this reading, although right, is also incomplete and hides a few of the interesting issues that have surfaced in these cases.

If I were to start explaining what reverse payments are, the background to these cases and the content and implications of the opinion and the decision you’d probably be tempted to stop reading after a few lines. In order to avoid that, instead of following the normal structure of a post, this will be a reverse post on reverse payments:

Today we will provide you with some comments on these developments and of why they can be relevant beyond their specific context. Tomorrow (if I’ve time) or on Friday (more likely) we’ll offer you our vision on the background to these cases and an overview of the opinion and the decision. I trust this will enable (i) connaisseurs to skip the background stuff; and (ii) those not initiated in these issues to grasp their relevance and to become interested in reading more about them.

Some reactions to the SCOTUS opinion and to the Commission’s decision

–          Leaving the pharma sector aside, and looking at things from a broader perspective, the underlying philosophy of the Opinion in relation to the IP regulation/antitrust interface (condensed in this statement: “it would be incongruous to determine antitrust legality by measuring the settlements anticompetitive effects solely against patent law policy, rather than by measuring them against procompetitive antitrust policies as well”) appears to be at odds with the principles governing the interface between sector-specific regulation and antitrust established in Trinko . It’s therefore not surprising that Justice Scalia, that wrote the majority opinion in Trinko, has joined Roberst and Thomas in a dissenting opinion here. So, does this signal a change of trend in the way the SCOTUS interprets antitrust law? The 3 dissenting Justices at least do seem to see it that way, and argue in strong terms that the opinion overturns understood antitrust.

–          On a very related but more specific note, although I haven’t read any comments on this point I see common link between these two recent cases on reverse payments and other landmark cases like  Linkline US) and Telia Sonera (one of the most controversial EU cases in recent years). In all these cases some party relied on the idea that “he who can do the most can do the least”. In Actavis and Lundbeck the argument was that a patent holder was entitled to exclude competition provided that it remained within the limits of the “scope of the patent”; and in TeliaSonera and Linkline it was that if refusing to supply would not be deemed abusive, there could be no room to find an abusive margin squeeze.

This argument, however, had only been accepted by the SCOTUS in Linkline, with European Courts taking a different line in the most criticized TeliaSonera Judgment, so it’s not surprising (at least to me) that the Commission has rejected it in Lundbeck, but it’s remarkable that the SCOTUS has taken a different line in Actavis.

By the way, I leave one provoking thought I heard from someone the other day discussing TeliaSonera: “I don’t have an obligation to let anyone into my home, but once they’re inside it would be illegal for me to kick them out violently…”. (I expect some virulent reactions to this; happy to discuss).

–          Are the EU and US approaches converging with regard to reverse payments, or even with regard to the assessment of horizontal agreements more widely? Not really (leave aside the synchronized summer desk cleaning timing coincidence). Sure, both the SCOTUS and the Commission see a margin for potential restrictions of competition in reverse payments, but they have chosen very different approaches. And whereas the theoretical difference does not appear to be large, the practical consequences hugely differ. In the US reverse payments will need to be assessed under the rule of reason –which imposes a very considerable burden on plaintiffs- (as we will explain in our forthcoming post, the Supreme Court has dismissed the “quick look approach” proposed by the FTC). In Europe, on the contrary, the Commission has decided to take the usual “object” shortcut. This is key, for an “amorphous rule of reason” (an expression actually used in the dissenting opinion in Actavis) analysis normally means difficulties for the plaintiff, whereas a “bifurcated” 101(1) / 101(3) analysis generally results in condemnation because of the (anticipated and worrysome) death of Art. 101 (3).

(Interestingly, the FTC wasn’t able to give a satisfactory answer to a very pertinent question asked by Justice Sotomayor at the hearing: “Why is the rule of reason so bad?”)

If you ask me, I would have no objection to the EU solution if Art. 101(3) were an effective possible way out (this was basically the ECJ’s stand in GlaxoSmithkline) and I would have no objection to the US approach if the burden of proof incumbent upon plaintiffs was a bit less burdensome. As things stand, it was probably not feasible to strike the right solution in theory (where I think the SCOTUS’ one is preferable) as well as in practice (where the Commission’s will likely yield better results) for these cases.

To be continued…

Written by Alfonso Lamadrid

2 July 2013 at 6:50 pm

ABA Spring meeting + New Spanish competition authority

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As explained in previous posts, there is a new and innovative Spanish competition law in the pipeline. I say innovative because the main change it will bring to the current system is the unification of sectoral regulators and the competition enforcer into a single “competition and markets authority”. We have voiced out some of our views about the draft law in a previous post. I’m still hesitating over the idea of writing a well thought out post explaining what’s going on in Spanish competition law (I do very little national work these days, but still follow it closely), but it might be wise to go through a cooling off period first.. Anyway, what I meant to say -mainly to our Spanish readers- is that the new draft law was approved by Congress and sent to the Senate earlier today. It’s available here.

Also, I’ll be flying to DC on Tuesday for the ABA’s section of antitrust law spring meeting. The program is interesting, but this event is mostly about attending free cocktails networking (which may reinforce the perception some people have of lawyers as heavy drinkers). If any of the readers of Chillin’Competition is around, you can drop me a line (alfonso.lamadrid@garrigues.com); unfortunately we don’t always get to meet those of you outside Brussels. My firm will not be hosting a reception [hosting cocktails in the State can be risky from a legal point of view ;)], so I’m collecting cocktail invitations from others. I actually have a bet with an in-house counsel friend to see who gets more, and he’s clearly way ahead. Being an in-house at one of these events must feel like being the hot girl at a night club: everybody wants to buy you drinks…

Written by Alfonso Lamadrid

4 April 2013 at 5:05 pm

More on antitrust and politics: Interview with CPI

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As some of you may remember, a few months ago I wrote a post here on “Antitrust and Political Stupidity“. Competition Policy International asked me to develop the post for a special issue of the Antitrust Chronicle, which I did one-handedly during my extended Christmas break (the paper is available here). I was then asked to do a follow-up interview with CPI; the interview was published today (click here for the version in CPI’s web).

Asked about whether I was being too optmistic in the paper, I started my response saying that “my paper was written during the Christmas break, and it is not much more than a Christmas tale, a superficial exercise of wishful thinking” (see below for the complete answer). Little did I know that the mailing that was sent today to some thousands of people would summarize the interview saying that: “Lamadrid says his paper is ‘a superficial exercise of wishful thinking,’ and he tells CPI why“. So, here I am, promoting my work by saying that it’s really not any good (between us: it’s not a masterpice, but it’s somehow original and maybe not as crappy as my own quote suggests…). Man do I really need to work on my self-selling skills….  😉

If anyone’s interested, you can click here to read the full interview:

Read the rest of this entry »

Written by Alfonso Lamadrid

4 March 2013 at 6:39 pm

HK

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As reported earlier on this blog, Hong Kong recently joined the league of jurisdictions with a domestic competition regime.

On this occasion, CCH Wolter Kluwers organized a one day conference to discuss forthcoming challenges for the new law.

I was one of the happy many to be invited to the conference, together with a bunch of lawyers from Brussels, Beijing, Australia and the United States.

Now, our Hong Kong friends might be pondering how to apply their new law, they know how to throw a good event. Everything was perfect. Congrats’ in particular to Shirley Hon and Simon Bellamy for the superb organisation.

The level of the discussions was by all standards very high. You could tell the speakers had put time and energy in their presentations. Not the usual quick and dirty, taxi-drive preparation. I personally gave a talk entitled “New Challenges for XXIst Century Competition Authorities” where I identify 5 new enforcement challenges, and 4 new substantive ones. My ppt is available at the end of this post.

The after-conference evening was also a success. There was a cocktail reception, which was followed by rounds of free cocktails, courtersy of Kluwer (no kidding here). With a bunch of enthusiastic conference participants (including several speakers), we then moved to Lan Kwai Fung where we had a lot of fun. I then took a few days off, enjoyed the sun and did some trekking with an old friend who relocated there.

The bottom-line: it was a fantastic trip. And I must confess that since I came back, I have been looking once or twice if academic positions were available in the region…

Presentation – New Challenges for 21st Century Competition Authorities – HK [Mode de compatibilité]

Written by Nicolas Petit

7 November 2012 at 9:57 pm