Archive for the ‘International Antitrust’ Category
And the answer is….
Las Siete Partidas, passed by Alfonso X, El Sabio (1265) [Alfonso “The Wise”].
Congrats to Tatiana Siakka, David Mamane, Andrey, and Lorenzo Climenti! (Nico: you can afford 4 beers, right?)
Here is an explanation extracted from their answers:
Title 7 within Law 2 of the Fifth Partida, entitled “Of the shortages and bids that merchants create between themselves through oats and guilds” was the legal provision prohibiting traders from engaging in price-fixing and output restriction.
The Code was elaborated in Spain (Castile), but it was in force in Latin America until the modern codification movement (1822–1916). Until the beginning of the 19th century, they were even in effect in the parts of the United States, such as Louisiana, California or Nevada, that had previously belonged to the Spanish empire and used civil law. Furthermore, they served as the legal foundation for the formation of the governing juntas that were established in both Spain and Spanish America after the imprisonment of King Fernando VII during the Peninsular War.
Below you will find a scanned version of the relevant part by courtesy of José Luis Buendía.
[The text appears in Spanish and Latin. Since the short bios available at Brussels-based law firms suggest that all competition lawyers are fluent in practically every language, we trust that many of you will be able to understand it 😉 ]
P.S. Could someone please edit wikipedia´s entry for History of Competition Law?
A (kinda tricky) quizz
If we asked you what was the first antitrust legislation ever in force in part of the territory of what is now the United States you would probably respond that it was the Sherman Act.
This answers is wrong.
What then was the first antitrust law ever in force in America??
We can give you two hints: (i) it was drafted in the 13th century; (ii) the person who promoted its drafting is one of the 23 lawmakers depicted in the marble bas-reliefs of the House of Representatives chamber of the United States Capitol.
Our quizz will be open for 24 hours. You can submit your answers either as comments to this post (they won´t be made public until tomorrow) or via email to alfonso.lamadrid@garrigues.com (I anticipate that I won´t be able to reply; actually, the reason why we´re posting a quizz is because these are busy -and fun- times at work).
Those who get the answer right are entitled to a free beer.
P.S. Since, as you know, “free” products are rarely ever free, the beer will be paid by Nicolas, who doesn´t yet know about it 😉
An”toy”trust
It was reported yesterday that construction toy manufacturer Mega Brands has lodged a federal antitrust complaint against its competitor Lego in order to “stop Lego’s illegal efforts to monopolize the construction toy market through illegal anti-competitive practices including, but not limited to, use of fraudulently obtained IP [intellectual property] rights to interfere with Mega Brands’ right to continue to import certain competitive products [cylindrical studs] into the United States.”
More information is available here. The original complaint is available here.
PS. The picture above is supposed to be one of a Lego Courtroom, although I´m a bit confused by the cook handing a pizza to one of the strangely-dressed members or the Jury…
The laugh test
A prominent practitioner once explained to me the usefulness of the “laugh test” (a.k.a. “red face test”) in our profession. He said that lawyers often have to defend arguments about which they are not very confident, but that there should be a limit to the “originality” of these arguments. According to him, this limit could only be drawn with the aid of the laugh test.
The practical instructions are easy: whenever you come up with what you fear to be a far-fetched argument, ask yourself the following question: will the addressee of the argument in question have a laugh when she/he reads it? If the answer is no, you may as well give it a try. If the answer is yes, then you´re better off keeping it to yourself.
Sounds easy, right? If you´d read some decisions and submissions that I´ve been reading this week you´d realize that not everyone applies the laugh test properly!
Since I can´t talk about the examples that are currently on my desk, I will refer to a case that´s being heard today in the U.S. in which it appears legitimate to ask whether the laugh test has been applied or not.
Take a look at this piece (Price-fixing or good manners? Jury might decide) and reach your own conclusion 😉
Competition Awareness
A big thank you to Sean F. Ennis, Executive Director of the Competition Commission of Mauritius. I just received this morning a bunch of very original compliance brochures.
This year, I have planned to make my lectures a little more interactive. With t-shirts from the Norwegian competition authority and the mangas of Singapore’s competition authority, those brochures will clearly help.
Hereafter, a ppt. presented at the ICN conference this year, with more examples of innovative public outreach instruments:
Our Fordham Paper
Just before the summer we anticipated that Chillin´Competition readers would have a virtual seat at the mother of all antitrust conferences Fordham´s Annual Antitrust Conference (see here and here). As you may recall, Luis Ortiz Blanco had been asked by Barry Hawk to chair a panel on European competition law enforcement featuring a very impressive line-up of speakers (namely Alexander Italianer, John Finfleton, Bruno Lasserre, Andreas Mundt, and Manuel Sebastiao).
Luis and I decided that it could be interesting to profit from this opportunity to draft a paper examining the current state of EU competition law enforcement in terms of effectiveness and uniformity. We decided to draft an unorthodox paper which touches upon many issues and that concludes every section with a question. Those questions were the ones posed to the panelists at the roundtable.
The brainstorming work that preceded the drafting of the paper was mainly based on the suggestions and ideas that we received from readers of this blog. Accordingly, Barry Hawk has given us his very kind permission to post the version of the paper that was distributed at the conference on this blog.
Here it is: Ortiz & Lamadrid_European Comp. L. Enforcement
(Considering that drafting this took a substantial portion of my summer holidays, I really hope that at least one or two of you read it! )
Our intention is to edit it and turn it into a standard academic paper with a view to its publication in the annual volume edited by Barry Hawk. Any comments that any of you may have on the current version of the paper would therefore be most welcome and, of course, duly acknowledged.
Leverage
The term “leverage” is commonly used in antitrust law to refer to practices whereby a firm with market power exerts such power with a view to stretching it to a related market.
It seems that not only dominant firms may engage in such behavior. Last week gave us a couple of real-life examples of instances in which competition authorities may, perhaps, have also engaged in leverage:
This is the first one: “Commission market tests IBM’s commitments on mainframe maintenance and closes separate case into alleged unlawful tying“. The European Commission has been tough on IBM, and, in the end, it has been able to secure very significant commitments from it. Whether the Commission has or not used the “threat” of continuing the tying investigaton as a bargaining tool is unknown, but I would tend to imagine that, at the very least, this is a factor that was in the minds of all sitting at the negotiating table (particularly when the Commission always has the winning hand when it comes to Art. 102 cases). We are aware of the fact that the Commission denies that commitments are “voluntary” and that the process leading to their adoption does not imply any negotiation, but as we´ve stated before also with regard to settlements, such denial is reminiscent of one of Magristte´s best known works: 
(By the way, did you know that this image was used at the oral hearing of the Compagie Maritime Belge case? We´ll tell that story some other time..).
The second example of leveraging on the part of competition authorities comes from the US, is much more obvious, and was reported also last week by the Financial Times: “US accused of unfair antitrust tactic“. In a nutshell, the US DOJ is said to be resorting to immigration law with a view to obtaining guilty pleas from foreign businessmen. Views with respect to the legitimacy of this strategy are mixed; what´s yours?
On Cartels and Beers
Yesterday´s post was about Services of General Economic Interest and Sausages. Today´s deals with cartels and beers.
Some days ago we anticipated that we would comment on the latest cartel Judgment issued by the General Court in Case T-235/07, Koninklijke Grolsch v Commission in relation to the Dutch Beer Cartel, which was sanctioned by the Commission back in 2007. When we announced that we would comment on it we hadn´t yet read the Judgment but rather the Court´s press release about it, but the notice about the annulment of a Commission´s decision is something that always turns us on attracts our interest).
Those interested in an objective summary of the relevant facts and of the GC´s reasoning can read the Court´s Press Release. Those interested on some not objective opinions can keep on reading:
In our opinion, the annulment of the decision as regards Grolsch is, in a sense, quite logical: that is what happens when you conflate distinct legal entities into one (a temptation too often seen in EU competiton law) and distinct infringements into one single and continuous infringement (also quite usual) and then mix it all together. But there are two interesting aspects of the case that are worth commenting.
One is the manner in which the GC dismisses the validity of the evidence concerning the parent´s company possible participation in the infringement: After noting that the majority of the evidence put forward by the Commission related in reality to the participation of Grolsch´s subsidiary, the Court was left with a couple of evidentiary items that could be used to support the accusation against the parent company (see recital 61 of the Judgment). The GC however dismisses those elements in an interesting manner (in recitals 62-71 of the Judgment). In essence, the GC decomposes the elements of the single and continuous infringement into three, and, departing from the Commission´s summary description of each of those components, it attempts to check whether the evidence can fit into any of them (this is an interesting, and welcome, deconstruction exercise that I´d never seen before regarding “single and continuous infringements). The GC then underlines that some of the evidence (documents found at Heineken relating to telephone conversations with one of the parent company´s employees) did not fit into the description provided by the Commission and therefore dismissed it. The Court was then left with one piece of evidence (notes taken at a meeting by that same employee of the parent company), but this evidence was also considered insufficient on the basis of another interesting reasoning (see recitals 65-66). In essence, the GC´s stance is that a complex concertation necessarily involves regular contacts throughout a long period of time, and that a single element cannot prove the participation of one company over the whole of this period. Does this imply a raise in the evidentiary standard for complex and long infringements?
The other aspect worth mentioning is the Commission´s lapsus (probably due to a certain overconfidence) , that has cost the EU budget 31.66 million euros. As it is clear from the Judgment, the participation of Grolsch´s subsidiary in the infringement was clear and there was enough evidence to prove it. If the Commission had addressed the decision to both the parent company and the subsidiary (as it normally does, and as it did in this case with regard to all other groups of companies involved) the sanction would´ve been upheld. Ooops.
According to one of our favorite sources: beveragedaily.com, the Commission is pondering whether to appeal the Judgment before the ECJ.
More on cartels and beers:
On 10-13 October the International Competition Network will be holding a Cartel Workshop in Bruges (Nicolas is attending, and I wouldn´t mind accompanying him if someone at DG COMP considers me -when I wear my blogger hat- as a stakeholder and kindly sends an invitation…). If any of our readers is attending the conference, I will now disclose one of Bruge´s most precious secrets: the most amazing beer that I´ve ever had can only be found in Bruges at a place called DeGarre. 
This is a traditional place for students of the College of Europe (because, you know, there are so many other things to do in Bruges…). Luis Ortiz Blanco also traditionally invites the students attending his seminar at the College for some beers at the end of the academic year. You really shouldn´t miss it.
PS. And speaking about the ICN´s Workshop, we very much recommend you to check out their blog at www.icnblog.org . It really is a great source of information on international antitrust.
Christine Varney on the move
It has been reported that Christine Varney, the U.S. Assistant Attorney General for Antitrust will be stepping down from her job in order to join Cravath, Swaine & Moore.
Varney´s professional bio is probably the one within the antitrust world that I´m most envious of has impressed me the most. Not only she has been Assistant Attorney General for Antitrust (2009-11), a FTC Commissioner (1994-97), and a Partner at Hogan Hartson; she has also worked as General Counsel to the Democratic National Committee (1989 to 1992), Chief Counsel to the Clinton/Gore Campaign (1991), General Counsel to the 1992 Presidential Inaugural Committee (1992), and Assistant to President Clinton and Secretary to the Cabinet (1993–1994). Not bad, huh?
P.S. Could anyone imagine her EU counterpart -Commissioner Almunia- ever making a similar move?
Fordham Brainstorming Room (I)
As we announced last Friday, and thanks to Barry Hawk and Luis Ortiz Blanco, in the upcoming weeks we will be using this blog as a “brainstorming room” to come up with issues related to “European Competition Enforcement” that could be worth discussing at the 2011 edition of Fordham´s 38th Annual Conference on International Antitrust Law and Policy.
In addition to having your suggestions appear on the blog, once in a while we will devote a post to setting out our own ideas on possible topics.
Here go a handful of them. We look forward to hearing your views!
1. Positive v. Negative Enforcement of Competition Law
a. “Negative” decisions (decisions concluding to the absence of infringement). If we follow Tele2 Polska, NCAs cannot adopt such decisions under Regulation 1/2003. Importantly, this ruling may have an impact on how a number of NCAs run their decisional business, and in particular the French CA which occasionally adopted negative decisions.
b. Inapplicability decisions and guidance letters. Under Regulation 1/2003, the Commission can adopt several types of negative decision. To date, the Commission has never used such powers. In light of (a) stakeholders face now a competition enforcement system that looks very prohibitive. Query: could this lead to over-fixing/type I errors (with firms being excessively risk averse)?
c. Guidance on firm behavior through non-decisional instruments. As we reported on a previous post, the French CA adopted earlier this year a report (avis) on Google and more generally on search advertising. The French CA has an important track record in relation to such reports. Those documents are somehow akin to positive decisions in the making: they contain only provisional findings and do not prescribe remedies. Yet, they are a considerable source of concern for the companies targeted in such reports. They make individualized statements on market definition, dominance, abuse and so on. In practice, they may trigger follow-on complaints from third parties, litigation, etc. By contrast to positive decisions adopted as a result of formal proceedings, the companies targeted by such reports have little procedural rights.
2. Priority setting, “opportunité des poursuites”. On which sectors/practices should Commission/NCAs focus, both in abstract terms (e.g. sectors where consumer welfare improvements can be large?) and concrete ones (e.g. financial services?) ? Should there be coordination EU/NCAs and NCAs/NCAs in relation to the definition of enforcement priorities?
3. Impact assessment. How to quantify the contribution of competition policy to economic growth and other macro-economic indicators (investment, productivity, employment, etc.)?
4. Alrosa-like case law. A question on the state of play at the national level (Can commitments go further than conventional remedies? Can they escape a strict proportionality assessment?)
5. Appeals. NCAs ability/duty to stand in review courts to defend their decisions (see the VEBIC ruling, also commented on previous posts).
6. Integrated v. bifurcated agency model. Think of the ongoing discussions over the merger of the OFT and the CC in the UK.
7. Competition within agencies. It is somehow of a “secret de polichinelle” that there are diverging views on the effects-based approach between the Legal Service and DG COMP. Are such situations beneficial or counterproductive? In the latter case, could they be avoided?
8. Private enforcement. The elephant in the room? What are NCAs doing and what can they do to foster private interaction? How do they feel about the Judgment issued yesterday by the ECJ which states that it is a matter for national courts to discern whether access to leniency documents can be granted to parties seeking evidence to substantiate claims for damages?
Chillin'Competition 