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The General Court on the scope of the Commission’s powers to request information

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On Friday 14 March the General Court issued seven Judgments in cases T-292/11, T-293/11, T-296/11, T-297/11, T-302/11M T-305/11 and T-306/11. We represented one of the seven applicants (needless to say, the opinions below are exclusively my own, and in no way can be attributed to my client or my colleagues).

I had already anticipated those Judgments noting that -irrespective of who the prevailing parties were- they would be of great interest and procedural relevance. [The Judgments came out while I was lecturing on competition procedure at the Brussels School of Competition, so I discussed them almost live].

The cases concerned seven appeals lodged by cement companies against massive -arguably unprecedented- requests for information, and they are important because the Court was asked to clarify whether there are any real limitations to the Commission’s investigative powers.

There have been two groups of Judgments:

-In six cases the applicants grounded their appeal on the lack of motivation of the information request. In those cases the GC has ruled (a) that although “it is true that “the presumed infringements [were] set out in very general terms which might well have been made more precise”, they have the minimum degree of clarity in order to be able to be considered to be consistent with the requirements of EU law; and (b) that even if “the size of the workload caused by the volume of information and the very high degree of precision in the response format imposed by the Commission cannot be reasonably disputed”, that workload was not disproportionate in the light of the necessities of the enquiry and the extent of the presumed infringements.

[Intermission: Too often, when the Court decides to dismiss an application it practically denies any reason to every argument made by the applicant). This wasn’t the case here, and the Court was objective and transparent enough to acknowledge that there could be problems, but that they were overridden by effectiveness considerations. I like it better this way].

-The content of the Judgment in the seventh case (T-296/11 in which we acted for the applicant) is different, as explained in the Court’s press release http://curia.europa.eu/jcms/upload/docs/application/pdf/2014-03/cp140035en.pdf

Instead of focusing our arguments on lack of motivation (which we thought would at most have only given us a temporary victory), we had posited that the criterion of “necessity” in Art. 18 of Regulation 1/2003 should be interpreted not in light of what the Commission intends or hopes to find, but in the light of the elements that the Commission has and that raise the suspicion triggering the investigation. We claimed that otherwise the criterion of necessity would be devoid of any practical significance.

The GC has accepted the theory (as it did in Prysmian and Nexans -now pending before the ECJ- regarding inspections). According to the GC, the Commission is not obliged to disclose to the companies the preliminary evidence at its disposal, but it must have enough evidence to justify the information request (paras. 38-40).

In this particular case, and since the Court acknowledges we had “put forward factors capable of casting doubt on the sufficiently serious nature of the evidence concerned”, the Commission was very exceptionally asked to produce a summary of its file. Luis Ortiz Blanco and myself were asked to go to Luxembourg to access it and make observations without being allowed to disclose anything not even to our client [I’m not disclosing anything confidential because this is all explained in paras. 23-26 of the Judgment]. This is what explains that a great part of the Judgment is redacted as confidential.

Obviously I can’t say or even hint at anything that’s not been disclosed in the non-confidential version of the Judgment. Essentially, the Court explains that in the light of the Commission’s file the Institution could have validly addressed the exhaustive and exhausting information request to the applicant. The reasoning (mainly contained in para 59) is that even if we did offer an alternative interpretation of the elements in the file, the Commission cannot be asked at a preliminary stage to have evidence so consistent as to be sufficient to establish an infringement; it’s enough to have evidence that -at a preliminary stage and absent third party contextualization- would have arouse a reasonable suspicion.

The lines of what’s reasonable are of course blurry, and the Court’s approach is -rightly or wrongly- deferential to the Commission and to the need of safeguarding the effectiveness of its investigations, particularly at an early stage. Some may fear that if Courts started annulling requests for information (or Phase I clearance decisions, to pick a “random” example) then the floodgates would open. However, failing to annul those categories of decisions systematically and regardless of their merits or lack thereof those may also be akin to conferring carte blanche on the Commission, and that (regardless of the unquestionable good intentions of the Institution) might also have drawbacks.

Written by Alfonso Lamadrid

14 April 2014 at 9:38 am

Conflicts of Interest in EU Competition Law

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It’s been two months since Nicolas temporarily left this blog for a half a year stint at DG Comp’s Private Enforcement Unit.

In the course of this short period he’s managed to single handedly unblock negotiations on the Commission’s proposal for a Directive on Antitrust Damages, and he’s adapted very well to the fonctionnaire lifestyle (meaning that he’s now taking some days of holidays) 😉  (jokes aside, congrats to Eddy de Smijter and to the rest of the people involved in the negotiations about the Directive).

As he anticipated in his farewell post, Nico is maintaining all academic activities. Within that context, he’ll soon be participating at a conference on one of is favorite topics organized by his University. So, on 24 April the Liège Competition and Innovation Institute will be hosting a conferece in Brussels on Conflicts of Interest, Ethical Rules and Impartiality in EU Competition Policy .

Although Nicolas knows that I don’t share the same passion for the topic (or maybe precisely because he does?), he’s asked me to advertise the conference here. So voilà. It will feature representatives from the General Court, the European Commission, the OECD, the Belgian Competition Authority, as well as lawyers in private practice, The New York Times’ Brussels correspondent and ULG Professors and Researches, including Nico himself. Even Emilly O’Reilly (the current Ombudsman, whom you may remember from this) is on the tentative list of speakers.

Why do I say I don’t share the passion for the issue? Because whereas some improvements could possibly be made in the rules -mainly regarding their transparency-, I think we should be careful in not overshooting the mark. Otherwise we’d risk creating the impression that there’s a major endemic problem where I’m not at all sure there’s one (I, for one, I’m much more concerned about the Commission’s recruitment processes and about internal rules that oblige experienced people to rotate jobs too often or too soon). Anyone working in Brussels for some time will have worked with, against and before friends or professional acquaintances (sometimes the line is drawn too thinly). In my experience who you have on the other side doesn’t matter (at least for good: I do know of situations where lawyers’ friends deciding on cases have been unnecessarily harsh on them just to make a point and dispel any concerns, and that’s as unfair as the contrary) and there are enough checks and balances to avoid problems. The only positive consequence of working before people who know you is that they will perhaps trust you, provided that you have never proved not worthy of that trust (and competition law practice is also a game of repeated interactions), but I don’t see what’d be wrong about that.

As I told Nico back when he wrote his controversial piece on this subject, what’s different in our field is that our “relevant market” is very narrow; we’re not so many lawyers/economists repeatingly interacting among us and with the same academics, officials and judges. The only solution to the perceived problem, as framed, would be to have virginal public officials and lawyers who have not moved around jobs, who know no one, who haven’t studied at the same places, who haven’t worked with different people and who haven’t established a personal rapport with those in their field. In my view, at least, in that case the cure (assuming it were feasible, quod non) would be worse than the disease.

That said, considering the speaker line-up I’ve no doubt the conference will be most interesting.

 

Written by Alfonso Lamadrid

1 April 2014 at 11:49 am

What makes a great lawyer?

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In the course of a conversation last weekend someone asked me about who I thought were the best competition lawyers in Brussels. Not that I’m going to share my thoughts on that here because it wouldn’t be elegant to use the blog for self-publicity 😉  it would be unfair as, aside from the subjectivity inherent to the reply, I’ve only been exposed to the work of a limited number of people. Our conversation then shifted to what is it that makes a great lawyer, and that’s something that I thought could make an interesting subject for a blog post (it’d been a while since we didn’t post random ruminations).

 

To be sure, there’s no perfect lawyer for all situations, areas of practice and clients, but in any event the ideal recipe should probably incorporate a balanced doses of multiple ingredients, most of which aren’t taught, or at least not at law schools, and often not even at most law firms:

 

Typical (bad) legal education mainly centers on developing and evaluating brain power. In my own country as well as in other continental systems this too often means plain memory. In anglosaxon systems (and to some extent in the German system too, or so I’m told) logic, analysis and writing receive more attention. And once you’re out of university some people will measure how of a good lawyer you are internally in terms of billable hours (we’ve already dealt with that at length before), and externally in terms of which firm employs you and your hourly rate (in my experience very imperfect proxies too).

 

But, in reality, there are a wide array of intangible abilities or skills that are extremely hard to assess and even to perceive, but that, fortunately, can be developed and that are, in my view, what make the difference. I refer to things like empathy, integrity, creativeness, common sense, communication and people skills, diligence and responsibility, perfectionism, the ability to question everything starting with oneself, availability, hunger/ambition (to learn and to improve), commitment (often confused with the belief that success deserves absurd sacrifices), marketing and selling, loyalty, reliability, curiosity, passion, experience, good judgment,  ability to prioritize (which has always made me distrust advice from lawyers who seem not to get priorities in their own life straight; or maybe I’m the erred one??), attention to detail, the ability not to lose the forest for the trees, having a practical business-oriented mind, being motivational and fair to colleagues, calmness, prudency, confidence (in your ability to improve, not the false security of thinking you already master everything), and I’m sure I’m forgetting many others.

 

Of course, there are many people that make partner at BigLaw firms without many of these, in which case some will consider that they are “successful”, “rich” and “hence” great lawyers. I would disagree because, lawyering being a service, excellent lawyering should be measured by its impact on others, not on the lawyer.

 

As I said earlier, to me, the ideal probably lies in a right combination of the skills outlined above, or perhaps in their relentless pursuit. But if I had to choose the single most important ability to have in a lawyer, I’d say the ability to understand people.

 

By people I mean clients, colleagues, decision-makers (judges, authorities, etc), opponents as well as the processes and interactions within and among them. And by understanding I mean trying to work inside their mind to know or guess -sometimes even to help them know or guess- what they want, what moves them and how they are likely to move and be moved. Knowing the law will provide you with a basic knowledge of the common framework you all move in, but then you need a lot of listening and a bit of intuition.

 

The above is only my Saturday morning take at a question without an answer, and, frankly, it’s highly unlikley that an ultra-specialized 30 year old lawyer who chose EU competition law for a career will get it right… So, it’s your turn: what is it that makes a great lawyer?

P.S. Pictured above is Atticus Finch, the legal hero from To Kill a Mockingbird, who recurrently tops up every list of fictional lawyers. His domination is so uncontestable that the ABA had to come up with this list of  The 25 Greatest Fictional Lawyers (Who Are Not Atticus Finch)

Written by Alfonso Lamadrid

3 March 2014 at 1:00 pm

Two-sided markets in merger and abuse of dominance cases

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When you have a 8 9 10 to 9 ? job it’s often quite hard to do things on the side, and, between us, it may not make much sense that many of them are work-related. Only this month, and in addition to ordinary work -which included 5 Court deadlines- and blog posting, I had to lecture in Madrid about 102 (intro, tying and refusal to deal in 3 hours), participate in the panel on interop at AIJA’s antitrust and tech conference on a Saturday morning, finish and present a paper on evidence in cartel cases, and lecture -next Friday- for 6 hours at the Brussels School of Competition on procedure. And since I thought it would be the quietest month in sight, I took a week off for my postponed Christmas holidays (not very smart, no). Overall I spent almost as much times in planes (11 flights this month) as in the office, and had to compensate at the cost of sleeping hours.

Why should you care about all this? You shouldn’t; this is all to explain why during this whole month I kept on swearing myself that -blogging aside- I would refuse any non-work projects for the next few months. Well, said and not done:

On 3 April ERA will be hosting an afternoon workshop on Two sided markets in merger and abuse of dominance cases here in Brussels. They couldn’t have chosen a more interesting topic, so I gladly accepted to chair it. Not only is the subject matter a fascinating one, it will also be dealt with by two great panellists: Thomas Graf (Cleary Gottlieb) and Lars Wiethaus (E.CA Economics).

The program is available here: Two Sided Markets in Merger and Abuse of Dominance Cases (ERA)

Written by Alfonso Lamadrid

26 February 2014 at 1:10 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

New job

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One of us just got a new job (and a new car). More details tomorrow…

Written by Alfonso Lamadrid

9 September 2013 at 4:44 pm

Mens Sana in Corpore Sano

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image (1)

Our motto (above) says it all.

At chillingcompetition, we like people who combine business and pleasure.

And we are particularly fascinated by those who mix serious lawyering and sport.

Alfonso is perhaps the physical incarnation of this.

Sport, especially basketball, was always big in his life as a kid.

When he moved to Brussels as a young lawyer, he started socializing running at the Aspria.

And in more recent years he has seemed willing to explore new, extreme sporting territories like gastronomic orgies of jamon serrano and trappist beer drinking.

With this background, we are proud to post above a picture of the fastest competition lawyer in town.

Alfie pays a drink to the reader who finds the man behind the helmet.

Written by Nicolas Petit

5 September 2013 at 12:12 pm

Posted in Life at Law Firms