Archive for the ‘Our Publications’ Category
Antitrust and the political center
A few weeks ago I published a post called “Antitrust and political imbecility“. The raw ideas in it had been in my mind for a while, but conscious that I would likely not take the time to refine them, I chose to publish them on this blog with the hope that they would benefit from public discussion. I wasn’t particularly proud of this post, but Lindsay Mcsweeney (Competition Policy International) thought it was original and asked me to develop it for a special issue of CPI’s Antitrust Chronicle to be published right after Christmas. I accepted thinking that it would only take a few hours of my holidays; little did I know that I would break my arm and go through some pains to finish it! (btw, I’m back on track as of today). In any event, and thanks to Lindays’s pressure encouragement, it’s done.
Those interested in reading my take on why antitrust law can be regarded as sensible centrist economic policy can do so here. Non-CPI suscribers can read it here (courtersy of CPI): Antitrust and the political center-
Any critical feedback would be most welcome!
Antitrust law blogs
Competition law blogs are mushrooming. This means that Chillin’Competition is now subject to intense competitive pressure, and that Lindsey McSweeny will start having problems to pick the monthly posts for CPI’s Blogs o’ Blogs.
Some of you might remember that when Nico falsely announced that we were done with Chillin’Competition a new blog called Chilled Competition was rapidly created. Its first (and only) post was entitled “Low barriers to entry”. And it was very right: ayone can enter this market; in fact, as you will see below there are already a few entrants challenging incumbents.
– Kartellblog. We have the intuition that it’s a great blog. Unfortunately we cannot confirm it because neither of us can read German…
– Prof. Sokol’s blog: The best source of information for new antitrust-related publications. We don’t know how he does it, but he finds out about almost anything that is published.
– The Antitrust Hotch Potch. As you know, prior to starting Chillin’Competition Nicolas used to run the Antitrust Hotch Potch with Damien Geradin. Damien kept the blog and the trademark and has since then re-started it (about 3-4 times in the past few months) 😉 Damien has an admirable ability to surround himself with smart people (like Nico back in the day) and this time he has been joined by young Covington associates, namely John Wileur, Christos Malamataris and Jennifer Boudet. It’s a great initiative, so good luck! We will be happy to generate some debate with them (a piece of humble advice: in our experience it’s important to identify the person writing each post!).
– Kluwer Competition Law Blog. This one features very good stuff. It currently has more than 20 co-authors (including people who we know well and like, such as Thomas, Damien, José, Gavin…. ). In spite of the different styles it generally features very interesting stuff. The only thing we miss is more regular updates.
– Competition Bulletin. Written by 10 authors (Blackstone Chambers barristers + Oke Odudu) this blog features very interesting stuff, notably on UK competition law. I should have mentioned them here before (my apologies for the delay).
– Truthonthemarket. It not only covers antitrust issues, but also wider economic or IP-related issues. Its posts are always timely and insightful.
– Derechomercantilespana. Written by Jesús Alfaro, who does an amazing job covering all sorts of corporate and competition related development several times a day. How he gets the time is beyond me. The content ranges from a Judgment by a lower Court in a tiny village in Spain, to comments on EU to good music Non-spanish speakers won’t be able to enjoy it though.
– There are also a handful of blogs covering jurisdictions other than the US and the EU. Harün Gündüz once asked us to help advertise TurkishCompetitiionBulletin (well done!). Lalibrecompetencia is an excellent source of info on Latin American issues.
– Chillin’Competition: Written by two freak weirdows. One is a University Professor who spends his life in a car and likes to have his pic on his browser’s address bar. The other is a lawyer who somehow tricked his firm into letting him spread nonsense in the public domain. We frankly would not recommend you to ever read it. For each decent post they write there are dozens of nonsensical ones.
Expert economic evidence(?) in competition cases
On 21 November Concurrences, A&O and MAPP will be holding a worskshop on “Standard of Proof for Economic Evidence” (registration is free and still possible through this website).
The topic is very interesting. I don’t know whether I’ll be able to attend, so I’ll make a point in public here (or rathe repeat what I co-wrote on a piece published here) in relation only to the assessment of economic evidence in judicial proceedings. To me, it’s more appropriate to refer to “economic argument” than to “economic evidence”. Unless the expert is appointed by the Court (off the top of my head I can only remember this being done in Woodpulp) or comes from the Commission (which has the winning hand enjoys a margin of discretion in this regard), I do not see many differences between legal and economic argument put forward by the parties in competition proceedings, and no one would call lawyers´ pleadings “legal expert opinions”.
Certainly, in some cases there will be a hardcore of economic data which is not contested by opponents (be it the Commission, the parties, or complainants), but a great part of the “evidence” will be opinion and based on each one’s assumptions, not strictly evidential. An expert presenting evidence is supposed to act as a translator for the judge on areas on which the latter lacks the appropriate training. However, in real life, expert economic evidence has a “strong tendency” to favor the argumentation of one particular party, and is often contradictory with that presented by other parties.
In the end, economic evidence offered by the parties will be assessed by the European Commission and EU Courts as a friendly (former CFI Judge Huber Legal would call it “sisterly”) statement commanded by the interested party with a view to making its case more palatable to the deciding authority or court. Its value will depend on how persuasive the economist in question can be, just like lawyers and their plaidoiries. In the words of Hubert Legal at the 2006 Fordham conference “[T]he way we proceed is compatible with our Rules of Procedure because [economists] are not pleading under oath; it is only a part of the pleading, like you would have the possibility to ask a member of the board of a company to speak, or your sister or whoever is interested in the case”.
On antitrust and hotels
We have discussed about hotels in previous posts (notably when I shamelessly unconsciously advertise my parents’ hotel (pictured above); you see? it just happened again!) (btw, top floor third window from the left is the room where I grew up). A couple of months ago I published a short piece on Competition law in the hotel sector in the industry’s magazine in Spain in which I highlighted (in, let’s admit it, a rather simple way), some of the interesting competition law issues that may arise in this sector; here are a couple:
OFT’s investigation on price-match guarantees
I’m following with interest the OFT’s investigation on price-match guarantees in the hotel sector (again, out of personal geeky interest, nothing professional). As you may know, in July the OFT addressed a statement of objections to Expedia, Booking and InterContinental Hotels challenging agreements that are said to restrict online travel agency’s ability to discount the price of room-only accomodation. The OFT considers that “the alleged infringements (…) could limit price competition between online travel agents and increase barriers to entry and expansion for online travel agents that may seek to gain market share by offering discounts to consumers“. It notes that it “limited the scope of its investigation to a small number of major companies, with a view to achieving a swift and effective outcome. However, the investigation is likely to have wider implications as the alleged practices are potentially widespread in the industry“.
Keep an eye open, because this is a case which may contribute to altering how we think about agency agreements and price matching guarantees. In the meanwhile, the OFT has published a most interesting report on “price match” or “lowest price” guarantees that makes a good read (that is, if you really have nothing else to do..).
A candidate to the worst antitrust development prize
In April 2011 we wrote a post announcing that there was an ongoing investigation that could yield a strong candidate for the Worst Antitrust Development Prize. Last week our forecast materialized. The Spanish competition authority (CNC) imposed a 150,000 euro fine on the Confederation of Spanish Industries, and an individual fine of 50,000 euro fine on the President of its Tourism Committee, a well known Spanish and former President of F.C. Barcelona (for full disclosure, my firm has no interest in this case, but I do know the person who was sanctioned).
The sanctions have been imposed because this person told the press at an industry fair that he thought there was a margin for hotels in certain cities of Spain to increase rates. No more. Admittedly, the fact that this personal opinion was accompanied by an inconvenient joke -“if there’d be someone from the competition agency here I’d be sanctioned“- may not have helped much… Later on, he was asked by a newspaper whether hotel rates would increase in the course of 2011. He responsed that rates had gone down 20% since 2007 and that a 6-7% increase could be reasonable, but that different hotel owners had different views.
If you ask me, such a statement can very hardly have led to any sort of collusion. There are thousands of hotels in Spain and hundreds of relevant markets evolving under different conditions, so this had nothing to do with setting a focal point to facilitate tacit collusion. Nonetheless, just as I feared on my previous post, the CNC decided to resort to competition authority’s favorite shortcut: the “object label”:
According to the CNC’s decision, one only needs to verify the content, author and diffusion of the statement. It explains that “it is not necessary to examine additional factors, such as the context in which the conduct takes place, the intention, the degree of furtherance, or the relevant market”. This paragraph alone makes this decision a good candidate to the “worst antitrust development prize”.
And, but the way, this “collective recommendation” was until now unknown to most hotels in Spain. The CNC has just ensured that everyone hears about it thus multiplying any potential effects. Now, in light of its new practice of sanctioning public authorities contributing to private breaches of the competition rules: should the CNC sanction itself for having acted as the loudspeaker and propagator for this alleged invitation to collude? 😉
On competition and blogs
Competition seems to be moving moving to the blog arena.
Some of you may recall that a while ago we discussed the case of a Spanish professor who had been sued for accusing a Promusicae of anticompetitive behavior (see here). We are glad to report that the blogger has won the case, thereby establishing a good precedent to shield Nico and myself from possible similar attacks 😉
Another interesting blog-related development has taken in the U.S. In the context of a high-profile patent infringement case between Google and Oracle, district court judge Alsup has ordered these companies to diclose the identity of bloggers, journalists and consultants that they pay for favorable opinions or consultancy work (for more, see here or here).
This decision has been triggered by the revelation that Florian Müller a well-known IP blogger (from the blog FOSS Patents) had been hired by Oracle shortly after the trial begun.
This unprecedented move should cast light upon the problem related to the lack of transparency surrounding blog content. As the influence of certain blogs grows, it is necessary to start thinking whether the ethical rules governing traditional journalism should also apply in this area. It has certainly led Nicolas and myself to reflect on the way we want to do things.
In our case, we don’t pretend to be impartial informers. We are simply two young professionals who voice out subjective opinions in public to entertain and/or to spur some hopefully interesting debates. We see Chillin’Competition more like a diary than like a newspaper story or an academic paper, and therefore don’t feel under the pressure of being always perfectly informed, accurate, exhaustive and objective about what we write. Of course we try to do our best and to be as technically rigurous as possible, but we’re not afraid of posting first thoughts on some topics, even if our views may evolve afterwards (remember our disclaimer?) 🙂
The small dimension of the competition law community makes it practically unfeasible to continuously disclose personal links. We often know quite well, or are friends with, in-house counsel, external counsel, Commission officials, clerks or Judges involved in all sides of the cases on which we comment here. Disclosing friendship or other informal ties with the people involved in the cases on which we comment would be tremendously burdensome (and it would look a bit weird too…). As said above, we don’t pretend to be always objective. In fact, we generally try to be subjective, but we develop our reasons and we expose them to public criticism. For the time being, our policy is to indicate only the cases in which we are personally involved. Also, where we have written about a case and have later become involved in it, we have also publicly stated it. However, we are, as always, open to comments and suggestions on how to better do what we do.
Blogging law is getting increasingly complicated. Nico: we need a lawyer.
Fine and Punishment
In the article that kept me working during my otherwise summer holidays last year Luis Ortiz Blanco and myself wrote for the Fordham Conference held last September [the final version is published here; a draft version is available for free here] we quoted one of our “Friday Slotters”, Ian Forrester, (actually, he was the one who proposed “The Friday Slot” as a name for the section) saying that competition fines imposed by the Commission “exceed fines imposed by the public authority in any democracy of which I am aware for any offence“.
Some evolution is apparently taking place in this regard. Look, for instance, at the $3 billion fine that GlaxoSmithkline has agreed to pay for promoting its best-selling antidepressants for unapproved uses and failing to report safety data. Take a look also at this very interesting graph, which points out at the largest corporate fines and settlements in the past seven years, and also presents the fine as a percentage of the yearly income of the sanctioned companies.
During a Paris-Brussels train trip last night I read an interesting piece on The Economist that deals precisely with the recent increment in corporate fines using international cartel fines (which reportedly “rose by a factor of one thousand between the 1990s and 2000s”) as the main example.
The Economist‘s piece draws on economic research to justify the conclusion that “to deter bad behavior fines need to rise”.
You may recall that our guest Benoît Durand dealt with this same issue some posts ago and came to a contrary conclusion: that deterrence would be better served by envisaging individual sanctions (fines, disqualification and/or prison penalties) for the executives directly involved in cartel meetings. We haven´t really thought this through, but we’re not big fans of prison penalties, nor would we favor the imposition of disproportionate individual fines. A well designed disqualification sanction, however, would appear to us as a reasonable measure. Any views?
Oops!
Monsieur Petit seems to have abandoned this blog in order to share his thoughts on an exclusive basis with US media. On Wednesday he was quoted again in The New York Times, this time in relation to yet another a new investigation on Microsoft’s non-compliance with a Commission’s decision.
As you may know, the Commission issued a statement announcing an investigation over Microsoft’s possible non-compliance with the 2009 commitment decision which obliged it to include a brouser choice screen to enable users to pick a browser instead of using the pre-installed one (until then Internet Explorer).
Microsoft has also issued a statement apologizing and explaining that:
“We have fallen short in our responsibility to do this. Due to a technical error, we missed delivering the Browser Choice Screen (BCS) software to PCs that came with the service pack 1 update to Windows 7. The BCS software has been delivered as it should have been to PCs running the original version of Windows 7, as well as the relevant versions of Windows XP and Windows Vista. However, while we believed when we filed our most recent compliance report in December 2011 that we were distributing the BCS software to all relevant PCs as required, we learned recently that we’ve missed serving the BCS software to the roughly 28 million PCs running Windows 7 SP1”.
The Commission has anticipated that it might impose “severe” penalties.
Keith Hylton (Boston University) has stated that the Commission is overreacting because “there may be a few people on the planet, living deep in forests on the Marshall Islands, who are not already aware that Microsoft’s Internet Explorer is not the only browser available”.
The well-informed and ironic reader who has conveyed Mr. Hylton’s statement to us responds that “whoever at Microsoft was not aware that they had to include a browser choice screen in Windows must also live deep in the forests in the Marshall islands, and whoever told the Commission in December that such error had not happened must live in the woods next door”.
We lack any precise information about this investigation but it’s hardly conceivable that Microsoft would do this on purpose, so, just as Microsoft says, this is most certainly due to an unfortunate mistake.
In any event, this story shows that antitrust law does perhaps not worry some companies as much as we usually think. Most importantly, the fact that nobody had noticed until now that 28 million copies of Windows had been sold since February 2011 without the browser choice screen says something about how compliance with antitrust commitments is monitored…
Self promotion
We like to self promote at chillin’competition.
For instance, you will have noticed from yesterday’s post that Alfonso likes to incidentally recall that he works on a pending case against a giant US corporation.
So I take my turn to self promote a little, with a recap on recent and forthcoming chillin’competition-related activities:
- I was in Helsinki with my friend Miguel Rato (Shearman & Sterling). We were invited to deliver a presentation at the 11th Annual Conference of the Association of European Competition Law Judges (AECLJ). With 60 judges from accross Europe in the room (including judges from Luxemburg), Richard Whish, Alexander Italianer and Nick Banasevic on the podium, this was a very challenging talk. I attach the presentation here: Slides – Petit & Rato – Abuse in Technology-Enabled Markets – 11th AECLJ Conference (14 06 12. A paper on “Abuse in Technology-Enabled Markets” is in the making;
- The registration process for the 2012/2013 edition of the LLM in Competition Law & Economics at the Brussels School of Competition is now opened. We have a new brochure in which you will find a number of changes. A teaser: F. Jenny will teach on abuse with JF. Bellis, Alfonso’s existence is now official and several ***** economists have joined;
- We have a GCLC lunch talk this Friday, on the Commission’s review on the rules on technology transfer agreements. Our speakers are Donncadh Woods (DG Competition), Frédéric Louis (WilmerHale) and Paul Lugard (Tilburg Institute for Law and Economics (TILEC) and ICC Commission on Competition);
- Ana Paula Martinez (Levy & Salomao) is the editor of a new, impressive volume entitled Temas Atuais de Direito da Concorrencia with written contributions (in English) from S. Salop, E. Elhauge, D. Geradin, Mariana Tavares de Araujo, Ian S. Forrester and Francisco Enrique González-Díaz. Here’s the leaflet and table of contents: GED_LS-#845180-v1-2012_Brazil_Competition_Book
- I was in Strasbourg yesterday to lecture on IP and competition law at the CEIPI and I will be in Bruges tomorrow to give a presentation at the 8th ELEA symposium. It is a very busy week, like last week… and hopefully unlike next week.
Reading Competition Law Books
In our “Friday Slot” interviews we ask what competition law book deserves an Antitrust Oscar. A frequent reply from our interviewees is that they do not read competition law books but rather consult specific sections of such books when they are looking for something in particular.
We don’t necessarily agree with this view. Even though there are certainly some books that we only use for reference, we believe that some of the best books on antitrust are texts that you will not come accross if you’re just looking for references or for the answer to a very particular problem.
In our very own experience, reading certain competition law books written by people who clearly outsmart us has provided us good general overview of issues that we may not had/have yet seen in our professional life, and, most importantly, it has obliged us to reflect and think about what makes sense and what doesn’t in a discipline to which we devote an insane proportion of our life. Personally, we have learnt most of the theory we know from books and not from attending courses, seminars or conferences, no matter how good they were.
The obvious -and reasonable- response is “if, as you say, you already devote an insane amount of time to this, why on earth would you spend non-working time reading about the same subject?”. That’s partly true, but, the way we see it, it is one thing to spend your time working on a particular issue, and a very different one to take the time and distance (not to let the trees hide the woods) to reflect on the reasonableness of the overall discipline in which we are immersed.
We’re not saying that we do -nor, of course, that anyone else should- read competition law books instead of non-competition law books. No matter how good a competition law book is, non-competition law books teach you or open your mind to much more important stuff. We are just saying that -when we’ve had the time- we have found it useful to include some competition law books in our reading list.
A (certainly non-exhaustive) selection of some of the competition law books that make a most interesting read could feature Hovenkamp’s “The Antitrust Enterprise“; Areeda and Kaplow’s “Antitrust Analysis: Problems, Text, Cases“; Bork’s “The Antitrust Paradox“; Posner’s “Antitrust Law“; Amato’s “Antitrust and the Bounds of Power“; Luis Ortiz’s “Market Power in EU Antitrust Law“, Giorgio Monti’s “EC Competition Law” or Odudu’s “The Boundaries of EC Competition Law; The Scope of Article 81“. There are many other great books but we can’t name them all (suggestions in the form of comments will be welcome!).
The ones I’m currently in the (slow) process of reading (alternating from one to the other) are “Creation without Restraint: Promoting Liberty and Rivalry in Innovation” by C. Bohannan and H. Hovenkamp; Kevin Coates’ “Competition Law and Regulation of Technology Markets” and Einer Elhauge’s (Ed), “Research Handbook on the Economics of Antitrust Law“. I´ll also be happy to read Nicolas’ most recent book ; sorry, wrong link; this is the right one! 😉 I intend to post a review of these books here once I´m done with them.
Regardless of all the above, my personal favourite antitrust book ever is one that I have only used for specific consultations and that I will most likely never read: the Treatise written by Areeda and Hovenkamp: “Antitrust Law: An Analysis of Antitrust Principles and their Application“. The reason why I know I won’t read it is that it looks like this:
Three additional comments:
– Herbert Hovenkamp -whose work is referenced above a few times- is clearly one of the 4 or 5 people from whom I’ve learnt more antitrust law, and the only one of these (aside from his co-author late Philip Areeda) whom I have never had the chance to meet in person (which again proves the importance of competition law books). We are very proud to anticipate that our next Friday Slot interview is with him!
– There is much to be said about the pricing of many of these books. But we’ll deal with that in a separate post.
– I recently recommended here a non-competition book -in Spanish, though- and a few (four) of you have sent emails saying that you loved it, which is nice to hear. Here is another suggestion, in English this time: A Heartbreaking Work of Staggering Genious.
And the winners are….
Concurrences and George Washinton Law School presented their Antitrust Writing Awards on Tuesday night in D.C.
The list of winners is available here.
Bill Kovacic was in charge of announcing the winners. We weren’t there, but we can imagine him saying something like: “And the award to the best academic paper on unilateral conduct goes to…….. Nicolas Petit, for “Credit Rating Agencies, the Sovereign Debt Crisis and Competition Law“!l
Yep, Nicolas is the proud winner of the award to the best academic article on unilateral conduct. His piece was also the most publicly voted one (the readers of this blog probably have something to do with that, so thanks on his behalf).
I want to congratulate not only Nicolas, but also all other winners as well as all the authors of all the other articles that had been selected for the competition.
Moreover, we want to congratulate the organisers: Concurrences (in the person of Nicolas Charbit) and George Washinton Law School. The creation of these awards is a fantastic initiative; we hope that they’re here to stay.
A few non-politically correct comments now:
1: To a certain extent Nicolas deserves credit for this prize. Nonetheless, any impartial observer should rapidly realize that I -in my capacity as the manager of Nico’s brilliantly conceived campaign– am the one responsible for his victory.. 😉 We’ll ask a credit rating agency who deserves more credit (wow, this is incredibly bad even for my standards…).
2: The picture illustrating one of our “campaign” posts was premonitory.
3: This must be the first time in a decade or so that a Frenchman wins any competition (except, certainly, for this one) 😉 In fair reciprocity (some background here), I -as a Spaniard- should write a piece hinting that Nicolas owes his victory to doping (which, by the way, was definetely the case since he finished it during a trip to Scotland; this is how his desk must have looked like).
4: How much sense does it make for a paper on “collective” dominance to be awarded the prize to the best article on “unilateral” conduct?? Just kiddin’ here: the core of the paper apparently deals with individual abuses of collective dominance, so it makes perfect sense.
5: You caught me: I just wrote “apparently”. I guess I’ll now have to read Nicolas’ paper.
P.S. One suggestion for the organizers of the Writing Awards: since client alerts and articles published in newsletters are elegible for the prizes in the “Business” category, why not extend it to blog posts? We also need incentives to compete!
Chillin'Competition 
