Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

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We need your votes!

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voteGCR

Global Competition Review has just announced the nominees for the 2019 GCR Awards.  And….

Unsurprisingly, Pablo is (once again) nominated as best Academic of the Year. This is the third time in a row, which speaks volumes about his influence in international competition law and is turning him into the Peter O’Toole of competition awards 😉 This time should be the definitive.

My firm, Garrigues, is nominated for the European Firm of the Year Award. This is a testimony to great work from an admirable group of lawyers over recent years.  As I have often explained to many of you, I have repeatedly chosen Garrigues over other paths mainly because of the human and legal quality of its lawyers, and that has only kept improving. We are doing many things now that not so long ago seemed impossible for a non Anglo/American firm, and we have fun doing them. In my totally biased view, my colleagues very much deserve this Award. Plus the firm has never curtailed my freedom to write on the blog, which is a sign of trust that may also deserve credit from those of you who oddly enjoy our nonsense here.

I have also been nominated for the Lawyer of the Year (Under 40) Award. Yes, as my colleagues have made sure to remark, contrary to what my hair may suggest I’m still 35.

Your vote counts, and you can cast it (in under 1 minute) clicking here.[If you have friends or colleagues who also read the blog, please use any means of threat and intimidation at your disposal to make sure they vote -the right way- too].

Forgive our leveraging of the blog for a self-serving campaign. In spite of my recent diatribe against politicians getting their hands on our discipline, I always liked politics and electoral campaigns (one day, perhaps… ), and this may be as close as I’ll get to campaigning!

Written by Alfonso Lamadrid

7 February 2019 at 7:34 pm

Posted in Uncategorized

This is not a post on Siemens/Alstom – Congratulations to DG Comp (and brace for what’s coming)

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pandoras box

I have no view on whether the Siemens/Alstom deal deserved to be prohibited or not. Even if I had one, I’m not even sure that I would be at liberty to share it, but I truly don’t. Like most of whom are criticizing the Commission’s decision announced today, I simply don’t have sufficient elements to have an informed opinion.

And nevertheless I have to congratulate the European Commission. Not for prohibiting the deal, but for resisting exceptional pressure. I would have also congratulated the Commission had it prohibited or approved this or any other deal in the face of extreme and virulent criticism. So this is not a post on Siemens/Alstom; it’s a post about the role and attitude of competition enforcers at a time of mounting political pressure to shake things on the basis of reflexes and short-term considerations packaged as long-term ones.

The fact is that today the Commission has shown that it can be an example of independence to other authorities around the world (who should also take note). And it has done so facing pressure from the most influential Member States, and at a time that wasn’t the most convenient for Commissioner Vestager. The Commissioner and the Institution have this time met the high standars that I referred to in my last post.  Commissioner Vestager has said today that the EU internal market is what enables EU companies to attain a global scale and compete in the worldwide market. That’s exactly the point, and the internal market is a rule-based construction.

Right or wrong, the Commission has applied the rules in what it believes is the right, objective way. This has earned them unusual public criticism. For example: “it must be bitter to be technically right but to do everything wrong for Europe”, or the comparison between “backward-looking technocrats or future-oriented Europeans” (see here). President Juncker even pointed to those “who are saying that the commission is composed of blind, stupid, stubborn technocrats.”

For a competition enforcer, being accused of “technocrat” doing the “technically right” thing should be a badge of honor. Competition authorities are there to apply the rules to a set of facts, not to do politics or shape markets according to the wishes of some [Member States/politicians/lobby groups/companies].

The institutional structure of the Commission arguably facilitates taking into consideration elements that may not necessarily be technical or at all related to the law (admittedly, we may have seen a bit of that in recent cases). But this time DG Comp has prevailed, and –regardless of whether their assessment is right or wrong- they have done what they believed was right no matter the cost. Too often decisions are simply adopted because they are the easy thing to do. This wasn’t the case.

Let’s nonetheless be aware that some disgruntled politicians will now want to use the occasion to do something about competition law (it’s shocking to have a technical area of law that does not explicitly accommodate all kinds of political goals!). So now a lead candidate to the EU elections says thatIf EU competition rules are not fit for today’s challenges, then we need to change the rules”. Other politicians in France and Germany have announced proposals to “overhaul EU competition rules” (not sure the recent reforms in Germany signal the way to go in terms of independence from pressure groups…). Even the European Parliament has just issued its annual report on EU competition policy calling for a  “fundamental overhaul of EU competition policy”.

To be sure, I’m afraid the competition law community was part of the problem, opening Pandora’s box, signaling that competition law could reach further, and reclaiming public attention. You know, be careful what you wish for. It’s difficult to argue that one can enlarge competition law to cover [x, you name it], but not climate change, labor standards or industrial policy. Perhaps we should all reflect upon this and revisit our attitudes and our complaints about alleged blind spots.

Everyone wants to change the rules when they are not applied in the way we like. But that’s the very reason why we have rules in the first place! It’s perhaps time to abandon this Marxist reflex towards competition rules (and I mean Groucho, not Karl).

Competition law is already vague enough to make it even more nebulous by accommodating all kinds of goals and in no particular order. I have often said half-jokingly that there are issues far too important to be left to competition authorities. The only thing that could make me revisit this view is that over the past few weeks competition authorities have proved to be more sensible than your average politician.

Anyone who understands and cares about this discipline should probably start realizing that competition law ain’t broke, but it risks being broken. Don’t let that happen.

Written by Alfonso Lamadrid

6 February 2019 at 3:18 pm

Posted in Uncategorized

Competition Policy in the era of digitization (Post-conference thoughts on balance, the role of the case law and what the debate is really about)

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DG Comp held its much heralded conference about “Competition Policy in the area of digitization” a few days ago. Whilst I unfortunately had to miss the event, I was able to watch part of the recording over the weekend thanks to a new acquisition that admittedly has provoked some laughter and jokes at the office. A good overview of the event is available here.

Some hopefully constructive thoughts follow:

1) The way I see it, it’s a good thing for competition authorities to hold conferences on issues about which they care. These initiatives can show that authorities are willing to listen to different viewpoints. They also publicly expose the thinking that is influencing enforcers. From this perspective (and for all their hard work), the organizers truly deserve credit.

2) The conference was meant to be about “shaping competition policy”. The official line is that the conference showed a consensus on the need for active enforcement. If the real aim was to give an appearance of consensus to put the issue on the table for the next Commission and Parliament, then it probably was a success.

3) The conference did indeed feature multiple viewpoints, all of which nonetheless converged in advocating for stronger enforcement. The problem, however, is a certain impression that the program may have been designed with that in mind. The conference would have benefitted from a greater balance of views, even if (or precisely because) that would have shown that the consensus may not be there at present.

4) The point above is, in my personal view, particularly important in the case of a conference organized by an enforcer. This is, first, because an enforcer must not only be neutral but appear to be neutral; and second, because one learns the most from views that  -right or wrong- challenge one’s own ideas. From that perspective, it would seem ironic to use the conference to discuss “neutrality obligations” and the problem of “echo chambers”.

5) Perhaps the best illustration of what I’m saying lies in this intervention of a representative from the Open Markets Institute focused on Amazon as a Private Government (see around 11.58 h. here). I cannot see the reasons that would justify giving a public enforcer’s microphone (even if a not-always-functioning one 😉 ) to such extreme views. Perhaps because other stuff would seem more reasonable by comparison? On this point there seems to be a real consensus among attendees. The Commission itself must have probably instantly realized about how self-damaging that was for the event and its objectives.

6) In my view, the more-vs-less enforcement debate is pretty Manichean and not so useful. Most, if not all of us, would always support strong enforcement if the law is correctly applied to a proven set of facts. So this is not so much about policy as it is about the law. Stronger enforcement may perhaps be needed, but then the question is “how?” Is it just about doing more cases under the current legal framework, or is it about changing or ignoring the law as refined and incrementally built over decades of experience? Do we need to change the law as applicable only to certain companies/business models/activities? [On the latter point, by the way, the State aid experts at the Commission could explain that selective regulation also constitutes State aid…]

7) Unfortunately, there was not that much discussion about the law. In fact, too often in these debates the law is side-stepped or looms in the background as an uncomfortable obstacle. Unfortunately the conference only featured (3/18) jurists (plus a very good one, Heike, as moderator) and no practitioners (this I can understand) or judges. The academic panelists were surely respected figures, but also the most vocal on the anti-big-tech front (which is absolutely fine, but only represents one side). There was not much of a debate on how the current case law already addresses the issues raised. Btw, Pablo’s contribution to the Commission’s call for ideas was precisely about that.

8) The highlight of the day was probably Jean Tirole’s keynote. Many of us admire his work and consider him to be a very reasonable person. Two messages that caught my attention were (a) his comment that failing to consider the multi-sided nature of some practices leads to absurd results; and (b) the common theme that one “should err on the side of competition policy”. From a legal standpoint, I couldn’t agree more with the first message. From the same standpoint, the second message sounds my alarms, as it did when in a previous interview some months ago (available here) he responded the following to the question “so how should antitrust evolve?”:

First, we need to reconsider our burden of proof in antitrust decisions. This is a delicate matter. Consider the acquisition of WhatsApp and Instagram by Facebook. They were social networks, just like Facebook. They could have become Facebook competitors. But is there any evidence for that? Not really, as this is just a guess on what the future would have looked at in the absence of acquisition. The suppression of competition in the absence of data is hard to prove. My guess is that we should err on the side of competition, while recognizing that we will make mistakes in the process”.

9) Tirole’s comments  have the virtue of putting the spotlight exactly where it belongs. It reveals what the debate is really about in clear terms that others are (understandably) much more reluctant to use. One can perhaps legitimately decide to “err on the side of competition” when it comes to regulation or even merger control. We can have a debate on those areas, and this is perhaps what Mr. Tirole has in mind.  But, in my view, not when it comes to antitrust (i.e. Articles 101 and 102). As repeatedly held by the Courts, this is a quasi-criminal area of law. This is not about regulation nor about seeking optimal results. It is about punishing illegal behavior with potentially very drastic consequences for the company’s finances, reputation and now, seemingly, even structural integrity. And illegal wrongdoing must be established by the authority on the basis of facts, not suppositions to compensate for lack of evidence.  There is probably a consensus among jurists on this point, as we are trained to identify the dangers of such logic and to protect the presumption of innocence. The rule of law is no less important than alleged optimal economic outcomes.

This should not be a problem, and digital businesses should certainly not get a free pass.  There may well be competition problems and anticompetitive practices in these markets, but if the alleged problems are so evident, then proving them is perhaps not so much to ask for.

This is not to say that one should not be cautious or take into consideration factors such as innovation or potential competition. One can perfectly do all that within the current legal framework. What I’m saying is that there’s no reason to reconsider our burden of proof.

10) This is why, interestingly, the policy debate that is taking place in this regard goes in exactly the opposite direction to the legal trends visible in the case law (see most notably Cartes Bancaires and Intel which, as noted by Vice-President Van der Woude, raise questions for which answers “can be found in the burden of proof that rests upon the Commission pursuant to Article 2 of Regulation 1/2003”, or see also the most recent Krka Judgment). One can only speculate about what will happen when these two opposing trends meet each other and clash (although if history tends to repeat itself, look at the 2002 annus horribilis on the merger front). Strong competition policy requires a strong, respected, neutral and confident enforcer. And the Commission can certainly be that, perhaps better than any other authority in the world. But the trick is to step up and meet its burden, not to try to relax it or do away with it.

+1) Some may perhaps think that I’m writing all this because I myself am biased and work for large digital companies affected by this debate (which I do, although I also work for smaller and non-digital companies that might also be affected). But any of you who has ever attended our own events would have realized that we have always done our best to ensure a good balance of views regardless of how convenient or aligned with our own opinions (see e.g. the first panel at our last Chillin’Competition conference). That’s really not it.  For the reasons recently set out by Pablo, we genuinely care about the Commission’s reputation and we believe so much in the Institution that we often subject it to the high standards that it can aspire to meet. In the long term, defending our law-based system is the best way to protect the Commission.

Written by Alfonso Lamadrid

31 January 2019 at 5:02 pm

Posted in Uncategorized

4th Chillin’Competition Conference- Sarah Long,”Gender, competition policy and the GUDP (Grossly Undervalued Domestic Product)”

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sarah long

Sarah Long did one of the most-talked-about interventions at the 4th Chillin’ conference, where she discussed “Gender, competition policy and the GUDP (Grossly Undervalued Domestic Product)”.

In the picture illustrating this post, she is presenting with a slide depicting Adam Smith. Sarah explained that every night his dinner was served by his mother, with whom Adam Smith lived until she died: “It was therefore thanks to Adam Smith’s mother, to her invisible hand, to her GUDP, that he was free to write his great works“.

The video of Sarah’s presentation is available here.

[Note: this is the seventh post in a series featuring videos of the individual interventions that took place at the Chillin’Competition conference on 30 November 2018. For more videos, click here]

 

Written by Alfonso Lamadrid

30 January 2019 at 5:56 pm

Posted in Uncategorized

4th Chillin’Competition Conference (Catriona Hatton “Due Process in Antitrust”)

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catriona

Catriona Hatton,  who is also known as one of the nicest people in this field, spoke about due process in antitrust at the 4th Chillin’ conference.

The video of her presentation is available here.

[Note: this is the sixth post in a series featuring videos of the individual interventions that took place at the Chillin’Competition conference on 30 November 2018. For more videos, click here]

 

 

Written by Alfonso Lamadrid

30 January 2019 at 11:35 am

Posted in Uncategorized

The Role of Competition Policy in Hi-Tech Markets (Madrid, 15 February, 2019)

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hi-tech

On 15 February we will be holding a seminar in Madrid on “The role of competition policy in hi-tech markets“. The seminar -that we have put together in cooperation with Cecilio Madero and Nick Banasevic- is part of the competition law course that I remotely co-direct in Madrid.  This seminar will be hosted by the Spanish Competition Authority.  If interested in attending, please drop a line to competencia@ieb.es

This is the program:

15.30- Keynote Speech

Cecilio Madero Villarejo (Deputy Director General, DG COMP, European Commission)

16-17.15: The Role of Competition Policy in Hi-Tech Markets

Beatriz de Guindos (Director for Competition, Comisión Nacional de los Mercados y la Competencia)

Nicholas Banasevic (Head of Unit, DG COMP, European Commission)

Alfonso Lamadrid (Partner, Garrigues, Brussels)

Moderator: Lewis Crofts (Editor-In-Chief, MLex)

17.15-17.30: Break

17.30-18.45: Competition Law and Online distribution

Kevin Coates (Partner, Covington&Burling, Brussels).

Henar González Durántez (Partner, Herbert Smith Freehills, Madrid)

Milan Kristof (Legal Secretary, Court of Justice of the European Union, Luxembourg)

Moderator: Lewis Crofts (Editor-In-Chief, MLex)

18.45-19: Break

19-20: Hi-Tech Mergers

José María Jimenez-Laiglesia (Partner, Latham&Watkins, Madrid)

Christian Riis-Madsen (Partner, O’Melveny&Myers, Brussels)

Moderator: Lewis Crofts (Editor-In-Chief, MLex)

Written by Alfonso Lamadrid

29 January 2019 at 10:50 am

Posted in Uncategorized

4th ChillinCompetition Conference (Denis Waelbroeck “What is a restriction of competition” & Andriani Kalintiri “The Burden of Proof”)

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We continue the serious of posts devoted to the TED@Chillin’Competition talls delivered at the 4th Chillin’Competition conference with the interventions of two of the people have had a greater influence on Pablo’s career (which should be a positive thing to say, I guess?) 😉

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-The video of Denis Waelbroecks clarifying intervention on the notion of restriction of competition is available here. Denis’s to-the-point presentation has the virtue of reminding us of cases that should never be forgotten, but that too often are.

The slides he used are available here: denis waelbroeck- what is a restriction

 

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-The video of Andriani Kalintiri ‘s quite unique presentation on “The Burden of Proof” is available here. While it is not evident to many people, the interpretation and application of this concept might well be single most important issue in competition law nowadays. And very few people understand it and explain it as neatly as Andriani. If this interests you, she has a book on the pipeline .

The slides she used are available here: andriani kalintiri-the burden of proof

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[Note: this is the fifth post in a series featuring videos of the individual interventions that took place at the Chillin’Competition conference on 30 November 2018. For more videos, click here]

 

 

Written by Alfonso Lamadrid

25 January 2019 at 5:17 pm

Posted in Uncategorized