Archive for the ‘Uncategorized’ Category
A Nobel moment
Congratulations to Jean Tirole on the Nobel Prize! I cannot imagine anybody being unhappy or disappointed about this year’s pick. Even though he is just 61, I am ready to say the prize comes a little late. I confess I have been waiting for this moment since at least 2009, when it went to Elinor Ostrom and Oliver Williamson. The upside of waiting a few more years is that the award comes solo this time, comme il le fallait.
He is one of these economists who does not need an introduction. He is the author of The Book on Industrial Organisation (le Tirole) and has made fundamental contributions in the field. For instance, his 2003 landmark paper (with Jean-Charles Rochet) on two-sided markets has proved to be enormously influential, as Groupement des Cartes Bancaires and MasterCard show. Competition in Telecommunications, written jointly with the late Jean-Jacques Laffont, is one of my favourite books, and is a good introduction to his work on regulation. I guess I could keep going for a while (for instance, I remember discussing his work on open source software with a colleague the other day).
On bus lanes and State resources: AG Wahl in Eventech
The best way to start the first post I write after my ‘formal’ induction into the blog is, I tell myself, by referring to one I wrote back in July, and which concerned the preliminary references in Eventech and Kunsten Informatie and Media. The two AG opinions came out during the Court’s hyperproductive month of September. While I still think the two cases are relatively straightforward in terms of substance, it makes sense to write a couple of notes on Eventech (in the form of two separate posts).
You may remember that the key question in that case was whether regulation allowing black cabs (the iconic London taxis) to use bus lanes and excluding the so-called minicabs (private hire vehicles) entails the use of State resources. The answer, in my view, is an obvious no. It is in fact a good textbook example showing that advantages within the meaning of Article 107(1) TFEU are not always granted through the use of State resources. The position taken by AG Wahl therefore comes as no surprise to me. It is rather the orderly analysis of the question that inspired me to write this post.
When going through it, I thought, first, of AG Jacobs’ classic opinion in PreussenElektra. It seems difficult to believe, but many of the issues that now seem straightforward were far from established when that opinion was written back in year 2000 (which, or so I like to think, is not such a long time ago). If a masterful analysis was necessary to put some order into a set of scattered and seemingly contradictory precedents, this must mean that State aid has come of age only relatively recently.
Second, I thought that I had never seen such a careful dissection of the different ways in which State resources may be involved in a case. Eventech had raised several arguments trying to link the regulatory advantage to the use of resources by the State. For instance, the firm argued that black cabs can be said to be exempted from fines for using the bus lanes, which, in turn, leads to a loss of revenue for the State. The opinion is valuable not because this argument, or similar ones, were particularly powerful or persuasive, but due to the way in which they are examined by AG Wahl. To this day, I still have misgivings about the treatment of some issues in landmark cases like Sloman Neptun. From this perspective, the opinion sets a model for the future, in particular to the extent that the Court had seemingly never been confronted with some factual scenarios that were relevant in this case.
I will write something in the coming days about the advantage aspect of Eventech. Before that, I will end on a personal note. I took an Uber cab this summer for a fairly long ride and one of the many questions with which I pestered the driver had to do with this case. Interestingly, he was of the opinion that the regulatory regime in place makes sense. He said that traffic would be unmanageable in London if minicabs were allowed to use bus lanes. And he thought he would rather be subject to lighter regulatory obligations, even if it means giving up some privileges. Thoughtful and sensible, I would say.
A new kid on the blog: Introducing Pablo Ibañez Colomo
As I said in my farewell post to Nicolas, I don’t think it’s good for this blog to be run only by a practitioner like myself, so we have a “new” luxury addition to the team.
As of today, Pablo Ibáñez Colomo, who’s already been writing here for the past few months, has finally cracked and will join Chillin’Competition as editor. Most readers of this blog already know Pablo. He’s an Associate Professor of Law at the London School of Economics; prior to that was a teaching assistant at the College of Europe for three years (I was actually his student there), completed his PhD at the European University Institute in Florence (he was also Visiting Researcher at Stanford during his research period) and, among other things, is also one of the authors of the best competition law textbook ever written (in Spanish).
More importantly, like Nicolas, Pablo is also a reputed young and independent academic, a brilliant guy, a very good friend, a person whose ideas often differ from mine. On top of that, and in case you haven’t realized yet, he’s probably even geekier than Nicolas and myself 🙂
On Nicolas Petit leaving Chillin’Competition and on reasons to continue it
(Cautionary note: as this post is rather lengthy and rather personal, you won’t lose too much if you skip it).
Last Friday Nico announced that he was quitting Chillin’Competition, so this blog loses its founder and main figure (although it’s true that there weren’t so many).
In order to dispel the rumors that seem to be going around I’ll address them directly: no, it’s not a hoax; no we haven’t fought (in fact we had lunch together today, as witnessed by some prominent Commission officials, one of whom even said that it was good to see that we were still talking to each other despite the rumors…); no he didn’t have an affair with my wife (at least not that I know of) nor me with his girlfriend (apparently because I’m not attractive enough), and no, his move is not due to political pressures from his home country after our posts on Arnaud Montebourg (see here and here) provoked the French Government’s collapse.
So, yes, Nico is leaving the platform he created back in September 2009 (I only joined a few weeks later –on 8 October 2009-, initially as a guest, and I’m still grateful for his invitation for me to join, particularly because back then he was already well known and I was a very young associate at a Spanish law firm whom he really didn’t know that much). For some reason it worked, and in the course of these 5 years –time flies- we have written no less than 960 posts(!) and had 800,000 visits. His creature fared well.
Nicolas and I certainly didn’t have the same views on some substantive issues and we naturally did have divergences, all of them because he always wanted me to be more politically incorrect and I always told him not to play the enfant terrible. But I think the mix contributed to this blog being less one-sided and hopefully more interesting.
As for the real reasons behind this decision, he can explain better, but I think he summed it up well when he said that “the thrill is gone”. His quitting the blog fits within a reshuffling of priorities that also includes his resignation as Director of the Global Competition Law Center. As I’m writing I’ve just recalled that, interestingly, both of these moves were already anticipated in a post he wrote 3 years ago listing possible things to quit from “in order to refocus a little on things that really matter”.
As he said in his farewell post, we had been discussing this for a while. I even wrote here back in July that “you should expect some significant changes in Chillin’Competition after the summer holidays” . To tell the truth, at the time I was thinking of quitting myself.
I saw plenty of reasons to do it. For one, finding the time to think things through and write properly about them was becoming impossible, with the result that our publications weren’t nearly as good as we’d like them to be and wouldn’t reflect well on us. On top of that, which has been a constant over these years, I felt that what used to be a fun exercise now had become an obligation, that I was running out of ideas worth your and my time, and that what used to be a fresh approach to things wasn’t really anymore. No less important, what I enjoy is actual lawyering, and was –and still am- quite weary of being seen more as a blogger than as a lawyer, even if a bit of that is, I guess, inevitable. And most important of all, my first son was about to be born (Edu came on August 30th) and I want to save all my non-working time for him. As you can see, and as this esteemed guy observed back then over a beer or two, it really sounded like I’d made up my mind. [Actually, all this is starting to sound compelling again!]
This is all to say that when Nicolas gave me some of the same arguments in support of his contemplated move, I understood him perfectly. And the fact that he’d already quit posting 6 months ago whilst at DG Comp certainly broke the inertia and made the decision easier for him.
At the same time, it also made me reconsider my own position. For one, I thought it’d be a pity for the two of us to leave and let the blog die; not because it has any social value –which it obviously hasn’t and we surely could do more useful things with our time- but because, after all, we’ve had fun doing it, we’re even told that at times our writings may have even had an influence in the application/interpretation of the law (which, if true, I’m not sure is positive for the law, though) and it has also enabled us to meet very interesting people.
Many advised us to continue with the blog because it is good as a matter of “visibility”. Indeed, when we have asked for advice about terminating it, many –particularly lawyers- replied that we shouldn’t do it because it gives us visibility, as if that were per se a good thing. To that I consistently responded that visibility cuts both ways, that any stupidity we might write would also be very visible, that sometimes it’s preferable to remain silent and look stupid than to open one’s mouth to confirm that appearances don’t lie, and that it’s a bit of a problem that our most visible work is precisely that which –unlike real work- is done hastily and not always upon careful reflection.
I confess that the main reason why I’ll remain writing here even with Nicolas gone, at the least for as long as the baby is still a baby (I see too many people in this job with skewed priorities), is one of intellectual hygiene. For some reason I can only think properly about something when I write or teach about it. So even if it may be uncomfortable to commit to finding the time and the ideas to write here, and even if I’ll have to remain being careful with balancing it with my real job, I guess this is a good way of forcing myself out of the comfort zone to continue learning.
Since I don’t think it’s good for the blog to be run only by a practitioner like myself, a new addition to the team will be announced in the coming hours. Your ideas and suggestions on the way to go will also be very welcome.
A last note: Nicolas is quitting regular posting but I hope that he’ll be willing to contribute from time to time. We will also continue to work together in the Brussels School of Competition, the Madrid course and possibly in some other projects under the Chillin’Competition brand. And you won’t get rid of ads, because I’ve promised him to continue advertising all his events and publications here.
In sum, thanks so much, Nico, and you know you’ll always be most welcome if you ever want to return chez toi.
Exit
To all readers,
After a long period of silence – part of it was Commission-imposed – the shareholders of chillincompetition have decided to transform this blog.
From today onwards, the blog moves from joint to sole control. In plain words, I quit, and leave the blog in Alfonso’s hands.
We discussed this together, but the reasons for exit are compelling.
Paraphrasinging BB King: “The Thrill is gone, it’s gone away for good“.
Alfonso’s challenge is now to find a new “bad cop“, to keep a sane degree of political incorrectness on this platform.
Thanks to all for the support in the past years.
And to my good pal Alfonso: “And now that it’s all over, All I can do is wish you well“
The Interface between Competition and the Internal Market – Market Separation under Article 102 TFEU
Given:
1. the 102-abusive prices charged by academic publishers for their books;
2. the drain in State aids imposed on Belgian Universities;
=> this advertisement is my sole way to get a copy of this new book.
Vasiliki Brisimi
This book explores the interface between competition law and market integration in the application of Article 102 of the Treaty on the Functioning of the European Union (TFEU), focusing on the notion of market separation namely conduct that may hinder cross-border trade. The discussion reviews, among other things, the treatment of geographic price discrimination and exclusionary abuse, by which out-of-state competitors are affected.
Market separation cases are treated in the book as a case study for appraising the interface between competition and the Internal Market. On this basis, the book provides a comparative analysis of the Treaty requirements under Article 102 TFEU when applied in market separation cases and the Treaty requirements under the free movement provisions. In addition, it utilises market separation cases as a springboard for advancing an informed reformulation of the application of Article 102 TFEU when state action comes into play.
All in all, the analysis presented in the book deconstructs the elements for establishing market separation as an abuse of the dominant position. It shows that there is nothing that would justify a distinctive treatment of market separation under Article 102 TFEU, other than a principled understanding of Internal Market law as a whole: whatever understanding one reaches about the proper shape of the Internal Market, interrogation of the proper application of competition law comes after that and thus should be informed by this understanding.
Coming up…
On Thursday the European Court of Justice will deliver two very important competition Judgments in the Mastercard and Cartes Bancaires cases. We’ll be commenting on them asap (my paternity leave will unfortunately be over on that same day…).
For a reminder of the issues at stake in both cases, you can check out our previous comments on the General Court’s Mastercard Judgment (Mastercard: A priceless Art. 101(3) assessment) (I was actually proud of this post which I nevertheless swiftly relegated by sillier ones) as well as Pablo Ibañez’s take on AG Wahl’s Opinion in Cartes Bancaires (Restrictions of competition by object under Article 101(1) TFEU: chapeau bas, Prof Wahl!).
A post from the past
A reader of this blog sent me this morning the link to a post we wrote more than 2 years ago titled The post of a summer day , reproduced below.
A re-read of those lines shows that things have changed little in the course of that period:
Just like two summers ago, it’s unusually hot in Brussels, DG Comp’s officials have stampeded out of the city to conduct on-site beach inspections (not before sending a few requests for information), and, two years later, the Commission is still pondering what to do with Google.
Silly posts never get old.
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Today is not only busy but also extremely hot in Brussels (no kidding). An ideal day for a fresh summer story.
Italian beach owners have called a lockout on 3 August to protest against the obligation imposed by the Services Directive to open up beach concessions to competition (for more, see here). Actually, it seems that the application of this Directive to beaches has been the source of some concern at the European Parliament (see here).
The reader who has sent us this information adds that the current lack of competition is evident to anyone visiting private beaches this summer. We have been provided with evidence that shows that the prices applied in Knokke (Belgium) are supra-competitive, and it seems that this is the case throughout the EU [which is why you should all spend yor holidays in Spain, where beaches are great and public 😉 ].
A week ago another friend/reader from DG Comp wrote to us complaining about the every day cartels that he had identified in beaches, including the renting of hammocks, pedal boats and drinks.
All these reports have generated widespread concern at DG Comp. We are told that many officials have volunteered to conduct in-depth on-site investigations. Hords of DG Comp’s staff are leaving Brussels these days in order to conduct extenuating beach inspections which, in some cases, may last for over a month. They can be spotted at airports flying to almost every beach destination in Europe.
I had lunch at the Commission’s canteen today and was told by insiders that during August the Commission will be giving absolute priority to this sector investigation. In fact, and this is an exclusive from Chillin’Competition: we are told that Commissioner Almunia has decided to settle the investigation on Google in order to free resources for this programmed massive beach inspections. One of the officials heading an inspection team has sent us the pic that illustrates this post and that proves the Commission’s zealousness.
Of Politics and Competition Law (and on the Google cases too)
In a recent post on the diluted legality of competition law I voiced out the view that our discipline could partly be losing its last name, a development for which I blamed a number of factors. However, some developments in the past few weeks have led me to think that perhaps I missed a critical feature: the increasing involvement of politics in the application of the competition rules.
To be sure, since its inception and all along its development, antitrust law –as a public policy tool at the core of the economic Constitution of any State- has had as much of a tight link with politics as it has with economics. But whereas economics not only provides a justification for the existence of the rules but also plays an important role in the development of legal rules and in individual cases, politics had traditionally exerted its influence in the exercise of enforcement discretion, and arguably not so much in the development of the rules and the outcome of cases.
The link between politics and competition enforcement might have been more obvious at the national level, where national competition authorities often are attached (organically or otherwise) to the Government at issue, which often appoints its members in the light of political considerations. It’s against this backdrop that one has to interpret the European Commission’s recurrent calls for independence of national competition authorities (most recently on a Staff working paper issued last Wednesday).
I think it’s fair to say that the influence of politics on the European Commission’s application of the competition rules has been more tenuous. For the most part, EU competition law has developed under the auspices of a firm political view on the advantages of competition in a system of social market economy, but in isolation from short-sighted political interests/small politics. This is largely explained by the theoretical legal status of the Commission as a body independent from Member States, and by the practical status DG Comp as a quasi-specialized agency within the Commission that one was not to second-guess. However, there are signs that this might be changing. In recent times national politicians have increasingly given their views on how competition law should be applied (here is one very recent example), and so have members of the European Parliament and a number of EU Commissioners. Moreover, they are doing so not only when their national interests are at stake (political solutions have been and are all the more common in State aid cases and in some high-stakes mergers), but also concerning investigations of potential infringements.
There are several examples of this evolution. Most recently we have seen politicians –mainly Chancellor Merkel- vouching for the approval of the Telefónica/E-Plus deal (see here). But perhaps the best illustration of the trend can be found in the Google case, on which we have written extensively on this blog.
This is a case in which DG Comp has extracted (arguably using the commitment procedure and its impressive record in judicial review of 102 decisions to stretch the boundaries of current legal standards) a set of significant commitments on the part of Google (see my comments here), going beyond what US authorities did. This could be regretted by people interested in the clarity of the law, but would normally have been seen as a practical enforcement success on the part of the Commission. However, a number of motivated and well-funded complainants –led by some smart lawyers who know how to play with the system and who deserve credit for getting near what I would’ve thought was impossible- now start to seem capable of derailing the commitment procedure by politicizing it. First, the German and French ministers for economics wrote a most unusual joint letter to Vice-President Almunia asking for a tougher stance on Google. And now, a widely extended rumor has it that a few EU Commissioners are being persuaded not to approve any Article 9 decision during Mr. Almunia’s tenure. As you can imagine, not all Commissioners are persuaded with sophisticated legal arguments related to evidence on foreclosure and the such, some being more receptive to political lines alien to antitrust analysis, mainly “don’t let these guys off the hook because they don’t pay taxes in Europe and because the US spies on us”. Obviously, this has nothing to do with the law, or at least with competition law.
It’s difficult to guess how this will turn out. As recently explained in the FT (Alex Barkers’s coverage of EU competition issues is, by the way, excellent) “[s]ome people involved think the pressures make it more likely Mr Almunia will decide to launch a formal probe of Android”. And indeed, the Android investigation may be the second leg of this political game, and once again the Commission might be under enormous pressure to take a hardline. [By the way, if you’re interested in reading about the competition issues involved in the Android investigation, I would very much suggest you read the insightful pieces recommended by Kevin Coates here 😉 as well as this interesting brand new piece on the matter (particularly enjoyed footnotes 26 and 127…) (thanks to Jorge Marcos –ULg- for drawing our attention to it)]
Much more could be said about the politicization –and possible transformation- of antitrust and I look forward to your comments, but I’ll close it off now (mainly because the Word Cup final is already on). Some of you will recall my piece on Antitrust and the Political Center, in which I outlined some views on how antitrust embodies a centrist political ideology and can contribute to the expansion of sensible political views internationally. Well, in my view, the same is not true the other way around; infusing minor, short-sighted, political goals into the application of competition law can only contribute to disfigure even more a branch of the law which –let’s not forget- is, on its sanctioning dimension, quasi criminal in nature.
The political agreement in having technical competition rules applied by independent agencies is now an established idea, heralded internationally by the European Commission. And it makes sense because in spite of its unquestionable benefits, competition law’s constituency is diffuse and unable to mobilize politicians in the right direction. If you ask me, competition law can better serve its goals when dissociated from small politics.
Chillin'Competition 