Archive for the ‘Uncategorized’ Category
Assorted links
- Wouter Wils has a new paper on recidivism. I understand it will appear in World Competition. A question: Does Wouter have an exclusive supply agreement with Kluwer?;
- At the GCLC we are DESPERATELY looking for a Commission official to come present the best practices on the conduct of proceedings in antitrust cases (101 and 102 TFEU) at a forthcoming lunch talk;
- I gave a presentation on standardisation agreements, IP and competition law. See link thereafter for the ppt. Droit des brevets et droit de la concurrence – Accords de normalisation A paper is in the making;
- A good New Yorker paper on why the current laudative discourse on small business is misguided;
- And a rumination/question: what makes it that in some markets, the supplier pays for distribution (publisher-search engines, airlines-travel agents), and in other markets, the supplier sells to distributors (consumer goods-supermarkets)?
On the EU and the sovereign debt crisis (because life isn’t just competition law)
We spend most of our time working on competition law matters – be it in academia or in private practice-, and we also spend part of our free time trying to look at competition law from a different angle on this blog. If we devote so much time to try to make sense –and sometimes fun- out of competition law it isn’t because we believe that competition law is more important than other stuff. For all its many virtues, it actually isn’t.
We started this because we thought there was something a bit different that could be done within our tiny and endogamic professional circle, and because we only feel comfortable speaking out loud about issues on which we feel we can add something coherent and hopefully useful (as you can imagine, writing every day what comes off the top of our heads without thorough reflection and in front of such an informed audience as you are means entails certain challenges and risk, notably the risk of making fools out of ourselves). In other words, we do this because we thought there was something meaningful –if only a tiny bit- that we could add to the area in which our professional lives are focused.
But even though our economist friends could argue that we are rationally choosing to exploit our competitive advantage, we can’t help thinking sometimes that maybe our priorities are somehow skewed. One example: while EU leaders were holding crucial talks in Brussels–just a few meters away from my office- on October 27th and 28th, we were writing here about the names of partners at an American firm as well as about the “slow death of Article 101(3)”. Wouldn’t it have made much sense for us to write about the slow death of the European project?
We are just as politics geeks and fervent EU supporters as we are competition law geeks; the difference is that we feel, or rather know, that you wouldn’t give a damn about our personal views on general issues on which our opinion is not different from anybody else’s; that’s why we’ve only gone off track on very rare occasions. There are times however where we feel that we have to give vent to some non-competition related thoughts.
There are some things we simply can’t understand. We don’t have solutions and are not going to fix the world, but since we need to let some steam off, we thought we’d use this platform.
If interested in knowing what we can’t understand, keep on reading. If not, we’ll be back tomorrow with the usual stuff, and apologies for going off-track.
Patent wars (+ Faull&Nikpay)
It has been reported today that the European Commission is concerned about the use that is being made of patents essential to the 3G mobile communications standard in the context of the ongoing legal battles surrounding the smartphone technology markets.
The Commision has confirmed that it has addressed requests for information to both Samsung and Apple, but it has not yet provided any further details. A legal filing by Apple in the U.S. nevertheless reveals that this preliminary investigation on the part of the Commission may be targetting a possible abuse of FRAND (Fair Reasonable And Non Discriminatory) licensing agreements on the part of Samsung, which in the recent past has initiated a large number of proceedings against Apple in several jurisdictions.
This is not the first antitrust investigation regarding anticompetitive behavior related to enforcement, use and misuse of patents undertaken by the EU Commission (think, for instance, about the Qualcomm or Astra Zeneca cases), and it certainly won´t be the last. Patent wars may be a newcomer in the antitrust world, but they´re here to stay.
By the way, I´m very fortunate to be -together with Miguel de la Mano (Deputy Chief Economist at DG Comp and currently Acting Chief Economist at the UK´s Competition Commission), Hans Zenger (CRA), and Renato Nazzini (LMS and Southampton University)- part of the team that is currently should be drafting the chapter on Article 102 for the next edition of the Faull&Nikpay (which, as you know, is one of our favorite books), and given the rise of IP-related abuse of dominance cases we´re planning to devote a specific section to these issues.
Have a nice weekend!
(Image possibly subject to copyright)
Perfect competition
At university, I teach a course entitled “basic economics of competition law“.
Last week, I told my LL.M. students that there are only few real life examples of the perfect competition model.
I also told them that the “perfect competition” entry in Wikipedia only mentioned street food in Asia.
If I had to think personnally of additional illustrations, the only examples that sprung to my mind were:
- Le Carré in Liège => the city centre area where students get d***k on the WE
- The Kebab street close to the Grand Place in Brussels => the city centre area where people rush at night after they got d***k
Since then, one of my LL.M. students has apparently updated the Wikipedia entry :).
Our second birthday!
On 20 October 2009, Chillin´Competition opened for business.
In the two years that have gone by since then, this blog has taken up a considerable part of our “free time”, but it has taught us a lot and it has rewarded us with a great deal of satisfaction as it has introduced us to many new friends and opportunities. As we replied in an email to one of you last week, as most parents we´re very proud of our baby, but we are ambitious parents and we want it to get better and better in every possible way.
One year ago, we confessed to be “frankly surprised by the reach of this tool” because we´d had nearly 70.000 visits and an average of 350 visits a day. As of today, we´ve had 177.000 visits and our daily average has constantly increased to the extent that this week we´ve had over 1 , 000 visits a day. Over 450 of you receive our daily posts via subscriptions or via our LinkedIn group.
Over the lifetime of the blog, we have been lucky enough to receive some really excellent input, from both guest contributors and from you in the form of your comments.
W hen we stated out, we couldn’t have imagined the interest that Chillin’ Competition would generate. Thanks so much!!
Nicolas & Alfonso
Competition Law Everywhere
I often tell my studs that there’s competition law everywhere.
Here’s an example, found this morning when reading the news at breakfast.
In several recent lectures, I have explained that the case-law insulates organs with “exclusively social functions” from the ambit of the competition rules. This is especially the case of social schemes that operate under the solidarity principle (ECJ, C-159/91 et C-160/91, Poucet and Pistre).
In France, the “mutualités” (complementaty social schemes) have recently announced their intention to collectively raise prices, to pass-on tax increases decided by the Government. I suspect that some of them do not operate under the solidarity principle, and might thus not benefit from the above exception. Needless to say that any coordinated plan to increase prices could be akin to an unlawful concerted practice or decision by associations of undertakings under Article 101 TFEU.
Moreover, it seems that the governement does not force them to pass-on the price increase (in which case they could benefit from the act of State defense). Hence, the sole economic situation in which 100% repercussion would be unavoidable, is where the “mutualités” already price at marginal costs. Otherwise, if they make a profit, they can take part (or all) of the tax increase on their profits. In this case, they should compete on the tax increase absorption. A joint decision to transfer it on consumers should thus be forbidden, in that it chills competition.
Now off to watch France v. Wales
Reforming the EU General Court
Last week, the European Commission adopted a formal position on the reform of EU Courts. The document refers to both the ECJ and the General Court, but for the moment we will focus on the latter as the main subject of the proposed reform.
The Commission´s position advocates for the appointment of 12 new Judges to the General Court (which would make a total of 39) as well as for the creation of at least two new specialised chambers (one of which would most likely be devoted to competition cases). These reforms are aimed at addressing the enormous workload that the General Court currently faces (with over 600 new cases registered every year and ever growing delays).
The Commission´s proposal -which to a great extent endorses that of the President of the ECJ, Mr. Skouris- has now been circulated to the Parliament and to the Council.
Unsurprisingly, the most contentious issue that has arisen in the context of the ongoing discussions between Member States relates to the designation and nationalities of the new Judges. As you know, the method for the designation of Judges falls entirely upon Member State, which have always acted on the basis of informal consensus. The Commission, fully aware of the fact that abandoning the principle of equal representation would be tough to swallow for some Member States, has attempted to tackle the issue by proposing two alternative methods of designation (see recitals 42-50 of the document that appears in the link above). In our view, the merits of the candidates should weigh much more than their nationality, and therefore the second option proposed by the Commission appears to be preferrable.
We feel nonetheless, that several important issues remain unaddressed:
First, whereas the nationality of the Judges may certainly be important, there is another very relevant nationality factor at the General Court that has so far gone unnoticed.
What would you say is the percentage of French référendaires (clerks) at the General Court? Under a system of equal representation, the answer should be approximately 4%. In real life, that number is however…..40%!
We know some truly excellent French référendaires, and of course French is the working language at the Courts, but, as a mater of principle, when it comes to judging shouldn´t quality and credentials matter more than language abilities? (I´m using “we”, but maybe Nico, being a froggy French citizen sees things differentlly…) 😉
Secondly, there is nothing the Commission can do about designations of candidates at the national level. The Committee envisaged in Art. 255 TFEU has certainly helped by acting as minimum filter in the most flagrant cases. Nonetheless, some Member States may still be tempted by the possibility of appointing candidates on grounds other than those strictly technical (although the second option proposed by the Commission has the virtue of perhaps shifting those incentives).
In our view, Member States should ideally follow the Dutch example (we believe that other Member States are already doing it). They arranged a merit-based competition and eventually appointed two outstanding Judges such as Sacha Prechal (ECJ) and Marc van der Woude (GC).
Tougher Competition Law
The day before yesterday, in Joined Cases C‑403/08 and C‑429/08 (Premier League), the Court of Justice :
(i) failed to understand what a public good is;
(ii) further expanded the “object” box.
And a proposition: would I be a monopolistic supplier (like FAPL), I’d sell to one buyer only in the EU, at a very high price. Or I’d sell to all of them, at a very high, similar price (to limit arbitrage).
This case has been presented as a victory for market integration. I am afraid this is more of a knock-out.
GCLC Lunch Talk on VEBIC and Tele2 Polska
I am very pleased to announce a new GCLC lunch talk on “The Rights, Powers and Duties of NCAs following the ECJ Judgments in VEBIC and Tele2 Polska“.
It will take place on 24 October. Time and place as usual. Online registration available here.
We have invited E. Sakkers (DG COMP), F. Zivy (French Competition Authority) and S. Brammer (University College Leuven) to discuss those fascinating cases.
Some background documentation can be found here.
Antitrust Story
Like theft, monopoly pricing does not necessarily harm total welfare, but injures consumer welfare.
Depending on where you stand on the total v. consumer welfare equation, this may influence your social tolerance to theft.
A good illustration of this can be found in a story about William Baxter, a former Professor at Stanford Law School. Baxter also served from 1981 to 1983 as Assistant Attorney General in charge of the Antitrust Division of the DoJ:
“While strolling one evening on a quiet street near the Washington residence, Bill and his wife Carol were confronted by an armed robber; they emerged minus some personal property but without injury. At the next Antitrust Division holiday party, the incident became a skit in which the robber demanded Bill’s watch. When Bill resists, the robber points out that it would be only a wealth transfer – a mere redistribution that would not affect economic efficiency or total social welfare. Reassured that the robber shares his standards of economic analysis and acknowledging that the point is analytically correct, Bill immediately surrenders his watch”.
Source can be found here. Found in reading Ben Van Rompuy’s doctoral dissertation (VUB, Belgium).
Chillin'Competition 