And the answer is….
Las Siete Partidas, passed by Alfonso X, El Sabio (1265) [Alfonso “The Wise”].
Congrats to Tatiana Siakka, David Mamane, Andrey, and Lorenzo Climenti! (Nico: you can afford 4 beers, right?)
Here is an explanation extracted from their answers:
Title 7 within Law 2 of the Fifth Partida, entitled “Of the shortages and bids that merchants create between themselves through oats and guilds” was the legal provision prohibiting traders from engaging in price-fixing and output restriction.
The Code was elaborated in Spain (Castile), but it was in force in Latin America until the modern codification movement (1822–1916). Until the beginning of the 19th century, they were even in effect in the parts of the United States, such as Louisiana, California or Nevada, that had previously belonged to the Spanish empire and used civil law. Furthermore, they served as the legal foundation for the formation of the governing juntas that were established in both Spain and Spanish America after the imprisonment of King Fernando VII during the Peninsular War.
Below you will find a scanned version of the relevant part by courtesy of José Luis Buendía.
[The text appears in Spanish and Latin. Since the short bios available at Brussels-based law firms suggest that all competition lawyers are fluent in practically every language, we trust that many of you will be able to understand it 😉 ]
P.S. Could someone please edit wikipedia´s entry for History of Competition Law?
A (kinda tricky) quizz
If we asked you what was the first antitrust legislation ever in force in part of the territory of what is now the United States you would probably respond that it was the Sherman Act.
This answers is wrong.
What then was the first antitrust law ever in force in America??
We can give you two hints: (i) it was drafted in the 13th century; (ii) the person who promoted its drafting is one of the 23 lawmakers depicted in the marble bas-reliefs of the House of Representatives chamber of the United States Capitol.
Our quizz will be open for 24 hours. You can submit your answers either as comments to this post (they won´t be made public until tomorrow) or via email to alfonso.lamadrid@garrigues.com (I anticipate that I won´t be able to reply; actually, the reason why we´re posting a quizz is because these are busy -and fun- times at work).
Those who get the answer right are entitled to a free beer.
P.S. Since, as you know, “free” products are rarely ever free, the beer will be paid by Nicolas, who doesn´t yet know about it 😉
Chinese Antitrust Law – The Year of the Rabbit in Review (1)
The Year of the Rabbit is over, and the Year of the Dragon just started today in China. This is thus a good moment to look at the rabbit in the rearview mirror, and reflect on what has been achieved in Chinese antitrust over the past year. Our colleague and friend Adrian Emch from Hogan Lovells Beijing has proposed us a series of posts on the Year of the antitrust Rabbit. If time allows, Adrian has promised a “trilogy!”
For this first post, let’s just review the main developments in Chinese antitrust law over the year of the rabbit (the description is not meant to be exhaustive)? The year started with a bang: on 1 February 2011, a total of five new regulations implementing the Anti-Monopoly Law came into effect. Two of them were released by the National Development and Reform Commission (NDRC), and three of them issued by the State Administration for Industry and Commerce (SAIC). (For in-depth analyses of these regulations, see here.)
Besides this, and focusing on case-work, here’s a flavor of what Chinese agencies and Courts have been busy working on.
NDRC. As already reported, one of the highlights in NDRC’s activities was the Unilever decision in May. In November, NDRC also adopted a decision against two domestic pharmaceutical companies, with the highest fines ever imposed for an infringement of competition law. The case was about two of only a handful of distributors of a drug (promethazine hydrochloride) that entered exclusive supply arrangements with the two only domestic producers of the drug. The result was rather obvious – significant price increases. The legal reasoning in NDRC’s public announcement of the case, in turn, was less clear. Press reports indicated that the two distributors were affiliated, so a possible theory that the two distributors had engaged in cartel conduct would not make much sense if one were to accept the “single economic entity” defense (which is not explicitly in the law inChina, though). It seems that NDRC, instead, held that the distributors had abused their dominant position. But there is no explanation on this in the announcement, so one can only speculate whether the dominance was found pre- or post-agreement, and whether it was single or collective dominance.
Finally, in December, NDRC officials told the domestic press that they were investigating a potential abuse of dominance by two ofChina’s three large telecoms companies, China Telecom and China Unicom. In the absence of an official decision or announcement, the exact facts of the case are not fully clear. For example, it is, again, not entirely clear whether the dominant position would be each company individually (China Telecom is strong in the South of China, and China Unicom in the North) or jointly (collective dominance can be presumed if the aggregate market share of two companies is two-thirds or more). As for the alleged abuse, it seems it consisted of making difficult access to the broadband network. The particular allegation may be that the two companies granted access on a discriminatory basis, with higher access charges for companies that compete with them downstream.
Finally, in terms of human resources, NDRC has started restructuring its antitrust team in 2011. In July, the main body was re-named Price Supervision and Anti-Monopoly Bureau (in English), and the antitrust team inBeijingis scheduled to grow from half a dozen to over 20 in the coming months.
The Friday Slot (3) – Antoine Winckler
For this third edition of the Friday Slot, Antoine Winckler (Cleary Gottlieb, Brussels) has taken a shot at our questions. I met Antoine five years ago at a conference on “Non-competition concerns under the EUMR”. He made a great impression and since then, with my competition friends, we refer to him as the “Tribun”. A full biography of Antoine can be found here. I also know for a fact that Antoine reads our blog regularly. It is a great honor that he took the time to answer to our questions.
“Oscar” of the best competition law book? And of the best non-competition law book?
Judge Bork’s Antitrust Paradox
Boccacio’s Decamerone
“Oscar” of the best case-law development in the past year? “Oscar” of the worst case-law development?
Worst : CJEU, C 439/09, Pierre Fabre Dermo-Cosmétique SAS v Président de l’Autorité de la concurrence and Ministre de l’Économie, de l’Industrie et de l’Emploi (another move away from the effects theory)
Best: Advocate General Sharpston’s Opinion in CJEU, C-389/10 P, KME v. Commission
Let’s do it like economists => assume that you could change 3 rules, principles, judgments, institutions in the current EU competition system. What would you do?
I would transform DG COMP into an EU Prosecutor and give the General Court the power to make all antitrust decisions (but only after making sure judges have all followed economics 1.01).
Average working time/week?
When does work really stop?
Why do you work in competition law? How did you first get into it?
You get to work with non-lawyers a lot.
I really wanted to work in Brussels – just kidding.
Most interesting, intense or funny moment of your career?
Watching Judge Vesterdorf being shown a streamed James Bond movie (James Bond in his Aston Martin) during the Microsoft v Commission hearing.
Hearing my learned colleague/partner/dear friend Mario Siragusa and his opponent Antonino Abate from the Legal Service – both pure Sicilians – plead a State-aid case in re-invented French.
Your role model (if any) in the competition community? And outside of it?
Don Holley and Mario Siragusa (my mentors at Cleary)
Winston Churchill
What do you like the least about your job?
Difficult clients
What do you like the most about your job?
Difficult clients
What you like the most about economics in competition law?
Finding an economist coming up with the right answer
What you like the least about economics in competition law?
Economists who repeat what lawyers say
What career/personal achievement are you most proud of?
Having had fun (most of time) working
A piece of “counterfactual” analysis: what would you do if you weren’t in your current position?
Teaching philosophy/literature/history or riding horses
Besides being a “competition geek” (sorry for this one, but we all are), what are your hobbies?
Philosophy and horses
Favorite movies?
Gilda, The Night of the Iguana, Hitchcock and Marx Brothers generally
Favorite music style in general?
Opera
Your favorite motto?
Work is the curse of the drinking classes (Oscar Wilde)
Websites that you visit the most (besides Chillin’Competition)?
Google of course
A piece of advice for junior competition professionals?
Have fun
An”toy”trust
It was reported yesterday that construction toy manufacturer Mega Brands has lodged a federal antitrust complaint against its competitor Lego in order to “stop Lego’s illegal efforts to monopolize the construction toy market through illegal anti-competitive practices including, but not limited to, use of fraudulently obtained IP [intellectual property] rights to interfere with Mega Brands’ right to continue to import certain competitive products [cylindrical studs] into the United States.”
More information is available here. The original complaint is available here.
PS. The picture above is supposed to be one of a Lego Courtroom, although I´m a bit confused by the cook handing a pizza to one of the strangely-dressed members or the Jury…
For real?
In the last weeks, France lost its triple A, but gained a fourth operator in the mobile telephony sector.
The chronology of events that led to the entry of Free Mobile brings a good illustration of what may constitute retaliation tactics amongst semi-collusive oligopolists. A reminder of what happened:
- Since last year, rumour has it that a new operator contemplates entering the French mobile telephony triopoly;
- In the summer 2011, the 3 incumbent oligopolists introduce low cost subscriptions in a bid to possibly dissuade the new entrant;
- As the threat of entry grows in the first days of 2012, the incumbents make statements in the press that they are ready to throw heavy artillery at Free mobile;
- On 10 January, Free Mobile launches its mobile telephony service, cutting the incumbent’s mobile offers by several €s, and outcompeting them on voice, sms and the Internet;
- In the following days, all three incumbent players align their offers on Free, with Bouygues Telecom even applying similar prices as Free ;
- Yesterday, one incumbent send bailiffs to witness that Free’s network is dysfunctional, in violation of a number of contractual obligations.
Looks to me as if 2, 3, 5 and 6 are clear examples of ex ante and ex post retaliation tactics. Thanks to Free Mobile for offering an opportunity to put pictures on theory. Will likely use this as a case-study with my students.
Now, the theoretical question is: can Free Mobile rely on the competition rules to block incumbents’ retaliation tactics? As a matter of theory, retaliation practices of collectively dominant oligopolists could fall within the scope of Article 102 TFEU’s under-used abuse of collective dominance doctrine (O’Donoghue and Padilla, 2009, p.158).
That said, traditionnally, the economics of oligopolistic retaliation are still seen as too equivocal to be imported into a legal standard. Economists for instance disagree on the magnitude of retaliation measures. Whilst some believe that only measures akin to predatory pricing constitute an effective retaliatory mechanism, others view a mere temporary breakdown of collusion as a sufficient deterrent mechanism. Moreover, economists still disagree on whether retaliation must be specifically targeted at the cheating firm or whether general retaliation through market-wide price reductions is a sufficient disciplining factor.
Now, what is interesting in the Free Mobile case, is that retaliation is not just confined to prices. Incumbents seems to be engaged in a broadening pattern of retaliation tactics, the purpose of which is to force Free Mobile off the market. Those include the sending of anticompetitive signals through the press, agressive price competition, and possibly judicial/contractual harassment.
If things go on this way, and new retaliation measures are taken by incumbent oligopolists, Free Mobile may well solicit the protection of competition authorities under Article 102 TFEU. The fact that there are additional retaliation measures in addition to aggressive price competition could indeed make a strong case of abuse, under a Karate-competition law approach. Moreover, the incumbents might have coordinated their response to Free Mobile’s entry, as they did back in the day when they organized a Yalta on mobile telephony.
A last reason to believe: at the press conference announcing the launching of Free Mobile’s offer, X. Niel, the CEO of Free Mobile praised Bruno Lasserre, the head of the French CA, for his support in the last few years. And in reading Bruno Lasserre’s own words about free, it seems the French CA is quite enthusiastic with the entry of a fourth player in the market.
I wish I was…
During a recent conversation with a Judge, he mentioned that he felt envious of competition agencies (we were talking about the European Commission) because they could easily behave in a “schizophrenic” way, taking one stance in one case and a completely different one in another. He argued that courts are much more concerned about respecting their own precedents (as I pointed out, there are also some nuances to this view) than competition authorities are. In my view, there is a lot of truth to this statement; competition enforcers do not feel bound by their decisional practice because the Court has endorsed the view that each case must be dealt with in light of its specific circumstances. Moreover, progressive interpretations of the law (notably with regard to unilateral behavior) show that some national competition authorities as well as the European Commission do not necessarily feel obliged to follow the case-law neither. To a certain extent, much of this could be understood, but only provided that adequate reasoning is offered to justify that the circumstances merit a change of approach. Sadly, this is not always the case (although, to be fair, the Courts are not a paradigm of transparency when they overrule their previous case-law neither). I´m sure you can think of quite a few examples of radical unexplained shifts.
This conversation made an idea spring to mind: we should ask you who or what (within the antitrust world; yeah, we know, that´s pretty limited, but..) do you wish you were?
Here are a couple of ideas to get the ball rolling:
– I wish I was one of those economists who can say “this is an economic model that we developed for this particular case“. I´m waiting for the day when I can say “this is a legal principle that we developed for this particular case“!.
– I wish I was NOT the lawyer (or rather the former lawyer, I suppose) of the Austrian company that has requested a preliminary ruling from the ECJ on whether having obtained wrong legal advice can exempt a company from responsibility…
Anyone else?
Costs Conference
A reminder for our readers: the Brussels School of Competition (BSC) will hold to organize on 25 January in Brussels a half-day compliance seminar entitled “Costs in Competition Law”.
In line with the interdisciplinary spirit of the BSC, this event attempts to “blend” competition law and economics. Under each selected topic (see link to the agenda below), it thus brings together a team of one lawyer and one economist, who will seek to provide an integrated perspective on the issue.
The programme can be found at the end of this post. In recent days, we have made several significant additions to it.
Costs in competition law – Compliance Seminar – 25012012 – Programme
Christmas miscellanea
We will be closing the shop for a few days, but there are a few things that we would like to tell you first:
– Our personal Christmas wishlists appear in a special issue from Competition Policy International. They´ve done a great job with editing our pictures (“thanks” to all those of you who have written to say that I need to change the one I use for these things), and we´re grateful for having been placed in such good company. I´m also grateful for the opportunity to do some free advertising of my family´s bakery: thanks to this they will now start seeing some usefulness to my job! Nicolas also profited from this occassion to make it (more) evident that he´s a competition law freak geek.
– Nicolas and I had some pre-holiday drinks last night together with some good friends. Not only all of us were competition lawyers, but the place we went to was also packed with competition lawyers from a well-known firm. We´ll keep the name of the firm confidential, but we can give you a hint: what do you see in the second row of the image below? 😉
– Many other lawyers in Brussels and elsewhere are also getting some last-minute Christmas gifts. Our thoughts will be with all those who, like our friend David Henry, will have to be stuck at the office with a merger filing…
– The Spanish CNC also received a Christmas gift the day before yesterday, when the names of the members of the new Spanish government were made public. The new minister for the economy is Luis de Guindos, who was the Secretary General for Competition between 1996 and 2002. The CNC is certainly poised to play an important role in the coming years as Spain makes an effor to boost competitiveness. (By the way, the CNC has joined the list of national competition authorities resorting to animated cartoons to explain their job and the benefits of competition. Check it out here).
– A reminder of some events coming up right after the holidays: Nicolas will be opening the new edition of the IEB´s Competition Law Course in Madrid on 13 January (we´ll profit from our visit to Madrid to plot a couple of interesting projects on which we´ll report right after the holidays). The BSC will also be holding a very interesting conference on “Costs in Competition Law” on 25 January.
– A light piece of Christmas reading: Freedom to Trade and the Competitive Process by A. Edlin and J. Farrell. This short article is perhaps the most insightful paper I´ve read in a long time. It´s cool to see two top-notch U.S. economists saying sensible stuff that in Europe would be received with the worst of all insults: Ordoliberal!
– Finally, we want to thank whoever had the idea of improving the search tool in the webpage of the European Court of Justice. You made our lives easier.
– To be frank, there were more issues on which I was planning to comment, but I need to run to the airport…Merry Christmas to all and our best wishes for 2012!!
P.S. We leave you with the image of the European Union´s Christmas tree:
The B******t Test
As demonstrated by H.G. Frankfurt, we are surrounded by b******t.
One of the methods for spotting b******t it is the “not test“. As explained here and there, this test checks whether “it is possible to negate the statement and create a sentence that any sane person would utter in public“.
The “not test” has been applied by development economists to G20 declarations.
In concrete terms, the idea is to take a speech and turn its sentences to their opposite, i.e. turn all positive sentence to negative and vice versa. If the revised sentence makes sense and could equally be voiced by the speaker, then it enshrines worth content. If, on the other hand, the changed sentence makes no sense and would never possibly be pronounced by the speaker, then it is a vacuous statement which conveys b******t.
Now let’s see whether b******t is also pervasive in the antitrust field.
To apply the “not test“, I have chosen a policy speech of former Competition Commissionner Neelie Kroes. I apply it to bits and pieces of the speech which seem to convey opinions rather than descriptions. Instead of systematically using the “not” word, I occasionally apply antonyms.
“Together with the Court of Justice, the Commission has been an independent driving force to promote antitrust compliance to bring better products, greater choice, and lower prices to the citizens of Europe” gives => “Together with the Court of Justice, the Commission has been a biased inefficient force to promote antitrust compliance to bring better products, greater choice, and lower prices to the citizens of Europe” => b******t
“this is an impressive record, I still believe that more can be done” gives => “this is an unimpressive record, I believe that more cannot be done” => b******t
“Let me be very clear. These discussions are not about bargaining or negotiating. The Commission will not bargain about evidence or objections” gives => “Let me be very clear. These discussions are just about bargaining or negotiating. The Commission will bargain about evidence or objections” => no b******t
“We have a lot to be proud of. But as you can see, we are not resting on our laurels: our commitment to designing ever better competition policy and enforcement is as strong as it was fifty years ago” gives => “We have a lot to be ashamed of. And as you can see, we are
notresting on our laurels: our commitment to designing ever better competition policy and enforcement is as weak as ever” => definitely b******t
I leave it to our readers to draw their conclusions on this. But it seems we’d save a lot of time and paper if speeches were better drafted…
A disclaimer: this post was inspired by Alfonso’s last post + drinks yesterday with my LL.M students…
PS: I suppose only die-hard fans of AC/DC-like sound will know the LP that illustrates this post. Jackyl was a great band, and their titles are worth re-listening.
Chillin'Competition 