Are above-cost selective price cuts abusive? AG Mengozzi´s Opinion in Post Danmark (Case C-209/10)
Yesterday, Advocate General Mengozzi delivered an interesting Opinion in the Post Danmark v Konkurrenceradet case (C-209/10) (Not yet available in English).
This case has its origin on a preliminary reference submitted by the Danish Hojesteret which asks the ECJ whether it can be concluded that a dominant company which sets selectively low but non-predarory prices to be applied to three large customers of its main competitor can be held to have abused its dominant position when there is no evidence of any strategy aimed at excluding its competitor. The Danish Court also asked about the relevant additional elements that must be taken into consideration before concluding that selective above-cost pricing is illegal.
One of the main remarkable aspects of this Opinion is that it names Nicolas as authorized doctrine (this reflects the current level of antitrust doctrine.. ) 😉 But we´ll come back to that later.
Mengozzi´s Opinion is interesting in several respects. If you´re interested on a fairly detailed and hastily written identification of its highlights, click here to keep reading.
(Warning: as many cost-related discussions this one can be a bit tedious for some lawyers).
Information Exchange in EU Competition Law – Conference 22 June
I attach the programme and registration form of a forthcoming half day conference on information exchange agreements. It will be organized under the auspices of the BSC, and held at the premises of the FEB.
Do not wait to register (with the online form here or by following the link below).
Programme Conf. Exch. Info. BSC 22 JUNE 2011 version 24052011
Enforcement Gap?
While in Sorrento for the first conference of the Associazone Antitrust Italiana, I learned an interesting fact about Italian competition law. For a few years now, the Italian Antitrust Authority has apparently shifted the quasi-entirety of its enforcement resources to the investigation of unfair trading practices. As a result, little, if any, enforcement initiatives are undertaken on the basis of the Italian competition rules. The daily business of Italian competition lawyers has thus changed dramatically, and many have had to learn a new discipline.
Interestingly, the rationale for this strange enforcement prioritization agenda has to do with media exposure. Because unfair trading practices cases require little resources, the competition authority can investigate and decide many of them and thus appears frequently in the press. In contrast, antitrust cases are more costly, lengthy and uncertain. Their political, social, and media benefits are much more limited.
Now, I wonder if the Italian CA, and more generally multi-function CAs, can lawfully decide to renege on competition enforcement, and allocate their resources to other areas (e.g., consumer protection, unfair trading practices, etc.). After all, an enforcement agenda of this kind undermines the principle of effectiveness of Article 101 and 102 TFEU enshrined in Article 35(1) of Regulation 1/2003. Such a practice creates an enforcement gap on Italian territory which to me, is incompatible with the twin logic of decentralized & homogeneous enforcement which blows on the EU competition system. Just think for a minute to the situation of a French firm facing exclusionary tactics from a dominant Italian incumbent. Faced with a CA reluctant to open proceedings, the remedies open to the French firm are drastically limited.
Of course, the next question is: what can firms do to induce the Italian CA to revisit its enforcement agenda? Besides asking DG COMP to put pressure on Italian officials, the most obvious course of action involves a complaint before the Commission against Italy under Article 258 TFEU for failure to comply with EU law.
The first conference of the Associazone Antitrust Italiana was a great success with approximately 150 participants. I attach my slides and the text of my speech.
Oral Intervention – Speaking Notes – N Petit
Slides NP – Judicial Review in European Union Competition Law – Final
Rock and Law + The Legal Run
In the past few days we have posted stuff on Competition Parties, Competition Tourism , Fine Arts in Brussels and even on competition law manga. To complete this string of posts on competition law and leisure time we wanted to publicize and praise a couple of worthy initiatives undertaken by some law firms and in which a more than fair representation of competition lawyers (as well as a handful of readers of this blog) are participating:
The first one is “Rock and Law” a beneficial concert night which will take place in Madrid on the 16th of June with the participation of rock bands from Garrigues, Clifford Chance, Freshfields, Uría Menéndez, Ashurst, Cuatrecasas, Gómez Acebo &Pombo, CMS Albiñana, and Baker& McKenzie. Last year this event was a tremendous success, and I bet that this edition will top its predecessor.
Competition lawyers will be very well represented in Rock and Law with the band “The members of the Bar” (also called “The Whistleblowers” when under a different formation); two of their components , Carlos Vérgez and Enrique Carrera , are (apart from readers of this blog and good friends) almost as good with the guitar as they are with competition law (and I mean this as a compliment!)
The second initiative I was referring to is “The Legal run”, a fundraising activity organized by the Brussels in the framework of the Brussels 20 K, which will be taking place next Sunday. Although not necessarily registered through the Legal Run, a good bunch of competition lawyers will be taking part in this race (although fewer than expected; a number of ex-Howreys had reportedly been registered by the (ex)firm but their entries were subsequenlty withdrawn without notice. What are liquidators for if not for these things?). We´re willing to offer one of our already famous prizes to the fastest competition lawyer taking part in the race, so feel free to send us your times.
Awareness and Public Outreach Programmes
Public outreach programmes were a key topic on the agenda of the ICN annual conference in the Hague.
Those programmes seek to raise awareness of the general public (including firms) to the scope, content, institutions and penalties of competition rules. They are particularly important in countries with young antitrust regimes. They induce firms to comply spontaneously with the new rules.
But they are also relevant to any agency seeking to improve its detection efficiency. To take one example only, too many individuals still believe that price-fixing is not unlawful. Through education, awareness programmes may prompt stakeholders to report infringements (by lodging complaints and leniency applications, for instance).
Now CAs accross the world have been very inventive in crafting such programmes, often with the active support of the ICN. The leniency movie is now a standard in many competition law jurisdictions. DG COMP has recently posted on its website a funny flash module which illustrates the scope of competition policy. The Norwegian and Brazilian CAs have produced t-shirts with competition-friendly slogans (would love to get one of them. My size S or M).
Without the shadow of a doubt, however, the prize of the best public outreach device must be awarded to the Competition Commission of Singapore (CCS). On its website, the CCS makes available (for free) a MANGA on abuse of dominance (in English). Bravo!
I am just back from the Hague with 6 paperback copies. They will be awarded to my best students this semester.
PS: A great experience. I am truly indebted to the DG COMP for its kind invitation.
Competition Tourism
Last week, I finished my lectures in Liege. Now comes the time of tourism for us academics:
- To start, a dream comes true: For the 1st time, I will be attending the ICN conference in the Hague as a NGA representative (a big thank you to the EU Commission for the invitation). Subject to Wifi availability, and to the interest of speeches, I will try to report/tweet live from the ICN tomorrow. In the Netherlands and elsewhere in Europe, an unusual number of competition law events are organized in the days that follow the ICN conference. Events organizers are taking
a free rideprofit of the presence in Europe of high-profile speakers from the overseas.
- On Saturday, I will be in Sorrento (Italy) where the Italian Antitrust Association organizes a conference entitled “Major Developments in EU and Italian Competition Law“. See programme hereafter. Sorrento – bozza programma – 22-2-11 – def (2)
- Finally, on 20th, 27th May and 10th June, the Brussels School of Competition (BSC) will be organizing a tour in the national competition laws of 4 Member States (Be, FR, DE, UK). See registration form hereafter. Nat_comp_registration_form
Forthcoming GCLC Lunch Talk – Roundtable on Leniency Programmes
The next lunch talk of the GCLC will be devoted to “Leniency Applications and the European Competition Network: Roundtable discussion on the Interplay between National and EU Procedures“.
It will take place on 27 May 2011 at The Hotel in Brussels.
Our speakers for this promising event are Saari Suurnäkki (DG Competition); Marcos Araujo (Garrigues); Mario Todino (Gianni, Origoni, Grippo & Partner); and Antoine Winckler (Cleary Gottlieb).
The registration form is available here.
Fine Arts in Brussels
In the past few days both Commissioner Almunia and Cecilio Madero, Deputy Director General for Antitrust, have spoken publicly about sanctions for breaches of EU Competition law (see here and here). Both have praised the current EU enforcement system as well as the changes that have been introduced to improve enforcement practice, namely the settlement procedure.
In his speech, Mr. Almunia also made a very welcome announcement. From now on “the Commission will indicate already in the Statement of Objections itself, the elements for the calculation of the fine such as the value of the cartelised sales – which is a critical factor – but also, for example, an indication of the gravity and issues of recidivism”. I see this as a great development, and one for which the European Commission must be congratulated.
But there are still a few issues which, in my view, should also be reconsidered by the Commission. Some opinions and suggestions in this regard are developed in an article I´m specially proud of, titled “Fine Arts in Brussels, Punishment and Settlement of Cartel Cases under EC Competition Law”. This article was authored by Luis Ortiz Blanco, Angel Givaja and by myself; it was presented by Luis Ortiz Blanco at a conference in Treviso in May 2008 and later published on the book Antitrust, Between EC Law and National Law.
Until now this article had never been available online, so we´ve decided to remedy that and make it available to the readers of this blog. As you will see, the arguments in this article are accompanied by Roman numbers; those numbers refer to paintings which graphically illustrate those ideas.
Here it is:
DG COMP Stakeholder’s Study – A Counter-Survey
In July 2010, DG COMP published the results of a wide-scale stakeholder study (Alfonso commented on this a while ago).
According to the stakeholders study, DG COMP has arguably enforced the competition rules in a satisfactory fashion, both from a substantive and procedural standpoint.
As part of their exam, my students from EDHEC Business School have been requested to assess whether the findings of DG COMP’s stakeholder study are sound. To this end, I have required them to run a counter-stakeholders’ survey, which takes the form of a reduced questionnaire.
I would like to offer our readers the opportunity to help my studs, by filling-in the below questionnaire:
https://spreadsheets.google.com/spreadsheet/viewform?formkey=dHZVVWI0SzNhNUFQUlpsa2NnZWVra1E6MQ (or simply by clicking here)
Please note that it should take you a maximum of 15 minutes to complete this survey. Obviously, all the responses to the survey will remain confidential and will be used for the sole academic purpose of this study. If you have any questions or concerns about completing the questionnaire, you may contact my assistant at dgcompsurvey@edhec.com or eprovost@doct.ulg.ac.be.
Name of assistants/students involved in the research project: Elise Provost; Naruttama Asvamanee;Edouard Augris; Melissa Butarbutar; Guilain Lobut; Anne-Juliette Lepoutre; Sabine Racine; Mariama Sene.
Net neutrality and Antitrust
The European Commissioner for the Digital Agenda, a certain Neelie Kroes, is now in charge of dealing with European policy with regards to net neutrality. This hot issue, which is now her current priority (for her latest speeches on this subject see here and here), is the subject matter of a Commission´s Report she presented to the European Parliament on April 19th.
Net neutrality activists have heavily criticized the Report alleging that it endorses a “wait and see” approach in spite of the identification of alleged instances of blocking or throttling of certain types of traffic. The Report states that the Commission and BEREC are currently investigating those alleged practices and that “[i]n this regard, the Commission reserves its right to assess under Articles 101 and 102 of the TFEU any behaviour related to traffic management that may restrict or distort competition“. One should however note that the Report doesn´t exclude the possibility that an ad hoc regulatory framework might be adopted.
On the other side of the Atlantic the debate on the interface between antitrust and regulation on this same area is also a “trending topic”. Speaking last Thursday before a Subcommittee of the US Congress, the President of the US Federal Communications Commission expressed his views on this debate stating that:
“while critically important, antitrust laws alone would not adequately preserve the freedom and openness of the Internet or provide enough certainty and confidence to drive investment in our innovation future.
(…) antitrust enforcement is expensive to pursue, takes a long time, and kicks in only after damage is done. Especially for start-ups in a fast-moving area like the Internet, that’s not a practical solution”.
He also replied to the Republican´s party proposal to enact specific antitrust laws to regulate internet neutrality:
“Some have suggested that Congress adopt new antitrust laws addressing Internet openness. But that too would be a problematic approach, ill-suited to the fast-changing nature of Internet technology. As the Supreme Court has pointed out, while statutes are hard to change in light of new developments in network technology or markets, expert administrative agencies have flexible processes for dealing with the unexpected and are, accordingly, better suited for handling this particular issue”. (See here for his complete statement).
At first sight, my -rather simple- take is that if there really were a need for intervention (not having devoted time to this issue I wouldn´t dare to express an opinion on this point) antitrust and regulation could play together and should be seen as complements rather than as substitutes (although that´s certainly much easier to say in the EU in light of case law such as Deutsche Telekom than in the EU, where the Supreme Court´s Decision in Trinko enormously complicates antitrust challenges to practices already subject to regulation on the part of the FCC).
This could be an interesting topic a discussion and we haven´t paid much attention to it here. We´d be glad to open the floor to any of our readers who might have some more developed thoughts on it. Anyone?
