Google News
Things are developing on the Google front, and for some reason the timing of the most significant developments is practically coincidental:
The complainants in the EU investigation on Google are as active as we had forecasted. A supplementary complaint has just been lodged before the European Commission by the French company 1plusV, which controls ejustice.fr, one of the original complainants. More on the content of the complaint here.
Almost in parallel, the Texas Attorney General disclosed on Tuesday some details on the information that it requested from Google a year ago concerning the operation of its search algorithm (see here ).
The new complaint and those revelations come at at moment of growing rumors on the likelihood of an early settlement. Apparently there have been a number of preliminary talks (including a meeting between Eric Schmidt and Commissioner Almunia), although the Commission has made clear that the investigation is ongoing. An offer of commitments on the part of Google seems to be the most sensible solution from Google´s standpoint it it wants to avoid entering into a never-ending legal battle with the Commission. In fact, Google´s CEO has been reported to be thinking along these lines (see here). As we´ve said before, I very much doubt that complainants and other of Google´s competitors would be satisfied; I bet that the case will be taken to Luxembourg no matter what, but given the Commission´s litigation record in art. 102 cases (and ultimately the Alrosa litigation) there´s no doubt Google would rather have the institution on its side.
Unrelated to the EU investigation, but also of interest is the fact that the American Antitrust Institute has published a white paper arguing that the DOJ should seriously consider challenging Google´s acquisition of ITA Software. It strikes me that the AAI, whose members should probably have very divergent views, has taken such a defined institutional position on this particular deal, but the paper makes an interesting read anyhow.
PS. Once again, all the info above has been found through Google News.
Nut Complaint
After MSFT I and II, bringing an Article 102 TFEU case against the Redmond giant may have seemed an easy shot.
This is probably what prompted the Omnis Group to lodge in December 2009 a complaint with the Commission alleging violations of Article 101 and 102 TFEU.
The Commission rightly dismissed the complaint in December 2010.
From both a factual and legal standpoint, the complaint looks indeed like a (bad) competition joke.
Read and judge for yourself:
- The allegations relating to Article 102 TFEU concern a market (Enterprise Resource Planning software) on which MSFT had a market share<5%. When the Commission disputed the complainant’s dominance allegation, Omnis Group had this to reply: the Commission’s data – which is based on market intelligence from Gartner and IDC – is flawed. Microsoft lied to market research companies. Quotes from wikipedia confirm Microsoft’s important market position…
- Besides invoking all the existing types of antitrust violations under Article 101 and 102 (tying, refusal to deal, discrimination, cartel (!), monopoly (!)), the complainant took issue with a number of exotic antitrust infringements: misuse of European funds, violations of public procurement rules and corruption by Microsoft. No comment.
- Last, but not least, the complainant requested a oral hearing pursuant to Regulation 773/2004.
Omnis Group lawyers should be commended for their knowledge of competition law, and their impressive mastering of legal strategy.
This, to me, is one of the nuttiest cases of 2010.
Much Ado about Nothing
Some topics exercize a somewhat irrational fascination on competition lawyers and should not.
Take, for instance, “hub and spoke agreements“. Lately, this topic has been amongst the trendiest issues in competition law circles.
However, those are just ordinary vertical agreements with horizontal anticompetitive effects (read collusion). Conceptually, they should be dealt with along the lines of multi-agency contracts, english clauses, single branding agreements and so on.
Viewing hub and spoke agreements as a novel kind of agreements is purely formalistic reasoning.
The bottom-line: I will fight any proposal to organise an event on hub and spoke agreements :).
TV and events of ‘major importance for society’
(Once again we have the pleasure of publishing a contribution by Pablo Ibañez Colomo. It seems that the future of broadcasting rights is being decided in Luxembourg, and as he did last week when Kokott´s opinion was issued, Pablo is sharing with us his views on the latest Judgment in this area).
More on TV rights this week. In Cases T-385/07, T-55/08 and T-68/08, the General Court dismissed an annulment action against a Commission Decision declaring the compatibility with EU law of national measures concerning the broadcasting of events of ‘major importance for society’ (read: the FIFA World Cup, the Euro, the Olympics and similar sports events). In accordance with Article 3 of the Audiovisual Media Service Directive, Member States may require that these events are offered on subscription-free TV channels.
Given the way in which the said provision is worded, the outcome of the action is as unsurprising as it is uncontroversial. Some bits of the judgment raise some interesting issues:
Freedom of information: I have always been surprised by the lightness with which freedom of expression issues are addressed in TV rights-related cases. The General Court (as does the Preamble to the Directive) argues that these measures are justified by Article 10 ECHR, which includes the ‘freedom to receive information’. It is far from clear that the freedom of speech encompasses a right to access an event offered by a private actor on a subscription-free basis . Does this mean that publishers breach the freedom of information of their readers when they charge for their newspapers informing about events of ‘major importance for society’?
Have your cake and eat it?: When reading about Article 3 of the Audiovisual Media Services Directive, I cannot help thinking about the hybrid situation they create. Sport has become a multi-million business benefitting its governing bodies. If governments do not object to these developments (and I am not suggesting that they should), I do not see why they interfere downstream in the value chain to create market distortions at the level of broadcasters (which very often means, moreover, that public broadcasters end up paying for the rights).
Slides of GCLC Conference on Horizontal Cooperation Agreements
A good conference overall, nice turnout, good speeches (with a hat tip to Adrian Majumbar who made a remarkable presentation).
A. Gutermuth GCLC – Revision of R-D BER – 16 Feb 2011_(EUROPE_10326795_2) (3)
D. Wood – Horizontals presentation – GCLC – 14022011 (2)
HCG Chapter on Standardisation – GCLC
J. Koponen – Joint purchasing agreements (2)P. Hellstrom – GCLC Standards Brussels Feb 2011 (2)
R. Hesse GCLC Presentation FINAL (2)
Lars Kjolbye – GCLC 16 February 2011 Information Exchange (2)
Apple´s offer to publishers & an overstatement on lawyers´(un)happiness
Today we´d like to point you to a couple of short and interesting pieces on which we would appreciate hearing your views:
As some of you may know, Apple recently announced that it will allow newspapapers, magazines and other publications to sell digital subscriptions of to iPhone, iPad and iTouch users (if you don´t, see here). An interesting post published yesterday on The Wall Street Journal Law Blog (see here) has highlighted the potential antitrust-related risks incurred by Apple with regards to some of the terms of its offer. One of the central issues essentially boils down to defining the relevant market affected by Apple´s offer: is there a relevant market for consumer tablet computers? A wider market for digital and print media outlets? Any opinions? And even case Apple were found dominant in a nascent market, should that warrant antitrust intervention?
A second interesting, and certainly controversial piece of reading, is this one. It´s an article written some years ago in The Sunday Times concerning lawyers´ dissatisfaction with their work. I have stated here some of my views on this topic, and I´ve even ventured some criticism on how things are often done (see here and here). However, I view this article as overstepping the mark and as a consequence it ends up depicting “City” lawyers -and, in a sense, the whole profession- in a way that makes lawyers appear as despicable inhuman beings. There are a number of cheap overstatements in this admittedly somewhat tongue in cheek article, but I´m sure it should elicit some reactions amongst our readership.
The Law of Unintended Consequences
With rising fines for antitrust violations, there’s been a lot of fuzz about the adequacy of the current EU penalty system.
The EU fines system is generally lambasted on two counts. First, it would be inefficient because the average level of fines currently slapped by competition authorities would still be far below the optimal deterrence level. Second, it would be unfair because it targets companies as a whole, rather than the individuals which have secretly engaged into unlawful conduct. In so doing, administrative fines would thus harm a range of third parties (shareholders, workforce, etc.) which have nothing to do with the infringement. Interestingly, increasing fines to satisfy the efficiency concern would further exacerbate the unfairness concern.
The upshot of this has been a renewed interest for alternative penalties (director disqualification, individual fines, etc.). In a recent paper published in ECLR, our esteemed colleague Prof. Alan Ryley (City University London) puts forward a creative, and somewhat radical proposal:
Thirdly, the expulsion of aliens from EU territory: Most international business executives need to be able to travel into the European Union, the world’s largest single market. Prohibition from entering EU territory for a term of years would make it difficult for them to act as senior level executives, as well as significantly damaging their reputations.
Now a question: beyond preventing business executives from making Xmas shopping in Paris and London – which I do not view as a particularly strong deterrent – I fail to see how this could really dissuade guilty alien executives to operate cartels within the EU. Paradoxically, those executives will be increasingly incentivized to negotiate cartels targeted at the EU outside of the European territory, with the unintended side-effect that the Commission’s will face mounting difficulties to gather evidence of unlawful conduct.
The full reference of Prof. Riley’s excellent paper is “The modernisation of EU anti-cartel enforcement: will the Commission grasp the opportunity?”, E.C.L.R. 2010, 31(5), 191-207, 2010.
Thanks to my assistant N. Neyrinck and my student B. Boggaerts for the pointer.
The picture above is taken from one of the worst French movies ever.
100,000 visits!
We crossed the 100,000 threshold yesterday!
I seize this opportunity to recap. several notable evolutions that have taken place on this blog lately:
- Since Alfonso came back, we have now between 375 and 500 visits a day;
- Readers increasingly post comments on chillin’competition. We are nowhere as compared to other megablogs, but the trend is encouraging;
- We have reorganized the “categories” section on the right of the blog;
- We have opened the blog to external contributors (Pablo Ibanez, Philipp Werner, Napoleon Ruiz);
- We got a first hand on several big news and we leaked them :);
Thanks to all our readers for the support. Alfonso and I are going out for drinks this week.
New Paper
A poorly informed friend just told me over the phone that he was concerned by my low publishing record in recent weeks.
To prove him wrong, I am proud to announce the publication of a new paper entitled “Behavioral Economics and Abuse of Dominance: A Fresh Look at the Article 102 TFEU Case-law” (pdf available at the end of this post). The paper appears in the Osterreischische Zeitschrift für Kartellrecht (Dezember 2010 /Nr. 6, Seiten 201-236, p.203), and was co-drafted by my assistant Norman Neyrinck. This paper is an upgraded version of a GCLC working paper.
Recent publications
In the past few days there have been several publications on which we hadn´t had the chance to comment:
Some days ago the European Commission published a document stating its position regarding the nowadays common claims on inability to pay made by undertakings on which a fine has been imposed. Interestingly, the document was published on a Commission´s site on transparency, but not on DG Comp´s website.
Last week, DG COMP also launched the public consultation on collective redress (thanks to P. Sabbadini for immediately pointing us to this).
On the European Courts side (and aside from an arguably insufficient but nevertheless welcome fine reduction that some colleages of mine got in the Spanish raw tobacco case), Advocate General Kokott issued a very important Opinion in the Greek decoders case (the one concerning Karen Murphy, the owner of the Red White & Blue pub in Portsmouth, who cancelled her licence with BSkyB -who holds the right to broadcast live Premier League games in the UK-, and instead signed up with a Greek provider and imported its decoders). The matter eventually arrived at the ECJ by way of a reference for a preliminary ruling. In her Opinion, AG Kokott considers that “territorial exclusivity agreements relating to the transmission of football matches are contrary to EU law“. Were the Court to follow its Advocate General, its Judgment would constitute a revolution that would shock the world of sports in a way only comparable to the Bosman Judgment, not to mention its potential implications for the cinema and TV industries in general. We´ll post a comment on the Opinion here as part of our “Competition Law & Sport” series as soon as we get the time to read it and think it through.
And speaking of publications, there´s a new journal which might be of interest to many of us: the Journal of Universal Rejection They will reject absolutely everything submitted to them 🙂
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