It’s nothing as it seems
I recently peer-reviewed a paper for a competition law journal.
The paper was crap: a recycled and biased “expert” opinion, poorly translated from a non-English language to English, with a significant amount of considerations that were entirely off-topic (technical discussion of the regulatory framework for IPRs). My assessment was negative, bad, tough. I made loads of comments, supposing that the editors would forward them to the author, who in turn would try to implement and/or contest them. In brief, I expected to see a new version of the paper, or at least receive some explanation to the effect that my comments were not relevant, etc. My experience is that this is how it works with professional journals.
Anyway, I was quite surprised to learn today, by myself, that the paper had been published. I have not yet seen it but I doubt that it differs much from the initial version. So I am pissed off: I spent a considerable time on this peer-review, and this was probably useless.
More importantly: European legal journals like to say that they now implement peer-review procedures, but I believe that the practical implementation of such procedures remains far from perfect, and that politics still play a huge role in the publication process. It’s nothing as it seems (as Pearl Jam said in a great song).
(Image possibly subject to copyrights: source here)
Nice
My excellent colleague Frédéric Marty has sent me the programme of a promising conference which will take place on 4 June 2010 in Nice (France).
The conference is organized under the auspices of GREDEG – CNRS. It is devoted to negotiated procedures (settlements and commitments) and gathers a number of top notch French lawyers and economists.
In addition, with summer approaching, Nice is a very pleasant location to stay for a WE.
See link to programme below.
affiche pour les journées de droit éco 4 juin fait le 7 mai 2010 (2)
Congrats
Hat tip and best of luck to my LL.M. students A-S. Come, M. Coquelet, M. DeVos and P. Sabbadini, who have reached the finals of the Concours Lamy de la Concurrence, and are now invited to Paris to plead their case at the French NCA. I am really proud. Congrats’ also to their coach Norman Neyrinck.
Again, our LL.M. offers unique training in antitrust and IP law, and this is just the proof of it.
Here’s a link to the subject of the concours.
Do We, AT Lawyers, need a Shrink?
This is the question which arises from the growing influence of behavioral economics in competition law.
Ahead of a conference in Vienna which will take place next week (“Industry v. Competition“, see programme below), and where I have to speak of this issue, I would like to share a thought with my readers :
There’s an irrational me that understands that economic agents do not necessarily seek to profit maximize;
There’s a rational me that thinks that this is probably the exception more than the rule. Irrationality is not, and cannot, be a good basis for devising general rules and making public policy choices. In so far as firms’ behavior is concerned, the rationality hypothesis remains indeed a reasonable assumption because most CEOs, and more generally sales agents go to business school and learn how to make informed decisions. In so far as consumers are concerned, the undisputable success of low costs business model, and customers’ increased sensitivity to price in times of crisis are blows to the irrationality hypothesis. At best, behavioral economics shall play at the margins, and inform individual decisions on particular cases where markets depart from rationality (retail banking and telcos, where consumers do not switch despite price competition).
So no, we do not need a shrink.
I love Rock’n Roll
This one is to rock music what W. Baumol is to painting.
Most of the readers of this blog know Greg Sidak, the famous AT lawyer and economist, co-editor of the Journal of Competition Law and Econ, who co-authored a range of excellent papers with my former boss Damien Geradin.
Despite my incredulity, it seems that Sidak is also a serious musician. See picture hereafter:
I believe the URL and content of the website tell it all : http://www.gregorysidakmusic.com/
A quote worth reading (Sidak mission’s statement on the website)
“I want to show that rock music can be a medium capable of expressing powerful, consequential ideas and emotions beyond the simplistic sexual ones from which it (like the tango) rose into a much more complex art form“.
New GC Ruling – EMC v. Commission
Database
Article 15(2) of Regulation 1/2003 requires Member States to forward to the Commission a copy of any written judgment of national Courts deciding on the application of Articles 101 or 102 TFEU. These judgments must be sent “without delay after the full written judgment is notified to the parties”.
Since the entry into force of Regulation 1, the Commission has published a database of the judgments it has received from the Member States. A year ago, during the review of the functioning of Regulation 1, stakeholders have criticized the database, as “far from complete“. The Commission has itself acknowldedged that “overall, options for ensuring a more efficient and effective way of providing access to national court judgments should be contemplated” (§291 of Commission Staff Working Paper, Report on the functioning of Regulation 1/2003 {COM(2009)206 final}).
I checked the database today. “Far from complete” exhibits a flavour of euphemism. The most recent Belgian judgments in the database date back to 2007. In France, it seems Courts have not ruled on Articles 101 and 102 TFEU since 2008. In the UK, the Courts have not dealt with EU competition rules since 2005…
Very unsatisfactory, and probably one of the most blatant failures of Regulation 1. I thought I would just help in publishing here a judgment of 6 May 2010, handed down by the Brussels Court of Appeal in a margin squeeze case. See below.
Competition Law on Trial
Once in their lifetime, academics in Belgium must deliver a public lecture on their particular field of expertise. This event – which is known under the name “leçon inaugurale” – is attended by students, but also colleagues, members of the civil society, family, etc. Mine took place two months ago. I attach below my speech (in French). It is entitled “competition law on trial“.
Competition Cassandras
There is a popular mantra in modern EU competition law. Competition enforcement ought to be case-driven, and substantive guidance to firms shall stem from individual decisions. At last week’s GCLC Lunch Talk, D. Schnichels repeatedly said that to justify that – 18 months following a wide-ranging sector inquiry – the Commission had not yet provided guidance to pharma firms over a number of disputed practices. Cases are in the pipe-line, and guidance will come, soon or later.
This has numerous shortcomings. First, until a final decision is adopted with respect to each and every practice, firms are left in a sea of doubt. Some may believe that the practice is not covered by the EU competition rules until a case has been completed (under-fixing problem) . An obvious example is abuse of collective dominance. Other firms, on the contrary, may be willing to comply, but cannot optimally observe the rules absent substantive guidance on the applicable principle. An obvious example is patent settlements (reverse payments).
Second, with the influence of economic analysis, cases become increasingly market-specific. The methodology, theories of harm and reasoning enshrined in decisions is growingly topical. As a result, individual decisions have only little normative value.
Regulation 1 provides a solution to (part of) this problem: under §38 of the Recital of the Regulation, the Commission may provide guidance to firms. To date, however, the Commission has been reluctant to issue such letters. The official reason for this lies in the alleged risk of reintroducing, through the backdoor, a notification procedure similar to the one that existed under Regulation 17/62. The unofficial, but more convincing, reason is that guidance letters generate less press exposure – and political returns – than negative decisions.
Anyway, contrary to the arguments invoked by some EU Commission Cassandras against guidance letters, the UK Office of Fair Trading just proved that issuing a guidance letter is perfectly compatible with a system of ex post enforcement, and does not entail the resurection of ex ante notification.
(Image possibly subject to copyright: source here)
Admission of Guilt
On Weds, the Commission adopted its first settlement decision in a cartel case. In a nutshell, the settlement procedure seeks to incentivize parties to cartel proceedings to admit early that they are guilty.
The procedure was introduced in 2008. It is based on Regulation (EC) No 622/2008 of 30 June 2008, which amended Regulation 773/2004. At the time, the procedure attracted much criticism, in particular because it allegedly forces firms to forfeit their right to judicial review (see paper by D. Waelbroeck et. al). Back in the day, I have published in Concurrences a chart which summarizes the procedure.
The ratio behind the procedure is plain simple: with leniency being a potential time-bomb in terms of workload, the Commission is adamant on achieving “procedural efficiencies” (sic). It thus tries to gain time in inducing parties to acknowledge their guilt. In turn, the Commission can reallocate scarce administrative resources to other – more demanding – investigations.
Importantly, this procedure is only likely to succeed if incentives for companies are right. On paper, the rewards for firms contemplating a settlement look attractive. In addition to the 10% potential discount on the fine, the limitation of the duration of proceedings leads companies to face lesser regulatory exposure over time, and management can return quickly to normal business. In addition, because “a sin confessed is a sin half pardoned“, companies may view new procedure as a means to exhibit repent, and minimize risks of follow-on proceedings.
Now the key question is whether the EU procedure is in practice workable, and delivers sufficient incentives to bring companies to the table of negotiation. On this, I have some doubts. The new system was introduced in June 2008. With this case – which started before this date – it took almost two years to the Commission to land its first settlement. On pure performance grounds, I do not view this as particularly efficient. The Commission implicitly confirms this in its press release, stating:
With experience and as the procedure applies to new cases, the Commission will deal with investigations more expediently
