Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

End-of-year presents from JECLAP

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JECLAP

As the year comes to an end, I am reminded that it has been a remarkable year also for the Journal of European Competition Law & Practice (JECLAP). I am proud to be a Joint General Editor of the Journal together with Gianni De Stefano.

And as I was thinking of JECLAP’s remarkable year, I realised that I had not shared on the blog some materials that best reflect what has been going on. So why not close the year with some materials.

We had an anniversary conference back in October, where we were surrounded by past authors and editors. It was the high-level event we were hoping to have.

First we had a session on cartels (with Eric Barbier de la Serre, Paula Ramada and Marisa Tierno Centella). The three presentations used can be found here.

We then had a session on abuses where I had the privilege to be joined by Article 102 TFEU greats, Giorgio Monti and Ekaterina Rousseva. Here you will find the presentation I used.

The session on procedural and institutional matters was led by three JECLAP editors and former editors (Mark English, Andriani Kalintiri and Paul Nihoul). This is Andriani’s PPT on presumptions.

The event was closed by a dialogue between Pascale Dechamps, Giulio Federico and Lars Wiethaus. It was short on presentations, but I still think of it as probably the most dynamic and insightful panel of 2019. Thanks all three!

And a few weeks ago, the proceedings of the 1st Ithaca Competition Summit came out as a Special Issue of the Journal (see here). The authors of the lead articles? Marc van der Woude, Max Kadar, Cani Fernandez, Eliana Garces, Jorge Padilla, Martin Cave, Katerina Maniadaki and Gönenç Gürkaynak. And it comes with a Foreword by Lefkothea Nteka. It rarely ever gets much better than this! By the way, my Legal Tests in EU Competition Law came out in this issue.

Enjoy the celebrations! We will Chill as usual in 2020.

 

Written by Pablo Ibanez Colomo

31 December 2019 at 7:47 pm

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NEW PAPER | Indispensability and abuse of dominance: from Commercial Solvents to Slovak Telekom and Google Shopping

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Under certain circumstances, Article 102 TFEU can only be triggered if it can be shown that an input or platform is indispensable for competition on a neighbouring market. There is some controversy, however, about what these circumstances are. Sometimes (e.g. CBEM-Telemarketing, Bronner) indispensability is required; sometimes, it is not (e.g. Telefonica, TeliaSonera).

The question is so intriguing that I have written a paper on it (available on ssrn, see here). Many of you will be familiar with my take: the case law is clearer than most commentators tend to concede. As I have explained in past papers, it is all about the remedy.

Where intervention under Article 102 TFEU would demand the administration of a proactive remedy (either a structural remedy or a prescriptive obligation that necessitates monitoring), indispensability becomes an element of the legal test (and thus a precondition for intervention).

Why the remedy determines whether indispensability is an element of the legal test

Support for this position can be found in the case law. In fact, the EU courts were explicit about the point in Van den Bergh Foods. According to this ruling, indispensability would be an element of the legal test where intervention would require the firm to ‘transfer an asset or enter into agreements with persons with whom it has not chosen to contract’.

The case law makes a lot of sense. Proactive remedies are notoriously difficult to design, implement, and monitor – the experience with Microsoft I and Microsoft II is there for all to see. Therefore, it makes sense to limit to exceptional circumstances the instances in which competition law institutions (courts, authorities) are exposed to this particular stressor.

This is all the more sensible if one considers, in addition, that weighing the ex ante and ex post dimensions of competition is as difficult an exercise, if not more.

From an ex post perspective, any refusal to deal restricts competition. Why is a refusal to start dealing typically abusive only in exceptional circumstances, then? Because the ex ante dimension of competition – the counterfactual, again – also matters. In this regard, indispensability is a valuable proxy to avoid a difficult balancing exercise (even if one ignores the difficulties, mentioned above, around the design, implementation and monitoring of proactive remedies).

Implications for ‘grey area’ cases

Indispensability is a controversial issue in some pending ‘grey area’ cases. What is interesting about these is that they come across as being somewhere in between two lines of case law.

Slovak Telekom is one of these cases. Some of the practices at stake in the case were labelled as a refusal to supply. Does it follow that indispensability should be required? Not necessarily, the Commission argued. I concur with it (and the General Court, which has already examined the question).

Why? In the circumstances of Slovak Telekom, the infringement could be brought to an end without resorting to proactive remedies. The usual reactive intervention (a cease-and-desist order) was more than enough.

The issue arose again in Google Shopping. Unlike Slovak Telekom, the infringement could only be brought to an end by means of proactive remedies (in essence, a redesign of Google’s products). The difficulties that come with the design, implementation and monitoring of such measures have become apparent in the aftermath of Google Shopping (and as far as I can tell, these difficulties have not yet been solved; see here).

In Google Shopping, the Commission refers to the principle laid down in Van den Bergh Foods.

Why does it conclude that indispensability is not required? It is all about its interpretation of the principle.

Google Shopping suggests that, so long as the Commission does not formally mandate a proactive remedy, indispensability is not an element of the legal test. According to this view, if the Commission simply requires that the infringement be brought to an end, Van den Bergh Foods would not be relevant.

As I explain in the paper, I am not sure this is the most reasonable interpretation of Van den Bergh Foods, and this, for two main reasons.

First, the interpretation advanced in Google Shopping would give the Commission the discretion to decide when indispensability is an element of the legal test and when it is not.

In other words, this interpretation would turn an issue of law (the conditions to establish an infringement), subject to full judicial review, into one left to the discretion of the authority (and thus subject only to limited review).

Second, the EU courts have always placed substance above form. As a result, I fail to see how the relevance of indispensability can depend on what a decision formally requires – as opposed to what it entails in substance.

It remains to be seen whether the case law will prove resilient. The pressure to circumvent and/or abandon the consistent doctrine since Commercial Solvents is strong. I claim in the paper that, if the case law is to survive, the underlying principles would probably have to be spelled out more clearly.

Before I forget: I am delighted to clarify that, in accordance with the ASCOLA declaration of ethics, I have nothing to disclose.

I really look forward to your comments!

Written by Pablo Ibanez Colomo

16 December 2019 at 11:05 am

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Chillin’Competition Conference 2019- The Videos

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Sponsors Chillin 2019

Thanks a million to all those of you who attended, sponsored, wanted to attend, or otherwise followed our conference last Monday. We felt it was interesting, chilled, decaffeinated ,and fun, and we were happy to see so many friends from all over the world. Vice-President Vestager did us the honor of announcing the revision of the market definition notice at the conference. General Court President van der Woude provided his insightful views on the past, present and future of EU judicial review. We are particularly grateful to the two of them for their support.

With this conference we always wanted to do something substantive but refreshing, and also something balanced, with no particular agenda. Thanks to you, to our sponsors and to the excellent speakers and friends who have accepted our invitations, this conference has become a significant event in only 5 editions.

This time we were “only” able to accomodate 450 people, while close to 500 remained in the waitlist (most of whom had registered on day 1!). We will do our best to fix that in the furure.  In case you couldn’t make it, here are the videos (which, however, do not capture the best thing about this conference: its atmosphere).

Here are the videos:

Introduction- The 10 Year Challenge (Alfonso Lamadrid)

Keynote by General Court President (Marc van der Woude)

Keynote by European Commission Executive Vice-President (Margrethe Vestager)

TED@Chillin’Competition “Our Data/ Our Future” (Jorge Padilla)

TED@Chillin’Competition “Hey Dude, for Pete’s Sake, you’re 30. It’s no longer cute to be so ?#@*&% disorganized. Grow up and focus on the essentials!” (Frank Montag)

InstantYoutubeHit@Chillin’Competition “A Rap on Competition” (Philip Marsden)

TED@Chillin’Competition “Sustainable Competition Policy”  (Maurits Dolmans)

10 Years of Competition Enforcement by the European Commission(featuring Nicolas Petit, Kim Dietzel, Kai-Uwe Khühn, Lars Kjolbye, Vanessa Turner and Lewis Crofts)

Articulating the Effects-Based Approach (featuring Svend Albaeck, Christian Ahlborn, Avantika Chowdhury, James Killick, Christian Riis-Madsen and Pablo Ibañez Colomo)

[P.S. Due to a technical problem we have no videos of two panels, the discussion with Renata Hese, John Sutton and Heike Schweitzer and the last panel on the burden of proof featuring Eric Barbier de la Serre, Kevin Coates, Leigh Hancher, Kristina Nordlander and Nigel Parr. But we’ll try do something about that soon]

 

 

Written by Alfonso Lamadrid

12 December 2019 at 11:07 am

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Chillin’-Conference 2019- Follow the live stream here

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The Chillin’Competition conference is about to start.

You can follow it live via this link.

The action will start at 9.30 (or 9.40, as people are still arriving…)

Enjoy!

Written by Alfonso Lamadrid

9 December 2019 at 9:26 am

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Chillin’Competition Conference 2019- Updated Program + Live Stream

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The 5th Chillin’Competition conference is fast approaching!

We have received many requests for additional tickets, particularly from those of you on the waitlist. We can’t unfortunately accommodate any more attendees (Pablo is even concerned that we might not be able to accommodate those currently registered).

Here’s the good news: to make up for this, we have arranged for the conference to be accessibe via a Youtube live stream.

We will be posting a (functioning) link on the blog around 9.am next Monday that will enable you to follow all the action.

We have had to make a few tweaks to the program. Please see the final version below. Those watching from the office/home will at least be able to take a break at some point in the morning 😉

THE CHILLIN’COMPETITION CONFERENCE 2019

9.00-9.30: Registration

9.30-9.45: The 10-Year Challenge

Alfonso Lamadrid (Garrigues)

9.45-10.30: Keynote by GC President Marc van der Woude

10.30-11.30 TED@Chillin’Competition  

Philip Marsden (Bank of England, College of Europe, CRA)

Frank Montag (Freshfields)

Jorge Padilla (Compass Lexecon)

Maurits Dolmans (Cleary Gottlieb)

11.30-12.15: Keynote by Commissioner Margrethe Vestager

12.15-13.30: 10 Years of Enforcement by the European Commission 

Kim Dietzel (Herbert Smith Freehills)

Lars Kjolbye (Latham & Watkins)

Kai-Uwe Kühn (University of East Anglia and The Brattle Group)

Nicolas Petit (University of Liège)

Vanessa Turner

Chair: Lewis Crofts (MLex)

13.30-15: Lunch

15.00-16.00: A New Competition Law for a New Decade? Chillin’ with:

Renata Hesse (Sullivan & Cromwell)

Heike Schweitzer (Humboldt University Berlin, Special Adviser to Commissioner Vestager)

John Sutton (LSE)

16.00-17.15: Articulating the Effects-Based Approach

Christian Ahlborn (Linklaters)

Svend Albaek (European Commission)

Avantika Chowdhury (Oxera)

James Killick (White & Case)

Christian Riis-Madsen (GibsonDunn)

Chair: Pablo Ibáñez Colomo (LSE and College of Europe)

17.15-17.45: Coffee Break

17.45-19:  Meeting or Shifting- The Burden of Proof

Eric Barbier de la Serre (Jones Day)

Kevin Coates (Covington & Burling)

Leigh Hancher (Baker Botts)

Kristina Nordlander (Sidley)

Nigel Parr (Ashurst)

Chair: Alfonso Lamadrid (Garrigues)

19-21.00 Drinks

 

Written by Alfonso Lamadrid

2 December 2019 at 5:58 pm

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NEW PAPER: Pay-for-delay and the structure of Article 101(1) TFEU: points of law raised in Lundbeck and Paroxetine

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People sometimes ask me how much time I devote to the blog. And I almost invariably answer by saying that the correct question is how much I benefit from the blog.

I have just uploaded a draft paper on ssrn (see here). This is a piece I would never have written had it not been for the blog. It has been inspired by the many discussions on pay-for-delay we have had in the past few years.

The comments I received were invariably thoughtful, and were sometimes outright passionate. I learnt a great deal from them. Something I learnt was that, for better or worse, the message I wanted to convey did not always come across as clearly as I would have wanted it to. The paper just poured out of me in an attempt to bring clarity to the issues.

These comments also gave me the – right or wrong – impression that I had something to contribute to the debate. There is a rich line of case law addressing the relationship between Article 101(1) TFEU and intellectual property that had gone virtually unnoticed.

Of these cases, two of them – Nungesser and BAT (Toltecs-Dorcet) – provide, in my view, the structure to analyse the lawfulness of pay-for-delay agreements. Other crucial cases include Coditel II, Ottung and Micro Leader.

One of the points I wanted to clarify is that I am not interested in the outcome of individual cases. This is something I have often emphasised on the blog. In spite of this, many commentators assumed that I was challenging the outcome in Lundbeck.

That was never my intention. I will say more: it is very difficult for a moderately attentive reader of the Lundbeck decision to avoid the impression that the agreements at stake in the case were restrictive by object and deserved a fine. But again: I am interested in principles, not outcomes.

Another point that I felt needed clarification: some commentators thought I endorsed Roberts’ dissent in Actavis. Nothing further from the truth. The more I think about theat dissent, the more I am persuaded that it is intellectually indefensible.

Stephen Breyer’s majority opinion, which rejected the prima facie unlawfulness of genuine settlements and proposed a case-by-case approach, comes across as more reasonable (more on this below).

As rightly observed by one of our commentators, John Roberts’ dissent seems to be based on the idea that, since patents are presumed valid, we can presume that, in the context of a dispute, they have been infringed. But there is no such thing as a presumption of infringement.

Main points raised in the paper

On the notion of (potential) competition and restriction by object

So how does my paper go about the analysis of pay-for-delay agreements? I thought the right approach was to go step by step: I start from the fundamentals and then progressively move to the specifics of Lundbeck and Paroxetine.

Thus, I discuss the fundamental notions at stake in these cases (competition, potential competition and restriction by object); I move on to the discussion, in general, of the relationship between Article 101 TFEU and intellectual property to finally explain the controversy behind Lundbeck and Paroxetine.

On the fundamentals, I believe the case law is consistent and unequivocal since the 1960s. The Court defined the notion of competition early on, in Societe Technique Miniere.

It is clear from this case and subsequent ones that the notion of competition under the Treaty should be understood as meaning ‘actual or potential lawful competition which would have existed absent the practice’.

One of the implications is that the evaluation of the counterfactual is of course relevant when assessing restrictions of competition (whether by object or by effect). I recently addressed this question on the blog (see here).

Another implication is that the evaluation of the object and/or effect of a practice is a case-specific inquiry. Restrictions by object do not exist in the abstract, and can never be established without considering the relevant economic and legal context (both AG Kokott – see here – and AG Bobek – in his Opinion discussed here – have recently emphasised the importance of context).

On the relationship between Article 101(1) TFEU and intellectual property

There is a wealth of case law addressing the relationship between Article 101 TFEU and intellectual property.

Nungesser provides the principle. The Court distinguished between two scenarios: (i) one in which the scope of the agreement does not go beyond the range of acts that the right holder would be able to authorise or prohibit by virtue of its intellectual property and (ii) one in which the agreement allows the right holder to obtain protection that it would not have been able to obtain by enforcing its intellectual property.

Agreements falling under the first (i) scenario are not necessarily restrictive of competition, and may sometimes (e.g. Coditel II, Micro Leader) fall outside the scope of Article 101(1) TFEU altogether. Agreements falling under the second (ii) scenario (e.g. Ottung) may restrict competition, and are often restrictive by object.

The principle set out in Nungesser was applied to intellectual property settlements in BAT (Toltecs-Dorcet). The Court, uncontroversially, concluded that the settlement at stake in the case was not a genuine one, and thus pertained to the second (ii) scenario.

Indeed, BAT had sought to obtain via the settlement what it would not have been able to obtain via the enforcement of its (dormant) trade mark. The object of the agreement was the restriction of competition.

On the application of the principle to pay-for-delay agreements

The framework described above fits pay-for-delay cases particularly well. One can distinguish between settlements that address a genuine patent dispute and those that do not. The object of the former would not be the restriction of competition; the latter are likely to infringe Article 101(1) TFEU by its very nature.

Lundbeck shows how this framework would work in practice. The originator itself admitted during the proceedings that its process patents did not block all possibilities of entry. Accordingly, it sought to obtain by means of the agreements a degree of protection that its patents would not have afforded. The conclusion that the agreements in Lundbeck are restrictive by object is in principle inevitable as a result.

Why the controversy, then? Again, it is not about the outcome. The reasoning of the Commission in Lundbeck, and of the CMA in Paroxetine, suggests that a settlement addressing a genuine dispute would also be restrictive by object.

It follows from this reasoning that there would be a prima facie infringement of Article 101(1) TFEU even when it has not been shown, to the requisite legal standard, that generic producers need to rely upon a patented process to enter the market.

As I have suggested in the past, the approach in Lundbeck and Paroxetine heralds a new relationship between competition law and intellectual property (these are not the only cases, hints at this new relationship can be found elsewhere).

This new approach is not obvious to square with the principle whereby EU law does not question the existence of the rights, but only their exercise. It is also difficult to square with the principle whereby registered titles are presumed valid.

Exciting times ahead! I very much look forward to your comments.

As ever, I am delighted to clarify, in accordance with the ASCOLA declaration of ethics, that I have nothing to disclose.

Written by Pablo Ibanez Colomo

28 November 2019 at 4:44 pm

Posted in Uncategorized

Shortcuts and Courts in the Era of Digitization

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Solution concept

The October issue of Competition Policy International’s Antitrust Chronicle featured a short article of mine titled “Shortcuts and Courts in the Era of Digitization“.  It is now freely accesible here, courtesy of CPI:

CPI-Shortcuts and Courts in the Era of Digitization (Lamadrid)

The article sketches some thoughts regarding the proposals to facilitate competition law enforcement in digital markets that will be familiar to readers of this blog, using the Special Advisers’ Report as a conducting thread. It focuses mainly on two related elements: the proposals to reverse the burden of proof in certain cases, and the vision of Courts and consolidated case law as an inconvenient.

 

Written by Alfonso Lamadrid

20 November 2019 at 10:16 am

Posted in Uncategorized