Alfonso Lamadrid ‘Shortcuts in the Era of Digitisation’ (2019) CPI Antitrust Chronicle – October

Competition law is arguably one of the areas of least importance when it comes to the major societal challenges posed by digitalisation. Nonetheless, competition law has been advertised as a sort of miraculous tool that would right all wrongs. In this context, the idea of entrusting a Report to three independent Special Advisers before advancing a reorientation of the competition rules was a very sensible initiative on the part of the European Commission. However, the author does not really agree with the report’s conclusions. He explain why in a paper that can be found here. Section two discusses what are the specific problems that digital markets raise for competition law. The first question to ask is whether there is consensus about competition problems in digital markets. If the answer is in the affirmative, we then need to ask whether we can address those problems while still preserving the benefits flowing from digitisation. The Report and other similarly-timed initiatives suggest that there…

Massimiliano Kadar ‘Article 102 and Exclusivity Rebates in a Post-Intel World: Lessons from the Qualcomm and Google Android Cases’ (2019) Journal of European Competition Law & Practice 10(7) 439

Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits behaviour by a dominant undertaking that is capable of harming competition. The notion of ‘capability to harm competition’ has been at the centre of the legal and economic debate for many years. A strict interpretation of ‘capability’ would require evidence of actual or quasi-actual effects on the market in the form of, for example, the exit of existing competitors or sustained price increases. A lax interpretation of capability could make it possible to enforce competition rules also in circumstances where harm to competition is purely hypothetical and not supported by concrete evidence. This discussion – which is ultimately about the level of the standard of proof – not only influences the likelihood of Type 1 and Type 2 letters, but also the amount of resources that administrative agencies needs to devote to individual enforcement cases. Modulating this impact are presumptions, which can lead to significant savings…

Yannis Katsoulacos ‘Substantive Criteria and Legal Standards in Recent Abuse of Dominance Cases across the Atlantic’ (2019) CPI Antitrust Chronicle March

Legal standards in competition law fall across an analytical continuum whose boundaries are set, respectively, by categorical rules of condemnation (per se illegality) or acquittal (per se legality) on the one end, and an elaborate, fact-intensive assessment of reasonableness (Rule of Reason) on the other. These poles are connected by a range of intermediate tests that seek to combine some of the clarity and economy of bright-line rules with the greater analytical accuracy that a fuller examination of evidence can produce – e.g. in the US, the modified per se and the truncated effects based tests. This paper, available here, reviews a number of recent cases in high technology markets on both sides of the Atlantic (Intel, Google, QUALCOMM), to compare how abusive practices are treated in Europe and the US. Section II compares legal tests in the EU and the US. In the EU, there are multiple goals guiding antitrust enforcement. Under the influence of a strong Ordo-Liberal tradition, the…

Michael Funk and Christian Jaag ‘The More Economic Approach to Predatory Pricing’ (2018) Journal of Competition Law & Economics 14(2) 292

This paper, available here, argues that legal requirements and economic reasoning are not aligned as regards predatory pricing. Predation is not a strategy predominately used by ex ante dominant firms, but rather a strategy to gain ex post dominance. Consequently, the current legal practice in Europe and other jurisdictions, which requires ex ante dominance to pursue predatory pricing, makes the prosecution of predatory pricing virtually impossible because it overlooks the basic economic rationale for predatory pricing. This inconsistency has become even more severe because the adoption of a “more economic approach”: in fact, the more accurate the economic assessment is, the less probable is a conviction of harmful predation under the current legal framework. The authors suggest prohibiting predatory pricing independently from other exclusionary abuses. Instead, predatory pricing should be subject to the same analytical framework as mergers, where a similar economic and business logic applies. Since recoupment of predation is akin to the unilateral effects arising from the merger…

Pablo Ibáñez Colomo ‘Legal tests in EU competition law: taxonomy and operation’ (2019) Journal of European Competition Law & Practice

EU competition law does not apply a single legal test. However, the existence of various legal tests is not commonly acknowledged, nor has it been studied systematically. This paper, available here, seeks to bridge this gap. (c) Pablo Ibanez Colomo One of the objectives of this paper is to draw a map of the existing legal tests, and to clarify where each of the practices stands along a spectrum ranging from those deemed prohibited irrespective of their effects and those deemed lawful. According to the author, legal tests in EU competition law can be grouped into four main categories. First, some practices are prima facie unlawful irrespective of their effects. Secondly, some conducts are deemed prima facie lawful. Thirdly, some behaviour is subject to a ‘standard effects’ test, which seeks to ascertain whether it has, or is likely to have, anticompetitive effects in the economic and legal context in which it is implemented. Finally, an ‘enhanced effects’ test applies in…

Sophie Lawrance and Edwin Bond on ‘Reverse-payment’ patent settlement agreements: non-cash value transfers are not immune from competition law scrutiny’ (2018) Journal of Intellectual Property Law & Practice 13(7) 552

This article – which can be found here – argues that a non-cash value transfer – particularly commitments by the producer of a branded drug not to launch a generic version of its drug – is able to bring a pay-for-delay agreement within the scope of the antitrust prohibition of reverse-payment patent settlement agreements. It does so as follows: The paper first looks at the law in the US as regards non-cash value transfer settlements. In its landmark 2013 FTC v, Actavis decision, the US Supreme Court held that pharmaceutical patent settlements which involve ‘large’ and ‘unexplained’ reverse payments may breach the antitrust rules. However, and as a result of the Supreme Court’s lack of detailed guidance, the lower US courts have in the last few years found themselves considering a fairly basic question: what constitutes a ‘payment’? While a couple of US district courts concluded that patent settlements that do not involve a cash transfer could not constitute unlawful…

Jose Luis da Cruz Vilaca on ‘The intensity of judicial review in complex economic matters – recent competition law judgments of the Court of Justice of the EU’ (2018) Journal of Antitrust Enforcement 6(2) 173–188

The author of this paper, available here, was for a long time the President of the Court of First Instance (now the ECJ’s General Court). More importantly for our purposes here, he was also the CJEU judge responsible for drafting the Intel judgment. The paper is structured as follows: A first section reviews how EU courts approach judicial review in complex matters, and how this approach has evolved over time. For a number of years, the Court of Justice (ECJ) has taken a careful approach to the scope and intensity of review of Commission decisions as regards complex economic matters. From the outset, the Court conceived its role in competition matters as being limited to reviewing legality, and not as involving unlimited jurisdiction or full merits review (except as regards the imposition of fines). Since Consten & Grunding in 1966, the ECJ has acknowledged that the Commission must engage in complex evaluations of economic matters. The judicial review of these evaluations…

Anne C. Witt ‘The Enforcement of Article 101 TFEU: What has happened to the Effects Analysis’ (2018) Common Market Law Review (55) 417

This paper – which You can find here – focuses on the role that priority setting and institutional dynamics can have on public competition enforcement. It argues that, while the Commission has developed an impressive theoretical framework for assessing the effects of agreements on competition, there has in fact been very little effects analysis in the Commission’s decisional practice since 2005. Instead, most cases have been decided as ‘object restrictions’. The paper is structured as follows: A first section briefly retraces how the Commission came to endorse a more effects-based approach to EU competition law generally, and to Article 101 TFEU in particular. By the late 1990s, commentators had been long criticising the Commission for relying too heavily on form-based presumptions of legality and illegality in its assessments under Articles 101 and 102 TFEU. Commentators pressed the Commission to scale back the use of form-based presumptions in favour of more individual assessments in line with contemporary US antitrust law. The Commission…

Sven Gallasch ‘Activating Actavis in Europe – the proposal of a ‘structured effects-based’ analysis for pay for delay agreements’ (2016) Legal Studies 36(4) 683

This article – which can be found here – criticises the adoption of a ‘by-object’ approach in the EU for pay-for-delay agreements, and argues that Europe should instead adopt a test along the lines of the rule of reason approach delineated by the US Supreme Court’s decision in Actavis. This paper is structured as follows: Section 2 compares the EU and US regulatory frameworks. While broadly consistent with the papers above, this paper emphasises two points which merit attention. First, it is pointed out that the existence of a period of exclusivity for the first generic entry can, when coupled with the possibility of the generic supplier settling a patent validity claim with the branded drug originator, skew the incentives of the parties in favour of settlement to the disadvantage of final consumers. Instead of solving the patent dispute in court, the parties settle their dispute. The generic company is nonetheless granted the 180 days of generic exclusivity. The parties…

Alison Jones ‘ Antitrust Appraisal of Vertical Agreements in the ASEAN Economic Community’ in Ong (ed.) The Regionalisation of Competition Law and Policy within the ASEAN Economic Community (2018, CUP)

This paper – which you can find here – looks at the different approaches to vertical agreements across ASEAN. The paper draws on practice and experience in the US and EU to consider whether, and if so how, the approach to vertical agreements under the competition law systems of ASEAN countries should be changed in order to ensure a more coherent policy across the region. Following an introduction, Section 2 examines how divergent national policies towards vertical agreements in ASEAN might be damaging competition, efficiency and market integration, and why greater convergence around a harmonised framework might be desirable. It begins by reviewing the outlines of the ASEAN single market and by assessing the role of competition law for its development. It devotes particular attention to the treatment of vertical agreements, which are subject to a spectrum of radically different approaches across the region – from only vertical agreements by dominant companies being subject to competition law in Singapore and…