David Bailey ‘The New Frontiers of Article 102 TFEU: antitrust imperialism or judicious intervention?’ (2018) Journal of Antitrust Enforcement 6(1) 25-53

This paper – which can be found here – addresses the way in which EU competition law cuts across and interferes with other legal regimes such as pharmaceutical regulations (Astra Zeneca and patent settlement cases), energy rules (Gazprom) and data protection (Facebook). This has led to a debate about whether EU competition law and policy should be able to trespass on turf that is properly subject to other areas of law, and whether it is appropriate for it to act as a “repair service” for other fields of economic law that lack sanctioning mechanisms. The article is structured as follows: The second section examines four situations in which Article 102 TFEU controversially overlapped with a different area of law. Competition law applies to unilateral business conduct whenever there is an act (or omission) of a dominant undertaking that distorts the competitive process or is directly exploitative of consumers. On the other hand, the application of competition law is usually precluded by…

Thomas Hoppner ‘A Duty to Treat Downstream Rivals Equally: (Merely) a Natural Remedy to Google’s Monopoly Leveraging Abuse’ (2017) European Competition and Regulatory Law Review (3)208

This  paper – which can be found here – reviews the European Commission’s decision in the Google case, and the remedy that the Commission imposed in that decision. It argues that this decision follows settled law regarding anti-competitive extensions of dominance from a primary market to a distinct, but related, secondary market. It also seeks to refute the argument that the decision created a novel rule that a dominant company may not favour its own services – instead, it is argued that this requirement is merely the remedy that the Commission imposed to bring Google’s infringement to an end. The paper is structured as follows: A first section provides an overview of the decision and some critical reactions to it. The Commission fined Google for having abused its market dominance as a search engine by promoting its comparison shopping service, Google Shopping, and demoting rival services. Describing the abuse, the EC explained that it: “objects to the fact that Google…

When is Price Discrimination Anticompetitive? Case C-525/16 MEO v Portuguese Authority ECLI:EU:C:2018:2700

This post reviews the recent MEO decision of the CJEU (Case C-525/16 MEO v Portuguese Authority ECLI:EU:C:2018:2700, available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=201264&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=826760). You will excuse me for the length of the analysis below, but I do believe this is an important discussion that merits attention. Facts of the Case GDA is the sole body responsible for the collective management of the rights of artists and performers in Portugal. Among the undertakings which pay rights to GDA are television channels such as MEO. Between 2010 and 2013, GDA charged different tariffs to different television channels. The tariffs charged by GDA to MEO were the result of an arbitration decision, which was the required mechanism to deal with failures to arrive at an agreement when rights are negotiated. In 2014, MEO lodged a complaint with the Portuguese national competition authority (NCA) alleging that GDA had abused its dominant position by: (i) charging excessive prices; (ii) applying to MEO different terms and conditions from those which it…

Margherita Colangelo ‘Reverse Payment Patent Settlements in the Pharmaceutical Sector Under EU and US Competition Laws: A Comparative Analysis’ (2017) World Competition 40(3) 47

As its name indicates, this paper – which can be found here – compares the European and American approaches to pay-for-delay agreements – i.e. those agreements between an originator and a generics manufacturer where the former pays the latter to settle a patent injunction and agrees conditions to delay generic entry into the market. This payment goes against the standard expectation that a defendant in a patent suit would pay an IP-holding plaintiff to settle, but it is nonetheless economically rational for both parties: ‘the profit that the generic entering the market anticipates selling at a significant discount to the price of the brand-name product will be much less than the profit the brand-name drug company loses from the same sales applying the monopolistic price’. Settling the dispute eliminates the potential for competition and allows the parties to share profits that would otherwise be eroded by lower prices. The argument is that, while the case-mix on each side of the…

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…

Christopher Townley, Eric Morrison and Professor Karen Yeung ‘Big Data and Personalised Price Discrimination in EU Competition Law (2017) Yearbook of European Law 36 683

This paper – which can be found here – seeks to determine whether ‘algorithmic consumer price discrimination’ can amount to an abuse of a dominant position. It is structured as follows: Section 2 explains how ‘big data’ allows for greater personalisation of prices, and how recourse to digital algorithms facilitates personalised pricing. The paper seeks to identify whether ‘algorithmic consumer price discrimination’ enhances or diminishes economic efficiency. To do so, the paper reviews, in detail, the main economic theories on price discrimination, which have already been summarised when describing the paper reviewed in the post below. The authors observe that price discrimination can have rent-transfer effects (from consumers to producers), allocation effects (reflecting consumers’ willingness to acquire the product) and output effects (by pricing some consumers into the markets and/or out of the market). Which of these effects predominates in imperfectly competitive markets is a very hard question. Ultimately, the effects of price discrimination will have to be assessed on a…

Inge Graef  ‘Algorithms and fairness: what role for competition law in targeting price discrimination towards end consumers?’

This paper – which can be found here –  tries to identify when algorithmic price discrimination will be anticompetitive. Price discrimination is not per se unlawful or anticompetitive; on the contrary, price discrimination  may be efficient and lead to increased output. However, personalised pricing is commonly felt to be unfair – and it is undisputed (in Europe, at least) that some forms of price discrimination can be anticompetitive. This paper seeks to distinguish between those situations when algorithmic price discrimination is anticompetitive and those in which it is not. The paper is structured as follows: Section 2 looks at how price discrimination can harm competition. Two types of harm are identified: (i) primary line injury occurs where the supplier’s conduct discriminates against competitors in markets in which the supplier also operates; and (ii) secondary line injury takes place when a supplier discriminates between a number of its customers as against one another. While behaviour giving rise to primary line injury…

Ioannis Lianos & Pierre Regibeau “Vexatious”/”Sham” Litigation: When can it Arise and How can it be Reduced?’ (2017) Antitrust Bulletin 62(4) 643-689

It is possible that companies may, through regulatory and litigation processes, be able to exclude or marginalize their competitors from the market and therefore charge higher prices, limit output, maintain the status quo price, or diminish innovation. But while these strategies may offer a cheap mechanism for non-price predation, litigation and regulatory process have been set up to protect public goods regardless of the risk that their use may negatively impact competition. Furthermore: ‘assessing on a case-by-case basis the welfare effects of each use of the regulatory and litigation process through some form of sophisticated cost benefit analysis would be too burdensome and would generate too much uncertainty, chilling the legitimate use of such governmental processes and thus frustrating their aims. For this reason, in practice, the use of the regulatory and/or litigation process stays presumptively outside the scope of competition law, through the operation of some form of antitrust immunity, in both the U.S. and in Europe, this being…

Steven Andeman ‘Overplaying the Innovation Card: Stronger Intellectual Property Rights and Competition Law’ Kritika: Essays on intellectual property (ed.) Peter Drahos, Gustavo Ghidini, Hanns Ullrich (Elgar, 2015) 17-58

This paper is already over two years old, but it provides a good overview of the main challenges that arise at the intersection of competition and IP law. The article’s thesis is that patents and copyrights seek to promote innovation by striking a balance between protecting initial inventor rights, on the one hand, and fostering follow-on or cumulative innovation, on the other. It conceptualises recent efforts to use competition law to limit the scope of IP law as attempts to limit excessive protections granted to original inventors by IP rights to the detriment of follow-on innovation. Examples of such interventions in Europe include compulsory copyright licensing remedies, the sanctioning of certain attempts to manipulate the IP regime in order to extend the scope and duration of existing IP rights, the prohibition of pay-for delay agreements, and the use of competition law to limit reliance by Standard Essential Patent (SEP) holders on patent injunctions. The paper is structured as follows: Section…

Cento Veljanowski “Credit Cards, Counterfactuals, and Antitrust Damages” Journal of European Competition Law & Practice (2018) 9(3) 146–160

This paper – which can be found here – provides an overview of the UK MasterCard litigation. Mr. Veljanowski is likely very well placed to discuss this:  he was one of the two economic experts involved in a case recently decided by the CAT on the matter. He also seems to publish a paper about every court decision concerning the MasterCard litigation (see my post of 24 March 2017, regarding the Arcadia v MasterCard case). The paper begins with a quick overview of the MasterCard litigation. As a result of the European Commission’s MasterCard decision, there are currently about 25 separate standalone and follow-on retailer actions making their way through the English courts concerning MasterCard and Visa’s card systems’ interchange fees. The first decision in these cases was adopted by the CAT last year (Sainsbury v MasterCard). The second one was the Arcadia v MasterCard case I posted about on 10 February. There are also more recent decisions by the…