Mark Friend ‘Loyalty Rebates and Abuse of Dominance’ (2018) The Cambridge Law Journal 77(1) 25

This paper – which can be found here – argues that the Intel decision should be given a cautious welcome for signalling a move to a more economics-based approach in the assessment of loyalty rebates. On the other hand, the author thinks that the decision also represents a missed opportunity to provide a comprehensive analytical framework for one of the more unsatisfactory areas of EU competition law. The author begins by describing the EU case law on rebates. In line with AG Wahl’s Opinion, the author identifies two main strands in the case law: Since Michelin II, it has been clear that quantity rebates or discounts – linked solely to volumes purchased from the dominant undertaking – are generally considered not to give rise to foreclosure effects and are presumptively lawful. On the other hand, loyalty rebates have consistently been condemned ever since Hoffmann-La Roche. This case held that a dominant company will be guilty of an abuse whenever that…

When is a rebate prima facie anticompetitive? Case C‑413/14 P Intel v Commission ECLI:EU:C:2017:632

This piece reviews the Court of Justice’s decision by the Grand Chamber in Intel (Case C‑413/14 P Intel v Commission ECLI:EU:C:2017:632), which can be found at http://curia.europa.eu/juris/liste.jsf?num=C-413/14. The facts of the case are relatively straightforward. Intel sells x86 CPUs processors. The x86 architecture is a standard designed by Intel for its CPUs, and can run both Windows and Linux operating systems. The European Commission found that Intel had engaged in two abusive conducts concerning these processers intended to exclude a competitor, AMD, from the market for x86 CPUs; and imposed a EUR 1.06 billion fine. The first conduct consisted in the grant of rebates to four original equipment manufacturers (‘OEMs’), namely Dell, Lenovo, HP and NEC. These rebates were conditional on these OEMs purchasing all or almost all of their x86 CPUs from Intel. The second conduct consisted in making payments to OEMs so that they would delay, cancel or restrict the marketing of certain products equipped with AMD CPUs….

Luis Ortiz Blanco and Jose Luis Azofra Parrondo ‘The Intel Case: Issues of Economic Analysis, Comity and Procedural Fairness’

According to the authors of this short pirce – which can be found here – the Intel judgment addresses three main issues: (i) the role that economic analysis – and the as-efficient-competitor test – should play in the context of abuses of dominant position in general, and loyalty rebates in particular; (ii) the jurisdiction of the European Commission and international comity; and (iii) procedural fairness and the rights of the defence. Looking at each in turn: The As-Efficient-Competitor (AEC) Test – This part of the paper describes the facts of the case and outlines the Court’s reasoning. For the authors, the main doubt concerning this judgment is: ‘whether the Court has willingly or unwillingly opened the door to an obligation to drive thorough economic analysis in all abuse-related cases without exception’. The Commission decided – and the General Court agreed – that Intel’s rebates were by their very nature capable of restricting competition. This was based on the EU Courts’…

Kevin Coates  ‘The Intel CJ Ruling: More Than a Nudge towards Economic Analysis’

Even though this (very short) reaction piece – which can be found here – focuses mainly on the procedural part of the judgment, it also comments on more substantive matters. As regards extraterritoriality, he notes that AG Wahl had argued that it should be unlawful to bring together conduct which could have had no effect in the EU (e.g. a contract between Intel and an OEM in Asia, with products destined for Asia), with conduct that could have EU effects (e.g. a contract with products destined for the EU). The Court disagreed: the “conduct … viewed as a whole” should be taken into consideration to avoid “an artificial fragmentation of comprehensive anticompetitive conduct”. As regards the treatment of exclusive rebates, he argues that we have learned less than many had hoped. On the one hand, the CJEU seems to be making a procedural point: if the Commission relied on economic evidence, then the General Court should examine it. But other…

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…

Steven Salop  ‘An Enquiry Meet for the Case: Decision Theory, Presumptions, and Evidentiary Burdens in Formulating Antitrust Legal Standards’

Because legal decisions are adopted with imperfect information, decision-makers must strive to create a decision process and make decisions that are rational in light of the costs and benefits of information-gathering and the inevitable uncertainty under which they decide. Presumptions play an important role in this.  Antitrust law contains a number of important presumptions, which: ‘run the gamut along a continuum from irrebuttable (i.e. conclusive) anticompetitive presumptions to rebuttably anticompetitive to competitively neutral to conclusively procompetitive and finally to irrebuttable procompetitive presumptions. These presumptions are based on the effects inferred from the market conditions’ and most capture the central tendency of the category of conduct to increase or decrease competition and consumer welfare. This paper – which can be found here – seeks to understand, through the lens of economic decision theory, how the appropriate presumption for various categories of conduct should be established, and how rational presumptions and their associated post-rebuttal evidentiary burdens of production and persuasion can be better…

Herbert Hovenkamp ‘Antitrust Balancing’ (2016) NYU J. L. & Bus. 12 369

The basic argument of this paper, which can be found here, is that courts very rarely engage in any balancing even when cases fall under the rule of reason. Most people who are familiar with Hovenkamp’s work will not be particularly surprised by this argument. The interesting claim in this paper is that he thinks that there can be meaningful balancing in merger control – particularly when determining whether merger-induced efficiencies are sufficient to offset upward pricing pressures created by the merger. The paper is structured as follows: A first section looks at balancing under the Sherman Act. It points out that “aside from naked price fixing, market division, and a few boycotts, most agreements among competitors are addressed under the rule of reason”. It then explains (as he has done so many times before) that in practice: “the courts pursue rule of reason analyses through a verbal sequence something like this: first, the plaintiff has the burden to show…

Carl Shapiro and Herbert Hovenkamp ‘Horizontal Mergers, Market Structure, and Burdens of Proof’ (2018) Yale Law Journal 127(7) 1996

This paper, which can be found here, deals with the ‘structural presumption’ for merger control set out in US law by the Philadelphia National Bank case in 1963. In this case, the Supreme Court stated: “That ‘competition is likely to be greatest when there are many sellers, none of which has any significant market share,’ is common ground among most economists, and was undoubtedly a premise of congressional reasoning about the antimerger statute.’ The Supreme Court held that a merger producing a firm that controls an “undue percentage share” of the market and that “results in a significant increase in the concentration of firms in that market” is “inherently likely to lessen competition substantially.” As a result, the merger should be prohibited, at least “in the absence of evidence clearly showing that the merger is not likely to have such anticompetitive effects” The merging parties can then rebut this structural presumption by showing that the market shares do not accurately…