Zygimantas Juska ‘The Effectiveness of Antitrust Collective Litigation in the European Union’ (2018) International Review of Intellectual Property and Competition Law 49(1) 633

The article, which can be found here, seeks to assess whether European efforts to promote compensation for anticompetitive harm have been successful. These efforts have focused on promoting compensation, treating deterrence as a goal best promoted through public enforcement. It finds that collective enforcement has not been successful in the EU, particularly by comparison to the US, where the main objective of private enforcement is deterrence. By granting standing to both direct and indirect purchasers without also creating appropriate collective redress mechanisms, the EU system merely ensures that neither direct purchasers nor indirect purchasers can effectively exercise their right to compensation. The paper argues that Europe should adopt a deterrence-enhancing approach to private enforcement that borrows from the US. The paper is structured as follows: Section 2 provides an overview of competition enforcement models in the EU, with an emphasis on private enforcement. It begins by describing how public enforcement prevails in EU competition law, which broadly assumes that fines and…

Eckart Bueren, Kai Hüschelrath, and Tobias Veith ‘Time is Money–How Much Money is Time? Interest and Inflation in Competition Law Actions for Damages’ (2016) Antitrust Law Journal 81(1) 271

One aspect that is often overlooked, but is of enormous practical importance in competition damages cases, is the way a legal system deals with costs associated with the passage of time, as expressed through interest and inflation. Cartel damages generally are spread over a cartel’s lifespan, which can be long; furthermore, a considerable amount of time often elapses between the incidence of loss and the award of damages. This paper – which can be found here – seeks to address a gap in the literature by describing how major legal systems deal with interest and inflation in the context of antitrust damage claims, what the consequences are of adopting certain approaches to interest and inflation for recoverable damage amounts, and whether these approaches are economically sound. The paper is structured as follows: The first section describes the main economic approaches to address the passage of time on damages awards and for selecting an appropriate interest rate. Four main measures are identified: the…

Jens-Uwe Franck and Martin Peitz ‘Toward a coherent policy on cartel damages’ (2018) University of Manheim Discussion Paper No. 007

In short, the argument of this paper – which can be found here – is that there is an undue focus on overcharges when talking about cartel damages. The authors argue that significant losses can be suffered as a result of volume effects as well, i.e. from reduced sales / purchases as a result of the higher price that results from a competition infringement. This has implications in terms of standing, since victims of volume effects may not be allowed to bring claims for damages. This is mistaken, and standing should be granted to victims of volume effects. The argument is developed as follows: Part II outlines the law on antitrust standing in the U.S. and the E.U., as well as the basic economics of cartel damages and optimal deterrence. In the US, only direct purchasers or sellers have standing to claim antitrust damages, alongside some victims of ‘umbrella pricing’ (i.e. when non-cartelists raise their prices as a consequence of a competition infringement)….

Chinese Vitamins – Extraterritoriality and State Compulsion

This is a U.S. Supreme Court decision in the ‘Chinese Vitamins case’ (Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd, 585 U. S. [to be determined] (2018), available here). As to the facts of the case, in 2005 Animal Science sued Hebei Welcome. Animal Science manufactures livestock supplements, in which it uses Vitamin C. It alleged that Hebei and other Chinese manufacturers had fixed the prices of the Vitamin C that they sold to the United States. The Chinese sellers moved to dismiss the complaint on the ground that Chinese law required them to fix the price and quantity of vitamin C exports, thus shielding them from liability under U. S. antitrust law by the act of state doctrine, the foreign sovereign compulsion doctrine, and under principles of international comity. The Ministry of Commerce of the People’s Republic of China (the ‘Ministry’) filed an amicus brief explaining that it is the administrative authority authorized to regulate foreign trade,…

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’…

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…

Eleanor Fox “China, Export Cartels and Vitamin C: America Second?”

This paper, which can be found here, seems to argue that framing the issue in this case – which was described in the post below – as a matter of international comity misunderstands the matters at stake. The question is first, one of jurisdiction under the effects’ doctrine over a cartel implemented abroad, and, following this, about whether the US rules on the foreign sovereign compulsion defence apply. The correct interpretation of Chinese law may be relevant, but only in certain circumstances and only in the course of the normal application of US rules. She begins by pointing out that this is a case of a naked cartel, and that China’s sole role in it is to intervene before US courts in order to free its manufacturers from the consequences of violating the clear and well-known rule of US law forbidding price fixing. As such, the matter is not merely whether China alone can say what Chinese law is, which is…

Danny Crane “The Chinese Vitamins Case: Who Decides Chinese Law?’

This paper – which can be read here – begins by summarising the background to the case. In short, since the 1970s, when China began its transition to a market economy, the Chinese government has maintained export controls in the Vitamin C market in order to maintain a competitive edge over producers from other countries. In part due to the regulatory activities of the Chinese government, Chinese companies control about 60% of the worldwide Vitamin C market. A class of vitamins’ purchasers alleged that the defendant Chinese vitamins companies conspired to fix the price of vitamin C sold to U.S. companies, in violation of Section 1 of the Sherman Act. Rather than contest the facts, the defendants enlisted the aid of the Ministry of Commerce of the People’s Republic of China (“MOFCOM”) which submitted an amicus curiae brief in the district court asserting that defendants’ output reduction agreements were directed by MOFCOM itself and were mandatory. Two main questions arose…

Marek Martyniszyn ‘Foreign State’s Entanglement in Anticompetitive Conduct’ (2017) 40 World Competition, Issue 2, pp. 299–321

This paper – which can be found here – argues that legal scholarship on the extraterritoriality of competition law examines this phenomenon predominantly through two lenses. The first strand of research focuses on defences and doctrines that remove a situation from competition law control due to State involvement (such as foreign State compulsion or the act of state doctrine). The second strand analyses the applicability of domestic competition laws to anticompetitive conduct by state-owned firms. The article seeks to bring these two strands together and to develop a typology of State’s entanglement in conduct causing competitive harm abroad. He holds that competitive harm arising from commercial practices should be subject to competition law regardless of the character of the party involved (i.e. be it a firm or a foreign State), unless there are overriding reasons justifying abstention such as national security or the strategic interests of the State that is exercising jurisdiction over an anticompetitive practice. The paper is structured…