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 the existence of another law or regulatory regime that applies to the situation at hand. The author identifies four situations in which these two views came into conflict:
- When competition law and sector-specific regulation overlap. In the US, the existence of a regulatory regime designed to remedy and avoid competitive harm supplants the need for, and the application of, US antitrust law. By contrast, regulatory obligations only exclude anticompetitive conduct from the scope of EU law: ‘if it is required by the legal framework or if the regulatory obligations preclude the possibility of competitive conduct.’
The difference seems to arise from different approaches on each side of the Atlantic to the risk of false positives. Such differences arise from: (i) the continuing dominance of former State-owned monopolies in Europe; (ii) the common objective of European competition law and regulation to bring about the internal market; (iii) the priority given to public over private enforcement in Europe by comparison to the US.
- When patent procedures are misused. The main example of this is Astra Zeneca, which made highly misleading representations to patent offices and courts in order to prolong its monopoly on the proton pump inhibitor market. AstraZeneca argued that submitting misleading information could not, by itself, amount to an abuse, particularly where there are mechanisms under IP law to address the issue. The court nonetheless held that such conduct can amount to an abuse when a misrepresentation has potential anti-competitive effects on the market, regardless of whether the misconduct may also be rectified under another set of rules. A second anticompetitive practice in this case consisted in the deregistering of branded medicines – which had the effect of preventing generics from being marketed. AstraZeneca claimed its behaviour was not abusive because it was lawful under the EU legislation on marketing authorizations. The General Court held this to be irrelevant, since lawful conduct under one set of rules does not usually prevent the same conduct from infringing another set of rules.
- When SEP holders rely on injunctions. This refers to the various SEP cases that I reviewed in previous emails already (see, more recently, the emails of 26 January and 2 February). The author maps out these cases, and concludes that, while there may be better solutions than antitrust to deal with this issue, the application of competition law cannot be excluded.
- When internet search services appropriate original content from other websites (‘scraping’). While some have expressed concern about the absence of competition harm in such practices, others have advanced a theory of harm according to which using third party content to promote search services may reduce competitors’ incentives to invest in the creation of original content for the benefit of internet users. Here, the tension between IP and competition law is less obvious, since such an approach raises a competition concern that is quite separate from any copyright infringement issues.
A third section then moves on to discuss the possible limits on the substantive scope of Article 102.
The author extracts the following possible limits to the scope of Art. 102 TFEU from the case law, and proceeds to assess them in turn: (i) express derogations; (ii) implied competition law immunity, such as when apply the competition rules are found not to apply in order to avoid a clash with another policy or objective pursued by the Treaty (e.g. collective agreements on working conditions); (iii) non-economic activity, which falls outside the scope of competition law under the EU courts’ case law; (iv) whether an entity is able to infringe competition law; (v) whether conduct leads to an increase in price; (vi) whether conduct is proportionate to the pursuit of a legitimate objective; (vii) the existence of a link between a dominant position and an abuse.
The article concludes by offering some guiding principles regarding the scope of Art. 102 TFEU in its fourth section.
It is clear that the application of competition law is not restrained by the existence of other legal rules or by a dominant firm’s compliance with those rules. At the same time, Article 102 TFEU is, and indeed must be, sensitive to the relevant legal and regulatory framework.
The article finishes by offering six propositions that inform the application of Article 102 TFEU to conduct of dominant undertakings that is also subject to other legal rules. If I may attempt to summarise them, the author argues that while failure by a dominant company to comply with competition law does not by itself amount to an infringement of competition law, neither does compliance with a regulatory scheme exempt a dominant company from competition law scrutiny except if: (i) there is a Treaty derogation to that effect or (ii) the conduct is objectively necessary and proportionate for securing either an objective reflected in the EU treaties or a valuable social goal. The normal principles of competition law regarding the need for anticompetitive effects and dominance will apply to the analysis of conduct falling within the scope of other regulatory frameworks, but the analysis should take into account the legal and factual context in which the conduct occurred.
Comment: I think this piece is very good – it is extremely clear, it covers the topic quite well (to an extent that I was just unable to adequately reflect David’s analysis here), and it provides valuable guidance to legal operators. The paper should be of interest to anyone interested in the interaction between competition law and other legal regimes.
I would merely note that most situations of overlap that the author identifies concern IP. However, I think that a thorough study of the relationship between competition law and regulation would require an in-depth analysis of other sectors – in the EU, this would probably entail looking at abuse cases in recently liberalised sectors. Having said that, my instinct is that the outcome of such an analysis – which would likely have to be a book-length one – would not significantly differ from that pursued in this article, unless one attempts to go deeper into the concepts of ‘objectively necessary conduct’ and ‘State compulsion’.