Frank Maier-Rigaud and Benjamin Loertscher ‘Structural v Behavioural Remedies’ (2020) CPI Chronicle April

Both antitrust and merger investigations at the EU level regularly conclude with the European Commission (“Commission”) accepting or imposing remedies. Despite the theories of harm underlying antitrust and merger investigations often being similar, if not identical, remedies in these two areas of competition law vary substantially. The predominance of behavioural remedies in antitrust cases stands in contrast to structural remedies relied upon in most merger investigations. This is surprising and begs the question of what are the factors driving the Commission’s remedies practice – which is the question that this paper, available here, seeks to address. Section II provides some background on the application of remedies under EU law. Under merger control, commitments accepted by the Commission “should be proportionate to the competition problem and entirely eliminate it.” Similarly, in antitrust enforcement the Commission can “impose any […] remedies which are proportionate to the infringement committed and necessary to bring the infringement effectively to an end”. The broadest classification for…

John Kwoka ‘Conduct Remedies, with 2020 Hindsight: Have We Learned Anything in the Last Decade?’ (2020) CPI Chronicle April

A decade ago, U.S. antitrust policy embarked on an experiment in expansive use of conduct remedies for mergers. Several major cases were settled with commitments that the merged firm – as a condition for approval of their mergers – would not engage in specific anticompetitive actions. However, a growing body of experience and research has found that conduct remedies are hard to write, even more difficult to enforce, and often simply ineffective. Despite this, over the past decade the agencies have not only failed to limit reliance on conduct remedies: they have continued to use them and even extended their use in more problematic directions. This essay, available here, discusses the flaws inherent in conduct remedies, before describing three recent cases that raise the question of whether anything has been learned from recent experience with such remedies Section II looks at the limitations of conduct remedies. Conduct remedies represent an effort to allow a merger to proceed while preventing anticompetitive…

John Kwoka and Tommaso Valletti ‘Scrambled Eggs and Paralyzed Policy: Breaking Up Consummated Mergers and Dominant Firms’

Competition policy has been no obstacle to the rise of dominant firms in e-commerce, social media, online search and other important aspects of the modern digital economy. The well-documented results of these trends are increasing market concentration, entrenched dominance, diminished competition and entry, and harm to consumers and businesses alike. Competition agencies, policymakers, academics, interest groups, and others have proposed various ways of addressing the weaknesses of past policy. Most of these proposed policies involve more vigorous application of conventional tools, which, however, are unable to address current levels of market concentration. However, the most obvious solution – breaking up such firms — is generally dismissed as impractical, the equivalent of trying to unscramble eggs. The authors disagree in this paper, available here. The rationale for breaking up companies is straightforward: where the essential competitive problem with a company is its structure, in the sense that its anticompetitive behaviour flows inexorably from that structure and is otherwise difficult to prevent,…

C. Scott Hemphill and Tim Wu on ‘Nascent Competitors’ (2020) University of Pennsylvania Law Review (forthcoming)

A nascent competitor is a firm whose prospective innovation represents a serious future threat to an incumbent. Nascent rivals play an important role in both the competitive process and in developing innovation. New firms with new technologies can challenge and even displace existing firms; sometimes, innovation by an unproven outsider may be the only way to provide new competition to an entrenched incumbent. For competition enforcers, nascent competitors pose a dilemma. While nascent competitors often pose a uniquely potent threat to an entrenched incumbent, the firm’s eventual significance is uncertain, given the environment of rapid technological change in which such threats tend to arise. That uncertainty, along with a lack of present, direct competition, may make enforcers and courts hesitant or unwilling to prevent an incumbent from acquiring or excluding a nascent threat. This essay, available here, identifies nascent competition as a distinct category and outlines a program of antitrust enforcement to protect it. It favours an enforcement policy that…

C. Scott Hemphill and Nancy L. Rose on ‘Mergers that Harm Sellers’ (2018) Yale Law Journal 127(1) 2078

In typical mergers, the main concern is that the parties will be able to raise the prices they charge purchasers. Some mergers, however, reduce competition among competing buyers, thereby reducing the prices that sellers receive for their products and services. These adverse “buy-side” effects may harm a wide variety of sellers, including workers.  This paper, available here, examines the antitrust treatment of mergers that harm sellers. Its central claim is that harm to sellers in an input market is sufficient to support antitrust liability. Part I considers mergers that increase classical monopsony power. Monopsony is used here as the mirror image of monopoly, i.e. market power susceptible of affecting the price of inputs. Monopsony is a frequent concern in labour and agricultural markets. As with lawfully acquired monopoly power, antitrust law does not prohibit the exercise of lawfully acquired monopsony power, despite its economic costs. Yet antitrust problems do arise when buyers increase their monopsony power by combining forces. Agreements…

David Glasner and Sean P. Sullivan on ‘The Logic of Market Definition’ (forthcoming) Antitrust Law Journal

This paper,available here , is not technically about merger control, but it is as relevant here as in any other competition topic – and it fits nicely with wider discussions of market power and market entry, which, as we have seen in past weeks, are common in merger control. While the usefulness of, and methodologies concerning market definition would seem to be well established, in practice both are actively questioned. Some have even argued that market definition is unnecessary in competition law. While this argument is not new, Louis Kaplow has recently advanced this thesis with a particularly pointed argument that: (1) market definition serves no role except to produce market shares, (2) market shares are poor measures of market power, and (3) antitrust would be better served by ignoring market shares and trying to assess market power from estimates of residual-demand curves and the like instead. The goal of this paper is to trace the internal logic of market…

Julian Nowag and Liisa Tarkkila on ‘How much effectiveness for the EU Damages Directive? Contractual clauses and antitrust damages’ (2020) Common Market Law Review 57 433

Market actors often include clauses in contracts which determine the jurisdiction, and/or forum in which any claim arising from the contract may be heard; or clauses which prohibit reassigning a claim or joining a class action. In some situations, these clauses may make it more difficult to obtain full compensation for a competition law infringement. Antitrust victims can be forced to bring damages actions in jurisdictions or before arbitrational tribunals that have less favourable cost and evidential rules; they may also encounter language-related problems. Similarly, preventing forms of collective redress has obvious benefits for defendants whenever a large number of victims only suffered very small individual harm. This paper, available here, explores the extent to which the aims of the Damages Directive and development of a strong EU private enforcement system in Member States’ courts might be undercut by such contractual arrangements. It argues that EU law protects consumers against clauses that could hinder the full effectiveness of the right to compensation…

Michal Gal ‘The Case for Limiting Private Litigation of Excessive Pricing’ (2020) Journal of Competition Law and Economics 15(2-3) 298

Excessive pricing raises strong concerns for private competition litigation, for three reasons: (1) the inherent difficulty of defining what constitutes an unfair price; (2) additional challenges inherent to private excessive pricing litigation, such as the need to pinpoint when exactly a price becomes unfair in order to calculate damages; and (3) the institutional features of general courts in EU member states. Given that private litigation of competition law violations is only beginning to develop in the EU, and collective redress mechanisms are still viewed with caution by many member states, this is exactly the time to ensure that, as private litigation expands, it will increase welfare. This is the purpose of this paper, which is available here. Section 2 addresses the inherent difficulty of determining when a price becomes unfair. The excessive pricing prohibition, though longstanding, suffers from serious and inherent difficulties in its implementation. In particular, it lacks clear and workable criteria. The challenges can be summarised as follows: to decide…

Jean-François Laborde ‘Cartel damages actions in Europe: How courts have assessed cartel overcharges’ (2019) Concurrences

The primary objective of this study, available here, is to analyse how national European courts have assessed cartel overcharges. In addition, it also provides figures on the development of cartel damages actions in Europe (how many cases were decided, in which countries, with which outcomes, etc.). It was completed with the help of lawyers, law professors, economists, national competition authorities and national judges from 30 European countries.   Now in its fourth edition, this study shows that national courts in Europe have handed down judgments in at least 239 cartel damages actions in 13 countries, relating to more than 63 cartels. In these judgments, courts have given many insights into how to assess cartel overcharges. Section I describes the methodology followed. The process employed for this research involved four steps. The cases were identified; copies of judgments were gathered; using a recent automatic translation service, judgments were translated into English; their content was then analysed. To identify cases, contributors were asked whether they…

Eugenio Olmedo-Peralta ‘The Evidential Effect of Commitment Decisions in Damages Claims’ (2019) Common Market Law Review 56 979

The European Commission and national competition authorities (NCAs) make extensive use of commitment decisions. Since these decisions do not establish the existence of competition infringements, claimants still have to bear the burden of proof in stand-alone damages actions concerning conduct covered by them. However, some evidential effects should be recognised to commitment decisions, as well as to certain statements made in the context of related public enforcement proceedings. This article, available here, describes such effects as follows. Section II outlines the relationship between commitment decisions and the private enforcement of competition law. According to Regulation 1/2003, commitment decisions are adopted without concluding whether competition law has been infringed. Commitment decisions merely state that there are no longer grounds for action by a competition authority, as the behavioural or structural measures taken by the companies involved in an investigation are sufficient to put an end to the potential restriction of competition. In short, the main features of commitment decisions are that: (i) they…