Massimiliano Kadar ‘Article 102 and Exclusivity Rebates in a Post-Intel World: Lessons from the Qualcomm and Google Android Cases’ (2019) Journal of European Competition Law & Practice 10(7) 439

Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits behaviour by a dominant undertaking that is capable of harming competition. The notion of ‘capability to harm competition’ has been at the centre of the legal and economic debate for many years. A strict interpretation of ‘capability’ would require evidence of actual or quasi-actual effects on the market in the form of, for example, the exit of existing competitors or sustained price increases. A lax interpretation of capability could make it possible to enforce competition rules also in circumstances where harm to competition is purely hypothetical and not supported by concrete evidence. This discussion – which is ultimately about the level of the standard of proof – not only influences the likelihood of Type 1 and Type 2 letters, but also the amount of resources that administrative agencies needs to devote to individual enforcement cases. Modulating this impact are presumptions, which can lead to significant savings…

Cani Fernández ‘Presumptions and Burden of Proof in EU Competition Law: The Intel Judgment’ (2019) Journal of European Competition Law & Practice 10(7)

Some of the procedural tools used by competition authorities and courts (in particular, presumptions) present an inherent link to the burden of proof and to the rightful exercise of the rights of the defence. In principle, the use of presumptions can be an efficient response to the enforcement of competition policy both in situations where a given behaviour usually amounts to an infringement or where it is competitively innocuous. In any rule of law system, presumptions of illegality must be rebuttable. Indeed, a resort to presumptions not surrounded by proper procedural guarantees may infringe the presumption of innocence and undertakings’ rights of defence. The Intel judgment provides a good opportunity to discuss the role of presumptions under Article 102 TFEU and their implications for the burden of proof. In addition to this, this article, available here, analyses how defendants in exclusivity rebate cases can rebut the presumption of illegality in practice, with a special focus on the efficiency defence. It does so…

Sean Ennis ‘Price Abuses: An overview of EU and national case law’ (2019) Concurrences

Pricing abuses can be viewed as a hybrid between regulation and competition law enforcement, since they raise questions of principle over when pricing that takes advantage of market power should be prevented by competition law action, by regulation or simply left unchallenged. In many cases – e.g. in predation, margin squeeze, rebates and excessive pricing cases – companies may have practical difficulties in assessing ex ante whether their pricing policies are illegally low (in the case of predation and rebates), illegally high (in excessive pricing cases) or some combination of both (in margin squeeze). This has the potential to influence those companies’ incentives significantly, an effect compounded by lack of predictability as to when such cases will be brought. As such, it is important to have a clear view of what types of cases have been brought recently. This is the object of this paper, available here, which reviews recent instances of price abuses in Europe. Section 2 looks at…

John Ratliff ‘Unilateral conduct in the energy sector: An overview of EU and national case law’ (2019) Concurrences Special Issue Energy & Dominance

This paper, available here, provides an overview of European Commission (“EC”) and European national competition authorities’ (“NCAs”) practice as regards the application of competition rules to unilateral conduct in the energy sector. It covers more than 120 cases, including national court judgments and investigations up to June 2019. While the article divides the various practices into 19 different sections, I will do so as follows: In the introduction, the author summarises European and national approaches, as well as recent developments. The 2007 EU Energy Sector Inquiry prompted much enforcement of Art. 102 TFEU in the energy sector. Most of enforcement concerned traditional foreclosure practices in relation to infrastructure capacity, access to the infrastructure, capacity hoarding and withholding of generation capacity. Other cases have dealt with new types of abuse, such as strategic underinvestment and market manipulation, and there have also been cases on excessive pricing. Energy markets remain a priority for the European Commission. Recent developments include closing investigations against…

Michael Funk and Christian Jaag ‘The More Economic Approach to Predatory Pricing’ (2018) Journal of Competition Law & Economics 14(2) 292

This paper, available here, argues that legal requirements and economic reasoning are not aligned as regards predatory pricing. Predation is not a strategy predominately used by ex ante dominant firms, but rather a strategy to gain ex post dominance. Consequently, the current legal practice in Europe and other jurisdictions, which requires ex ante dominance to pursue predatory pricing, makes the prosecution of predatory pricing virtually impossible because it overlooks the basic economic rationale for predatory pricing. This inconsistency has become even more severe because the adoption of a “more economic approach”: in fact, the more accurate the economic assessment is, the less probable is a conviction of harmful predation under the current legal framework. The authors suggest prohibiting predatory pricing independently from other exclusionary abuses. Instead, predatory pricing should be subject to the same analytical framework as mergers, where a similar economic and business logic applies. Since recoupment of predation is akin to the unilateral effects arising from the merger…

Miroslava Marinova ‘What Can We Learn About the Application of the as Efficient Competitor Test in Fidelity Rebate Cases from the Recent US Case Law?’ (2018) World Competition 41(4) 523

The treatment of fidelity rebates is one of the most difficult and controversial topics in EU competition law and US antitrust law. Unlike in the EU, where a number of fidelity rebates are deemed abusive without the need to engage in detailed economic analysis, in the US it is consensual that rebates should be subject to an effects-based analysis. Nonetheless, the legal assessment of fidelity rebates in the US remains controversial. Some courts have adopted an exclusive dealing framework, while others have used price-cost tests; others still have applied a mix of the two frameworks. This diversity of approaches has led to intense academic debate in US scholarship, which finds a parallel in debates regarding whether the appropriate approach to fidelity rebates should be based on predation or on a raising rivals’ cost (RRC) framework. This paper, available here, compares the EU and US approaches to fidelity rebates, and seeks to draw lessons from the US experience and apply them…

Pietro Crocioni ‘On the Relevant Cost Standard for Price-Cost Tests in Abuses of Dominance’ (2018) Journal of Competition Law & Economics 14(2) 26

This article, available here, reviews the use of cost standards in selected European abuse of dominance cases. It shows that a variety of cost standards were employed until recently, and criticises the ECJ’s case law for ignoring challenges with identifying the appropriate cost standard for each case. To address such challenges, it is important to identify the key questions a price–cost test should answer, and agree on the features of such a test. The paper is structured as follows: Section II summarises current knowledge on price-cost tests. This knowledge is outlined in the European Commission’s Article 102 Enforcement Guidance, which puts forward two widely accepted concepts: Average Avoidable Cost (AAC) and Long Range Average Incremental Costs (LRAIC). These tests provide the benchmarks for predatory behaviour in Europe. There is a legal (but rebuttable) presumption that prices below AAC anticompetitively foreclose competition; that prices above LRAIC do not to raise concerns; and that prices between AAC and LRAIC require consideration of…

Dagmar Schiek and Andrea Gideon on ‘Outsmarting the gig-economy through collective bargaining – EU competition law as a barrier?’ (2018) International Review of Law, Computers & Technology 32(2-3) 275

While the use of information technology can enhance personal self-determination, its use in the context of the gig-economy also creates the risk of entrenching casual, precarious and exploitative working conditions. A crucial question that arises is how far gig-workers are able to shape their work conditions. Within the sphere of employment law, the right of workers to organise collectively provides the opportunity to achieve just that. This paper, available here, aims to analyse the barriers posed by EU competition law to collective labour rights of gig-workers. It argues that EU competition law, as currently interpreted by the Court of Justice, would hinder collective organisation of those serving the gig-economy. It also advances an interpretation of the competition provisions which would allow EU competition law to adapt to recent developments in labour markets. It is structured as follows: A first section sketches the basic features of the gig-economy. The gig-economy is mainly characterised by the extensive use of IT for the distribution, allocation,…

Emilio Calvano, Giacomo Calzolari, Vincenzo Denicol and Sergio Pastorello ‘Artificial Intelligence, Algorithmic Pricing and Collusion’ Centre for Economic Policy Research, London

Algorithmic pricing is not new, but newer software programs are much more “autonomous” than their precursors. Powered by Artificial Intelligence (AI), pricing algorithms can develop their pricing strategies from scratch, engaging in active experimentation and adapting to the evolving environment. In this learning process, they require little or no external guidance. Taken together with the diffusion and evolution of pricing algorithms, these developments raise various issues for competition policy, particularly as regards tacit collusion. While so far no one has brought an antitrust case against autonomously colluding algorithms, antitrust agencies are discussing the problem seriously. In addition to the OECD, competition authorities in the US, Canada and UK have held roundtable or issued papers on the topic. This paper, available here, tries to understand whether tacit collusion arising from AI should be a real concern by looking, for the first time, at the emergence of collusive strategies among autonomous pricing algorithms. It takes an experimental approach, by constructing AI pricing agents and…

Jonathan Baker and Fiona Scott Morton on ‘Antitrust Enforcement against Platform MFNs’ (2018) Yale Law Journal 127 2176

 . This paper, available here, argues for more vigorous antitrust enforcement against Most Favoured Nation (MFN) provisions in the platform context. A MFN clause requires providers to refrain from offering their products or services at lower prices on other platforms. During the past two decades, antitrust enforcement against MFN provisions has grown, particularly in Europe. In contrast, there have been almost no enforcement actions against platform MFNs in the United States. The authors make a number of proposals to reverse this trend. The article is structured as follows: Part I shows how platform MFNs can harm competition and consumers, despite their potential competitive benefits. The authors’ draw on the economics’ literature on the effects of MFNs generally, and platform MFNs in particular. Simple MFNs commit sellers not to discount selectively, which assures covered buyers that they will be charged the lowest price offered by the seller. At first blush, one might expect this provision to lead to lower prices for covered buyers….