Angela Huyue Zhang ‘Strategic Comity’ (2019) Yale Journal of International Law 44(2)

The extent to which US courts should enforce antitrust laws against state-led export cartels has been the subject of intense debate among academics, courts and policymakers for decades. While defendants often invoke the state compulsion defence, which is based on comity and respect for foreign sovereigns, these doctrines have long been criticised for their ambiguity and inconsistent application. The recent Supreme Court decision regarding the Chinese state-led Vitamin C cartel – reviewed here – highlights a number of challenges with the way these doctrines have been applied in the US. The author’s argument in this paper, available here, is that the application of both comity and foreign state compulsion defences are susceptible to political considerations, and that the Supreme Court decision is a good example of this. The author argues that the Supreme Court proactively solicited the opinion of the executive branch before hearing its case, and its final ruling is exactly in line with the opinions and suggestions proposed…

The Common Understanding of G7 Competition Authorities on “Competition and the Digital Economy”

While adopted on 5 June, this communique was embargoed until yesterday. It can now be found here. As it says on the tin, this document reflects the common position that the competition authorities in the G7 countries (namely, the Autoritá Garante della Concorrenza e del Mercato (Italy), the Autorité de la Concurrence (France), the Bundeskartellamt (Germany), the Competition Bureau (Canada), the Competition and Markets Authority (United Kingdom), the Department of Justice (United States of America), the Directorate General for Competition (European Commission), the Federal Trade Commission (United States of America) and the Japan Fair Trade Commission (Japan)) have reached on the digital economy. It may come as no surprise that the level of agreement is relatively thin, and that the document does not go into the most controversial topics addressed in the reports reviewed last week and further below. The common understanding begins with the mandatory section on the benefits of the digital economy. Investment and innovation in the digital…

UK CMA’s Digital Market Strategy

The CMA’s Digital Market Strategy, available here, could be said to be a reaction to the Furman Report reviewed last week,  even if the official reaction took the form of a shorter and earlier letter to Government which can be found here. The paper begins by describing why digital markets are different and how the CMA sees its role in their respect. The underlying features of digital markets include substantial network effects, economies of scale and scope, the role of data and the computing power to use it, scope for personalisation, and market concentration. Most of these are not new individually, but in combination they are novel. Combined with the pace of change, it can be hard for both consumers and public authorities to keep up. Some of these features, or their effects, raise questions, including: firms’ use of people’s data; the market power or ‘gatekeeper’ status of certain platforms; use of increasingly sophisticated technology to target advertising; or the risk of so-called ‘killer acquisitions’. The…

Japan’s Interim Study on Digital Platforms and Fundamental Principles for Improvement of Rules Corresponding to the Rise of Digital Platform Businesses (sic) [Updated with correct link]

Japan published late last year an interim study on digital platforms and a number of Fundamental Principles for Improvement of Rules Corresponding to the Rise of Digital Platform Businesses (sic), both available here. The study, which was produced by a working group, is structured as follows. Section I and II review the characteristics of digital platforms and the legal regime to which they are subject. The study begins by outlining the characteristics of online platforms and the various benefits they bring in terms of innovation, ease of market entry and consumer welfare. The study also notes how digital platforms benefit from direct and indirect network effects and from economies of scale. These features can raise switching costs between different platforms, which would tend to facilitate monopolisation or oligopolisation. Further, once a business model based on using and accumulating data is established data, a virtuous cycle may be created, where the competitive advantage of such business is maintained and strengthened through further…

Italy’s Big Data Report

This is a report published by Italian competition authority, together with the telecommunications regulator and the data protection authority, on how to address big data. It is available here. In my analysis below, I will focus on the elements of the report that touch or focus on competition law. I would also emphasise that this is not the first competition authority in Europe to look at data – the joint Franco-German report in 2016 also looked at the intersection between competition and data. The decision to pursue an interdisciplinary study arose from a recognition that the characteristics of the digital economy are very often such that it touches on the competences of the three authorities. The relationship between competition, privacy and pluralism requires a particularly close coordination between different regulators, not only to ensure effective regulatory action but also to identify and reconcile possible trade-offs between the values protected by different regulatory schemes. Furthermore, joint action will allow a better understanding of…

Beatrice Stange on ‘Romano Pisciotti v Bundesrepublik Deutschland: Increased Risk of Extradition for EU Citizens after Involvement in US Cartels’ (2019) Journal of European Competition Law & Practice 10(2) 89

This paper, available here , discusses the first deportation of an EU citizen to the US for competition law infringements. It focuses on a recent judgment by the Court of Justice of the European Union on this matter. A first section outlines the factual background of the case. In 2010, a US arrest warrant was issued for Italian businessman Romano Pisciotti on account of his involvement in the marine hoses cartel. In 2013, the German federal police arrested Mr. Pisciotti at Frankfurt Airport during a stopover of his flight from Nigeria to Italy. He was provisionally detained and, a few months later, the German authorities accepted the US request for extradition despite Mr. Pisciotti’s legal appeals, inter alia before the German Federal Constitutional Court. Other extradition requests from the US authorities had so far been unsuccessful, mainly because most international extradition agreements (including the Treaty between Germany and the US) require that the sanctioned conduct must be a crime in…

David Gerber ‘Competitive Harm in Global Supply Chains’  (2018) Journal of Antitrust Enforcement 6(1) 5-24

This paper – which can be found here – focuses on the difficulties that transnational supply chains pose for competition law enforcement. ‘Transnational supply chain’ is a concept used to describe the process through which multiple firms located in multiple jurisdictions provide components for and/or assemble and manufacture end-use products. As a result of this process, anticompetitive conduct in one jurisdiction may have anticompetitive effects in other jurisdictions. However, few legal tools are available for deterring such harms. The article reviews current responses to the problem, and identifies the potential value of transnational coordination as a response. The article is structured as follows: A first section outlines the challenge posed by global supply chains. It describes their development with the deepening of globalisation, and the form that supply chains usually take. Global supply chains have major consequences for many countries, so we might expect them to have generated legal developments on the transnational level. Yet, little attention has been paid…

Filomena Garcia, Jose Manuel Paz y Mino, Gustavo Torrens ‘Of Course Collusion Should be Prosecuted. But Maybe… (Or the case for international antitrust agreements)’ (2017) CPI

This paper – which can be found here – was written by a number of economists at University of Indiana, and it looks at the incentives of competition authorities to pursue international cartels. A benevolent competition authority with a mandate to maximize national welfare might prefer to delay the prosecution of domestic firms when those firms will benefit from anticompetitive conduct at the expense of foreign consumers. To demonstrate this, the paper develops a simple two-country model of collusion and antitrust policy where there is an industry comprised of two multinational firms that operate in countries with competition agencies. In a first variant of this model, the competition agency of the country where the effects of an anticompetitive practice are felt (country B) will discover this practice only if the agency of the country where the companies are based (country A) starts an investigation. The authors show that country B always prosecutes the colluding firms as soon as there is…

Pierre Huizing ‘Fining Foreign Effects: A New Frontier of Extraterritorial Cartel Enforcement in Europe?’ (2017) World Competition 40(3) 365

This paper – which can be found here – asks whether national competition agencies in Europe (NCAs) have the power to sanction anticompetitive activity taking place outside their territory. The question went unaddressed in Regulation 1/2003, which set up the system of decentralized competition enforcement currently in place in the EU. According to this paper, the members of the European Competition Network (ECN) used to proceed on the basis of a common understanding that each authority would only pursue cross-border cartels for their domestic effects – with the Commission pursuing EU-wide cartels. However, in recent cases some NCAs have departed from this practice and imposed fines that took into account the EU-wide effects of cartels. This article reviews the NCA’s practice as regards the sanctioning of extra-territorial cartel activity, and the academic and political debate about whether this practice is legitimate and appropriate. It does so as follows: Section 2 reviews the enforcement practices of a number of NCAs. It…

Florian Wagner Von Papp ‘Competition Law in EU Free Trade and Cooperation Agreements (and What the UK Can Expect After Brexit)’ European Yearbook of International Economic Law, Forthcoming

This paper – which can be found here – focuses on the interplay between trade and competition from a competition perspective. Its basic argument is that the more integrated a trade area is, the more similar competition rules are likely to be, and the easier it will be for international cooperation to occur.  The focus of the paper is on demonstrating how this occurs in practice, by looking at “the concentric circles of cooperation around the EU by examining the intergovernmental and inter-agency agreements concluded by the EU to face the complexities of the transnational economy of the 21st century.” Section 2 contains a short overview of the relationship between free trade and competition law. Free trade interacts with competition law on many levels, and their relationship is mainly symbiotic and self-reinforcing. However, competition and trade law conflict at points. Free trade should increase competition, since market entry by foreign competitors undermines domestic market power. Competition law is then useful…