Healthcare systems and competition: challenges and boundaries for the application of competition law in the EU healthcare sector

Chapter 1 - Introduction to Competition Law 1.1 The economic background to competition law 1.2 The function of competition law 1.3 The market 1.4 Competition law and the economic theory of regulation 1.5 Various systems of competition law Literature Chapter 2 - The basic structure of competition law 2.1 Some key concepts in the application of competition law 2.2 The combined system of UK and European competition law 2.3 The scope of application of competition law Chapter 3 - The prohibition of anti-competitive agreements 3.1 Introduction 3.2 The prohibition of cartels 3.3 Voidness 3.4 Block exemptions 3.5 Other exceptions from the prohibition of cartels 3.6 Some important types of anti-competitive agreements Chapter 4 - The prohibition of the abuse of positions of economic power 4.1 Introduction 4.2 The prohibition of the abuse of a position of economic power 4.3 Postscript: the Commission's Discussion Paper on Exclusionary Abuses under Article 82 EC Chapter 5 - Control of concentrations 5.1 Introduction 5.2 The key elements of the EC Merger Regulation 5.3 Merger control in the UK system: the Office of Fair Trading and the Competition Commission Chapter 6 - The Application and Enforcement of Competition Law 6.1 Introduction 6.2 The application of competition law by the courts 6.3 Competition procedure and enforcement under UK law 6.4 Enforcement of EC competition law 6.5 Leniency policy 6.6 Judicial protection in EC competition law 6.7 Division of competence and co-operation between the Commission and the UK authorities (OFT and CC) Chapter 7 - Competition Law and the State 7.1 Introduction 7.2 The rules for public undertakings and undertakings with exclusive or special rights 7.3 The norm of Articles 3(1)(g), 10, 81 and 82 EC 7.4 How to assess conduct in mixed situations? 7.5 EC state aids law: a general introduction Chapter 8 - The international dimensions of competition law 8.1 Introduction 8.2 The geographic scope of application of EC and UK competition law 8.3 International agreements 8.4 Relevant concepts Chapter 9 - Epilogue 9.1. Introduction 9.2. Themes in competition law 9.3. Objectives of EC Competition law and policy 9.4. Does competition law do the job? 9.5. Antitrust procedure 9.6. Fundamental rights 9.7. Block exemptions 9.8. Fostering general Community policies? 9.9. Remedies 9.10. Liberalisation of the closed 9.11. Public service obligations 9.12. Extraterritorial application of EC competition law and international co-operation in the competition law field 9.13. Merger Control 9.14. Article 82 EC 9.15. Articles 3(1)(g) and 10 EC 9.16. Article 86 EC 9.17. Role of national courts 9.18. Harmonisation 9.19. Centralisation & Decentralisation of EC competition law 9.20. Regulation 1/2003/EC 9.21. Competition between Legal Orders 9.22. Targeted sectors and/or issues 9.23. Accession 9.24. Conclusion

For decades, the debate about the tension between IP and antitrust law has revolved around the question to what extent antitrust should accept that IP laws may bar competition in order to stimulate innovation. The rise of IP rights in recent years has highlighted the problem that IP may also impede innovation, if research for new technologies or the marketing of new products requires access to protected prior innovation. How this ‘cumulative innovation’ is actually accounted for under IP and antitrust laws in the EU and the US, and how it could alternatively be dealt with, are the central questions addressed in this unique study by lawyer and economist Thorsten Käseberg.

This monograph is the definitive work on the application of antitrust and competition law in blockchain, decentralized finance, and virtual asset markets. It covers all aspects of antitrust and competition law, including market definition, market power, abuse of dominance and monopolization, and anticompetitive agreements and restraints of trade. Completely up to date with all recent literature and case law, this monograph is a key companion to academics, practitioners, competition authorities, and anyone with an interest in competition law and policy in the decentralized economy. Both EU competition law and US antitrust law are covered, and the legal analysis is complemented by extensive economics and computer science literature. Keeping in pace with recent industry developments, this monograph not only systematizes extant scholarship but also breaks new ground, introduces new concepts of the decentralized economy, and integrates them in the analytical framework of competition and antitrust law, making it readily usable by academics, practitioners, and regulators.

The Interface of Competition and Intellectual Property Law – Taking Stock and Identifying New Challenges

‘The goals and scope of competition and antitrust laws’ evaluates the goals and scope of competition and antitrust laws. Competition laws seek to protect the competitive process in the marketplace from companies that seek to distort it. By safeguarding free and fair markets, competition laws promote consumer welfare as well as efficiencies in the marketplace. While key competition law principles are similar across the world, competition laws are not internationally uniform, but are instead customized by each jurisdiction. A comparison can be made between US Federal Antitrust Law and the EU competition law. There are also other jurisdictions that apply competition laws, including China, Japan, and South Korea.

For Christophers, capitalism is always poised on a knife edge “between the contradictory forces of competition and monopoly, and perennially in danger of lapsing too far to one side or the other” (9). Capitalism avoids disasters by deploying law—antitrust law (“competition law” in Europe)—to reduce monopolization to a tolerable level, and intellectual-property law to encourage innovation. These areas of law are intimately related conceptually, because intellectual-property law confers the power to prevent others from exploiting patents or trademarks, thus creating monopolies with respect to its subject.Christophers paints with a broad brush, though, in passing, he concedes that he has simplified certain areas for purposes of clarification. Mapping large-scale economic developments from the late nineteenth century to the present and focusing on the United States and Great Britain, he identifies three periods of pendulum-like cycling (214). From the late nineteenth century to around 1946, a combination of strong intellectual-property rules and weak antitrust enforcement led to excesses of monopolization. The next period, lasting until the 1970s, saw antitrust law strengthening, followed by a reversal into the present period. Christophers notes as well that the modern emphasis on intellectual-property law has ascended to the international level through such instruments as the trips (Trade-Related Aspects of Intellectual Property Rights) Agreement.Part I of The Great Leveler develops Christophers’ position on controversies within contemporary Marxist theory, engaging extensively with positions developed in the work of Harvey.1 Part II presents Christophers’ historical overview. The breadth of the brushstrokes makes evaluation difficult, though the description of the three periods seems roughly accurate. Emphasizing law as an equilibrating mechanism to preserve capitalism is a promising approach, but Christophers’ exposition raises questions. Although the reciprocal relationship between antitrust and intellectual-property law is correct on the conceptual level, intellectual-property law might not be able to do everything that Christophers claims for it. He lists the Dow Jones Index’s component companies to support the claim that many large companies rely on patent and trademark protection to secure their positions (159). Yet, plausible as his claim is regarding patents (for, say, pharmaceutical companies), it is less plausible for trademarks, which provide substantially weaker “monopoly-like” protection. In supermarkets, for example, branded items sit right next to house versions that duplicate them in everything but name. Christophers’ list includes numerous companies that have assets that are probably due to trademarks rather than to patents. Stronger evidence is necessary to support the idea that trademarks are as important as patents in maintaining market position for companies in general.The mechanism by which antitrust and intellectual-property law perform their equilibrating function also deserves greater attention. Christophers clearly maintains that these domains of law perform as they do for capitalism because they have to do so. Representative statements are: “The law largely reinforced monopolizing tendencies…because it had to” (124); “it happened because it had to” (169); “once more, the law was called upon to come to capital’s aid” (218). Functional accounts of law may be familiar, but they are exceedingly difficult to develop in detail, because the agents who actually articulate and implement the law somehow have to enter into the equation, threatening its objectivity. Christophers gestures toward a more concrete account, with only occasional references to “perceptions” (141) and “opinions” (177)—“opinions” being elaborated most explicitly in connection with the rise of Chicago-influenced antitrust law in the United States (217). It would have been helpful to have some examples of how ideas about intellectual-property law contributed to the pendulum-like effects.Attempting to connect the conceptually related areas of antitrust and intellectual-property with broad developments is an ambitious enterprise. Christophers might well be on to something. Yet, the most that can be said about The Great Leveler at this point is “interesting, maybe correct, but not proven.”

Introduction The purpose of this chapter is to present an economic analysis of intellectual property right (IPR) law and its relationship with competition policy. The relevant economic literature on this subject is enormous and complex. Here, we will strive for simplicity, trying to extract the main concepts and proposing simple principles that might help to guide the application and design of both intellectual property and antitrust laws. While our analysis does not account for every single aspect of intellectual property law or every single competitive situation, we do believe that the analysis does derive useful general principles. The overriding thesis of this chapter will be the separation of intellectual property and competition law. This separation will apply to the design of the law: IP law should limit itself to properly assigning and defending property rights while competition law should be concerned with the use of such property rights. More precisely, competition law should be concerned only with the use and abuse of property rights that are sources of monopoly power. This principle of separation also applies to the enforcement of the law. The main theme here is the equality of treatment of various sources of monopoly power, i.e. of the use of various property rights. We will argue that once property rights of various types have been properly assigned, there is no reason for competition policy to further distinguish between the sources of monopoly power.

Innovation is central to competition policy. Indeed, in some industries, it is the primary means by which firms compete. The metaphors are dramatic: innovation is a ‘life and death matter for the firm’ and ‘a weapon in the arms race of competition’. Even more fundamentally, innovation, economists tell us, is pivotal to the capitalist economy as a whole. Baumol, in his book on innovation, declares that it is innovation that drives economic growth and that, without it, economies stagnate. Despite the well-established role of innovation in competition law and policy, however, the contribution such a perspective brings to the particular innovation issues raised in Gray’s case, the subject of discussion in other chapters, is limited. A contest between an employer and employee for intellectual property rights to an invention has clearer implications for labour, intellectual property and corporate law. The response of competition law to this issue, it seems to me, is far less clear. In broad terms, competition law and policy is concerned with the promotion of competition or, putting it in the more negative terms of competition legislation, prohibiting conduct that lessens competition.5 With this focus, competition law would seem to have little interest, in a general sense, in whether intellectual property rights are granted to an employer or an employee. It is true that there is a well-established interface between competition and intellectual property laws and, in a broad sense, some of this interaction may be relevant. This is because competition law, like intellectual property law, sees innovation as one of its key aims.

Ever-increasing health spending, which, according to future projections, continues to outpace economic growth, will further endanger the financial sustainability of health systems. In a quest to improve the efficacy and efficiency of the health system and thus strengthen its financial sustainability, member states are employing market-based mechanisms to finance, manage, and provide health care. However, the introduction of elements of competition is constrained by the application of EU competition law, which raises significant concerns regarding the applicability of competition law and its limits in the field of health care. Due to the lack of a clear definition in EU legislation, the applicability and scope of competition law are determined on a case-by-case basis, which reveals an inconsistent approach by the European Commission and the CJEU regarding the application of competition law to health care providers and has created legal uncertainty. The aim of this article is to analyze relevant decisions by the commission and the CJEU case law in the pursuit of "boundaries" that may trigger the applicability of competition law with regard to health care providers. Based on the findings of the analysis, the article proposes a set of principles or guidelines for determining whether a health care provider should be considered as an undertaking and, as such, subject to EU competition law.

There are many biases concerning the application of competition law in health care. Quality concerns can however be integrated into competition law analysis. The aim of this paper is to identify the links between the application of competition law in the European Union and the right to quality health care and to point out the problems that arise when integrating quality concerns in competition law analysis. Guidelines must be issued and competition authorities must work together with institutions that have expertise in the field of health care quality measurement in order to integrate these dimensions in competition practice.

State-Owned Enterprises (SOEs) directly compete with private companies, including foreign investors. The scope of applicability of competition law towards SOEs constitutes one of the key features of national competition protection regimes. Two approaches (models) can be identified in this area: the equality approach (competition law applied in the same manner towards the public and the private sector; the model is based on the neutrality principle); and the differentiation approach (excluding fully the application of competition law on SOEs). The second model is usually justified by important social and economic goals, mainly by a necessity to provide highquality public services. However, the differentiation model may negatively affect both domestic competition and the investment atmosphere. The Gulf Cooperation Council (GCC) countries adopted competition laws that generally put SOEs and the public sector in a broader sense out of scrutiny of competition law regime. The paper aims to check what reasons lie behind a rejection of the neutrality principle in GCC’s competition laws, specifically if competition protection regimes are patterned on antitrust laws from liberal economies. By identifying how the differentiation approach to addressees of competition laws is reflected at a legislative or practical level in most GCC’s countries, the article tends to assess the impact of national competition laws on Foreign Direct Investments (FDI) in the Gulf region. competition law, Gulf States, neutrality principle, State-owned enterprises, foreign investments, national champions

‘Final reflections’ explains that as the understanding of markets and economic theory evolves, so does the application of competition law. With changing market and socio-political realities, these challenges become apparent. We need to consider the rise of digital markets and the threat of climate change, and assess the effect they have on the enforcement of competition and antitrust laws. What is the right formulation of competition policy? The key to effective competition law enforcement lies not in the pretence of purity or certainty, but in an open and informed debate on the law and economics, and the society to which we aspire.

I. INTRODUCTIONThe proper role of private enforcement in antitrust law has long been debated. One of the most significant judicial reforms of antitrust law associated with the Chicago School was the Supreme Court's decision to limit standing to direct purchasers in Illinois Brick Co. v. Illinois.1 Although that decision has proven controversial, the Illinois Brick doctrine has endured as a principle of federal antitrust law for nearly 40 years.Whatever the merits of the Illinois Brick decision in 1977, subsequent developments have undermined its rationale. In particular, the Supreme Court's 2013 decision in American Express Co. v. Italian Colors Restaurant2 undercuts the fundamental premises of the Illinois Brick doctrine. The Illinois Brick majority assumed that direct purchasers were the most motivated and the best situated to enforce antitrust laws that resulted in supracompetitive prices. But Italian Colors makes it very difficult for direct purchasers to enforce antitrust laws in a wide variety of circumstances, because the decision allows potential antitrust defendants to use arbitration clauses in standard-form contracts to ban antitrust class actions and require individual arbitration of antitrust disputes. The result is to deprive overcharged direct purchasers of the tools antitrust law offers for effective enforcement-class action status, a lengthy statute of limitations, treble damages, and, if successful, attorneys' fees.3 Without effective opportunities for enforcement by direct purchasers, the rationale for excluding indirect purchasers from bringing antitrust claims collapses.Antitrust law is common law and is often based on policy arguments. The decision in Illinois Brick is no exception. The Court based its reasoning on its assessment of the ability of direct purchasers to enforce antitrust laws effectively. After Italian Colors, that is no longer the case. Old doctrines must give way in light of legal developments (including later judicial opinions) that change the underlying environments and undermine the original policy arguments upon which the old common law is based. By eliminating most antitrust enforcement by direct purchasers, Italian Colors has paved the way for reconsideration of Illinois Brick.4II. ILLINOIS BRICK: ITS HOLDING AND RATIONALECourts have long been suspicious of competitors as antitrust plaintiffs,5 in part because competitor interests do not necessarily align well with consumer interests. For example, competitors might object to conduct that benefits consumers, such as aggressive price competition.6 Beginning in the 1970s, courts began creating limits on competitor standing in an effort to tackle that disconnect.7Consumers, by contrast, are, in some sense, the perfect antitrust plaintiffs. They are the intended beneficiaries of the competitive markets that antitrust policy seeks to encourage; consumers are injured by cartels and other anticompetitive conduct, but benefit from aggressive competition on the merits. Accordingly, courts have long permitted purchasers to sue to recover overcharges that result from cartels,8 though some courts have (incorrectly) questioned customers' standing to enforce the antitrust laws.9In Illinois Brick, the plaintiffs were state and local governments who sought recovery for overcharges that resulted from a cartel that fixed the prices of concrete blocks. But the governments did not buy the blocks directly from the defendants. Rather, construction contractors bought the blocks and used them to build buildings, which the governments later bought.10 The governments were indirect purchasers; their injury came from the fact that the contractors, who paid an artificially high price, passed that higher price on to them.11The Supreme Court held that indirect purchasers could not recover the overcharges that direct purchasers passed on to them.12 Illinois Brick was decided on two basic policy considerations. …

The competition-related provisions in the TRIPS Agreement were very much influenced by the context in which the Agreement was concluded. The inclusion of competition provisions served a specific purpose. Competition law was basically seen as a tool to facilitate the transfer of technology. Twenty years after the entry into force of TRIPS, the legal landscape within which IPRs are exercised has experienced tremendous changes on the IP front, as well as on the competition law front. IP protection tends to be raised beyond the minimum standards of TRIPS, questionable protection has been granted specially in the field of patents, enforcement mechanisms and remedies have been strengthened and IP portfolios are strategically used in the markets. From an international perspective, higher IP standards have been exported through bilateral and regional trade agreements. Competition law is developing at a very fast speed, especially in emerging and developing economies. Moreover, competition law and IP laws are increasingly understood as being complementary to each other. A strict and “conflict oriented” reading of TRIPS’ competition provisions does not help to cope with the new strategies of innovation and the new forms of use of IPRs. We argue in this paper that a flexible reading of the competition-related provisions in TRIPS provides enough room for applying competition law as an innovation instrument. Hence, the application of competition law to combat IP-related restraints of competition that inhibit innovation would be covered by the rationale of the TRIPS Agreement just as much as an application of competition law aimed at enhancing access to and dissemination of IP-protected products.

Contents: Preface PART I: ECONOMIC FOUNDATIONS OF COMPETITION LAW 1. Are People Self-interested? The Implications of Behavioral Economics on Competition Policy Maurice E. Stucke 2. Consumer Choice as the Best Way to Recenter the Mission of Competition Law Robert H. Lande 3. Protecting Consumer Choice: Competition and Consumer Protection Law Together Neil W. Averitt 4. Is Competition Law Part of Consumer Law? Paul L. Nihoul PART II: INDIVIDUAL JURISDICTIONS AND INTERNATIONAL PERSPECTIVES 5. Resale Price Maintenance: A Reassessment of its Competitive Harms and Benefits Marina Lao 6. The Leegin Case: A US Antitrust Chief Event versus a Storm in a European Teacup? Josef Bejcek 7. Competition Law Issues Concerning Related Markets and their Treatment under EU Competition Law Thomas Eilmansberger 8. A Comparative Look at the Competition Law Control of State-owned Enterprises and Government in China Deborah Healey 9. Australia's Criminalization of Cartels: Will it be Contagious? Caron Beaton-Wells PART III: INTELLECTUAL PROPERTY AND COMPETITION LAW 10. Patent Ambush Strategies and Article 102 TFEU Andreas Fuchs 11. Three Statutory Regimes at Impasse: Reverse Payments in Pay-for-Delay Settlement Agreements between Brand-name and Generic Drug Companies Rudolph J.R. Peritz 12. Patent Ambush and Reverse Payments: Comments Gustavo Ghidini 13. Intellectual Property in Competition: How to Promote Dynamic Competition as a Goal Josef Drexl 14. Industrial Standards and Technology Pools: A Regulatory Challenge for EU Competition Law Steven Anderman PART IV: PROMOTING COMPETITION POLICY NATIONALLY AND ACROSS BORDERS 15. International Antitrust Solutions: Discrete Steps or Causally Linked? Michal S. Gal 16. Penumbras of European Union Competition Law: External Governance, Extraterritoriality, and the Shifting Borderlands of the Internal Market Clifford A. Jones 17. The Role of Non-governmental Organizations in the Development of Competition Law Albert A. Foer Index