The competition law assessment of innovation – issues, solutions and best practices

Influence in the International Competition Network (Icn): Who Seeks It, How Do They Do This and Why?

Effective enforcement of competition law is vital for the functioning of competitive markets. As competition authorities are constrained by scarce financial and human resources, it is neither possible, nor desirable, to enforce every possible competition law infringement. Hence, the power to set priorities – that is the competition authorities’ legal competence and de facto ability to choose which cases to pursue and which to disregard - is a precondition for preserving society’s resources to tackle the most harmful infringements. Credible enforcement priorities build independent and accountable competition authorities. A degree of discretion to set enforcement priorities, therefore, serves a double purpose of effective allocation of scarce resources and the concretisation of the open-ended and broadly formulated competition law norms. At the same time, the exercise of such discretion is subject to external and internal constraints and influenced by substantive, procedural, and institutional rules guiding the authorities’ course of action. Despite its importance, the theoretical foundations and practices underlying the setting of enforcement priorities in competition law are vastly unexplored in Europe: they remain largely overlooked by policy and decision-makers; there is no clear set of definitions or criteria to guide prioritisation; and effective accountability mechanisms to evaluate and reform prioritisation choices remain underdeveloped or are completely absent. In particular, the question of priority setting had limited relevance in the enforcement of EU competition law for many years. Under the pre-2004 notification based and centralised regime, the Commission had devoted much of its resources to respond to notifications, leaving only limited room to devise its enforcement strategy. Even after the shift to the decentralised enforcement regime, which enabled the Commission and national competition authorities to set their priorities, there are few EU law provisions to guide the priority setting principles and practices of the competition authorities. This remains valid even after the implementation period of the ECN+ Directive has ended. This Policy Report fills this gap by offering four main contributions: first, it introduces a new theoretical framework, developed by the authors to establish a common typology to guide the analysis of priority setting rules and practices. More specifically, the Report identifies seven different legal, economic, and political aspects of setting priorities for competition law enforcement, each of which may be subject to external or internal control. Those seven aspects include: (i) setting an enforcement agenda; (ii) legal (de jure) competence to prioritise; (iii) (de facto) ability to prioritise; (iv) procedural rules framing the prioritisation decision; (v) substantive criteria that determine which cases are priority and which are not; (vi) alternative enforcement mechanisms: instrument and outcome discretion; and (vii) impact assessment. Second, the Report provides a systematic and comprehensive mapping of the procedural and substantive priority setting rules and practices guiding the competition authorities of the 27 EU Member States, the United Kingdom, and the EU Commission according to the proposed typology. Pointing to a great divergence in this regard, it demonstrates that each competition authority’s priority setting powers and practices are deeply embedded in, and directly shaped by its respective administrative law systems and constitutional and political order. Accordingly, the Report classifies the competition authorities into four representative models on the basis of their specific rules and practices to set their enforcement priorities. Third, the priority setting rules and practices are evaluated against a set of administrative law principles of good governance, including effectiveness, efficiency, independence, transparency, and accountability. The Report demonstrates that each of the four representative models entail a different trade-off between those administrative law principles. Fourth, based on the above, the Report provides policy options (a “checklist”) on how legislators and CAs could review and if necessary, reform their existing practices or design new priority setting rules and practices to meet the administrative law principles of good governance. Notably, the Report does not intend to provide a single best model for priority setting. Rather, it offers competition authorities legal and practical solutions on how to design and apply priority setting in a way that fits their respective legal framework and mandate, thereby offering country-specific trade-offs.

The objectives of competition policy and the application of competition law need defining and redefining along with changing structures of the economy and the maturing of the competition authority. Market structures associated with digital technology and globalization are often not in consonance with the prevalent law framed in economic analysis of traditional product markets. Antitrust interventions by the competition authorities are caught in a bind as was the case with the Competition Commission of India and the Competition Act, 2002. The emphasis on monopolistic competition, or on oligopolistic markets, as anti-competitive, which marked the earlier days of implementation of competition laws, is at variance with the prevalent monopolistic structures of platform markets or technology firms and the market for ideas. Competition authorities are grappling with identifying anti-competitive activities of these markets which tip towards monopolistic structures. In the process there has been a churning of possible diverse antitrust abuses and, as competition law grapples to incorporate these new market structures, there is another churn that is slowly emerging as a major concern — that of convergence of competition policy and public interest. This is an area in antitrust literature which is yet to receive sufficient attention. The core of antitrust intervention — that competition benefits consumers — is undisputed and perhaps axiomatic but what is not axiomatic is that monopolistic market structures can also lead to enhancing public welfare. Emergent trends towards monopolistic markets suggest a rethink of competition policy and law and their convergence for public interest. The focus of this article is on the importance of convergence of competition policy, competition law and public interest in new and emergent markets. It raises questions: Is there convergence or divergence between policy and law and public interest? What is public interest? Do consumers represent public interest and, if so, which set of consumers? Are innovation and technological development, which are part of public interest, also in the ambit of competition policy or are they in the realm of competition law? This is another question which has become acute in recent times. In India and the BRICS group, where usage of internet on smart phones is high, the convergence between competition policy, law and public interest suggests antitrust intervention is guided by public interest.

Competition Law for the Digital Era: A Complex Systems’ Perspective

Competition law provides the formation and protection of free competition. Modern market economy is the basis of the principle of free competition. Free competition provides an effective utilization of resources, price goes down, saving to reduce costs, find new technologies and their use in production. Desired markets, although a perfect competition market, because of market failures rather than the ideal situation monopolies, cartels can occur. At this stage, competition policies become important because they provide an efficient resource allocation, and constitutes an important element in raising the level of social welfare. Competition law is state intervention tool in order to establish and maintain free competition in the economy. Competition laws is seen as the constitution of the economy. In Russia, first competition authority was created in 1990 and the Law “On Competiton and Ristriction of Monopolistic Activity on Goods Markets” passed in 1991. After the OECD Peer Rewiew Report on Russia’s Competition Policy and Law, competition authority was abolished, new Federal Antimonopoly Service (FAS) established in 2004. Also new competition law passed in 2006. In Turkey, competition law passed in 1994, Turkish Competiton Authority was established in 1997. The aim of this study is to analyze competition law rules is implemented in Turkey and Russia. Also Examples of decisions issued by the Turkish competition authority and FAS Russia will be presented.

This chapter will review competition policy and law (CPL) in ASEAN and provide some lessons for improving legal technical assistance (LTA) on CPL to ASEAN and intensifying intra-ASEAN cooperation in competition law enforcement. In 2021 Cambodia finally enacted its competition law and all ASEAN Member States have established respective competition law regimes. While they share various common features in the texts of the laws, the degree of implementation varies. The independence of competition authorities is one of the underlying causes of this difference and the lack of enforcement resources and expertise is crucial, particularly for CLMV Countries. The chapter will propose Japan Fair Trade Commission to extend LTA based on its experiences of the Antimonopoly Act enforcement for 75 years. Intra-ASEAN cooperation on CPL could support the efforts by young competition authorities in CLMV Countries to implement respective competition laws and coordinate enforcement activities to address anticompetitive mergers and other practices with regional dimension. In this context, the chapter will also examine the future developments of ASEAN-wide CPL, comparing with EU competition law and its institution.

For a competition agency to be visible and successful, it needs a face and a voice that are known and recognised beyond its remit as an authority in competition advocacy and sound economic judgement. Until not so very recently, it would have been unusual for the President of a national competition authority in the European Union (EU) to be well known beyond its jurisdiction. An exception to this rule—in the past—may have been the case of Italy, where a former Prime Minister was appointed as President of the authority in 1994. But even a number of years later, it would have been rare for competition law practitioners in a given country to be acquainted with the policies of other national competition authorities, let alone their staff. With the installation of the International and the European Competition Networks, this has now changed and this is, in particular, the merit of a small number of very well-known and charismatic personalities at the top of these agencies. One of these outstanding competition chiefs is Prof. Jacques Steenbergen, the President of the Belgian competition authority. He has now turned 65, and for this occasion, his friends and colleagues have put together an impressive Festschrift, which is called Mundi et Europae Civis. In recognition of Steenbergen’s exemplary professional track record as a leading academic, a private practitioner, a legal secretary at the European Court of Justice, and from 2007 onwards as the head of the Belgian competition authority, a further subtitle of the book in 21st century parlance could have been: Curriculum portarum versatilium. The 19 pages of bibliography collating the publications of Jacques Steenbergen place on record that competition law practice should not be isolated from other legal disciplines. Jacques Steenbergen has contributed articles on topics as varied as corporate restructuring, product liability, consumer protection, foreign trade law, constitutional law as well as on all aspects of Belgian and EU competition law. With hindsight, an article published in 1984 sounds almost prophetic: ‘The Court of Justice and governance in an Economic Crisis’, which Steenbergen co-authored with Mertens de Wilmars, the then President of the European Court of Justice. In the last almost 10 years of his professional career as the head of the Belgian competition authority, Steenbergen has been instrumental in making this authority an important hub in the network of European competition authorities, always somewhat of a primus inter pares given it’s not only geographic proximity to the European Commission. Three contributions in the Liber Amicorum authored by Bruno Lasserre, Andreas Mundt, and Wouter Wils are dedicated to this topic. There are further contributions on the institutional role of a national competition authority by Roger Witcomb on the situation in the United Kingdom as well as by Chris Fonteijn and Annetje Ottow on the independence of competition authorities from a global and from a Dutch perspective. The book provides an excellent panopticum of most of the current topics around competition policy and practice as well as other key issues on the EU political agenda such as political governance in the Euro crisis (contribution by Frans Vanistendael) and of the challenges of a new trade policy (contribution by Hugo Paemen). Other articles cover issues of procedure such as the contribution by Koen Lenaerts on the interplay between regulation number 1049/2001 and competition law-specific rules on access to documents alongside the contribution by Piet Van Nuffel on whether confidential business information enjoy the specific protection of a fundamental right. The book takes a keen interest in the prospective development of competition policy and practice into new areas of the law such as the inter relationship between sustainable development and competition law (articles by Jan Wouters/Laura Beke, David D’Hollander/ Kolja Raube, and Rene Smits). The book is rich in linguistic variety with articles in English, in French, and also in the Dutch language. It is an important source of reference and an ideal lectuur for a relaxing yet edifying extended weekend in the Hautes Fagnes.

Part One Introduction 1 Introduction and Framework for Analysis I. Introduction II. General Approach to the Interrelationship between Competition and Public Procurement Law III. Aim of the Study IV. Structure of the Study and General Overview V. Methodology: An Eclectic and Heuristic Multi-Disciplinary and Functional Approach to EU Law VI. Normative Assumptions VII. Delimitation of the Study: Exclusions and Limitations Part Two Foundations and Principles: The Economic and Legal Basics of Public Procurement and Competition Law 2 An Economic Approach to Public Procurement and Competition I. Introduction II. Types of 'Public Procurement Markets' III. Economic Dimensions of Public Procurement IV. The Role of Public Authorities as Purchasing and Contracting Authorities V. Public Procurement as a Market Failure: Difficulties in Recreating a Competitive Scenario and Competition- Restricting Effects 60 VI. Conclusions to this Chapter 3 Basics of Competition and Public Procurement Regulation I. Introduction II. Principles Common to Competition and Public Procurement Law as Two Sets of Economic Regulation III. The Goal(s) of Competition Law IV. Goals of Public Procurement V. Conclusions to this Chapter: Common Goals of Competition Law and Public Procurement Conclusions to Part Two: Legal and Economic Normative Foundations of a More Competition-Oriented Public Procurement System Part Three General Part: The Building Blocks of a Framework for the Competition Analysis of Public Procurement 4 EU Competition Law and Public Procurement: The Inability of EU Competition Rules to Rein in Anti-Competitive Public Procurement I. Introduction II. The Inability of Rules on the Grant of State Aid and Special or Exclusive Rights to Tackle Anti-Competitive Public Procurement III. The Inapplicability of 'Core' EU Antitrust Rules to Public Procurement: A Jurisprudentially Created Gap in EU Competition Law IV. The Insufficiency of State Action Doctrine to Capture Most of the Anti-Competitive Public Procurement Regulations and Practices V. Preliminary Conclusions: The Insufficiency of Current Competition Institutions and Potential Improvements to Achieve Better Results VI. A Revision of Current Doctrine to Achieve Better Results (1): A More Economic Approach to the Concept of 'Economic Activity' in the Public Procurement Field VII. A Revision of Current Doctrine to Achieve Better Results (2): Setting the Proper Bounds to the State Action Doctrine VIII. Conclusions to this Chapter 5 The Principle of Competition Embedded in the EU Public Procurement Directives I. Introduction II. The Competition Principle Embedded in the pre-2014 EU Public Procurement Directives III. The Principle of Competition Consolidated in Article 18(1) of Directive 2014/24: A Critical Assessment of the Interpretative Difficulties it Creates IV. Implications of the Competition Principle for the Shaping of Public Procurement Rules by Member States: The General Obligation to Develop a Pro-Competitive Public Procurement Framework V. The Principle of Equal Treatment and the Principle of Competition Distinguished VI. Conclusions to this Chapter Part Four Analysis of Competition Distortions Caused by Public Procurement 6 A Critical Assessment of the 2014 EU Public Procurement Directives and the Existing Case Law from a Competition Perspective: Preventing Competitive Distortions by the Public Buyer I. Introduction II. A Competition Appraisal of Potential Distortions Derived from Public Procurement Processes III. Two Examples of Potential Distortions Derived from the Exercise of Public Entities' Market Power IV. Conclusions to this Chapter 7 Complementary Proposals for the Development of a More Competition-Oriented Public Procurement Framework I. Introduction II. Complementary Proposals Aimed at Limiting Publicly Created Restraints of Competition III. Complementary Proposals Aimed at Limiting Privately Created Restraints of Competition IV. Complementary Measures Aimed, in General, at Strengthening the Relationships between Competition and Procurement Authorities V. Conclusions to this Chapter Part V General Conclusions 8 Conclusions: Towards a More Competition-Oriented Procurement System References

This paper provides a study of the impact of EU competition rules on Lithuanian legislation and legal practice. It was found therein that the Lithuanian law on competition, its competition authority and courts do not adhere to all objectives of EU competition law consistently. In Lithuania, the most followed objectives of EU competition law are primarily that of the internal market and consumer welfare. The European Commission looks at both: competition and the creation and preservation of the internal market, as promoting consumer welfare and an efficient allocation of resources; it proclaims that the role of competition law is to prevent harm to consumers.The Lithuanian law on competition fully corresponds to the provisions of the Treaty. Full compliance is endorsed by the National Competition Authority while Lithuanian courts strive to maintain such policy by referring to the internal market and consumer welfare standards. Both the Lithuanian competition authority and its courts defend consumer welfare from higher prices, reduced output, less choice or lower quality of goods or services, or diminished innovation. Existing legislation and other procedural rules entitle the competition authority and courts of Lithuania to enforce competition law without significant obstacles. Applicable procedures ensure transparent, independent, and professional decision-making by the competition authority, confidentiality, as well as an effective process of investigation and information collection.The Commission’s move towards the realignment of competition law with modern economic thinking on efficiency and welfare has begun. It entails not just the adoption of the consumer welfare standard, but also the application of the ‘effects’ approach. However, EU Courts have not been unambiguously following the consumer welfare standard, as endorsed by the Commission. They protect competitors themselves, rather than competition, ruling in favour of small or medium-sized firms in order to keep markets open and achieve fairness. They tend to protect the structure of the market from indirect possible long-term effects on consumers, rather than just from immediate direct effect on them.Some evidence was found of a ‘more economic’ approach being applied over the last decade as it started to find its way into the enforcement of Lithuanian competition law. Although this trend is likely to increase in the future, it is, nevertheless, still not the prevailing approach in Lithuania. At the same time, the national competition authority and courts strictly follow the guidelines and communications of the Commission on this issue.

Competition authorities can identify a violation of the data protection rules when such a finding is necessary to establish an abuse of dominance under the competition rules. This is the main outcome of the judgment that the Court of Justice of the European Union (CJEU) delivered in Meta Platforms on 4 July 2023. The judgment is the next step in the saga that started with the 2019 competition decision of the Bundeskartellamt (the German Federal Cartel Office) requiring Facebook (now Meta) to refrain from combining user data from different sources beyond its social network. The judgment provides a welcome confirmation that data protection standards can also matter for the interpretation of the competition rules. However, what is more remarkable and less expected is the general framework the CJEU sets out for coordination between competition and data protection authorities building on the duty of sincere cooperation and the clarity with which it evaluates the different legal bases Meta invoked for processing user data. The judgment can become a reference point for assessing the legality of personal data processing by powerful firms, but also leaves competition and data protection authorities with an assignment to explore how to coordinate their work in the future.

Independence has been a mainstay of competition policy and enforcement in Europe and in many jurisdictions that have followed that model. However, the perception of regulatory failure which led to the financial crisis, the rhetoric of political supremacy over technical expertise, the renewed attention towards the application of “public interest” tests in some jurisdictions and the quest for new tools of enforcement to meet the challenges of the so-called “new economy” in light of the alleged inadequacies of the current antitrust paradigm, all call this principle into question. The principle of political independence of competition authorities is widely accepted internationally. However, in practice it takes a multiplicity of forms in various jurisdictions and it has an impact on a number of dimensions of competition law and policy. This paper looks in greater detail at the experience of the EU and that of the UK with comparative references to other jurisdictions within the EU and elsewhere. The experience in the EU and the UK jurisdictions is interesting for a number of reasons. First, the origin and rationale for independence in competition law enforcement has some peculiarities which derive from the nature of competition law and practice within the institutional framework of the EU. However, as is the case with many aspects of the EU legal order, the principle has evolved beyond its original rationale over the initial decades of application. In light of the interrelation between the EU and the national jurisdictions the principle of independence in competition law enforcement has had an impact on the institutional design of national competition authorities within the EU which have proliferated over the last 20 years and aligned to the EU system with some important distinctions. Moreover the general principles that have emerged within this system have often been looked at and considered elsewhere internationally as a result of organisations such the OECD and the ICN. The comparison with the UK regime is particularly interesting for two reasons. First because, notwithstanding the alignment of the UK substantive regime with the EU, it has maintained a number of interesting distinctive features such as the ability to intervene on public interest grounds in relation to mergers and more widely in relation to markets (with the potentially far reaching ability to impose remedies in case of a negative finding even in the absence of unlawful conduct and competition law infringement). Second because Brexit provides at least an opportunity to consider certain aspects of the institutional design and remit of UK competition enforcement and the strength of the independence of the UK Competition & Markets Authority (the CMA) can be an important consideration. This contribution looks at the principle of independence along two axes: (1) appointment and institutional design, (2) case selection and prioritisation. It then offers some conclusions and reflections on outcome and accountability. It concludes that now more than ever independence in competition law enforcement is required. Independence does not mean that a competition authority should be oblivious of the general political context within which it operates. To the contrary a competition authority must maintain a dialogue with both the executive branch and elected representatives to ensure the relevance of its action as well as to maintain a credible advocacy role in assisting other areas of policy and even legislation when it is afforded those powers. This form of “soft accountability”, if coupled with strong measures to protect an authority from pressure points, is desirable. As a law enforcement agency a competition authority should also subject to hard accountability through the judicial process. This is important and, far from creating a tension, this dimension is a guarantor of independence because judicial oversight of the application of the law has the effect of pushing a competition authority to adopt procedures that would withstand judicial scrutiny and indirectly preserve the integrity of the system.

This chapter proposes that new competition regimes, particularly those of developing and underdeveloped economies, should take advantage of more amenable and more familiar legal tools such as the doctrine of unconscionability in their abuse of dominance assessments. This is because the pure economic models mainly deployed by the more mature regimes might be unsuitable for the less developed systems at least in the early years. This chapter will therefore explore how the doctrine can be infused into their competition laws, serving either as a major basis for assessment or as a stopgap while they gain concrete knowledge of the true economic and developmental implications of applying complex economic models in abuse of dominance cases.

The development of modern Serbian competition law started in 2005 with the adoption of the Competition Act laying down rules which were generally inspired by European Union law. As is usually the case in countries in transition, the 2005 Competition Act was soon replaced by a new one, adopted in 2009. The 2009 Act further harmonised substantive competition rules with those of the EU, while at the same time empowering the Competition Authority to directly impose fines for infringements of competition law. Although it is evident that the public authorities of Serbia made certain efforts to improve competition law enforcement, it still cannot be concluded that significant progress has been made. In this paper, the authors analyse specific problems which appeared throughout six years of competition law enforcement in Serbia. Some of the problems analysed are so-called built-in errors, arising as a consequence of the choices made by the legislator. Others are, however, the result of wrongful doing by the members of the Competition Authority. Taken as a whole, they represent the main reason for the poor results achieved through competition law enforcement in Serbia. The first problem analysed is that of wrong priorities: the Competition Authority has mostly concentrated on the control of concentrations of undertakings, while generally ignoring restrictions of competition through the conclusion of anti-competitive agreements or through abuse of a dominant position. The second problem emphasised by the authors is the absence of sound economic analysis in most decisions adopted by the Competition Authority. The fining policy of the Competition Authority is also analysed in in this paper. While no fines have been imposed under the 2005 Competition Act, the Competition Authority seems to be trying to ‘catch up’ by imposing fines under the 2009 Act for infringements established in proceedings brought under the 2005 Act. The authors argue that this should be seen as an illegal retroactive application of law. The fourth problem in the enforcement of competition law in Serbia arises from a de facto privileged treatment of undertakings with state-owned capital.

In most Member States competition law powers have been granted to a more or less independent competition authority. The idea is that the application and enforcement of competition law should not be influenced by political and volatile considerations. However, some recent cases, most notably in the field of merger control, show that political considerations can creep into the decision-making process in competition law. In this paper we examine how the independence of the competition authorities in the United Kingdom, Germany, the Netherlands and the European Union vis-a-vis the political system has actually been regulated. We have not only looked at the independent position from the political sphere, but also at the internal design of the competition authority, i.e. how it is managed. It appears that none of the national legislators has opted for total independence. But the national competition authorities have been confronted with less political control than in the past. For the Commission, this is different, as the Commissioner for Competition does not act independently from other Commissioners, which causes an imbalance between the status of national competition authorities and the Commission. Therefore, it could be considered whether an advisory agency might be set up, having that task to issue recommendations in the field of European competition law.

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.