Competition Law Cases Research Articles

Market Definition for Multi-Sided Platforms: A Legal Reappraisal

It is frequently assumed that the outcome of today’s most discussed competition law cases hinges on market definition. In the context of multi-sided platforms, delimiting the relevant product market is a particularly delicate and complex task. Thus, this article seeks to analyse, from both an economic and a legal perspective, how relevant product markets for multi-sided platforms are properly defined under European competition law. Multi-sided platforms act as intermediaries which enable distinct groups of customers (also called platform-sides) to interact with each other. Multi-sided platforms have the possibility to set different prices for each group of customers, therefore econometric tools such as the small-but-significant-non-transitory increase-in-price test (SSNIP-test) must be applied with caution. It is argued that multi-sidedness can be considered a question of degree, therefore, for the purpose of market definition, it is necessary to distinguish different types of multi-sided platforms. The stronger the indirect network effects involved, the more the market definition deviates from traditional approaches. Indeed, the established legal framework allows a sound categorization of various forms of multi-sided platforms. In the context of multi-sided platforms, markets are regularly closely interrelated, therefore, the competitive assessment would be incomplete without an intermarket-analysis.

Whither competition law in Indian pharmaceutical markets?: evidence from arbitration data of CCI and COMPAT

This article examines the evolution of competition law cases in the context of the Indian pharmaceutical industry. The Competition Commission of India and Competition Appellate Tribunal of India are two of the most important emerging institutions in guiding firm behaviour and competition in modern India. Together with other institutions, it is important that their activities are guided by economic reasoning, which for the most part, they seem to be doing. This article was a short attempt in highlighting their status as of today. Our data and analysis, which for the first time assembles historical information and demonstrates heterogeneities in behaviours and outcomes therein, should provide a starting point to conduct more fine-grained analysis on the evolution of competition law cases in the Indian pharmaceutical sector and more broadly across the economy.

REGULATING THE INFERENTIAL PROCESS IN ALLEGED ARTICLE 101 TFEU INFRINGEMENTS

EU competition law has various evidentiary rules and presumptions relating to the existence of collusive activity. I consider the effect of these rules and presumptions on economic efficiency, and highlight two forms of inefficiency associated with existing procedural law. First, suboptimal regulation of the inferential process increases the risk of “false positives,” a type of erroneous inference that is particularly problematic in the setting of collusion. I show that where existing procedural law allows the inference of collusive activity from the parallel conduct of firms, there is a risk that the trier of fact may infer anticompetitive conduct from factually neutral or procompetitive conduct. Second, I illustrate a different type of inefficiency that arises in competition law cases. Because evidential rules and presumptions have the potential to influence the behavior of firms in a collusive setting, overregulation of the inferential process has the potential to ameliorate the sustainability of a collusive equilibrium, undermining a key rationale of substantive competition law. I set out three specific areas of procedural law which exhibit these forms of inefficiencies, and argue for appropriate reformation of the law.

Fishing Expeditions and Subsequent Electronic Searches in the Light of the Principle of Proportionality of Inspections in Competition Law Cases in Europe

Inspections carried out in competition law cases are undoubtedly an effective instrument of competition law enforcement since they constitute an efficient means to obtain relevant evidence. Nevertheless, this institution often leads to a serious interference with the sphere of an undertaking’s rights, in particular the right to defence. Several problems can be observed when it comes to the conduct of inspections in the framework of competition law in Europe. These relate, inter alia, to the right to defence, including the privilege against self-incrimination and legal professional privilege, right to privacy, right to an effective remedy and the principle of proportionality. Most of these questions are common to vario us European states since they emerge at the level of the European Union, in old an d new EU Member States (such as Poland) as well as in countries outside the EU (Switzerland). This paper focuses on the questions of fishing expeditions and subsequent electronic searches. They are analysed mostly in the light of the principle of proportionality. The paper presents selected controversies and developments in relation to the powers of inspection granted to competition authorities as well as procedural safeguards available to undertakings.

The IEEE-SA Revised Patent Policy and Its Definition of 'Reasonable' Rates: A Transatlantic Antitrust Divide?

The IEEE-SA updated patent policy and the Business Review Letter issued by the US DoJ have caused much discussion in the US (Sidak, 2015). The purpose of this paper is to assess whether a similarly lenient antitrust approach to Standard Setting Organizations’ (“SSOs”) rate setting policies would prevail under the European Union (“EU”) competition rules. Recent EU competition case-law has promoted a very hard line in the area of coordinated conduct. Cases such as Dole Food Company, T-Mobile or Expedia have expanded the scope of the per se prohibition rule found in Article 101 TFEU to forms of horizontal coordination with less than obvious anticompetitive potential, such as “cheap-talk” pre-pricing communication (Dole Food Company), episodic collusion (T-Mobile) and horizontal agreements with limited market coverage (Expedia). Those judgments, and others, share a common rationale: that of deterring any coordinated interference with the price system. In the EU courts’ view, joint interference by competitors with the price system seems to be a sin in itself, regardless of actual or potential market effects. Horizontal coordination is thus increasingly prohibited on its face, and punished as a means to set an example. From an enforcement standpoint, this trend in the case-law trend has pros (lower enforcement costs) and cons (deters pro-competitive coordination). But perhaps more importantly, it has a major normative implication, which is that it raises the antitrust risk for all forms of coordination, including arrangements of the type found in the IEEE-SA updated patent policy. This paper explains that the antitrust risk generated by SSOs rate setting policies is presumably higher in the EU than in the US, where the case-law on horizontal coordination is less stringent. From a methodological standpoint, the paper choses to discuss this issue on the sole basis of the case-law of the EU courts, instead of focusing on Commission Guidelines and other soft law instruments, whose binding value on parties other than the Commission itself has been considerably degraded in recent judgments.

Private Enforcement of Competition Law The Case of Estonia

Jurisprudence on private enforcement of competition law has so far been almost non-existent in Estonia. Most cases where competition law issues are raised within the context of damage claims are solved by out-of-court settlements. One of the main reasons for this scarcity is the fact that this is a fairly unfamiliar field for Estonian lawyers, attorneys and judges. The first reason for the low number of private enforcement of competition law cases in Estonia is therefore lacking awareness and legal uncertainty. The other key barrier lies in burden of proof issues associated with damage claims. It has proven very difficult in practice for an injured person to prove that he/she sustained damages as a result of a competition law infringement; even more so to prove the actual extent of such damages. There is no juridical practice yet on how to calculate business losses and judges face considerable difficulties when confronted with this task. Another problem lies in the availability of evidence. As discovery is not possible in Estonia, its civil procedure rules make it difficult for claimants to obtain evidence necessary to prove the facts underlying their claims.Estonian law does not provide for a special procedure for antitrust damage claims – there are no collective claims, no class actions, nor actions by representative bodies or other forms of public interest litigation (no collective redress). It is thus only possible to file damage claims arising from competition law infringements either in normal civil proceedings or as a civil claim within the framework of criminal proceedings on a competition law crime. The need for collective redress has not yet been subject to a legal debate at the national level, and there has not been a single private enforcement case opened by a consumer in Estonia so far. The only Supreme Court case in existence in this field, which was decided in 2011, has cleared the basis and availability of damage claims for competition law infringement. It has shown, at the same time, the many problems connected to calculating damages in this context.

Patent Assertion Entities and EU Competition Law

Patent Assertion Entities (“PAEs”) are playing a growing role in the United States, but also in Europe. Their activities are controversial in that while they may be a source of efficiencies, they may also create anticompetitive harm. Given the growing trend of operating companies transferring patents to PAEs in order to increase their licensing revenues, the risks of anticompetitive harm created by PAE activities must be taken seriously. When analysing the impact of PAE activities on competition, a distinction must be drawn between “pure” PAEs, which acquire patents from a variety of sources and generate revenues by asserting them, and “hybrid” PAEs, which acquire patents from operating companies and maintain a relationship with these companies post-acquisition. While pure PAEs create risks of exploitation, hybrid PAEs create exclusionary concerns as such PAEs may be used by operating companies to harm their rivals on downstream product markets. These exclusionary concerns are particularly serious when the operating company retains a significant degree of control over the activities of the PAE following the transfer of the patents. As there is currently no EU competition case-law on the activities of PAEs, this paper attempts to show through hypotheticals that depending on the circumstances of each case, privateering may lead to exclusion.

Access to File for Damage Claimants in Competition Law Cases (Austria)

Access to File for Damage Claimants in Competition Law Cases (Austria)

Notices, enforcement and the making of the Hong Kong competition ordinance

Created by the Hong Kong competition ordinance 2012 (Ordinance), the infringement notice and the warning notice are novel tools of competition law enforcement. Their use, however, involves serious tradeoffs. On the one hand, the notices promote a speedier, more flexible and cheaper resolution of investigations in competition law cases. On the other hand, they may curtail deterrent effects while injecting greater discretion and uncertainty into the enforcement process. This article investigates the extent to which such tradeoffs were identified and weighed by the designers of the notices in the lawmaking process. Written records of the legislative debates on the Ordinance were collected and their content analysed systematically. The findings suggest that although the participating actors largely agreed upon and fluently articulated the benefits of the notices, they either ignored or neglected their potential risks. The development of competitive markets in Hong Kong requires that those risks be well understood and managed.

Away From Market Shares? The Increasing Importance of Contestability in EU Competition Law Cases

In recent cases, the European Commission has shown a willingness to look beyond market shares to the contestability of markets when assessing the compatibility of mergers with EU competition law. In Syniverse/MACH, that approach, which understands that the strength of competition may not be expected to vary together with traditional measures of concentration, allowed the Commission to approve the proposed transaction, despite very high levels of concentration in three different relevant markets. The Commission granted clearance subject to conditions in relation to two of the relevant markets, while accepting that no such remedies were required in the third market of concern taking into account, in particular, the competitive constraints exerted by the customers’ ability to self-supply.

The Presumption and Quantification of Harm in the Damages Directive and the Practical Guide

One of the beneficial innovations for claimants introduced by the EU Competition Damages Directive is the rebuttable presumption of harm in cartel cases enshrined in Article 17(2). Especially for follow-on claimants, i.e. claimants who base their case on a cartel case that has already been brought successfully by the European Commission or by a national competition authority, the presumption of harm will be of the greatest utility. Not having to prove the infringement, nor that the cartel has resulted in some harm, will leave them with the need to only show loss, causation and quantum. Stand-alone claimants will need to prove the infringement of EU (or national) competition law in addition to that. The estimation of the quantum of damages in competition law cases can be costly in terms of time, effort and resources, due to the complexity of the economic data and the methods of transforming it into legally meaningful indicators of damage. The estimation is also inherently speculative, since it involves a counterfactual. Although the existence of harm and its quantification are two distinct elements of a successful claim for damages, the benefits from the former depend to a great extent on the latter. This was realised by the drafters of the Directive, who included in Article 17 an obligation on national courts to estimate the harm and an option for national competition authorities to assist in its calculation. In this paper, I discuss the relationship between the presumption of harm and its quantification, and by extension also the relationship between the Damages Directive and the Practical Guide on Quantifying the harm. As shown in the paper, it is doubtful that the presumption of harm in cartels will make much practical difference in the case law. The positive impact will instead come from the national courts’ power to estimate the harm, and the national competition authorities’ possibility to assist therewith.

ID

Boycott is one of violations in the competition law that eliminating the freedom of parties to enter the market. The aim of it no other than lessened fair competition. Theoretically, the issue related boycott discuss about the approach utilised by the authority to investigate and enforce boycott and its meaning: whether boycott is vertical or horizontal, or both; and what are the criteria of the violations? Given so few references on boycott, this paper attempts to reveal the regulation and the enforcement of it in the United States. It is aimed as reference to regulate and/or to settle the competition law cases of boycott in Indonesia in the future day. The United States does not specifically state boycott in the Antitrust Law. The United States includes boycott as concerted to deal and refuse to deal as ruled in the Section 1 of Sherman Act.

Intel v Commission: Keep Calm and Carry on!

Few competition law cases have excited as much attention as the General Court’s Intel judgment of 12 June 2014, in which it upheld the Commission’s finding that Intel had infringed Article 102 and the fine of E1.06 billion that it had imposed on it. The judgment has been greeted with huge hostility. At a recent conference I heard a senior economist refer to it as a ‘return to the Dark Ages’; a session at the GCR conference in Brussels in November will include a session on ‘sifting the wreckage of the Intel General Court judgment’; Jim Venit’s commentary on the judgment is entitled ‘All Steps Backward and No Steps Forward’. One law firm’s briefing declares that the judgment ‘bans’ rebate schemes that may be beneficial to consumers and may chill legitimate business behaviour; another says that the judgment creates more legal uncertainty, which is not easy to reconcile with the common criticism that it reverts to a form-based system that automatically prohibits exclusivity rebates: if that is the case, it makes the law more certain, not less. The judgment is also said to widen the gap between what the Commission intended to achieve by its Guidance on Article 102 Enforcement Priorities and the jurisprudence of the Courts in Luxembourg. Of course there have also been more measured commentaries on Intel, not least by Paul Nihoul in this journal who helpfully examines why the EU courts do not adopt the same line as the Federal Courts in the US in their application of section 2 of the Sherman Act. Wouter Wils has argued powerfully that Intel is both legally and economically sound, and that the so-called ‘more economic approach’ to the enforcement of Article 102 is unsound. The debate now moves to the Court of Justice. Intel’s grounds of appeal have recently been published in the Official Journal: it argues that the General Court erred in law by concluding that the rebates in question were inherently capable of restricting competition; it was wrong to proceed on the basis of ‘abstract considerations rather than likely or actual effects’; and it should have taken into account a number of factors such as the market coverage of the practices, their duration, falling prices and a lack of foreclosure, as well as the conclusions that should properly have been drawn from the Commission’s analysis of the ‘as-efficient competitor’ test in its decision. Other grounds of appeal address, among other issues, extraterritorial jurisdiction and the level of the fine. It can hardly be an exaggeration to suggest that the Court of Justice’s judgment in Intel will be one of the most important on competition law for many years, and it will certainly be eagerly anticipated. My expectation is that the

Soft Law in EU Competition Law and its Judicial Reception in Member States -- A Theoretical Perspective

The EU competition enforcement regime underwent quite some changes in both its substantive and procedural workings when Regulation 1/2003 – the 'Modernization' Regulation – entered into force on May 1st 2004. The procedural decentralization and the change in the logic of substantive enforcement the Regulation introduced created challenges for the new system, especially in light of the general principle of legal certainty. Mindful of possible (and plausible) enforcement inconsistencies, the European Commission maintained that certainty is going to be well served by the already existing and well-developed competition case law of the CJEU, the Commission’s own decisional practice, and, last but not least, its soft law guidance in the forms of guidelines, notices, communications, etc.It is these latter instruments and their value for steering judicial discourse in EU Member States that the current paper is interested in. Since the year 2004, the significance of Commission-issued soft law has increased because the latter instruments provide an in-depth account and guidance of, respectively, the enforcement practice and priorities of the Commission. These are important functions to perform in a highly uncertain and fluid policy enforcement setting, where the multiplicity of decision-makers and new substantive enforcement goals make it increasingly difficult for businesses to predict what constitutes anti-competitive behavior and what not. In this sense, and in view of legal certainty, it would be desirable that not only businesses and national competition enforcement agencies (NCAs), but also the national judiciary took heed of the said soft instruments. The question asked in this paper, thus, is whether and if so – how – do national courts take Commission-issued competition soft law into account in their judgments? Since there are indications that the provisions of competition soft law are being disregarded at the supranational level (take the recent Expedia judgment of the CJEU), it could be that national courts exhibit a similar approach. Such a development, however, is deemed undesirable from the theoretical standpoint of legal certainty, since instruments which contain and elaborate on the substantive core of the re-designed regime, and which are explicitly designed to ensure consistency in a moment of fluidity in the law, cannot simply be ignored, especially by the judiciary. As ultimate instances of normative ordering, courts have the responsibility to maintain legal certainty, and to do so, in the context of EU competition law, they should engage with the pertinent soft instruments. To this end, the current paper proposes a theoretical framework for national judicial engagement with competition soft law instruments.

A critical evaluation of the proposed treatment of special cost advantages in excessive prices law

Firms have a special cost advantage when they receive a discount or subsidy without assuming any risk or without being innovative. It is thus a received benefit, rather than an earned benefit, which results in a cost below the normal competitive level. The treatment of these special cost advantages has been a complicating factor when the firm in question is a dominant firm accused of charging an excessive price. The relevant benchmark against which to assess the price charged by the firm is the notional competitive market price, which in turn is linked to the cost of production under competitive conditions. This led to the Competition Appeal Court recommending that special cost advantages should be excluded from the cost build-up of the dominant firm when assessing excessive prices allegations. This would artificially inflate the dominant firm’s costs and reduce the likelihood of a finding against the firm. This recommendation by the CAC has a number of theoretical and practical problems, and it remains unclear how special cost advantages should be treated in South African competition law cases.

Economic Reasoning in the Court of Justice of the EU: A Study on the Use of Economics in Competition Case-Law

Economic Reasoning in the Court of Justice of the EU: A Study on the Use of Economics in Competition Case-Law

Recent Developments in Slovak Competition Law Legislation and Case Law Review

Slovak competition law is set by the Act No. 136/2001 Coll. on the Protection of Competition, as amended (hereafter, Competition Act). Covered therein is the prohibition of competition restricting agreements and the prohibition of the abuse of dominance as well as concentration control. The wording of the prohibitions is identical to Articles 101 and 102 TFEU. Control of concentrations is largely modelled after the EU system also including the substantive test, Significant Impediment of Effective Competition, which is used in Slovakia since 2012 with some procedural divergences. Enforcement is administrative in nature and only undertakings are subject to investigations and fines. The relevant enforcement body is the Antimonopoly Office of the Slovak Republic.

Competências da Autoridade Concorrencial em Setores Regulados: Considerações à Luz da Jurisprudência do Cade no Setor de Medicamentos

This article reviews Brazilian competition case law agency regarding the pharmaceuticals. In Brazil, manufacturing, distribution and commercialization of medicines are highly regulated, including prices. In such strictly regulated market is there still room for antitrust enforcement by competition authorities? We start presenting an overview of the observed market failures in pharmaceuticals, the applying federal regulation, especially regarding price caps. Then, we take on Cade’s case law on anticompetitive practices of abusive pricing, predatory pricing and collusion, and its practices on merger review. By comparing both, we conclude that, on the one hand, sector regulation may prevent some potential anticompetitive practices. On the other hand, Cade has punished companies for cartel practices and imposed restriction on mergers, which show that competition authorities still have an important role to play in this market.

Looking Towards Europe: Regulation of Dominance in Nigerian Telecommunications

Nigeria is yet to enact generally applicable competition laws. However in the telecommunications sector, sector specific competition rules were enacted with the regulator taking steps including determination of dominance in selected markets to enforce these rules. These developments are important in Nigeria as they could provide good domestic references for future application of both general competition law in Nigeria and sector specific application of competition rules in other network industries in the country. Furthermore with regulatory determinations of dominance relatively rare in the national communications sectors in Africa, Nigerian regulatory decisions are likely to be of interest to operators and regulators in other countries within the West African sub-region specifically and Africa in general.This article critically analyses regulation of dominant positions in the Nigerian telecommunications sector. It identifies the relevant legal provisions on dominant positions in Nigerian telecommunications and shows that while the Nigerian Communications Commission’s (NCC) approach in this area appears to be influenced by European Union (EU) law, the Nigerian rules have developed and are applied in a way different from the application of comparable EU rules. These differences in application manifest in a number of areas. For instance, while the Nigerian Communications Commission’s (NCC) approach in this area appears to be influenced by EU law, the differences between the differentiated sources of rules applicable to market power or dominance in telecommunication markets within EU law when juxtaposed with a common source of applicable rules in Nigeria appear to create problems. This is especially so when NCC appears to be following positions laid down in ex post EU competition case law while implementing a legal framework that is substantially influenced by EU ex ante sector specific regulation. Furthermore, NCC and at least one of the leading operators appear to adopt the view that regulation of dominance should be predicated on a finding of abuse of dominant position. This article argues that a finding of anticompetitive conduct is neither required in the Nigerian legal framework nor a pre-requisite in EU sector specific regulation, for the imposition of obligations on a firm that is in a position of dominance.In addition to these, the article also identifies a need for revision of the applicable regulations to stipulate the basis for market selection and refine criteria for the related concept of identification of the relevant market for purposes of dominance analysis. These steps are necessary not simply because comparable provisions are found in the EU regulatory framework which substantially influenced the development of the Nigerian legal framework; they ensure that identification of relevant markets in Nigeria is in line with international best practice and more accurately reflects local circumstances.The article further identifies specific issues with the NCC’s application of criteria for single dominance assessment. Firstly, there appears to be a misapplication of the market shares criterion. Secondly, on the determination pertaining to the mobile telephone market, the full range of actual competitors was not utilised in the assessment, furthermore very little of the NCC’s assessment is backed by available data and supporting evidence, and the entire assessment focused on application of its six criteria to the retail aspects of the mobile markets with the wholesale market completely ignored contrary to European application of rules from which the Nigerian criteria were derived. Thirdly, the article called for the commission’s adoption of a holistic view to the application of its regulations and recognition of the fact that decisions on dominant positions have important implications for services providers’ access to each other’s networks. With regards to the International Internet Connectivity market, the article argued that the NCC’s decision to rely only on ex-post regulatory intervention in line with the practice in other jurisdictions failed to appreciate the differences in the legal basis for regulatory action between Nigeria and the EU for instance. The EU has separate provisions for sector specific ex ante regulation and general ex-post competition laws, while Nigeria only has sector specific prescriptive regulations governing dominant positions. This entails that reliance only on as yet nonexistence ex-post basis for regulatory intervention would leave Nigerian service providers without a remedy.The manuscript posted here is an author original version of an article that was published in (2013) Competition and Regulation in Network Industries 14(4) 338-364.

‘Did They Do It?’ The Interplay between the Standard of Proof and the Presumption of Innocence in EU Cartel Investigations

This article examines the need for EU Courts to clarify the appropriate standard of proof in cartel proceedings. It discusses the usefulness of this legal benchmark in antitrust procedure, having regard to the Member States different legal traditions re the rules of evidence and the implications of a dissimilar approach to the problem across the EU, in a system of parallel enforcement regimes. In the absence of an EU provision on the matter, the article observes that the presumption of innocence, which is a generally recognized international standard, provides for a workable solution, considering the evidence based safeguards that stem from it, in light of both the Strasbourg and the EU courts case law. Bearing in mind the intrinsic distinctive nature between competition law cases, the article finally explores whether it is appropriate to argue the existence of a single uniform standard of proof and review and submits that these inevitably vary according to the subject matter of each case, notably, to whether the presumption of innocence is applicable or not.