Competition Law Perspective Research Articles

Centralisation of procurement and supply chain management in the English NHS: some governance and compliance challenges

This paper provides a critical analysis of the new operating model for NHS procurement that is being implemented in 2018/2019 (the NOM). The government expects NOM to generate significant savings through centralised procurement and strategic supply chain management, which would then be dedicated to frontline NHS healthcare services through newly devised ‘sustainability and transformation plans’ (STPs). The paper stresses that the NOM rests on a complex network of contracts resulting in a layer of contractualised governance that obscures its architecture and decision-making processes. It maps the changes that the NOM introduces in the operation and governance of the NHS supply chain and identifies key challenges in ensuring that the NOM is subjected to adequate oversight and accountability mechanisms, in particular from the perspective of public procurement and competition law. The paper advocates for the location of all NOM relationships on the NHS Business Services Authority, especially to facilitate judicial review.

Restrictions on Privacy and Exploitation in the Digital Economy: A Competition Law Perspective

The recent controversy on the intersection of competition law with the protection of privacy, following the emergence of big data and social media is a major challenge for competition authorities worldwide. Recent technological progress in data analytics may greatly facilitate the prediction of personality traits and attributes from even a few digital records of human behaviour. There are different perspectives globally as to the level of personal data protection and the role competition law may play in this context, hence the discussion of integrating such concerns in competition law enforcement may be premature for some jurisdictions. However, a market failure approach may provide common intellectual foundations for the assessment of harms associated to the exploitation of personal data, even when the specific legal system does not formally recognize a fundamental right to privacy. The paper presents a model of market failure based on a requirement provision in the acquisition of personal information from users of other products/services. We establish the economic harm from the market failure and the requirement using the traditional competition law toolbox and focusing more on situations in which the restriction on privacy may be analysed as a form of exploitation. Eliminating the requirement and the market failure by creating a functioning market for the sale of personal information is imperative. This emphasis on exploitation does not mean that restrictions on privacy may not result from exclusionary practices. However, we analyse these in a separate study. Besides the traditional analysis of the requirement and market failure, we note that there are typically informational asymmetries between the data controller and the data subject. The latter may not be aware that his data was harvested, in the first place, or that the data will be processed by the data controller for a different purpose, or shared and sold to third parties. The exploitation of personal data may also result from economic coercion, on the basis of resource-dependence or lock-in of the user, the latter having no other choice, in order to enjoy the consumption of a specific service provided by the data controller or its ecosystem, than to consent to the harvesting and use of his data. A behavioural approach would also emphasise the possible internalities (demand-side market failures) coming out of the bounded rationality, or the fact that people do not internalise all consequences of their actions and face limits in their cognitive capacities. The paper also addresses the way competition law could engage with exploitative conduct leading to privacy harm, both for ex ante and ex post enforcement. With regard to ex ante enforcement, the paper explores how privacy concerns may be integrated in merger control as part of the definition of product quality, the harm in question being merely exploitative (the possibility the data aggregation provides to the merged entity to exploit (personal) data in ways that harm directly consumers), rather than exclusionary (harming consumers by enabling the merged entity to marginalise a rival with better privacy policies), which is examined in a separate paper. With regard to ex post enforcement, the paper explores different theories of harm that may give rise to competition law concerns and suggest specific tests for their assessment. In particular, we analyse old and new exploitative theories of harm relating to excessive data extraction, personalised pricing, unfair commercial practices and trading conditions, exploitative requirement contracts, behavioural manipulation. We are in favour of collective action to restore the conditions of a well-functioning data market and the report makes a number of policy recommendations.

The Competition Neutrality in Malaysia Challenges and Policy Options

Competition law (CL) prevents anti-competitive conducts but does not ensure fair competition or level playing field with respect to State-Owned enterprises (SOEs). Hence, the principle of competitive neutrality promotes that government related business activities in competition with the private sector should not have a competitive advantage or disadvantage simply by virtue of government ownership and control (UNCTAD). Therefore, specific policies and legal rules is essential for achieving competitive neutrality. The Malaysian, Competition Act 2010 (CA2010) subjectively restricts and excludes some government linked enterprises. However, the some economic or, legal policy and political reasons limits CLs applicability and dictates its scope subjectively. In these context exemptions, de facto or de jure, direct or indirect state aid and restrictive licensing requirements impairs competition to benefit the domestic economy or national champion. This practice impacts the true spirit of market competition among rivals. Although Malaysian SOEs recognised as government’s toolbox for societal and public value creation but its future should to be more actively owned and managed to avoid competing unfairly on enterprises that can deliver more efficiently and effectively the goods and services that citizens need and want. In this context, three principal questions from the international trade perspective is analysed on (1) How important is state ownership within Malaysian context (2) What types of advantages should be granted to SOEs (or disadvantages afflicting them) and (3) What policies required to enhance effective competition among all market participants? The paper reviews the state of SOE with respect to exemptions and exclusions policy with respect to governance, independent decision-making, accountability and disclosure policy to improvise the level playing scope between SOE and private sector within the competition law perspective in Malaysia.

Google Search (Shopping) as a Precedent for Other Sectors - the Example of Google for Jobs

With its Google Search (Shopping) decision of 27 June 2017 the European Commission set the legal framework for the assessment of any favouring of Google-own services on its general search results pages. Using the example of the recent launch of Google for Jobs in Europe, this article examines the scope of this precedent. To this end, the authors (i) summarise the finding of the Google Search (Shopping) decision, (ii) describe the functioning, launch and economic consequences of Google for Jobs in Europe and (iii) analyse this launch from a competition law perspective. The article concludes that Google for Jobs is an online recruitment service akin to a job board or job search aggregator that is separate from Google’s general search service. Google’s favouring of Google for Jobs on its general search results pages as compared to competing services is capable of foreclosing the competition on the market for online recruitment services. Thus, Google’s conduct constitutes an abuse of dominance under the legal framework set by the Google Search (Shopping) decision.

A személyes adatok értéke a Facebook–WhatsApp- összefonódás versenyjogi értékelésében


 
 
 
 „Az internetes forgalomirányító szolgáltatások szabályozási kérdései” című, elsősorban a Google és a Facebook tevékenységét és annak a joggyakorlatra és a jogi szabályozásra gyakorolt hatásait vizsgáló átfogó kutatásunk egyik fókuszterülete a versenyjog. Emiatt kiemelt figyelemmel kísértük azokat az eljárásokat, amelyek során az Európai Bizottság (a továbbiakban: Bizottság) 2017 közepén két jelentős versenyjogi bírságot is kiszabott: előbb májusban rótt 110 millió eurós pénzbírságot a Facebookra, majd a valaha volt legmagasabb versenyjogi bírságnak is több mint a duplájával,3 2,42 milliárd eurós bírsággal sújtotta júniusban a Google-t.
 
 
 

Pay for Delay Agreements: Antitrust Watch Intensifies

The pharmaceutical sector has constantly endeavoured to balance its dual objectives of promoting state-of-art innovation and achieving affordable healthcare for all. The contrasting aims are also germane to the inevitable conflict between the competition law and the patent law with respect to this sector. Reverse payment settlement is one such concept that lies at the cross-section of these two legislations and strangely offers an uncanny mechanism where extreme partisans (i.e., innovator and generics) become comrades, thereby prodding genuine concerns and exposing legal vulnerabilities of such agreements. Against this backdrop, this article seeks to examine the growing undercurrent re reverse payment settlement agreements from a competition law perspective. In an attempt to harmonize the conflicting policy objectives, it will study the interplay between patent law and competition law by placing reliance on the approach followed by other jurisdictions. Further, this article will also assess whether reverse payment settlement agreements fall within the statutory construct of the Competition Act, 2002 and whether the Competition Commission of India (“CCI”) can assert its jurisdiction over such agreements. An attempt is also made to outline the approach which the CCI could adopt, bearing in mind the importance of ensuring exclusivity as an incentive for innovation.

European Air Traffic Management from a New Perspective: Competition Concerns in the Single European Sky

This article attempts to assess the Single European Sky (SES) from a competition policy and competition law perspective. While air traffic management (ATM) has been viewed as a traditional and firm example of the exercise of public powers, as a result of technological developments, sectoral EU legislation and the relevant activities of the European Commission, this assessment may no longer be valid and certainly needs to be reconsidered. The European ATM scene is in dynamic change, inspired by EU policies and driven by legislative acts. While a recent report of the European Court of Auditors highlights several problematic aspects of the SES, new European and global markets of ATM services emerge, traditional state functions are earmarked for privatization, powerful industrial partnerships try to shape future markets, public functions are subjected to industry governance and the whole sector is increasingly at risk of technological disruption by tech firms such as Google and Facebook, interested in developing automatized solutions for the separation of drones and possibly traditional ATM. At least some of these new developments may be relevant from the competition perspective. It will be argued that competition policy and competition law are not only relevant to the ATM sector, but they need to be considered when making political and business decisions and adopting new legislation. Focussing on the most relevant sectoral developments, including provisions of the reinvented SES 2 sectoral legislative proposal of the European Commission, the article will argue that overlooking competition policy and competition law in the digital SES may lead to anti-competitive consequences in the reorganized ATM sector.

Information exchanges between competitors from a competition law perspective – the problem of premature exchanges of sensitive information in the context of merger control (Gun Jumping)

The topic of information exchanges between competing undertakings is central to competition law. These are practices that enhance market transparency and, as such, can generate significant efficiencies. However, they can also give rise to serious competition concerns, often because they afford competitors the possibility of reaching focal points of coordination. The analysis of information exchanges has traditionally taken place in the context of the legal framework that prohibits cartels. This article reviews, at first, the approach taken in Europe by competition authorities and courts, firmly grounded in the Commission Guidelines and in the most recent case law of the European Court of Justice. After discussing the relevant legal framework and the main criteria for the assessment of information exchanges in detail, the article elaborates on the specific problem that premature exchanges of information between competitors can create in the context of a merger transaction. As the competitors that they are, at least until closing of the deal, it is essential that contracting parties ensure that their due diligence exercise and the planning of the integration of their businesses are carried out in a manner that is consistent with competition rules, avoiding behaviour that can be interpreted as gun-jumping or as a cartel practice and, as a consequence, financial penalties and judicial claims.

Algorithms and Fairness: What Role for Competition Law in Targeting Price Discrimination Towards End Consumers?

While algorithms bring about benefits for consumers in the form of more efficient price setting, concerns have also been expressed about possible adverse effects including discrimination. The paper takes a competition law perspective in analysing a type of discrimination that is said to be facilitated by the use of algorithms, namely personalised pricing. This is a form of price discrimination between consumers whereby a firm charges each consumer a different price depending on willingness to pay. As the advent of data analytics and algorithm-based services has made it easier for firms to engage in price discrimination, a clarification of the latter’s legality under competition law is to be welcomed. As such, the paper discusses the extent to which competition enforcement can be considered desirable to target price discrimination towards end consumers. In this regard, attention is also paid to the interaction with other regimes such as data protection, consumer protection and antidiscrimination law.

La liberalización del sector ferroviario: ¿una política congruente con el derecho comunitario de la competencia?

The Forth Railway Package approved in 2016 in order to remove remaining obstacles to complete the Single European Rail Area aims, inter alia, to boost competition by adapting the system of governance between railway infrastructure managers and service operators. However, in this respect, reality shows us a scenario away from those objectives and dominated by a few operators. This paper aims to analyze the causes of this situation and to propose ways of improvement. To this end, it focuses on a key aspect of the liberalization process of the sector, such as the area of market relations between railway infrastructure managers and transport service operators. The study is approached from the perspective of EC Competition law, with particular reference to rules applicable to merger control.

Big Data and Personalised Price Discrimination in EU Competition Law

Big Data and Personalised Price Discrimination in EU Competition Law

Patent Settlements in Europe and the Lundbeck Case: A Competition Law and Economics Perspective

The paper studies the Lundbeck patent settlement antitrust case of the European Commission from an economic perspective. The Commission concludes that the agreements in Lundbeck involving reverse payments from the originator to generics have violated competition law. The paper shows that this decision is the correct one. More broadly the paper analyzes problem areas of patent settlement assessment in Europe. It assesses what we can learn from the U.S. patent settlement debate with particular focus on the differences in regulatory frameworks of the pharmaceutical sector which are relevant for patent settlement assessment. The recommendation is presented that, instead of taking into account the wide range of factors and effects which are important for the correct assessment of these agreements, we should rather aim at a more pragmatic approach. The paper suggests that a presumption of the illegality of reverse payments in patent settlements and a safe harbor rule for agreements without reverse payments can be a feasible approach.

Multiple Product Discounts: A Comparative EU/US Competition Law Perspective

This article constitutes a direct challenge to applying cost tests as the sole liability test for multiproduct discounts. The article utilizes Neoclassical Price Theory to isolate the methods by which mixed bundling can harm consumers by viewing the practice as a form of predation, then alternatively as tying.1Under tying, the article considers market power and the conditions aside from the aggregate amount of price cuts that must exist for coercion to produce anticompetitive foreclosure. Such factors determine the contestability of demand in the linked market. The article lastly recommends an alternative test that aims to maximize welfare by focusing the analysis on overlapping demand, contestability, the EU cost test, and the benefit of the discount to package purchasers.

Compulsory Membership of Pension Schemes and the Free Movement of Services in the EU

Mandatory pension participation in the Netherlands is currently under review. This article examines the manner in which the system of mandatory participation in sectoral pension funds is presently organised as well as future proposals from the perspective of the freedom to provide services. It also briefly reviews mandatory participation in Belgium, Denmark, Germany, France and Sweden and asks whether it constitutes a barrier to the freedom enshrined in Article 56 TFEU. Restrictions of this freedom in the field of mandatory participation are too easily excused in the Netherlands by pointing to decisions by the European Court of Justice (ECJ) in which it judged the system to be permissible. These decisions, however, were made from the perspective of competition law, and not on the basis of Article 56 TFEU. Grounds for justifying restrictions to this freedom exist, although different justifications are available for direct and indirect discrimination. The article questions how mandatory participation in the Member States considered in this article fare from this perspective?

European Harmonised Standards, EU Law and Copyright

The issue of free and fair access to technical standards is a hot issue. If technical standards, which are being used to interpret or fill in norms in laws and regulations have to be regarded as law, then their content should, according to the general consensus, belong to the public domain. According to several Member States Copyright regimes and general legal thinking, laws and regulations should be publicly accessible free of charge, as only free access complies with basic standards of democracy, rule of law and transparency. If technical standards are not to be regarded as law, but as products of private intellectual creative production, access may have to be paid for, by way of buying a licence or by otherwise paying a price for the product of standardization. Indeed, whether technical standards are law or self-regulation is an issue both of constitutional interest, and of financial importance, and that is the issue which shall be discussed in this paper. The issue shows that it is obvious that the ECJ and the EU legislator want to both obtain the benefits of self-regulation, while still uphold the possibility of judicial review of standards and standard-setting from Trade Rules and Competition Law perspective. From the recent James Elliott case, we now know harmonised standards forms part of EU law, and may be interpreted by the ECJ, and very likely also scrutinized, under Art 267 TFEU. The question is whether a dichotomy between form, content and authorship can also be applicable in reference to the copyright issue discussed in this paper.

Compulsory membership of pension schemes and the free movement of services in the EU

Mandatory pension participation in the Netherlands is currently under review. This article examines the manner in which the system of mandatory participation in sectoral pension funds is presently organised as well as future proposals from the perspective of the freedom to provide services. It also briefly reviews mandatory participation in Belgium, Denmark, Germany, France and Sweden and asks whether it constitutes a barrier to the freedom enshrined in Article 56 TFEU. Restrictions of this freedom in the field of mandatory participation are too easily excused in the Netherlands by pointing to decisions by the European Court of Justice (ECJ) in which it judged the system to be permissible. These decisions, however, were made from the perspective of competition law, and not on the basis of Article 56 TFEU. Grounds for justifying restrictions to this freedom exist, although different justifications are available for direct and indirect discrimination. The article questions how mandatory participation in the Member States considered in this article fare from this perspective?

The Bitter Medicine: Competition Law and Parallel Trade in the Pharmaceutical Sector

The economic crisis and the growing urge of governments to cut public expenditure – particularly its heftier items, among which is pharmaceutical spending – have, in recent times, brought back on the agenda of pharmaceutical companies the issue of how to lawfully limit parallel trade of their products towards lower-price EU Member States. This objective may prove particularly hard to achieve since, from a EU competition law standpoint, parallel trade has been traditionally perceived as beneficial for consumers, as well as a force towards EU single market integration. This article aims at assessing, under a EU competition law perspective, the most common paths chosen by companies to deal with parallel trade, by relying on the (limited) case-law of EU courts and by providing a detailed and practical analysis of every available option.

Joint Tendering Under EU Competition Law

From a competition law perspective, subcontracting and consortia both constitute joint tendering. Joint tendering comes down to joint selling, which can constitute an infringement of Article 101 if all its other conditions are met. However, not all joint tendering is anti-competitive joint selling. Joint tendering can also be the expression of legitimate cooperation between firms. A joint tender may be the only way for two firms to produce efficiencies that outweigh the competition concerns, or to be able to tender at all. This article seeks (a) to draw the line between legitimate joint tendering and joint tendering which is actually anti-competitive joint selling, and (b) to draw attention to other theories of harm than joint selling in the area of joint tendering. The EU competition law assessment of joint selling can require a multi-step reasoning drawing on the distinction between competitors and non-competitors (section 2), object and effect restrictions and joint selling versus joint production (section 3). Section 3 also discusses other theories of harm than joint selling, namely exclusivity clauses and spillover information exchanges. Section 4 addresses several common arguments against classifying joint tenders among competitors as restrictions by object, and finds them all unconvincing. Section 5 discusses efficiencies under Article 101(3).

Big Data and Personalized Price Discrimination in EU Competition Law

Big Data and Personalized Price Discrimination in EU Competition Law

EU Competition Law Analysis of FRAND Disputes

This paper describes the degree of obligation created by a FRAND commitment on the holders of a Standard Essential Patent (“SEP”) from an EU competition law perspective. It shows that the EU courts case-law does not seem supportive of the reading of FRAND as a distributional, pricing commitment. Instead, it views FRAND as a soft commitment device, designed to promote cooperation and exchange amongst independent firms. This is apparent in the Huawei v ZTE judgment, which conveys an invitation on both SEP holders and unlicensed implementers to follow basic procedural requirements in licensing talks. In addition, the paper contributes to the debate on the legal applicability of Article 102 TFEU to SEP holders other than practicing entities. Last, the paper discusses if Standard Setting Organizations (“SSOs”) ex ante specifications of FRAND terms can constrain the conduct of SEP holders under EU competition law.