Effects-based Approach Research Articles

Exploitative Abuse and Abuse of Economic Dependence: What Can We Learn From an Industrial Organization Approach?

Cet article analyse les concepts d’abus d’exploitation et de dépendance économique, non seulement sous le prisme de la jurisprudence concurrentielle européenne mais également sous celui de l’économie industrielle. Bien que les racines théoriques de ces concepts reposent sur la théorie économique, ils ont été ignorés ou peu pris en compte dans le contexte de l’application du droit de la concurrence. Une approche fondée sur les effets ( effects-based ) devrait tenir compte de ces pratiques et pourrait fournir des indications sur la façon d’analyser leurs impacts. Nous nous appuyons sur deux exemples tirés des industries agro-alimentaires et de l’économie numérique. Le présent article souligne l’existence d’un paradoxe : bien que les modèles d’organisation industrielle fournissent des outils pertinents pour caractériser ces abus, évaluer leurs effets et concevoir des mesures correctives, ils demeurent peu utilisés dans la pratique décisionnelle. Classification JEL: K21, L12, L40, L42

The European Court of Justice and the More Economic Approach to EU Competition Law—Is the Tide Turning?

In the late 1990s, the European Commission embarked on a mission to bring EU competition policy more into line with contemporary economic theory. Over a period of ten years, it systematically revised key legal concepts of all three pillars of EU competition law. Most importantly, it adopted the consumer welfare aim, revised its understanding of competitive harm and countervailing effects accordingly, and committed itself to carrying out more in-depth assessments of the investigated conduct’s effects instead of relying on form-based presumptions of illegality. Initially, many tenets of the more economic approach were in conflict with the case law of the European Court of Justice, which had a broader understanding of the aims of EU competition law. However, after a few initial set-backs for the Commission, several recent judgments in cases such as MEO, Intel, Post Danmark I, and Cartes Bancaires suggest that the Court’s understanding of EU competition law is evolving and that it is willing to embrace at least a few of the Commission’s revised principles. In particular, it is adopting a more effects-based approach to assessing business conduct and is cautiously curbing its former concept of harm in exclusionary situations. At the same time, however, it continues to adhere to many of its former freedom- and fairness-based principles, so that a number of uncertainties and inconsistencies remain.

Legal Treatment of Abuse of Dominance in Indian Competition Law: Adopting an Effects-Based Approach

Abuse of dominance investigations around the world are often form-based, primarily centred on the pre-requisite of dominance. This may lead to false positives or restrict innovation in today’s dynamic and complex markets. Accordingly, abuse of dominance enforcement requires a shift towards adopting an effects-based approach, weighing pro and anticompetitive effects and considering efficiency justifications. The European Union is increasingly moving in this direction, as is demonstrated by its case law that is analysed in this paper. The paper also explores competition law in India—traditionally a form-based jurisdiction for abuse of dominance investigations—and finds an encouraging trend towards an effects-based approach.

Whither Antitrust Regulation of Loyalty Rebates in China: The Tetra Pak Decision and Lessons from the EU

On 16 November 2016, China issued the trailblazing Tetra Pak decision, which introduced the concept of loyalty rebates into the Chinese Anti-Monopoly Law. This article is aimed at critically assessing the loyalty rebates analysis in this decision and discussing how the law could develop thereon. It argues that, while breaking the ground for an effects-based approach to loyalty rebates in China, this decision failed to establish a solid theory of harm. This destined that the decision-maker would not be able to engage in a contextualized effects-analysis it had envisaged. By comparing this problem to a similar one in EU competition law, this article suggests that the exclusive dealing analogy should be employed for loyalty rebates analysis.

Whither evidence (Act) based reasoning?: towards an effects-based approach in Indian competition jurisprudence

Whither evidence (Act) based reasoning?: towards an effects-based approach in Indian competition jurisprudence

Where Do We Stand on Discounts Under the Competition Law Prohibition on Abuse of Dominance? Norwegian Perspective and Experience an Effects-Based Approach to Legitimate Conduct?

The article considers how the Norwegian Competition Authority and Norwegian courts have distinguished abusive discounts from legitimate price competition. Norwegian law contains two prohibitions on abuse of dominance: Section 11 of the Norwegian Competition Act and Article 54 of the European Economic Area Agreement. The prohibitions correspond to and shall in principle be interpreted in line with Article 102 of the Treaty on the Functioning of the European Union. Even though the Norwegian Competition Authority has conducted and endorsed relatively extensive analyses of competitive effects when distinguishing abusive from legitimate price competition, the authority’s decisions in abuse of dominance have either been repealed or annulled by the courts. A potential explanation for the authority’s unsuccessful enforcement efforts is that the dominant undertakings’ conduct was rather competition based on merits or performance than on potentially abusive market methods. In light of the Court of Justice of the European Union’s case law on abuse of dominance, the article discusses whether the Norwegian experience with discounts and pricing practices can be described as an effects-based approach to legitimate conduct.

The Role of Effects, Saliencies and Norms in U.S. Cyberwar Doctrine

How should the United States respond if an adversary employs cyber attacks to damage the U.S. homeland or weaken its military capabilities? More specifically, how should the United States choose between cyber and kinetic responses to cyber attacks? We build the foundation of our analysis on a basic effects-based logic — that is, decisions about deterrence and warfighting should be based on the effect a given U.S. attack will have, not on the means via which that effect is produced. While this approach takes us part of the way toward developing a cyber doctrine, it turns out that the basic logic is too sparse and would likely provided misleading guidance in a number of situations. The shortcoming arises because states may perceive different forms of retaliation that do equal damage as differently punishing and differently escalatory. To reduce these shortcomings, we draw upon the concepts of focal points and saliences to add necessary distinctions. The result remains a largely effects-based approach, but one that incorporates a much richer understanding of effects. Attention to saliencies tends to reduce the role of kinetic retaliation for deterring and responding to cyber attacks. We also consider the possibility that cyber norms will constrain U.S. cyberwar doctrine, but find that are none are well enough established to play a significant role in the near future.Note: This paper was prepared for a workshop on the strategic use of offensive cyber operations held in March 2016 and organized by the Stanford Cyber Policy Program. On August 18, 2016, this paper was submitted to the Journal of Cybersecurity for entry into its review process and perhaps for publication.

Coherence in the Application of Articles 101 and 102: A Realistic Prospect or an Elusive Goal?

The shift to an effects-based approach has brought within reach coherence in the application of Articles 101 and 102, ensuring a predictable and effective policy that systematically protects competition in the interest of consumers Under Article 101, avoiding an overly wide definition of what constitute by object restrictions and the blurring of the distinction between by object and by effect restrictions is the main challenge for achieving coherence. The challenge is to ensure that individual restrictions are not defined as by object simply because in a particular market, the negative effects are obvious and/or the parties’ intention is manifestly to restrict competition. A well-functioning European Competition Network (ECN) and detailed, widely supported enforcement guidelines can help to avoid this tendency. The main challenge for coherence in the application of Article 102 is the possible creation or re-creation of a ‘soft by object category’: conduct and restrictions which are not treated as by object below the level of dominance but which become so once applied by a dominant firm. Establishing such a category would undermine coherence not only within Article 102 but also between the application of Articles 101 and 102.While case law may not always progress along the most logical route, the overall development seems still in the direction of a coherent effects-based approach.

Critical levels and loads and the regulation of industrial emissions in northwest British Columbia, Canada

Northwest British Columbia, Canada, a sparsely populated and largely pristine region, is targeted for rapid industrial growth owing to the modernization of an aluminum smelter and multiple proposed liquefied natural gas (LNG) facilities. Consequently, air quality in this region is expected to undergo considerable changes within the next decade. In concert, the increase in LNG capacity driven by gas production from shale resources across North America has prompted environmental concerns and highlighted the need for science-based management decisions regarding the permitting of air emissions. In this study, an effects-based approach widely-used to support transboundary emissions policy negotiations was used to assess industrial air emissions in the Kitimat and Prince Rupert airsheds under permitted and future potential industrial emissions. Critical levels for vegetation of SO2 and NO2 and critical loads of acidity and nutrient nitrogen for terrestrial and aquatic ecosystems were estimated for both regions and compared with modelled concentration and deposition estimates to identify the potential extent and magnitude of ecosystem impacts. The critical level for SO2 was predicted to be exceeded in an area ranging from 81 to 251 km2 in the Kitimat airshed owing to emissions from an existing smelter, compared with <1 km2 in Prince Rupert under the lowest to highest emissions scenarios. In contrast, the NO2 critical level was not exceeded in Kitimat, and ranged from 4.5 to 6 km2 in Prince Rupert owing to proposed LNG related emissions. Predicted areal exceedance of the critical load of acidity for soil ranged from 1 to 28 km2 in Kitimat and 4–10 km2 in Prince Rupert, while the areal exceedance of empirical critical load for nutrient N was predicted to be greater in the Prince Rupert airshed (20–94 km2) than in the Kitimat airshed (1–31 km2). The number of lakes that exceeded the critical load of acidity did not vary greatly across emissions scenarios in the Kitimat (21–23 out of 80 sampled lakes) and Prince Rupert (0 out of 35 sampled lakes) airsheds. While critical loads have been widely used to underpin international emissions reductions of transboundary pollutants, it is clear that they can also play an important role in managing regional air emissions. In the current study, exceedance of critical levels and loads suggests that industrial emissions from the nascent LNG export sector may require careful regulation to avoid environmental impacts. Emissions management from LNG export facilities in other regions should consider critical levels and loads analyses to ensure industrial development is synergistic with ecosystem protection. While recognizing uncertainties in dispersion modelling, critical load estimates, and subsequent effects, the critical levels and loads approach is being used to inform regulatory decisions in British Columbia to prevent impacts that have been well documented in other regions.

A More Economic Approach to the Application of EU Merger Control

In general terms, the more economic approach to the application of EU merger law implies increased reliance on theoretical concepts from industrial economics and quantitative methods of analysis, firstly in the case of investigations and, secondly, when formulating legislation and defining the criteria that are to be set. In other words, a tendencyof the more economic approach to EU merger control is to base the evaluation of each specific case on an assessment of its anti- and pro-competitive effects (effects-based approach), rather than on the form of the intrinsic nature of a particular practice (formbased approach). In this article, the author presents the development of the more economic approach to the application of EU merger control and analyses the implications of this new trend which is present in the European Commission’s practice.

Simulation-based decision support for evaluating operational plans

In this article, we describe simulation-based decision support techniques for evaluation of operational plans within effects-based planning. Using a decision support tool, developers of operational plans are able to evaluate thousands of alternative plans against possible courses of events and decide which of these plans are capable of achieving a desired end state. The objective of this study is to examine the potential of a decision support system that helps operational analysts understand the consequences of numerous alternative plans through simulation and evaluation. Operational plans are described in the effects-based approach to operations concept as a set of actions and effects. For each action, we examine several different alternative ways to perform the action. We use a representation where a plan consists of several actions that should be performed. Each action may be performed in one of several different alternative ways. Together these action alternatives make up all possible plan instances, which are represented as a tree of action alternatives that may be searched for the most effective sequence of alternative actions. As a test case, we use an expeditionary operation with a plan of 43 actions and several alternatives for these actions, as well as a scenario of 40 group actors. Decision support for planners is provided by several methods that analyze the impact of a plan on the 40 actors, e.g., by visualizing time series of plan performance. Detailed decision support for finding the most influential actions of a plan is presented by using sensitivity analysis and regression tree analysis. Finally, a decision maker may use the tool to determine the boundaries of an operation that it must not move beyond without risk of drastic failure. The significant contribution of this study is the presentation of an integrated approach for evaluation of operational plans.

An Effects-Based Approach to Article 102: A Response to Wouter Wils

In his defence of the General Court's Intel judgment as 'effects-based' and 'economically sound' Wouter Wils has articulated an interpretation of Article 102 which rejects a case-by-case approach as inconsistent with the European Treaties and instead favours the uniform application of clear a priori legal rules that are easily administrable and assign the risks of non-compliance to dominant firms. Wils argues that this approach is best designed to protect the discovery value of competition. Wils' article identifies many of the key issues concerning how competition law, and Article 102 in particular, should be applied. In this article the authors examine Wils' analysis. They first address whether the European Treaties preclude a case-by-case approach under Article 102 and conclude that they do not. They then note that, even if early regulatory intervention has the virtues of predictability and ease of administration, it fails to take into account the effects of both the conduct it seeks to regulate and the effects of such regulation. As a result, they conclude that the goal of protecting competition is best served by intervention only when there is a risk to competition based on the most likely assessment of the effects of the conduct concerned.

The Intel judgment: the Commission threw the first stone but the EU courts will throw the last

In its long-awaited judgment, the General Court dismissed in its entirety the appeal brought by Intel against a Commission decision whereby Intel was found to have abused its dominant position by means of exclusivity rebates and direct payments to its customers. The judgment of the General Court has important implications for the modernisation of Article 102 of the TFEU and the future of the effects-based approach to it. Situating the Intel judgment within the broader framework of the modernisation of Article 102, this article observes that the Intel judgment simply reiterates that the EU courts have the exclusive power to interpret the Treaty provisions. It argues that while the Commission has faced a major setback for its new reading of rebates as enshrined in the Guidance Paper, it may nevertheless proceed with the effects-based approach in other areas of Article 102 in its future enforcement.

Kształcenie utawiczne jako dzielenie się odpowiedzialnością

Commenting on an article devoted to the continuing education of assessment psychologists from the point of view of transport psychology, the author proposes that various forms of postgraduate education should be evaluated in terms of the assumed and verifiable effects of education, and that, with their assumptions based on the effects-based approach (EBA), they should develop a habit of combining practice with scientific knowledge. Since many people lack basic psychological skills, the best solution in their case seems to be traineeship and work under supervision. The system of education should take into account the fact that the teaching of rules, skills, and procedures amounts to taking over part of the responsibility for the trainees’ actions in their future assessment practice.

The Role of Exclusionary Intent in the Enforcement of Article 102 TFEU

The role to be played by intent evidence in antitrust enforcement has always been a controversial issue. The debate is particularly significant as regards unilateral exclusionary abuses. On one hand, it is argued that intent evidence is irrelevant, insofar as objective standards should determine antitrust liability. On the other hand, intent evidence may assist in informing the analysis of potentially abusive behaviour, and can act as a check against both under and over-enforcement. This article will explore the usage of intent evidence in EU competition law under Article 102 Treaty on the Functioning of the European Union (TFEU). It will be argued that evidence of exclusionary intent is an essential component in the enforcement of certain types of abuses and that its continued usage is desirable, notwithstanding the move towards a more effects-based approach under Article 102. Whereas an effects-based approach seeks to ascertain the likely impact of behaviour by recourse to economic data, intent evidence seeks to establish the likely impact of behaviour by examining the motivation of the undertaking concerned. While different, such approaches are not mutually exclusive and may complement each other. In particular, intent evidence plays a vital and irreplaceable role in disambiguating ambiguous practices which may, by their nature, constitute pro or anti-competitive behaviour depending upon the intent motivating the dominant undertaking in so acting.

The Uncertain Scope of the Public Performance Right after Aereo

The Supreme Court’s recent majority decision in American Broadcasting Companies v. Aereo, Inc. 134 S.Ct. 2498 (2014) holds that a service allowing consumers to watch broadcast television programs over the Internet virtually simultaneously with the original over the air broadcast directly infringes the copyright owners the exclusive rights to 'perform the copyrighted work publicly.' The majority overrules the Second Circuit ruling in the same case, and throws into doubt one of the central holdings in the Second Circuit’s Cablevision decision. The majority’s 'looks like a cable system' approach makes the public performance right almost incomprehensible. This Article considers a number of questions left open by the Aereo decision relating to specific technologies, including remote DVRs, devices that allow the consumer to pause and rewind live television, and cloud computing generally. It also considers whether the Court's decision in Aereo portends the use an effects-based approach to expand other exclusive rights under the Copyright Act in future cases. Finally, this Article concludes with a concise explanation as to why Aereo would not have prevailed under a fair use analysis. Judge Chin’s intuition that Aereo’s design was a mere 'Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act,' was spot on; however this technological contrivance should not have been the foundation for the Supreme Court's legal contrivance.

Critical loads of nitrogen and sulphur to avert acidification and eutrophication in Europe and China

Forests and other (semi-)natural ecosystems provide a range of ecosystem services, such as purifying water, stabilizing soils and nutrient cycles, and providing habitats for plants and wildlife. Critical loads are a well-established effects-based approach that has been used for assessing the environmental consequences of air pollution on large regional or national scales. Typically critical loads of sulphur (S) and nitrogen (N) have been derived separately for characterizing the vulnerability of ecosystems to acidification (by S and N) and eutrophication (by N). In this paper we combine the two approaches and use multiple criteria, such as critical pH and N concentrations in soil solution, to define a single critical load function of N and S. The methodology is used to compute and map critical loads of N and S in two regions of comparable size, Europe and China. We also assess the exceedance of those critical loads under globally modelled present and selected future N and S depositions. We also present an analysis, in which the sensitivity of the critical loads and their exceedances to the choice of the chemical criteria is investigated. As pH and N concentration in soil solution are abiotic variables also linked to plant species occurrence, this approach has the potential for deriving critical loads for plant species diversity.

Approaching the subject of violence: a response-based approach to working with men who have abused others.

Traditional effects-based approaches to therapeutic work with men who have abused others often attempt to intervene by correcting personal deficits assumed to be causing the violence. This not only creates a hierarchical counseling relationship but also can inadvertently excuse aggressive actions. In this article, we outline a response-based alternative that emphasizes questions of choice, agency, and volition within a collaborative therapeutic relationship. Rather than impose external correction, we pay attention to details of how men describe their violent acts and position themselves as agents of those acts as we work toward supporting them in their own acts of self-correction.

Absolute Territorial Protection and Competition in the EU: An Economic Approach

Antitrust law enforcement against vertical restraints has made great progress since the 1970s, building on the advances in economic thinking. Challenges to vertical mergers are rare and most vertical restraints are not prohibited without an analysis of their anticompetitive effects. Most jurisdictions have moved from the strict judicial and administrative enforcement of the 1960s and 1970s to a more balanced view of vertical relationships and vertical restraints based on economics.There are some exceptions. In the US, tying is still nominally a violation per se, but the courts are requiring a showing of market power. In the EU, absolute territorial restrictions are prohibited by object (under Article 101 TFEU), and in all vertical contracts aiming at creating separate territories, irrespective of the market share of the parties involved, most channels of arbitrage between territories need to be left open. Similarly, absolute territorial restrictions imposed unilaterally are anticompetitive under Article 102 TFEU if they are put in place by a dominant company whether they produce an anticompetitive or a welfare increasing effect. This approach needs to be changed. Agreements and practices leading to territorial protection need to be assessed under an effects-based approach (both when they have their origin from an agreement and from a unilateral conduct). The trade-off between competition and market integration concerns does not exist. The more firms are left free to negotiate their contracts, the more competition is increased and the more convergent the internal market becomes. This extends also to absolute territorial restrictions that have to be analyzed on a case by case basis and under a market power constraint.

Effects-based chemical category approach for prioritization of low affinity estrogenic chemicals

Regulatory agencies are charged with addressing the endocrine disrupting potential of large numbers of chemicals for which there is often little or no data on which to make decisions. Prioritizing the chemicals of greatest concern for further screening for potential hazard to humans and wildlife is an initial step in the process. This paper presents the collection of in vitro data using assays optimized to detect low affinity estrogen receptor (ER) binding chemicals and the use of that data to build effects-based chemical categories following QSAR approaches and principles pioneered by Gilman Veith and colleagues for application to environmental regulatory challenges. Effects-based chemical categories were built using these QSAR principles focused on the types of chemicals in the specific regulatory domain of concern, i.e. non-steroidal industrial chemicals, and based upon a mechanistic hypothesis of how these non-steroidal chemicals of seemingly dissimilar structure to 17ß-estradiol (E2) could interact with the ER via two distinct binding types. Chemicals were also tested to solubility thereby minimizing false negatives and providing confidence in determination of chemicals as inactive. The high-quality data collected in this manner were used to build an ER expert system for chemical prioritization described in a companion article in this journal.