Competition Law Infringements Research Articles

Comparative Impacts of Ex-Ante and Ex-Post Regulation in Digital Markets: An Event Study Analysis of Stock Price Reactions

Abstract In the analysis of digital markets and competition, it is imperative to consider the regulatory landscape. Specifically, with the shift from ex post to ex ante regulation in competition law, establishing a competitive environment reflective of regulatory costs becomes imperative. This study investigates the market’s assessment of ex ante regulation through stock price event analysis. The findings reveal that the market perceives a 10–20 % negative impact on businesses from ex ante regulation for each event upon finalization of the regulatory framework or identification of regulated entities. Unlike ex-post regulation, which targets specific businesses and yields varied impacts in competition law violations, ex ante regulation’s broader influence is remarkable. ex ante regulation incurs significant business costs, with the market assessing its impact as surpassing that of ex-post regulation when viewed holistically. Acknowledging these regulatory costs underscores the imperative for stringent oversight to guarantee the attainment of regulatory aims and objectives.

The important role of civil class actions in the enforcement of corporate criminal law

Recent experience in civil litigation, particularly with opt-out class actions against corporations for competition law offences, has highlighted the efficiency of ‘dual enforcement’ as a strategy for fighting corporate crime. The success of the opt-out class action regime has resulted in innovation and developments that have pushed the boundaries of competition law, involving cases that are traditionally considered matters of environmental, data or consumer protection law. However, although private litigation can overcome the deterrence deficit associated with criminal enforcement by deferred prosecution agreement, and is an increasingly important tool in the fight against corporate crime, the Supreme Court’s recent decision in the PACCAR case has created uncertainty in the third-party litigation funding market, upon which these class actions rely. Given the woefully inadequate funding afforded to public enforcement agencies, including the UK’s Serious Fraud Office, there is a clear economic case for the availability of dual enforcement, and thus an urgent need for Parliament to enact amending legislation, with retrospective effect, to reverse the PACCAR decision. Furthermore, the dual enforcement model should be extended to enable individuals to enforce consumer protection law through opt-out class actions. This would avoid the current situation in which claims are being framed as competition law infringements, such that success may well turn on the finest of distinctions. Lacking the various constraints associated with the criminal law, this extension would also enable the private enforcement of various types of corporate misconduct that, viewed through alternative the lens of the criminal law, are tantamount to fraud.

Повышение эффективности выявления антиконкурентных соглашений в государственных закупках: анализ цифровых инструментов и международных лучших практик / Enhancing Efficiency in Detecting Anti-Competitive Agreements in State Procurement: An Analysis of Digital Tools and International Best Practices

Detection of violations of competition law in public procurement processes under existing electronic systems requires significant resources. This article examines the effectiveness of various international digital tools and platforms in simplifying data analysis of procurement processes and uncovering anti-competitive agreements. Within the framework of the article, a study of international experience was carried out, and innovative solutions in the field were highlighted. The study suggests integrating advanced digital tools into a new e-procurement system. The main recommendations are related to the introduction of an automated tool for detecting and proving possible anti-competitive agreements in the e-procurement system, which will enable the revelation of interconnections between economic entities by identifying the characteristics of agreements restricting competition, as well as calculating and managing possible risks. The proposed changes aim to improve the identification of connections between business entities, highlight suspicious activities by the latter, and provide a flexible and interoperable system for comprehensive data analysis. These changes are expected to promote competition and transparency in public procurement.

Solving Investors’ Problems with Access to Evidence in Damages Litigation: Suggestions for a Future Issuer Liability Regime

AbstractPrivate enforcement’s role in the European secondary securities market is narrow. Issuer companies’ civil liability for violations of the inside information disclosure obligation is no exception. While trying to avoid the shadow of the US class action institution, European scholarship has long explored ways to increase the role of private enforcement in the securities market. Harmonising issuer liability is one of the suggestions to create a more prominent role for private enforcement. Even though harmonising issuer liability would be a welcome option for legal certainty and investor protection, it seems unlikely to happen in the near future. As an initial step towards potential harmonisation, this article analyses credit rating agencies’ (CRAs) liability and liability for competition law violations from the viewpoint of information asymmetry in litigation. It evaluates whether the legislative solutions in the CRA III Regulation and the Competition Damages Directive regarding plaintiffs’ access to evidence could be used as models for a potential issuer liability regime. The article finds that the choices made in the Competition Damages Directive could serve as viable models for issuer liability. The provisions in that Directive solve the information asymmetry between the plaintiff and the defendant by granting the plaintiff access to evidence in litigation through a court order.

Designing (restorative) remedies for abuses of dominance by online platforms

Abstract The debate surrounding the application of European Union competition law to online platforms so far has predominantly focused on identifying anti-competitive practices. The design of corresponding remedies has been far less explored, although it is of equal importance to practice. In the absence of effective remedies, the mere identification of anti-competitive practices can do little to protect competition. Given the difficulties associated with identifying competition law infringements by online platforms, there is no reason to assume that the design of remedies intended to tackle the effects of such infringements will be straightforward. Therefore, this article aims to show the intricacies of designing effective remedies for Article 102 TFEU infringements by online platforms based on the case study of tying and bundling practices. In this process, the article clarifies the importance of incorporating restorative measures in competition law remedies that may require opting for structural interventions, which are difficult to impose under the scope of Regulation 1/2003. The article offers three potential options to overcome such difficulties within the ambit of this regulation, namely through the strategic use of interim measures, the introduction of flexible remedies, and the incorporation of the regulatory restraints of the Digital Markets Act.

Narodowy Fundusz Zdrowia jako sprawca szkody antymonopolowej

Both in the European Union law and in the Polish national order, there is a comprehensive model of competition protection law enforcement, which includes: public and private competition rules enforcement. Private enforcement is carried out individually by entities aggrieved by the unlawful conduct of other entities by submitting a lawsuit under the Act on Claims for Compensation for Damage Caused by Violation of Competition Law. In compensation proceedings, it is necessary to identify the perpetrator of the antitrust damage. The concept of the perpetrator of antimonopoly damage also covers entities that organize or provide services of general interest without carrying out economic activity. The content of the publication, on the basis of legal regulations, available literature and judicates, is an attempt to answer the questions whether the National Health Fund, as a public entity not oriented towards making a profit, may be qualified as an entrepreneur who is the perpetrator of anti-monopoly damage and is obliged to repair it, and whether a civil court in the compensation proceedings may not qualify the National Health Fund as an entrepreneur that may be the perpetrator of antitrust damage?

PROVING ANTITRUST DAMAGES IN CIVIL PROCEEDINGS – The Compatibility of Serbian Law with Directive 2014/104 –

Private competition law enforcement has been a recent phenomenon in the European Union. In the past, the EU law and member states’ national laws lacked elements that contributed to the preponderance of private enforcement in the United States, such as treble and punitive damages, the procedural right of a damaged party to request discovery of evidence, collective actions, etc. The interest in private enforcement of competition law has gradually increased after Regulation 1/2003 authorised national courts to implement Articles 101 and 102 TFEU, the EU courts established private enforcement principles, and Directive 2014/104 (Antitrust Damages Directive - ADD) laid down rules to facilitate proving competition law violations and damage resulting from them. The US model evidently inspired the EU legislator. At the same time, ADD attempted to balance the private interests of injured parties and the public interest for effective public enforcement. Specific ADD provisions instigated a public debate concerning their reach and alleged confrontation with general legal principles. Even though member states have taken comprehensive measures to implement ADD, national courts need to search for an equilibrium between private and public interests. Therefore, the full effect of Directive 2014/104 is yet to be seen. Private enforcement of competition law in Serbia is still in its initiation phase. The Serbian Competition Protection Act 2009 proclaimed the right of damaged persons to bring actions for damages, even though this right has already existed under the general rules of civil law. The Competition Protection Act failed to stipulate material conditions and procedural rules that would facilitate private enforcement. The Serbian legislator has not yet taken steps to transpose ADD into national law. This paper first analyses the development and principal features of the US and EU private enforcement models. After that it focuses on the ADD provisions expediting evidence collection and damage assessment. The second part of the paper analyses Serbian tort and civil procedure rules relevant to bringing actions for antitrust damages and case law on antitrust damages. The author concludes with proposals for Serbian legislators to harmonise national law with ADD.

Article: The Great Saga of Collective Redress in EU Competition Law: All Cry and No Wool?

The paper presents the evolution of attempts at regulating antitrust collective redress in Europe, and the omission of listing competition law infringements in the annex to Directive 2020/1828 on consumer collective actions and thus from its scope of application. It attempts to understand why the non-availability of antitrust collective actions is the result of the long-lasting drafting processes on the EU level that typically covered competition law, taking into account that the collective redress mechanism is the only real option for consumer private enforcement of antitrust. It calls for the European Commission, the European legislator and the Member States to finally regulate collective actions in the field of competition law as otherwise access to justice for victims of antitrust breaches is not guaranteed. consumer collective redress, collective actions, antitrust collective actions, Directive 2020/1828, Directive 2014/104, follow-on, scope of application, antitrust, competition law

The Compensation for Harm Caused by Infringements of Competition Law in Germany

The Compensation for Harm Caused by Infringements of Competition Law in Germany

Проблема правового регулирования определения срока исполнения контракта в сфере закупок товаров, работ, услуг для обеспечения государственных и муниципальных нужд

The subject of the research in this article is the procedure for determining the deadlines for the execution of contracts to meet state and municipal needs. The author defines a list of principles on the basis of which the functioning of the contract system in the field of procurement is carried out to ensure state and municipal needs: openness and transparency, competition, unity of the contract system, professionalism of the customer, stimulation of innovation. The common mistakes made by the customer in the process of procurement for state and municipal needs are indicated: violations related to overcharging, concluding multiple contracts with the same contractor, etc. The analysis of the norms of the administrative and civil legislation of the Russian Federation, which establish the essential terms of contracts to meet state and municipal needs and the procedure and problems of determining the deadlines for the execution of such contracts, is carried out. The main range of negative consequences associated with the customer's right to determine the terms of the contract at his discretion has been determined: violation of competition law, the formation of penalties, violation of the budget plan of state and municipal customers and non-fulfillment by authorities of their obligations.

Collective Actions for Competition Law Violations and DMA Infringements Following the Transposition of the Representative Action Directive in Germany

Collective Actions for Competition Law Violations and DMA Infringements Following the Transposition of the Representative Action Directive in Germany

Full compensation and the volume effect: assessing different policy options

ABSTRACT According to the Damages Directive victims of infringements of competition law are entitled to full compensation. To achieve this goal overcharges, passing-on, and volume effects should play a role in the calculation of damages (for any purchaser who is not yet the final consumer). Whereas the Damages Directive promotes the passing-on defence for the defendants, it does not regulate volume effects in depth. The computation of these effects requires information on counterfactual prices and quantities. Since this information cannot be observed, the size of the volume effect tends to be uncertain. This paper discusses policy-options that aspire to bring compensation closer to full compensation, given uncertainty about the size of the volume effect. Based on the maximin-principle, a principle for decision-making under uncertainty, not allowing a passing-on defence appears to be an attractive option since this may lead to the minimization of the maximum gap between actual and full compensation.

Compensation for Damages in Competition Law Under the Law of the European Union: Case Law and Fundamental Principles

The implementation of EU legislation into Ukrainian domestic legislation is becoming more and more relevant, given Ukraine’s determination to follow the European integration route and the grant of EU candidateship to Ukraine in the summer of 2022. Competition law is undoubtedly one of the current priority fields for the EU, as it ensures and guarantees the development of the internal market. Simultaneously, in recent years, not only the creation of a competitive environment but also the provision of a right to compensation for damages caused by an infringement of competition law, as a specific type of compensation outside the traditional branch of civil law, has been crucial in the EU. To address the peculiarities of compensation for damages in competition law, the EU adopted Directive 2014/104/EU. The adoption of Directive 2014/104/EU and the outline of its main provisions and principles were based on several landmark decisions of the CJEU. For Ukraine, the issue of compensation for damages in competition law is new and unexplored in the scientific, let alone legislative, field, as there are almost no scientific publications on this question.Therefore, it is vital for Ukrainian legal science and practice to explore the formation and development of provisions regulating the issue of compensation for damages caused by infringements of competition law in the judgments of the CJEU and EU legislation, as well as the fundamental principles and provisions set out in Directive 2014/104/EU. All eight principles, enshrined in the Damages Directive serve as a basis for numerous provisions of the Directive. Among these, the principle of full compensation for damages, which is reflected in almost every norm related to consumer rights, can be considered fundamental for the entire field of compensation in EU competition law.It is critical to implement the defined principles and other provisions of the Damages Directive in Ukrainian competition legislation once Ukraine wins the war.

Antitrust liability, corporate groups and M&A transactions: a tale of undertakings, economic continuity and effectiveness of EU competition law

ABSTRACT Who should be liable for competition law infringements? While the answer should be, in theory, a simple application of the personal liability principle – the infringer pays – the corporate changes that an infringer may undergo in the years necessary to come to an imputation of the infringement make the matter, in practice, significantly more complex. In this article, we first investigate the core of the antitrust liability theories, all to be traced back to the fundamental concept of undertaking, which constitutes their indispensable theoretical background. Then, we will try to provide an answer to the question, by analyzing, on the basis of the case-law, the multifaceted and colourful applications of antitrust liability theories to M&A transactions involving antitrust infringers. Lastly, we lay out practical suggestions which may be useful for companies to minimize the risks of being left with antitrust liability as a result of corporate transactions.

Text classification in fair competition law violations using deep learning

IntroductionEnsuring fair competition through manual review is a complex undertaking. This paper introduces the utilization of Long Short-Term Memory (LSTM) neural networks and TextCNN to establish a text classifier for classifying and reviewing normative documents.MethodsThe experimental dataset used consists of policy measure samples provided by the antitrust division of the Guangdong Market Supervision Administration. We conduct a comparative analysis of the performance of LSTM and TextCNN classification models.ResultsIn three classification experiments conducted without an enhanced experimental dataset, the LSTM classifier achieved an accuracy of 95.74%, while the TextCNN classifier achieved an accuracy of 92.7% on the test set. Conversely, in three classification experiments utilizing an enhanced experimental dataset, the LSTM classifier demonstrated an accuracy of 96.36%, and the TextCNN classifier achieved an accuracy of 96.19% on the test set.DiscussionThe experimental results highlight the effectiveness of LSTM and TextCNN in classifying and reviewing normative documents. The superior accuracy achieved with the enhanced experimental dataset underscores the potential of these models in real-world applications, particularly in tasks involving fair competition review.

The legal aspects of hotel rate parity

This research note delineates the conflict of hotel rate parity and key clauses of competition laws in both Europe and the U.S. We trace the origin of hotel rate parity to the principle of most favored nation (MFN) in international trade agreements. We show that rate parity challenges two pillars of competition law. Under rate parity agreements, it is travel intermediaries—not hotels—that demand rate parity, which comes down to the dominance of travel intermediaries over small and independent hotels. The courts view MFN status as a hindrance to competition and therefore in violation of competition law. The trend and message in Europe are clear: the clause is most likely to be judged as not complying with EU competition law and its national equivalents. In the U.S. though, a lack of case decisions precludes us from reaching any conclusion about the fate of the MFN clause.

Analysing Exclusive Dealing in Two-Sided Markets: Marketplaces for Video Games

Competition law in the EU has a rich history dealing with exclusive dealing (ED). Past economic analysis has informed the view that ED is not by its nature a tool of exclusion and can serve other goals and purposes. Yet, sometimes exclusive dealing may require economic analysis.1 This is particularly true when we look at entry into adjacent markets by large firms that are under greater scrutiny to begin with and whose business practices are sometimes generally under suspicion of having anticompetitive effects.2 This article proposes a theoretical framework and an empirical analysis for analysing ED in a two-sided market. I analyse Epic Games Store, an entrant into online computer game distribution which included ED as a cornerstone of its entry strategy. The purpose of the article is not to provide evidence of anticompetitive conduct in this special case. The conduct in our example is likely not in violation of European competition law as it is the entrant that uses ED to take on an incumbent with a very high market share. Instead, I demonstrate the trade-off between efficiency and consumer choice in a marketplace that can be analysed in the framework of two-sided markets. The economic theory of two-sided markets has gained increasing prominence in antitrust.3 However, analysis rarely moves beyond the assertion that traditional tests and tools are inappropriate and sometimes misleading.

When government sets prices: what can history teach us?

Agreements on prices by undertakings selling competing products are regarded as one of the most serious competition law infringements. This article considers what happens when government sets the prices at which those competing firms can sell their products. This article firstly examines the extensive use of government price controls in World War II. It then reviews early cases in the Restrictive Practices Court that considered the public interest (if any) in price stability. This article then touches on EU case law on when government involvement in price setting is acceptable or may provide some defence for undertakings and more recent EU legislation imposing price controls. Finally, the article draws the arguments for and against price fixing together to show what we can learn from the history of price controls. Current economic conditions and the range of solutions available to government make such a historical review both valuable and timely.

Inspections in Private Premises Under Slovak Competition Law: Did the Implementation of the ECN+ Directive Miss the Point?

We face the era when tech giants are getting ever more powerful, when there are subtle ways of collusion via algorithms, and when home offices are the new normal. One would expect competition authorities to have suitable tools to investigate any infringement of competition law even under these difficult conditions. Inspections are arguably the most powerful investigatory tool within the realm of the powers of competition authorities. Although inspections are very often conducted in business premises, there might be a need to search private premises too. Regulation 1/2003 has recognised this need for almost two decades. The ECN+ Directive expects national competition law to provide their competition authorities with the power to inspect non-business premises. How was this provision transposed into the Slovak legal order? What obstacles would the Slovak Antimonopoly Office (Slovak NCA) face if it wanted to conduct an inspection on private premises? These are the questions asked in this article. The article finds that, although the legislation itself seems in compliance with the ECN+ Directive, any attempt to conduct an inspection on private premises would be difficult. Particularly, we look into shortcomings related to the institution of the guardian who should be present during an inspection; and we present solutions de lege ferenda.

Compensation liability for antitrust damages caused by related companies – development of the concept of a single economic unit Case comment to the CJEU judgment of 6 October 2021 in case C-882/19 Sumal SL v Mercedes Benz Trucks España SL

The subject of this case comment is the analysis and assessment of the judgment of the Court of Justice of the European Union (CJEU) issued on 6 October 2021 in case C-882/19, brought by Sumal SL v Mercedes Benz Trucks España SL. The Sumal judgment concerns an important issue in the area of competition law, both public and private (private enforcement) – determining the group of entities responsible for infringements of competition law operating within one economic body. Earlier CJEU case law in this regard focused primarily on determining the liability of the parent company within a group of companies. In the Sumal judgment, however, the CJEU raised the issue of the liability of subsidiaries in the event of a breach of competition law by the parent company. The CJEU has by no means crossed out its earlier case law on the single economic unit, but looked at the issue from the opposite direction and specified the liability conditions of subsidiaries. Such clarification was undoubtedly desirable. However, it calls into question the principle of liability of subsidiaries in a situation where they were not directly involved in the infringement, rather than only indirectly or informally.