I have been nominated for two academic awards in the competition law & economics field:
1. Antitrust writing award
My article “Antitrust Compliance Programmes & Optimal Antitrust Enforcement: A Reply to Wouter Wils” has been nominated for the Antitrust Writing Awards 2014.
In that paper, I challenge the view traditionally held by the European Commission that the fact that a company has undertaken a robust compliance program should never be taken into account in the assessment of fines in case of cartel infringement.
If you want to vote for the paper, here is the link: http://awards.concurrences.com/academic-articles-awards/article/antitrust-compliance-programmes-411
2. GCR academic excellence award
I have been shortlisted for this award together with Daniel Sokol, C Scott Hemphill, Gregory Sidak, and John Vickers
If you want to cast your vote (seems to only work for those having access to GCR), here is the link: http://globalcompetitionreview.com/news/article/35268/gcr-awards-2014-voting-open/
Many thanks in advance.
The Harvard European Law Association is putting together a very nice programme where I will give a keynote speech and chair a couple of panels.
Harvard European Law Association
Informal Enforcement of Competition Law: Perspectives from the U.S. And Europe
March 24, Center for European Studies, Harvard University
Welcome: Pieter-Augustijn Van Malleghem (HELA) (9-9.10)
Opening Speech: An Enforcer’s View: Prof. Jacques Steenbergen (Belgian CA), The Informal Competition Policy of the Belgian Competition Authority (9.10-9.30)
Chair: Prof. Jacques Steenbergen
Anna-Louise Hinds (NUI Galway), Cartel Settlement in EU Competition Law – A Potential Compliance Impact?
Niels Baeten (Linklaters), Combined Lenience/Settlement Cases as the new normal in EU Cartel Enforcement: challenges & opportunities
Georges Georgiev (UCLA), The EU’s 2013 Proposal for a Directive on Antitrust Damages Actions: A Comparative Assessment
Coffee Break: 10.50 – 11.05AM
Keynote 1: Prof. Damien Geradin (11.05-11.25AM)
Chair: Prof. Damien Geradin
Giovanna Massarotto (Criterion Economics), Antitrust Enforcement – The Crucial Role of Consent Decrees
Urska Petrovcic (EUI), Antitrust Settlements in Innovative Industries – The Case of Standard Essential Patents
Yane Svetiev (EUI), Settling or Learning: Commitment Decisions as a New Competition Enforcement Paradigm in the EU
Keynote 2: Prof. Einer Elhauge (1.45-2.05PM)
Chair: prof. E. Elhauge
Maurice Stucke (UTK), In Search of Effective Ethics & Compliance Programs
Matthew Jennejohn (BYU), Innovating Merger Review Outcomes
Mislav Mataija, (Uzagreb/EUI), Regulating the Regulators through Competition Law: Voluntary Private Regulation as an Alternative to Direct Enforcement?
Coffee Break: 3.25-3.40PM
Chair: Prof. D. Geradin
Damien Gerard, (UCLouvain/CGSH), Negotiated Remedies in the modernization era: the limits of effectiveness
Florian Wagner von Papp (UCL), Out-Lawing Antitrust
Georges Vallindas (ECJ), Is a Triple Cheeseburger easy to eat? EU’s Architecture facing non-litigation competition enforcement
Closing Remarks: Prof. Damien Geradin
Here is my last paper.
The January 2012 decision of the Italian Competition Authority (“ICA”) to fine Pfizer and Pharmacia €10.6 million is an illustration of the more aggressive trend taken by competition authorities in the pharmaceutical sector. In this case, the ICA alleges that the parties sought to delay entry of generic suppliers by implementing a “complex strategy” to “artificially” extend its patent rights, hence committing an abuse of a dominant position in breach of Article 102 of the Treaty on the Functioning of the European Union (“TFEU”).
The purpose of this paper is to show that the decision of the ICA is fundamentally flawed as it fails to provide any evidence that the parties’ patent filings were misleading or “artificial” under the applicable patent laws. Instead, the decision is based solely on the ICA’s unsubstantiated view that Pfizer’s conduct did not constitute “competition on the merits”, a vague standard unable to satisfy the basic requirements of the rule of law and legal certainty. Following this unreasoned decision, pharmaceutical companies and their counsel face an impossible task of assessing which IP strategies are compatible with competition law. This legal uncertainty, combined with the risk of large fines, means that pharmaceutical firms may no longer dare to take steps to obtain patent protection to which they are legally entitled, and more importantly, may have less incentive to invest in future research and development.
I have recently authored two papers dealing with the issue of FRAND in the context of standardization
Although much of the policy debate has focused during the past several years on the availability of injunctions to enforce SEPs against infringers, the meaning of FRAND remains of considerable importance in a context where there may be a need for settling SEP-related licensing disputes through third party determination of FRAND terms. For instance, Judge Robart in the Western District of Washington in Microsoft Corp. v. Motorola, Inc., set a both FRAND rate and range per unit for the Motorola’s video coding and wireless networking patents,for the purpose of helping the jury to determine whether Motorola had breached its FRAND commitment. More recently, Judge Holderman of the US District Court for the Northern District of Illinois Eastern Division in In re Innovatio IP Ventures, LLC determined the FRAND rate per chip that manufacturers had to pay to Innovatio for licensing its wireless networking patents.
Given the positions recently adopted by the FTC in its Google consent decree and the growing interest of scholars and practising lawyers in the potential need for third party determination of FRAND terms, there are reasons to believe that Judges Robart and Holderman’s decisions will not remain isolated and that parties to licensing negotiations will increasingly resort to courts or other forms of third-party determination, such as arbitration, to have them set the terms on which they are unable to reach an agreement. This raises the question of which methodologies these courts or arbitration tribunals should use when asked to set FRAND-compliant licensing terms.
There is a large strand of legal and economic literature suggesting the FRAND regime is broken and that standardization is at risk given “hold-up and “royalty stacking” problems. A variety of proposals have been made to address these alleged problems, most of which seeking to decrease the bargaining power of essential patent holders to the benefit of standard implementers. The hold up and royalty stacking conjectures have been questioned by a number of authors essentially on the ground that these theories contained logical inconsistencies, but also that they were not based on sufficient empirical support to warrant policy reforms. Against this background, this paper explains why hold up and royalty stacking only occur in rare circumstances given the private solutions that are available to standard implementers to avoid paying license fees that are not FRAND or that would aggregate to a level that would render the implementation of the standard more difficult or even impossible. Given the dearth of empirical evidence over hold up and royalty stacking, this paper also looks at the evolution of the mobile communication sector in the past decade to see whether the alleged adverse consequences (in terms of harm to standard implementation, innovation and investment and the continuity of the standardization process) that would be created by hold up and royalty stacking can actually be observed. The available data suggests that the mobile communication device markets are healthy despite the fact that these markets have been said to be harmed by regular SEP-related abuses. Although it could be argued that these markets would be even healthier “but for” SEP abuses, the available data should give pause to those claiming that significant reforms should be made to the FRAND regime. In fact, the high degree of competition in the above markets and the presence of highly successful entrants that do not have a track record in the development of mobile communication technologies strongly suggest that the FRAND regime has largely worked in that it has stimulated the broad licensing of SEPs while maintaining a fair balance between the interests of SEP holders and standard implementers.
I attach the slides of the presentation I made last week on the above subject at the conference held in Bruges to celebrate the 10th anniversary of the Global Competition Law Centre (GCLC)'s creation.
I was lucky to take part in a great panel with Judge Alan Rosas, Sir Francis Jacobs, and Eric Gippini-Fournier.
My presentation focused on two themes:
- why is the case law on Article 102 TFEU much less conceptually clear than the case law on Article 101 TFEU. The early preliminary rulings adopted by the CJEU in the 60s and 70s may be part of the explanation; and
- why preliminary rulings are so critical to the evolution of the CJEU case law in competition law, in particular given the large number of settlements adopted by the Commission.
The CJEU published on 6 June 2013 its long-awaited judgment in Donau Chemie. This is the first case after Pfleiderer in which the CJEU looks at the issue of access to cartel case files, including leniency documents. In yesterday’s judgment, the CJEU recalled all the principles of Pfleiderer but did little to clarify them and provide further guidance.
The facts of the case are as follows. After a leniency application, the Austrian Competition Authority brought a case before the Cartel Court of Vienna concerning a cartel of wholesalers of printing materials. The Cartel Court found that Article 101 was infringed and imposed fines. One year later, an industry association considered filing an action for private damages against the cartelists and requested access to the file of the Cartel Court. However, according to Austrian cartel law, access to the case file can only be given with the consent of all the parties to the proceedings. The parties can refuse to give such consent, without necessarily giving any reasons. The Cartel Court sent a preliminary question to the CJEU asking whether this provision is in line with EU law.
In the Donau Chemie judgment, the CJEU reminded the principles of Courage and Crehan. It stated that it is for the Member States to establish procedural rules concerning competition damages claims and highlighted that these rules should not make it practically impossible or excessively difficult to claim competition damages, thereby jeopardising the effectiveness of the very right to private enforcement (para. 27). By adopting the traditional Courage and Crehan test, the CJEU disagreed with AG Jääaskinen who proposed a revision of this test in the light of Article 47 of the Charter of Fundamental Human Rights and Article 19(1) TEU. According to the AG, it does not suffice that procedural rules do not render damage claims “practically impossible or excessively difficult”, but they must also ensure that such claims can be made in an “accessible, prompt and reasonably cost effective” way (para. 47 of the Opinion).
Against this backdrop, the CJEU looked at the specific provision in Austrian law and concluded that this rule does jeopardise the effectiveness of the right to private enforcement of competition rules (para. 39). The CJEU insisted that “any request for access to the [cartel file] must be assessed on a case-by-case basis [by the national courts], taking into account all the relevant factors of the case” (para. 43). The CJEU also dismissed the Austrian government’s point that broad access to the cartel file could undermine leniency programmes: “[g]iven the importance of the actions for damages brought before national courts in ensuring the maintenance of effective competition in the EU… the argument that there is a risk that access to evidence contained in a file in competition proceedings… may undermine the effectiveness of a leniency programme… cannot justify a refusal to grant access to that evidence” (para. 46).
To conclude, Donau Chemie reiterated Courage and Crehan’s and Pfleiderer’s basic principles but did not take any step further to: (i) clarify the principle of effectiveness in the light of the Charter and the TEU; nor to (ii) elaborate on the criteria for the case-by-case assessment. Hopefully, the Commission’s proposed legislation (forthcoming by the end of this month) will shed more light on both these issues.
Last week, the General Court (“GC”) adopted its judgment in the CISAC case whereby it partially annulled the 2008 Commission’s decision. CISAC is an international organisation which represents collecting societies. Collecting societies manage copyright acquired either directly from the authors (e.g., of musical works) or indirectly from other societies and grant exploitation licenses of such rights to commercial users. CISAC drew up a model contract for Reciprocal Representation Agreements (“RRAs”) between societies. The Commission did not question the necessity for collecting societies to cooperate through RRAs but it did found that there was a breach of Article 101(1) TFEU as regards (i) the membership clause of the model contract, which restricted the authors’ ability to affiliate freely to the collecting society of their choice; (ii) the exclusivity clause of the model contract, whereby collecting societies were given absolute territorial protection to grant copyright licences in their territory; and (iii) the existence of national territorial limitations in all RRAs, which the Commission considered as being the result of a concerted practice. No fine was imposed on CISAC nor on the collecting societies.
CISAC appealed against the Commission’s decision in relation to the concerted practice allegations. As it had already amended the model contract before 2008, it did not contest the Commission’s findings on membership and exclusivity clauses. In its appeal, CISAC alleged that the Commission had not proved the existence of a concerted practice and that, in any event, such a practice would not be restrictive of competition. The GC applied the standard in PVC II and looked at (i) whether the Commission had documentary evidence supporting its findings and if not, (ii) whether it had rendered implausible all other explanations of the societies’ parallel conduct before concluding that it involved a concerted practice.
-- The Commission itself accepted that there was no documentary evidence (para. 103). Interestingly, the GC criticised such an absence of documents given that the Commission was supported in its investigation by certain collecting societies which wished to abandon the RRAs and which could easily provide documentary evidence (para. 104).
-- The GC then turned to examine whether the Commission had collected sufficient evidence to render implausible all other explanations of the parallel conduct before concluding on the existence of a concerted practice. The GC considered that the need to monitor and fight against unauthorised use of musical works in each territory was a plausible explanation for the existence of national territorial limitations (para. 181). This is well in line with the principles established by the CJEU in Tournier and Lucazeau (para 137). The GC found that the Commission had not convincingly justified why the monitoring explanation was implausible (paras. 134-180).
Another interesting point in this case is that in its decision the Commission only challenged the territorial restrictions with respect to three forms of commercial exploitation – via internet, satellite and cable. However, the GC pointed out that the model contract and the RRAs had been in place years before these technologies developed (para. 129). The arrival of new technologies cannot automatically turn existing structures for collective management into anti-competitive behaviour (para. 130).
The GC judgment offered welcome clarifications on the notion of concerted practice for collecting societies but also has ramifications beyond the field of Competition Law. For example, it will likely influence the discussions regarding the Directive Proposal on collective management of copyright and related rights for online uses of musical works in the internal market.
Over the past year, merger activity in the Greek banking sector picked up significantly. The Greek Competition Authority approved concentrations such as Piraeus/ ATE, Alpha/ Emporiki, and Piraeus/ Geniki. Most recently, a merger between the largest Greek bank, NBG, and the third largest Greek bank, Eurobank, was also cleared, after the companies offered to divest Eurobank’s stake in Cardlink. Cardlink was a joint venture with the participation of Eurobank and Alpha (the second largest bank) and it handled credit card transactions between banks and merchants, supplying electronic bank card terminals to the latter. The divestment of Eurobank’s stake in Cardlink opens the door for Cardlink’s competitors to service NBG/ Eurobank after the merger. It also removes concerns about possible collusion between the merged entity and Alpha to coordinate behaviour in the merchant acquiring market.
Following the clearance, NBG and Eurobank began integrating their operations. The NBG/ Eurobank merger was expected to bring economies of scale of EUR 630 million by 2015, without creating abuse of dominance issues. Overall, the raft of banking consolidation in Greece was celebrated as a positive development. It was seen as a process, at the end of which “three large strong banks and a few smaller banks will remain”, according to the Head of the Bank of Greece.
Until last week. At that point, concerns were voiced for the first time that the NBG/ Eurobank merger would form a bank too big relative to Greece’s GDP, possibly leading to Cyprus-like problems. Taking into account these concerns, Greece decided to suspend the merger. Now, NBG and Eurobank will be recapitalised (separately) by the state bank support fund (HFSF), unless they manage to prove that they can raise 10% of the needed capital from the private sector. Both NBG and Eurobank stated that this might not be possible. So, if recapitalisation takes place with 100% HFSF capital, it is the state bank support fund that will control the two banks in the future and thus, re-assess and decide again whether the merger should go forward.
The bottom-line is that in economies facing sovereign debt crises, the clearance of the NCA is not sufficient and a merger can still have many more adventures after that. As the Commission’s spokesperson put it last Friday, one might have to go beyond the application of the “mainstream” merger rules. Έπεται συνέχεια...
Here is the abstract of my new paper:
In the inaugural issue of the Journal of Antitrust Enforcement, Mr. Wils published an article discussing the relationship between compliance programmes and competition law enforcement in the EU. This paper questions some aspects of Mr. Wils’ analysis of compliance programmes, as well as some of its policy prescriptions. The core theme of Mr. Wils’ article is that there are sound policy reasons why the European Commission and the US Department of Justice Antitrust Division do not, and should not, grant a reduction in the amount of fines imposed on companies that have a pre-existing compliance programme. The present paper disagrees with this view and explains why compliance programmes should be rewarded by competition authorities.