POSITIVE DECISIONS IN EU COMPETITION POLICY

Transcription

1 POSITIVE DECISIONS IN EU COMPETITION POLICY GCLC 10th Annual Conference 05 November 2014 Prof. Nicolas Petit Liege Competition and Innovation Institute (LC

2 PURPOSE OF THE PRESENTATION ssues. Guidance output since R1/2003. Role of individual positive decisions in the Commission s Guidance mix. Guidance >< advocacy. Guidance to firms Structure Has the Commission issued Guidance since R1/2003, to what extent, in what forms? Should the Commission adopt more positive decisions under Article 5 and under the Notice on Informal Guidance?

3 THE COMMISSION S UIDANCE MIX SINCE R1/2003 1

4 BUSINESS AS USUAL No change in guidance where stable Subcontracting Notice Market Definition Notice Standard updating of existing Guidelines, Communications and Notices Verticals, horizontals, technology transfer, setting of fines and other issues New instruments to respond to novel needs Commission Communication on quantification of harm; Notice on the conduct of settlement proceedings; Notices on Best practices in 101 and 102 proceedings; Best practices on submission of economic evidence

5 SUBSTANTIVE NOVELTIES Abstract examples in Guidelines, see HCG Qualitative safe harbours, see HCG re. standardisation agreements New chapters on Internet distribution in VG and on information exchange in HCG Chapter on environmental agreements ditched of HCG Evolving list of restrictions in Guidance on restriction by object, which «DG COMP s intends to regularly update» Guidance on enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings

6 PROCEDURAL AND INSTITUTIONAL NOVELTIES Guidance Proliferation? Guidance document, Better regulation: a guide to competition screening, Commission Staff Working Document Guidance «on restrictions of competition "by object" for the purpose of defining which agreements may benefit from the De Minimis Notice» Use of Article 9 decisions ( Although they do not create as strong a legal precedent as an Article 7 prohibition decision, Article 9 decisions may also provide guidance to companies (Competition Policy Brief, March 2014) EDF Long Term Contract, 2010 Siemens/Areva, 2012 Forced Guidance? TTBER revision Hidden Guidance? COMP s Guidance on restrictions of competition by object, p5 Schizophrenic Guidance? COMP v LS v CET v HO: «Guidance Communication» v «Priorities paper» (Wils, 2014) Networked Guidance ECN heavy involvment in drafting of HCG, in particular on information exchange

7 STATE OF PLAY (1) Much Guidance issued since entry into force of R 1/2003 n numerous forms, about many subjects, including new ones No such thing as a «Guidance desert» in modern EU competition law But no such thing as a «Guidance policy» either The Commission has never made a case-specific finding of inapplicability under Article 10 Neither has it issued a Guidance letter Commission has monopoly on positive guidance in individual cases: Tele2 Polska, 19-30; Schenker, 42 Demand for such tools exists (Waelbroeck, Bourgeois and others) Output restriction, leading to «guidance gap»?

8 STATE OF PLAY (2) truments R 1/2003 mmunicatio Notices, delines, cle 7 isions cle 9 isions cle 10 isions dance ers rmal dance Scope Timing Content Author Practice Generic Ex ante Positive and negative College Case-specific Ex post Negative College Y Case-specific Ex post Negative College Y Case-specific Ex post Positive College N Hybrid Ex ante Positive and Negative Hybrid Ex ante/ex post Positive and Negative College College, COMP Y N Y

9 SHOULD THE COMMISSION ISSUE MORE POSITIVE DECISIONS IN INDIVIDUAL CASES? 2

10 POSITIVE DECISIONS Article 10 decisions Acquittals (or exculpatory decisions) Reasoning (distinct from closure of proceedings) Operative part (distinct from letters rejecting complaints) Case specific (distinct from general guidance) Ex post 101(3); abuse of a dominant position; agreement between non undertakings; etc.

11 I. PRINCIPLED ARGUMENTS Reasons against rticle 10 is not a guidance nstrument eeks to offer exit route for Article 1(6) if agency wrongly forbidds awful conduct (false positive) Case for Legislative intent of the Council 14: «clarifying the law and ensuring it consistent application throughout the Community»

12 II. POLICY ARGUMENTS Reasons against certain indeterminacy is necessary o keep a degree of deterrence Schinkel, 2010) Case for Indeterminacy is not causal in deterrence In many areas of law, high deterrence rates coexists with substantive determinacy (tax, safety regulation, pollution safety) Compliance is cost center for companies: incentives to invest in compliance are a twin function of benefits (fines avoidance) and costs (counselling); Guidance decreases second variable

13 III. PRACTICAL REASONS. We had «no good case» to issue a positive decision under Article 10. No willingness to «invest» scarce resources on individual positive decisions. Negative decisions give guidance. Individual positive guidance given through «publication of rejection decisions». Law is clear. Lack of EU Courts precedents. Risk of re-notification through the backdoor

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15 1. NO GOOD CASES? + cases in which no formal proceedings were opened Euronext, Annual Report, 2005, 120: The issues investigated were possible rebates and exclusionary behaviour. In October, the Competition DG decided not to pursue the investigation as, at a preliminary stage, no evidence of abuse was established. Indeed, the reduction in Euronext s prices had benefited users and the continued presence of London Stock Exchange in the Dutch equities trading market appeared to prevent Euronext from returning to its original pricing levels Velux, Competition Policy Newsletter 2, 2009: the Commission s investigation showed that Velux had designed a conditional rebate system without any anticompetitive foreclosure effects, that is, competitors were not foreclosed in a way that could cause likely harm to consumers

16 2. NO RESOURCES TO «INVEST»? Argument Commission has scarce resources Does not want to «invest» esources on individual guidance hrough positive decisions More pressing issues Rebuttal In principle, at late stage where inapplicability becomes clear, investigative resources have been sunk so there is no longer an investment decision to make Unless the case is early screened as weak, in which case investment will be presumably low

17 3. NEGATIVE DECISIONS GIVE GUIDANCE? J. Coffee, Law and the Market: The Impact of Enforcement, University of Pennsylvania Law Review, Vol. 156, No. 2 (Dec., 2007), pp Welfare effects of enforcement intensity on financial markets : FSA s gentle guidance v SEC s deterrence through sanctions Depends on type of conduct FSA soft policy may work well for certain types of conduct, but not for predatory behavior like insider trading; Conversely, SEC s sanctions may over deter good conduct Antitrust implications?

18 4. BEST PRACTICE TO PUBLISH DECISIONS REJECTING COMPLAINTS 150: In the interest of transparency, the Commission intends to make public on its website its decisions rejecting complaints (pursuant to Article 7 of the Implementing Regulation) or a summary thereof Good re. rejection on substantive grounds is concerned, but does not dry up the need for more formal guidance: Low value: It does not bless the agreement or practice complained of. Rejection of a complaint by the Commission is without prejudice to NCAs or national courts acting regarding the same case (ManProc, Chapter 21) Many complaints rejected under the wide lack of EU interest box (+ lack of substantiation and lack of procedural grounds ) Timing is slow

19 5. LAW IS CLEAR (1)? Existing law is clear (Wils, 2005) No need for more through case-specific, positive decisions Case-specific positive guidance is useful Recognized complementarity between generic and case-specific guidance (Guidelines on 101(3) on out of market efficiencies and Star Alliance case) Emerging practice of recourse to individual Article 9 decisions to provide positive safe harbours Samsung, 2014, 122: «safe harbour» for potential licensees and dominant IP holder Siemens/Areva, 2012 Issuance of reasoned letters rejecting complaints (Port of Helsingborg in excessive pricing literature) Huge impact factor in academic and practice-oriented literature

20 5. LAW IS CLEAR (2)? W. Wils (2005) said three conditions had to be met: all existing information is made publicly available underlying conceptions of the law are broadly understood by the business and legal communities the content of the law is not dependent on discretionary political decisions adding: three conditions [ ] are fulfilled in the case of Articles 81 and 82 EC today Condition 2 and 3 are problematic Underlying conceptions Objective of competition law still unsettled Competing underlying conceptions (forms v effects) wihtin COMP? Discretionary political decisions?

21 6. ABSENCE OF BINDING PRECEDENT Wils, 2011: «On questions of interpretation on which the Court has not yet spoken, the Commission may provide its own interpretation, provided that hese additions are coherent with the case-law of the Court of Justice, and hat the communication does not create any confusion as to what is the Court's case-law and what is the Commission's additional interpretation, and does not suggest that the Commission's interpretation is binding» Preemptive Guidance Samsung and Motorola 2014

22 7. NOTIFICATION THROUGH THE BACKDOOR? Article 10 applies in context of suspected infringements Commission is thus already investigating ex officio or upon formal or informal complaint Thus, not a request for blessing => The re-notification argument is thus only elevant for guidance letters The guidance letter Notice sets a very high standard for accepting to issue «Brussels» legend argument? See statistics? Not credible: notification everywhere, in State aid, in Mergers, in cartels and soon on Minority shareholdings

23 NOTIFICATIONS (AR 1997-AR 2003) The image part with relationship ID rid2 was not found in the file.

24 WAY FORWARD? (2). Constitutional issue General requirement of the «rule of law». See Hadfield and Weingast, 2012: prospectivity is what defines the rule of law; Beccaria, «Nullum crimen, Nulla poena sine lege» certa; Rise of transparency issues. Economic issue Ex post individual guidance is optimal when behavior is infrequent. L. Kaplow, «Rules v Standards, An economic Analysis», Duke Law Journal, Vol. 42, No. 3 (Dec., 1992), pp

25 WAY FORWARD? (2) Mindset issue From «Cop» competition to «Coach» competition Or from «Bad Cop» Competition to «Good Cop» Competition «Look tough» Qualcomm case: repugnancy to admit that a case is closed: «complaints have been withdrawn» Peering telecoms case closed on the same day as headline grabbing Facebook/Whats app approval Practicalities Options Issue Article 7 decisions with reasoning on dismissed allegations Like CJEU NCAs practice circumvents Tele2 Polska (Belgian agency in Electrabel)) Issue letters rejecting complaints with more reasoning Disclose preliminary assessment Issue Article 10 decisions Perception Say it Why accept that a behavioral remedy restores competition, and refuse to say that conduct is procompetitive?