Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Saturday, August 25, 2012

Call for papers: "The evolution of antitrust public enforcement"

Posted by D. Daniel Sokol

The Italian annual journal "Concorrenza e mercato" (Giuffre Publ.), whose 2012 issue has just been published, invites submission of full papers for publication in the next issue (forthcoming 2013). Contributions are invited on the topic: "The evolution of antitrust public enforcement". Completed papers should be submitted by December 31, 2012. The Journal also welcomes, by the same deadline, contributions on competition law and economics dealing with issues other than that above mentioned.

August 25, 2012 | Permalink | Comments (1) | TrackBack (0)

Reach Out to a Wide Audience

Posted by D. Daniel Sokol

The Taiwan FTC makes an effort to Reach Out to a Wide Audience.

ABSTRACT: Although the FTC has received individual satisfactory surveys from key audience members after each competition advocacy activity, and has published annual performance evaluations of its outreach program, it was concerned that the effectiveness of its competition advocacy intervention might not be completely reflected due to diverse evaluation criteria. In this context, the FTC called on an external expert in 2011 to assess the effectiveness of its competition advocacy and a survey was conducted, focusing on regulatory agencies that have received advices from the FTC as well as firms that have participated in advocacy events for competition in the past two years. The results of this survey are as follows:

1. 89 percent of target respondents from other governmental agencies agreed that suggestions and advices provided by the FTC are helpful for future decisions. 87 percent of respondents agreed that they would take FTC's advices into account when reviewing current policies, or use them as references for developing future policies.

2. 77 percent of target respondents from the business sector replies that they have a better understanding of competition laws after attending competition advocacy activities. More than 90 percent of respondents recognized that the outreach program could effectively assist business in building a corporate image of integrity and reducing the risk of competition law infringement. In response to this survey it is suggested that it would be of help if the outreach could be held in cooperation with business associations or industrial sectors.

Advocacy has been among the FTC's most important functions apart from law enforcement. The results of this outside report expressly show that the current outreach and competition advocacy programs have delivered a clear and consistent message to regulators, business, and consumers -that competition plays such a vital role in the market economy.

August 25, 2012 | Permalink | Comments (0) | TrackBack (0)

Friday, August 24, 2012

The Impact of Telecommunication Technologies on Competition in Services and Goods Markets: Empirical Evidence

Posted by D. Daniel Sokol

Vahagn Jerbashian and Anna Kochanovay (CERGE-EI) offer The Impact of Telecommunication Technologies on Competition in Services and Goods Markets: Empirical Evidence.

ABSTRACT: In this paper we empirically show that a more intensive use and wider adoption of telecommunication technologies significantly increases the level of product market competition in services and goods markets. Our result is consistent with the view that the use of telecommunication technologies can lower the costs of entry. This finding is robust to various measures of competition and a range of specification checks.

August 24, 2012 | Permalink | Comments (0) | TrackBack (0)

Does Multimarket Contact Facilitate Tacit Collusion? Inference on Conduct Parameters in the Airline Industry

Posted by D. Daniel Sokol

Federico Ciliberto, University of Virginia and Jonathan W. Williams, University of Georgia ask Does Multimarket Contact Facilitate Tacit Collusion? Inference on Conduct Parameters in the Airline Industry.

ABSTRACT: We provide empirical evidence to support the hypothesis that multimarket contact facilitates tacit collusion in the US airline industry using two complementary approaches. First, we show that the more extensive is the overlap in the markets that the two firms serve, i) the more firms internalize the effect of their pricing decisions on the profit of their competitors by reducing the discrepancy in their prices, and ii) the greater the rigidity of prices over time. Next, we develop a flexible model of oligopolistic behavior, where conduct parameters are modeled as functions of multimarket contact. We find i) carriers with little multimarket contact do not cooperate in setting fares, while we cannot reject the hypothesis that carriers serving many markets simultaneously sustain almost perfect coordination; ii) cross-price elasticities play a crucial role in determining the impact of multimarket contact on collusive behavior and equilibrium fares; iii) marginal changes in multimarket contact matter only at low or moderate levels of contact; iv) assuming that firms behave as Bertrand-Nash competitors leads to biased estimates of marginal costs.

August 24, 2012 | Permalink | Comments (0) | TrackBack (0)

Bargaining, vertical mergers and entry

Posted by D. Daniel Sokol

Geza Sapi (Dusseldorf Institute for Competition Economics) discusses Bargaining, vertical mergers and entry.

ABSTRACT: This paper analyzes vertical integration incentives in a bilaterally duopolistic industry where upstream producers bargain with downstream retailers on terms of supply. In the applied framework integration does not affect the total output produced, but it affects the distribution of rents among players. Vertical integration incentives depend on the strength of substitutability or complementarity between products and the shape of the unit cost function. I demonstrate furthermore that in contrast to the widely prevailing view in competition policy, vertical integration can under particular circumstances convey more bargaining power to the merged entity than a horizontal merger to monopoly. The model is applied to analyze strategic merger incentives to influence entry decisions. Mergers can facilitate and deter entry. While horizontal mergers to deter entry are never profitable, firms on different market levels may strategi! cally choose to integrate vertically to keep a potential entrant out of the market. I provide conditions for such entry-deterring vertical mergers to occur.

August 24, 2012 | Permalink | Comments (0) | TrackBack (0)

Thursday, August 23, 2012

Kovacic on Robert C. Marshall & Leslie M. Marx, The Economics of Collusion – Cartels and Bidding Rings

Posted by William E. Kovacic

No modern development in antitrust law is more striking than the global acceptance of a norm that condemns cartels as the market’s most dangerous competitive vice.  As the 1990s began, only the United States and a few other jurisdictions actively challenged horizontal price-fixing, bid-rigging, and market allocations.  By the decade’s end, lysine, leniency, and vitamins had changed all of that. Today, more and more antitrust systems treat cartels as serious offenses.  

Expanded prosecution of cartels with increasingly powerful sanctions has inspired an abundance of excellent books about collusion.  Recent superb volumes include collections of essays on the operation, detection, and punishment of cartels.[1]  With Economics of Collusion, Robert Marshall and Leslie Marx have surpassed a formidable field.[2]  Economics of Collusion is the best single volume yet written about the formation and operation of cartels and bidding rings.  It is destined to be an indispensable text for enforcement officials, academics, business procurement officials, and practitioners in law firms and economic consultancies.

Three features of the book stand out.  First, in examining how cartels function, Marshall and Marx combine a state-of-the-art distillation of economic theory with a comprehensive reading of publicly
available accounts of prosecuted cartels, especially the cartel decisions of the European Commission. In several chapters, the authors present the material with first person narration from the perspective of a fictional business manager who instructs managers from rival companies about the best ways to design and implement collusive schemes.  By setting out the gains that conspirators can realize, the narrative underscores why firms strive (and will continue to strive) to find inventive means of coordination to counteract enhancements in anti-cartel enforcement.  The portrayal of coordination problems and their solutions is highly instructive -- and so well-informed and powerfully realistic that it has a how-to-build-a-nuclear-weapon quality for prospective cartel participants.

A second valuable feature of The Economics of Collusion is its pathbreaking analysis of what cartels must do to succeed. Marshall and Marx model cartels as two-stage mechanisms whose effectiveness often requires the application of collusive and exclusionary tactics.  In the first stage participants reach a consensus about how they will restrict output or, in the case of a bidding ring, depress the price to be offered at an auction.  In an especially important contribution to the literature, Marshall and Marx illuminate what happens next.  Not only must the cartel cope with cheating and defections within its own ranks, it must neutralize challenges posed by entrants, suppliers, customers, substitute products, and rivals which chose not to join the conspiracy.  Marshall and Marx adapt Michael Porter’s “five forces” model to identify the external threats to the cartel and to examine how successful cartels cope with them.  In many instances, cartels address stage-two threats with exclusionary tactics that individual dominant firms use to chasten rivals.  Among other means of exclusion, cartels engage in predatory pricing, file vexatious patent infringement suits, and form exclusive dealing contracts with upstream suppliers.  By analyzing cartels as two-stage mechanisms, Marshall and Marx show how successful collusion often requires recourse to exclusionary behavior, as well.

In a third important contribution, this volume draws upon experience with cartels to suggest refinements in the approaches that antitrust law uses to define concerted action and to analyze horizontal mergers.  Marshall and Marx propose a reformulation of the assessment of “plus
factors” as tools to distinguish concerted action from unilateral behavior.  They identify a category of
“super plus factors” entitled to special weight based upon their importance to the operation of a cartel.  The authors also describe how close study of past cartels (especially the vitamins cartel)
provides lessons for the analysis of possible coordinated effects from a horizontal merger.

One useful addition to the book would have been a concluding chapter that drives home more expressly and completely the interconnections among what often are seen as the distinct subject areas of cartels, dominant firm misconduct, and mergers.  The analysis of cartels as two-stage mechanisms and the application of cartel experience to the treatment of coordinated effects in merger enforcement go a great distance to discourage the traditional tendency to study cartels, mergers, and single-firm conduct in airtight compartments.  A final chapter that emphasized the conceptual links across these previously discrete areas of analysis would have made a great book even more impressive.

[1] Examples include Criminalising Cartels (Caron Beaton-Wells & Ariel Ezrachi, eds., Hart, 2011); John Connor, Global Price Fixing (2d edition, Springer, 2008); Handbook of Procurement (Nicola Dmitri, Gustavo Piga & Giancarlo Spagnolo eds., Cambridge, 2006). European Competition Law Annual 2006: Enforcement of Prohibition of Cartels (Claus Dieter Ehlermann & Isabela Atanasiu eds., Hart, 2007).

[2] In offering this opinion, I am not an entirely disinterested observer.  I have co-authored papers with Marshall and Marx and have worked with them on various projects involving antitrust law and procurement policy.

August 23, 2012 | Permalink | Comments (0) | TrackBack (0)

Ten Years of Pros and Cons Conferences

Posted by D. Daniel Sokol

Arvid Fredenberg (Swedish Competition Authority) describes Ten Years of Pros and Cons Conferences. As a participant in one of these conferences, I should add that I think that the Swedish Competition Authority really does a nice job in putting together good themes and a lively debate.

ABSTRACT: It could have started better. Einar Hope, former Director-General of the Norwegian Competition Authority and Professor of Energy Economics at the Norwegian School of Economics and Business Administration phoned in on September 5, 2002 to say that he had sprained his ankle and was unable to attend the conference. He was supposed to be the moderator of the Swedish Competition Authority's first Pros and Cons conference, the Pros and Cons of Merger Control. When Director-General Ann-Christin Nykvist next day entered the stage in the meeting room Trafalgar in a hotel in the Old Town of Stockholm she did not know that it marked the beginning of a now ten-year old tradition of organizing Pros and Cons conferences....Among the research seminars we arrange, the series of Pros and Cons conferences are our success story. We have covered numerous topics throughout the years. We always try to set a timely topic in order to stimulate discussions and let the input from the researchers influence the agenda. A timely topic is one of the keys to our success in organizing conferences. Finding the best mix of researchers and discussants to get a thought-provoking discussion is another.

August 23, 2012 | Permalink | Comments (0) | TrackBack (0)

American Needle Inc. v. NFL

Posted by D. Daniel Sokol

Matt Mitten, Marquette University - Law School has written on American Needle Inc. v. NFL.

ABSTRACT: In American Needle, Inc. v. National Football League, a 2010 case, the United States Supreme Court unanimously held that the National Football League (NFL) clubs’ centralized and exclusive licensing of their individual trademarks through a wholly owned league subsidiary is not immune from judicial scrutiny under §1. This landmark decision has broad implications because its rationale suggests that all collective decisions by a U.S. professional sports league’s member clubs that reduce intrabrand economic competition among themselves (e.g., joint decisions regarding the ownership, number, and geographical location of teams, restrictions on the sale of broadcasting rights, labor relations issues, etc.) are subject to §1. Before describing and analyzing American Needle, this chapter explains how U.S. major professional sports leagues are structured and governed and briefly surveys the rulings of lower courts, which generally rejected the single entity defense. It concludes by reviewing how lower courts have applied American Needle to subsequent sports antitrust litigation and scholarly commentary regarding its future application to professional sports leagues.

August 23, 2012 | Permalink | Comments (0) | TrackBack (0)

Looking at the Monopsony in the Mirror

Posted by D. Daniel Sokol

Maurice E. Stucke, University of Tennessee College of Law is Looking at the Monopsony in the Mirror.

ABSTRACT: Although still a distant second to monopoly, buyer power and monopsony are hot topics in the antitrust community. Despite the increasing interest in monopsony and buyer power, relatively few cases have actually been brought. Given the relatively few antitrust cases, the legal standards for monopsony claims are less developed than for monopoly claims. In recent years, courts, competition agencies, and scholars in addressing monopsony begin with a simple premise: monopsony is the mirror image of monopoly. But as this Article contends, courts and agencies should be careful when importing monopolization standards for monopsony cases. What works for monopolization claims may not necessarily work for monopsony claims.

This Article discusses two key issues: first, how much market share must defendant possess to be a monopsony? If courts and agencies assume that monopsony is the mirror image of monopoly, should the agencies and courts use the same market share thresholds for monopsonization claims as in monopolization claims? Second, should agencies and courts use consumer harm as a threshold screen for monopsony claims?

August 23, 2012 | Permalink | Comments (0) | TrackBack (0)

The Baby and the Bathwater - The Relationship in Competition Law between Private Enforcement, Criminal Penalties, and Leniency Policy

Posted by D. Daniel Sokol

Angus MacCulloch, Lancaster University - Law School and Bruce Wardhaugh, Newcastle University - Faculty of Humanities and Social Sciences have posted an interesting paper on The Baby and the Bathwater - The Relationship in Competition Law between Private Enforcement, Criminal Penalties, and Leniency Policy.

ABSTRACT: Across the EU we have witnessed the development of numerous programmes to eradicate cartel activity. Some of the significant developments have been increasing administrative fines, the development of leniency policy, the introduction of criminal sanctions, and the encouragement of private actions for compensation. This paper examines the interaction of criminal sanctions and leniency, and the interaction between private enforcement and leniency. The paper highlights the tensions and conflicts which arise between leniency policy and these new enforcement tools and suggests that these new polices should be seen as adjuncts to mainstream administrative enforcement. Where conflicts arise between public enforcement, as supported by corporate leniency, and criminal or private enforcement we suggest that maintaining the effectiveness of public enforcement should prioritised.

August 23, 2012 | Permalink | Comments (0) | TrackBack (0)


Posted by D. Daniel Sokol


ABSTRACT: As antitrust becomes more complex, so do its remedies. While access and disclosure remedies have been a part of antitrust law since the very earliest days of the Sherman Act, they have become a vital part of litigated cases and settlements only recently in both the United States and the European Union. This has been particularly true for cases involving network industries, telecommunications, broadcasting, software platforms, and other high-technology industries at the forefront of antitrust enforcement. Interestingly, these cases and settlements constitute an informal revival of the essential facilities doctrine and an acknowledgement that the doctrine (and its equivalents) remain an important and needed part of the antitrust toolkit. This article will examine the growing use of complex behavioral remedies in both merger and monopolization cases, which suggest antitrust enforcement has moved far beyond any stated preference for structural remedies. Among the examples I use are the Microsoft and Intel litigation in the United States and the European Union, as well as more recent merger consent decrees involving Google-ITA, Comcast-Universal, and Livenation-Ticketmaster to illustrate these important changes in competition law enforcement and what they portend for the future.

August 23, 2012 | Permalink | Comments (1) | TrackBack (0)

Wednesday, August 22, 2012

Cost Recovery of Congested Infrastructure Under Market Power

Posted by D. Daniel Sokol

Erik T. Verhoef, VU University Amsterdam addresses Cost Recovery of Congested Infrastructure Under Market Power.

ABSTRACT: The famous Mohring-Harwitz theorem states that, under certain technical conditions, the degree of self-financing of congested infrastructure is equal to the elasticity of the capacity cost function in the optimum, so that under neutral scale economies exact self-financing applies. Although the theorem has been proven to remain valid for various extensions of the basic set-up for which it was originally derived, it breaks down when the infrastructure is used by operators with market power when competing in Cournot fashion, the case in point often being oligopolistic airlines at a congested airport. This paper proposes a regulatory scheme, not involving lump-sum payments or budget constraints in the optimal pricing problem, that restores self-financing for congested infrastructure for this market form. What is more, under the proposed scheme, exact self-financing applies independent of the elasticity of the capacity cost function. The result remains true both for the case where operators treat the tolls parametrically, and for 'manipulable' tolls, designed to account for the fact that operators with market power can be expected to be aware of, and exploit, the fact that toll are not truly parametric, but instead depend on their own behaviour.

August 22, 2012 | Permalink | Comments (0) | TrackBack (0)

Price Discrimination in Input Markets: Downstream Entry and Efficiency

Posted by D. Daniel Sokol

Fabian Herweg, University of Bonn and Daniel Muller, University of Bonn address Price Discrimination in Input Markets: Downstream Entry and Efficiency.

ABSTRACT: The extant theory on price discrimination in input markets takes the structure of the downstream industry as exogenously given. This paper endogenizes the structure of the downstream industry and examines the effects of permitting third‐degree price discrimination on market structure and welfare. We identify situations where permitting price discrimination leads to either higher or lower wholesale prices for all downstream firms. These findings are driven by upstream profits being discontinuous due to costly entry. Moreover, permitting price discrimination fosters entry which often improves welfare. Nevertheless, entry can also reduce welfare because it may lead to a severe inefficiency in production.

August 22, 2012 | Permalink | Comments (0) | TrackBack (0)

Endogenous Market Structures and Welfare

Posted by D. Daniel Sokol

Federico Etro, Ca Foscari University of Venice explains Endogenous Market Structures and Welfare.

ABSTRACT: I characterize microfounded endogenous market structures with Bertrand and Cournot competition and perform welfare analysis generalizing the Mankiw-Whinston condition for excess entry. The impact of market leaders on welfare is reconsidered, with a number of policy implications about strategic investments, vertical contracts, bundling, mergers and . The neutrality of consumer surplus holds only when utility is homothetic. Under quantity competition, aggressive (accommodating) leaders increase consumer surplus if the elasticity of utility is decreasing (increasing) in consumption. This provides general rules to evaluate mergers and abuse of dominance issues in antitrust policy.

August 22, 2012 | Permalink | Comments (0) | TrackBack (0)

Competition Policy Control over Intellectual Property Abuses: Some Lessons from Latin America

Posted by D. Daniel Sokol

Ignacio De Leon, Catholic University Andres Bello (UCAB) explores Competition Policy Control over Intellectual Property Abuses: Some Lessons from Latin America.

ABSTRACT: This paper describes the interaction between Intellectual Property (IP) protection and competition policy in Latin America, as well as the institutional difficulties of Latin American countries in making progress towards an increased control of IP abuses. The first part gives a summary of the current state of IP protection in the region; the second part, highlights areas of interaction between IP protection and competition policy; the third part explores some of the institutional problems undermining the capacity of competition agencies to effectively redress IP competitive abuses.

August 22, 2012 | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 21, 2012

Consumers Are The Winners In The Visa/Mastercard Antitrust Settlement

Posted by D. Daniel Sokol

Todd Zywicki (Geroge Mason) claims Consumers Are The Winners In The Visa/Mastercard Antitrust Settlement in an op-ed for Forbes.

August 21, 2012 | Permalink | Comments (0) | TrackBack (0)

Positioning Competition Policy in Chile: Outreach, Advocacy, and Alternative Dispute Resolution Mechanisms

Posted by D. Daniel Sokol

Mario Ybar & Fernando Araya (Fiscalia Nacional Economica, Chile) explore Positioning Competition Policy in Chile: Outreach, Advocacy, and Alternative Dispute Resolution Mechanisms.

ABSTRACT: Chile is one of the countries that have pioneered the introduction of market reforms since the end of the seventies. Market reforms have transformed the country's landscape in the last 35 years, together with increase in population, and have contributed to increases in per capita income. Competition policy has been an integral part of these reforms, the Competition Act being enacted in 1973.

Competition policy, as understood today by most jurisdictions, is served by two major tools: competition law enforcement and competition advocacy. The boundaries of the enforcement of competition law are relatively clear, since enforcement actions should abide by the principles of rule of law, due process guarantees, and so on. As to competition advocacy, the case is different. A competition policy not clearly and explicitly defined may mean different things to different people.

Thus, a major challenge of positioning competition policy is to promote a consensus around a conception of competition in each of the instances where such a conception is disputed; a consensus that defines certain benefits that can outweigh all the potential downsides of competition. Such a challenge, when the instruments used are those of outreach and advocacy, implies deploying efforts in segmenting audiences. Considering different competition outreach and advocacy initiatives undertaken by the Fiscalía Nacional Económica ("FNE") in recent years, it appears that segmenting audiences has been crucial in all of them.

Following, we will briefly describe some of these initiatives with references to the target audience and the core message in each case. Short references to the use of alternative dispute resolution mechanisms in order to avoid litigation costs, are addressed before the concluding remarks.

August 21, 2012 | Permalink | Comments (0) | TrackBack (0)

Revolution, Evolution and Devolution: Overview of the Past Twenty Years of Competition Legislation in Serbia

Posted by D. Daniel Sokol

Vladimir Pavic, University of Belgrade - Faculty of Law describes Revolution, Evolution and Devolution: Overview of the Past Twenty Years of Competition Legislation in Serbia.

ABSTRACT: This paper analyzes twenty years of competition policy in Serbia until 2011. It analyzes economic, political and legislative factors which have shaped the way in which the competition policy was established, both initially and in the reforms that followed. A particular attention is devoted to the institutional design and public law considerations of establishing the Competition Comission as a regulatory body, as well as technical and policy shortcomings of 2005 and 2009 reforms.

August 21, 2012 | Permalink | Comments (0) | TrackBack (0)

Save the Date for AAI's Private Antitrust Enforcement Conference December 4, 2012

Posted by D. Daniel Sokol

6th Annual Private Antitrust Enforcement Conference

Event Date: 
Tuesday, December 4, 2012
National Press Club, Washington DC

On Tuesday, December 4, 2012, the American Antitrust Institute will host its 6th Annual Private Antitrust Enforcement Conference at the National Press Club in Washington D.C.

Tuition for this program is $250 with a discounted rate of $50 for government employees, educators, public interest advocates, and students.

Panel Descriptions

Employment Antitrust Litigation
A discussion of key issues in major cases involving hospital nurses, petroleum industry employees, high tech employees, medical residents, and others. Such issues include: Can a class be certified? How can monopsony power be proved? When are information exchanges unlawful? What damages models are available?

Current Status and Trends in Use of Truncated or "Quick Look" Analysis
Andrew Gavil presents his new paper "Moving Beyond Caricature and Characterization: The Modern Rule of Reason in Practice" and Jonathan Baker presents his new paper "Exclusion as a Core Competition Concern" followed by a discussion of the history and recent development of truncated analysis including how courts are wrongly confining its use and might apply it more effectively across a wider range of conduct.

Litigation in Regulated Industries
Experts will explore recent developments in the insurance and energy industries and how those developments affect the private enforcement of antitrust law.

Class Action Developments
Panel will discuss recent developments in Rule 23 jurisprudence in antitrust cases, including continuing developments in the law of predominance post-Hydrogen Peroxide, the effects of the Supreme Court's decisions in Concepcion and Dukes, and the changing role of economists at the class certification stage. Panel will also consider what the Advisory Committee on Civil Rules has in store for possible changes to Rule 23.

AAI Jury Instruction Project
An update on progress on the antitrust jury instructions project, including materials prepared on one or more instructions. The AAI jury instructions will provide an alternative to the ABA Model Jury Instructions. We will also discuss possible next steps (e.g., focus groups, testing for comprehension).

Up to 5 CLE credits are expected. 

Networking opportunities have been built into the program, including breakfast, a networking break, and a cocktail reception.

Speakers include: 
  • Jonathan Baker, Professor, American University's Washington College of Law
  • F. Paul Bland, Jr., Senior Attorney, Public Justice
  • Elizabeth J. Cabraser, Partner, Lieff Cabraser; Federal Civil Rules Committee
  • Eric Cramer, Shareholder, Berger & Montague, P.C.
  • Joshua P. Davis, Professor and Director, Center for Law and Ethics, University of San Francisco School of Law
  • Bert Foer, President, American Antitrust Institute
  • Kathleen Foote, Senior Assistant Attorney General, California Department of Justice
  • Andrew I. Gavil, Professor of Law, Howard University School of Law
  • Daniel E. Gustafson, Partner, Gustafson Gluek PLLC
  • Peter Kohn, Partner, Faruqi & Faruqi, LLP
  • Joseph R Saveri, Founder, Joseph Saveri Law Firm
  • Dan Small, Partner, Cohen Milstein Sellers & Toll PLLC
  • Gregory Vistnes, Vice President, Charles River Associates
  • Shannon Wheatman, Kinsella Media, LLC

August 21, 2012 | Permalink | Comments (0) | TrackBack (0)

Commitment Decisions in the EU and in the Member States: Functions and Risks of a New Instrument of Competition Law Enforcement within a Federal Enforcement Regime

Posted by D. Daniel Sokol

Heike Schweitzer, University of Mannheim explores Commitment Decisions in the EU and in the Member States: Functions and Risks of a New Instrument of Competition Law Enforcement within a Federal Enforcement Regime.

ABSTRACT: Commitment decisions are a relatively new instrument of competition law enforcement both in the EU and in the Member States. They provide a competition authority with a tool to handle certain complex competition cases quickly and flexibly where the parties are willing to cooperate. Yet, commitment decisions under article 9 of Reg. 1/03 have also raised important concerns, as they allow for a development of competition policies largely outside the realm of judicial review. Not much attention has been given to the spreading of similar instruments at the level of the Member States so far. This paper sets out to compare the commitment decision policies and practices in the EU and in the Member States. At a practical level, commitment decisions are used by NCAs predominantly either as a substitute for the former conditional exemptions under article 101(3) TFEU and/or to implement a policy clearly outlined by the EU Commission – whether by way of sector inquiries, infringement decisions or commitment decisions. The latter use is unobjectionable where the relevant legal issues have been clarified by the EU courts; yet, where this not the case, and the NCAs implement a policy developed by the Commission outside the scope of judicial review, the concerns raised against article 9-decisions are aggravated. The concerns regarding the use of commitment decisions could be mitigated if NCAs would systematically weigh the interests of administrative efficiency that may argue in their favor against the public interest in public censure, deterrence and the development of legal doctrine which should constrain the use of commitment decisions. In part, NCAs have indeed formulated policies that require them to do so. Also, commitment decisions are arguably subject to stricter forms of judicial review in some Member States. In the medium run, the decentralized experimentation with different commitment decision policies may hold important insights also for the EU Commission and the Union courts.

August 21, 2012 | Permalink | Comments (0) | TrackBack (0)