Friday, April 19, 2013
You Made a Pledge, Then Keep Your Promise: Article 9 Commitments Decisions in European Antitrust Law
Posted by D. Daniel Sokol
Paul McGeown & Juliette Orologas (Wilson Sonsini) have written on You Made a Pledge, Then Keep Your Promise: Article 9 Commitments Decisions in European Antitrust Law.
ABSTRACT: Until the European Commission slapped a U.S. $730 million fine on Microsoft at the beginning of March 2013 for failing to comply with the "choice screen" commitment that it had made in 2009 to close the Internet Explorer case, part-time antitrust watchers could have been forgiven for believing that a European Article 9 decision was akin to a settlement. The result was, after all, a textbook "win-win." The Commission could close its file without needlessly expending scarce resources on the prosecution of an investigation; it could assert that it had corrected the perceived-though not proven-anticompetitive effects of certain behavior quickly through a tailored remedy; and it could repeat its claim to being a consumer-champion, all without undue fear of its decision being overruled in the courts. Back at corporate headquarters, meanwhile, the boards of the companies concerned could announce that they had spared the business a costly, drawn-out procedure-the outcome of which was unpredictable-and avoided a formal ruling that the company had infringed the competition rules; they could also be confident that for all practical purposes they had side-stepped costly follow-on damages actions before national courts.
But, as the Microsoft case reminds us, it never was thus.
People talk colloquially about European competition law "settlements," but often confuse "remedies" imposed by the Commission, "commitments" offered by the parties, and "settlements" where a member of cartel admits liability in return for a reduced fine. Indeed it is reported that in December 2012 even Commissioner Almunia misused the "s" word, when speaking about the "constructive discussions" that DG COMP was having with Penguin Books about "a possible settlement" of the e-Books case. That is not what an Article 9 decision is. It is a commitments decision, a promise by a corporation to do or not to do something. And its failure to keep its promise is actionable. So why on balance do so many corporations sign up to them?