Chilling at the Chillin’ Competition conference in Brussels

Since its inception in 2009, the Chillin’ Competition blog has achieved somewhat of a cult status amongst competition law students, academics and practitioners. Thanks to a singular blend of irreverent humour rarely seen in the legal world and on-point legal analysis of competition law cases and competition law related events, the blog has reaped over a million views in its relatively short life span, making it one of the most popular competition law blogs in Europe – and perhaps even beyond.

It should thus come as no surprise that the members of BDK’s competition law team, many of whom developed a taste for Chillin’ competition early in their post-graduate studies which has not dwindled throughout the years, were (to put it mildly) thrilled to learn that the blog’s authors/runners, Alfonso Lamadrid de Pablo and Pablo Ibañez Colomo, were planning the first ever Chillin’ Competition conference in Brussels.

The conference, which took place on 19 November 2015,  congregated some of the leading European experts in the field of competition law such as Advocate General Nils WahlWouter Wils (Hearing Officer, European Commission and King’s College London), Stephen Kinsella (Sidley Austin), Nicholas Banasević (DG Comp, European Commission), Luis Ortiz Blanco (Garrigues and College of Europe), Barry Rodger(University of Strathclyde) or Eddy de Smijter (DG Comp, European Commission) – to name just a few. For reasons of space we unfortunately cannot list all of the more than 25 speakers, but a quick glimpse at their profiles should attest to the truly remarkable level of expertise in attendance at the conference.

While it is frankly impossible to recreate the superb atmosphere coming into the conference, we will do our best to summarize some of the points raised and topics discussed. For the humour however, you will have to go straight to the source and read the Chillin’ competition blog.

The first panel, dubbed “letters or cards”, was geared towards discussing the implications of two of the CJEU’s recent preliminary rulings which have put the distinction between restrictions of competition by object and by effect in the cross-hairs of commentators, practitioners and academics: Post Danmark II (“letters”) and Cartes Bancaires (“cards”). For starters, following the line of reasoning put forth in his opinion, AG Wahl said that the CJEU’s ruling in Cartes Bancaires confirmed what should have never been forgotten in the first place, namely that only agreements and concerted practices which are by their very nature capable of harming competition (output restrictions, price-fixing and market allocations) should be considered restrictions by object. This “narrow” interpretation once seemed obvious (see, for instance, STM) , but was recently obfuscated by the lower standards in T-Mobile and Pierre Fabre, where the Court held that “for a concerted practice to be regarded as having an anti-competitive object, it is sufficient that it has the potential to have a negative impact on competition” (T-Mobile, para.59 and para. 74). The AG warned that an enlargement of the by object category would have the effect of prohibiting practices that are either not negative or that even enhance competition (such as e.g. certain information exchanges).

Johan Ysewyn agreed that the by object category should be interpreted restrictively having regard to the terms, objectives and context of the contested measures, but disagreed with AG Wahl on the idea that the Cartes Bancaires judgment wasn’t revolutionary: in his opinion the CJEU’s return to the object/effect orthodoxy was revolutionary in its own right. He wondered whether the horizontal guidelines, which were based directly on the (now obsolete) T-Mobile ruling, needed to be reviewed. Heike Schweitzer emphasized that a legal system is administrable only insofar as its rules (restrictions by object) and standards (analysis of anticompetitive effects) are clear and predictable. The section concluded with an homage to Article 101(3) TFEU, which all speakers at the table agreed was pretty much dead (see an interesting blog post on the topic by Alfonso Lamadrid). Indeed, where a measure is harmful enough to warrant a by object categorization, the chances of Article 101(3) TFEU being applicable are exceedingly slim. On the other hand, the fact that NCAs and the Commission have focused almost exclusively on by object restrictions (owing in part to the broadening of the by object category, as discussed above) has meant that there are very few by effect cases and thus very little space to apply article 101(3). Lastly, the change in the enforcement structure of Article 101 TFEU, brought about by Regulation 1/2003, whereby undertakings no longer have to seek an individual exemption, has further precipitated the downfall of Article 101(3) TFEU.

The second panel, which boasted an equally impressive roster of speakers (Kevin Coates and Bo Vesterdorf, amongst others), revolved around the increasingly pertinent question of whether there is a need for a set of specific competition rules to regulate the “new economy” – a hot potato if there ever was one (Uber being a prime example). Rather than warranting a new set of competition rules, the general consensus amongst the speakers was that the challenges posed by the “new economy” can be successfully addressed by competition law as we know it, provided that the current competition rules are properly understood and interpreted. Indeed, a “new” problem isn’t necessarily “novel” or, as Kevin Coates put it, “there is law that is applicable to horses (the internet), but there is no such thing as a horse (internet) law” – and no need for it, for that matter. Furthermore, a fresh set of rules could run into the “goldie locks problem” i.e. if the porridge (the new economy) is too hot, it may be too early to intervene (regulate). If it is too cold, it may be too late.

After a terrific lunch-break (many thanks to the organizers and sponsors), the third panel on institutional and procedural developments kicked off. In contrast with the previous panels, this segment did not follow the thread of an overarching question but was rather intended as a hotchpotch tackling separate procedure-related issues, each relevant in its own right (hence the title “known knowns, known unknowns and unknown unknowns“). Wouter Wils gave an overview of recent procedural developments, touching on several important issues such as the interplay between competition law and fundamental rights, the Commission’s powers of investigation and follow-on actions for damages (the full article used for the presentation is available here). Luis Ortiz Blanco in turn criticized the lack of legal certainty resulting from the opacity of the Commission’s fine-setting procedure. Mercedes Pedraz, a judge at the Spanish Audiencia Nacional (High Court) gave valuable first-hand insight into the interaction between the review courts and the National Competition Authorities: the latter tend to frown at the prospect of what they consider unspecialized institutions (courts) reviewing their decisions. There is, she said, a general notion that judges should respect the decisions and expertise of NCAs and should limit the scope of their review, as they are not “experts”.

Barry Rodger and Eddy de Smijter focused on the private enforcement of competition law, another topic of great interest following the publication last year of the Commission’s Directive for actions for antitrust damages. Eddy de Smijter, who co-authored the Commission’s Green and White paper on actions for antitrust damages and led the Commission’s team that negotiated with the European Parliament and the Council the Directive on actions for antitrust damages, said that although Member States have a little over a year to implement the directive, a significant number of them had not yet taken any action towards that goal.

The fourth panel tackled certain issues relating to the interplay between competition and intellectual property law. Nicholas Banasevic talked about Standard Essential Patents (SEPs) and how they create benefits as well as risks. With regards to the former, he emphasized the fact that SEPs allow interoperability and foster innovation and consumer welfare. On the flipside, he conceded that they can also lead to dominance in cases where they are necessary to develop a technology or where the switching costs are particularly high. In order to address these antitrust risks adequately while at the same time keeping the benefits, Mr. Banasevic suggested that ex ante disclosure of essential patents would protect market participants from “patent ambush” while a commitment to license on fair, reasonable and non-discriminatory (FRAND) terms would grant access to the standard to all participants and could constrain the ex post exercise of market power resulting from the standard. Following up on the SEP discussion, Mr. Banasevic touched upon the issue of SEP-based injunctions, which often seek to exclude a participant from the market based on a SEP. These injunctions are thus liable to have a number of anticompetitive effects, e.g. they may exclude products from the market or lead licensees to accept harmful terms. Accordingly, Mr Banasevic emphasized that seeking a SEP based injunction can be anticompetitive in and of itself, depending on the circumstances of the case (for e.g., where the licensor is forcing a good faith licensee into agreeing to potentially onerous licensing terms such as a higher royalty than what would otherwise have been agreed).

The last panel was dedicated to State aid. Conor Quigley discussed the Commission’s recent tax decisions. In his opinion, the Starbucks and Fiat decisions raise two very important questions: Does the misapplication of domestic tax rules on the part of domestic tax authority warrant action by the Commission to remedy the mistake? Further, is such an intervention by the Commission permissible if the “mistake” was in fact made consciously? Jose Luis Buendia Sierra  also “took a bite” at the Commission’s recent tax decisions. He said that whereas the Commission tended up until now to condemn unfair tax systems and did not normally look into how each discretionary decision had been taken, its approach in the Starbucks and Fiat cases was different. The Commission did not question the tax systems themselves, but rather focused on some apparently abusive decisions that had been taken within the system. The main issue is in comparison to which undertakings Fiat and Starbucks were granted advantage: all undertakings, or just multi-nationals? A comparison with all undertakings (which is the Commission’s current position) would always show an advantage in favour of multi-nationals.  In this regard, it is important to apply the selectivity criterion correctly: for there to be a selective advantage the undertakings compared must be in the same legal and factual situation.

I hope that we have succeeded in replicating at least a fraction of the in-depth legal argumentation and good spirit of the first, and hopefully nowhere near last, Chillin’ competition conference. We would also like to thank the organizers, sponsors and speakers for making the event possible, and being fantastic hosts.