Fabio Polverino

Bio: Fabio Polverino is an academic researcher from University of Chicago. The author has contributed to research in topics: Class action & Damages. The author has an hindex of 2, co-authored 4 publications receiving 14 citations.

A Class Action Model for Antitrust Damages Litigation in the European Union

Abstract: This paper reviews the legal and economic structure of the class action litigation model in the United States, as set forth by rule 23 of US civil procedure, exploring the requirements for obtaining class certification and maintaining a class action. I analyze a number of critical issues and inefficiencies connected to the adoption of class action as a tool for adjudicating controversies. The paper, then, takes into consideration the issue of private antitrust litigation in the European Union, at the moment still underdeveloped. A Green Paper recently published by the EU Commission includes proposals for the adoption of private antitrust damages litigation in the EU, but, even suggesting the possible adoption of a collective action model, never mentions class action as a viable solution. I consider some of the questions raised by the EU Commission in the Green Paper. Relying on the fact that US courts have repeatedly stated that antitrust controversies are suitable for class action treatment, I consider whether the US model of class action litigation might provide, although in an amended version, a satisfactory answer to the problematic issues raised by the Green Paper and represent an efficient tool for the private enforcement of antitrust law in the European Union.

Hunting the Wild Geese: Competition Analysis in a World of 'Free'

Abstract: Not far from DG Competition, in Brussels, there is the “Wild Geese”, a pub where football games (generally broadcast on pay TV) may be watched for free while sipping a beer or eating a sandwich (which, of course, are not free). In a more metaphoric sense, a business based on “free” products or services is a “wild” animal which has a disruptive effect on markets and business traditionally based on (and used to) fees and subscriptions. This article observes from a competition perspective the case of a number of “wild geese” active in today’s economy. The article consists of two parts: the first one focuses on market identification and definition, in cases where “free” is involved. In doing so, the article considers the Commission’s previous case practice and, in addition, takes into consideration elements which might be relevant to market definition (i.e. reverse cellophane fallacy, the demand-enhancing effect of “free” and the role of technology). The second part focuses on the possible conflict between businesses based on “free” and traditional “fee-based” businesses. In particular, it explores available theories of harm which could be raised in relation to “free” businesses. In doing so, the article reviews case decisions based on theories and disciplines which might provide the reader with new tools in the competition analysis of “free” (in particular, game theory and pre-emption in Alcoa, bundled rebates and tying in 3M/LePage and tying in Microsoft). The article concludes with the recently published Microsoft/Skype merger decision which appears to set a new trend for the analysis of “free.”

A Class Action Model for Antitrust Damages Litigation in the European Union

Abstract: This paper reviews the legal and economic structure of the class action litigation model in the United States, as set forth by rule 23 of US civil procedure, exploring the requirements for obtaining class certification and maintaining a class action. I analyze a number of critical issues and inefficiencies connected to the adoption of class action as a tool for adjudicating controversies. The paper, then, takes into consideration the issue of private antitrust litigation in the European Union, at the moment still underdeveloped. A Green Paper recently published by the EU Commission includes proposals for the adoption of private antitrust damages litigation in the EU, but, even suggesting the possible adoption of a collective action model, never mentions class action as a viable solution. I consider some of the questions raised by the EU Commission in the Green Paper. Relying on the fact that US courts have repeatedly stated that antitrust controversies are suitable for class action treatment, I consider whether the US model of class action litigation might provide, although in an amended version, a satisfactory answer to the problematic issues raised by the Green Paper and represent an efficient tool for the private enforcement of antitrust law in the European Union.

Assessment of Coordinated Effects in Merger Control: Between Presumption and Analysis

Abstract: The first part of the paper, drawing upon modern oligopoly theory, provides an answer to the question concerning the market characteristics that are relevant in assessing coordinated effects arising from mergers (standard of proof). The second part analyzes recent decisions on coordinated effects in the field of EU merger control, in order to draw a conclusion as to the degree of certainty that antitrust enforcers have to reach, before taking a decision prohibiting or authorizing a merger (burden of proof). The cases reviewed include the EU Commission's decision and the related judgment by the Court of First Instance in the Airtours/First Choice case and the EU Commission's decision in Sony/BMG. Since the latter appears, prima facie, radically different from Airtours with respect to the method adopted and the conclusions drawn, the paper also investigates what has changed in the time lapse between the two decisions. I argue that a number of circumstances (the judgments of the Court of First Instance in Airtours, Tetra Laval and Schneider, the adoption of Merger Regulation No. 139/2004 and the cooperation with the US FTC in merger control activity) have affected both the standard of proof and the burden of proof. These circumstances have made the Commission's analysis more economically sound. However, as a downside, the CFI's decisions have also raised the burden of proof on the Commission for prohibiting a merger on the ground of coordinated effects. I conclude that such approach is far too conservative and may result in the undue clearance of mergers, which eventually prove harmful to competition.

L'action privée en droit des pratiques anticoncurrentielles : pour un recours effectif des entreprises et des consommateurs en droits français et canadien

Abstract: La regulation de la concurrence est dualiste en France et au Canada. D’un cote, des autorites publiques de regulation encadrent le marche et sanctionnent le cas echeant les pratiques contraires aux dispositions legislatives en vigueur, et, d’un autre cote, les victimes de pratiques anticoncurrentielles, c'est-a-dire les consommateurs et les entreprises, peuvent intenter des poursuites privees sur le fondement d’une action en responsabilite civile afin d’obtenir la reparation du prejudice concurrentiel subi. Il s’agit respectivement de l’action publique et de l’action privee en matiere de concurrence, qualifiees aussi de public enforcement et de private enforcement du droit de la concurrence. Cependant, dans l’Union europeenne, et en France particulierement, le prejudice concurrentiel reste sans reparation effective. En effet, en France, les consommateurs n’avaient pas, jusqu’a l’adoption de l’action de groupe, de moyen procedural d’acceder au juge de la reparation. De plus, le droit civil francais se montre trop rigide pour permettre l’indemnisation d’un prejudice economique aussi complexe que le prejudice concurrentiel. Pour alimenter sa reflexion a ce sujet, le legislateur francais s’est souvent tourne vers les modeles canadien et quebecois pour reformer son droit civil bicentenaire. En effet, le droit civil quebecois se montre particulierement souple dans les litiges lies au droit de la concurrence. De plus, la Loi sur la concurrence canadienne offre un droit a reparation adapte aux contraintes des victimes de pratiques anticoncurrentielles. L’auteur a ainsi cherche a comprendre comment fonctionne le mecanisme canadien de private enforcement pour evaluer si ce modele, par le truchement du droit civil quebecois, pourrait inspirer une reforme du modele civiliste francais adopte par le legislateur notamment lors de l’introduction de l’action de groupe. L’analyse se situe principalement en droit civil pour permettre une lecture de l’action privee qui s’eloigne des stereotypes classiques tires de l’experience americaine dans ce domaine. L’objectif ultime de cette comparaison est de rendre effectif le recours prive des entreprises et des consommateurs en droits francais et canadien a la suite d’un prejudice decoulant d’une violation du droit des pratiques anticoncurrentielles.

The Role of Media Pluralism in the Enforcement of EU Competition Law

Abstract: In an era of communicative abundance, consumers can access content anytime, anywhere and on any digital device. Safeguarding media pluralism has never before been as essential to our democracies…

Group Litigation in European Competition Law: A Law and Economics Perspective

Abstract: textIn this thesis, insights of the law and economics literature were collected in order to develop the features of an optimal group litigation concerning the deterrence of European Competition Law violation and these were then compared to the proposals of the European Commission in the White Paper on damages actions. Chapter 1 and 2 provide the basis for the analysis conducted in remainder of this thesis. Chapter 1 provides an overview of the enforcement of European Competition law including the rationale of European Competition Law, the debate about private versus public enforcement in general, and the discussed legal changes to enhance private enforcement. Chapter 2 provides the economic and legal framework used to analyse the efficiency of group litigation mechanisms with regard to deterrence of competition law infringements. This structure is mainly based on economic insights and knowledge developed in the Law and Economics literature. Such an economics based approach entails a choice as to the goal to be pursued by private enforcement to be that of deterrence of unlawful conduct, in this specific case, the (inefficient) breach of competition law and the focus on total welfare. Therefore the insights of the theories on optimal deterrence are applied to the setting of private enforcement of competition law. Using the economic framework laid out in Chapters 1 and 2, in Chapter 3 turns to two necessarily slightly abstract forms of existing group litigation mechanisms, i.e.. collective actions and representative actions. These different actions were analysed with regard to their potential to achieve deterrence. Outcomes resulting from an initial analysis showed that the optimal group litigation mechanisms from the point of view of society at large (total welfare approach), would be a stand-alone action brought in the form of a mandatory group litigation, including all losses caused to society at large. The main arguments for that outcome are that to reach optimal deterrence, the penalty imposed on the infringer, in the form of damages to be paid, should be based on total harm caused to society, and therefore include all losses caused to all different members of society. This leads to the conclusion that the optimal group litigation should incorporate all individual losses in one proceeding, to be (cost-) efficient. Therefore, and because free riding problems can be eliminated, the optimal system would be a mandatory one, rather than opt-in or opt-out mechanism. It is shown that stand alone actions are to be preferred over follow-on actions from an efficient deterrence perspective, as only the former increase the rate of detection. This is important as it is increased detection that decreases the amount of the optimal sanction, which otherwise may be prohibitively large, and also when the availability bias leads to a greater value of the risk of detection compared to an increase in the damage awards, i.e. the imposed monetary penalties. Follow-on actions merely contribute to the amount of sanction faced by the infringer when public fines are too low to deter. However, it would be more (cost) efficient in such cases, where the public fine is too low, that the public fine be instead raised sufficiently. Therefore, the analysis continued focusing on mandatory stand-alone group actions. In the analysis of the two abstract forms of existing group litigation systems of collective and representative actions, problems and obstacles to private litigation for damages specific to certain types of breaches of European Competition Law were taken into account. The analysis suggests that neither collective nor representative actions will be the optimal group litigation mechanism in the sense of the best group litigation to reach the goal of efficient deterrence, unless the existing systems were to be substantially altered. Problems specific to collective actions, such as the necessity of one of the victims (lead plaintiff) to become active on behalf of himself and other victims of the infringement, render that particular system of bundling similar claims into one procedure less efficient. This is especially so in those cases where the information asymmetry on the side of the victims is large. One way to reduce such problems would be to motivate the lawyer representing the group of victims to become the actual driving force and the active party. However, as the analysis shows, problems and large inefficiencies occur when the collective action is not adequately and explicitly designed to have a lead lawyer, rather than a lead plaintiff. Similar outcomes result in the analysis of representative actions brought by associations on behalf of the victims. One particular necessity crystallised out of this analysis: the incentives given to the acting agent need to be adequately taken into account and designed in any form of group litigation. In cases where typically individual victims (such as end consumers) will not be the acting agent themselves, this insight has large implications for other goals which one may pursue, such as complete compensation of individual losses of these victims. This important insight is the corner stone of the idea of a market based approach to private enforcement, where agents compete with each other for detection and litigation of competition law infringements. As has been shown, such a market may heal many of the problems and inefficiencies that would remain in the two stylised forms of existing mechanisms described before. Such a market with competing enforcement agents would, however, face similar problems as those unearthed in the discussion of the economic analysis of competition in research and development. Both are characterised by large upfront investments that are necessary in order to gain profits that are highly uncertain. Therefore, under a first-come, first-served mechanism, there will be many resources wasted in the competitive process. Solutions to these market failures presented included the use of auctions for the right to litigate after detection of a certain infringement has taken place. This solution would not only increase the efficiency of the market idea in general, but also those of other systems of collective actions or representative actions when characterised by strong competition and races to the courts. After the features of the theoretical optimal system of group litigation with regard to deterrence were determined, the insights gained are used in Chapter 4 to compare and discuss the efficiency of the Commission’s proposal against this benchmark. The analysis shows that the proposed mechanisms do not reach the potential efficiency of the theoretical optimal solution developed in the previous Chapter. This result was no surprise, as the starting point or goal to be achieved though private enforcement in the Commission’s point of view, is presumably not deterrence - at least not the dominating one. Moreover, while the theoretical analysis in Chapter 3 focuses on stand-alone actions, the Commission wants to encourage follow-on actions in addition to stand-alone actions. The examination nevertheless highlights the inefficiencies, necessary trade-offs, and some of the costs imposed on society should those particular mechanisms suggested by the Commission be chosen. These considerations are also relevant for follow-on actions and for achieving other goals. A discussion of the goals other than deterrence also shows that even these goals may not be achieved to the highest degree possible. After all, the choices made by the Commission can be interpreted to stem from compromises made in the issues (e.g. the goals) themselves and in the political arena (e.g. taking harmonisation and implementation costs into account). The fifth Chapter illustrates the basic features of three selected legal systems, i.e., the group litigation mechanisms as developed in the US, UK and Germany. These are then compared to the features of the theoretical optimal solution developed in Chapter 3. As these existing mechanisms deviate substantially from the theoretical benchmark, they are unlikely to achieve the optimal deterrence results the optimal group litigation mechanisms are argued to achieve. However, the stark differences between the developed systems and their experienced effectiveness and difficulties provide some partial support to the insights gained in the theoretical part of Chapter 3. In very broad terms, it seems that less attention was paid to the question of who would actually have incentives to become active under the current systems, and which problems might occur and what possible regulative remedies to these might be enacted, the less effective the systems turned out to be. This outcome would also hold, if the goal to be achieved would be anything other than deterrence, for example corrective justice as compensation of individual victims. If the incentives structures that the economic analysis highlights are neglected neither deterrence not compensation can be achieved in any efficient or even just effective way.

Private enforcement of EU antitrust rules in light of the U.S. and Canadian experience: the case for harmonization

Abstract: El principal objetivo de esta tesis es determinar que medidas serian necesarias para garantizar una aplicacion privada eficaz de las normas de defensa de la competencia en la Union Europea y realizar propuestas sobre su forma de ejecucion. En el estado actual de la legislacion i.e., con anterioridad a la trasposicion de la Directiva, las normas procesales nacionales en esta materia son muy diversas, y tales divergencias procesales incrementan el riesgode diferencias de trato y generan inseguridad juridica en la medida en que resulta mas dificil, tanto para los perjudicados como para los demandados, prdecir cual va a ser el resultado de un proceso. Ademas, el reducido numero de acciones indemnizatorias interpuestas hasta la fecha en la Union Europea, en particular por consumidores, sugiere que el sistema actual de aplicacion privada no esta funcionando de modo satisfactorio.si, el primer objetivo de esta tesis es determinar las normas procesales que deben ser objeto de modificacion para subsanar el actual deficit de aplicacion privada de las normas de defensa de la competencia. Por tanto, la primera parte de la tesis se dirige al analisis de los obstaculos a la aplicacion privada que existen actualmente en la Union Europea en general y en el Reino Unido, Alemania, Francia, Espana, Suecia y Finlandia en particular.La presente tesis tambien determina que aunque el objetivo primordial de la aplicacion privada deberia ser la reparacion del dano derivado de las conductas anticompetitivas, cualquier obligacion de indemnizacion generara potencialmente efectos disuasorios para las empresas. Tanto la aplicacion publica como privada son por tanto necesarias para asegurar el cumplimiento de las normas de defensa de la competencia.El segundo objetivo es analizar los recientes instrumentos legislativos europeos dirigidos a potenciar la aplicacion privada: la Directiva sobre Accione de Indemnizacion por Danos en materia de Defensa de la Competencia y la Recomendacion sobre Mecanismos de Recurso Colectivo. El proposito de esta analisis es demostrar los defectos y las limitaciones de la reforma y determinar los aspectos adicionales que requeririan de armonizacion o aproximacion legislativa.Dado que la aplicacion privada de las normas de defensa de la competencia tiene un papel notablemente mas relevante en Estados Unidos y esta igualmente aumentado en Canada, el tercer objetivo de esta tesis es examinar especificamente que lecciones pueden extraerse de las experiencias norteamericana y canadiense en materia de aplicacion privada del derecho de defensa de la competencia. En este ambito se hara enfasis en el papel de las demandas colectivas (class actions), los pactos de cuota litis y la politica en materia de acceso a pruebas discovery a efectos del reforzamiento de la aplicacion privada, en la medida en que todas ellas son caracteristicas distintivas del modelo vigente en los Estados Unidos, asi como en Canada.El ultimo objetivo de esta tesis es determinar cual es el modo optimo de potenciar la aplicacion privada. En este sentido, la ultima parte de esta tesis se centra en examinar que aspectos adicionales a los incluidos en la Directiva deben regularse de modo uniforme y como debe llevarse a efecto su amortizacion. Concluye que las demandas colectivas (class actions) y otro tipo de herramientas procesales existentes en los ordenamientos estadounidenses y canadiense para potenciar la aplicacion privada son necesarias para mejorar el derecho a compensacion sobre todo por consumidores aunque deben ser adaptadas a los ordenamientos y tradiciones juridicas europeos.La tesis demuestra que la nueva Directiva sobre acciones de Indemnizacion por Danos en materia de Defensa de la Competencia ha sido una oportunidad perdida de mejorar el acceso a la justicia en los supuestos de infraccion del Derecho de defensa de la competencia de la Union Europea y que las reglas comunes porpuestas no seran suficientes para asegurar una aplicacion efectiva

The record industry and competition law in the twenty-first century

Abstract: This research argues for recognition of the importance of cultural industries and cultural diversity and their special treatment by competition law. It uses the record industry as a tool to demonstrate how independent music labels contribute to diversity in a record business dominated by four major players. Whilst some scholars have advocated the inclusion of cultural issues under competition law, no concrete suggestions have been made as to how exactly to do that and no study has been made to determine what pitfalls may lay in doing so. This thesis deals with the lacuna by adopting a number of approaches and shows why cultural industries require special protection by competition law. The aforesaid is the unique feature of this thesis, which should help bridge the existing gap between theory and practice. In order to address the research question, a three-stranded methodological approach is utilised. Firstly, the historical analysis demonstrates the different competitive dynamics of the record industry since its inception, and it shows that musical diversity generally increased when the industry concentration was low. Secondly, the legal analysis focuses on the EU merger test and Article 81 of the EC Treaty; the US approach is also analysed for comparative purposes. Legal analysis examines how competition law has dealt with the regulation of competitive dynamics in the record industry, drawing analysis from a number of mergers and acquisitions, most notably the merger wrangling between Sony and BMG lasting for 5 years overall. Thirdly, qualitative interviews probe into why independent labels are important and what effect the recent mergers had on the independent sector. The main finding of this study is that cultural diversity can be incorporated into the EU merger test as well as Article 81(3) of the EC Treaty as a non-competition concern and therefore should be taken into account by decision-makers.