Showing papers in "World Competition in 2006"

Is Criminalization of EU Competition Law the Answer

Abstract: This paper address the following five questions : First, what do we mean by “criminalization”, or “criminal” enforcement (as opposed to public enforcement of a “civil” or “administrative” nature) ?…

Optimal antitrust fines : Theory and practice

Abstract: This article discusses the use of fines imposed on companies or other corporate entities to enforce antitrust or competition law prohibitions such as Articles 81 and 82 of the EC Treaty or…

Compulsory Insurance of loss to property caused by natural disasters: competition or solidarity?

Abstract: There are three types of public intervention to make sure that property damage caused by natural disasters is compensated: ad hoc solutions, payments through compensation funds, and a compulsory catastrophe extension of property insurance contracts. The best known example of the latter approach is the French law, which imposes a mandatory catastrophe insurance on all owners of property (tying clause), fixes the premiums and arranges re-insurance by the State. This French scheme creates distortions that competition law is willing to prevent and it is also at odds with the principles of the group exemption for the insurance industry. However, both efficiency reasons and grounds of national solidarity may provide powerful arguments to justify a compulsory catastrophe extension of voluntarily subscribed property insurance contracts. The concerns about competitive distortions are legitimate but should be discussed in a broader social welfare context. Since pure forms of public intervention (ad hoc solutions and compensation funds) provide insufficient incentives for risk prevention and mitigation of losses, forms of public-private cooperation that avoid the latter efficiencies may generate benefits outweighing the costs of anti-competitive distortions.

Settlements of EU antitrust investigations : Commitment decisions under Article 9 of Regulation No 1/2003

Abstract: Article 9 of Regulation (EC) No 1/2003 provides for formal settlements of investigations by the European Commission into suspected infringements of Articles 81 or 82 EC This paper analyses the…

Behavioural Remedies in EC Merger Control - Scope and Limitations

Abstract: The use of remedies in merger appraisal enables the competition agency to engage in fine tuning rather than simply blocking or approving a merger transaction. As such, remedies act as tools which enable reaping the benefits of the transaction which would otherwise be blocked. Subsequently, they play a major role in shaping the market following the transaction and ensuring a competitive environment. Remedies are commonly classified as either behavioural or structural. While structural remedies have traditionally been regarded as superior to behavioural remedies, the latter may have an important role. This paper explores the scope and limits of behavioural remedies and their potential role in conditional clearances. The paper starts with a general discussion on the potential difficulties associated with behavioural remedies and how these may affect the negotiation of remedies. It then explores the manner in which these remedies are used under the European merger regime and the European Commission's policy in addressing the difficulties in monitoring and enforcing behavioural remedies.

State Aid Reform: Some Reflections on the Need to Revise the Notice on Guarantees

Abstract: In June 2005, the Commission launched the "State Aid Action Plan'', which is a roadmap for a comprehensive reform of EC State aid rules that the Commission intends to undertake in the 2005/2009 period. Among the texts which the Commission is planning to revise is its Notice on State aid in the form of guarantees, a communication published in 1999 with the aim of outlining the Commission's approach to State aid awarded by means of public guarantees. The purpose of this article is to briefly illustrate some flaws and shortfalls of the current Notice, and how this has negatively affected the Commission's past practice. In fact, in the last years the Commission has had to deal with a large number of cases which concerned aid granted through public guarantees or other equivalent forms of support, and these cases have highlighted the limits of this piece of legislation. It is therefore submitted that the Commission should not miss the momentum created by the publication of the State Aid Action Plan, in order to conduct a careful reflection on the rules laid down in the Notice on Guarantees, and to produce a new text, more in line with the fundamental principles of EC State aid law developed in the jurisprudence of the Community Courts.

Standardization and Technological Innovation: Some Reflections on Ex-ante Licensing, FRAND, and the Proper Means to Reward Innovators

Abstract: In today's technology-driven world, industry standardization, component interoperability, and product-compatibility have become critical to promoting innovation and competition. Standards are typically created by voluntary organizations (generally referred to as standard-setting organizations (SSOs)) composed of participants from a given market or industry (electronic components, communications, etc.). They meet to discuss, analyze, refine, and ultimately adopt mutually acceptable standards, which ensure competing and complementary products and components are compatible and can interoperate with one another. SSOs have thus gained importance over the years in technology-driven sectors.

Towards a Constructive Public-Private Partnership to Enforce Competition Law.

Abstract: Virtually every jurisdiction is considering the most appropriate role for private rights of actions for damages for competition violations. The United States is in the midst of reexamining these issues in the context of the Antitrust Modernization Commission created by Congress. The European Commission is nearing the conclusion of its lengthy review of the proper role of private damage actions in member state courts. Other jurisdictions both new and old to competition enforcement are wrestling with whether and how to implement effective private enforcement. Some private rights of actions are a necessary compliment to the public enforcement of competition law, but that the precise shape and extent of those rights is heavily dependent on the unique law, history, judiciary, and legal culture of each jurisdiction. At a minimum, some form of damage action for indirect purchasers and some method of class action or other form of aggregate litigation is necessary to have an effective private damage right. It is most ironic that the United States is seeking to restrict those rights of actions precisely at the same time that most of the rest of the world is seeking to expand private rights of actions to supplement existing public enforcement regimes. Neither public or private enforcement should "monopolize" competition law, but must work together to deter, detect, punish, and compensate victims of unlawful anticompetitive conduct.

Innovation and Market Definition under the EU Regulatory Framework for Electronic Communications

Abstract: This article provides with a thorough analysis of market definition under the EU regulatory framework for electronic communications. It is stressed that, under a forward-looking approach to market definition, demand-side substitution must address the competitive constraints imposed by the emerging services and that, in assessing supply substitution, regulators should take into account the likelihood of potential competitors to enter the market within a reasonable time frame. Accordingly, potential competition must be addressed in defining market (and not subsequently when assessing market power) whenever the financial ability and the profitability for potential competitors to enter the market is established. Assessing the constraints imposed by the emerging Voice over Internet Protocol (VoIP) services that are substitutable for traditional telephony is necessary to conduct a consistent market analysis and accurately apply ex ante regulation, especially given the development of bundling strategies.

Abuse of Protected Position? Minority Shareholdings and Restriction of Markets’ Competitiveness in the European Union

Abstract: In corporate governance minority shareholders deserve particular protection in order to guarantee their rights in the companies' management and to avoid their passive submission to the majority's decisions. This article stresses that the protection granted to them could be used as an instrument to circumvent Competition law. More generally it is argued that participation in companies' equity, even when it does not grant control over the same companies, can in particular circumstances generate effects restrictive of competition. The paper shows that there is a substantial lack of European Courts jurisprudence and that the Commission's approach to the issue is inconsistent. The paper calls for a substantive, systematic and economically based analysis of minority shareholdings by the Commission to guarantee legal certainty, uniformity of interpretation and the resolution of some unexplained structural questions. Furthermore the paper calls for a legislative revision of the actual set of Competition rules. There is, in fact, a vacuum legis that needs to be filled because there are some circumstances in which market operations involving minority shareholdings, although outside of the scope of application of both Art.81 and Art.82 and of the Merger Regulation, can generate anticompetitive effects. In the absence of proper normative measures, these situations are ultimately undetectable by the European Competition authorities. These circumstances are described and a possible solution to the mentioned predicaments - in line with the United States approach to the question - is suggested.

Powers of investigation and procedural rights and guarantees in EU antitrust enforcement : The interplay between European and national legislation and case-law

Abstract: This paper deals with the powers of investigation of the European Commission and of the competition authorities of the Member States for the enforcement of Articles 81 and 82 EC, and with the…