17th CRESSE CONFERENCE
The article discusses the journey from form-based to effects-based analysis in the context of Article 102 TFEU. It highlights the transition, challenges, and potential reforms in competition law enforcement within the EU.
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17THCRESSE CONFERENCE ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? Emeritus Professor Richard Whish, KC (Hon) Saturday 1 July 2023
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? STRUCTURE OF PRESENTATION THE JOURNEY FROM FORM TO EFFECTS PROBLEMS RAISED BY (TOO MUCH) EFFECTS ANALYSIS TENTATIVE SUGGESTIONS FOR REFORM 2 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? THE JOURNEY FROM FORM TO EFFECTS THE COMMISSION HAS HAD THE POWER TO ENFORCE THE COMPETITION RULES FOR 60+ (REGULATION 17 OF 1962) WE HAVE HAD JURISPRUDENCE FROM THE EU COURTS FOR 50+ YEARS MANY OF THE COMPETITION RULES UNTIL THE 1990S WERE FORM-BASED THE MOVE TO AN EFFECTS-BASED SYSTEM BEGAN IN THE LATE 1990S 3 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? THE JOURNEY FROM FORM TO EFFECTS THE COMMISSION REDESIGNED THE BLOCK EXEMPTION SYSTEM: EG REGULATION 2790/99 ON VERTICAL AGREEMENTS SEE ALSO THE GUIDELINES ON HORIZONTAL AND NON-HORIZONTAL MERGERS, 2004 AND 2007 REGULATION 1/2003 MARKED AN IMPORTANT STEP AWAY FROM FORMALISM: THE PRINCIPLE OF SELF-ASSESSMENT OF AGREEMENTS UNDER ARTICLE 101 THE EU COURTS JURISPRUDENCE IN ANTITRUST CASES BECAME MORE SOPHISTICATED 4 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? THE JOURNEY FROM FORM TO EFFECTS STEERING ARTICLE 102 TO A MORE EFFECTS- BASED STANDARD WAS A MORE DIFFICULT TASK THE LAW OF ARTICLE 102 IS TO BE FOUND IN THE RELATIVELY SPARSE JURISPRUDENCE OF THE EU COURTS SOME OF THE COURTS JURISPRUDENCE WAS RATHER FORM-BASED GUIDELINES SETTING OUT THAT JURISPRUDENCE WOULD HAVE HELPED TO ENTRENCH THAT FORMALISM 5 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? THE JOURNEY FROM FORM TO EFFECTS THE COMMISSION COULD NOT WRITE GUIDELINES ON ARTICLE 102 AT VARIANCE WITH THE COURTS JURISPRUDENCE NOR COULD THE COMMISSION REDESIGN ARTICLE 102 THROUGH BLOCK EXEMPTIONS IN THE ABSENCE OF AN ARTICLE 101(3) HENCE THE GUIDANCE ON ENFORCEMENT PRIORITIES, INDICATING THE CASES THE COMMISSION WOULD BE LIKELY TO SELECT FOR INVESTIGATION 6 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? THE JOURNEY FROM FORM TO EFFECTS SOME COMMENTATORS WERE UNHAPPY WITH THE COMMISSION S GUIDANCE, EVEN CALLING FOR IT TO BE WITHDRAWN AS INCONSISTENT WITH THE COURTS JURISPRUDENCE IN PRACTICE THE GUIDANCE HAS UNDOUBTEDLY INFORMED SUBSEQUENT THINKING IN THIS AREA, INCLUDING AT THE LEVEL OF THE EU COURTS THE COURTS TODAY REGULARLY REFER TO THEIR COMFORT WITH DOMINANT FIRMS THAT WIN BY EFFICIENCY; INEFFICIENT FIRMS ARE NOT PROTECTED AS SUCH UNDER ARTICLE 102 7 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? THE JOURNEY FROM FORM TO EFFECTS THE ARTICLE 102 JURISPRUDENCE THROUGHOUT THE TEENIES AND INTO THE TWENTIES MOVED AWAY FROM FORM AND BECAME MORE SOPHISTICATED REBATES WERE AN AREA OF DISPUTE, DUE TO HOFFMANN-LA ROCHE AND SUBSEQUENT CASELAW INTEL BROUGHT THIS PARTICULAR CONTROVERSY TO A HEAD BY OVERRULING CORRECTION, CLARIFYING - HOFFMANN-LAW ROCHE: SEE PARAGRAPH 138 OF THE JUDGMENT 8 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? THE JOURNEY FROM FORM TO EFFECTS INTEL SAYS THAT HOFFMANN-LA ROCHE CREATES A PRESUMPTION THAT LOYALTY REBATES OFFERED BY A DOMINANT FIRM ARE UNLAWFUL BUT THAT EVIDENCE FROM DOMCO THAT THE REBATES COULD NOT RESULT IN ANTI- COMPETITIVE FORECLOSURE IS ADMISSIBLE AND MUST BE ADDRESSED BY THE COMMISSION/NCA UNILEVER COMPLETES THE CIRCLE BY APPLYING INTEL TO EXCLUSIVITY AGREEMENTS, SO THAT THE AGCM MUST ADDRESS UNILEVER S AS EFFICIENT COMPETITOR ARGUMENT 9 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS RAISED BY (TOO MUCH) EFFECTS ANALYSIS THE MOVE AWAY FROM A FORM-BASED ARTICLE 102 IS DESIRABLE: FORMALISM LEADS BOTH TO FALSE POSITIVES AND TO FALSE NEGATIVES THE COMMISSION S CURRENT ARTICLE 102 INITIATIVE IS NOT AN ATTEMPT TO REVERSE FROM EFFECTS ANALYSIS HOWEVER THIS IS AN APPROPRIATE TIME TO ASK THE QUESTION: COULD THE MOVE TO EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? 10 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: LACK OF LEGAL CLARITY WHAT DO WE MEAN BY EFFECTS ANALYSIS? LEGAL CLARITY IS REQUIRED, AND FUTURE GUIDELINES CAN DISTIL IMPORTANT POINTS FROM THE JURISPRUDENCE THE EFFECT DOES NOT HAVE TO BE ON THE FINAL PRICE TO CONSUMERS; IT CAN BE TO THE COMPETITIVE STRUCTURE OF THE MARKET THIS IS WELL-ESTABLISHED LAW, STATED VERY CLEARLY RECENTLY IN SERVIZIO ELETTRICO NAZIONALE 11 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: LACK OF LEGAL CLARITY THE EFFECT DOES NOT HAVE TO HAVE ACTUALLY OCCURRED: CONDUCT CAN BE FOUND TO HAVE A POTENTIAL EFFECT AS WELL AS AN ACTUAL EFFECT: WELL-ESTABLISHED LAW, STATED CLEARLY IN SERVIZIO ELECTTRICO NAZIONALE CONDUCT CAN BE ABUSIVE ON THE BASIS OF POTENTIAL EFFECTS EVEN WHERE IT CAN SUBSEQUENTLY BE SEEN THAT NO EFFECT HAS ACTUALLY OCCURRED: STATED CLEARLY IN SERVIZIO ELECTTRICO NAZIONALE 12 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: LACK OF LEGAL CLARITY WHAT STANDARD OF PROOF IS REQUIRED TO DEMONSTRATE EFFECTS? SHOULD THE CONDUCT BE LIKELY TO PRODUCE EFFECTS? HAVE THE ABILITY TO PRODUCE EFFECTS? BE CAPABLE OF PRODUCING EFFECTS? HAVE A TENDENCY TO HARM COMPETITION? IT IS NOT SURPRISING THAT DIFFERENT CHAMBERS OF DIFFERENT COURTS IN DIFFERENT CASES OVER 50 YEARS HAVE USED DIFFERENT FORMULATIONS 13 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: LACK OF LEGAL CLARITY A FUTURE GUIDELINE PROPOSING A SINGLE STANDARD OF PROOF, DISTILLED FROM THE VARIOUS FORMULATIONS, WOULD BE VERY WELCOME THIS IS PROBABLY TRUE FOR THE EU COURTS AS WELL AS OTHER STAKEHOLDERS CASE-LAW CAN INFLUENCE GUIDELINES WHICH CAN INFLUENCE CASE-LAW 14 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: EXCESSIVE COMPLEXITY THERE IS A DANGER THAT EFFECTS ANALYSIS BECOMES SO COMPLEX THAT IT BECOMES TOO DIFFICULT FOR A COMPETITION AUTHORITY TO RUN A CASE SUCCESSFULLY IN A REASONABLE AMOUNT OF TIME IF THAT IS A PROBLEM FOR THE EUROPEAN COMMISSION, WITH ITS RESOURCES, IT IS PRESUMABLY FAR GREATER FOR THE NCAS, IN PARTICULAR THE SMALLER ONES 15 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: EXCESSIVE COMPLEXITY COMPETITION AUTHORITIES OUTSIDE THE EU ALSO TAKE INSPIRATION FROM THE EU EXPERIENCE, AND MAY BE SIMILARLY AFFECTED COULD EXCESSIVE EFFECTS ANALYSIS HAVE A CHILLING EFFECT ON ENFORCEMENT ACTIVITY? THERE IS A VERY POWERFUL INDUSTRY THAT DEFENDS THE DOMINANT FIRMS OF THE WORLD: LAWYERS, ECONOMISTS, PUBLIC RELATIONS ADVISERS 16 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: EXCESSIVE COMPLEXITY COMPLEXITY FAVOURS THE DOMCOS SEE ON THIS FERNANDO CASTILLO DE LA TORRE, IS THE EFFECTS-BASED APPROACH TOO CUMBERSOME:TAKING STOCK OF RECENT PRACTICE AND CASE LAW ON ARTICLE 102 TFEU RAISING THE EVIDENTIARY BAR ACROSS THE BOARD IS PROBABLY LEADING TO CHRONIC UNDER- ENFORCEMENT, IN WHICH ONLY A HANDFUL OF CASES CAN REALISTICALLY BE PURSUED 17 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: EXCESSIVE COMPLEXITY IN THE MAY 2020 EDITORIAL I WROTE FOR CONCURRENTIALISTEI ASKED DO COMPETITION LAWYERS HARM WELFARE? IN ANTITRUST AND THE DIGITAL ECONOMY FOX, IN SIMPLE RULES FOR ANTITRUST,SAYS THAT ASSESSING WHAT IS ANTICOMPETITIVE UNDER EXCESSIVELY COMPLEX STANDARDS WASTES BILLIONS OF EUROS/DOLLARS (OFTEN TO THE GAIN OF LAWYERS AND ECONOMISTS IS EVERY BILLABLE HOUR EARNED ETHICALLY? 18 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: EXCESSIVE COMPLEXITY LAWYERS SHOULD REMIND THEMSELVES OF THEIR ETHICAL OBLIGATIONS WHEN ADVANCING ARGUMENTS ON BEHALF OF THEIR CLIENTS, INCLUDING AS TO EFFECTS IN THE UK SEE THE SOLICITORS REGULATION AUTHORITY CODE OF CONDUCT ECONOMISTS GIVING EVIDENCE IN COURT SHOULD RECALL THEIR DUTY TO THE COURT COULD APPEAL COURTS BE MORE ACTIVE IN CALLING OUT VEXATIOUS BEHAVIOUR? 19 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: AS EFFICIENT COMPETITORS IT IS IMPORTANT TO DISTINGUISH THE AS EFFICIENT COMPETITOR PRINCIPLE FROM THE AS EFFICIENT COMPETITOR METHODOLOGICAL TEST AS A PRINCIPLE THE AEC PRINCIPLE REFUTES THE ASSERTION THAT EU LAW PROTECTS COMPETITORS RATHER THAN COMPETITION AS A METHODOLOGICAL TEST THE AEC TEST PROVIDES FOR A QUANTITATIVE EXAMINATION OF WHETHER CERTAIN CONDUCT MAY BE ABUSIVE 20 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: AS EFFICIENT COMPETITORS THE AEC TEST MAY BE PARTICULARLY USEFUL FOR SOME CASES: EG PREDATORY PRICING, MARGIN SQUEEZE, SOME REBATE PRACTICES IT IS USEFUL AS A PRINCIPLE, BUT HAS NO ROLE AS A TEST, IN OTHER CASES: EG ASTRAZENECA, REFUSAL TO SUPPLY THE JURISPRUDENCE IS CLEAR THAT THE AEC TEST IS ONE, AMONG OTHER, METHODOLOGIES, BUT THAT ITS USE IS NOT MANDATORY: POST DANMARK II, INTEL, UNILEVER 21 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: AS EFFICIENT COMPETITORS THERE ARE MARKETS IN WHICH THE AEC PRINCIPLE CAN BE UNHELPFUL: THERE IS NO AS EFFICIENT COMPETITOR, EVEN HYPOTHETICALLY: VERTICALLY-INTEGRATED STATE-CREATED UTILITIES PLATFORM MARKETS WITH CERTAIN CHARACTERISTICS ARTICLE 102 IS CONCERNED WITH COMPETITIVE MARKET STRUCTURES, NOT JUST PRICE: SEN INTERVENTION MAY THEREFORE BE JUSTIFIED TO ENABLE ENTRY BY A NOT YET AS EFFICIENT COMPETITOR 22 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: AS EFFICIENT COMPETITORS THE NOT YET AS EFFICIENT COMPETITOR PRINICPLE HAS BEEN ACKNOWLEDGED IN VARIOUS CASES POST DANMARK I UNILEVER ROYAL MAIL V OFCOM (UK COMPETITION APPEAL TRIBUNAL AND COURT OF APPEAL) FUTURE GUIDELINES COULD HELPFULLY INDICATE CASES IN WHICH INTERVENTION IS JUSTIFIED IN A NYAEC SITUATION 23 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? PROBLEMS OF EFFECTS ANALYSIS: AS EFFICIENT COMPETITORS THE COMMISSION S APPEAL IN INTEL AND GOOGLE S APPEAL IN GOOGLE SHOPPING WILL PROVIDE THE COURT OF JUSTICE WITH THE OPPORTUNITY TO EXAMINE FURTHER THE RELEVANCE OF THE AS EFFICIENT COMPETITOR IN EXCLUSIONARY ABUSE CASES 24 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? TENTATIVE SUGGESTIONS FOR REFORM GUIDELINES (IN 2025?) WOULD BE USEFUL THEY COULD USEFULLY DISCUSS A NUMBER OF ISSUES, INCLUDING: THE RELEVANCE OF COMPETITIVE MARKET STRUCTURE TO EXCLUSIONARY ABUSE CASES ACTUAL AND POTENTIAL EFFECTS OF CONDUCT THE STANDARD OF PROOF IN EFFECTS CASES THE AS EFFICIENT COMPETITOR PRINCIPLE AND TEST THE CIRCUMSTANCES IN WHICH AEC MIGHT BE DEPARTED FROM THE NEXT TWO YEARS WILL BE INTENSE! 25 Richard Whish CRESSE 17th Conference
ARTICLE 102 TFEU: CAN EFFECTS ANALYSIS HAVE UNDESIRABLE EFFECTS? THANK YOU FOR YOUR ATTENTION! 26 Richard Whish CRESSE 17th Conference
