European Commission Decisions on

CompetitionLandmark Decisions from an Economic Point

of View Francesco Russo, Maarten Pieter Schinkel, Andrea Günster, Martin

Carree

Francesco RussoEC Competition Enforcement Data

Amsterdam, 11th of April 2008

Agenda

• Why this book and for whom• Our approach• The starting point…• Structure of the Book• Template for landmark decision• Example of use: Vertical Restriction (Selective Distribution Agreement)• Future developments and discussion

Why an economic oriented handbook ?

• Economic oriented Legislation, Notices, Guidelines• Commission’s (and Courts’) reasoning has always more an economic approach

• Instrument to analyze and verify the Commission’s application of the economic concepts and theories• Consistent idea about the evolution of the Commission’s approach during the years• Possible divergences between economic theory and Commission’s Decisions• Instrument that can be easily and quickly consulted

• Industrial Organization courses as integration of Economics texts • Economists and lawyers in their practices• Competition authorities (the Commission already expressed its interest)• Students and researchers

• There are no other similar books

Who the book is addressed to?

SourcesCommission Decision pursuant to Article 81, 82 and 86 EC Treaty since the beginning of EC Competition law enforcement in 1962 until 2007558 formal decisions (until March 2008)

English version of Official Journal Publications (OJ)

Checked against: Harding and Joshua (2004) chapter 5, Harding and Gibbs (2005), Ritter et al. (2005), Jones and van der Woude (2006), Van Damme (2005), Geradine et al. (2005) and DG Comp website

What is not in the Book

• ECSC Treaty • Interim measures • (Dis)comfort letters • Complaints’ rejection • Air transport sector decisions• Commitments decisions (Article 9) • Notices pursuant to Article 19(3) of the Regulation 17/62• Carlsberg’s notices inviting interested third parties to submit observations• Notices pursuant to Article 27(4) of Regulation 1/2003 (in case of foreseen negative clearance decision) • Mergers• State Aids (Articles 87-89 EC Treaty)

• Problems in classifying cases • Difficult categories of agreement (e.g. collective exclusive dealings)• Criteria adopted to select the categories• Economic literature + Commission classification (e.g. 6.3) + legal specificity of EC system (i.e. mergers until 1989)• Categories initially adopted and then excluded because never discussed in a decision (e.g. monopsony)• Double (or more) classification for the same decision

Methodology

The starting point…

Structure of the Book

• Introductory chapter• 7 Chapters describing the economics of Commission decisions • 32 Subchapters/Sections• 4 Annexes • Table of Legislation, the Texts of Articles 81-82-86, Bibliography, Index

1. Introduction • Preamble about the story of the entire research project• Origins and structure of European competition policy system (goals, enforcement systems, institutions, legal concepts)• Statistic description of Commission decisions over years • Structure of the book• Scope and use of the book

Chapters from 2 to 6

2. Horizontal Restraints (9)

3. Abuse of Dominance (9)

4. Licensing (2)

5. Vertical Restraints (7)

6. Joint Ventures and Alliances (3)

Chapters 7 and 8Chapter 7. Decision addressed to Member States ex Article 86

Liberalization period (90s), regulated sectors, relation between Articles 82 and 86 (ECJ’s role in its interpretation) Chapter 8. Mergers and Minority AcquisitionsUntil 1989 Europe did not have a Merger Regulation, Continental Can doctrine

Minority acquisitions are not unequivocally interpreted by the Commission and not easy to classify

I. Failure to comply decisions (request of information)

II. Table of landmark decisions

III. Table of decisions in chronological order

IV. Table of decisions in alphabetical order

Annexes

Structure of the Chapters

• Introduction: brief description of the related economics, ongoing debate in Europe and structure of the chapter• Applicable EC legislation (Treaty articles, BER, Guidelines, Notices)• Relevant parts (chapter and/or paragraph)of Economics Texts. Bishop and Walker, Carlton and Perloff, Church and Ware, Martin, Motta, Tirole, Waldman and Jensen. • Relevant parts of Legal Texts Ritter, Sufrin and Jones, Whish

Structure of the Sections

• Introduction: definition of the subcategory, its relevance in economic theory, ongoing debate in Europe• Applicable EC legislation (if special)• Economic and legal texts (relevant pages)•Complete list of decisions that dealt with the topic in chronological order (1962-2008)• Within the list, landmark decision(s) are shown in bold

Template of Landmark Decisions/1F.1 Wall Mart Commission Decision 2050/33/EC [2050]

OJ 33/33Relevance: IV/33.333 (case number)Decision: Negative clearance, Exemption, InfringementAddresses of the Decision: Francesco, Italy; MP Jr., USA; Andrea, Germany…Reports route: Notification, Complaint, Commission investigation (Leniency application)Date of the Decision: 2 March 2050Competition Commissioner: N. Kroes

Relevant geographical market: ItalyRelevant product market: Pizza

Template of Landmark Decisions/2Description of the cases (with quotes from the

relevant Recitals of the Decision)

a. Relevant facts (industry structure, firms’ market power, agreement,…)b. Allegation c. Economic theory applied (that became constant approach for future similar Commission Decisions) d. Fines, remedies and conditions enclosede. Further development of the case (CFI/ECJ rulings)

First page of the OJ publication (the entire decision in the attached CD-ROM)

Example

Example/2

Example/3

Example/4

Example/5

Future developments and discussion

Receive comments and critiques

Try-out by Industrial Organization teachers

More legal references (Bellamy and Child; Faull&Nikpay)

To deepen references to ECJ and CFI Case-law

Create and constantly update a website with reference to new decisions

Mergers (?)

PUBLICATION !!!!

Francesco Russo

francesco.russo@beplex.com

f.russo@uva.nl

Via Salaria 259, 00199 Roma, Italia