State Intervention and Action in EC Competition Law - Chapter 23 - International Antitrust Law & Policy: Fordham Corporate Law 2003

ENFORCEMENT OF CARTEL LAW IN IRELAND
Terry Calvani

Chapter 2
THE ROAD TO CONVICTION – THE CRIMINALISATION OF CARTEL LAW
Nicholas Green QC

I. Introduction
II. Roman Antitrust
III. The Dark Ages
IV. The Norman Conquest
V. And Elsewhere In Europe
VI. Export Cartels: Early Webb Pomerene Act Precursers
VII. Following Magna Carta
VIII. Queen Elizabeth I and the "Great Case of Monopolies"
XI. The 18th and 19th Centuries
X. And So To The Sherman Act
XI. And Back Across the Atlantic to the United Kingdom in the 21st Century
XII. "Dishonesty"
XIII. Prognosis: The Road To Conviction
XIX. Conclusion

Chapter 3
AN OVERVIEW OF RECENT DEVELOPMENTS IN THE ANTITRUST DIVISION'S CRIMINAL ENFORCEMENT PROGRAM
James M. Griffin

I. Introduction
II. International Cartel Enforcement

    A. Investigations
    B. Cartels Prosecuted
    C. Fines Imposed
    D. Percentage of Foreign Corporate Defendants

III. Prosecution of Individuals

    A. Jail Sentences Have Increased
    B. Increasing Length of Jail Sentences
    C. Conviction of Foreign Executives
    D. Tracking Down International Fugitives

IV. Increased Cooperation With Foreign Antitrust Authorities

    A. International Anti-Cartel Enforcement Workshops
    B. Assistance in Obtaining Foreign Located Evidence
    C. Cooperation and Coordination of Investigations
    D. Adoption of Legislation and Agreements to Foster Cooperation
    E. Increased Foreign Enforcement

V. Criminal Fines

    A. Corporate Fines Have Increased Dramatically
    B. Year-End Total Fines
    C. High Top-End Fines

VI. Corporate Leniency Program

    A. Application Rate
    B. Case Generator
    C. Foreign Authorities Following the U.S. Model
    D. Amnesty Rewards
    E. Amnesty Plus
    F. Penalty Plus
    G. Confidentiality Policy

Chapter 4
THE FIGHT AGAINST SECRET HORIZONTAL AGREEMENT IN THE EC COMPETITION POLICY
Olivier Guersent

Chapter 5
YOU CAN’T LEGISLATE PERFECTION:
THE VIRTUES OF EXPERIMENTATION IN THE DESIGN OF ANTITRUST ENFORCEMENT REGIMES
D. Stuart Meiklejohn

I. Introduction
II. Substantive Uniformity
III. Procedural Uniformity
IV. The Fugitive
V. Conclusion

Chapter 6
U.S. ANTITRUST ENFORCEMENT AGAINST INTERNATIONAL CARTELS:
TRENDS AND PRACTICAL CONSIDERATIONS
A. Paul Victor

I. Introduction
II. Considerations Relevant To Advising Clients In International Cartel Matters

    A. Criminal Enforcement Policy
    B. Criminal Antitrust Investigations

III. Joint Investigations
IV. Avoiding Potential Conflicts With Employees
V. Plea Agreements
VI. Conclusion

Chapter 7
INTERNATIONAL CARTELS ROUNDTABLE
A. Paul Victor, Presider
Terry Calvani
Nicholas Green, Q.C.
James M. Griffin
Olivier Guersent
D. Stuart Meiklejohn
Karen L. Morris
     Panel Discussion

Chapter 8
DOMINANT FIRM BEHAVIOR UNDER GERMAN COMPETITION LAW
Dr. Ulf Böge

I. Introduction
II. Market Dominance And Restrictive Practices Under German Competition Law – An Overview

    A. Discrimination and Hindrance

        1. Abusive behavior by firms with relative market power
        2. Obligation to deal
        3. Offer/sale below cost price

    B. Section 19 of the ARC: Abuse of Dominance

        1. Pricing
        2. Essential facilities

III. Access To Essential Facilities: A Case Example
IV. Conclusion

Appendix

Chapter 9
MONOPOLIZATION VERSUS ABUSE OF DOMINANT POSITION: AN ECONOMIST’S VIEW
Franklin M. Fisher

I. Introduction
II. Testing For Power or Dominance
III. Abuse and Anticompetitive Acts
IV. Conclusion

Chapter 10
DG COMPETITION'S REVIEW OF THE POLICY ON ABUSE OF DOMINANCE
Philip Lowe

I. Introduction
II. Context of the Policy Review

    A. Reasons For Launching A Review
    B. Limits of the Review
    C. Approach

III. Selected Substantive Issues

    A. Issues of Market Definition
    B. The Concept of Dominance
    C. The Concept of Abuse
    D. Objective Justifications as a Defence
    E. Issues Relating To Certain Specific Abuses

IV. Conclusion

Chapter 11
DOMINANT FIRM BEHAVIOUR UNDER UK COMPETITION LAW
Sir Derek Morris

I. Introduction
II. The New Competition Regime In The UK

    A. The UK Regime Prior To 1998
    B. The New Regime: The 1998 Competition Act
    C. The New Regime: The 2002 Enterprise Act

III. Procedural Issues

    A. Institutional Arrangements
    B. Inquiry Procedures

IV. Economics

    A. Competition Versus Consumer Welfare
    B. Co-ordinated Effects
    C. Assessment of Profitability
    D. Treatment of Efficiency

V. Conclusions

Chapter 12
THE COMMON LAW APPROACH AND IMPROVING STANDARDS FOR ANALYZING SINGLE FIRM CONDUCT
R. Hewitt Pate

I. Introduction
II. Single Firm Conduct On The Competitive Continuum
III. The U.S. Evolution Toward An Objective Standard For Single Firm Conduct
IV. U.S. And EU Enforcement In The Single Firm Arena

    A. Duties To Assist Competitors
    B. Monopoly Leveraging
    C. Predation
    D. Bundle Pricing and Fidelity Discounts

V. Conclusion

Chapter 13
MONOPILIZATION AND SHORT-TERM PROFITS
Mark R. Patterson

I. Introduction
II. Exclusion and Multiple Markets
III. The Sacrifice of Profits In The EC
IV. Typologies of Market Relationships
V. Justifications For The Sacrifice Of Profits

    A. The Conduct Produces Cost Savings
    B. The Profits Were Merely Transferred, Not Sacrificed
    C. The Downstream Market Is Not Monopolized
    D. The Conduct Is Profitable
    E. There Was No Previous Dealing
    F. There Is Only Involuntary Dealing

Chapter 14
ANTICOMPETITIVE NON-PRICING ABUSES UNDER EUROPEAN AND NATIONAL ANTITRUST LAW
John Temple Lang

I. Introduction
II. Summary
III. Part One

    A. The Main Reasons Why EU Law Under Article 82 Is Not Clear

IV. Part Two

    A. Foreclosure Under Article 82(B): Limitation of Production, Markets or Technical Development of Competitors of The Dominant Enterprise
    B. The Extent of The Limitation of Rivals’ Possibilities
    C. "Limitation" of Rivals’ Possibilities – The Key To Defining Legitimate Competition
    D. Harm To Consumers

V. Part Three

    A. The Only Non-Discrimination Principle: Article 82(C)
    B. "Equivalent Transactions"
    C. "Competitive Disadvantage"
    D. Arbitrage
    E. Should Article 82(B) or Article 82(C) Apply To Foreclosure?
    F. Is Harm To Consumers Necessary Under Article 82(C)?
    G. Different Treatment of Contracting Parties
    H. Discrimination Linked With Other Anticompetitive Conduct
    I. Refusals To Make Second Or Subsequent Contracts
    J. How Many Intellectual Property Licences Under Article 82(A)?
    K. Justifications For Refusing Second or Subsequent Contracts on Mon-Discriminatory Terms
    L. Are There Kinds of Unlawful Abuse Not Mentioned In Article 82?

VI. Part Four

    A. Essential Facilities Under Article 82(B): The Basic Rules
    B. When Is A Facility "Essential?"
    C. The Two Markets
    D. The Effect of The Refusal on Competition In The Downstream Market
    E. The Scope For Non-Price Competition In The Downstream Market: More Competition Must Be Promoted Than Is Discouraged
    F. Acquiring Technology, Cutting Off Existing Buyers, And Refusing To Contract For The First Time
    G. For A Duty To Contract, The Dominant Company Must Be Present On The Downstream Market
    H. Justifications For Refusing Access To Essential Facilities
    I. Reprisal Abuses Under Article 82(B) – Duty To Contract As A Remedy
    J. Should The Essential Facility Principle Apply In A Special Way To Former Statutory Monopolies?
    K. Price Squeezes
    L. "Equally Efficient Competitors"
    M. Prices For Access To Essential Facilities
    N. Antitrust Risks of A Duty To Contract In Essential Facility Cases
    O. If There Is No Duty To Contract, Can There Be A Duty To Contract Only On Reasonable Terms?

VII. Part Five

    A. Intellectual Property Rights – The Background
    B. Compulsory Licensing Of Intellectual Property Rights — The EC Cases
    C. Compulsory First Licences of Intellectual Property Rights Under Article 82(B)
    D. The Magill Conditions
    E. The "Existence" And "Exercise" of Intellectual Property Rights
    F. The Need For Additional Conduct
    G. What Is "Additional Abusive Conduct"?
    H. "Standards" And Compulsory Licences
    I. Two Single Market Situations: Compulsory Licences As A Remedy
    J. Compulsory Licences Only As Remedies?
    K. Proportionality
    L. The Unsolved Problem of The Rate Of Royalty For A First Licence of Intellectual Property Rights
    M. Article 82(B): How Many Licensees?
    N. The IMS Health Case

VIII. Part Six

    A. Foreclosure, "Leverage" And Overreactions Under Article 82(B)
    B. Tying
    C. Tying Under Article 82(B) and 82(D)
    D. Prices In Tying and Bundling Cases
    E. Tying, Capital Gods, Aftermarkets, and "Consumables" Under Article 82
    F. Horizontally Integrated Companies: When An Interface Is An Essential Facility
    G. Horizontally Integrated Companies: Duties Arising From Integration of Products
    H. Article 82 Cases: The Commission’s Report On The Technology Transfer Regulation
    I. Efficiency Defences
    J. Overreaction By Dominant Companies As An Anticompetitive Abuse Under Article 82(B)

IX. Part Seven

    A. Simultaneous Application of EU and National Rules on Abuse of Dominance
    B. Why Are Separate National Laws On Abuse Needed?
    C. The Risks of Separate National Laws On Abuse
    D. National Authorities’ Powers and Procedures
    E. Interim Measures Decisions By National Antitrust Authorities
    F. National Antitrust Powers and Guidelines
    G. National Regulatory Authorities

X. Legal Certainty
XI. Conclusions

Chapter 15
MONOPILIZATION VERSUS ABUSE OF DOMINANT POSITION
Professor Mark R. Patterson, Presider
Ulf Böge
Professor Franklin M. Fisher
Philip Lowe
Sir Derek Morris
R. Hewitt Pate
Dr. John Temple Lang
     Panel Discussion

Chapter 16
EU COMPETITION POLICY AFTER MAY 2004
Mario Monti

I. Introduction
II. Focused Enforcement of EU Competition Rules
III. Legal Certainty and Enhanced Economic Approach
IV. Co-Operation Between The Commission And The National Competition Authorities and Courts
V. Internal Reforms
VI. International Co-operation
VII. Conclusion

Chapter 17
THE APPLICATION OF ARTICLE 81 IN THE NEW EUROPE
Gerwin Van Gerven

I. Introduction
II. The Old Vs. New Europe — An Example of "Regime Change"

    A. The Regulation No. 17/62 Regime
    B. The Regulation No. 1/2003Regime

III. The Guidance On Article 81(1) In The Notice

    A. The Goal of Consumer Welfare
    B. No Rule of Reason under Article 81(1)

IV. The Guidance on Article 81(3) In The Notice

    A. Which Benefits Count?
    B. The Restriction Must be Indispensable to Achieving the Benefit
    C. Fair Share for Consumers
    D. No Elimination of Competition

V. What Does This Mean?

    A. Is the Notice Not a Bit too Abstract and Theoretical?
    B. Convergence of the Merger Regulation and Article 81 Analytical Frameworks
    C. Comparison with the Treatment of Efficiencies under the Merger Regulation
    D. Lessons from the U.S.

Chapter 18
EUROPEAN COMMISSION COMPETITION POLICY
William T. Lifland, Presider
Mario Monti
Professor Dimitris N. Tzouganatos
Gerwin Van Gerven
     Panel Discussion

Chapter 19
STATE ACTION IN COMPARATIVE CONTEXT:
WHAT IF PARKER v. BROWN WERE ITALIAN?
Professor Eleanor M. Fox

I. Introduction
II. United States: Parker v. Brown and The Rights of States
III. The European Union: Italian Matches and The Responsibilities of States

    A. Consorzio Industrie Fiammiferi 

IV. A Comparison
V. Conclusion

Chapter 20
COURTS AS ECONOMIC EXPERTS IN EUROPEAN MERGER LAW
Professor David J. Gerber

I. Introduction
II. Economic Expertise and The European Courts

    A. Components of Economic Analysis
    B. From Analysis To Expertise
    C. Economicanalysis and General Fact-Finding

III. The Merger Trio Decisions: The Court As Economic Expert?

    A. Stated Roles and Standards
    B. Implicit Roles and Standards

IV. Judicial Roles and The Development of Community Competition Law

    A. The Courts’ Role In The Competition Law System
    B. The Impact of Judicial Roles
    C. Evolutionary Change

V. Implications For Competition Law Decisions

    A. The Institutional Context
    B. Analytical Capacity and Knowledge
    C. Potential Distorting Factors

VI. Implications For The Development 0f Competition Law
VII. Conclusion

Chapter 21
STATE INTERVENTION/STATE ACTION – A U.S. AND EC PERSPECTIVE FROM CASSIS DE DIJON TO ALTMARK TRANS AND BEYOND:
TRENDS IN THE ASSESSMENT OF STATE INTERVENTION THE EUROPEAN COURTS
Mário Marques Mendes

I. Introduction
II. The Altmark Trans Case: The Revolution In The Application of Article 86(2) [Formerly Article 90(2)] In Conjunction With Article 87(1) [Formerly Article 92(1)] Of The EC Treaty
III. Merger Regulation / Powers of The Commission v. Powers of Member States

Chapter 22
STATE INTERVENTION/STATE ACTION - A U.S. PERSPECTIVE
Timothy J. Muris

I. Introduction
II. The Problem of Public Restraints
III. Strategies For Addressing The Problem

    A. U.S. History
    B. European History
    C. Combating Public Restraints Through Competition Advocacy

        1. Advocacy Addressing Professional Licensing
        2. Advocacy Addressing Advertising Restrictions
        3. Advocacy Addressing Restraints on E-Commerce
        4. Importance of Intergovernmental Cooperation

IV. Combating Public Restraints Through Antitrust Enforcement

    A. The State Action Doctrine
    B. The FTC’s State Action Task Force

        1. Problems The Task Force Identified
        2. Clarifications The Task Force Recommended

    C. Recent FTC Cases Raising State Action Issues

        1. South Carolina Board of Dentistry
        2. Household Goods Movers Cases

V. Conclusion

Chapter 23
STATE INTERVENTION AND ACTION IN EC COMPETITION LAW
Richard Wainwright and André Bouquet

I. Introduction
II. General Obligation of Co-Operation of The Member States

    A. Article 10 EC and The Inno Doctrine
    B. The Restatement of The Inno Doctrine In Van Eycke
    C. Confusing Case Law and The ‘November Revolution’ of Meng, Ohra And Reiff
    D. Conclusion on The General Co-operation Obligation: A Fossil of The Inno Doctrine?

III. Effects of State Intervention For Undertakings

    A. State Compulsion Defence
    B. State Ecouragement
    C. Right To Approach Government

IV. Member State Obligations With Regard To Public Undertakings or Undertakings With Special or Exclusive Rights

    A. Obligation To Refrain From Measures Contrary To Treaty Rules

        1. Combined Application of Articles 86 (1) And 82 EC
        2. Combined Application of Articles 86 (1) And 81 EC

    B. Balancing Public Service Obligations
    C. Enforcement

        1. Directives
        2. Decisions Addressed To Individual States
        3. Private and Public Enforcement

V. Member State Obligation To Adjust Existing Monopolies
VI. Mergers
VII. State Aid
VIII. Conclusion

Chapter 24
STATE INTERVENTION/STATE ACTION 
Professor David J. Gerber, Presider
Professor Eleanor M. Fox
Dr. Mario Marques Mendes
Hon. Timothy J. Muris
Richard Wainwright
     Panel Discussion

Chapter 25
"EAST IS EAST AND WEST IS WEST "AND THE TWAIN SHALL NEVER MEET" OR SHALL THEY?
Stefan D. Amarasinha

I. Introduction
II. Function and Purpose of Core Principles
III. Core Principles In The Trade And Competition Context
IV. Trade and Competition Core Principles — Fools Rushing In Where Angels Fear To Tread?
V. Misgivings About The WTO As An Institution — Black Elicopters Next?
VI. Quo Vadis - If Not The WTO, Where Then?

Annex 1
Annex 2
Annex 3
Annex 4
Annex 5

Chapter 26
COMPETITION, TRADE AND DEVELOPMENT BEFORE AND AFTER CANCUN
Frederic Jenny

I. Introduction
II Cases of International Cartels

    A. Cement In Egypt
    B. The Aluminium Cartel
    C. The Heavy Electrical Equipment Cartel
    D. How Can Egypt Deal With These Cases

III. The Importance of Trans-National Anticompetitive Practices For Developing Countries
IV. Two Approaches To The Problem Of Externalities Due To International Anti-Competitive Practices
V. Possible Remedies
VII. The State of Play Before Cancun|
VIII. The Cancun Ministerial Conference
IX. Conclusion

Chapter 27
COMPETITION AND THE WTO: BEYOND CANCUN
Abbott B. Lipsky, Jr

Chapter 28
WTO CORE PRINCIPLES AND TRADE/COMPETITION ROUNDTABLE
Prof. Dr. Ernst-Ulrich Petersmann

I. Introduction

II. The Lack of A "Competition Culture" Undermines The Welfare Effects and Legitimacy of The World Trading System: Need For Transatlantic Leadership

III. Policy Lessons of The Cancun Ministerial Conference: Optional "Plurilateral WTO Competition Rules" Appear Politically More Acceptable Than Mandatory General WTO Competition Rules

IV. Increasing Importance of WTO Competition Rules In WTO Dispute Settlement Practice

Annex 1
Annex 2

Chapter 29
INTERNATIONAL COOPERATION BETWEEN DEVELOPED AND DEVELOPING COUNTRIES
Pamela Sittenfeld

I. Introduction
II. International Experience

    A. World Trade Organization
    B. Main Challenges

III. Differences and Limitations Between Developed and Developing Countries

    A. Legal Differences

        1. Agency Design and Procedures
        2. Investigative Powers and Access To Information
        3. Punitive Powers
        4. Prohibited Practices and Rules of Analysis
        5. Exception and Exemptions
        6. International Regulation

    B. Institutional Development

        1. Competition Culture and Market Development
        2. Resources

IV. Analysis of Proposals For Cooperation Agreements

    A. Legislative Harmonization
    B. Multilateral, Plurilateral, Regional or Bilateral
    C. General Principles of Trade And Competition

        1. Trade Principles

            a. Non-Discrimination Principle
            b. Pocedural Equity
            c. Transparency

        2. Competition Principles

            a. Anticompetitive Practices
            b. Exception And Exemptions

        3. Mechanisms of Cooperation

V. Conclusions

Chapter 30
WTO CORE PRINCIPLES AND TRADE/COMPETITION POLICIES
Frédéric Jenny, Presider
Stefan D. Amarasinha
Jacques Bourgeois
Abbott B. Lipsky, Jr.
Pamela Sittenfeld
Debra Valentine
Panel Discussion

Appendix to Chapter 30