Competition journals: July - Sept. 2005

1GENERALITES - SCOPE OF APPLICATION

Europe and competition: the big misunderstanding..., L. IDOT (Europe, August-September 2005, p. 3).

In an editorial in the journal Europe on the lessons to be learned from the results of the French and Dutch referendums on the European Constitution, Laurence Idot warns, at a time when the conditions for implementing Article 82 EC are about to be revised, that we should not go too far in seeking only the efficiency of practices and behaviour. No doubt other objectives and values must also be taken into account alongside economic efficiency, otherwise, we are warned, the gap between the citizen and the elites is likely to widen. We shall also see, Non à la concurrence ?, J.-J. BIOLAY (Petites affiches, 29 Jul. 2005, n° 150, p. 11), who, behind a somewhat provocative title, wonders whether the application in France of the rules of competition is not compromised by the failure of the referendum of 29 May 2005. The author answers the question in the negative, but wonders whether the specific features of French competition law, which is perceived as less liberal than Community competition law, might not find renewed interest and application.

Standards of proof and standards of judicial review in EU competition law, H. LEGAL (http://listes.cru.fr/sympa/d_read/creda-concurrence/Art/Legal-Fordham2005.pdf)

In this speech delivered at the 32nd Annual Conference on International Antitrust Law & Policy of the Fordham Corporate Law Institute on 22 September 2005 in New York, Judge Hubert Legal, President of the Chamber of the Court of First Instance of the European Communities, addressed the essential and highly controversial issue of the intensity of the judicial review carried out by the Court of Justice and the Court of First Instance of the various Commission decisions in the field of competition. These reflections, inspired in part by the judgment of the Court of Justice of 15 February 2005 in the Tetra Laval case, are all the more interesting in that the author manages to establish a subtle categorization of the intensity of the control carried out according to the nature of the decisions adopted by the Commission, not without first placing the issue in a historical perspective, particularly from a French perspective, which is very useful for a proper understanding of the issues at stake. The text of this paper is to be published, together with all the other papers delivered at the 32nd Fordham Annual Conference, in the "2005 Fordham Corporate Law Institute - International Antitrust Law & Policy" (B. Hawk ed.). See also, Judicial Review in EC Competition Law: Reflections on the Role of the Community Courts in the EC System of Competition Law Enforcement, B. VESTERDORF (Competition Policy International, Autumn 2005, Vol. 1, No. 2, pp. 2-27).

The correct approach to the use of empirical analysis in competition policy, P. FLORIAN and M. WALKER (ECLR, June 2005, Volume 26, Issue 6, pp. 320-327)

In this article, the authors present the good and bad uses of economic studies in the field of competition, with the aim of preventing them from being ignored or leading the authorities to erroneous conclusions. From a methodological point of view, the authors prohibit presentations based on a "black box" involving reliance on the expert and develop the quality criteria of a complex empirical analysis (sensitivity of the result to the chosen model, quality of the data and possibility of evaluating the results). They conclude in three stages: complex studies must be presented in such a way that they can be evaluated; in return, the authorities must therefore appreciate these analyses and possibly take them into account without dismissing them out of hand; finally, simple demonstrations can have a very strong probative power and be complementary to complex studies.

Is there a general principle of free competition law, D. LINOTTE (AJDA, 1 August 2005, p. 1549).

Detecting in administrative and constitutional jurisprudence the emergence of a general principle of free competition law that would derive from the principle of transparency, the author of this article shows first of all that the explicit affirmation of such a principle still meets with resistance. He then concedes that the assertion of such a principle is probably not indispensable, since the reception by the administrative judge and the constitutional judge of the freedom to undertake and the principle of equality provide for it sufficiently, the principle of competition being nothing more than an avatar of the combination of the principles of freedom and equality, concludes Didier Linotte.

Entreprises en difficulté et application du droit de la concurrence, Ateliers de la concurrence de la DGCCRF (Rev. conc. consom. July-August-Sept. 2005, No. 143)

On 23 June 2004, the initiators of the Competition Workshops had decided to focus on the Schumpeterian process of creative destruction, which, when transposed to the market level, leads to the gradual destruction of the least efficient players and favours the development of the most competitive companies, and, in so doing, promotes economic growth through an ever more efficient allocation of production factors. In fact, it had been decided to devote this session to a subject that could not be more cross-cutting, that of the link between the law on companies in difficulty and competition law, since all areas of competition law were reviewed - cartels, abuses of dominance, concentrations and state aid, sanctions, etc. - and all the areas of competition law were examined. Professor Saint-Alary-Houin began by recalling that the law of collective proceedings also exercised a competitive function by participating in the process of creative destruction through the elimination of non-viable companies. The economist Paul Seabright then looked at the weaknesses of bankruptcy, understood not only as the inadequacies of the market process that leads to the disappearance of some of its players, but also as weaknesses specific to collective proceedings. Changing perspective, Jean-Mathieu Cot recalled how competition law apprehends firms in difficulty by placing itself in turn from the point of view of the firm in difficulty, that of the sector in difficulty and that of the competitors of the firm in difficulty, through the evocation of the theory of the failing firm. Jean-Louis Colson then came to present, on behalf of the Commission, the scheme, which was being revised at the time, concerning rescue aid and restructuring aid for firms in difficulty. In the ensuing debate with the House, Mr Martin wondered - a highly topical issue today - whether the control of State aid did not come under any law other than competition law, and whether it was not appropriate for the logic of State aid to be part of a search for consumer surpluses, in other words, to become a fully-fledged branch of competition law. We will read the very interesting answer given by Jean-Louis Colson. Finally, Professor Idot had the difficult task of dealing with the link between collective proceedings and competition law, especially between collective proceedings and merger control, with the risk that it cannot be completely ruled out that the decisions adopted by the bankruptcy judge and by the competition authorities may be contradictory.

A symposium on Monti’s legacy (Competition Policy International, Spring 2005, Vol. 1, No. 1, pp. 55-178)

A series of five articles provides a broad overview of Mario Monti’s activity and impact as Competition Commissioner from 1999 to 2004. These articles focus on Article 81, Article 82, mergers and the role of the economy in the Commission’s competition decisions, describing the key events, important cases and, above all, the key dates and directions taken by Mario Monti during his term of office. The last article gives an assessment of the Competition Commissioner, and through him of the evolution of European competition policy from a US perspective. This series of articles is also an opportunity to welcome the arrival of the Competition Policy International journal, of which at least two very interesting principles should be noted (in addition to being available free of charge on the Internet at the following address: http://www.esapience.org/journals.aspx): firstly, the publication organised around a theme or in response to a reference article, which undoubtedly makes it possible to deepen reflection on a subject and, secondly, the republishing of classic articles from the competition literature.

Observations on the multiple dimensions of market power, A. J. DASKIN and L. WU (Antitrust, Summer 2005, pp. 53-57).

In this article, the authors present the main definitions of market power and then the traditional economic basis for its assessment. In particular, when considering the index that the supra-competitive price level may constitute, the authors focus on the question of the benchmark to be used and point out that marginal cost may sometimes prove to be inappropriate. With regard to exclusionary capacity, they note that, in addition to the study of barriers to entry and a static assessment of market shares, attention must also be paid to a temporal aspect, the sustainability of profits and the evolution of market shares. They conclude by stressing the importance of an appropriate competitive benchmark, which may vary from one market to another, for a realistic assessment of the market power of a firm or group. In this regard, see I. DOBBS and P. RICHARDS, Output Restriction as a Measure of Market Power (ECLR, Oct. 2005, Vol. 26, Issue 10, pp. 572-580), an article in which the authors propose a way to measure market power. They describe a test of the elasticity of output restriction, defined as the percentage change in an industry’s total output relative to the percentage change in an individual firm’s output, and present it as a fine benchmark that is easy to understand and calculate, and a useful complement to the firm’s market share, both in the case of homogeneous and differentiated goods.

The use of own price elasticity of demand in competition law, A. TORRE (ECLR, Aug. 2005, Vol. 26, Issue 8, pp. 468-473).

A dual theory of the firm between transactions and competences: conceptual analysis and empirical considerations, P. COHENDET and P. LLERENA (Revue d’économie industrielle, No. 110, 2nd quarter 2005, p. 175).

La stratégie des entreprises vis-à-vis du droit de la concurrence : adaptation - évasion - organisation, Ateliers de la concurrence de la DGCCRF (Rev. conc. consom. juil.-août-sept. 2005, n° 143)

Activity of the Paris Court of Appeal in the field of anti-competitive practices (February-April 2005), P. ARHEL (Petites affiches, 12 August 2005, No. 160, p. 6) (May-June 2005) (Petites affiches, 28 Sept. 2005, No. 193, p. 12)

Activity of the Community courts in competition law, P. ARHEL, (Jan. 2005) (Rev. conc. consom., Apr.-May-June 2005, No 142, Studies, p. 1), (Feb.-Apr. 2005) (Petites affiches, 11 Jul. 2005, No. 136, p. 4), (May 2005) (Rev. conc. consom., July-August-Sept. 2005, No. 142, Studies, p. 1), (June 2005) (Petites affiches, 1 Aug. 2005, No. 151, p. 4)

Domestic Competition Law, C. CARON and G. DECOCQ (JCP éd. E 2005, n° 1004, p. 1112)

Chronique Concurrence, E. CLAUDEL (RTD com., Apr.-June 2005, p. 272)

Competition Law Gazette, edited by J.-P. GUNTHER and J. PHILIPPE (2005-1) (Gaz. Pal. 22-24 May 2005, pp. 2-31) (2005-2) (Gaz. Pal. 5-6 August 2005, pp. 2-31)

Chronique Concurrence, L. IDOT (Europe, July 2005, p. 20; August-September 2005, p. 27).

Chronique Droit interne de la concurrence, M. MALAURIE-VIGNAL (Contrats, conc., consom., Jul. 2005, p. 25; Oct. 2005, p. 46)

Chronique annuelle de jurisprudence de droit interne de la concurrence, M. PICARD (CJEG 2005, p. 165)

Chronique Droit communautaire, S. POILLOT-PERUZZETTO (Contrats, conc., consom., Jul. 2005, p. 25; August-Sept. 2005, p. 20)

Chronique de la concurrence, jurisprudence of the years 2003 and 2004, J.-M. THOUVENIN, (first part) (RMCUE July-August 2005, No. 490, p. 476) (second part) (RMCUE Sept. 2005, No. 491, p. 524)

2ENTENTS

2.1 Concepts and principles

Why go to court in Europe? An analysis of cartel appeals 1995-2004, C. Harding and A. GIBBS (Eur. Law Rev., 2005, Vol. 30, Issue 3, pp. 349-369)

This study is a response to the following article: The case for a radical reform of the infringement procedure under regulation 17, F. MONTAG (ECLR, 1996, Vol. 17, Issue 8, pp. 428-437), which concluded from the analysis of appeals against Commission decisions sanctioning cartels that the system was in crisis and legally discredited. After a thorough study, the authors aim to show that this conclusion was erroneous, or at least excessive. First of all, they develop a certain number of the characteristics of the appeals in this area, and note in particular that the challenges most often concern individual participation in a consultation rather than the analysis of its illegality. Then they list some methodological points in the search for data on the issue. They then study both the sample taken into account by Frank Montag with regard to his own arguments and the procedures launched, the means and the results of the appeals over the decade following Frank Montag’s sample. The analysis then shows that the victories on appeal are not very numerous and most often consist of a reduction of the fine rather than a reversal of the Commission’s analyses. They conclude by noting that the role of the CFI has in fact become more that of a moderator of sanctions than that of a guarantor of the Commission’s legal rigour, and that the mission of the counsels will therefore be more to reduce the amount of the sanctions than to seek total exoneration.

Collective or collusive? On the application of the law of agreements to official quality certifications, E. RAYNAUD and E. RAYNAUD. VALCESCHINI (RIDE, 2005, Vol. 19, Issue 2, pp. 165-196)

Economic analysis of cartels - Theory and practice, M. ALFTER and J. YOUNG (ECLR, Oct. 2005, Vol. 26, Issue 10, pp. 546-557).

2.2Distribution

Pratique du droit des réseaux de distribution, É. BACCICHETTI and J.-P. DOM (Petites affiches, 27 June 2005, No. 126, p. 5)

Multi-Branding of cars: a Paper Tiger, S. M. KLEVSTRAND (ECLR, Oct. 2005, Vol. 26, Issue 10, pp. 538-545).

Le référencement publicitaire sur internet au regard des règles concurrentielles françaises, C. MANARA (D. 2005, act., p. 2442)

2.3Public procurement

De la nature juridique des contrats des SEM, G. LE CHATELIER (Le moniteur, 29 Jul. 2005, p. 46)

Mise en concurrence pour les marchés de conseils juridiques - commentaire de l’arrêt du Conseil d’État du 7 mars 2005, Communauté urbaine de Lyon, G. LE CHATELIER (Le Moniteur, 12 August 2005, p. 42)

3ABUSES OF DOMINATION

3.1Dominant position bus

The Analysis of tying cases: A primer, J. TIROLE (Competition Policy International, Spring 2005, Vol. 1, No. 1, pp. 1-26)

This article provides a clear and sequential presentation, in terms of both substance and method, of the assessment that, according to the author, must be made in the case of coupling. After a presentation of the elements of definition and context of coupling practices, it proposes a two-stage study. First, it describes the characteristics of markets that may affect the ability of competitors to compete in the linked market (such as the costs of a unit of production, the possibility of differentiation or the presence of a multi-sided market). Then, on the basis of a rule of reason, it presents the legitimate and efficiency-generating causes and then two anti-competitive motivations for coupling: to monopolise the competitive segment on the one hand, and to protect the monopolistic segment on the other. The author then considers that coupling should not be incriminated in itself but as a strategy of predation. Therefore, he sees no reason to treat it differently and instead advocates applying the predation test to it. Jean Tirole concludes by presenting the advantages and disadvantages of such a position and by considering the possibilities of remedies for an anti-competitive coupling practice. This very comprehensive article is interesting both per se’’ and for the reactions and comments it elicits. Thus, in How economics can improve antitrust doctrine towards tie-in sales (pp. 27-40), D. W. CARLTON and M. WALDMAN provide two additions to Jean Tirole’s paper. Firstly, they focus on an additional pathological situation, drawn from the analysis of Microsoft’s cases, in the presence of product updates and exit costs. They then provide details on the cases in which the competition authorities must intervene. Where coupling increases social welfare or has ambiguous effects, the authors advocate forbearance; in other cases, they recommend caution. In Tied and true exclusion (pp. 41-53), B. NALEBUFF sees, unlike Jean Tirole, two reasons for coupling to receive special treatment: first, it allows, unlike predation, a strategy of exclusion without costs; second, it creates leverage and the transfer of monopoly power to another market and may result in the exclusion of an equally effective competitor on another market. The author therefore concludes that a coupling practice may in certain circumstances fall under a prohibition per se.

Loyalty rebates: An Assessement of Competition Concerns and a Proposed Structured Rule of Reason, D. Spector (Competition Policy International, Autumn 2005, Vol. 1, No. 2, p. 89).

Still in the same review, but in his latest issue, David Spector addresses the issue of loyalty rebates and discounts, through a critical analysis of two cases, by some different sides, in which the European (Michelin II) and American (LePage’s) competition authorities nevertheless concluded that these loyalty practices were anti-competitive. It has come to the view that, because such loyalty rebates may, irrespective of the terms they adopt, prove in certain circumstances to be pro-competitive in that they induce favourable incentives in the retail markets, they should not be prohibited per se. However, the author readily concedes that such loyalty rebates may also be part of a strategy of exclusion of competitors by the dominant firm, a strategy that is all the more effective since it can be implemented at lower cost than alternative strategies such as predatory pricing. Since any such practice may be alternatively pro- or anti-competitive depending on the circumstances, he argues for recourse in all circumstances to the rule of reason which, in his view, is the only way to answer the following question: does the market structure allow exclusion on purpose to increase or protect market power? However, applied without qualification, the rule of reason would quickly prove impracticable as it requires competition authorities and judges to consider the often limitless complexity of the justifications for price discrimination and to assess incentive problems that may be as elusive as they are economically important. In this paper, David Spector therefore suggests the adoption of a structured rule of reason, which would include a safe harbour based on the idea that price structures with marginal prices above certain cost measures should be considered inherently lawful, a solution that would avoid the disadvantages induced by the two extreme solutions - prohibition per se and pure rule of reason. This issue of discounts, which is the subject of a thematic study in the Competition Council’s 2004 report (http://www.conseil-concurrence.fr/doc/etudesthema.pdf), has been particularly addressed recently. Note first of all the two articles that follow David Spector’s paper: The Economics of loyalty discounts and antitrust law in the United States, B. H. KOBAYASHI (pp. 115-147) and Below-cost pricing and loyalty-inducing discounts: are they restrictive and, if so, when, A. HEIMLER (pp. 149-172). Also note: Michelin II: A per se rule against rebates by dominant companies, D. WAELBROECK (Journal of Competition Law and Economics, Vol. 1, Issue 1, pp. 149-171) and When are rebates exclusionary, F. GIULIO (ECLR, Sept. 2005, Vol. 26, Issue 9, pp. 477-480).

Modernizing by eradicating: how the Commission’s new approach to article 81 EC exemptions with the need to apply article 82 EC to vertical restraints, E. ROUSSEVA (CMLR, 2005, Vol. 42, Issue 3, pp. 597-638).

The purpose of this Article is to examine the interaction between Articles 81 and 82 EC in the case of vertical contractual practices, where the two qualifications can sometimes be combined. In order to do so, the editor looks first at the past. She analyses the initial approach to the concept of abuse of a dominant position, inherited from German competitive thinking, and its repercussions in case law. In this respect, she criticizes certain solutions that pay little (or no) attention to the justifications in terms of efficiency and effects. It then examines the present, and the current state of application of Article 81 EC, from the objectives of modernisation to the methodology currently followed by the Commission in this area. But the most interesting point of the article obviously concerns the future. Not finding any real dividing line between abuse of dominance and cartels in cases of vertical relationships and noting that the modernisation of Article 81 EC reinforces this state of affairs by emphasising the importance of market power in the analysis, Ekaterina Rousseva concludes that the breakdown between Article 81 and 82 EC in the field of vertical restraints is artificial and difficult to sustain, both legally and economically. She therefore underlines the advantages of excluding the application of Article 82 EC in such cases, both to ensure smooth and easy modernisation and to allow the fundamentals of the concept of abuse to be rethought and intellectual effort to be concentrated on pure unilateral practices.

Abuse of dominant position: a plea for consumer welfare, H. CALVET (RLC 2005/4, No. 337, p. 131)

As everyone has seen from recent literature on competition law, particularly that dealing with the abuse of a dominant position, the consumer is the object of all attention. So much so that the authors’ attachment to "consumer welfare" or "Consumer Welfare" now resounds like a refrain, so much so that it is invoked systematically, while the simple reference to the protection - whatever it may be - of the competitor triggers the wrath of those who only want to see the competitive process as a mechanism for the natural selection of players. This Darwinian’ movement, of American origin, which is so much in vogue at the moment in competition circles, is tending, particularly in the debate on the revision of Article 82 EC, to gather more and more echoes on this side of the Atlantic, even beyond the circle of economists. In a militant article, Hugues Calvet undertakes here a defence and illustration of the "harm to consumers" test, through the examples of three decisions of the Competition Council in which the latter has, the author points out, implemented this test with regard to three distinct practices - predatory pricing, tying and exclusive supply.

Refusal to deal and "essential facilities": does intellectual property require special deference compared to tangible property, C. RITTER (World Competition, 2005, Vol. 28, Issue 3, pp. 281-298).

Excessive prices: using economics to define administrable legal rules, D.S. EVANS and A. J. PADILLA (Journal of Competition Law and Economics, Vol. 1, Issue 1, pp. 97-122)

3.2Abus of collective dominance

Collective dominance: towards a unified notion? (2nd part) P. RINCAZAUX and E. DIENY (RLC 2005/4, n° 334, p. 117)

First collective dominance cases under the European consultation mechanism on electronic communications, I. BERNAERTS and S. KRAMER (Competition Policy Newsletter, 2005, No. 2, Summer, pp. 47-52).

4RESTRICTIVE PRACTICES

What back margins should be included in the threshold for resale at a loss after the law of 2 August 2005 in favour of SMEs? C. PECNARD and M. COUSIN (Petites affiches, 26 Sept. 2005, n° 191, p. 3)

Pending the publication of two decrees, but especially the "Dutreil II" circularwhich should clarify certain provisions of the last legislative intervention to date concerning restrictive practices of competition, namely the law of August 2, 2005, the authors, focusing on the new calculation of the threshold of resale at a loss (SRP), seek to understand how this device could be implemented by companies in practice, in particular with regard to the requirement laid down in the text to express the back margins, for the calculation of the PRS, as a function of the net unit price of each product, which is not without raising considerable difficulties, if not many questions in the companies. The authors propose an interpretation key based on the concept of effective purchase price, which has been invariable since 1963.

One will also see in connection with the same law of 2 August 2005, "Modernisation des relations commerciales" par la loi PME du 2 août 2005 - D’une action opportune à un résultat déceptif sur le droit français de la concurrence, M. CHAGNY (JCP éd. G 2005, n° 173, p. 1789), which notes at the same time the complexity of the new system and its excessive modesty, noting here and there real advances, like the system on remote reverse auctions, which, however, according to the author, could be open to circumvention.

Still on the subject of the law in favour of SMEs, we read: Commentaires de la loi en faveur des PME (BRDA 17/05, n° 19, p. 9-20); Loi Dutreil du 2 août 2005 en faveur des PME : analyse critique des dispositions relatives au droit des relations industrie-commerce, J.-C. GRALL, J.-M. MEFFRE and C. GUET (D. 2005, doct., p. 2149); La loi "Jacob-Dutreil" ou la réforme de la loi Galland - Titre VI de la loi du 2 août 2005 en faveur des PME (articles 41,42 et 47). Impact and consequences, J.-P. GUNTHER and F. VIALA (Petites Affiches, 4 oct. 2005, n° 197, p. 9); Le droit des pratiques restrictives est nouveau réformé: Chronique Droit interne de la concurrence, M. MALAURIE-VIGNAL (Contrats, conc., consom., oct. 2005, n° 170, p. 46); Loi n° 2005-882 du 2 août 2005 en faveur des petites et moyennes entreprises, Rédaction DO (documentation opérationnelle) (JCP éd. E 2005, n° 1373, p. 1535)

Proceedings of the Petites Affiches Meetings of 22 March 2005 on the theme "Distribution practices: the impossible reform", under the scientific direction of M.-A. FRISON-ROCHE (Petites Affiches, 1 Jul. 2005, No. 130) and more particularly, Des structures de marché responsables des dérives constatées dans le jeu des relations fournisseurs /distributeurs, M. GLAIS (p. 40-43) Pour une application raisonnée des dispositions de l’article L. 781-1, 2°, du code du travail, S. REGNAULT (Petites affiches, 29 July 2005, n° 150, p. 4)

The theory of parasitism exists... but it is not without limits! (note ss. TGI Paris, June 1, 2004), M. POUMAREDE (Petites affiches, August 18, 2005, n° 164, p. 9)

La technique contractuelle au service de la pérénnité du réseau de distribution, J. RAYNARD (JCP éd. E 2005, Cah. dr. entr. n° 3, p. 30)

5CONCENTRATIONS

Merger control and French administrative judge, P. HUBERT (RLC 2005/4, No. 265, p. 14).

In this article, in which Patrick Hubert looks back on the most recent contentious episodes of the Cegid/CCMX merger, we will learn the more general lesson he draws from the recent interventions of the Conseil d’État, inviting companies not to disregard the motivation of the Minister’s decisions on mergers, on the pretext that this would be the "thing" of the administration, regretting that this aspect of the issue is often neglected by the parties. "Finally, what the parties to a concentration need is not only ministerial authorisation but authorisation with a coherent and credible reasoned justification."

A new substantive test for EU merger control, K. FOUNTOUKAKOS and S. FOUNTOUKAKOS. RYAN (ECLR, May 2005, Volume 26, Issue 5, pp. 277-296).

The authors present here a comprehensive review of the history of the Merger Regulation and the development of case law in this area, as well as the context of the reform that has taken place and the prospects of the new testing standard. On more specific points, see also: Unilateral effects under the European merger regulation: how big is the gap, S. BAXTER and F. BAXTER and F. BAXTER, "Unilateral effects under the European merger regulation: how big is the gap? DETHMERS (ECLR, Jul. 2005, Vol. 26, Issue 7, pp. 380-389) and EC Merger regulation and the status of ancillary restrictions: evolution of the European Commission’s policy, G. METAXAS and H. METAXAS. ARMENGOD (ECLR, Sept. 2005, Vol. 26, Issue 9, pp. 500-506).

The DGCCRF guidelines on concentrations, P. ARHEL (JCP éd. E 2005, No. 231, p. 1359)

6 STATE AID

Privatisation and state aid - Time for a new policy, I. SIMONSSON (ECLR, Aug. 2005, Vol. 26, Issue 8, pp. 460-467)

The author of this article presents a critical reflection on the Commission’s position on State aid for privatisations. It develops the pro-competitive effects of privatisations, in particular with regard to transparency, analyses both the conditions under which privatisations may involve state aid and the way in which an allegation of state aid must be denied in such circumstances, and ends by challenging the procedure for privatisations envisaged in the Commission guidelines.

EC state aid control: the case for reform, F. LOUIS, S. FRATTA and V. TERRIEN, (Global Competition Review, August 2005, p. 37).

The editors comment here on the discussions that took place at the conference on 14 June 2005 in Brussels on, among other things, the Commission’s State Aid Action Plan to achieve the Lisbon objectives. In particular, we note the difficult question raised by Professor Ehlermann concerning the criteria for determining the "right" amount of aid as well as that relating to investment aid, particularly in R&D in the context of global competition.

Les services d’intérêt économique général : développements récents, F. CHALTIEL (Petites affiches, 5 Jul. 2005, No 132, p. 4)

Note ss. CAA Paris 5 Oct. 2004, B. FERRARI (Gaz. Pal., 7-9 Aug. 2005, p. 9)

Chronique des aides publiques - 2004, T. FOUQUET, (RMCUE June 2005, n° 489, p. 398)

7PUBLIC SECTOR AND COMPETITION

Incremental costs and cross-subsidies: a method of analysis which contributes to the rebalancing between free competition and public service - Based on two recent decisions of the European Commission ("Deutsche Post" case) and of the Competition Council ("régie des passages d’eau de la Vendée" case), C. BARTHELEMY (CJEG 2005, p. 225)

A review of two decisions of the European Commission (Deutsche post AG) and the Competition Council (régie des passages d’eau de la Vendée) in which the competition authorities, seized of predatory pricing practices, departed from the accounting method of comparing costs and revenues recommended in the Akzo judgment to adopt an analysis based on covering the "incremental costs" incurred by the revenues of the competing activity. In this extremely detailed analysis, which is also highly critical of the reasoning followed by the Competition Council, which has since been confirmed beyond all expectations by the Paris Court of Appeal, we will focus on developments relating to the most delicate aspect of the Council’s decision, namely the failure to take into account the fixed costs of renting the launch, even though the Council had already decided on this point, on the grounds that the Conseil d’État had already given its opinion, not to consider whether the launch was oversized with regard to the public service mission in which it was involved.

Due to the richness of the developments and the finesse of the analysis, this paper is particularly valuable for a good understanding of the treatment by competition authorities of the recurrent issue of predatory pricing. We will also see in connection with the same decision of the Council in the case "régie des passages d’eau de la Vendée", Concurrence et services publics : détermination des coûts pertinents, A. MAZIERES (AJDA, 27 June 2005, p. 1334). Anticompetitive practices: autonomous producers must hold EDF liable before the administrative judge (note ss Cass. 1re civ. Sept. 29, 2004), P-A. JEANNENEY and L. AYACHE (AJDA, 27 June 2005, p. 1348) Entente et marchés publics, nouvelles avancées du droit de la concurrence, F. Linditch (JCP éd. Administrations et collectivités territoriales 2005, n° 1324, p. 1449)

La régulation des services publics en réseau : réflexions sur la recherche d’un équilibre entre l’ouverture à la concurrence et l’exigence de service public, F. F. LISSOUCK (RRJ, 2005-2, p. 841)

A text on the environment in the light of the principle of free competition (note ss CE. 20 Apr. 2005, CNPA), F. D (Dr. admin., June 2005, p. 18).

8PROCEDURES

8.1General

Les mesures conservatoires devant le Conseil de la concurrence: la "procédure conservatoire" en question, O. FREGET, F. HERRENSCHMIDT (première partie) (Rev. Lamy dr. aff. juin 2005, n° 83, p. 13); (seconde partie) (Rev. Lamy dr. aff. juil. 2005, n° 84, p. 11.

The article also appeared in Lamy dr. éco, July and Sept. 2005, bull. J and K, no. 186 and 187. However, it is preferable to refer to the Lamy droit des affaires insofar as this version alone contains a graphic useful to the understanding of the text, as well as a timely warning on the activity of the authors.

Behind the (pro domo) plea, which is very well argued and ultimately convincing, is the argument in favour of broadening the scope of application of protective measures, since Olivier Freget and Fleur Herrenschmidt propose that the Competition Council be given a scope of action at least as broad as that enjoyed by the civil or commercial summary proceedings judge and that the same Council be relieved of the obligation to proportion the measure it intends to take to what is strictly necessary to deal with the emergency, The authors provide a detailed and enlightening overview of a jurisprudence whose nuances are sometimes difficult to perceive, and which is still in the process of consolidation. In this regard, they stress the practical dangers of the overly restrictive assessment of the Council’s powers in this area adopted by the Paris Court of Appeal. The increase in the threshold for intervention by the competition authorities in the adoption of protective measures which we are witnessing is mainly giving rise to the risk of not taking a measure which would have proved necessary and justified, since the competition authorities are obsessed - and this goes far beyond the strict framework of protective measures - with the fear of implementing measures which might ultimately prove to be inappropriate. To be read as a matter of urgency... Determinants of private antitrust enforcement in the United States, D. H. GINSBURG and L. BRANNON (Competition Policy International, Autumn 2005, Vol. 1, No. 2, pp. 28-43). Chronique de droit de la concurrence - Arrêt "Syfait", P. IBAÑEZ (RDUE, 2/2005, p. 397)

8.2 Regulation 1/2003

The new EC competition policy: is private enforcement appropriate for the banking sector, I. M. CATLETT (Journal of Int. Banking Law and Regulation, 2005, Vol. 20, Issue 7, pp. 305-314)

8.3 Sanction Policy - Clemency - Settlement

The settlement procedure before the Competition Council, M. KOEHLER DE MONTBLANC and K. BIANCONE (JCP éd. E 2005, n° 1222, p. 1374)

Here is a first, very detailed assessment of the implementation by the Competition Council under the supervision of the Paris Court of Appeal of the settlement procedure set out in Article L. 464-2, III, of the Commercial Code. In addition to the highly analytical, and as such particularly welcome, nature of the examination of the various cases handled by the competition authorities, the main focus of this article is on the advice, from which companies will benefit most, on the strategy to be adopted in the conduct of the procedure at each stage of the procedure. This will ensure that the reasoning put forward to demonstrate that the notified objections have not caused damage to the economy cannot be interpreted as a challenge to the reality of the objections.

Cumulative implementation of simplified and transaction procedures, E. CHEVRIER (D. 2005, act., p. 2216)

First commentary on the opinion delivered on 11 July 2005 by the Cour de cassation at the request of the Paris Court of Appeal on the possibility for the Competition Council to combine the so-called "settlement" procedure provided for in Article L. 464-2, III, of the French Commercial Code and the simplified procedure of Article L. 463-3 of the same Code.

Is the Penalization of Community Law the Solution, W. P. J. WILS (RLC 2005/4, No. 338, p. 139)

At the end of an in-depth study, Wouter Wils envisages the horizon, which is probably still quite distant, where criminal sanctions, and in particular prison sentences for natural persons who have played a decisive role in the organisation of unjustifiable cartels, will become an integral part of the competition laws of the Member States of the Union, and even of Community competition law, a development which the author calls for because of the effectiveness of the resulting repression, even if he is aware that the main obstacle to such a development is not so much legal as cultural: a broad political and public consensus on the harmful nature of cartels and the need to condemn them severely is indispensable. He even goes so far as to consider the possibility of generalising criminal law enforcement in all Member States by harmonising European rules and procedures, without omitting to envisage similar generalisation at the level of the Community institutions, even under a constitutional treaty.

Leniency applicants face to modernisation of EC competition law, C. SWAAK and M. R. MOLLICA (ECLR, Sept. 2005, Vol. 26, Issue 9, pp. 507-517).

In this article, the authors draw up an inventory, from the point of view of the leniency applicant, of the practical and legal difficulties of applying the leniency regime in the context of the modernisation of the European competition rules. In particular, it focuses on the non-existence of leniency in some Member States, the lack of harmonisation in others, the practical question of the body (or bodies) to which a leniency application can be submitted and the security of the information provided. They also try to propose main lines of thought and practical solutions to these questions. The authors conclude on the risks currently created by the procedure as it currently operates and suggest the adoption of a harmonised leniency regime on the basis of Article 83 (possibly combined with Article 308) of the EC Treaty, which would cover the Commission and all NCAs.

9REGULATIONS

Generating profits? Can liberalized markets fit the electricity bill, M. GRIMSTON (Int. Energy Law & Taxation Review, 2005, 6, p. 127-139).

In this article, the author presents a critical, reasoned and constructive assessment of the process of liberalisation of electricity markets in Europe. After presenting the specificities of the electricity market, he reviews the main difficulties raised by liberalisation. In particular, he notes the difficulties related to the incentive to invest and the divergence of needs and objectives between consumers, potential investors or governments. It also discusses the interactions between market structure and the outcome of the process and raises the inevitable issue of rising prices. It stresses that liberalization is a complex reform that involves major changes and believes that the failures of the processes can be partly attributed to the fact that they were not orchestrated by specialists or with sufficient knowledge of the models and needs. He concludes by highlighting some points necessary for the success of a liberalization process, including investor confidence and the recognition that there is no single general and effective model of liberalization.

Competition in the Electricity Sector (OECD Review of Competition Law and Policy, Vol. 6, No. 4, 2005)

The OECD Secretariat has summarised here the discussions that took place in October 2002 at a round table devoted in particular to the analysis of market power in the electricity sector, particularly with regard to congestion problems, but also to alternatives to the existence of such powers, such as increasing transport capacity.

Actualités du droit de la concurrence et de la régulation, L. RICHER, P-A. JEANNENEY and N. CHARBIT (AJDA, 12 Sept. 2005, p. 1657)

Service bancaire de base, service universel et service public (note ss. avis du Conseil de la concurrence n° 05-A-08 du 31 mars 2005), M. BAZEX et S. BLAZY (Dr. admin., June 2005, p. 30)

Annulment of a decision of the Autorité de régulation des télécommunications on local loop unbundling tariffs and its consequences - conclusions on Conseil d’État, 25 February 2005, France Télécom, E. PRADA-BORDENAVE (RFDA, July-August 2005, p. 802).

10INTERNATIONAL POLICY

Federal Trade Commission 90th Anniversary Symposium (Antitrust L. J., 2005, Vol. 72, Issue 3, pp. 745-1183)

The Antitrust Law Journal includes in this issue twenty-three papers presented at a two-day symposium marking the ninetieth anniversary of the FTC. The large number of contributions devoted directly or indirectly to consumer protection is noteworthy, as is the contribution by T. CALAVANI, Conflict, cooperation, and convergence in international competition (pp. 1127-1146).

Competition policies, N. JALABERT-DOURY, L. NOUVEL, I. SIMIC (RD aff. Int. 4/2005, pp. 495-508)

The European Commission’s decision against Microsoft: A violation of the antitrust agreements between the United States and the European Union, M. MÜLLER (ECLR, June 2005, Volume 26, Issue 6, pp. 309-315).

The US and EU move towards substantial antitrust convergence on consumer welfare based enforcement, M. BLOOM (Antitrust, Summer 2005, pp. 18-22).