Kluwer Competition Law Blog

The discussion on the merit and feasibility of a possible application of Behavioural Economics in Competition Law and Policy has been fierce, particularly so in the context of US Antitrust Law. The fundamental assumption of Behavioural Economics lies in the recognition that human decision making is vulnerable and subject to biases. So-called neo-classical economic models that have hitherto informed competition law and policy (Chicago School, post-Chicago School, Harvard School) have relied on the existence of a ‘homo economicus’ i.e an ‘[economically] rational’ market participant (be it consumer or firm) who is driven by the goal of constant profit maximisation, appropriates all avai [...]

The bigger they are, the harder they fall and the sounds of the crash get louder as the legal controls get weaker.

Take, for instance, the recent £807.2m sale of Edinburgh airport to Global Infrastructure Partners. This is the latest disposal following the original recommendation by the UK Competition Commission (CC) that BAA’s airport operating empire should be broken up. Before approving the Edinburgh deal, the CC reviewed potential buyers to ensure that they met its criteria on things such as expertise, financial resources and independence from BAA. The CC will now consult on draft undertakings provided by GIP that prevent any resale of the airport within five years unless the new purc [...]

That the ECJ rejected Tomra’s appeal was unsurprising. The strictures of the EU case law on illegal rebates for dominant companies is well known. The case law of the Court takes a near per se approach to condemning any rebate scheme linked to exclusivity, substantial volume purchases or stretch targets, taking the view that by their nature such programmes tend to exclude competitors. Absent cost savings or benefits that can be shown – and hitherto none have survived review in the Court’s case law – then the rebate scheme would be illegal.

Degree of Foreclosure

But practitioners were watching closely whether the ECJ would resolve apparently irreconcilable dicta of the General Court, dicta wi [...]

There have been two big pieces of news in the UK recently: the resignation of John Fingleton, the chief executive of the Office of Fair Trading, and the heavily-trailed announcement of the newly merged OFT and Competition Commission, now called the Competition and Markets Authority (CMA).

The link between the two events is probably only one of timing. In his resignation letter to the business secretary Vince Cable in late February, Mr Fingleton said that a major reason for his going was that the  proposals to merge the OFT and the Competition Commission into the SMA “have now reached a suitable juncture to enable arrangements for succession to be taken forward”. Three weeks later, the g [...]

Sometimes competition law looks as if it’s on the side of the bullies. Take, for example, the French Autorité de la concurrence’s recent decision in the Paris food retail sector case. The Autorité came up with the idea of using a new tool – a structural injunction – to tackle retail concentration. This would let the regulator order the sale of assets to competitors without first deciding that their owner had broken any competition rules.

In the present case, the Casino group has a 60% share of the Parisian food retail market. This is over three times more than its main competitor, the Carrefour group. However, no-one has suggested that Casino has done anything wrong in being so suc [...]

On 2 February 2012, the EU’s General Court issued two important judgments concerning the issue of whether joint venture parents can be held liable for the cartel behaviour of their 50-50 joint venture. In T-77/08 (Dow Chemical v Commission) and T-76/08 (El du Pont de Nemours and Others v Commission), the General Court held that Dow Chemical and El DuPont could be held jointly and severally liable for the conduct of their jointly owned subsidiary, DDE, in which each parent had a 50% shareholding. This was despite the fact that each parent did not individually have the power to impose decisions on DDE, but could only prevent DDE from taking certain decisions, and that DDE was a “full function” [...]