Insights from a busy week on the Brussels conference circuit

Last week the competition law community got together in Brussels for the Chillin’Competition and CRA annual conferences, now two of the most anticipated conferences of the year (at least in Europe).

In case you missed all the excitement, we have summarised some of the most important themes for you below, including a number of important announcements.

Welcome to our new Director-General for Competition

Vice-President Vestager appointed Olivier Guersent as the European Commission’s Director-General for Competition.

Guersent, currently Director-General in DG FISMA (Financial Stability, Financial Services and Capital Markets Union), is not new to competition law. Some will remember him from his days at the Merger Task Force, which he joined as a national expert from his native France in 1992. He has remained in Brussels since and has worked with Competition Commissioners van Miert and Kroes, as well as with Barnier in DG MARKT. He returns to DG COMP succeeding Johannes Laitenberger, who recently became a judge at the General Court. The Director-General at DG COMP wields significant power. And tapping a Frenchman for a position traditionally held by Germans (six of the eight most recent Director-Generals have been German) is a strategic political move for France. Guersent’s appointment, which takes effect from 1 January, is welcomed by the competition community at large.

Vestager recently announced some changes to senior appointments within her cabinet. With Vestager’s broader responsibilities in her second term, her leadership team is likely to have an even more prominent role to play.

Market definition revamp

Vestager announced that the EC would be revisiting the way in which it defines relevant markets. The current notice is from 1997.

The review is set to look at the geographic scope of markets as well as how markets are defined in terms of products and whether consumers can easily switch from one product to another. It will, according to Vestager, take into account developments such as globalisation and also digitalisation and is generally welcomed by the competition community. However, it is unlikely that this review will lead to any dramatic reform of how markets are defined for the purpose of EU antitrust enforcement.

Think about remedies

Antitrust

Instead of imposing massive fines, regulators should think about crafty behavioural remedies to regulate big tech’s market conduct after an offence has been established. Fines are a blunt instrument that do not provide guidance on how the companies should behave to avoid infringing competition law.

Ceclio Madero Villarejo, acting Director-General of DG COMP pending Guersent taking office, said that the EC needs to design more prescriptive remedies in order to ensure that the conditions for effective competition can be restored after an antitrust offence has been established.

Merger Control

Martijn Snoep, President of the Dutch Competition Authority, emphasised that when exclusionary concerns arise during the merger review process, regulators should not shy away from behavioural remedies. This requires some ex-post monitoring, but Snoep said that these costs are still low compared to the resources needed to conduct an ex-post abuse investigation.

Snoep referred to a case in which the Dutch authority reviewed the acquisition of an online study materials platform by an established publisher. A remedy was imposed that mandated access to this platform on FRAND terms for the other established publishers.

How much proof?

A topic discussed at both the Chillin’Competition and the CRA conferences was the burden of proof. Recent studies have suggested that the burden of proof should be reversed, or at least made lighter for enforcers, when assessing the acquisition of tech start-ups by an incumbent.

Theofanis Christoforou, Director at the EC’s Legal Service, explained that the presumption of innocence is not an argument to put the burden of proof with regulators in merger control cases because there are no fines at stake. Cecelio Madero criticised the standard of proof saying that there must be a reasonable limit to the standard the EC needs to meet. Hans Zenger, from the EC’s Chief Economist Team, later justified reversing the burden of proof in these situations because already dominant companies are trying to maintain their dominance by making a defensive acquisition.

Many in the antitrust community are not convinced of the merits of these opinions, and it is too early to tell whether they will translate into concrete legislative proposals.

For a discussion on this topic in the context of antitrust, see our recent LinkingCompetition post.

Be daring with novel abuses

Novel abuses need not necessarily fit old precedents. Regulators often try to couch digital offences, like self-preferencing on online platforms, into old case law that was developed for pre-digital age infrastructures. They fear that otherwise their decisions will not be upheld by the Courts. It was argued that this reduces regulators’ flexibility and limits their ability to analyse new offences on new markets. And that regulators should dare to base their antitrust decisions directly on Article 102, without referring to old precedent. This forces Courts to go back to the origin of the prohibition and will lead to new strands of case law which will ultimately empower regulators.

The global rise against Big Tech: U.S. State brewing up the “perfect storm”

Unexpectedly, one of the biggest threats to the likes of Google and Facebook now comes from the U.S.. Earlier this year a large gathering of State Attorney Generals decided to take joint action to investigate Big Tech companies.

Doug Peterson, Nebraska’s Attorney General, and Max Miller, Iowa’s Assistant Attorney General, attended the CRA conference and reiterated that they are actively looking into the behaviour of Big Tech. It is unprecedented to have U.S. State enforcers speak at the conference and highlights the regulatory crackdown against the leading digital platforms.

For more on the uptick in U.S. enforcement in the digital sector, see our LinkingCompetition vlog (from 5 mins 5 seconds on for the U.S. content).