by Kevin Coates | Feb 12, 2010 | Competition
This seems to be my month for guest blogging. Danny Sokol at the Antitrust & Competition Policy Blog asked if I would review Professor Eleanor Fox‘s comparative competition law book, The Competition Law of the European Union in Comparative Perspective, an excellent book that I gave some minor comments on in draft. My review is here on Danny’s...
by Kevin Coates | Jan 20, 2010 | Antitrust, Intellectual Property
The IPKat weblog is a superb resource on a whole range of intellectual property issues, and it is well worth a regular read if you are interested in anything to do with IP in Europe or the US. I took issue at an aside made by the Kat on the subject of IP, monopoly and economists, and the Kat generously invited me to publish a guest post on the weblog. The problem I wanted to highlight is that antitrust law and intellectual property law both refer to “monopolies”, but that – contrary to what some IP lawyers and, to be fair, some caselaw from the early 20th century suggest – the term is used to mean two different things in the different legal disciplines. My guest post is...
by Kevin Coates | Dec 10, 2009 | Net Neutrality
Erik Cecil’s recent post on net neutrality is generating discussion on several mailing lists. I agree with a lot of what Erik says – particularly summing up the underlying problem as “monopoly power in the loop plant”, a point which seems so obvious to my (European, antitrust-influenced) eyes, that I often stare with bemusement at some of the debates (and court judgments) in the US. But I wonder about the implied strategy of abandoning the net neutrality proposals in favour of some form of network access regulation. Calling for net neutrality to be abandoned because it does not address the most fundamental problem reminds me a little of the old joke about the tourist asking the local for directions and receiving the reply, “Well, I wouldn’t start from here.” Although the validity of the 1996 Telecom Act and its unbundling provisions has been upheld in principle, the various FCC attempts to implement unbundling in practice were struck down hard by the courts, seemingly giving little or no deference to FCC discretion. Then with the shift in approach of the FCC under the Bush Administration, came the broadband de-regulation measures of 2003-2005 where first the cable networks, then the telecoms broadband networks were moved out of the scope of Title II of the 1996 Act and into Title I, ruling out any form of mandated third party access. This was upheld in court, with a ruling that seemed to give the FCC significantly more margin for discretion in deregulating, than the FCC had been given in its earlier attempts at regulating: the most notable example, probably being the court agreeing...
by Kevin Coates | Oct 27, 2009 | Antitrust, Apple, Microsoft
Scoble has a great piece on why he thinks Apple’s iPhone isn’t going to be pushed aside anytime soon: 85,000 reasons why Apple’s iPhone isn’t going to be disrupted. The availability of large numbers of applications valued by users is one of the arguments that was used to support the finding that Microsoft had market power in the US and EU antitrust cases. In the US, the District Court’s findings of fact discusses the applications barrier to entry starting at para. 37: Consumer interest in a PC operating system derives primarily from the ability of that system to run applications. The consumer wants an operating system that runs not only types of applications that he knows he will want to use, but also those types in which he might develop an interest later. Also, the consumer knows that if he chooses an operating system with enough demand to support multiple applications in each product category, he will be less likely to find himself straitened later by having to use an application whose features disappoint him. Finally, the average user knows that, generally speaking, applications improve through successive versions. He thus wants an operating system for which successive generations of his favorite applications will be released — promptly at that. The fact that a vastly larger number of applications are written for Windows than for other PC operating systems attracts consumers to Windows, because it reassures them that their interests will be met as long as they use Microsoft’s product. For the EU, see the confirmation in the CFI’s Microsoft judgment of September 2007 (at para. 1088) upholding the Commission 2004 Microsoft...
by Kevin Coates | Oct 27, 2009 | Competition, Regulation
(The third part of a general lecture on competition law, state aid and regulation, separated into three posts: Part 1, Part 2, Part 3.) Competition Enforcement in the Financial Crisis What should we make of State aid control? Is it a consistent part of a competition law system? Although it is often difficult to enforce, I think the answer is yes. There is already some recognition of its value in the – far too weak – WTO rules on subsidies, but until State aid laws are seen as important parts of domestic competition laws, I do not think that we are going to see significant multilateral enforcement mechanisms (which is a shame). If you want a consistent system of competition law, however, State aid control should be included to control national and sub-national State aid, and not just aid which has cross-border effects. At first sight, the US Commerce Clause would appear to provide a constitutional basis for that here,(“The central rationale for the rule against discrimination is to prohibit state or municipal laws whose object is local economic protectionism, laws that would excite those jealousies and retaliatory measures the Constitution was designed to prevent”; Toomer v. Witsell, 334 U. S. 385, 403–404 (1948)} but I know very little about US constitutional law so more informed minds may differ.) The present financial crisis has shown the value of the EU’s State aid rules. When he spoke here in September, Professor Jenny gave a number of examples of involvement of the EU competition rules in the financial crisis. The European Commission, as a competition authority, has been deeply involved in...
by Kevin Coates | Oct 27, 2009 | Competition, Regulation
(The second part of a general lecture on competition law, state aid and regulation, separated into three posts: Part 1, Part 2, Part 3.) The Competition Rules and State Action For a US antitrust lawyer, discussion of the competition rules does not extend to State (or state) action. For the drafters of the EC Treaty, however, it would have been obvious that State action would need to be covered. Looking at the different Member States, it would have been very clear that it is not just laws prohibiting trade, or actions of companies that could distort competition on the market. State owned companies were common – in some Member States they still are (even before the nationalisations caused by the financial crisis); state granted monopolies were also common. So completing the single market meant completing the competition rules with control on state action, control being exercised through Articles 86 – which imposes limits on the state’s ability to grant special or exclusive rights – and Article 87 – which imposes limits on the state’s ability to grant aid to individual companies or sectors. From the description of the system of the Treaty above, you can see that these rules aimed at the States have a dual origin – they are part of completing the single market (for example, state monopolies could effectively prevent free movement of goods and services), and they are part of the competition rules (for example, state aid could undermine productive efficiency, and incentives to invest and innovate). No other jurisdiction had, or has, comparable rules – the anti-subsidy provisions of the WTO are a shadow...