by Kevin Coates | Feb 16, 2010 | Antitrust
Christine Varney’s speeches as the Assistant Attorney General, such as that in Fordham last year, and yesterday’s speech in Paris (Co-ordinated Remedies: Convergence, Co-operation and the Role of Transparency) have struck a very constructive and conciliatory tone on the issue of convergence. Convergence between antitrust authorities, and having a coherent global system is clearly important to her, and she rightly points out that consistency will benefit both agencies and businesses. She also appreciates the limits to convergence, noting that any agency action has to be taken in the context of their own legal systems, and with a view to protect the consumers within that agency’s geographic area. In merger control, convergence works extremely well, particularly when parties time their notifications to the different agencies so that the agencies can move forward on a case together, discussing their thinking, and co-ordinating their information gathering. There are still some disagreements, but complete convergence is almost certainly an unattainable goal – given a complex set of facts, reasonable people can disagree on the appropriate analysis. In recent years, more concern has been expressed about (the lack of) convergence in respect of unilateral conduct. Given the DOJ’s section 2 report published last year, disavowed by several FTC Commissioners, then disavowed by Christine Varney, and withdrawn by the DOJ this year, transatlantic convergence is not the only problem to be addressed. There are profound differences of view within the US legal system and legal community as to the appropriate section 2 liability standards. And these are divisions within one single legal system. When you look at reducing divisions across different legal systems, the problem...
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...
by Kevin Coates | Oct 27, 2009 | Competition, Regulation
As part of Professor Eleanor Fox’s comparative EU/US competition law LLM class at NYU, she asked if I would give a lecture on state aid and regulation issues and how they relate to the competition rules. Here is the text of the lecture, separated into three posts: this is Part 1; Part 2; Part 3) Competition law, State aid, and Regulation One of the difficulties about studying the law is that there is never a good place to start. No individual law or rule exists in isolation; if you learn about one rule, you will understand a little; if you learn about more rules you will understand a little more about that first rule. Professor Dworkin’s idealised judge, Hercules, has a perfect knowledge of all rules, and only with that knowledge can the judge form a complete understanding of any individual rule. Fortunately, real life standards are a little lower, but it is useful to think about how any one rule fits into the overall system of laws; this is particularly useful when comparing US and EU competition law, as the EU system of “competition law” is rather different to that in the US. Rather than focused exclusively on company behaviour, the EU system looks at state action as well. The objective is, however, the same. Creating a Single Market When the drafters of the Treaties sat down in the 1950s, they had a specific object in mind – to create a single economic area out of the then six separate national economies (now 27 national economies). One of the major reasons to integrate the economies of the Member...
by Kevin Coates | Oct 22, 2009 | Net Neutrality
The FCC has published its notice of proposed rule-making on net neutrality rules (see also News Release, Genachowski Statement,
Staff Presentation). Under the draft proposed rules, subject to reasonable network management, a provider of broadband Internet access service: 1. would not be allowed to prevent any of its users from sending or receiving the lawful content of the user’s choice over the Internet; 2. would not be allowed to prevent any of its users from running the lawful applications or using the lawful services of the user’s choice; 3. would not be allowed to prevent any of its users from connecting to and using on its network the user’s choice of lawful devices that do not harm the network; 4. would not be allowed to deprive any of its users of the user’s entitlement to competition among network providers, application providers, service providers, and content providers; 5. would be required to treat lawful content, applications, and services in a nondiscriminatory manner; and 6. would be required to disclose such information concerning network management and other practices as is reasonably required for users and content, application, and service providers to enjoy the protections specified in this rulemaking. One quick aside: the proposed rules are limited to broadband internet access providers: AT&T’s complaint against Google Voice will go nowhere. The relationship between this proposal and the FCC’s earlier deregulation of fixed broadband networks seems odd. In a range of decisions from 2003 to 2005, the FCC took cable, DSL and fibre out of the scope of access obligations under the 1996 Telecoms Act. The FCC then claimed that the broadband market...