Viktoria HSE Robertson and Marco Botta
Industries often establish technical standards via standard-setting organizations (SSOs) in order to ensure the interoperability of products and future innovations, so-called formal standards. Industry standards can also emerge from the market, in which case they will be referred to as de facto standards. Many of these formal or de facto standards rely on a wide range of innovations that are protected by patent law. Patents that read on technical standards are referred to as standard essential patents (SEPs). Standards are widely regarded as being pro-competitive, especially as they can encourage further innovation. However, there can also be reason for competitive concern in relation to standards: as other intellectual property rights, SEPs establish an exclusive right of exploitation for the patent owner. Within formal standard-setting procedures, a mechanism has been adopted in order to avoid a potential restriction of competition in the market: the SEP owner usually offers to the SSO its ‘commitment’ to license its SEPs to any interested third party under fair, reasonable and non-discriminatory (FRAND) terms and conditions. In the case of de facto standards, no such commitment is made. Both within the EU and the US the question increasingly debated concerns the consequences of the failure by the SEP owner to conclude a licensing agreement with an interested third party. This chapter starts by looking at the vital role that injunctive relief plays in intellectual property law in order to safeguard the patent owner’s exclusive rights. Against this background, it discusses possible anti-competitive consequences that injunctive relief might bring about both in terms of exploitative and exclusionary effects. Thereafter, it analyses whether and under which conditions the seeking of injunctive relief by the SEP owner could represent an abuse of market power, in breach of section 5 of the Federal Trade Commission Act and Article 102 of the Treaty of the Functioning of the European Union. Finally, it discusses the diverging treatment of SEP injunctions on both sides of the Atlantic. The chapter adopts a comparative legal approach in order to highlight the possible convergences or divergences of the approaches taken so far in the US and in the EU on this issue, and the possible cases of mutual learning. The findings are also of interest for other competition law jurisdictions, since the standards adopted by SSOs have an international dimension, and SEP owners increasingly ask for injunctions in various national courts in order to safeguard their rights. Taking into consideration that most of the countries in the world nowadays prohibit the abuse of market power, the current American and European debates on the compatibility of prohibitory injunctions with antitrust/competition law is also likely to take place in other countries of the world in the near future. In particular, the test defined by the CJEU in the Huawei v ZTE ruling could be an inspiration for courts and competition authorities of other jurisdictions called to assess similar issues.
Marco Botta and Alexandr Svetlicinii
Alexandr Svetlicinii and Marco Botta
The chapter analyses the pattern of enforcement of Art. 102 TFEU in network industries by the national competition authorities (NCAs) of the new and the EU Member States who candidate. The chapter concludes that while the European Commission has enforced Art. 102 TFEU in the context of its market liberalization agenda, the NCAs of the selected jurisdictions have enforced Art. 102 TFEU in order to protect final consumers. In particular, while the Commission has focused its enforcement on exclusionary conduct and adopted structural and behavioural remedies via commitment decisions, the NCAs of the selected jurisdictions have mainly sanctioned exploitative conduct, such as excessive pricing and unfair contractual conditions.
Rozeta Karova and Marco Botta
Following the 2007 Sector Inquiry into the energy sector, the EU Commission has actively enforced Article 102 TFEU to sanction different forms of abuse of dominance by energy operators. Most of the cases have been concluded via commitments decisions which mainly included far-reaching structural (i.e. divestiture of capacity) rather than behavioural remedies. Moreover, in its commitment decisions the EU Commission has mainly targeted exclusionary conducts by energy undertakings, rather than directly sanctioning the excessive pricing in the wholesale and retail markets as exploitative abuses of dominance. Unlike the EU Commission, the National Competition Authorities (NCAs) of the EU Member States have directly sanctioned excessive pricing both at the wholesale and retail level as exploitative abuses of dominance. In particular, a number of NCAs have sanctioned withdrawals of capacity by electricity generators as abuses of dominance, since such conduct caused a direct rise of wholesale electricity prices. Secondly, NCAs of a number of EU Member States have also sanctioned the excessive prices in the retail energy markets imposed by undertakings on final customers. Besides the different focus in the enforcement of Article 102 TFEU in the energy markets in comparison to the EU Commission, the NCAs have mostly opted for imposition of fines on the sanctioned undertakings, rather than imposing structural remedies via commitment decisions. The chapter aims to analyse the enforcement trends of Article 102 TFEU by the NCAs with regard to excessive prices applied by energy operators in the wholesale and retail markets. In particular, the chapter compares such pattern of enforcement with that followed by the EU Commission in this sector during the past few years. The chapter tries to identify the reasons for the different focus of the authorities at national and EU level. It also discusses whether such divergences in the enforcement of Article 102 TFEU are justified in the light of the decentralized enforcement system of EU competition law. Keywords: electricity markets; excessive pricing; exploitative abuses; commitments; remedies
Pier Luigi Parcu, Giorgio Monti and Marco Botta
Since the Treaty of Rome, Art. 107 TFEU has regulated how the Member States can grant aid either to private or State-owned undertakings. Aid measures incompatible with Art. 107(1) may only be authorized by the European Commission if they fulfill one of the conditions mentioned in Art. 107(2) and 107(3) TFEU. Although the wording of the Treaty has not changed significantly over the past 60 years, the goals of State aid policy have progressively shifted. Similar to other free trade agreements, the EU founding fathers included State aid rules in the Treaty of Rome in order to avoid a subsidies war among the Member States—a war that could have distorted free competition within the internal market. State aid rules were thus initially conceived as a complementary instrument to the free movement rules. In addition, State aid law was also complementary to competition policy, since the provisions concerning both policies were included in the same chapter of the Treaty, and were enforced by the same institution—that is, DG Competition of the European Commission.
Emerging Trends at the National and EU Level
Edited by Pier L. Parcu, Giorgio Monti and Marco Botta
Pier Luigi Parcu, Giorgio Monti and Marco Botta
A long time has passed since Advocate General (AG) Geelhoed stated in his Opinion in Manfredi that ‘private enforcement of (competition law) in Europe is still in its infancy’. One decade after the landmark ruling of the Court of Justice of the European Union (CJEU), the number of antitrust claims in national civil courts has steadily increased, though major differences exist among the EU Member States. In particular, the UK, Germany and the Netherlands have become the preferred fora by claimants in cross-border actions, while the majority of the other Member States have not recorded many antitrust damages cases. In term of remedies, however, claimants often request either injunctive relief or contract invalidation, rather than damages. Finally, industrial customers, rather than final consumers, start most of the legal actions, even in the countries where private enforcement of EU competition law is more developed. During the past decade, the EU Commission has actively promoted damages actions for breaches of EU competition rules. During this period of time, the pendulum of the policy discourse followed by the EU executive branch has swung between the goal of increasing the number of damages claims in national courts on the one hand, and the idea of establishing a level playing field among the EU Member States in terms of applicable procedural rules, in order to discourage forum shopping on the other. In the initial 2005 Green Paper, the EU Commission emphasized that damages actions should ‘deter’ competition law violations.