Out of market efficiencies? Can they – should they be taken into account? This is an important question that tarnishes competition authorities as they struggle to take sustainability and other non-economic aims into account. Well, there are some hidden paragraphs in a few recent judgments of the Court of Justice of the European Union that pour cold water on this idea. First example: 𝑆𝑒𝑟𝑣𝑖𝑒𝑟 judgment of last week (https://lnkd.in/dgdXYpsR), look for para. 289 – this is about taking countervailing pro-competitive effects into account already in Article 101(1) TFEU: “289. In any event, as noted in paragraph 175 of the present judgment, the Krka licence agreement concerns markets which do not fall within the geographic scope of the infringement of Article 101 TFEU. In those circumstances, any pro-competitive effects that that agreement might have on those markets, even if they exist, would be irrelevant, from a logical standpoint, for the purpose of determining the existence of the infringement found in the present case on Servier’s core markets.” In other words, a restriction in one geographic market cannot be counterbalanced by something good in another geographic market. Second example: 𝐸𝑢𝑟𝑜𝑝𝑒𝑎𝑛 𝑆𝑢𝑝𝑒𝑟𝑙𝑒𝑎𝑔𝑢𝑒 judgment (Grand Chamber) of last December (https://lnkd.in/drUiFUsm), look for paras 193 and 194 – this is about the conditions of Article 101(3) TFEU: “193. As regards the second condition referred to in paragraph 190 of the present judgment, it involves establishing that the efficiency gains made possible by the agreement, decision by an association of undertakings or concerted practice in question have a positive impact 𝑜𝑛 𝑎𝑙𝑙 𝑢𝑠𝑒𝑟𝑠, 𝑏𝑒 𝑡ℎ𝑒𝑦 𝑡𝑟𝑎𝑑𝑒𝑟𝑠, 𝑖𝑛𝑡𝑒𝑟𝑚𝑒𝑑𝑖𝑎𝑡𝑒 𝑐𝑜𝑛𝑠𝑢𝑚𝑒𝑟𝑠 𝑜𝑟 𝑒𝑛𝑑 𝑐𝑜𝑛𝑠𝑢𝑚𝑒𝑟𝑠, 𝑖𝑛 𝑡ℎ𝑒 𝑑𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑡 𝑠𝑒𝑐𝑡𝑜𝑟𝑠 𝑜𝑟 𝑚𝑎𝑟𝑘𝑒𝑡𝑠 𝑐𝑜𝑛𝑐𝑒𝑟𝑛𝑒𝑑 (see, to that effect, judgments of 23 November 2006, Asnef-Equifax and Administración del Estado, C-238/05, EU:C:2006:734, paragraph 70, and of 11 September 2014, MasterCard and Others v Commission, C-382/12 P, EU:C:2014:2201, paragraphs 236 and 242). 194. It follows that, in a situation such as that at issue in the main proceedings, where the conduct infringing Article 101(1) TFEU is anticompetitive by object, that is to say, it presents a sufficient degree of harm to competition and is such as to affect 𝑑𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑡 𝑐𝑎𝑡𝑒𝑔𝑜𝑟𝑖𝑒𝑠 𝑜𝑓 𝑢𝑠𝑒𝑟𝑠 𝑜𝑟 𝑐𝑜𝑛𝑠𝑢𝑚𝑒𝑟𝑠, it must be determined whether and, if so, to what extent, that conduct, notwithstanding its harmfulness, has 𝑎 𝑓𝑎𝑣𝑜𝑢𝑟𝑎𝑏𝑙𝑒 𝑖𝑚𝑝𝑎𝑐𝑡 𝑜𝑛 𝑒𝑎𝑐ℎ 𝑜𝑓 𝑡ℎ𝑒𝑚.” In other words, all of the consumers harmed in the affected market must be the recipients of the benefit….
Thanks, but receiving benefit to an extent that can be determined does not necessarily mean total compensation.
Martin Gassler
3mo
Thanks for sharing these „hints“ - this seems to further support the Commission‘s reading of older cases (as set out in the Horizontal Guidelines, paras 569 and 583; citing in particular Asnef-Equifax in fn 400 and MasterCard in fn 405, which are also cited by the CJ in European Superleague)
Competition/regulatory lawyer + litigator (Avocat au Barreau de Bruxelles, Solicitor-Advocate & Barrister) Photographer
3moA broader and more flexible application of the criteria of Art 101(3) (perhaps for certain categories of cases such as environmental protection/sustainability) would be welcome, allowing for “out of market” efficiencies to be better taken account of…..the narrowness of the current approach which has been applied in so many cases is deeply unhelpful