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Where now for Article 82? Amelia Fletcher Chief Economist Office of Fair Trading

Where now for Article 82? Amelia Fletcher Chief Economist Office of Fair Trading. BIICL Transatlantic Dialogue 15 May 2008 (The views expressed here are my own and not necessarily those of the OFT). Background. Few Ch2/Art82 cases at OFT No sign of long-awaited EC guidelines

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Where now for Article 82? Amelia Fletcher Chief Economist Office of Fair Trading

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  1. Where now for Article 82?Amelia FletcherChief EconomistOffice of Fair Trading BIICL Transatlantic Dialogue 15 May 2008 (The views expressed here are my own and not necessarily those of the OFT)

  2. Background • Few Ch2/Art82 cases at OFT • No sign of long-awaited EC guidelines • Few s2 cases in the US and no imminent promise of guidelines • Is this….

  3. ….a death knell for Art 82? ARTICLE 82

  4. No! The DGComp caseload…. Alcan Intel Rambus Electrabel Microsoft II EDF ENI Boehringer Qualcomm RWE

  5. No! UK High Court judgments • Attheraces v BHRB (Feb 07) • EW&S v E.ON (Mar 07) • AAH v Pfizer (Mar 07) • Chester City Council v Arriva (June 07) • Software Cellular Network v T-Mobile (Jul 07) • Virgin Media v BSkyB (case pending)

  6. So why no EC guidelines? • Do the current DGComp cases provide a clue?

  7. So why no EC guidelines? • Do the current DGComp cases provide a clue? • Might guidelines restrict the types of abuse that could be examined? • Or is conflict with past precedent the greater worry?

  8. Do we care? • Art 82 Business ‘pretty brisk’ • DGComp - and others - broadly taking a more economic approach • DGComp not losing Art 82 cases

  9. Yes! • The Commission’s ‘more economic approach’ needs Court buy-in • Guidelines needed for this (prioritisation guidelines would be a start but not enough) • Guidelines also important for ensuring consistency across EU • So what can be done?

  10. Non-horizontal mergers: a parable • Cast your mind back 2 years… • Some high profile losses for DGComp • Basic problem: no clear story of harm and no clear empirical testing of logic • Recognised need for change/guidelines • Guidelines very principles-based: not tools/rules • Working well - eg TomTom/Tele Atlas

  11. Parallels with Article 82? • Much behaviour categorised as potentially abusive could equally be pro-competitive: • Low pricing and discounting • Offering a second product cheap (or free) with a first • Choosing the right business partner • Potential for exclusion depends critically on market circumstances • A clear story of harm would examine ability, incentive, likely effect and efficiency benefits

  12. Refusal to Supply by Microsoft: The Commission’s Key Findings

  13. An approach for Art 82 guidelines? • Principles instead of detailed rules • Harm to competition (and consumers) is crucial • Four elements of a clear story of harm: • Ability to foreclose • Incentive to foreclose • Likely impact on effective competition • Efficiency benefits • Plus: Dynamic ‘trumps’ static

  14. Where now for Article 82?Amelia FletcherChief EconomistOffice of Fair Trading BIICL Transatlantic Dialogue 15 May 2008 (The views expressed here are my own and not necessarily those of the OFT)

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