Competition authorities have a new “top model”

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by Joana Whyte, Associate Lawyer at SRS Advogados and member of CEDU

Until recently, the fashion industry had never been an obvious sector of focus for competition authorities. However, in the past few months, national competition authorities from Italy, the United Kingdom and France have been particularly attentive to this industry, initiating investigations for competition law infringements which culminated in the imposition of fines on several entities, reminding us all that competition law applies to all sectors of the economy.

In November 2016, the Italian Autorità Garante della Concorrenza e del Mercato concluded that eight major modelling agencies, representing 80% of Italy’s market share, including Elite Model Management, Major Model Management and the association of the fashion industry – Assem, had participated in a cartel during the relevant period from May 2007 to March 2015. The activity occurred in the context of negotiations with customers, including fashion houses, luxury car dealers, consumer goods brands and advertising companies on services ranging from runway shows to photoshoots for catalogues and promotional events.

The investigation was triggered by a leniency application put forward by IMG Italy, S.r.L on 18th September 2014. Following a thorough investigation, the Italian Competition Authority applied a total fine of €4.5 million on the investigated entities[i]. The evidence provided by IMG was considered to be decisive for the investigation. In particular, IMG provided useful elements for understanding the nature of the cartel, the purposes it pursued, and the ways in which it was achieved, and therefore was granted total immunity by the Autorità.
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Sanctions to the anti-trust behaviour: the rethinking

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by Ana Filipa Afonseca, student of the Master´s degree in EU Law of UMinho

It´s not enough for the conducts to be forbidden. The European legislator’s task is much more compelling and challenging because to the European legislator it’s not enough to say “what can’t be done”, he has to be the creator of a coordinated and coherent system of norms in the Member States. The specificity of the regime created will dictate from where these norms start and where they end up. The anti-trust practices, in a internal market logic, are established in the articles 101, 102 and 106, TFEU as prohibited conducts, prejudicial conducts of a European economic project, which shall be conducive to a strong and developed market. However, the European lawmaker could not apply the same logic of cause, effect and consequence that applies to the traditional national systems once these strike back with the set of rules of the market practice – heir to an era when it was every man for himself.

In fact, the European Union has responded with new mechanisms but they are not consistent with integral efficiency of the competition law, in one hand, because in many cases the heavy fines paid by companies outweigh the profit earned by the anti-trust practice or, in the other hand, in case of abuse of dominant position, after the sanction, it converts itself in a long-lasting dominant position. A calculated risk.

Continue reading “Sanctions to the anti-trust behaviour: the rethinking”

Google vs. EU antitrust proceedings

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by Ana Filipa Afonseca, student of the Master´s degree in EU Law of UMinho

In Portugal (and not only in Portugal), the prefix “Dr.” is usually attached to the name and confers a kind of inherent credibility to someone, as form of courtesy, sometimes for the sake of politeness even if it’s used wrongly. All over Europe, Google is referred as the most powerful search engine on the internet. Some may even address it as “Dr.”. Is it possible that we’re the main contributors for its overvaluation in the market? The fact is that Google acquired a dominant position in the market. But is this a mere case of success?

The European Commission believes that this is not the case and has accused Google of abusiving its dominant position for imposing to the device manufacturers and mobile service providers the installation of Google’s search engine by default on all the devices, through payments and exclusivity contracts.

In fact, competition between other search engine providers on the market and Google is practically nil, in accordance with the definition of a free market as one in which companies, independent of one another, operate in the same business sector and compete with each other to attract consumers. In other words, in free market each company is subject to the competitive pressure of one another. Not dispelling that the market power will always be regarded as a sort of cat and mouse game, and naturally, someone has to be the cat, that is the natural order of the market.

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Passing-on of Overcharges: Will the National Courts Lead the Way Forward?

by Vírgilo Mouta Pereira, Jurist and Collaborating Member of CEDU

This article starts by presenting a description of the passing-on regime enshrined in the Damages Directive. It argues that national judges need an effective toolkit to successfully deal with issues relevant to passing-on, thereby contributing to the ultimate goal of the Damages Directive: to help citizens and undertakings to be compensated if they are victims of infringements of the EU Antitrust rules. Against this background, in the years to come, the courts of the EU Member States are expected to play a crucial role.

I – Introduction

The Directive 2014/104/EU on antitrust damages[1] (hereinafter referred to as “Damages Directive”) seeks to help citizens and undertakings to claim compensation it they are victims of a breach of the EU Antitrust rules. Infringements cause concrete harm and the Directive sets out rules to ensure that anyone who has suffered harm caused by a breach of Articles 101 or 102 TFUE can effectively exercise the right to claim full compensation for that harm[2].

Antitrust law infringements causing an overcharge, i.e. a price increase, can harm not only the direct purchasers of the affected goods or services, but also those who afterwards purchased those goods or services. Quantifying the extent to which an overcharge has been passed on is part of a broader framework: the quantification of harm in competition law. Continue reading “Passing-on of Overcharges: Will the National Courts Lead the Way Forward?”