Table of Contents

Russian Competition Law in Light of the Principles of Ex Post and Ex Ante

Konstantin Totyev, National Research University Higher School of Economics

Public Enforcement Compensation and Private Rights

Prentiss Cox, University of Minnesota Law School

Soft Law in EU Competition Law and its Judicial Reception in Member States -- A Theoretical Perspective

Zlatina Rumenova Georgieva, Tilburg Law and Economics Center

Penalizing Cartels: The Case for Basing Penalties on Price Overcharge

Yannis Katsoulacos, Athens University of Economics and Business
Evgenia Motchenkova, VU University Amsterdam - Department of Economics, TILEC
David Ulph, University of Saint Andrews

The EU Leniency Programme and Recidivism

Catarina Moura Pinto Marvão, Stockholm School of Economics - Stockholm Institute of Transition Economics (SITE), Trinity College Dublin

Repeal the FTAIA! (Or At Least Consider It as Coextensive with Hartford Fire)

Robert Connolly, Geyergorey LLP


"Russian Competition Law in Light of the Principles of Ex Post and Ex Ante" Free Download
Higher School of Economics Research Paper No. WP BRP 37/LAW/2014

KONSTANTIN TOTYEV, National Research University Higher School of Economics

This article is devoted to the legitimation and application of the standards of ex post and ex ante by courts and the executive authorities in the sphere of competition regulation. The postulates of ex post and ex ante are considered as legal principles. The principle of ex post is intended solely for judicial and administrative application; it has a deontological framework; it assumes that the legality of the activity of economic entities is assessed only on the basis of positive legal criteria in terms of the subjective rights violated; it is limited to a particular case. The traditional approach to the principle of ex post limits the scope of its application on the subjects and excessively expands its objects. The postulate of ex ante has a utilitarian basis which assumes the assessment of the application of relevant rules in the future. One of the main aims of the article is to refute the common view of lawyers and economists that a legislator applies principle of ex ante not being bound by principle of ex post, while it is the other way around for the courts and the executive authorities. The principle of ex ante may be applied not only in the process of the creation of new rules but also at the application stage for existing rules on economic competition. This is justified because the arguments of the courts and the executive authorities about a refusal to take into account the consequences of a decision in a particular case are not convincing.

"Public Enforcement Compensation and Private Rights" Free Download
Minnesota Legal Studies Research Paper No. 14-36

PRENTISS COX, University of Minnesota Law School

Government enforcement actions have returned tens of billions of dollars to consumers, investors and employees. This “public enforcement compensation? is important to effective civil law enforcement, yet it is poorly understood and increasingly criticized. Recent scholarship asserts that public enforcement compensation raises the same concerns of accountability as occur in class action cases -- concerns that have led to judicial and legislative restrictions on class litigation. These critics suggest private rights would be better protected by imposing class action procedures on government enforcers seeking public enforcement compensation. In a Harvard Law Review article, one scholar goes further and argues that public enforcement compensation obtained by state attorneys general raises constitutional due process concerns because courts preclude subsequent monetary relief claims in private actions. This assertion simply is wrong. The error is symptomatic of the mistaken premise in the new scholarship of ascribing great importance to the observation that public enforcement compensation is the functional equivalent of a class action case.

This Article offers a defense of the current system. Public enforcement compensation is a discretionary remedial option. Use of this remedy occurs under statutory authority that courts and legislatures have shaped to meet the needs of varying regulatory fields. Seeking public enforcement compensation presents no substantially different issues of conflicts with private interests than arise in other aspects of government civil law enforcement. The Article notes two categories of cases in which law reforms could better align public enforcement with private rights. But courts and policymakers should give scant notice to calls for sweeping changes based on the existing evidence and scholarship.

"Soft Law in EU Competition Law and its Judicial Reception in Member States -- A Theoretical Perspective" Free Download
TILEC Discussion Paper No. 2014-035

ZLATINA RUMENOVA GEORGIEVA, Tilburg Law and Economics Center

The EU competition enforcement regime underwent quite some changes in both its substantive and procedural workings when Regulation 1/2003 – the 'Modernization' Regulation – entered into force on May 1st 2004. The procedural decentralization and the change in the logic of substantive enforcement the Regulation introduced created challenges for the new system, especially in light of the general principle of legal certainty. Mindful of possible (and plausible) enforcement inconsistencies, the European Commission maintained that certainty is going to be well served by the already existing and well-developed competition case law of the CJEU, the Commission’s own decisional practice, and, last but not least, its soft law guidance in the forms of guidelines, notices, communications, etc.

It is these latter instruments and their value for steering judicial discourse in EU Member States that the current paper is interested in. Since the year 2004, the significance of Commission-issued soft law has increased because the latter instruments provide an in-depth account and guidance of, respectively, the enforcement practice and priorities of the Commission. These are important functions to perform in a highly uncertain and fluid policy enforcement setting, where the multiplicity of decision-makers and new substantive enforcement goals make it increasingly difficult for businesses to predict what constitutes anti-competitive behavior and what not. In this sense, and in view of legal certainty, it would be desirable that not only businesses and national competition enforcement agencies (NCAs), but also the national judiciary took heed of the said soft instruments. The question asked in this paper, thus, is whether and if so – how – do national courts take Commission-issued competition soft law into account in their judgments? Since there are indications that the provisions of competition soft law are being disregarded at the supranational level (take the recent Expedia judgment of the CJEU), it could be that national courts exhibit a similar approach. Such a development, however, is deemed undesirable from the theoretical standpoint of legal certainty, since instruments which contain and elaborate on the substantive core of the re-designed regime, and which are explicitly designed to ensure consistency in a moment of fluidity in the law, cannot simply be ignored, especially by the judiciary. As ultimate instances of normative ordering, courts have the responsibility to maintain legal certainty, and to do so, in the context of EU competition law, they should engage with the pertinent soft instruments. To this end, the current paper proposes a theoretical framework for national judicial engagement with competition soft law instruments.

"Penalizing Cartels: The Case for Basing Penalties on Price Overcharge" Free Download
TILEC Discussion Paper No. 2014-037

YANNIS KATSOULACOS, Athens University of Economics and Business
EVGENIA MOTCHENKOVA, VU University Amsterdam - Department of Economics, TILEC
DAVID ULPH, University of Saint Andrews

In this paper we set out the welfare economics based case for imposing cartel penalties on the cartel overcharge rather than on the more conventional bases of revenue or profits (illegal gains). To do this we undertake a systematic comparison of a penalty based on the cartel overcharge with three other penalty regimes: fixed penalties; penalties based on revenue, and penalties based on profits. Our analysis is the first to compare these regimes in terms of their impact on both (i) the prices charged by those cartels that do form; and (ii) the number of stable cartels that form (deterrence). We show that the class of penalties based on profits is identical to the class of fixed penalties in all welfare-relevant respects. For the other three types of penalty we show that, for those cartels that do form, penalties based on the overcharge produce lower prices than those based on profit) while penalties based on revenue produce the highest prices. Further, in conjunction with the above result, our analysis of cartel stability (and thus deterrence), shows that penalties based on the overcharge out-perform those based on profits, which in turn out-perform those based on revenue in terms of their impact on each of the following welfare criteria: (a) average overcharge; (b) average consumer surplus; (c) average total welfare.

"The EU Leniency Programme and Recidivism" Free Download

CATARINA MOURA PINTO MARVÃO, Stockholm School of Economics - Stockholm Institute of Transition Economics (SITE), Trinity College Dublin

The EU Leniency Programme (LP) aims to encourage the dissolution of existing cartels and the deterrence of future cartels, through spontaneous reporting and/or significant cooperation by cartel members during an investigation. However, the European Commission guidelines are rather vague in terms of the factors that influence the granting and scale of fine reductions. As expected, the results shown that the first reporting or cooperating firm receives generous fine reductions. More importantly, there is some evidence that firms can "learn how to play the leniency game", either learning how to cheat or how to report, as the reductions given to multiple offenders (and their cartel partners) are substantially higher. These results have an ambiguous impact on firms' incentives and major implications for policy making.

"Repeal the FTAIA! (Or At Least Consider It as Coextensive with Hartford Fire)" Free Download
CPI Antitrust Chronicle Sep 2014 (1)


The FTAIA should be repealed. Times have changed since its passage in 1982. Today it is offensive to provide immunity to U.S. businesses for price fixing overseas while the USDOJ seeks to jail foreigners who fix prices that affect U.S. commerce. But, since Motorola Mobility v. AU Optronics will be decided under the FTAIA, the court should find that the requirements of the FTAIA were met, thus enabling the Antitrust Division to bring component price fixing cases. But, the comity concerns expressed by numerous foreign nations of not making the U.S. the world's competition policeman can be respected by applying the Illinois Brick doctrine and dismissing plaintiff's suit to recover damages for purchases made by its foreign subsidiaries.


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Antitrust: Antitrust Law & Policy eJournal

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