The General Court’s judgment in Telefónica: has the Atlantic Ocean just got wider?

(by Pinar Akman) On 29 March 2012 the General Court (GC) handed down its judgment in the case of Telefónica (Case T-398/07 Kingdom of Spain v European Commission).   The issue at stake was the Commission’s decision in Wanadoo España / Telefónica.  The original decision found that Telefónica’s pricing had been exclusionary and thus abusive despite it being approved by the regulator. The GC upheld the Commission decision in its entirety and dismissed the appeal.  This is in stark contrast to two famous US Supreme Court decisions which recently reached very different conclusions in similar circumstances.

Does the closure of the EU “pay-for-delay” investigations against AstraZeneca and GSK mark the end of pharmaceutical antitrust in Europe?

(by Sven Gallasch) Last month the European Commission closed its antitrust investigations into AstraZeneca/Nycomed and GlaxoSmithKline/Synthon BV. These centred on possible anticompetitive agreements to delay generic entry into the market. The investigations had been launched following the European Commission’s Pharmaceutical sector inquiry in 2009. The decision to end the investigations may come as a surprise given comments made at the time by Commissioner Kroes: “The inquiry has told us what is wrong with the sector, and now it is time to act. […] We will not hesitate to apply the antitrust rules where such delays result from anticompetitive practices”. So why did the investigation run out of steam?

European Court Gets it Right on Abusive Margin Squeeze in Regulated Industries

(by Bruce Lyons) Last week’s decision by Europe’s highest court provides admirable clarity and a welcome constraint on specialist regulators.  This seems to contrast with the apparently muddled situation in the USA.  The Court of Justice of the EU (formerly known as the ECJ) has finally confirmed the earlier judgements of the Commission and General Court (formerly CFI) in relation to the Deutsche Telekom (DT) case.  The case has been much debated, but it is worth reflecting on some of the consequences for the economic application of competition law.

Yes European Competition Law Enforcement is Open to Abuse, But at Least Firms in Europe Can Appeal

(by Andreas Stephan) An article and accompanying editorial in last week’s The Economist were very critical of the European Commission’s enforcement of competition law.  They argue that the combined roles of prosecutor, judge and jury make the system open to abuse. The authors point to the merits of US criminal antitrust enforcement where they suggest antitrust officials must ‘make [their] arguments in an open court’. What they fail to point out is that European firms can at least appeal a Commission decision. In the US, as many as 90 per cent of US defendants circumvent trial by striking plea bargains; waiving their rights to appeal and negotiating with the US Department of Justice in a closed process, not entirely unlike haggling for a rug at an Istanbul market.

Abuse of Indigestion: Whistleblower in TV Programme Triggers OFT Investigation

(by Andreas Stephan) Today, the UK’s Office of Fair Trading (OFT) issued a statement of objections against Reckitt Benckiser (RB), alleging abuse of a dominant position in its sales of popular heartburn remedy, Gaviscon, to the public health service (NHS). What makes this case different is that it was triggered by a whistleblower appearing in BBC’s Newsnight programme in 2008.