Margaret Bloom Presentation

Slide 1

SOME EXPERIENCE FROM
OVERSEAS

Joint DOJ/FTC hearings on single-firm conduct
12 September 2006

Margaret Bloom

Visiting Professor, King's College London
Senior Consultant, Freshfields Bruckhaus Deringer

Slide 2

Overview

• Should all jurisdictions have the same approach?
• Action to increase convergence worldwide
• Some lessons from EC Article 82 review

Slide 3

Should all jurisdictions have
the same approach?

• Would this maximize consumer welfare?
• Are different approaches justified by different market structures eg former state owned monopolies? Smaller national markets?

• Are they justified by whether enforcement is by administrative agencies or by courts?
  - Impact of treble damages suits
• Or do they just reflect different judgments on the right balance between false negatives and false positives?

Slide 4

Action to increase
convergence worldwide

• By ICN, OECD, U.S. agencies and others
• Training and sharing experience
  • Success of International Cartel Enforcers Workshops
  • ICN Investigative Techniques for Mergers Workshop
• Guidelines
  • ICN Merger Guidelines Workbook
  • How do others learn easily about US approach?
  • ABA "strongly encourage" EC to issue A82 guidelines
• Staff exchanges?

Slide 5

Some lessons from Article 82
review (1)

1. Need clarity on objectives ie enhancing consumer welfare and efficiency
   • Much EC case law influenced by "protecting the structure of competition" and "the rights and opportunities of market operators"
2. Plausible theory of consumer harm should be
3. required for intervention: actual or likely harm
4. Avoid overly complicated rules
5. Efficiency benefits should be assessed as part
6. of the analysis of conduct rather than a limited defence

Slide 6

Some lessons from Article 82
review (2)

5. Use safe harbors rather than presumptions of dominance/monopoly power or abuse eg
   • Low market share cannot have substantial market power. But high market share cannot safely presume firm has substantial market power
     • Assuming can define market!
   • Price > AAC for loyalty discounts and predation
6. Should not be too easy to find a firm isdominant or has monopoly power
   • Should follow US rather than EC approach

Slide 7

Some lessons from Article 82
review (3)

7. Avoid "abuse shopping"
   • Need same tests and cost benchmarks for similar economic effects eg
     • Predation and loyalty discounts
     • Margin or price squeeze, predation or refusal to deal
8. May need more than one test of harm to cover different types of exclusionary conduct
   • If so, need clarity on which one to use when
   • If only one, prefer no-economic-sense to equally- efficient-competitor