1. SUBSTANTIAL CONVERGENCE Margaret Bloom King’s College London Freshfields Bruckhaus Deringer

2. Substantial Convergence On Consumer Welfare Standard CartelsCartels Other agreementsOther agreements MergersMergers Unilateral conductUnilateral conduct State interventionState intervention  

3. Cartels: Enforcement Increasingly aggressive Per se infringement or criminal offence Trend towards criminal powers Fines increasingly tough. Now EU > US Leniency regimes spreading

4. Cartels: Increasing Cooperation Between Agencies Sea change in past five years“Sea change in past five years” Scott Hammond 1999 first of cartel enforcers workshops  ICN European Competition Network  assistance obtaining foreign-located evidence Simultaneous multi-jurisdictional raids –2003, 10 agencies (US, Canada, EU + 6, Japan)

5. Other Agreements Economics-based guidelines/BEs for A81 –1999/2000vertical agreements –2000horizontal cooperation –2004technology transfer Modernization: convergence 25 MS –A81(3) guidelines: consumer welfare, fair share of efficiencies for consumers

6. Mergers: EU History (1) 1999 Airtours/First Choice prohibited 2001 GE/Honeywell, Tetra Laval/Sidel, Schneider Electric/Legrand prohibited ICN launched: facilitate convergence 2002 CFI annuls Airtours, Schneider, Tetra prohibitions US/EC ‘Guidelines on Best Practice’: cooperation in investigations 2003 Chief Economist appointed. ‘Devil’s advocate’ panels Horizontal guidelines: broadly similar to US More sophisticated economics: GE/Instrumentarium

7. Mergers: EU History (2) 2004 New ECMR –‘Significantly impede effective competition’ test –Procedural changes: parties coordinate filings better Growing use of more sophisticated economics: BMG/Sony, Oracle/PeopleSoft 2005 ECJ dismisses Commission’s appeal of Tetra Changes  convergence with US % notified cases prohibited, withdrawn or commitments –1999-2001 average14 –2002-2004 average 8

8. “guidelines...have a lot – perhaps a surprising amount – in common” ICN 2004 Restriction of competition test SSNIPUnilateral effects Coordinated effects Efficiencies Australia Canada EU Finland Germany Ireland Japan NZ UK US

9. Unilateral Conduct (1) Are differences US/EU exaggerated? Are much quoted cases typical? –Magill and IMS: ‘poor’ IP –Bronner wider application; limits requirement to deal –Microsoft: ‘interoperability’ common ground EU/US? –‘Tying’: does it diverge significantly from US law? Both US/EU ‘bad’ cases for consumer welfare –US: LePage’s, Kodak (1997) but Xerox –EU: BA/Virgin, Michelin II Some MSs prohibit ‘unfair competition’ –Little used by NCAs. Aimed at helping small firms –So is Robinson-Patman Act

10. Unilateral Conduct (2) EU greater concern over type 2 errors (false –ve) –Previously state-controlled monopolies –Markets often national US greater concern over type 1 errors (false +ve) –Courts narrow: treble damages deter investment? EU intervene > US for consumer welfare? Application of A82 under reviewApplication of A82 under review –Should  stronger convergence

11. State Intervention US state action doctrine: Parker v Brown –States shielded from antitrust laws when bona fide exercise of sovereign regulatory powers ECJ Consorzio Industrie Fiammiferi –NCA duty to disapply national legislation which requires or facilitates conduct contrary to A81 Which is better for consumer welfare? All developed countries have too many antitrust exemptions/exclusions