Developments in Global Competition Policy: Soft Convergence, Hard Divergence?
Tokyo, Japan
10 October 2007
Hosted By: the Japanese Institute of International Business Law
Dr. Mark Williams, NERA Director and head of NERA's European Competition Policy group in London and Brussels, gave a seminar at the Japanese Institute of International Business Law in Tokyo, discussing the recent Microsoft judgment (on the server interoperability and Media Player abuse case) by the European Court of First Instance (CFI) and the US Supreme Court's judgment in Leegin (on resale price maintenance). Dr. Williams suggested that, despite increased practical cooperation between major competition agencies and a perceived trend of "soft convergence" in international competition policy, these two cases suggested that the reality of global antitrust indicated important areas of what could be called "hard divergence."
The CFI's Microsoft judgment in September 2007 essentially upheld the substantive analysis of the European Commission, with Microsoft prevailing only in its arguments concerning the independent trustee. This judgment arguably strengthened the position of the European Commission in bringing findings of abuse. However, within hours of the judgment Thomas O. Barnett of the US Department of Justice had issued a press statement to criticize the European Microsoft case, claiming that it may stifle innovation. The Microsoft case, and more generally the Commission's attitude to abuse of dominance under Article 82 places European competition policy in sharp contrast to (some parts of) the US antitrust system.
In June 2007 the US Supreme Court had handed down its judgment on Leegin. Prior to this case, US antitrust law enforcement, derived from Dr Miles of 1911, essentially adopted a per se prohibition approach to resale price maintenance (RPM), which was essentially similar to the de facto hostile treatment of RPM under European competition policy. However, in Leegin the Supreme Court (against a dissenting opinion, which included Justice Breyer) recommended a move to a rule of reason approach, moving not only towards but in fact beyond the effective European policy stance on RPM.
Policy-makers have in recent years stressed the convergence of transatlantic competition enforcement, emphasizing in particular the "soft convergence" of policy. Dr. Williams suggested that the differing attitudes on Microsoft (at least between one US agency and the European Commission) and the different status of RPM suggest that, in reality, transatlantic competition policy is rather characterized by "hard divergence" on substantive questions. In both these examples, US antitrust enforcement is more permissive than European competition policy. Once it is further recognized that particular national jurisdictions within the EU -- such as the UK and Germany -- have systems of national merger control that are appreciably more interventionist than US merger control, it is particularly clear that quite substantial transatlantic differences remain.
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