Vertical Agreements and Competition Law: A Comparative Study of the EU and US Regimes

223 Pages·2010·0.89 MB·English

by  Sandra Marco Colino

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VERTICAL AGREEMENTS AND COMPETITION LAW
This book focuses on the current legal framework for vertical agreements in the EC
and the US. Over the last ten years, antitrust rules governing these agreements have
undergone thorough reform. In the EC, the old sector-specific block exemptions
were replaced by Regulation 2790/99, applicable to all sectors of the economy. In
addition, changes introduced to the procedural rules have led to the decentralisa-
tion of Article 81(3) and the removal of the notification requirement. In like man-
ner, in the US the Supreme Court has gradually taken vertical restraints out of the
per se illegality rule. What Sylvania achieved in placing non-price vertical restraints
under the rule of reason in the late 1970s, the Khan judgment did for maximum
resale price maintenance in 1997, whilst most recently and most significantly in
2007 the Leegin case followed suit for minimum resale price maintenance.
The book is divided into four chapters. The first chapter considers the ‘double
nature’ of vertical agreements and the regulatory dilemma. The second chapter
explores the most influential economic theories underpinning current regulatory
frameworks, and how these theories shape antitrust policy. The third chapter
questions the adequacy of the current economic analysis in recent EU and US
legislation and court decisions. The fourth chapter analyses how this maturing
economic analysis can be reconciled with what commentators and regulators have
identified as a key role for competition policy, redressing assumed imbalances
between dealers and manufacturers. The author concludes by querying the
prevailing logic of protecting sectoral interests above the competitive process.
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Vertical Agreements and
Competition Law
A Comparative Study of the
EU and US Regimes
Sandra Marco Colino
OXFORD AND PORTLAND, OREGON
2010
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© Sandra Marco Colino 2010
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to be identified as the author of this work.
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Dó Máirtín
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Acknowledgements
The present book is based on my doctoral thesis, entitled Towards a Sound Economic
Analysis in Competition Law? The New Regulatory Framework for Motor Vehicle
Distribution Agreements in the EU. It was defended at the European University
Institute in Florence in May 2007 before a panel consisting of Professors Christian
Joerges, Luis Ortiz Blanco, Barry Rodger and Heike Schweitzer. Despite the nar-
rower focus of the dissertation, my research led me to explore the minutiae of ver-
tical agreements and directed me to innovative ideas on how to regulate these
contracts. The seed of the monograph was therefore planted in 2001, when I began
my research at the EUI, and was moulded into its final shape in various institutions
around the world. The initial impetus of fascination, curiosity and instinctive ideas
about a topic which proved more demanding than I could have ever expected soon
made me realise the magnitude of the task I had undertaken. The fruit of my exten-
sive investigation would never have ripened had I not been fortunate enough to have
encountered true experts along the way willing to provide me with the guidance and
knowledge I needed to achieve my objectives. The most crucial orientation came
from my supervisor, Professor Christian Joerges, whose extensive knowledge and
endless patience guided me along the years to overcome the hurdles I encountered.
I was also extremely fortunate to be able to benefit from the guidance of Professors
Hans Ullrich, Massimo Motta, Ernst-Ullrich Petersmann, Claus-Dieter Ehlermann
and Giuliano Amato, to whom I am extremely grateful.
My frequent research travels and study visits have proved crucial in my writing.
My second research home was the Institute of European Studies in Madrid, where
over the years Professor Jerónimo Maíllo González-Orús provided me with the
encouragement and guidance I needed to embrace this project. In addition, the
solid support of the academics at the Universidad Carlos III of Madrid was most
valuable. Special thanks are owed to Professor Carlos Moreiro González. Also,
I want to thank the academic staff at the Fachhochschule Mainz in Germany,
where during my Erasmus visit in 1999 I was persuaded to undertake my first ever
project on vertical agreements—the seed of my interest in the area.
This study is based on a comparison between the EC and US antitrust regimes.
Such a comparative approach was possible thanks to the possibility I had to spend
two semesters as a visiting scholar in the US. In 2003, I spent one semester at the
University of Wisconsin at Madison. I am particularly grateful to Professor Peter
C Carstensen for his support in my visiting the University and his inspiring advice.
His generosity and kind hospitality made my stay in Madison a true delight.
During my visit, I also had the chance to discover Professor Neil K Komesar’s
theories—which have proven very influential in the structure of my work—as
well as his sense of humour. Besides, the expertise of Professor Stewart Macaulay
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viii ACKNOWLEDGEMENTS
and the hospitality of the EU Studies Alliance, in particular Professor David
Trubek and Pam Hollenhorst, greatly contributed to my fruitful experience in
Madison. More recently, I was a visiting scholar at the University of California at
Berkeley while on research leave from the University of Glasgow. I want to express
my gratitude to the Center for the Study of the Law and Society, and particularly
to Rosann Greenspan and Meg Gentes.
In 2004, I had the chance to work as a trainee in the Directorate-General for
Competition of the European Commission. I spent five months within the now
defunct Unit F2, which dealt specifically with car distribution issues. This unique
opportunity to work with the best team of experts on my research area was invalu-
able, particularly given the constant attention and generosity of those I worked in
close contact with. I would particularly like to thank Konrad Schumm, Paolo
Cesarini, Rainer Becker, Bertrand Saint-Aubin, Iona Hamilton, Hubert Gambs
and Fernando Castillo de la Torre.
The final stage of this project was completed while holding a post as a Lecturer
in European Law at the University of Glasgow. The demanding challenge of
teaching competition law both at undergraduate and postgraduate level to enthu-
siastic, bright students forced me to grasp a fuller understanding of antitrust.
My colleagues have been at all times supportive, particularly in the stressful
final stages of my Ph D and the monograph. Their comments and advice have
proven most useful in the development of my conclusions. I owe thanks to all of
them.
Over the years, I have taken part in many conferences, seminars and events
around the world. In my involvement I managed to collect essential materials and
also hear the constructive criticisms of experts which have aided me enormously.
Some of the institutions I would like to thank are the Competition Law Scholars
Forum (CLaSF), the Europäische Rechtsakademie (ERA), the European Union
Studies Association (EUSA), the European Community Studies Association
(ECSA), the Industrial Organisation Society (IOS), the Athens Institute for
Education and Research (ATINER), the Private Law in a Multicultural and
Multilingual European Society (PrIME) Project within the University of Helsinki,
the Transatlantic Technology Law Forum (TTLF) of Stanford University and the
Instituto de Estudios Bursátiles of Madrid. I am particulary grateful to Professors
Luis Ortiz Blanco, Barry Rodger, Alan Riley, Oliver Budzinski, Jens Hammer and
Kathleen W Johnson.
Any academic merits hereby achieved would never have materialised without
my family and friends. I owe everything to my family for always believing in me,
in particular to my loving parents. Where I would be without their help is hard to
imagine. My unconditional friends from Ciudad Rodrigo, London, Madrid,
Mainz and Las Palmas, as well as those encountered in Florence, Madison,
Brussels, Glasgow and Berkeley—to name but a few—have, throughout this pro-
ject and beyond, aided me more than they will ever know. Last but by no means
least, I want to thank my husband Martin Doris for his constant and uncondi-
tional support.
Glasgow, October 2009
Sandra Marco Colino
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Note to the Reader: The Impact of the
Treaty of Lisbon on this Book
On 1 December 2009, the Treaty of Lisbon entered into force after ratification by
Ireland and the Czech Republic, the only countries to have not ratified previously.
This book was finalised in September 2009, and therefore still uses the numbering
of the provisions of the Treaty Establishing a European Union (EC Treaty) as
modified by the Treaty of Amsterdam in 1996.
Apart from the renumbering of the Treaty articles, the new amendments do not
significantly alter the content of competition law provisions, and the content of
the book is not affected by the changes. Importantly, Article 3(1)(g) EC, which
referred to ‘a system ensuring that competition in the internal market is not dis-
torted’ as a means to achieve the general objectives of the Community has now
been repealed. This does not, however, alter the substance of competition law and
policy in the EU.
The EC Treaty is now the Treaty on the Functioning of the European Union.
As a result, it is no longer appropriate to refer to the European Community, as it is
now the part of European Union. Any references to Community should be read
as Union, and likewise EC competition law is now EU competition law. Other
important terminology issues are that the Court of First Instancehas been renamed
as the General Court, and the common market has been replaced by the internal
market.
The reader should also note that, as of 2010, Neelie Kroes will be replaced by
Joaquín Almunia as the EU Competition Commissioner.
A full table of equivalences has been published in the Official Journal;1below are
the equivalences of the relevant provisions discussed in this book as they appear in
the table.
Treaty on the Functioning of the European Union
Old numbering of the Treaty Establishing New numbering of the Treaty on
the European Community Union the Functioning of the European
Article 2 (repealed) 2
Article 3, paragraph 1 (repealed) 3
Article 5 (replaced)4
Article 30 Article 36
Article 81 Article 101
1[2008] OJ C 115/361.
2Replaced, in substance, by Article 3 TEU.
3Replaced, in substance, by Articles 3 to 6 TFEU.
4Replaced, in substance, by Article 5 TEU