European Competition Law Annual: 2006: Enforcement of Prohibition of Cartels 9781472560148, 9781841137513

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PERMANENT SPONSORS OF THE A N N UA L E U I C O M P E T I T I O N WORKSHOPS

Blake, Cassels & Graydon LLP Contact: Calvin S. Goldman, QC Commerce Court West 199 Bay Street Toronto, Ontario Canada M5L 1A9 Tel: 416 863 22 80 Fax: 416 863 26 53 E-mail: [email protected] Cleary Gottlieb Contact: Mario Siragusa Rome Office Piazza di Spagna 15 I-00187 Rome Tel: 39 06 6952 2210 Fax: 39 06 6920 0665 E-mail: [email protected] Hengeler Müller Contact: Jochen Burrichter Benrater Strasse 18-20 40213 Düsseldorf Germany Tel: 49 211 830 41 38 Fax: 49 211 830 41 70 E-mail: [email protected] Howrey Simon Arnold & White LLP Contact: James F. Rill, Esq. 1299 Pennsylvania Ave., NW Washington, DC 20004 Tel: (001 202) 383 65 62 Fax: (001 202) 383 66 10 E-mail: [email protected]

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Permanent Sponsors of the Annual EUI Competition Workshops

Martinez Lage & Asociados Contact: Santiago Martínez Lage Claudio Coello 37 - 28001 Madrid Tel (34) 91 426 44 70 – Fax (34) 91 577 37 74 E-mail: [email protected] Skadden Contact: Jim Venit Brussels Office 523 Avenue Louise B-1050 Brussels Tel: (32 2) 639 03 00 Fax: (32 2) 639 03 39 E-mail: [email protected] White & Case LLP Contact: Ian S. Forrester, QC Brussels Office 62, rue de la Loi B-1040 Brussels Tel: (32 2) 219 16 20 Fax: (32 2) 219 16 26 E-mail: [email protected] WilmerHale Contact: John Ratliff Bastion Tower Place du Champ de Mars/Marsveldplein 5 B-1050 Brussels, Belgium Tel: (32 2) 285 49 08 Fax: (32 2) 285 49 49 E-mail: [email protected]

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1 1 T H A N N UA L E U C O M P E T I T I O N L AW AND POLICY WORKSHOP: ENFORCEMENT OF PROHIBITION OF CARTELS

List of Participants

Allendesalazar Rafael, Martínez Lage & Asociados—Madrid, Spain. Barnett Thomas, Assistant Attorney General for Antitrust, Department of Justice—Washington DC, USA. Bellamy Christopher, President of the Competition Appeal Tribunal— London, UK. Bloom Margaret, King’s College, London, and Freshfields Bruckhaus Deringer—London, UK. Burrichter Jochen, Hengeler Müller—Düsseldorf, Germany. Calkins Stephen, Wayne State University School of Law—Detroit, USA. Calviño Nadia, Deputy Director General with special responsibility for mergers, DG Competition, European Commission—Brussels, Belgium. Collins Philip, Chairman, Office of Fair Trading—London, UK. Denis Waelbroeck, Ashurst—Brussels, Belgium. Donncadh Woods, Deputy Head of Unit A-1 (Antitrust policy and strategic support), DG Competition, European Commission—Brussels, Belgium. Ehlermann Claus-Dieter, WilmerHale—Brussels, Belgium. Fingleton John, Chief Executive, Office of Fair Trading—London, UK. Forrester Ian, White & Case LLP—Brussels, Belgium. Forwood Nicholas, Judge at the Court of First Instance of the EC— Luxembourg. Goldman Calvin, Blake, Cassels & Graydon LLP—Toronto, Canada. Grout Paul, Head of Economics Department, Centre for Market and Public Organisation, University of Bristol—Bristol, UK. Guersent Olivier, Deputy Head of Cabinet with Commissioner Neelie Kroes, European Commission—Brussels, Belgium. Harding Christopher, Department of Law, University of Wales— Aberystwyth, UK. Harrington Joseph, Jr., Department of Economics, The Johns Hopkins University—Baltimore, USA. Joshua Julian, Howrey LLP—Brussels, Belgium. Klawiter Donald, Morgan Lewis & Bockius LLP—Washington DC, USA. Komninos Assimakis, White & Case LLP—Brussels, Belgium.

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viii List of Participants at the 2006 Workshop Kovacic William, FTC Commissioner—Washington DC, USA. Lawrence Jon, Freshfields Bruckhaus Deringer—London, UK. Motta Massimo, Economics Department, European University Institute— Florence, Italy. Ratliff John, WilmerHale—Brussels, Belgium. Rey Patrick, Institut d’économie industrielle, Université des Sciences Sociales—Toulouse, France. Roth Peter, Monckton Chambers—London, UK. Siragusa Mario, Cleary Gottlieb—Rome, Italy. Ullrich Hanns, Universität der Bundeswehr München—Munich, Germany. Venit James, Skadden—Brussels, Belgium. Whish Richard, School of Law, King’s College—London, UK. Wils Wouter, Legal Service of the European Commission, Brussels, Belgium, and Visiting Professor at King’s College—London, UK.

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TABLE OF CASES I. Judgments of the EC Courts: Ahlström Osakeyhtiö et al. (Woodpulp II), Joined Cases C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85, [1993] ECR I-1307. ............................... 18, 23, 121, 123–6, 129, 396 Aalborg Portland v. Commission, Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P, [2004] ECR I-6453 ..................................................... 410, 656 Acerinox, Case C-57/02 P, [2001] ECR II-3859. ....................................... 654 AC-Treuhand v. Commission, Case T-99/04, judgment pending. .............. 182 Airtours v. Commission, Case T-342/99, [2002] ECR II-2585.................... 122 AKZO v. Commission [1991] ECR I-3359 ................................................ 437 Akzo-Nobel v. Commission, Case C-7/04 P(R), [2004] ECR I-8739........... 414 Akzo-Nobel v. Commission, Joined Cases T-125/03 R and T- 253/03 R, [2003] ECR II-4771.......................................... 406, 414, 419, 421, 636–7, 646 AM & S v. Commission, Case 155/79, [1982] ECR 1575.................... 406, 636 Amministrazione delle finanze dello Stato v. San Giorgio, Case 199/82 [1983] ECR 3595 ........................................................... 438–9 Archer Daniel Midland Co. v. Commission, Case T-224/00, [2003] ECR-II 2597. ............................................................................. 326 Archer Daniel Midland Co. and Archer Daniels Midland Ingredients Ltd v. Commission [2006] ECR I-4429 ................................ 418 Association of Convenience Stores v. OFT Case 1052/6/1/05 ..................... 117 AstraZeneca, Case 223/01, [2003] ECR I-11809 ....................................... 438 Automec v. Commission (Automec II), Case T-24/90 [1992] ECR II-2223......................................................................................... 606 BAI v. Bayer and Commission, Joined Cases C-2/01 P and C-3/01 P, [2004] ECR I-26.................................................................... 327 Banks, Case C-128/92, [1994] ECR I-1251. .............................................. 179 Boehringer Mannheim v. Commission, Case 45/69, [1970] ECR 769.......... 657 Brasserie du Pêcheur v. Bundesrepublik Deutschland and The Queen v. Secretary of State for Transport, ex parte: Factortame and Others, Joined Cases C-46/93 and C-48/93, [1996] ECR I-1029................................................................... 444, 479–80 British-American Tobacco Company Ltd (BAT) and R. J. Reynolds Industries Inc. v. Commission, Joined Cases 142 and 156/84, [1987] ECR 4487. .............................................. 128

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Table of Cases

BRT v. SABAM (BRT I), Case 127/73, [1974] ECR 51. ........................... 447 Cascades v. Commission, Case C-279/98 P, [2000] ECR I-9709. ............... 277 Cimenteries CBR and Others v. Commission Joined Cases T-25/95 etc., [2000] ECR II-491. ................................................... 273, 656 Cipolla and Macrino, Joined Cases C-94/04 and C-202/04, [2006] ECR I-11421.............................................................................. 629 Commission v. SGL Carbon (Graphite Electrodes), Case C-301/04 P, [2006] ECR I-5915. ................................... 168, 175, 407, 629, 640, 642 Commission v. Anic Partecipazioni, Case C-49/82 P, [1999] ECR 4125. .... 655 Commission v. EU Council (Environmental Crimes), Case C-176/03, [2005] ECR I-2867. ........................................... 188–9, 233 Council v. Commission Case C-176/03, [2005] ECR I-7879 ................. 42, 314 Commission v. Italy, Case C-119/04, [2006] ECR I-6885. ......................... 629 Comateb and Others v. Directeur général des douanes and droits indirects, [1977] ECR I-165 ......................................................... 439 Compagnie Royale Asturienne des Mines SA (CRAM) and Rheinzink GmbH v. Commission, Joined Cases 29/83 and 30/83, [1984] ECR 1679................................................................. 125, 127 Consorzio Industrie Fiammiferi (CIF) v. Autoritá Garante della Concorrenza e del Mercato, Case C-198/01, [2003] ECR I-8055............ 329 Continental Can v. Commission, [1973] ECR 215...................................... 437 Courage Ltd v. Bernard Crehan, Case C-453/99, [2001] ECR I-6314.................................................. 180, 248, 263, 428, 444 Courage Ltd v. Bernard Crehan, Case C-453/99, [2001] ECR I-6297................................................................................... 448, 477 Danone v. Commission, Case T-38/02, [2005] ECR II-4407....................... 629 Dansk Rørindustri A/S and Others v. Commission, Joined Cases C-189/02 P, C-202/02 P, C-205/02 P, C-206/02 P, C-207/02 P, C-208/02 P and C-213/02 P, [2005] ECR I-5425. ...................... 178, 646–8, 652–3, 659 Edis, Case C-231/96, [1998] ECR I-4990. ................................................. 283 Elf Atochem v. Commission, Case T-9/97, [1997] ECR II-919................... 280 Enichem Anic v.Commission, Case T-6/89, [1991] ECR II-1695. ............... 277 Enso Española v. Commission, C-282/98 P, [2000] ECR I-9817. ............... 632 Enso Española v. Commission, [1998] ECR II-1875 .................................. 632 ERSA v. Ministero delle Politiche Agricole e Forestali, Case C-347/03, [2005] ECR I-03785. .................................................... 629 France v. Commission, Joined Cases C-68/94 and C-30/95, [1998] ECR I-1375................................................................................ 618 Gencor v. Commission, Case T-102/96, [1999] ECR II-753. ........................ 71 General Electric v. Commission, Case T-210/01, [2005] ECR II-5527........ 629 Gerhard Züchner v. Bayerische Vereinsbank AG, Case 172/80, [1981] ECR 2021. .......................................................................... 128, 132

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Germany v. Commission, Case 24/62, [1963] ECR 63................................ 619 Hercules Chemicals NV v. Commission, Case T-7/89, [1991] ECR II-1711. ............................................................................. 128 HFB and Others v. Commission, Case T-9/99, [2002] ECR II-1530. ................................................................................ 277, 631 Hoechst v. Commission, Joined Cases 46 and 227/88, [1989] ECR 2859. .................................................................................... 616, 633 Hoffmann-La Roche Ltd. v. Commission, [1979] ECR 461........................ 437 Hüls v. Commission, Case C-199/92 P, [1999] ECR I-4287................ 272, 632 Hydrotherm v. Compact, Case 170/83, [1985] ECR 3016. ......................... 276 Imperial Chemical Industries Ltd. (ICI) v. Commission, Case 48/69, [1972] ECR 619............................................... 122–4, 128, 132 JFE Engineering Corp. and Others v. Commission, Joined Cases T-68/00, T-71/00 and T-78/00, [2004] ECR II-2501...... 280, 529, 629 Kalfelis, Case 189/87, [1988] ECR 5565.................................................... 468 Krupp Thyssen Stainless and Acciai Speciali Terni v. Commission, Joined Cases T-45/98 and T-47/98, [2001] ECR II-3823. ...................... 279 Limburgse Vinyl Maatschappij and Others. v. Commission (PVC II), Joined Cases T-305/94, T-306/94, T-307/94, T-313/94, T-314/94, T-315/94, T-316/94, T-318/94, T-325/94, T-328/94, T-329/94 and T-335/94, [1999] ECR II-931. ...................... 127–9, 166, 277, 628–9, 640 Manfredi, Case C-295/04 [2006] ECR I-6619............................. 429, 440, 474 Mannesmannröhen-Werke v. Commission, Case T-112/98, [2001] ECR II-729. ................................................. 166, 407, 421, 621, 640 Martinelli v. Commission, Case T-150/89, [1995] ECR II-1165......................................................................................... 647 Masterfoods, Case C-344/98, [2000] ECR I-11369..................... 263, 442, 450 Matra-Hachette v. Commission, Case T-17/93, [1994] ECR II-595. ............................................................................... 524 Max-Mobil v. Commission, Case T-54/99, [2002] ECR II-313. ................. 629 Michelin v. Commission, Case T-203/01, [2003] ECR II-4071. .......... 279, 443 Microsoft v. Commission, Case T-201/04, not yet reported....................... 184 Mo Och Domsjo v. Commission, Case T- 352/94, [1998] ECR II-1989......................................................................................... 655 Montecatini v. Commission, Case C-235/92 P, [1999] ECR I-4539. ........... 632 National Pasnasonic v. Commission, [1980] ECR 2056 ............................. 280 Nederlandse Federatieve Vereniging voor de Groothandel op Elektrotechnisch Gebied v. Commission, Case C-105/04 P, [2006] ECR I-1185. ......................................................................... 629–30 Nintendo Co & Nintendo Europe v. Commission, Case T-13/03, judgment pending................................................................................. 178 Opel NL and GM NL v. Commission, Case T-368/00, [2003] ECR II-4491......................................................................................... 279

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Opinion 2/94 on Accession by the Community to the ECHR, [1996] ECR I-1759................................................................................ 628 Orkem SA v. Commission, Case 374/87, [1989] ECR3283................................................. 166-7, 406–7, 621, 638–41 Otto v. Postbank, Case C-60/92, [1993] ECR I-5683................................. 640 P&O European Ferries (Vizcaya) SA v. Commission, Case T-116/01, [2003] II-2957............................................................... 629 Rhône-Poulenc v. Commission, Case T-1/89, [1991] ECR II-869............... 276 Roche Nederland et al v. Frederick Primus et al, Case C-539/03, [2006] ECR I-6535. ....................................................................... 250, 468 Roquette Frères SA v. Directeur général de la concurrence, Case C-94/00, [2002] ECR I-9039. ...............................169, 405, 632, 634–5 Schöppenstedt v. Council, Case 5/71, [1971] ECR 983............................... 443 Sigma Tecnologie v. Commission, Case T-28/99, [2002] ECR II-1845......................................................................................... 526 Solvay v. Commission (Soda Ash), Case 27/88, [1989] ECR 3355. ............ 167 Solvay v. Commission (Soda Ash), Joined Cases T-30 to T- 36/91, [1995] ECR II-1175. .............................................................. 530 Stergios Delimitis v. Henninger Bräu, Case C-234/89, [1991] ECR I-935.................................................................................. 447 Suiker Unie v. Commission, Joined Cases 40 to 48, 50, 54 to 56, 111, 113 and 114/73, [1975] ECR 1663. ........................ 120, 123–5, 128 Tate & Lyle v. Commission (British Sugar), Case T-202/98, [2001] ECR II-2035. ............................................................................. 125 Tatry, Case C-406/92, [1994] ECR I-5439. ............................................... 468 Thyssen Krupp and Thyssen Krupp Acciai Speciali Terni v. Commission, Joined Cases C-65/02 P and 73/02 P, [2001] ECR II-3757........................................................................... 654–5 Tokai Carbon v. Commission, Joined Cases T-236/01, T-239/01, T-244/01 to T-246/01, T-251/01 and T-252/01, [2004] ECR II-1181. ....................................... 175, 538, 640, 649 Tokai Carbon v. Commission, Joined Cases T-71/03, T-74/03, T-87/03, to T-91/03, [2005] ECR II-10.....................................166 Transocean Marine Paint Association v. Commission, Case 17/74, [1974] ECR 1063................................................................ 618 Van Gend & Loos, Case 26/62, [1963] ECR 1............................................ 451 Van Landewyck v. Commission, Joined Cases 209/78 etc., [1980] ECR 3125. ................................................................................. 632 Volkswagen AG v. Commission, Case C-338/00 P, [2003] ECR I-9189................................................................................ 619 Walt Wilhelm and Others v. Bundeskartellamt, Case 14/68, [1969] ECR 1. ............................................................................... 332, 657 Verein für Konsumenteninformation v. Commission, [2005] ECR II-1121 .............................................................................. 175

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II. Decisions of the European Commission: Acrylics, Decision of 31 May 2006, IP/06/698. ......................................... 533 Alloy Surcharge, OJ L 100 [1998]. ............................................................ 329 Austrian Banks – ‘Lombard Club’, OJ L 56 [2004]............................. 176, 327 Bank Charges for Exchanging Euro-Zone Currencies, OJ L 15 [2003]. ....................................................................................... 96 Belgian Architects Association, OJ l 4 [2005]. .................................... 329, 631 Bleaching Products, Decision of 3 May 2006, IP/06/560........................... 533 Carbon and Graphite, IP/03/1651.............................................................. 649 Cartonboard, OJ L 243 [1994]. ................................................................. 526 Choline Chloride, OJ L 190 [2005]..................................................... 256, 539 Citric Acid, OJ L 239 [2002]................................................................ 95, 175 Coca-Cola, OJ L 253 [2005]. ............................................................. 600, 614 De Beers, OJ L 205 [2006]. ....................................................................... 614 Ferry Operators — Currency Surcharges, OJ L 26 [1997]. .......................... 96 French Beef, OJ L 209 [2003]...................................................................... 96 French-West African Ship-Owners’ Committees, OJ L 134 [1992]. ..................................................................................... 97 German Bundesliga, OJ L 134 [2005]................................................. 600, 614 Graphite Electrodes, OJ L 100 [2002] .............................................40, 97, 649 Industrial Bags, IP/05/1508....................................................................... 180 Italian Cast Glass, OJ L 383 [1980]........................................................... 182 Microsoft, Case COMP/C-3/37.792, Decision of 23 April 2004, full text available at http://ec.europa.eu/comm/competition/ antitrust/cases/decisions/37792/en.pdf. ............................................. 183–4 Napier Brown - British Sugar, OJ L 284 [1988]. ........................................ 329 Needles, Decision of 26 October 2004, text available at http://ec.europa.eu/comm/competition/antitrust/cases/ decisions/38338/en.pdf. ........................................................................ 539 Optical Fibres, OJ L 236 [1986]............................................................. 128–9 Petrochemicals, OJ L 239 [1994]................................................................. 97 Pioneer, OJ L 60 [1980]. ........................................................................... 529 PO/Interbrew, OJ L 200 [2003]. ........................................................ 186, 329 PO-Michelin, OJ L 142 [2003]. ................................................................. 328 Pre-Insulated Pipes Cartel, OJ L 24 [1999].............. 277, 328–9, 526, 646, 651 Raw Tobacco Italy, OJ C 60 [2006]. ....................................... 533–4, 539, 549 Rubber Chemicals, Decision of 21 December 2005, IP/05/1656. ............................................................................ 180, 533, 549 Seamless Steel Tubes, OJ L 382 [2003]. ...................................................... 97 Vegetable Parchment, OJ L 70 [1978]. ...................................................... 128 Vitamins, OJ L 6 [2003]. ............................................................ 326, 328, 518 Zinc Producer Group, OJ L 220 [1984]. .................................................... 124

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III. US Cases: Advanced Micro Devices, Inc. v. Intel Corp., No. C 01-7033, 2004 WL 2282320 (N.D. Cal., Oct. 4, 2004). ........................................ 564 American Column & Lumber Co. v. United States, 257 U.S. 377 (1921)..................................................................................... 354 Apperson v. Fleet Carrier Corp., 879 F.2d 1344, 1352 (6th Cir. 1089). ..................................................................................... 584 Associated Press v. United States, 326 U.S. 1 (1945)................................. 353 Blackledge v. Allison, 431 U.S. 63, 76 (1977). ........................................... 611 Blomkest Fertilizer, Inc. v. Potash Corp. of Saskatchewan, 203 F.3d 1028 (8th Cir. 2000). .............................................................. 357 Blue Shield of Virginia v. McCready, 457 U.S. 465, 472 (1982)................. 171 Braswell v US, 487 US 99, 108 SCt 2284 (1988). Broadcast Music, Inc. v. CBS, Inc., 441 U.S. 1 (1979). ............................. 355 Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993)....................................................................... 355, 360 Brown Shoe Co. v. United States, 370 U.S. 294 (1962).............................. 353 Brunswick Corp. v. Pueblo Bowl-O-Mat Inc., 429 U.S. 477 (1977)............ 354 Business Electonics Corp. v. Sharp Electronics Corp., 485 U.S. 717 (1988)....................................................................... 355, 359 California Dental Ass’n v. FTC, 526 U.S. 756 (1999)..................... 355–6, 358 Chicago Board of Trade v. United States, 246 U.S. 231 (1918).................. 354 City of Columbia v. Omni Outdoor Advertising, Inc., 499 U.S. 365 (1991). ............................................................................. 356 Confederated Tribes of Siletz Indians of Or. v. Weyerhaeuser Co., 411 F.3d 1030 (9th Cir. 2005). .............................................................. 357 Continental Airlines, Inc. v. United Airlines, Inc., 277 F.3d 499 (4th Cir. 2002). ..................................................................................... 358 Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36 (1977). ......... 354–5 Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984). ............................................................................. 355 Dell Computer Corp., 128 F.T.C. 151 (1999). ........................................... 357 Eastern States Retail Lumber Dealers’ Ass’n v. United States (1914). .................................................................................................. 353 F. Hoffman-La Roche Ltd. v. Empagran S.A., 542 U.S. 155 (2004).................................................................... xxiii, xxv, 171, 256–7, 355, 562 FTC v. Arch Coal, Inc., 329 F. Supp. 2d 109 (D.D.C. 2004). .............. 71, 357 FTC v. Ethyl Corporation, [1979-1983 Transfer Binder] T.R.R. (CCH) 22,003 (1983).................................................... 153 FTC v. Indiana Federation of Dentists, 476 U.S. 447 (1986). ............. 356, 358 FTC v. Mylan Labs. Inc., 62 F. Supp. 2d 25 (D.D.C. 1999) ..................... 275

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FTC v. Superior Court Trial Lawyers Ass’n, 493 U.S. 411 (1990). .................................................................. 355–6, 358 FTC v. Ticor Title Insurance Co., 504 U.S. 621 (1992). ............................ 356 Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975) ................................. 259 Great Atlantic & Pac. Tea Co. v. FTC, 440 U.S. 69 (1979). ...................... 355 Hale v. Henkel 201 U.S. 43, (1906)........................................................... 631 Hartford Fire Ins. Co. v. California, 509 U.S. 764 (1993). ..................... 355–6 Hickman v. Taylor, 329 U.S. 495 (S. Ct. 1947). ........................................ 530 Illinois Brick Co v. Illinois, 431 U.S. 720 (1977) ................................ 439, 461 Illinois Tool Works Inc. v Independent Ink, Inc., 126 S. Ct. 1281 (2006). .................................................................. 355, 358 Image Technical Services v. Eastman Kodak Co., 125 F.3d 1195 (9th Cir. 1997). ..................................................................................... 358 In re Application of Microsoft, Case N° 06-80038 JF (PVT), (ND,Ca). .............................................................................................. 531 In re Application of Microsoft, MBD N° 06-10061-MLW, (Mass.) 17 April 2006. .......................................................................... 531 In re Methionine Antitrust Litigation, 221 F.R.D. 1 (N.D.Cal. 2002). ...... 564 In Re Methionine Antitrust Litigation, No. C-99-3491-CRB N.D.Cal. .............................................................................................. 174 In re Sulfuric Acid Antitrust Litig. (N.D. Ill. July 7, 2005)........................ 505 In re Vitamins Antitrust Litigation, 217 F.R.D. 229 (D.D.C. 2002). .............................................................................. 174, 564 Intel Corp.v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004). ............................................................................ xxv, 564 Intel Corp., Dkt. No. 9288, 1999 FTC LEXIS 38 (consent order 1999)............................................................................. 357 International Salt Co. v. United States, 332 U.S. 392 (1947). .................... 354 Interstate Circuit, Inc. v. United States, 306 U.S. 208 (1939). ................... 354 ISO Antitrust Litigation, 203 F.3d 1322 (Fed. Cir. 2000). ........................ 358 Joblove v. Barr Laboratories, Inc., 429 F.3d 370 (2d Cir. 2006). ............... 358 LePage’s, Inc. v. 3M, 324 F.3d 141 (3d Cir. 2003).................................... 357 Lorain Journal Co. v. United States, 342 U.S. 143 (1951). ........................ 354 McCormick & Co., 2000 FTC LEXIS 43 ................................................. 358 Maple Flooring Mfrs. Ass’n v. United States (1925).................................. 354 Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986)....................................................................... 355, 359 National Society of Professional Engineers v. United States, 435 U.S. 679. (1978).. .................................................................... 356, 358 NCAA v. Board of Regents of University of Georgia, 468 U.S. 85 (1984)......................................................................... 355, 358 North Texas Specialty Physicians, FTC Dkt. 9312................................... 358 Northwest Wholesale Stationers, Inc. v. Pacific Stationery and Printing Co., 472 U.S. 284 (1985). ........................................................ 355

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NYNEX Corp. v. Discon, Inc., 525 U.S. 128 (1998). ................................. 355 Polygram Holding, Inc. v. FTC, 416 F.3d 29 (D.C. Cir. 2005). ......... 351, 358 Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (1993).................................................... 355–6 Rambus Inc, Dkt 9302 (FTC Aug. 2, 2006) .............................................. 358 Re SGL Carbon Corporation, 3rd Cir. (1999). .......................................... 650 RX Care of Tenn., Inc., 121 F.T.C. 762 (1996). ........................................ 358 Santobello v. New York, 404, U.S. 257 (1971). .................................. 606, 611 Schering-Plough Corp. v. FTC, 402 F.3d 1056 (11th Cir. 2005). ........... 357–8 Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79 (2d Cir. 2004). ...................................................................................... 564 Siegel v. Chicken Delight 488 F.2d 43 (9th Cir. 1971) ............................... 436 Southern Motor Carriers Rate Conference v. United States, 471 U.S. 48 (1985). ............................................................................... 356 Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993). ........................ 355 Spirit Airlines, Inc. v. Northwest Airlines, Inc., 431 F. 3d 917 (6th Cir. 2005). ..................................................................................... 357 State Oil Co. v. Khan, 522 U.S. 3 (1997). .......................................... 355, 358 Stone Container Corp., 125 F.T.C. 853 (1998).......................................... 357 Stop & Shop Supermarket Co. v. Blue Cross & Blue Shield, 373 F.3d 57 (1st Cir. 2004). .................................................................. 358 Sugar Institute, Inc. v. United States (1936).............................................. 354 Summit Health, Ltd. v. Pinhas, 500 U.S. 322 (1991). ................................ 355 Texaco Inc. v. Dagher, 126 S. Ct. 1276 (2006). ......................................... 355 Texaco v. Hasbrouck, 496 U.S. 543 (1990). .............................................. 355 Time Warner Inc, 2000 FTC LEXIS 40.................................................... 358 Timpkin Roller Bearing Co. v. United States (1951).................................. 354 Toys “R” Us, Inc. v. FTC, 221 F.3d 928 (7th Cir. 2000). ...................... 357–8 Bell Atlantic Comp. v. Twombly 1265 S. Ct. 2965 (2006)................... 355, 357 United States ex rel Herbert v. Nat’l Acad. of Sciences, 1992 WL 247587 (D.D.C. 1992). .......................................................... 575 United States v. Addyston Pipe & Steel Co., 85 F. 271 (6th Cir. 1898). ..................................................................................... 354 United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945). ...................................................................................... 354 United States v. American Linseed Oil Co. (1923)..................................... 354 United States v. American Tobacco Co., 328 U.S. 781 (1946). .................. 354 United States v. AMR Corp., 335 F.3d 1109 (10th Cir. 2003)............ 353, 356 United States v. Andreas 216 F.3d 645 ..................................................... 579 United States v. Arnold, Schwinn & Co., 388 U.S. 365 (1977)............ 354, 436 United States v. Arthur Anderson, LLP, 334 F.3d 281 (5th Cir. 2004), reversed, 544 U.S. 696 (2005). ...................................... 347 United States v. Booker, 543 U.S. 220 (2005)............................. 146, 186, 304 United States v. Brown University, 5 F. 3d 658 (3d Cir. 1993)................... 358

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United States v. Colgate & Co., 250 U.S. 300 (1919)................................. 354 United States v. Container Corp. of America, 393 U.S. 333 (1969). ..... 26, 354 United States v. Cuisinart, Inc 1981–1 Trade Cas. (CCH) ........................ 359 United States v. Dairy Farmers of Am., Inc., 426 F.2d 850 (2005). ........... 353 United States v. Dentsply International, Inc., 399 F.3d 181 (3d Cir. 2005)................................................................................ 353, 357 United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377 (1956)..................................................................................... 354 United States v. General Dynamics Corp., 415 U.S. 486 (1974)................. 353 United States v. Grinnell Corp., 384 U.S. 563 (1966). ............................... 354 United States v. LSL Biotechnologies, 379.3d 672 (9th Cir. 2004)............. 353 United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001)..................................................................... 353, 355, 357 United States v. Oracle Corp., 331 F. Supp. 2d 1098 (N.D. Cal. 2004)................................................................................... 357 United States v. Penn-Olin Chemical Co., 378 U.S. 158 (1964). ................ 353 United States v. Philadelphia National Bank, 374 U.S. 321 (1963). ........... 353 United States v. Rose, 2006 U.S. App. LEXIS 11679 (5th Cir. 2006)........ 357 United States v. Sealy, Inc. (1967). ........................................................... 354 United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940). ................ 354 United States v. Sungard Data Systems, Inc., 172 F. Supp. 2d 172 (D.D.C. 2001). ..................................................................................... 357 United States v. Therm-All, Inc., 373 F.3d 625 (5th Cir. 2004). ................ 357 United States v. Topco Associates, Inc., 414 U.S. 801 (1973). ................... 353 United States v. Trans-Missouri Freight Ass’n, 166 U.S. 290 (1897). ........ 354 United States v. United States Gypsum Co., 438 U.S. 422 (1978). ..... 356, 360 United States v. VISA USA, Inc., 344 F.3d 229 (2d Cir. 2003). ................ 353 Valassis Communications, Inc., Dkt. C-4160, 2006 FTC LEXIS 25 (2006). ................................................................................. 357 Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, 540 U.S. 398 (2004)...................................................................... 141, 238, 355, 357 Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., 126 S. Ct. 860 (2006). .................................................................... 355, 358 Weyerhauser Co v. Ross-Simmons Hardwood Lumgber Co., 126 S. Ct. 2965 (2006)........................................................................... 355 White v. US, 322 U.S. 694 (1911). ............................................................ 277

IV. Judgments of the European Court for Human Rights (ECHR): Albert and Le Compte v. Belgium [1983] ECHR 1. ................................... 273 Bendenoun v. France [1994] 18 ECHR 54. ......................................... 271, 273 Bosphorus v. Ireland, [2005] ECHR 30. .................................................... 629

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xxii Table of Cases Bryan v. UK [1996] 21 ECHR 342. ........................................................... 632 Buck v. Germany, Application no. 41604/98, ECHR judgment of 28 April 2005.................................................................................... 636 Cantoni v. France [1996] ECHR 52. .................................................. 653, 659 De Cubber v. Belgium, [1984] 7 ECHR 236. ............................................. 273 Engel and Others v. the Netherlands, ECHR judgment of 8 June 1976, Series A no. 22. ................................................................ 271 Findlay v. United Kingdom, [1997] 8 ECHR 221, Reports 1997-I. ............ 273 Foley v. United Kingdom, Appl no. 33274/96, judgment of 20 June 2000......................................................................................... 637 Funke v. France, A/256-A [1993] 16 ECHR 297 ........................................639 Goodwin v. United Kingdom, Appl no. 25680/94, judgment of 11 July 2002 ......................................................................................... 629 JB v. Switzerland, [2001] 12 ECHR 281 ................................................... 639 OOO Neste St. Petersburg and Others v. Russia, ECHR judgment of 1 February 1983, text available at http://www.echr.coe. int/Eng/Judgments.htm................................................................. 272, 632 Özturk v. Germany, ECHR judgment of 21 February 1984, Series A no. 73. ............................................................................. 271, 273 Saunders v. United Kingdom, [1997] 23 ECHR 313. ............................ 639–40 Schmautzer v. Austria, [1995] 21 ECHR 511. ........................................... 633 Senator Lines GmbH v. the 15 Member States of the European Union, Appl no. 56672/00, text of the judgment available at http://www.echr.coe.int/Eng/Judgments.htm........................................ 272 Société Colas Est and Others v. France, Application no. 37971/97, ECHR 2002-III. .............................................. 405, 633, 635 Stenuit v. France, A/232-A, judgment of 11 July 1989. ............................. 272 Umlauft v. Austria [1996] 22 ECHR 76. ................................................... 633

V. National jurisdictions (miscellaneous): Canada British Columbia Securities Commission v. Branch [1995] 2 S.C.R. 3 ........ 196 Canada (Commissioner of Competition) v. Air Canada ............................ 194 Edwards [1999] O.J. No. 3819 (Sup. Ct.). ................................................. 200 Hudson’s Bay Co. v. Canada v. Canada (Director of Investigation and Research) (1992), 10 O.R. (3d) (C.A.). .......................................... 197 Irvine v. Restrictive Trade Practices Commission, [1987] 1 S.C.R. 181. ..... 196 Mutual Legal Assistance in Criminal Matters Act, R.S.C. 1985, c. 30 (4th Supp.) and SOR/90-704. .................................. 206 R. v. Grant, [1993] 3 S.C.R. 223 at 241-242. ............................................. 198 R. v. Jarvis, [2002] 3 S.C.R. 757. .............................................................. 196

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R. v. Ling [2002] 3 S.C.R. 814. ................................................................. 196 R v. Litchus [1997] 3 S.C.R. 320 (SCC) .................................................... 192 R. v. McClure, [2001] 1 S.C.R. 445........................................................... 202 Southam, [1984] 2 S.C.R. 145. .................................................................. 197 Germany BGH, Case GSSt 1/04, Entscheidungssammlung des Bundesgerichtshofes in Strafsachen (BGHSt) 50, 40 = Neue Juristische Wochenschrift (NJW) 2005, 1440, 1443 = Neue Zeitschrift für Strafrecht (NStZ) 2005, 389. ..................... 612 Bundesverfassungsgericht, Case 2 BvR 1133/86, Neue Juristische Wochenschrift (NJW) 1987, 2662 = Neue Zeitschrift für Strafrecht (NStZ) 1987, 419. ................................................................................. 616 Bundesgerichtshof (BGH), Case 4 StR 240/97, Entscheidungssammlung des Bundesgerichtshofes in Strafsachen (BGHSt) 45, 193 = Neue Juristische Wochenschrift (NJW) 1998, 86. ........................................... 617 BGH, Case 4 StR 240/97, Entscheidungssammlung des Bundesgerichtshofes in Strafsachen (BGHSt) 45, 193 = Neue Juristische Wochenschrift (NJW) 1998, 86. ........................................... 618 Spain Aceites, judgment of the TDC of 8 July 1992, Case 294/91. ..................... 135 Asturiana de Zinc, judgment of the TDC of 9 January 1987, Case 223/89. .......................................................................... 131, 134, 136 Autoescuelas Alcalá, judgment of the Spanish Audiencia Nacional of 11 April 2003..................................................................... 332 Autoescuelas Collado Villalba, judgment of the TDC of 18 December 1998, Case 421/97. .......................................................... 134 Autoescuelas Extremadura, judgment of the TDC of 16 February 2005, Case 582/04............................................................. 133 Autoescuelas, judgment of the TDC of 25 October 1988, Case 237/88. ......................................................................................... 135 Azúcar, judgment of the TDC of 15 April 1999, Case 426/98................... 134 BT/Telefónica, judgment of the Spanish Supreme Court of 23 March 2005. ............................................................................. 328, 329 Cider cartel, judgment of the Spanish Audiencia Nacional of 6 May 1999. ......................................................................................... 329 Detergentes concentrados, judgment of the TDC of 6 March 1992, Case 306/91. ............................................... 131, 133, 136–7 Distribuidores cine, judgment of the TDC of 10 May 2006, Case 588/05. ......................................................................................... 136 Driving schools of Tenerife, judgment of the Spanish Audiencia Nacional of 22 September 2003. ........................................................... 331

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Española de Zinc, judgment of the TDC of 18 July 1986, Case 223/86................................................................................... 131, 134 Estate Agents, judgment of the Spanish Audiencia Nacional of 16 October 2003. .................................................................................. 328 Hormigón Gerona, judgment of the TDC of 4 June 2001, Case 492/00....................................................................................... 134–5 Películas de vídeo, judgment of the TDC of 11 May 1998, Case 387/96. ......................................................................................... 134 Prensa del corazón, judgment of the TDC of 2 November 1988, Case 239/88. ......................................................................................... 135 Prensa dominical, judgment of the TDC of 4 July 1988, Case 235/87....................................................................................... 134–5 Servicios Agua Tenerife, judgment of the TDC of 23 September 2004, Case 567/03. ......................................................................................... 134 Suresa/Correos, judgment of the Spanish Audiencia Nacional of 26 September 2005. .............................................................................. 327 Tabacalera, judgment of the Spanish Audiencia Nacional of 13 December 2004. ............................................................................... 329 Tipos de Interés Bancario, judgment of the TDC of 5 July 1996, Case R 144/96. ..................................................................................... 136 Transmediterránea/Euroferrys/Buquebús, judgment of the TDC of 13 June 2003, Case 543/02. ................................................................... 134 Vacunas Antigripales, judgment of the TDC of 30 September 1998, Case 395/97. ......................................................................................... 134 United Kingdom Arkin v. Borchard Lines [2003] Comm EWHC 2844................................. 433 Arkin v. Borchard Lines [2005] EWCA Civ 655 ........................................ 433 Courage v. Crehan [2001] All ER (EC) 886................................ 180, 452, 480 Office of Fair Trading v. X, [2003] 2 All ER (Comm) 183. ................ 635, 639 Provimi Ltd v. Aventis Animal Nutrition SA [2003] 2 All ER (Comm) 683............................................................ 250, 258, 467 R (Morgan Grenfell) v. Special Commissioner [2003] 1 AC 563................ 637 R v. Derby Magistrates Court, Ex p B [1996] AC 487, 508. ...................... 637 Sevenoaks Survey, UK Office of Fair Trading Press Releases 88-06, 19 May 2006, and 214/05, 9 November 2005, available at www.oft.gov.uk................................................................. 602 Three Rivers v. Bank of England (No 6) [2005] 1 AC 610......................... 637

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I N T RO D U C T I O N This volume contains the written contributions prepared for the 11th edition of the Annual EU Competition Law and Policy Workshop, held on 2–3 June 2006 at the Robert Schuman Centre for Advanced Studies of the European University Institute in Florence, as well as the (edited) transcripts of the debate that took place on this occasion. Background. The EU Competition Law and Policy Workshop is a multiannual programme exploring topical policy and enforcement issues in the area of EC competition law. Each year the programme brings together a group of top-level EU and international policy-makers, judges, legal practitioners, economic consultants and academics for a one-and-a-half-day intensive roundtable debate in an informal and non-commercial environment. The 11th edition of the Annual EU Competition Law and Policy Workshop was devoted to the enforcement of the prohibition of cartels.1 The choice of this topic is easily explained. The fight against cartels has long been the top priority for the competition authorities in the US and Canada. During the 1990s, this fight also became the top priority for the European Commission. The reform of the leniency programme in 2002 has given the Commission a rather efficient tool for the detection of cartels. The modernization of EU competition policy by means of Regulation 1/2003, which abolished both the Commission’s exemption monopoly under Article 81(3) EC and the corresponding notification requirement, has allowed the Commission to allocate the necessary human resources to the detection, prosecution and fining of cartels. To a certain extent, the Commission has even become the victim of its own success: nowadays there are more leniency applications than the Commission is able to “digest”, that is to say, more applications are received than can be transformed into binding decisions which sanction the wrong-doers.2 1 Detailed information about the previous editions of the Workshop, and about the European Competition Law Annuals series, is available on the EUI website (see www.eui.eu/RSCAS/ Research/Competition/). The written contributions prepared for the more recent editions of the Workshop can be downloaded freely from the same website. 2 This Introduction follows the structure of the Workshop as indicated in the original programme, and sketches the essential content of the written contributions and the oral discussions of the six sessions in the order in which the proceedings unfolded. However, there are a few subjects which were addressed in several sessions despite being formally assigned to only one of them. The most obvious of these recurring themes is leniency. Another is the policy and practice of the Commission with respect to the level of fines in general and in individual cases. Even the compensation of victims of cartels is referred to in several sessions. We have resisted the temptation to regroup all these references in separate, specifically dedicated sections of this Introduction, so as to maintain the “historical” truth of the Workshop. The reader who is particularly interested in these subjects will therefore have to look at the Introduction and the book as a whole.

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It is therefore not surprising that the conclusion of the introductory paper submitted by Neelie Kroes, the Member of the European Commission responsible for Competition, addresses improvements of the existing leniency programme and the introduction of direct settlements, comparable to the US system of plea bargaining. The improvements envisaged for leniency consist of: clarifications of the threshold for immunity to encourage more precise and substantiated leniency applications; further specification of the duty of cooperation; and the adoption of rules on an oral procedure for corporate statements. The objective of a direct settlement procedure will be to reduce the duration of the administrative procedure leading to a binding Commission decision, thus releasing enforcement resources for the efficient pursuit of other cartel cases. For the Commissioner, such procedural “savings” must take place either before or upon the issuing of the Statement of Objections. At the same time, she warns that the margin for the reduction of fines in direct settlement procedures will be limited. Structure of the Workshop. Discussions at the Workshop were divided into six sessions. In what follows, we provide an overview of the main points that surfaced from the presentation of the written contributions and the subsequent debate.

1. Session One: Oligopoly Theory and Economic Evidence a. Written contributions Under the broader heading “Unearthing Cartels—the Evidence”, the first session of the Workshop discussed “Oligopoly Theory and Economic Evidence”. The discussions were introduced by five papers. Paul A. Grout’s oral presentation at the Workshop was based on the results of a study undertaken in 2005 (together with Silvia Sonderegger, University of Bristol) for the Office of Fair Trading, entitled “Predicting Cartels”.3 The study examined the economic and structural factors that are typically considered to contribute to the formation, maintenance or detection of cartels. Based on economic theory, case studies and econometric analysis, the OFT study came to the conclusion that, to begin with, three fundamental characteristics facilitate the formation of a cartel, i.e. homogeneous products, stable output and market conditions, and large and stable market players. In 3 Grout P. and Sonderegger S. (2005): Predicting Cartels, OFT Economic Discussion Paper, March 2005. Following the Workshop, the authors prepared a written contribution—reproduced in this volume—which updates and expands upon the outcomes and conclusions of the 2005 OFT study.

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addition to these basic requirements, certain other factors facilitate collaboration, i.e. transparency, payroll effects (high payroll per employee), concentration, barriers to entry and excess capacity. Finally, it is important to ask the questions “why and when”. Cartel formation is more likely if there has been a long-run decline in demand and/or of prices affecting all or almost all companies in the market, and where there is a sudden market shock that affects all companies in the market. The Grout and Sonderegger study of 2005 shows not only the well-known concentration of cartels detected thus far in certain economic sectors but also the strong correlation between those cartels on both sides of the Atlantic. While this is explainable in terms of structural and behavioural factors present in the US as well as in the EU, the strong correlation could also be explained in terms of some sort of “hysteresis”: the detection of a cartel by one authority leads other competition authorities to concentrate their efforts on the same activities in their respective jurisdictions. More interesting as guidance for the future, however, is Grout and Sonderegger’s list of sensitive sectors in which, so far, no cartels have been found. While the Grout and Sonderegger study concentrates on structural characteristics, the paper of Joseph E. Harrington turns to behavioural factors. He identifies a series of collusive markers. Collusive price markers are: (i) increased price uniformity: a higher list (or regular) price and reduced variation in prices across customers; (ii) a series of steady price increases preceded by steep price declines; (iii) price rises and import declines; (iv) strongly correlated prices of different firms (e.g., in bidding auctions, where bids are clustered); (v) a high degree of uniformity across firms in product price, and other dimensions including the price of ancillary services; (vi) low price variance; and (vi) price regime switches (collusion phases followed by punishment phases). Collusive quantity markers are: (i) market shares that are highly stable over time; and (ii) the presence of a subset of firms in which each firm’s share of total supply is highly stable over time. Patrick Rey’s paper overlaps with those of Paul Grout and Joseph Harrington. He discusses both structural and behavioural factors which facilitate or might otherwise indicate collusion. He notes that, while it would be natural to look for supra-competitive prices or profits (generated by a cartel), such an approach would require a deep knowledge and expertise of the examined industries—which regulators are supposed to have but competition authorities are not. Rey also notes that courts have been reluctant to take suspect behavioural patterns as evidence of collusion: indeed, price parallelism, market share stability and price reactions to changing demand conditions can all be compatible with competitive market conditions. All three authors consider structural and behavioural factors to be useful complements to the existing leniency programmes. In particular, Joseph Harrington emphasizes that, the greater the risk of discovery and the higher/more painful the penalties, the more effective leniency will be.

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xxviii Introduction “Amnesty plus” and “penalty plus” (generated through the so-called “omnibus question”) contribute to this risk, but so does the danger of ex officio scrutiny by a competition authority. The screening of certain economic sectors in which cartels are more likely to exist than in others will therefore reinforce the efficiency of leniency programmes. Richard Whish’s paper describes two instruments made available by UK competition law in cases where competitors are behaving in a parallel manner but where there is insufficient evidence, if any, of a cartel. The Office of Fair Trading (OFT) might itself conduct a “market study”; or it might also (like various sectoral regulators) make a “market investigation reference” to the Competition Commission (CC). Market investigation references can lead directly to the imposition of remedies, whereas sectoral investigations under Article 17 of Regulation 1/2003 cannot. Market investigation references are therefore a useful complement to Articles 81 and 82 EC and the instruments available to enforce them. Rafael Allendesalazar’s paper 4 discusses EC and Spanish competition law, as well as the attitude of European Courts and the Tribunal de Defensa de la Competencia (TDC), with respect to concerted practices on the one hand and conscious parallel behaviour on the other. The paper criticizes the fact that, in spite of the different treatment of the two situations under EC and Spanish law, the TDC has not acknowledged the fundamental difference between them. Spanish competition law should not, by virtue of presumptions, be applied to behaviours that are unilateral, logical, rational and competitive answers to market conditions.

b. Discussion The discussion among participants during the first session concentrated on the three economics papers dealing essentially with the ex officio detection of cartels. The answer to the question whether economists can assist in such ex officio detection was a qualified “yes”. Everybody agreed that the identification and quantification of structural and behavioural factors facilitating or signalling the existence of a cartel is not an appropriate method to identify collusion per se. But screening is a useful tool for competition authorities to prioritize, either in determining which sectors should be looked at more closely in order to find a cartel, or in choosing among leniency applications in order to determine which “tip off” to pursue first. That position was clearly confirmed by at least one of the major cartel enforcers, while others showed some scepticism, in particular in view of the potential high costs of monitoring certain sectors (e.g. the gasoline industry in the US). 4

Co-authored by Paloma Martínez-Lage and Roberto Vallina.

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Participants agreed that screening is a useful complement to leniency. The efficiency of a leniency programme depends on the risk of detection and punishment. Ex officio screening contributes to this risk: it enhances the fear of discovery of a cartel. This conclusion was nicely encapsulated in the formula “you cannot catch a thief with an economist, but you can scare him”. There was also consensus that screening methods should be refined through further research based both on theoretical insights and on case studies. Sectoral investigations are a useful starting point and have led DG Competition to prioritize its efforts (e.g. in undertaking dawn raids). The relationship (complementarity) between ex officio screening and leniency programmes invited several participants, in particular practicing lawyers, to reflect on their experiences with the existing leniency programmes. It was recognized by all that leniency is an efficient tool for destabilizing cartels. Reference was made to the complementarity of corporate and individual leniency and to the usefulness of a system of bounties. At the same time, it was emphasized that the effectiveness of leniency depends on proper incentives, and that hurdles discouraging would-be applicants from applying (such as the “omnibus question” and “penalty plus” in the US) should therefore be avoided. Interveners agreed that leniency applications can be used as a strategic tool to harm competitors, notably in a legal system (such as in the EC) based exclusively on fines. Such harm is particularly dangerous for smaller, financially weaker firms because of the relatively stronger impact of fines on such companies. While practicing lawyers seemed to regret this type of strategic use, representatives of competition authorities stressed their indifference visà-vis the motives of the whistleblower. For competition law enforcers, everything that destabilizes a cartel is good; leniency applicants are therefore welcome. For the enforcer, what is more important is the kind of cartel the whistleblower reveals. A young, healthy and well-functioning cartel is a more interesting target for prosecution than an old, dying one. A certain number of leniency applicants might well be members of the second group, a consideration which underlines the usefulness of increasing the fear of detection through increased, efficient ex officio screening. One participant raised the question of the importance of corporate culture and the changes likely to affect it. The increased sensitivity towards corporate wrong-doing in other sectors of the law (such as accounting) could have a major impact, but the discussion about its effects, in particular in Europe, were (regrettably) not pursued in detail. However, in the US, the attitude notably towards document retention has changed discernably.

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2. Session Two: Investigative Powers of the Competition Authorities Written contributions The five papers presented in this Session reflect the situation in the US, Canada, the EU and the UK. Thomas O. Barnett’s contribution sets out seven steps to better cartel enforcement. These seven steps are: (i) a focus on the detection, prosecution and punishment of hard core cartels (as opposed to the investigation of rule of reason or monopolization cases—with consequences well illustrated in Stephen Calkins’ contribution to the third session of the Workshop); (ii) the treatment of cartels as serious crimes and of cartel members as criminals, facilitated by the substantial increase in maximum jail term and criminal fines in recent US legislation, putting antitrust crimes on a par with other economic crimes such as bribery, bank fraud, and mail and wire fraud; (iii) amnesty and “amnesty plus” programmes, the efficiency of which requires significant benefits, a genuine fear of detection, predictability and transparency; (iv) the vigorous prosecution of obstruction of justice; (v) the combination of cartel offences with other violations of the law; (vi) predictability and transparency of the enforcement policy; and (vii) wide publicity of anti-cartel enforcement efforts. Calvin S. Goldman’s contribution5 discusses cartel enforcement in Canada. The section dealing with investigative powers highlights constitutional problems such as: the protection against self-incrimination; the issue of extraterritoriality in computer searches (where Canada seems to be less restrained than the US!); the recent authorization of wire-tapping; and the main elements of amnesty and leniency programmes. The section on international cooperation in antitrust investigations sketches the origins and the evolution of cooperation with the US, which Canada intends to extend to other jurisdictions; it also refers briefly to the work under way in the framework of the OECD. The concluding section confirms that the broad array of investigative tools available, the dramatic rise in international cooperation and the efficiency of leniency programmes signal the ever-growing likelihood that antitrust violations will be detected. The conclusion also stresses the growing need for coordinated responses by the defence in order to match the increased coordination between enforcement agencies. For Olivier Guersent, the EU enforcement system ensures effective and timely investigation and decision making. Efficiency has increased since the 5

Co-authored by Robert E. Kwinter and Angie L. Morris.

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creation of a cartel directorate, but the Commission’s output should rise to 10 cartel decisions per year, reached within 24 to 30 months each, in spite of the fact that a substantial increase in resources is unlikely. The high number of leniency applications (20 per year since the establishment of the 2002 leniency programme) suggests a streamlining of procedures in the form of a “European plea bargaining” compatible with the existing legislative framework, and a “transfer of immunity” together with the transfer of cases within the ECN, so as to facilitate decentralization of cases which are retained today by the Commission due to lack of immunity at national level. The EC public enforcement system should be complemented by more effective private actions, as advocated by the Commission’s Green Paper on Private Enforcement. Criminal enforcement is excluded for the foreseeable future at EU level but it might progress in certain Member States, although it entails higher standards of proof, increased rights, and the need for efficient leniency programmes for individuals which interact with the leniency programme at EC level. Ian Forrester examines the investigative tools available to the Commission under Regulation 1/2003. His paper also examines the new Commission leniency programme, its adaptation in view of the discovery procedure in the US, and its limits with respect to cooperation in the framework of the ECN. Compared to the US amnesty programme, the paper finds the EC leniency programme less attractive because of a lack of confidence in the Commission’s fairness in setting fines (citing, inter alia, relatively high fines for smaller companies), the relative slowness of the procedures, their opacity and the lack of predictability of the steps following the confession. “Amnesty plus” and a plea bargaining procedure would be a useful addition. The paper reviews current Commission initiatives, such as: favouring the increase of private enforcement (which is considered to be a useful complement to public enforcement if it is limited to achieving justice and not punishment, and which could be facilitated by obliging cartel members to accept arbitration of claims made by victims); the fining of “facilitators”; and the use of trustees, as in the pending remedy procedure against Microsoft. Criminalization could be prescribed by the EC, but would require the Commission to change its investigation procedures, increasing the rights of the defence. An alternative to criminalization would be the disqualification of directors. The payment of bounties, following the Korean example, should be considered. Philip Collins’ paper concentrates on the situation in the UK. It is sceptical with respect to treating facilitating devices as being forbidden as such (as opposed to forbidding them only when ancillary to a cartel). The paper describes the civil and more onerous criminal investigatory powers available to the OFT. The OFT has reviewed its internal procedures so as to ensure that they conform with the higher standards of criminal procedures. For Collins, own-initiative investigations are useful but less necessary than at first sight, as leniency applications can be triggered by a series of factors other than fear

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xxxii Introduction of detection, such as corporate compliance and governance activities, due diligence in the case of mergers, management changes, etc. From the brief oral presentations of the papers, the following points are particularly worth noting. Convergence of the laws of different jurisdictions in substance and procedure is desirable so as to facilitate international (and intra-EC) cooperation. Companies might be more inclined to tell the truth when asked directly than is normally assumed, also in view of the changes in corporate governance that have occurred outside the antitrust area. Compliance programmes are important, in particular if they engage senior management. Direct settlements are useful in appropriate cases. Such settlements should provide for the compensation of victims, to be determined through mediation or arbitration. But direct settlements s