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Competition Law

Analysis - debate - current awareness

28 JUN 2013

Settling for less

By John Cassels

The extent to which the European Commission is now seeking to bring antitrust investigations to a close via commitments or settlement is a cause for concern. The attractions to the Commission of settling with the alleged infringers of the competition rules are clear: swifter resolution of investigations meaning more cases can (in theory at least) be undertaken with the same level of resources; and alleged infringing behaviour is stopped without the need to go through the full panoply of procedural steps.

For cartel investigations, settlement means limited access to the file for those that choose to settle, a truncated statement of objections and an admission of guilt which effectively precludes an appeal to the EU Courts, at least as regards liability. For other alleged infringements, the commitments procedure under Article 9 of Regulation 1/2003 offers the possibility of securing undertakings from relevant parties without the need to find or secure an admission of an infringement.

Currently, both Google and Samsung are engaged in commitments negotiations with the Commission. 

Google has been under investigation in the EU since November 2010 when the Commission started looking into whether it was abusing dominance by granting preference to its own services in search results and restricting the online advertising market. Just as it seemed that this investigation was edging to a close on the basis of commitments offered by Google, a complaint by Fairsearch (a grouping that includes Microsoft, tripadvisor, Foundem, Nokia and Oracle) in connection with Google's conduct in connection with the Android OS prompted a second investigation and effectively put paid to the closure of the original investigation. In addition, a number of publishers, search engines and online mapping companies have mounted a unified and sustained attack on the commitments offered by Google in connection with the first investigation.

Samsung is under investigation in connection with alleged refusals to license standard essential patents. It is reportedly also seeking to bring the investigation to a close via commitments.

The danger in these and other cases is that the Commission secures legally binding undertakings to change behaviour without having established an infringement of the rules. It may or may not be the case that Google, Samsung (and others) have abused dominance. However, in the absence of being forced to establish that they have, and having its reasoning subject to scrutiny and challenge, it is possible that the Commission will be driven to act more on the basis of political pressure or media 'noise', rather than economic evidence. In complex cases such as those that involve a balancing of IP rights and competition law, the short-term attractions of going for a quick 'win' may be offset by the consumer harm that results from legal and regulatory uncertainty. 

If you would like to discuss these issues, please do not hesitate to contact John Cassels at john.cassels@ffw.com.

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