Competition Law

Selected Practical Issues

Dr Vincent J G Power SC

UCC, 10 October 2024

P-15644580-1
Three Topics

1. What do competition lawyers do? A look at some recent cases

2. What are the hot topics in competition law? A selection includes:

>Evidence
>ESG
>Competition (Amendment) Act 2022
>Mergers
>State Aid
>National Champions
>FDI, FSR, DMA

3. How do you enforce competition law? What is the optimum regime?

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1

What do competition
lawyers do?

A look at some
recent cases

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9
 Background to Competition Law

 Really fascinating and interesting area of law

 Hugely practical
 Spans all economic sectors
 Really get to know businesses and various sectors
 A combination of law, economics, business, strategy
and psychology!
 Key moments in the life of a business
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 What is Competition Law? 1/4

 Competition is rivalry

 Competition law is the set of rules adopted at EU and

national levels to promote rivalry / market competition
by regulating anti-competitive conduct
 What is Competition Law? 2/4
 Competition laws in the EU and the EU Member States are
wider than, and different from, US antitrust law – there is a
common core but they are different in various respects – e.g.,
State aid law
 Competition law in the EU is, in some ways tougher and in
some ways, weaker than US antitrust law
 Competition law is somewhat uncertain and dynamic: there
are grey areas so there is a lot that is unclear
 This means that the competition lawyer needs to be
imaginative and innovative
 What is Competition Law? 3/4

 There are both EU rules and Member State rules –

and we in Ireland must comply with whichever rules
apply (as well as UK, US, German and other relevant
rules)
 The EU and Member State rules may differ from each
other but:
» the EU rules prevail if there is a conflict
» the Member State rules may be tougher in
substance and in terms of penalties (e.g., jail)
What is Competition Law? 4/4

 Just because there are other regulations (e.g.,

banking, environmental or prudential rules), it does
not mean that we can ignore competition law, we
need to comply with all laws
 Competition law sometimes follows fashions and
trends
 Competition law is not fixed but is dynamic
Areas of Competition Law

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Examples of Anti-Competitive Arrangements

Price-fixing

Customer allocation
Anti-Competitive
Arrangements
Market Sharing

Information Sharing e.g.,

competitively sensitive
information
Examples of Abuses of Dominance

Artificially low pricing

Making the sale of one

product conditional on the
sale of another
Abuses of Dominance
Applying dissimilar conditions
to similar transactions

Refusal to supply, limiting

production, markets or technical
development to the prejudice of
consumers
 Sample Work of a Competition Lawyer

 Mergers
 State Aid
 Cartels
 Abuse of Dominance
 Digital Markets Act and Digital Services Act
 FDI
 Is it more research-based than other areas of the law?
 The “output” of legislation and cases means that it is
somewhat relentless
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Spotting the Competition Law Issues

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2

What are some of

the hot topics in
competition law?

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There are too
many to deal
with them all!

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 Evidence

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Evidence

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 ESG

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ESG

 ESG is virtuous so what’s the competition

problem…?

 Imagine the shipping companies operating between

China and Europe agree to reduce their speed by
two knots to save energy emissions…is there a
competition problem?

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ESG

 ESG is virtuous so what’s the competition

problem…?

 Imagine the shipping companies operating between

China and Europe agree to reduce their speed by
two knots to save energy emissions…is there a
competition problem?...Yes, they have reduced
emissions but they have now reduced supply and
therefore pushed up prices!
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Six Banks Subpoenaed over their ESG Activities

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Six Banks Subpoenaed over their ESG Activities

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ESG

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ESG

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ESG

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Take the US as a case study

 Senators writing to 51 law firms about their ESG advisory work

 Letter to Blackrock

 Subpoenas to six banks

 Some states (e.g., West Virginia) excluding those banks from State business
where the banks don’t lend to fossil fuel companies (see link)

 Issues in banking and insurance and what’s happening

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Who Sent the Letter?

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Letter to 51 Law Firms

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Letter to 51 Law Firms

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Letter to 51 Law Firms

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Law Firms who received “the letter”

 Akin Gump  Dechert

 Allen & Overy  Dentons
 Baker Donelson  DLA Piper
 Baker McKenzie  Eversheds Sutherland
 Cleary Gottlieb
 Freshfields
 Clifford Chance
 Gibson Dunn
 Cooley
 Goodwin Proctor
 Covington & Burling
 Davis Polk  Greenberg Traurig
 Debevoise & Plimpton  Herbert Smith Freehills

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Law Firms who received “the letter”

 Hogan Lovells  Millbank

 Holland & Knight  Morgan Lewis & Bockius
 Jones Day  Morrison & Forester
 King & Spalding  Norton Rose Fulbright
 Kirkland & Ellis
 Orrick, Herrington & Sutcliffe
 K&L Gates
 Paul Hastings
 Latham & Watkins
 Paul, Weiss, Rifkind, Wharton & Garrison
 Linklaters
 Mayer Brown  Proskauer Rose
 McDermott, Will & Emery  Quinn Emmanuel Urquhart & Sullivan

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Law Firms who received “the letter”

 Reed Smith  White & Case

 Ropes & Gray  Wilmer Cutler Pickering Hale & Dorr
 Shearman & Spalding  Wilson Sonsini
 Sidley Austin  Winston & Strawn
 Simpson Thacher
 Skadden, Arps, Slate, Meagher & Flom
 Squire Patton Boggs
 Sullivan & Cromwell
 Weil, Gothshal & Manges

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Blackrock

 Larry Fink in, for example, 2018 and

2021, asked companies “to disclose a
plan for how their business model will
be compatible with a net-zero
economy”

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Blackrock

 Larry Fink in, for example, 2018 and  Larry Fink in 2023 says he will not
2021, asked companies “to disclose a use “ESG” any longer because “it’s
plan for how their business model will been misused…it has been totally
be compatible with a net-zero weaponized”
economy”

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Blackrock

 Larry Fink in 2021 asked companies  Larry Fink in 2023 says he will not
“to disclose a plan for how their use “ESG” any longer because “it’s
business model will be compatible been misused…it has been totally
with a net-zero economy” weaponized”

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 What type of Competition Law
issues arise
in Banking and ESG?

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There is no ESG Exemption for Anti-Competitive
Conduct

 There is no exemption from competition law for conduct which breaches

competition law simply because it meets ESG goals
 But the breach may not be so obvious
 On 12 September 2019, the then Assistant Attorney General in President
Trump’s Department of Justice, Makan Dalrahim, wrote: “[t]he loftiest of
purported motivations do not excuse anti-competitive collusion among rivals.
That’s long-standing antitrust law.”
 On 21 December 2022, the Chair of the Biden Administration’s Federal Trade
Commission, Lina Khan wrote in the Wall Street Journal in an op-ed piece
entitled “ESG Won’t Stop the FTC”: “our job is to prevent illegal mergers, not to
make the world a better place.”

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Arrangements

 Exchange of competitively sensitive information with other banks (e.g., what

type of loans would you make/not make, what margins would you charge, in
which risks would you invest)

 Fixing of margins, rates, charges etc – price-fixing

 Participation in alliances/ groups/ thinktanks

 Interaction with governments

 Public initiatives/signaling

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1. Don’t Share CSI

 COP27 in Egypt: Collaboration

 European Commission’s 2021 decision in Car Emissions proves the point: it
was not easy to draw the line between permissible and impermissible
collaboration between competitors with the European Commission being
interested in protecting assumed competition in innovation.
 the letter sent to 51 international law firms by the five US Senators on 3
November 2022 threatening investigations and the last sentence read: “[t]o the
extent that your firm continues to advise clients regarding participation in ESG
initiatives, both you and those clients should take care to preserve relevant
documents in anticipation of those investigations.”

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2. Don’t Collectively Boycott

 the banks of Utopia decide collectively that they will not invest in, or lend to,
companies in the coal or oil sectors then those banks are actually organizing a
boycott because they are agreeing not only what they would do but also what
they would not do. Supporters of ESG would say that it is a desirable boycott
but opponents of ESG would say the opposite. The August 2022 letter by
various State Attorney Generals in the US raised the spectre that those involved
in ESG groups could be involved in group boycotts and concerted refusals to
deal. The Japan Fair Trade Commission adopted guidelines on 31 March 2023
to assist undertakings to collectively boycott unsustainable suppliers.

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3. Know the EU Horizontal Guidelines

 Guidelines on the applicability of Article 101 of the Treaty on the Functioning of

the European Union to horizontal co-operation agreements, OJ 2023/C 259/01
(published on 21 July 2023)

 Chapter 9 deals with sustainability agreements and informal guidance from the
European Commission (§515)

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3. Know the EU Horizontal Guidelines

 The EU is committed to sustainability:

“516. Sustainable development is a core principle of the Treaty on European

Union and a priority objective for the Union’s policies….The Commission has
committed to implement the United Nations’ sustainable development
goals….In line with this commitment, the European Green Deal sets out a
growth strategy that aims to transform the Union into a fair and prosperous
society, with a modern, resource-efficient and competitive economy, where
there are no net emissions of greenhouse gases from 2050 onwards and where
economic growth is decoupled from resource use….”

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3. Know the EU Horizontal Guidelines

 The EU sees competition law enforcement as contributing to sustainability:

“518. Competition law enforcement contributes to sustainable development by

ensuring effective competition, which spurs innovation, increases the quality
and choice of products, ensures an efficient allocation of resources, reduces the
costs of production, and thereby contributes to consumer welfare.”

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3. Know the EU Horizontal Guidelines

 The EU sees has a particular – and somewhat limited - vision of ‘sustainability

agreement’:

“521. In these Guidelines, the term ‘sustainability agreement’ refers to any

horizontal cooperation agreement that pursues a sustainability objective,
irrespective of the form of the cooperation. Sustainability agreements will only
raise competition concerns under Article 101 if they entail restrictions of
competition by object or they lead to appreciable actual or likely negative effects
on competition. Agreements that restrict competition cannot escape the
prohibition laid down in Article 101(1) simply by referring to a sustainability
objective….”

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3. Know the EU Horizontal Guidelines

 But the EU sees some hope for the right type of ‘sustainability agreement’:

“522. Where sustainability agreements restrict competition within the meaning of

Article 101(1), they may still be compatible with Article 101 if they fulfil the four
conditions of the exception provided by Article 101(3). Detailed guidance on the
application of those conditions is set out in the Commission Guidelines on the
application of Article 101(3) ….”

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3. Know the EU Horizontal Guidelines

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3. Know the EU Horizontal Guidelines

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4. Don’t engage in Virtue Signalling

 Price Signalling
 Container Shipping
 Irish Motor Insurance
 Bank of Ireland
 Virtue Signalling could be compared to Price Signalling

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5. Don’t Greenwash

 Japan Fair Trade Commission

 Australian Commerce and Consumer Commission
 Various challenges and claims lie ahead

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6. ESG as an Abuse of Dominance

 AstraZeneca v Commission, it is possible that regulatory filings could, in certain

circumstances, amount to an abuse of dominance. This is an area which
should be watched carefully by competition agencies to prevent abuses of
dominance – exuberance or deception could occur and amount to an abuse of
dominance.
 ESG activities need to be reviewed to ensure that there is no breach of
competition law

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7. Don’t Expect M&A Deals to be Cleared Based on ESG

 M&A deals are usually tested according to one of two tests:

>EU: does it “significantly impede effective competition (SIEC)?”

>Ireland/UK: does it “substantially lessen competition (SLC)?”

 Those are the only tests. If there is an ESG benefit then good but it does not
follow that a transaction which would lead to a SIEC/SLC would be approved on
the basis of ESG

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8. State Aid

 If there is the possibility of the bank getting State aid from any State then verify
that the aid/assistance is lawful and that the bank will not have to eventually
repay it with interest
 For example, a Government might be willing to give the bank some State aid to
deal with an ESG challenge. It is important to ensure that the aid is lawful.

EU Member State (e.g., UK Non-EU Member State /

Ireland) UK

EU State Aid regime UK State Aid regime EU Foreign Subsidies regime

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9. Make no False Claims

 This is a source of possible litigation

 And a source of possible enforcement

 There is Australian legislation on false claims but there are other legal rules in
other jurisdictions which could also be invoked

 This could be a form of “mis-selling” litigation in X years’ time

 Best avoided…

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10. Monitor the Competition Agencies

 The competition agencies are increasingly busy and interested in the area of
ESG
 The Dutch ACM has been particularly active and ambitious
 The Irish Competition and Consumer Protection Commission has not been
visibly active in the area
 The European Commission, the CMA and the BkA have been particularly active
in the area (e.g., CMA’s Guidance of 27 January 2021)
 Anticipate various degrees of interest but also anticipate various degrees of
investigation
 Some of those investigations could well involve Ireland and banks based in
Ireland even if the banking activities/lending etc relates to non-Irish situations

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11. Key Do’s and Don’ts

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11. Key Do’s and Don’ts

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 Competition
(Amendment) Act 2022
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B: Competition (Amendment) Act 2022

 Significant change to Irish competition law

 ECN+ Directive
 Penalties
 Mergers
 Below threshold transactions
 New procedures
 Adjudication Officers
 New investigations by the CCPC

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 Mergers

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Mergers
 Article 22 EUMR

> https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32004R0139

 Illumina/Grail

> https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3773

> https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4872

 Technology Start-Ups

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Illumina / Grail

 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62022CJ0611

 “Oops, we got that entirely wrong”

 Commission ambition meets Court’s legal test

 A dose of realism

 A sign of the future roadblocks for an Euro-Champion Policy?

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3

How do you enforce

competition law?

What is the optimum

regime?

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Having
Substantive Rules
without Enforcement
is Meaningless 74
Having
Substantive Rules
without Enforcement
is Meaningless 75
Therefore Enforcement
is Vital
76
But Enforcement
is Harder than you Might Think…
77
The Irish competition authority/CCPC
has had a very poor record of winning
contested cases in the superior courts
in Ireland… 78
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Different Jurisdictions have different approaches

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Rules

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Rules

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How can Competition Law be Enforced?

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How can Competition Law be Enforced?

PUBLIC

85
How can Competition Law be Enforced?

PUBLIC PRIVATE

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How can Competition Law be Enforced?

PUBLIC PRIVATE

CIVIL 87
How can Competition Law be Enforced?

PUBLIC PRIVATE

CIVIL CRIMINAL
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How can Competition Law be Enforced?

PUBLIC PRIVATE

CIVIL CRIMINAL
89
How can Competition Law be Enforced?

PUBLIC PRIVATE

CIVIL CRIMINAL
90
How can Competition Law be Enforced?

PUBLIC PRIVATE

CIVIL CRIMINAL
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92
Spectrum of Enforcement

Conviction
or Finding of
a Civil
Wrong

93
Spectrum of Enforcement

Conviction
or Finding of
a Civil
Wrong

94

Detailed
Investigation
Spectrum of Enforcement

Conviction
or Finding of
a Civil
Wrong

95

Detailed
Investigation
Spectrum of Enforcement

Conviction
or Finding of
a Civil
Wrong

Investigatio 96

n Detailed
Investigation
Spectrum of Enforcement

Conviction
Complaint or or Finding of
Own- a Civil
Initiative Wrong

Investigatio 97

n Detailed
Investigation
Spectrum of Enforcement

Conviction
Complaint or or Finding of
Own- a Civil
Initiative Wrong

Investigatio 98

n Detailed
Self- Investigation
Assessment
Role of Self-Assessment

Review of Arrangements and Practices

Compliance Programmes
Abolition of the Notification Regime
Importance of Self-Assessment as a
Preventative Tool 99
100
Enforcement of EU Competition Law

101
Enforcement of EU Competition Law

102
Enforcement of EU Competition Law

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104
Enforcement of Irish Competition Law

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Repealed Legislation

106
Key Elements of Current Regime
CCPC

Competition Authority (“CA”) (1991-

30/10/2014)
National Consumer Agency (“NCA”)
(successor to the Director of Consumer
Affairs)
Merger of the CA and the NCA to form the
108

CCPC
Why do we Have Competition Law?

 Efficiency
 Choice
 Lower/Wider Range of Price
 Improved Service
 Improved Quality
 Consumer Welfare
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Bill Gates, one of the brightest people on the planet, sent the following email,
which emerged in the Microsoft antitrust litigation:

"How much do we need to pay you to screw Netscape?“

He also asked in another e-mail about a competitor:

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“Do we have a clear plan on what we want Apple to do to undermine Sun?”

Client Has a Grievance

Is Litigation the right option?

Alternative Dispute Resolution?

Complaint to the Competition and Consumer Protection Commission?

111

Complaint to the European Commission?

Reflections on Enforcement

 Education
 Competing methods of enforcement
 Competing jurisdictions
 Institutions & Personalities
 Costs
 Notifications
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 Investigations
 Witnesses
Reflections

 Witnesses

 Who said this?

 “I do not understand the squeamishness about the use of gas. I am strongly in

favour of using poisoned gas against uncivilised tribes.”

 Hitler or Churchill? 113

Reflections

114
Reflections

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What is the Optimum Enforcement Regime?

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7. What is the Optimum Enforcement Regime?

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A Case

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A Case

N C
D E
V I
E E
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Communications

For example, in Microsoft, Bill Gates, had

sent an email to colleagues which read:

"How much do we need to pay you to screw

Netscape?? (This is your lucky day.)"

120
 Business Writing

 Learn from Ian and Peter

“'Ian … This is a great initiative that you and Neil have

instigated!!!!!!!!! However, a word to the wise, never ever put
anything in writing, its highly illegal and it could bite you right in
the arse!!!! suggest you phone Lesley and tell her to trash?
Talk to Dave. Mike”
Hasbro/Argos/Littlewoods
UK Office of Fair Trading (2003)
  So, what are the attributes of an effective
competition enforcement regime?

122
Three Topics

1. What do competition lawyers do? A look at some recent

cases

2. What are the hot topics in competition law?

3. How do you enforce competition law? What is the optimum

regime?

123
Competition Law

Selected Practical Issues

Dr Vincent J G Power SC

UCC, 10 October 2024

P-15644580-1