Abstract
It is an extremely rare event for a Judgment to contain many errors on many issues. It is even rarer for such a Judgment to be correct on virtually nothing. And it approaches the unheard that the Judgment becomes the leading case in a whole sector of Law. If we add that critical voices during the procedure were raised that would have avoided the biggest mistakes, then the Court errors appear to be diabolical. The Grundig-Consten Judgment handed down by the European Court of Justice on July 13, 1966 does all that and for that reason is exceptional and almost miraculous.
The current state of European Competition Law is unfortunate as its theoretical construct is concerned. In our view, it is necessary to reform the Treaties, Article 101 and Article 102, to eliminate the errors of the Court, since the Court does not change its doctrine almost ever. Grundig-Consten Judgment misinterpreted art. 81 by misunderstandig the concept of “competitition” under the norm. It is rivalry among competitors which is protected under art. 81 and not autonomous behavior by firms. Coordination between firms is not the correct way to define competition under art. 101.1 but coordination between competitors. Therefore, intrabrand competition can be legally restricted since the corresponding agreements are not agreements between competitors. This error, legal and economic, has generated an errors’chain that has made the European Competition Law an "intellectual nonsense", devoid of any dogmatic or economic coherence.
A list of the subsequent errors made by the Court of Justice on the interpretation of Articles 101 and 102 TFEU include, at least, the following1. Misunderstanding of the competition protected by article 101.1;2. Erroneous interpretation of the meaning of the reference to “object or effect" in art. 101.1;3. Erroneous interpretation of the term "agreement";4. Erroneous distinction between cases to be tried under Art. 101 and to be tested under Art. 1025. Incorrect ordering of rule (freedom of contract and business) and exception (prohibition of certain agreements), caused by a misapplication of the principle of effectiveness of EU law.6. An unduly broad interpretation of Articles 101 and 102 of the Treaty;7. Erroneous assessment of the relationship between the prohibition of art. 101 and fundamental freedoms8. The Court failed to acknowledge, from the beginning, that art. 101 and 102 of the Treaty were criminal rules imposing criminal-like sanctions to individuals and, therefore, that principles of criminal law, both substantive and procedural, had to be applied. The radical distinctiveness of art. 101 and 102 compared to the other provisions of the Treaty is still today not fully acknowledged by the Court.9. Inconsistent application of Articles 101 and 102 and the merger control rules relating to qualification as dominant a company and10. Incorrect application of art. 101.3, conceived as an exception to the prohibition of Art. 101.1 instead of as part of the definition of agreements that are prohibited).
Back to the basics is therefore unavoidable. The following text (in spanish) is a draft of a paper I’ve been writing for a couple of years. The ideas have been explained in several posts in this blog and in Competition Law conferences in Brussels, Madrid and Trento. A longer version of it will – presumably – follow.