The role of international arbitration in EC Merger Control: an update
| Autor | Gordon Blanke |
| Cargo del Autor | Associate and competition law specialist with the International Arbitration Group |
| Páginas | 411-468 |
Ver nota 1
Page 412
To the previous volume of the present series, I contributed a chapter on "The Role of International Arbitration in EC Merger Control"2. The subject-matter has become no less topical now than it was then: In fact, the European Commission, apart from having continued its practice of accepting arbitration clauses as monitoring mechanisms of behavioural remedies in EC merger control, has ventured into terra incognita, taking resort to alternative dispute resolution (ADR) in the archetypical sense of the word, meaning mediation, for monitoring purposes in some of its latest
Page 413
commitments3. The Commission has further published for consultation the new draft Notice on Remedies4, which, inter alia, aims to formalise the use of international arbitration to facilitate the implementation of behavioural remedies in EC merger control5. The enduring topicality of the subject-matter has also been confirmed from a recent English Court of Appeal decision6, in which - dealing with typical access and pricing problems in the context of essential facilities - Lord Justice Mummery made an extraordinary statement on the desirability of using private dispute resolution mechanisms in preference to recourse to the public courts in complex competition law cases, such as arise from the abuse of an essential facility. The Lord Justice said in as many words as follows:
"The nature of [...] difficult [pricing and access] questions [in relation to essential facilities] suggests that the problems of gaining access to essential facilities and of legal curbs on excessive and discriminatory pricing might, when negotiations between the parties fail, be solved more satisfactorily by arbitration or by a specialist body equipped with appropriate expertise and flexible powers. The adversarial procedures of an ordinary private law action, the limited scope of expertise in the ordinary courts and the restricted scope of legal remedies available are not best suited to helping the parties out of a deadlocked negotiating position or to achieving a business-like result reflecting both their respective interests and the public interest. These are not, however, matters for decision by the court, which must do the best that it can with a complex piece of private law litigation."7
What is extraordinary about this statement is the frankness with which the Lord Justice - despite holding one of the highest judicial offices in the country - acknowledges that a private individual acting as an arbitrator or a private (quasi-) arbitral body may well be better suited to adjudicate
Page 414
pricing and access issues arising from the abusive exploitation of essential facilities than public State courts are. To give clout to his statement, the Lord Justice enumerates the shortcomings of the judicial process in a staccato of three ailments that befall the ordinary public judiciary: procedural rigidity and inflexibility; lack of expertise; and insufficient remedial action. Essentially, according to the Lord Justice, the ordinary judiciary is ill-suited to achieve results that protect both the private and the public interests involved. Although there is no doubt that the Lord Justice is trying to tone down his criticism by using euphemistic adverbial expressions8 and attributive circumscriptions9, the Lord Justice’s eulogy in favour of the (quasi-)arbitral profession in the context of highly complex pricing and access disputes relating to essential facilities is unmistakable and can be heard loud and clear.
Against this background, the present chapter seeks to trace the latest developments with respect to the monitoring of behavioural remedies in EC merger control. Before delving into a more detailed review of such developments, the first few sections of this chapter will recap some of the basic concepts of arbitration in EC merger control for the benefit of those readers who may not have studied the previous piece in any detail.
Page 415
The European Commission - with some degree of prescience, one may think - has indeed been making practical use of the Court of Appeal’s wisdom in Attheraces10 for the better part of two decades already. To be precise, the Commission has been using international arbitration mechanisms in many of its merger remedy packages to date, including more specifically in relation to access problems to essential facilities11. The Commission typically makes use of a so-called arbitration commitment where the nature of the remedy required to allay the Commission’s competition concerns is behavioural and therefore requires some form of judicial monitoring with a view to guaranteeing the correct implementation by the merged entity of the remedy in question12. In general terms, such remedies tend to take the form of13:
Page 416
· Provisions to effect access to certain technological frameworks or physical infrastructure;
· Provisions to secure the establishment of new or the maintenance of already existing supply or purchasing relationships between the merged entity and the third-party beneficiary;
· Provisions to effect the termination of exclusive or long-term contractual arrangements between the merged entity and its customers in favour of the third-party beneficiary; and
· Provisions to effect the termination of anti-competitive distribution agreements between the merged entity and its customers which work to the detriment of the third-party beneficiary14.
Page 417
Most of these commitments can be classified as access commitments, as they intend to provide in one way or another (be it e.g. through a supply or distribution relationship) access for a third party (competitor) to a particular facility or infrastructure controlled by the merged entity. As one Commission official has recently pointed out, "[n]early all past cases involve remedies providing for the granting of access to networks, key technology, film content, or to put it more general, the granting of access to important infrastructure or assets."15 By way of illustration, more recent cases have involved the transfer of slots and/or the granting of interlining and/or inter-modal agreements in the airline industry16, the granting of technology licences17and the provision of inter-operability (information) for the interactive use of technical devices from different suppliers18-19.
Page 418
An arbitration commitment essentially constitutes an erga omnes obligation on part of the merged entity to submit to arbitration as against a third-party beneficiary of rights, such as access to an essential facility controlled by the merged entity, that flow directly from the remedy package of the Commission’s conditional merger clearance decision. By way of arbitration, the third party can enforce the rights it derives from the commitments entered by the notifying parties under the merger clearance decision and claim (i) compensation for the civil law damages caused to it by the notifying parties’ incorrect or non-performance of the commitments concerned20 and/or (ii) specific performance of the relevant matrix agreement21underlying the particular remedy (if any). Such commitments hence: "generally involve the undertaking by the merging firm of erga omnes obligations (e.g. the granting of access) towards [those] third parties (normally competitors or customers) which are intended to counterveil the increase in the merging party’s market power as a result of the merger. Thus, in addition to relations between the Commission and the merging firm, the commitments also give rise to obligations for the merging firm towards private parties and to corresponding rights for the latter. These relations between the merging firm and the private parties are
Page 419
unquestionably private law relations governed by a national law to be identified on the score of ordinary conflicts of laws principles."22
It is thus through arbitration as a means of private enforcement that the European Commission can ensure the medium- to long-term monitoring of the relevant behavioural commitments, without having to overstrain its own public resources23. Essentially, the option to resort to arbitration offers all potential third party beneficiaries an incentive to ensure the accurate implementation of the remedies by the merged entity and directly to enforce the rights they derive from those remedies before an arbitral tribunal. Hence, the potential beneficiaries’ private interests will command their vigilance, which will potentially be more effective than adhering to public administrative proceedings at the Community level24. As one Commission official has remarked with approval in this context, "if there is a potential unlimited number of beneficiaries of access commitments [as is often the case], the commitments have to include a mechanism for...
Para continuar leyendo
Solicita tu prueba