Luật Cạnh tranh EU và Pháp quyền: Luận án Tiến sĩ của Ryan R Stones tại LSE

The London School of Economics and Political Science EU Competition Law and the Rule of Law: Justification and Realisation Ryan R Stones A thesis submitted to the Department of Law of the London School of Economics and Political Science for the degree of Doctor of Philosophy London, September 2018 1 Declaration I certify that the thesis I have presented for examination for the PhD degree of the London School of Economics and Political Science is solely my own work other than where I have clearly indicated that it is the work of others (in which case the extent of any work carried out jointly by me and any other person is clearly identified in it). The copyright of this thesis rests with the author. Quotation from it is permitted, provided that full acknowledgement is made. This thesis may not be reproduced without my prior written consent.

I warrant that this authorisation does not, to the best of my belief, infringe the rights of any third party. I declare that my thesis consists of 99,998 words. 2 Abstract This thesis explores the justification for and realisation of the formal rule of law ideal in EU competition law. It argues that the form of market intervention for determining the legality of business conduct matters, although European enforcement has not always appreciated its significance.

It defends aspirations towards the formal rule of law in the fundamentally economic endeavour of competition policy: determining lawfulness through the application of generalised, equally-applicable, and comprehensible norms, subject to robust judicial review. While this less-discriminating form of market intervention is necessarily imperfect when compared with conduct-specific evaluations of competitive consequences, thus inaccurately prohibiting the efficient and permitting the inefficient, more restrained and structured determinations of legality facilitate the realisation of other important values. Part I justifies efforts to approximate the formal rule of law ideal in competition policy. Both the Chicago School of antitrust and German Ordoliberalism indicate support for enforcement through the application of generalised norms that are administrable and comprehensible to businesses.

Their perspectives on the legitimate form of market intervention are woven into broader works of jurisprudence, liberal constitutional theory, and institutional economics, thereby demonstrating the political and economic significance of the formal rule of law ideal for competition enforcement. Part II evaluates its mixed realisation in EU competition policy. On the one hand, the Commission has often prioritised the effective pursuit of its ends to make markets work “better”, seeking to maximise the scope for discretionary interventions as it deems necessary and perhaps facilitated by deferential judicial review. On the other hand, certain presumptions and multi-stage tests for determining legality in EU competition law incorporate efficiency considerations ex ante into generalised norms that afford normative certainty to firms.

Albeit imperfect, these are interpreted as admirable attempts to optimally reconcile economically-accurate ends and a means approximating the formal rule of law. 3 Acknowledgements This thesis is a result of the intellectually-stimulating environment found at the Law Department of the London School of Economics. It is the product of eight years of affiliation with the LSE, born of inspiring teaching on my undergraduate degree, and brought to fruition on the PhD programme through careful supervision, rigorous training, and collegiate support. The key figure throughout has been my lead supervisor, Professor Pablo Ibáñez Colomo.

He has not only shared his enlightening thoughts, sparked fascinating lines of enquiry, and unfailingly read countless drafts, but is also responsible for introducing me to the field of competition law in the first place. I am immensely grateful for his inspiration, guidance, and support since my very first day at the LSE in 2010, and look forward to many more years of scholarly discussions. This thesis has also benefitted from the wisdom and critique of Professor Martin Loughlin, my second supervisor. Indeed, Part I is largely the result of his earlier scepticism that the formal rule of law should have anything to do with competition enforcement.

It has been improved immensely by his comprehensive knowledge of all things theoretical. I would also like to acknowledge the support of the wider LSE Law Department: Professor Susan Marks as Doctoral Programme Director; Rachel Yarham as Doctoral Programme Administrator; my readers at the upgrade stage, Dr Orla Lynskey and Professor Tom Poole; Dr Niamh Dunne, for both chairing my third year presentation in January 2017 and for frequently discussing many of the ideas raised in this thesis; and my fellow students on the PhD programme for their collegiality and mutual support. I am also grateful for the receipt of a LSE PhD Studentship to fund this period of study. Furthermore, I would like to thank my family and friends for their unfailing interest and encouragement throughout the past four years.

Although my parents, Anthony and Julie, have struggled to understand the subject matter of this thesis, their intrigue and pride has been endless. Most of all, I would like to acknowledge the role of my inspirational partner, Lauren Scarlett Thomas, for what has truly been a joint effort. This long and at times difficult process would not have been possible without her love, care, and support. 4 Table of Contents Introduction 9 Chapter I: Competition Policy: Economic Orthodoxy and Formal Indeterminacy 16 I.

Basic Microeconomic Price Theory and the Need for Market Intervention 17 III. The Limits of Neo-Classical Price Theory and Contemporary Competition Microeconomics: Context is Key 22 A) Necessarily Unrealistic Assumptions 22 B) Important Considerations Excluded 23 C) Contemporary Competition Microeconomics: Context is Key 24 IV. The Unanswered Question: What Form of Market Intervention? 26 Chapter II: The Chicago School of Antitrust: An Economic ‘Subordination’ of Law? 29 I. The History, Approach, and Implications of the Chicago School of Antitrust 31 A) A Brief History of the Chicago School 32 B) The Chicagoan Approach: Economic Method and Legal Motivation 34 C) Legal Implications of the Chicago School Approach 37 III.

The Chicagoan Rejection of ad hoc, Subject-Specific Determinations of Legality 41 A) Posner’s Response to Sylvania 42 B) Bork versus Williamson and his Peculiar Conceptualisation of the Rule of Reason 45 C) Post-Chicago Complexity and Easterbrook’s ‘Workable Antitrust’ School 49 IV. The Chicago School and the Rule of Law 53 A) Bork and Easterbrook: On “Good” and “Bad” Law 54 B) The Chicago School of Economics and Liberal Political Theory 57 C) Posner: The Rule of Law as Incentive Calibration and Effective Intervention 60 V. Conclusion: The Chicagoan Form of Market Intervention and its Limits 64 Chapter III: Ordoliberalism: Ambiguous Economics and the Rechtsstaat Tradition 66 I. Ordoliberalism as a Family of Shared Concepts 68 A) Historical Account 68 B) Conceptual Account 70 III.

The Ambiguous Substance of Ordoliberal Competition Policy 79 IV. The Form of Ordoliberal Competition Policy: Contextualisation and Extrapolation 85 A) Kant and the Rechtsstaat in German Constitutional Theory 87 B) From the Formal Rechtsstaat to Freiburg 93 V. Conclusion: Rival Schools? 103 Chapter IV: The Rule of Law Ideal: Rationality, Restraint, and Robust Review 105 I. A Tripartite Conceptualisation of the Formal Rule of Law Ideal and its Critique 106 III.

The Rule of Law Ideal in Liberal Political Theory 113 A) Principle I - Comprehensible Norms: Respecting Rationality 115 B) Principle II - Generalisation and Equal Application: “Belt-and-Braces” Restraint 119 C) Principle III: The Instrumental Virtue of Robust Review 124 IV. Convergence: The Formal Rule of Law in New Institutional Economics 133 A) New Institutional Economics: An Overview 133 B) NIE and the Rule of Law 137 V. Conclusion to Part I: From Justification to Realisation 146 Chapter V: Effective Ends and Discretionary Means: Disregarding the Formal Rule of Law in EU Competition Policy 149 I. Introduction: Effective Realisation of Immaterial Ends 149 II.

Enforcement of Article 101 TFEU 152 A) Pre-Modernisation Commission Decisions: Exercising Discretion via Exemption Decisions 152 B) Judicial Review of Article 101 Decisions 161 III. Enforcement of Article 102 TFEU 169 A) Commission Decisions: Building Discretion 169 B) Judicial Review: Who Interprets the Law of Article 102? 176 IV. Commitment Decisions in the Post-Modernisation Era: More Effective Ends, Same Problematic Means, 182 A) Effective Ends I: Competition Enforcement without Competition Law 184 6 B) Effective Ends II: The Remedial Potential of Commitment Decisions 192 C) Problematic Means: Systemic Detriment to the Rule of Law 197 D) Judicial Review: A Missed Opportunity? 205 V. Conclusion 210 Chapter VI: Ex Ante Optimisation of Efficiency and the Rule of Law: Celebrating Imperfection in EU Competition Policy 212 I.

Efficiency “Perfectionism” and “Optimisation” in EU Competition Scholarship 215 A) Efficiency Perfectionism: Effective Ends and Problematic Means Redux 215 B) Efficiency Optimisation: Imperfect Ends and More Comprehensible Means 219 III. Optimising Ends and Means in EU Competition Law 224 A) Mixing Forms of Market Intervention: The Commission’s Soft Law Guidelines 225 B) Presumptions of Legality under Article 101 230 C) Presumptions of Illegality 235 D) More Discriminating Determinations of Legality: Multi-Stage Tests 246 IV. Conclusion: Less is More 256 Conclusion 258 Bibliography 262 I. Books, Articles, and Papers 262 II.

EU Legislation 295 III. European Commission Documents 296 A) Guidelines, Guidance, and Notices 296 B) Reports, Working Papers, and Briefs 296 C) Press Releases, Speeches, and Memos 296 IV. Decisions of the European Commission 298 A) Pre-Regulation 1/2003 Decisions 298 B) Article 7 Prohibition Decisions 299 C) Article 9 Commitment Decisions 299 D) Other Decisions under Regulation 1/2003 299 V. Judgments of the European Courts 300 A) Judgments of the Court of Justice of the European Union 300 7 B) Judgments of the General Court (formerly Court of First Instance) 301 VI.

Cases from the US 302 8 Introduction Scholarly interest in EU competition policy derives from its location at the intersection between law and economics, which brings together a suite of contrasting concepts and methods to make markets work “better”. Most decisions of the European Commission or judgments of the EU Courts pursuant to Articles 101 and 102 TFEU 1 can be interpreted as complex, sometimes tense, interdisciplinary syntheses. Exploring such frictions has been a perennial occupation of competition scholars. Since the inclusion of competition provisions within the Treaty of Rome, countless commentators have considered the substantive relationship between law and economics in the field.

For example, how should the economic goal/s pursued by EU competition law be understood? Do particular decisions, cases, and legal doctrines cohere with economic learning? Does economics reveal “gaps” where anticompetitive conduct escapes legal prohibition? In these enquiries, law is an empty vessel. As it lacks an essential substantive content of its own, 2 the question is the extent to which EU competition law has accurately absorbed contemporary economic thinking. Alternatively, scholars have also routinely addressed the appropriate form of market intervention: of how the economic goal/s of competition policy ought to be realised through the medium of law. Consider two reflections: “…competition policy cannot be based on economics alone.

The rule of law is a pillar of the constitutional system: it makes the enforcement of competition policy predictable and allows economic actors to adapt their behaviour.” 3 “…traditional lawyers remain reluctant to use economic analysis since it may make the outcome of real-life cases less predictable and thus fly in the face of legal certainty… The lack of flexibility resulting from the use of traditional legal concepts makes it impossible to profit fully from important economic insights.” 4 1 Article 101 Treaty on the Functioning of the European Union (“TFEU”) (prohibiting agreements, concerted practices, and decisions of trade associations with the object or effect of restricting competition); Article 102 TFEU (prohibiting the abuse of a dominant position). 2 It could be argued that rights of defence and due process are necessary “legal” elements, but these procedural requirements are not in conflict with an economically-informed substance. 3 Evans and Grave [2005] 136. 4 Van den Bergh [2002] 34-35.

9 Albeit offering different analyses, both extracts point to a particular tension within competition policy.