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"A Missing Step in the Modernisation Stairway – Any Role for Block Exemption Regulations in the realm of Regulation 1/2003?" with A. Sánchez

Block exemption regulations (BER) survived the modernisation of EU competition law. According to the Commission, they play a major role in the system instituted by Regulation 1/2003. Some authors consider that BER are conceptually hard to nest within the new system, but that they provide legal certainty. Others adopt a more critical approach and propose their axing. This paper adopts the latter approach. In view of the mixed messages that the Commission has been sending in the review of existing general and industry specific BER, this paper revisits the institution of BER, its justification and need in the decentralised system brought forward by Regulation 1/2003 and the more economic approach to EU competition law. After stating the initial justification for BER under the prior enforcement system, the paper stresses the difficulties for their fitness within the new paradigm, focusing on the distortions that they may generate for an effective and consistent enforcement of EU competition law. In order to complete the modernisation of EU competition law in a second wave (that is, as a consequence of the current revision of Regulation 1/2003), the paper recommends a clear-cut policy to abrogate all BER and to issue substitutive guidelines in exchange.
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together with A. Sánchez The Competition Journal, vol. 6/2, July 2010, pages 183-201.

Leniency and Criminal Sanctions: Happily Married or Uneasy Bedfellows?

This this chapter of the book Anti-Cartel Enforcement in a Contemporary Age: Leniency Religion, the authors consider a range of theories that may explain the dynamics in the cartel leniency — cartel criminalisation relationship and, in particular, that address the question as to whether the relationship suggests a largely instrumental justification for criminalisation (that is, using criminal sanctions to bolster leniency policies), as distinct from a more normative justification (that is, using criminal sanctions to reflect and punish the harmful and delinquent nature of cartels). Whichever theory is favoured, the authors argue that the relationship is problematic, replete with ambiguities, tensions and contradictions that threaten the legitimacy and effectiveness of both competition and criminal law enforcement. In making this case, Harding, Edwards and Beaton-Wells canvas the fragility of the economic policy justifications for singling out certain types of cartel conduct for criminal treatment; the retributive compromise and foreclosure inherent in a leniency-driven strategy of enforcement; the ways in which leniency policy underscores and may even reinforce the otherwise immoral (cheating) behaviour said to attract the moral opprobrium associated with criminal sanctions; the ways in which leniency policy shapes and distorts the relationship between cartelists as prospective leniency applicants and competition authorities; and the potential for leniency policy to be ‘gamed’ by cartelists and the associated risk of business capture of the legal process.
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Christopher Harding, Caron Beaton-Wells and Jennifer Edwards, 'Leniency and Criminal Sanctions: Happily Married or Uneasy Bedfellows?' in in C Beaton-Wells and C Tran (eds), Anti-Cartel Enforcement in a Contemporary Age: Leniency Religion, Hart Publishing, 2015, ch 12, pp234-260

Anti-Cartel Enforcement in a Contemporary Age: Leniency Religion

Leniency policies are seen as a revolution in contemporary anti-cartel law enforcement. Unique to competition law, these policies are regarded as essential to detecting, punishing and deterring business collusion – conduct that subverts competition at national and global levels. Featuring contributions from leading scholars, practitioners and enforcers from around the world, this book probes the almost universal adoption and zealous defence of leniency policies by many competition authorities and others. It charts the origins of and impetuses for the leniency movement, captures key insights from academic research and practical experience relating to the operation and effectiveness of leniency policies and examines leniency from the perspectives of corporate and individual applicants, advisers and authorities. The book also explores debates surrounding the intersections between leniency and other crucial elements of the enforcement system such as compensation, compliance and criminalisation. The rich critical analysis in the book draws on the disciplines of law, regulation, economics and criminology. It makes a substantial and distinctive contribution to the literature on a topic that is highly significant to a wide range of actors in the field of competition law and business regulation generally.
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Caron Beaton-Wells and Christopher Tran (eds), Anti-Cartel Enforcement in a Contemporary Age: Leniency Religion (Bloomsbury, 2015)

Identifying Anticompetitive Agreements in the United States and the European Union: Developing a Coherent Antitrust Analytical Framework

Commentary in both the US and the EU has repeatedly debated whether, and when, it is more efficient to use “rules” or “standards” to determine the legality of conduct subject to the antitrust laws and how such rules or standards should be formulated. This paper concentrates principally on the question of how this debate impacts on the analytical framework for identifying infringing agreements in the US and EU. It sets out the view that the question of how agreements are to be assessed under both the US and the EU jurisprudence is unduly opaque. Confusion as to, in particular, the role and scope of per se rules, the role and scope of ancillary restraint doctrines, and how competing anti- and procompetitive effects of mixed agreements are to be balanced against each other have led to excessive complexity in the system. The paper considers what factors might shape development of a coherent and optimal framework for antitrust analysis in a jurisdiction. Once these factors have been set out, it examines how US and EU competition law have approached the issues identified in relation to the appraisal of agreements and what features of each system have moulded the developments there. It concludes that both systems require some development to create more intelligible frameworks based on common concepts rather than historical categories of antitrust analysis and, further, that competition agencies could play an important part as catalysts in this progress.
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[2017] Antitrust Bulletin, Forthcoming TLI Think! Paper 57/2017 GWU Law School Public Law Research Paper No. 2017-12 GWU Legal Studies Research Paper No. 2017-12 King's College London Law School Research Paper No. 2017-17

Regulatory Avoidance and Suicide: An Empirical Analysis

This article is the first to empirically analyze the impact of tort liability on suicide. Counter-intuitively, our analysis shows that suicide rates increase when potential tort liability is expanded to include psychiatrists — the very defendants who would seem best able to prevent suicide. Using a 50-state panel regression for 1981 to 2013, we find that states that would hold psychiatrists (but not other doctors) liable for malpractice resulting in a suicide experienced a 12.8% increase in suicides. The effect is even stronger, 16.8%, when we include controls. We do not believe this is because suicide prevention doesn’t work. Rather, we theorize that it is because some psychiatrists facing potential liability choose not to work with patients at high risk for suicide. The article makes important contributions to the law of proximate cause and to the more general phenomenon of regulatory avoidance. Traditionally, one could not be liable for malpractice that causes another’s suicide — the suicide was considered a superseding and intervening cause. About half of states retain the old common law rule. Others have created exceptions for psychiatrists only, or for all doctors, and some have abandoned the old rule entirely. Our findings suggest that expanding liability for psychiatrists may have an adverse affect. Accordingly, this article suggests that the best policy might be to retain or revive the traditional no-liability-for-suicide rule for mental health specialists. The implications are enormous: over 40,000 people in the United States die each year from suicide. Keywords: torts, suicide JEL Classification: K13, K32, I18
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Indiana Law Journal (forthcoming 2017)

Causation Actually

The article debunks the consensus that in concerted action, concurrent causes and alternative liability situations, the actual causation requirement is missing. While courts and scholars insist that in these cases tort law holds liable parties who clearly did not cause the victim’s harm, this article offers a novel approach. Using a simple model and applying it to leading decisions, it shows that a party who did not and could not even potentially injure the victim could nevertheless be a but-for reason for the harm. The article also challenges claims that causation theories like concerted action, substantial factor and alternative liability are fair to the victim or that they are designed to deter actors from engaging in “antisocial” activities. In deviation from the prior literature, this article reveals that these causation theories reduce the parties’ incentives to take care and result in more, rather than fewer, accidents. This article further shows that, despite lip service to the contrary, tort law promotes harmful activities that judges declare immoral, antisocial and illegal. The article argues, however, that in many cases this result can be justified on efficiency grounds. The article concludes that the but-for test should have a larger role in causation analysis, and it provides a number of policy recommendations to courts and lawmakers. Keywords: actual causation, concerted action, concurrent causes, alternative liability, but-for, substantial factor, NESS, efficiency, welfare, fairness, deterrence
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51 Georgia Law Rev. 1 (2016) (Lead Article)

Tort-fest

This Article argues that mass torts involving multiple tortfeasors can be welfare enhancing. It begins by investigating the role of “dilution of liability” — a phenomenon that has been condemned for its role in facilitating accidents. According to the literature, in alternative care situations where the damage to the victim is constant, dilution of liability leads to inefficient precaution levels and consequently to more (bad) accidents. The Article deviates from this literature and shows that dilution of liability can be welfare enhancing. This is so even in the quintessential case where dilution of liability has been denounced. The Article further shows that an activity that is socially undesirable and should give rise to liability can become desirable as the number of tortfeasors increases. Put differently, it shows that in some situations an activity that would and should be condemned if conducted by one tortfeasor may become socially desirable if done by many. The Article analyzes the conditions under which such desirable “tortfests” occur, and it has important implications to the salience literature. After investigating the impact of tortfests on actors’ precaution and activity levels, the Article examines mechanisms that would incentivize actors, in certain situations, to join a group wrongdoing or combine with others to initiate one. The result, it is argued, could increase societal welfare. Keywords: tortfest, mass torts, dilution of liability, salience, alternative care, collusion, punitive damages, activity levels, precaution levels, economic analysis JEL Classification: A12, D20, D61, D72, K13
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80 U. Chi. L. Rev. 953 (2013)

Apportioning Liability Behind a Veil of Uncertainty

This article challenges the reason that led most states to abandon the “no contribution” rule. Under the rule if a victim obtains a judgment against two tortfeasors but chooses (even arbitrarily or out of spite) to recover only from one, the “chosen one” must pay the entire judgment while the other is exempt although both are liable. This is the case even if the paying tortfeasor is only 1% at fault while the non-paying tortfeasor is 99% at fault. The rule has been lamented by tort reform crusaders as immoral and unfair. One tortfeasor, the argument goes, should not bear the entire burden while the more culpable tortfeasor is exempted from liability. In deviation from the prior literature, the article employs economic theory to show that the “no contribution” rule that has been crowned as efficient is fair and just. It adopts a contractarian approach to analyze different apportionment regimes including joint and several liability (with and without contribution), several liability and market share liability. Relying on modern decision theory the article shows that individuals behind a veil of ignorance, unaware as to whether they would be victims or injurers may in fact choose the much criticized "no contribution" rule. In doing so the article sheds new light on a fierce and ongoing debate and concludes with a new framework for analyzing apportionment policies. Keywords: Apportionment, Contribution, Joint and Several Liability, Market Share Liability, Rawls, Veil of Ignorance, Harsanyi, Fairness, Justice, Economic Analysis JEL Classification: K13, D61, D63, D31, A12, A13
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62 Hastings L. J. 1729 (2011)

Damages claims in the Spanish sugar cartel

Market conditions in the sugar industry are strongly affected by protectionist regulatory measures and interventions, leaving narrow room for business competition. Moreover, competition authorities worldwide have investigated and successfully prosecuted anticompetitive actions by sugar producers and refiners in this market. As an example of collusive behaviour in the sugar industry, this article looks at the Spanish sugar cartel uncovered and sanctioned by the Spanish competition authority. It then turns into the subsequent private enforcement actions that concluded successfully last year with a Euro 5 million award in damages by the Supreme Court. Several lessons can be extracted from the Supreme Court’s decisions that will have an impact on future private claims for damages arising from competition law violations in Spain. They clarify the relevance and legal force of public enforcement decisions for private enforcement, how damages’ calculations should be done, and how expert forensic opinions on the matter should be assessed by the courts and, finally, they rule on the availability of the passing-on defence. In all, the Spanish Supreme Court dicta from its decisions in the sugar cartel case may well open the gateway for new private claims in the future.
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Journal of Antitrust Enforcement, 2015, 3, 205–225

Entertainment made in Spain : competition in the bullfighting industry

Controversial for many reasons, bullfighting is probably one of the most typical entertainment activities in Spain. Bullfights are an idiosyncratic spectacle belonging to the Spanish cultural tradition, but which has also a meaningful economic significance. This paper will look at the role of market forces and competition in the bullfighting industry, describing the peculiarities of its organization and looking at the many anticompetitive features that characterize it. Spanish local authorities are strongly involved in the organization of bullfights and strict and detailed public rules govern the intervening actors and the performance during the shows. Thus, the institutional framework of bullfighting heavily constrains competition conditions in the industry, setting the scenario for a limited role of market forces. Furthermore, history shows that the collective organization of different players involved (promoters, breeders, bullfighters and subordinates) in order to exert their market power has occasionally lead to anticompetitive actions and reactions. Thus, unsurprisingly, the Spanish Competition authorities have dealt with some anticompetitive behaviour by some of the players participating in the bullfighting industry.
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Competition Law Review Volume 11 Issue 1 pp 61-81, July 2015