Distribution, Competition, and Antitrust / IP Law

Milk expiration dates and clever cartels

A glass of milk Français : Un verre de lait

(Photo credit: Wikipedia)

The Planet Money podcast this week has a story about the Greek economy.  According to the podcast, there is a Greek milk producer “cartel.”  Of course cartels are unlawful in Europe, just as they are in the U.S.  So it seems that Greek milk producers have engineered a clever “cartel” — they have lobbied the Greek government to require that bottled milk have an expiration date no more than 7 days after the milk is obtained from the cow.  As a result, milk produced elsewhere in Europe either isn’t available in Greece or is (I assume) more difficult and more expensive to obtain.

The story is an interesting one, and caused me to pause for a moment about the use of the word “cartel.”  In the U.S., this sort of lobbying would almost certainly be protected by the Noerr-Pennington petitioning immunity.  But what if the milk producers got together and agreed on expiration date rules without obtaining a regulation?

Such an agreement might be a form of a “cartel.”  But it wouldn’t be focused on price — at least not directly.  So it probably wouldn’t be subject to the per se rule.  But I think there’s not much reason to worry about such “cartels,” because they wouldn’t work.  Such a milk “cartel” wouldn’t stop manufacturers outside of Greece from exporting milk to Greece (indeed, it might make longer-shelf-life milk produced outside Greece more attractive to Greek consumers), so Greek manufacturers have little or no incentive to form one.  Only the force of government regulation interferes with distribution of non-Greek milk in Greece.

Antitrust Issues In Retail Networks Can Be Difficult to Find

According to presenters at a Global Competition Review panel today, antitrust problems in retail networks can be difficult to find.  For the report on the panel, click here (sorry, it may be behind a paywall).

The article reports that according to the panel, antitrust cases in the retail sector are becoming more and more complex, frequently including hub-and-spoke conspiracies and most favored customer cases as well as resale price maintenance (RPM).  The panel included European regulators from Germany’s Federal Cartel Office, France’s Competition Authority, and Belgium’s Competition Council.

At least some panelists advocated for a more interventionist approach when dealing with decreased competition and vertical cartels in the European retail market.

I’m not sure about that conclusion, but I do agree that there are competition and distribution law issues lurking in many retail networks.  See, e.g., the Tempur-Pedic case I reported on earlier today.

European Union Court of Justice Examines Restrictions on Online Distribution

Can a manufacturer stop its distributors from selling products online to end consumers? It may want to do so to prevent online resellers from free-riding on the efforts of its brick-and-mortar merchants.

The EU’s Court of Justice will soon decide in the case of Pierre Fabre Dermo-Cosmetique SAS v. President de l’Autorite de le Concurrence & Ministre de l’Economie (C-439/09). An advocate general to the Court, Jan Mazak, recommended on March 3 that the Court hold that an absolute ban on selling goods online has as its “very object” the restriction of competition and so violates Article 101(1) TEFU. (This does not mean that such a ban would be per se unlawful, as that concept is understood in U.S. antitrust law, but it does mean that such a ban would be quite unlikely to satisfy EU competition law.) Under guidelines recently released in connection with the European Commission’s Vertical Block Exemption Regulation, at least in principle, every distributor must be allowed to use the Internet to sell products. If the Court adopts the recommendation, it will highlight yet one more difference between European and U.S. competition/distribution law – for decades in the U.S., non-price vertical restraints have been evaluated under a relaxed Rule of Reason analysis that takes into account all competitive and anti-competitive effects of a restriction. See United States v. Arnold, Schwinn & Co., 388 U.S. 365 (1967).

Optimization WordPress Plugins & Solutions by W3 EDGE
%d bloggers like this: