ANTITRUST AND THE BOUNDS OF POWER ANTITRUST AND THE BOUNDS OF POWER The dilemma of liberal democracy in the history of the market GIULIANO AMATO •HART- PUBLISHING OXFORD 1997 Hart Publishing Oxford UK Distribution in the United States by Northwestern University Press, 625 Colfax, Evanston, Illinois, USA © Giuliano Amato 1997 Hart Publishing is a specialist legal publisher based in Oxford, England. To order further copies of this book or to request a list of other publications please write to: Hart Publishing, 19 Whitehouse Road, Oxford, OXi 4PA Telephone +44 (0)1865 434459 or Fax: (0)1865 794882 e-mail: [email protected] British Library Cataloguing in Publication Data Data Available ISBN 1-901362-29-9 (hb) Typeset in i2pt Bembo by SetAll, Abingdon Printed in Great Britain on acid-free paper by Biddies Ltd, Guildford and King's Lynn CONTENTS Preface vii Table of Cases ix Table of Legislation xiii Antitrust: Introduction i On the surface—the technical profiles I In the foundations: the dilemma of liberal democracy 2 Part I Technical Profiles: the USA 1. Protection of competition or of freedom of contract? 7 From the common law to the Sherman Act 7 Early years of the Sherman Act 10 Prohibitions to protect market pluralism increase 14 2. Today's Subtle Weapons 20 The Chicago School 20 Evolution in the Supreme Court 24 Trends in recent cases 27 The present position in summary 33 Part II Technical Profiles: Europe 3. The Heritage of History 39 Europe's industrial culture 39 The Freiburger Ordoliberalen School 40 Early development of antitrust law 41 Antitrust in the European Community 43 vi CONTENTS 4. "Restrictive" Agreements • 46 The normative machinery 46 Vertical agreements 47 Horizontal agreements 54 5. Abuse of a Dominant Position 65 "Special responsibility" 65 Assessment of "dominant position" 67 Abuse as an "objective concept" 69 Individual types of abuse 72 In conclusion 76 6. Prohibitions of Dominant Position 78 Mergers: the ban and its limits 78 Antitrust against public monopolies 88 Part III Antitrust and the Bounds of Power 7. Drawing together the threads 95 Original aims and later evolution 95 In the USA 96 In Europe 98 The limits to antitrust law 100 Facing concentrated, competitive firms 102 Changing markets—what remains? 105 8. The Dilemma of Liberal Democracy 109 The dilemma of liberal democracy within the dilemma of efficiency 109 Towards autonomy of European antitrust from other common policies 113 The global market and tomorrow's antitrust 124 Index 130 PREFACE THIS work arises from a seminar I led on the same topic at the European University Institute, Florence, and at New York University, there together with Professor Eleanor Fox. The text is thus an unwinding of the guiding thread of that seminar, and the range of cases dealt with (certainly not the outcome of systematic selection) is what was used for the seminar, in relation to discussions with the students. In reviewing American and European antitrust develop- ment, the more analytic treatment has been given the lat- ter, as being less well known on either side of the ocean. I am very grateful to Ian L. Fraser, who has translated the initial Italian draft and made the text sometimes clearer in English than it was in Italian. TABLE OF CASES A. Ahlstroem Osakeyhitioe and others V. Commission [1994] 4 C.M.L.R 407, 57 A.B. Volvo v. Erik Veng (U.K.) Ltd. [1989] 4 CMLR 122, 90 Aerospatiale/Alenia/De Havilland, Case No. IV/M.053, i99i 83 AKZO Chemie BV v. Commission [1993] CMLR 215 ....71 Alcatel/Telettra, Case N0.IV/M.042, 1991 82 Appalachian Coals Inc. v United States 288 US 344, (1933) H Asia Motor France & Ors. v. Commission, 1996 ECR II-961 (T387/94) 122 Aspen Skiing Co. v. Aspen Highlands Skiing Corp. 472 US 585 (1985) 69 Berky Photo Inc. v. Eastman Kodak Co. 444 US 1093 (1980) 73, 112-13 BPB Industries Ltd. & British Gypsum Ltd. v. Commission [1993] CMLR 32, 70 British Leyland Ltd. v. Commission [1986] ECR 3263, 75 Brooke Group Ltd. v. Brown & Williamson Tobacco Co. 113 S. Ct. 2578 (1993) 71 Brown Shoe Co. v. United States 370 US 294 (1962).... 18 Business Electronics Corp. v. Sharp Electronics Corp. 485 US 7171 (1988) 27, 28, 30 Chicago Board of Trade v. United States 246 US 238 (1917) I2 Consten and Grundig v. Commission [1996] CMLR 418 48-51, 121 x TABLE OF CASES Continental Can v. Commission [1973] CMLR 199 78-9 Continental TV Inc. v. GTE Sylvania Inc. 433 US 36 (1997) 26,47, 5i Dyestuffs v. Commission [1972] CMLR 557 54—5 Eastman Kodak Co. v Image Technical Services Inc. 112 S Ct 2072 (1992) 28-30 Eni/Montedison, Case IV.31.055, in OJ L5/13, 1987 64 FTC v. Brown Shoe Co. 384 US 316 (1966) 18 FTC v. Proctor and Gamble 386 US 568 (1967) 19 General Motors Continental v. Commission [1976] 1 CMLR 95 75 Hoffman-La Roche v. Commission [1979] CMLR 211 70—1, 121 Istituto Chemioterapico Italiano and Commercial Solvents v. Commission [1974] CMLR 309 73 John Deere Lrd v. Commission [1994] ECR II-957 55 Kali und Salz/MDK/Treuhand N. IV/M.308, 1993 85 Klaus Hofner & Fritz Elsen v. Macroton GmbH [1991] 4 CMLR 306 89 Mannesmann Hoesch, Case No. IV/M. 222, 1992 82 Mannesmann/Vallomer/Illva, Case No. IV/M. 315, 1994 82 Matro Hachette v. Commission [1994] ECR II-595 59 MCI Communication Corp. v. AT&T Co. 708 F. 2d 1081 (1983) 72