TY - BOOK

T1 - Vertical Restraints in the Digital Age

T2 - Best Practices in the Assessment, Application and Enforcement of Resale Price Maintenance

AU - Kollmar, Christy Lynne

N1 - 2 vols.

PY - 2021/9

Y1 - 2021/9

N2 - The question of how to properly investigate and enforce against fixed and minimum resale price maintenance arrangements (RPM) has been a highly contentious debate for decades on both sides of the Atlantic. The impetus behind this controversy is the acceptance that RPM can generate both anti-competitive market effects and pro-competitive economic efficiencies that need to be properly balanced to ensure against Type I/Type II errors of enforcement and to create efficacious and sustainable legislation and an aligned multijurisdictional RPM regulatory framework. If the appropriate balance is not struck between proper intervention and allowance of efficient vertical structures, it can negatively impact the beneficial synergies inherent in aligning both upstream and downstream distribution interests and potentially thwart innovation, research and development in degradation of consumer welfare in the digital age. Part I of the dissertation focuses on 100 years of US historical origins and the current legal approach to vertical restraint enforcement, which reveals the tumultuous legal precedents responsible for the remarkable, but rather predictable, transition between the per se illegality and the rule of reason thresholds at the federal level, indicating an almost erratic mindset as regulatory enforcement transitioned towards a more lenient approach for most RPM usages. Nine anti-competitive and 18 pro-competitive RPM theoretical models are also introduced to clearly demonstrate the true non-consensus existent between economists as to whether RPM is sufficiently deleterious enough to justify a stringent approach to RPM regulation. Part II closely examines the European origins and current legal structure of vertical restraint enforcement, where RPM has maintained its hardcore by object designation pursuant to Article 101(1) TFEU with the consequence of having no safe harbors, no applicability of the De Minimus Doctrine, an onerous negative rebuttable presumption, non-severability of the whole of the agreement and almost no chance of obtaining an exemption under Art. 101(3) TFEU. This is exacerbated by the EC’s clear lack of guidance on how to prove all conditions necessary for an Art. 101(3) TFEU exemption and when a vertical arrangement actually satisfies the Treaty to escape Art. 101(1) TFEU applicability. Moreover, NCAs have stridently different approaches to the regulation of RPM agreements causing salient legal uncertainty and a clear lack of transparency and predictability at the national level, leading to what is known as the dark matter of antitrust law among many other negative implications, e.g., forum shopping; no case development, etc.The aim of the dissertation is to directly examine the economic theoretical models, historical origins, political influences and current legal structures of both the US and EU antitrust/competition regimes to develop strategic proposals on how to modify the EU’s current legal structure to ensure the proper assessment, application and enforcement of RPM behavior to ultimately decrease Type I/Type II errors and to assist with the creation of a more predictable and transparent RPM regime that actually enhances legal certainty through a more unified and aligned approach at the national level. To achieve this goal, Part III of the dissertation proposes five solutions which scrutinize the concepts of appreciability, hardcore and by object restraints, to implement strategic modifications to EU’s current regulatory framework to ensure vertical pricing restraints receive fair, reasonable and equitable treatment in line with current economic theory, and to right the wrong the current legal regime inflicts on efficient RPM usages in the digital age.

AB - The question of how to properly investigate and enforce against fixed and minimum resale price maintenance arrangements (RPM) has been a highly contentious debate for decades on both sides of the Atlantic. The impetus behind this controversy is the acceptance that RPM can generate both anti-competitive market effects and pro-competitive economic efficiencies that need to be properly balanced to ensure against Type I/Type II errors of enforcement and to create efficacious and sustainable legislation and an aligned multijurisdictional RPM regulatory framework. If the appropriate balance is not struck between proper intervention and allowance of efficient vertical structures, it can negatively impact the beneficial synergies inherent in aligning both upstream and downstream distribution interests and potentially thwart innovation, research and development in degradation of consumer welfare in the digital age. Part I of the dissertation focuses on 100 years of US historical origins and the current legal approach to vertical restraint enforcement, which reveals the tumultuous legal precedents responsible for the remarkable, but rather predictable, transition between the per se illegality and the rule of reason thresholds at the federal level, indicating an almost erratic mindset as regulatory enforcement transitioned towards a more lenient approach for most RPM usages. Nine anti-competitive and 18 pro-competitive RPM theoretical models are also introduced to clearly demonstrate the true non-consensus existent between economists as to whether RPM is sufficiently deleterious enough to justify a stringent approach to RPM regulation. Part II closely examines the European origins and current legal structure of vertical restraint enforcement, where RPM has maintained its hardcore by object designation pursuant to Article 101(1) TFEU with the consequence of having no safe harbors, no applicability of the De Minimus Doctrine, an onerous negative rebuttable presumption, non-severability of the whole of the agreement and almost no chance of obtaining an exemption under Art. 101(3) TFEU. This is exacerbated by the EC’s clear lack of guidance on how to prove all conditions necessary for an Art. 101(3) TFEU exemption and when a vertical arrangement actually satisfies the Treaty to escape Art. 101(1) TFEU applicability. Moreover, NCAs have stridently different approaches to the regulation of RPM agreements causing salient legal uncertainty and a clear lack of transparency and predictability at the national level, leading to what is known as the dark matter of antitrust law among many other negative implications, e.g., forum shopping; no case development, etc.The aim of the dissertation is to directly examine the economic theoretical models, historical origins, political influences and current legal structures of both the US and EU antitrust/competition regimes to develop strategic proposals on how to modify the EU’s current legal structure to ensure the proper assessment, application and enforcement of RPM behavior to ultimately decrease Type I/Type II errors and to assist with the creation of a more predictable and transparent RPM regime that actually enhances legal certainty through a more unified and aligned approach at the national level. To achieve this goal, Part III of the dissertation proposes five solutions which scrutinize the concepts of appreciability, hardcore and by object restraints, to implement strategic modifications to EU’s current regulatory framework to ensure vertical pricing restraints receive fair, reasonable and equitable treatment in line with current economic theory, and to right the wrong the current legal regime inflicts on efficient RPM usages in the digital age.

M3 - Ph.D. thesis

BT - Vertical Restraints in the Digital Age

PB - Det Juridiske Fakultet

CY - København

ER -