The high expectations placed on the new general director, Dan Sjöblom, by the competition bar in Stockholm are yet to be fulfilled. But some changes to the way the competition authority works have been noted by the lawyers we have interviewed. The dialogue with the authority during cases is more open, especially for merger cases. Regarding the use of economic analysis, there seems to be almost consensus among lawyers regarding what constitutes a successful contribution from the economists in competition law cases. In preparing this article, we have met prominent practitioners from Ashurst, Baker & McKenzie, Cederquist, Delphi, Eric Ericsson, Gernandt & Danielsson, Hannes Snellman, Kastell, Lindahl, Nord & Co, Mannheimer Swartling and Öberg Associés.
The competition authority - minor changes and progress
In our round of interviews for 2010 the respondents expressed high expectations on the (then) new general director, Dan Sjöblom, who has a lot of experience from the DG Competition and the Merger Task Force.
To see if the any effect could be traced in terms of enforcement, Copenhagen Economics conducted an informal summary of the number of decisions and actions coming from the authority and the Swedish courts. And indeed, the results show an increase in the number of decisions for both 2009 and 2010. So our question to the competition lawyer community was: “Is this increased activity the ‘Sjöblom-effect’?”
Since most of the cases were initiated before Sjöblom joined the authority, the bar thought it unlikely that the increase in activity can be attributed to him. The feeling is that overall the level of activity remains more or less the same. But there are some notable exceptions. There were two mergers in 2010 that fell under the turnover thresholds but were nonetheless required by the Swedish authority to file merger applications. This is an unusual step that may signal a new policy.
Other changes were noted, for example to the way the authority works. Several lawyers felt that the interaction with the authority is easier today than before. Meetings are more focused and meaningful, especially in merger cases.
Sweden also introduced a new law in 2010 prohibiting state and municipal bodies from engaging in economic activities that distort competition or impede the development of effective competition. The point is to stop the state, municipalities and state-owned firms from acting in markets in such a way that they disturb competition, to the detriment of private firms. Currently, there is a lot of work going on at the authority to set the standards of enforcement for this new law.
Status of economic analysis within competition law
The use of economic advisers showed a small growth compared with last year. Lawyers note that merger cases will always revolve around the economics, and the place for the economist will always be there. In cartel and abuse cases the lawyers noted an increased understanding of the use of economists in calculating damages and possible antitrust fines. This is an area where economists are sometimes better suited than the firms’ internal accountants and outside financial advisers.
We as economists sometimes hear the opinion that what we do is too hard to understand, for both the lawyers and ultimately for the courts, and that this limits the usefulness of economic analysis. In our interviews this year we asked “what should characterise the economic analysis and what does it look like when it is successful and useful?” There was a lot of consensus from the lawyers on this issue. Here is some of their advice to what we as economists should focus on when working together with lawyers in competition law cases;
- presentation is vital: there must be some graphic illustration that immediately catches the minds of the courts or the competition authority;
- if the lawyers do not fully understand the material themselves, they will never be able to fully use it in court, thus, the economics must be accessible to anyone; and
- the conclusion does not necessarily have to be intuitive, but the logic going from start to finish must be crystal clear and each step should be easy to follow.
Overall, we interpret their advice as that the bar wants simplicity, but with retained integrity regarding the economics.
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Sweden Henrik Ballebye Okholm
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Tel: +46 76 1872 717
We advise clients where market meets regulation and conflicts arise. Examples in the area of competition include advice on mergers, agreements, abuse, state aid and damage claims. We assist private enterprises in competition and state aid-cases and we provide expert reports to competition authorities and regulatory bodies.
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