Companies don't like competition and public procurement is no different

I remember - naively - thinking competition law made no sense conceptually. Surely, the idea of having a market and economic operators inside it was to enable competition for the best to win. So, why do we need competition law and by extension, public procurement rules?

The CEO of Liberty Steel provided this week with a nugget on my own naivety:

"The chief executive of Liberty Steel has called on the UK government to change public sector procurement rules, which he said fail to adequately support British manufacturers against European competitors.

Jon Bolton, who is in charge of Liberty’s Dalzell steel plant in Motherwell, fears UK public contracts are going overseas because the guidelines for steel procurement are too rigid.

Bolton said: “Guidelines for many public sector contracts are failing to properly take into account the regional economic benefit of our bids." "

Translation: we are not competitive but we are local. Give us the contracts because we are based in the UK.

And let's not forget that i) the UK is still inside the EU ii) Liberty Steel is worried with EU competitors, and not Chinese ones.

European Commission fines Google €2.4B but that is just the start of the story

The European Commission has just fined Google for abuse of dominant position for giving an illegal advantage to its own comparison shopping service on search results. The fine is big €2.4B but it is simply the beginning of a long story instead of the closure of another.

The decision also requires Google to cease its infringing practice within 90 days, leaving squarely on the company's shoulders the explanations of how it intends to comply with the order. As the Commission did not mandate any specific remedies, this is due to become particularly problematic. 

It is likely Google will appeal the fine and drag its feet on changing the way it operates for two reasons. First, there is no incentive to do so otherwise - paying the fine and changing practice would be an admission of wrongdoing and no manager wants to have a €2.4B hole on its finances to explain. So we can expect Google to drag this through the courts. Second, the process takes so long that the real final decision (assuming it maintains the current one) may well be 10+ years away from now. What will be the purpose of changing search results then? And inflation will eat into that €2.4B fine. Plus, from the perspective of Google's executives a protracted court battle means that it is likely that when closure happens they will all be long gone.

As I argued last year in this blog, current abuse of dominant position rules are not the correct deterrent to solve this issue as they are too slow to be useful. In a world where technology waves become shorter and shorter, speed is of the essence also for competition enforcement. I called at the time for abuse of dominant position enforcement to either be sped up or in alternative dropped all together. I maintain most of that view and would suggest looking into merger control rules as an alternative.

In any event, today's decision is simply the start of a long drawn out process.

Teaching competition law differently

For the last couple of years with my colleague Richard Leonard-Davies I have been teaching competition law here at Swansea University and doing so in a very traditional and straightforward way: lectures focused on plenty of case law and seminars where we drilled down the details. As competition law is one of those topics that can be eminently practical, there was plenty of scope for improvement. As we run two separate Competition Law modules in different semesters (Agreements in the first, Dominance in the second) it is possible to make changes in only a part of the year.

About a year ago I found this blogpost by Chris Blattman on getting students to draft a Wikipedia article as part of their assessment. Blattman called this the creation of a public good while my preferred description is getting them to pay forward for the next lot. Immediately I thought, "hmmm let's see the entries for competition law" and they were very underwhelming.

Fast forward a year, a few hoops and plenty of support from Wikimedia UK and we're now in the position of starting the module with a new assessment structure that includes the (re)-drafting of a Wikipedia entry. Here's the nitty gritty:


Assessment 1 (2,000 words)

For the first coursework you will have to choose from the topics covered this semester and check if it has a Wikipedia entry or not. Once you have selected a topic you will need to submit it for approval to either member of the teaching team. If an entry already exists you will critically analyse the entry by providing a report which encompasses the following:

-       Why you have chosen this topic

-       What is covered in the Wikipedia entry

-       What the entry does well

-       How the entry could be improved in your view (ie, caselaw, different perspectives, more recent doctrinal developments, context)

-       What aspects of the topic were not covered but should have been included

-       What sources (academic/case-law) you would use to reference the entry

We expect the piece to be factual on its description of the area of the law you decided to analyse but at the same time critical and reflective, basing yourself in good quality academic sources for the arguments you are presenting.


Assessment 2 (1,000 words)

For Coursework 2 you will be expected to put in action the comments and analysis from Coursework 1, ie you will be drafting an actual Wikipedia entry that improves on the strong points identified and addresses the weaknesses as well. This entry will be drafted on your Wikipedia dashboard (to be discussed in the Coursework Workshop in March) and will have to be submitted both on Turnitin and also uploaded to Wikipedia itself before the deadline.

Regular plagiarism rules apply, so if you pick an entry that already exists you are advised to re-write it extensively, which, to implement the changes from Coursework 1 you should be doing nonetheless. It is fundamental that you make the Turnitin submission prior to the Wikipedia one

The drafting style for this entry will be very different from the first one (or any academic coursework for that matter) as you are no longer critiquing a pre-existing text, but creating an alternative one. As such, it is expected to be descriptive and thorough, providing a lay reader with an understanding of the topic at hand. For an idea, please check Wikipedia’s Manual of Style:

What we are hoping for with this experiment is to get students out of their comfort zone and used to think and write differently from the usual academic work. Instead of padding and adding superfluous materials, they will be expected (and marked) to a different standard. 

But that is not the only thing we're changing as the seminars will also be quite different from the past. This year we will use WhatsApp as a competition law case study.


Why WhatsApp?

Well, when considering what company/product to use as a case study there had been no investigations into WhatsApp so that made it a clear frontrunner as a potential case study. It's a digital product/service which may or may not be tripping EU Competition Law rules with enough of a grey area to get people to think. So we will apply the law to WhatsApp and try to figure out if:

- It has a dominant position (and if so, in what market)

- It has abused its putative dominant position

- Its merger with Facebook is above board

- it's IP policy/third-app access policy is compliant with competition law requirements 

To this end, students will have to find information by themselves (incredible the amount of statistics freely available these days online...) and be prepared to work together in the seminar to prepare the skeleton arguments in favour/against any of those possibilities. The second half of the seminar will be spent with the teams arguing their position. 

We'll see how it goes and will comment on the whole experiment in four months or so. In the meanwhile, if you want to know more drop me a line in the comments.