Competition law is, by design, intrusive for businesses. Having cold- eyed officials burst through the doors in an unannounced dawn raid to rifle through a firm’s files is no executive’s idea of a good time. But thoughtful competition practitioners understand the economic benefits of legislation on cartels, mergers and predatory pricing to preserve the cut and thrust of market forces, which can be blunted when firms collude on price or swallow up competitors.
“It’s one of the key ingredients in making a capitalist market economy work in a way that’s tolerably fair,” explains James Webber, an antitrust partner at Shearman & Sterling. “The policy choices that competition law represents are aimed at trying to ensure that a fair share of the proceeds of economic activity make their way to people through higher quality products, lower prices, new products and services.”
In terms of day-to-day practice, that means “being empathetic to what clients are trying do and what the regulators are trying to do”. Since each case involves detailed examination of the market for a particular product or service, and what the proposed deal would do to competition on that market, antitrust lawyers can also expect to learn a hell of a lot about what their clients do, how they do it and who they compete with.
It also helps to be “reasonably fluent in economic theory”, and to have a head for figures -- but there’s no need to be a maths whizz. “It helps if you can manipulate numbers in your head and you’re comfortable with Excel. It’s that kind of level, not economic modelling or econometrics,” Webber explains.
The numbers involved can be staggering. The European Commission slapped Google with a €4.3 billion fine over the summer for illegally using its Android operating system to shore up its search engine dominance -- for example, by requiring Android phone manufacturers to pre-install Google Chrome and the Google search app. That came hard on the heels of a €2.4 billion fine for using its flagship search engine to artificially boost the Google Shopping price comparison service. Fines to old-fashioned manufacturers for old-fashioned price fixing cartels are less head- line-grabbing than sticking it to Silicon Valley, but can have just as big an impact on the bottom line: truck-makers said to be rigging the prices of their big rigs were fined nearly €3 billion recently.
Webber himself, like many others, only brushed up against competition law in passing as part of an EU law module. Initially trained as an intellectual property specialist, he now counts it as a blessing that he fell into antitrust. It’s a growth area, due both to the increasing sophistication of the regulators and the sheer number of them globally.
Antitrust law, or at least its basic principles, are fairly settled: the US still uses the Sherman Act 1890, and the EU treaty articles on competition were fixed in 1957. But the ideas contained in them have been taken up by governments around the world.
“When I started,” Webber tells Verdict, “there were about ten merger control regimes in the world, of which only two really mattered: the EU and the US. Now there are 160, and significant numbers of those matter. China, Brazil, Australia and South Africa are all places that regularly intervene in transactions.” Those more-numerous regulators have also been increasing the intensity of their investigations -- and even expanding them into new areas.
“Countries are introducing new regulatory regimes that aren’t focused on competition but are seeking to control M&A (Mergers & Acquisitions) activity,” Webber says. The British government looks set to bring in a system of checks to stop “hostile actors” from abroad buying up UK assets, while the EU is finalising a foreign investment screening regulation. Webber sees these as part of a wider, global trend: “Governments are more interventionist and less laissez-faire in their economies. That’s finding its expression through these public interest foreign investment controls and can also find expression through merger control itself. Especially in places like China where the merger control laws are quite broadly drafted and grant a wide discretion to the authorities.”
Also in vogue are the rules on state aid, under which EU governments are C barred from subsidising favourite firms if it gives them an unfair advantage. They were recently used, to pretty much everyone’s surprise, to target the Irish government’s taxation deal with Apple. “The Commission,” Webber says, “is using the state aid rules as a tool to try and dampen the extent of tax competition between the member states.”
As you might expect given how many times we’ve mentioned the EU, Brexit is causing a headache. Peter Willis and Richard Eccles of Bird & Bird warn of “an immediate risk and likelihood of parallel investigations... with an increased burden to businesses”. But with the City being the global legal services hub that it is, Webber doesn’t expect to see much impact on his own practice: “Probably less than 20% of my work has any particular connection to the UK. The vast majority of what I do is a transaction that doesn’t have a UK nexus, by which I mean neither the buyer nor the seller are UK companies.”
Either way, those interested in competition law practice need to keep a keen eye on policy trends as well as cultivating that grounding in economic basics, a legal brain and commercial acumen. Those lucky enough to make the grade tend to love it. “I never predicted a career as a competition lawyer,” Webber admits, “but now I wouldn’t have it any other way.”
About as high as it comes. All the Magic Circle firms carry out competition work, as do many of the City’s other big players. According to Chambers Student data, around one third of training contracts at large commercial law firms include a competition law seat. As such, a newly minted competition lawyer can command the top NQ salaries, currently north of £140,000 at some US-headquartered outfits. At the bar, similarly, the go-to chambers for competition work are the bluest of blue chip.
High profile competition lawyers
Richard Posner, American king of legal academia; Sir Christopher Bellamy, former head of the Competition Appeal Tribunal now consulting for Linklaters; David Aitman, former global managing partner at Freshfields Bruckhaus Deringer.
Key elements of the job
Advising on the competition law implications of transactions, steering mergers through the regulatory system and sometimes litigating to challenge regulatory decisions. In general, this is more of a transactional than an adversarial game. As you move up in seniority, establishing good working relationships with the general and sector-specific regulators is a must.
How to get a foot in the door
Relevant work experience is a serious bonus. For those with the necessary language skills, the European Commission offers graduate traineeships at various departments including DG Comp. Closer to home, vacation schemes or mini-pupillages taking in some competition law will help.