Bananas to Chillin Competition

Alfonso Lamadrid on Chillin Competition, commented earlier today on an interesting paper by Javier Berasategi bringing together issues of competition law, supermarkets and technology.

In passing he noted that I’d already brought groceries and tech together with my “exploding banana hypothesis.” I’m grateful to him for highlighting my valuable contribution to the jurisprudence on perishable fruit and cross border trade. For the curious, here are the relevant paragraphs from my book on competition law and regulation of technology markets:

7.07 Are there circumstances where product design can achieve what would otherwise be unlawful under the competition rules?

7.08 For example, EU competition law prohibits many vertical restraints that restrict parallel trade. In the United Brands case the Commission, in a decision upheld by the Court of Justice, found United Brands to have abused its dominant position by imposing a restriction on its distributors that prevented them from reselling bananas while they were still green. As bananas perish quickly once they have turned yellow, a ban on resale while green effectively prevented cross-border trade. A colleague once speculated as to what the European Commission’s approach would have been if, instead of imposing restrictions on its banana distributors, United Brands had instead created a banana that exploded when it crossed frontiers (the ‘exploding banana’ hypothesis).


The point was to highlight – assuming market definition and dominance – whether the design of such a banana could be abusive. In the book I then go on to talk about predatory innovation – a slightly more formal way of expressing the issue. Those curious can:
* buy the book;
– beg, borrow or steal a copy of a lecture I gave at Kings in London a couple of years ago which looked at product design and interoperability in more detail; or
– for the more patient, wait for me to write up that lecture. And this gives me yet more incentive to do so.

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