Antitrust and digital regulations update – November 2024

European Union – antitrust

European Commission

Commission fines Pierre Cardin and its licensee Ahlers €5.7 million for restricting cross-border sales of clothing

On 28 November 2024, the European Commission imposed fines totaling €5.7 million on Pierre Cardin and its largest licensee, Ahlers, for breaching European Union (EU) antitrust rules. The companies were found to have restricted cross-border sales of Pierre Cardin-branded clothing and sales to specific customers, violating Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the European Economic Area (EEA) Agreement.

Pierre Cardin, a French fashion company, licenses its trademark to third parties for the manufacture and distribution of Pierre Cardin-branded clothing. Ahlers, the largest licensee in the EEA during the infringement period, was subject to an investigation launched by the Commission following unannounced inspections on 22 June 2021. Formal proceedings were initiated on 31 January 2022, with a Statement of Objections issued on 31 July 2023.

The investigation revealed that between 2008 and 2021, Pierre Cardin and Ahlers engaged in anticompetitive agreements and concerted practices to ensure Ahlers’ territorial protection. These agreements would have:

1. Prevented other Pierre Cardin licensees and their customers from selling, online and offline, branded clothing outside their licensed territories.

2. Restricted sales to low-price retailers such as discounters, limiting consumer access to lower-priced goods.

These alleged absolute territorial protection practices would have distorted the internal market by preventing parallel trade, which typically fosters price competition and benefits consumers with lower prices and greater product diversity.

Fines were calculated based on the Commission’s 2006 Guidelines, considering the gravity, geographic scope, and duration of the infringement. A claim for inability to pay under point 35 of the Guidelines led to a fine reduction. The final penalties were €2,237,000 for Pierre Cardin and €3,500,000 for Ahlers.

Antitrust and digital regulations update – October 2024

EU antitrust updates

European Commission Fines Teva EUR 462.6 Million Over Patent System Misuse and Disparagement Campaign

On 31 October 2024, the European Commission imposed a EUR 462.6 million fine on Teva for abusing its dominant position to delay competition against its multiple sclerosis treatment, Copaxone. The Commission found that Teva misused patent procedures to extend Copaxone’s exclusivity and disseminated misleading information about a competitor’s product to hinder its market entry and uptake.

Teva, a global pharmaceutical firm, held a basic patent for the active ingredient glatiramer acetate in Copaxone, which expired in 2015. The Commission’s investigation revealed that Teva extended Copaxone’s market exclusivity in multiple EU countries through two main strategies:

The Commission determined that Teva’s actions collectively violated Article 102 of the Treaty on the Functioning of the European Union (TFEU), marking the first time the Commission has fined a company for these specific practices. Teva’s conduct may have prevented price reductions, impacting public health budgets. Following inspections of Teva’s facilities in 2019, the Commission opened proceedings in 2021 and issued a Statement of Objections in 2022.

Patent Manipulation: As its original patent neared expiration, Teva filed multiple divisional patent applications, creating a web of secondary patents focused on production processes and dosage. Teva used these patents to initiate injunctions against competitors. When it appeared likely that these patents would be revoked, Teva withdrew them, avoiding formal invalidity rulings and prolonging legal uncertainty for rivals.
Disparagement Campaign: Teva launched a systematic campaign to undermine a competing glatiramer acetate product, spreading misleading information about its safety and efficacy despite approval from relevant health authorities. This campaign targeted key stakeholders, including healthcare professionals and policymakers, to slow or block market entry in several EU states.

Dear Santa, I’d like to ask a consistent framework for Article 102 TFEU

On 31 October, a couple of months before Christmas, I had already sent my Santa letter to the European Commission in response to the public consultation on the Draft Communication from the Commission—Guidelines on the application of Article 102 of the Treaty on the Functioning of the European Union to abusive exclusionary conduct by dominant undertakings (Draft Guidelines)—see full version below. The background is the ongoing debate on whether competition law should incorporate non-market values, such as fairness, sustainability or even plurality and democracy, which has prompted an existential crisis that appears to have become chronic. In particular, there seems to be a disconnect between recent case law of the Court of Justice of the European Union (CJEU) and the Commission’s enforcement approach. Regarding Article 102 TFEU, while the former clearly leans towards making the relative efficiency of competitors of the dominant undertaking the criterion for abusive conduct (e.g., C-377/20 Servizio Elettrico Nazionale, para 101; C-48/22 P Google Shopping, para 164; C-240/22 P Intel RENV, para 181), the Commission insists on building cases grounded in fairness concerns (e.g., AT.40437 Apple—App Store Practices (music streaming)).

Submission-to-consultation-on-draft-exclusionary-abuse-guidelines-Pablo-Solano-Diaz Download

NEW PAPER! Quantum antitrust – A unified exclusionary abuse theory

Extra! Extra! There is a single (unified) framework for exclusionary abuses under Article 102 of the Treaty on the Functioning of the European Union (“TFEU”) consisting of a single standard of proof and a single legal test: the enforcer/claimant needs to establish that the plausible objective rationale (considering all the relevant circumstances) behind a dominant company’s conduct [standard of proof] is for the dominant company to derive an advantage (i) through means that equally efficient competitors cannot replicate to derive a comparable advantage, including means that are specifically designed to foreclose equally efficient competitors [“competition on the merits”/artificiality limb of the test]; and (ii) that equally efficient competitors cannot offset by other means, so they would be potentially foreclosed as a result [potential foreclosure effects/“capability to foreclose” limb of the test]; unless the dominant company proves that the advantage is either replicable or offsetable (as a matter of procedure or substance depending on the interpretation of C-413/14 P Intel), or provides an alternative explanation or an objective justification. This is the subject of my paper Quantum Antitrust – A Unified Exclusionary Abuse Theory that has just been published in open-access form in the IIC – International Review of Intellectual Property and Competition Law.

Obligations for digital platforms below dominance are no longer virtual reality

The Bundeskartellamt (case B6-55/20) has looked into Meta combining data from different services without the free consent required by Regulation 2016/679 (the General Data Protection Regulation, GDPR) and Meta has buried the axe in the wake of Regulation 2022/1925 (the Digital Markets Act, DMA) and its national replicants (like pioneering and bespoke Section 19a of the German competition act). This represents a further step in the long-drawn Facebook saga, which has even led to a preliminary request in case C-252/21 Meta v Bundeskartellamt and a specific provision in DMA, Article 5(2).

What else can we dispense with after indispensability became dispensable? The Spanish competition authority gives a shot at the Slovak Telekom tongue twister

Last 10 June, the Spanish competition authority (Comisión Nacional de los Mercados y la Competencia or “CNMC”) served an interesting decision on a solar power plant developer, together with an EUR 4.9 million fine, for abusing its alleged dominant position as single point of contact with the transmission system operator for access and connection to the electricity grid. Although charging beneficiaries of regulatory privileges with abuse of dominance for guaranteeing a level playing field in the exercise of those privileges seems like a walk in the park for watchdogs after C 165/19 P Slovak Telekom (if it was not already after case C-52/09 TeliaSonera desacralised the essential facilities doctrine), the CNMC’s reasoning on market definition, market power and abusive conduct in case S/0022/20 Enel Green Power España provides an insightful corollary of how national trustbusters are getting their heads around the recent silent revolution in exclusionary abuses.

Chips ahoy! Did the more economic unification finally board the per se flagship in Intel III?

Initial thoughts

What is all the fuss about judgment of the General Court of 26 January 2022 in case T-286/09 RENV Intel Corporation Inc. v European Commission (Intel III). No doubt it is a milestone in the revision process facing antitrust rules which, albeit started by the European Commission more than ten years ago, has only gained momentum in EU case-law over recent years – especially in the domain of abuse of dominance under Article 102 of the Treaty on the Functioning of the European Union (TFEU). Yet, how much credit is it to be given for revolutionising the traditionally fragmentary legal test of exclusionary abuses into a common and more economic analytical framework? If this jurisprudential trend is to be viewed as the “unification” (for romantic that it might sound) of the patchwork of hitherto inconsistent legal tests (and standards), it is necessary to iron out per se rules making some categories of abuse (e.g. tying or loyalty/exclusivity rebates) illegal regardless of the anticompetitive effect – some sort of “by object” abuses, using Article 101 TFEU (agreements) terminology which is however not supposed to apply to Article 102 TFEU breaches.

General Court in Google Search (Shopping). Chronicle of a renunciation foretold

Is so much of a stir justified?

The General Court’s ruling in Google Search (Shopping)[1] is perhaps the most eagerly-awaited judgement in the last years in the field of abuse of a dominance under Article 102 of the Treaty on the Functioning of the European Union (the “TFEU”) and even in the domain of competition law. The reason is not only the size of the interests at stake but also that it was expected to re-define the limits of competition rules by establishing whether a dominant company’s refusal to share its own competitive advantage can only be regarded as abusive if the qualified standard of “essential facilities” is met. Traditionally, this doctrine, instituted by United State case law to regulate the use of irreplicable physical facilities (e.g. railways or ports) by operators competing with the facility owner in a related market (e.g. freight transport), determined that the latter’s refusal to allow access by the former was only abusive if such access could be seen as indispensable for rivals to compete in the related market and, consequently, refusal would lead to elimination of competition in this market. However, its applicability has declined especially in digital economy where it is difficult to predicate the indispensability of a platform given the multiplicity of alternative channels (competition is “one click away” as Google put it).

Digital platforms and blockchain – is the same abuse of dominance bottle good for so different wines?

The features of so-called “digital platforms” have grabbed the headlines of competition law specialised publications for the last years: (i) easy internalisation of positive externalities generated by a user group on one side of the platform though their selling to a group on the other side; (ii) reduced transaction costs – which further increase the ability to channel positive externalities between platform sides; (iii) the exacerbated intensity of increasing returns to scale because of minimal marginal costs; or (iv) the greater value of data thanks to developments in storing and analysis technology.

These characteristics make certain economic laws applicable to digital platforms, the corollary of which seems to be a natural tendency toward monopolistic positions that maximise positive externalities arising in the form of network effects – often spilling over into neighbouring markets and producing economies of scope. This is the setting where platform operators having a quasi‑regulatory control over important, or even essential, bottlenecks to arrays of related markets (gatekeepers) emerge – which does not have to pose any concerns from the competition point of view where bottlenecks are free from permanent and significant barriers to entry.

However, the economic principles behind blockchain (so-called crypto-economics) are quite different due to its specific characteristics: (i) decentralisation (ii) transparency as regards executed transactions and opacity as regards content and parties; (iii) automaticity; (iv) immutability; and (v) multi-layer structure. Therefore, well-targeted abuse of enforcement needs the wheat to be separated from the chaff in the digital world beforehand. With many thanks to Alastria for allowing me to participate in the second issue of Alastria Legal, the purpose of my contribution (pages 41-43 – pages 38-40 in Spanish) is to shed some light on this distinction.

Abuse of dominance in digital platforms and blockchain: Is the same bottle good for so different wines?

The Spanish competition authority on the Commission’s proposed New Competition Tool and Digital Service Act. A few thoughts

The CNMC’s position paper seems to take a balanced stance in that it emphasizes the risks of across-the-board enforcement in rapidly evolving settings as digital markets where type I errors feature a particularly large potential for nipping in the bud business models that could grow very beneficial for competition and consumers. Likewise, it insists on the need not to duplicate legal frameworks – e.g. express reference is made to the overlap between tailor-made remedies addressed to large online platforms acting as gatekeepers in the Digital Service Act proposal and their imposition under the New Competition Tool, and the importance of clear rules for allocating this competence between the Commission and Member State’s authorities – maybe because they want to secure a piece of the enforcement cake.