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).

Continue reading “Obligations for digital platforms below dominance are no longer virtual reality”

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.

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

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.

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

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).

Continue reading “General Court in Google Search (Shopping). Chronicle of a renunciation foretold”

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.

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

Are smart contracts to outsmart competition rules?

Digital economy has been posing a massive challenge for competition enforcers, who are often led to stretch analogue-world rules in an attempt to capture brand new business dimensions. Therefore, one can easily imagine how difficult it will be for them to catch collaborative phenomena defying the very concepts of business and economy.

Blockchain is the archetypal case since it reunites the various ingredients for this paradigm shift: decentralisation, collaboration, automation, and determinism. It may even render obsolete the traditional game-theoretic approach to collusion as a trade-off between the benefits of cooperation and the threat of detection or defection.

Consequently, a better understanding of colluders’ changed incentives in each case seems necessary to determine whether the coin would land on the side of either increased attractiveness of coordination or stronger competition. This is the background to the potential obstacles and benefits to be expected in blockchain technology from the perspective of competition rules, and, in particular, on agreements between companies, which I discuss in the contribution “Coordination in blockchain: Are smart contracts to outsmart competition rules?

Coordination in blockchain: Are smart contracts to outsmart competition rules? – IE Law Hub

If the old competition rulebook has weathered the storm of digital economy so far, blockchain may pose too much of a challenge: it may bring a change of incentives that at least calls for more flexible and cooperative enforcement, albeit perhaps not a complete paradigm shift.

Coordination and information exchanges in financial markets. What comes first the chicken or the egg?

Intervention by competition authorities in financial markets is a complex and delicate task, given that financial service providers act not only as competitors but also as counterparties, intermediaries, and cooperation partners. In this context, contacts and information-sharing are necessary to create efficiencies such as the reduction of capital costs and transaction costs, or innovation and risk management.

This paper published on IE Legal Hub – Law Ahead explores the different approaches that have been proposed to tackle illegal coordination without hindering necessary information flows.

For instance, competition authorities in the United Kingdom (UK) have shown more willingness to characterise information exchanges as restrictions by object in themselves without need to identify an overarching agreement but relying on the presumption of causal connection to subsequent conduct.

Contrariwise, the European Commission appears to treat information exchanges as instrumental to broader pre‑existing coordination rather than ascertaining whether they could effectively constitute concerted practices in their own right. This would arguably relax the standard for information exchanges to constitute concerted practices – which might have already resulted in at least one judicial setback in case T-180/15 Icap and others v Commission.

Besides, the Spanish and Portuguese authorities have opted for a more nuanced approach, respectively, by placing the emphasis on the competitive outcome of the joint setting of conditions by competitors, and by accepting commitments in order to preserve potentially efficient information-sharing systems.

The Android of dawn

Last July the Commission struck back on Google with record fines, just like in summer 2017. On this occasion, Mountain View’s famous replicant was targeted by Berlaymont’s blade runner to cut short excessive optimism about Intel’s new dawn[1]. Indeed, the Android decision[2] joins Qualcomm (exclusivity payments)[3] in post-Intel Article 102 enforcement, their full versions not having been published yet. However, some light has already been shed on the way in which the EU trustbuster is interpreting the Court of Justice’s guidance in the seminal judgement on the chipmaker’s exclusivity payments and, more generally, on whether the more-economic approach is to be expected in digital world abuses.

This paper supplements the post Do androids dream of exclusivity with a conclusion on whether the Android decision should be read as a new setback to the long-awaited more-economic approach to abuse of dominance. Food for thought until the full decision comes out, in which we will see if the Commission interpreted the Intel ruling in the sense of requiring a full-fledged analysis of anticompetitive effects and efficiencies to invalidate Google’s. If this is the case, the battle for a digital approach to abuse enforcement might not be lost yet.

The Android decision: Is the EU blade runner seeking to retire the more-economic replicant?

[1] Judgement of the Court of Justice dated 6 September 2017 in case C-413/14 P Intel v Commission.

[2] Decision of the European Commission dated 18 July 2018 in case AT.40009 Google Android.

[3] Decision of the European Commission dated 25 January 2018 in case AT.40220 Qualcomm (exclusivity payments).

Has the Spanish Competition Authority found a way out of project finance antitrust maze?

Project finance has fallen under the spotlight of competition authorities as traditional antitrust concerns over competitors’ joining forces have met with increasing worries about financial customers suffering from information asymmetries.

Against this background, pricing, and more precisely “market conditions”, has been the thread pulled by the Spanish trustbuster to unravel, felicitously or not, the long entangled knot of syndicated loans and financial derivatives in its recent Financial Derivatives decision.

In this article, the three limbs of the decision will be discussed: loan syndication as a cooperation agreement among competitors, price coordination, and loan and hedge tie-in.

Syndicated loans and financial derivatives: ‛Belling the cat’ of market conditions