Article 102 – Competition Actually

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 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).

Google Search. Shopping for an appropriate abuse standard

Now that Google and the Commission are at daggers drawn in Luxembourg over the 27 June decision in Google Search,[1] it seems like high time to make our educated guesses about how the recently disclosed arguments in the tech giant’s September appeal[2] will come into play. Therefore, this post is a sort of an update (or a plug-in) to my recent paper EU Competition Law Needs to Install a Plug-in,[3] which for better or for worse was submitted one day after the Commission’s decision was adopted and it was published five days before we had the first news of Google’s bringing the case before the General Court.

As anticipated, Google’s appeal will revolve around the claim that the theory of damage behind its conduct was that of an essential facilities case, while the Commission found it abusive below the refusal to deal threshold. As a matter of fact, Nicholas Banasevic (head of the unit responsible for the Google case) has made clear that the June decision is ‘a very detailed effects-based decision‘ in a ‘plain and simple leveraging case,’ without there being any need to ‘apply another “label” to it, including abuses such as “refusal to supply” rivals.’[4]

Banasevic’s assertion implies that the Silicon Valley company’s leveraging on its dominance in general search to artificially favour its own products in an adjacent market would suffice to be found abusive, as far as the (actual or potential) anticompetitive effect is supported by a fair deal of evidence. No wonder, Google’s reaction would be trying to bring the discussion to the field of legal standard by pleading that the Commission’s move away from the refusal to supply test constitutes an attempt to lowering the abuse threshold below the essential facilities requirements of indispensability and removal of effective competition.

Against this backdrop, it must be recalled that the long-drawn Google Shopping battle, the first chapter of which was brought to a close by the June decision, touches upon a number of de lege lata and de lege ferenda questions. Indeed, it tables both the debate over the adjustments required by competition law of the European Union to be able to deal with the challenges of the digital environment and the traditional controversy about the limits of competition authorities’ say in dominant companies’ business models.

Continue reading “Google Search. Shopping for an appropriate abuse standard”

Vestager’s razor to cut the ordo-liberal knot

To turn the page on more than forty years of quarrel over whether antitrust is about protecting the competitive process without prejudging its result or about ensuring that markets have a competitive structure (thereby tipping the balance towards a particular market outcome), Commissioner Vestager has finally applied Ockham’s law of parsimony. In front of the European antitrust establishment attending the Chillin’ Competition conference last 21 November, the Commissioner heralded a return to the exploitation origins of EU competition law. Continue reading “Vestager’s razor to cut the ordo-liberal knot”

The bonfire of the vanities 3.0

Google doesn’t seem to have expiated its sins as Berlaymont’s crusade is about to become a Seven Years’ War. This week, we have witnessed with weary amazement Mountain View’s questing beast being struck by two new charge sheets: a supplementary statement of objections that persists restlessly in the unpalatable self-preferencing theory of harm and a brand new accusation of limiting third-party websites’ ability to display advertisements from rival online advertising intermediaries. Thus, a third limb has now been added to Vestager’s admonition barely three months after the tech colossus was made aware of her concerns over Android (see ‘Do androids dream of exclusivity?’). Continue reading “The bonfire of the vanities 3.0”

Do androids dream of exclusivity?

Almost fifty years ago, Philip K. Dick wondered whether androids dreamt of electric sheep as a way of reflecting on robots’ ability to develop feelings and on humankind’s entitlement to doing away with machines showing this dangerous anomaly. Almost thirty years ago, Ridley Scott brought this moral debate to the big screen in a film featuring Harrison Ford ‘retiring’ human-like ‘replicants’. Now, the Commission, as a modern antitrust blade runner, is seeking to ‘retire’ an Android which seems to have developed overambitious feelings.

As a matter of fact, this ambition of Google’s mobile app business gave Vestager a reason not to break with the tradition of giving the technological giant an April shower. One year after the charge sheet on Google Shopping (see ‘Alternativlos!’), Mountain View was hit with a brand new statement of objections focussing on Android. On this occasion, Google was preliminarily suspected of using its operating system to carry out conducts falling within the shabby boxes of tying and exclusive dealing. Continue reading “Do androids dream of exclusivity?”