A COMPETITION LAW ASSESSMENT OF PLATFORM MOST-FAVORED-CUSTOMER CLAUSES

Abstract

Most-favoured-customer (MFC) clauses adopted by online platforms in their relevant contractual relationships guarantee to an online platform that a supplier will treat the platform as favourably as the supplier’s most-favoured-customer concerning price, availability and similar terms of a given transaction. These clauses are a fundamental aspect of the business models of some of the world’s leading companies such as Apple, Amazon, Expedia, etc. The competition law implications of these clauses have been one of the key concerns of over a dozen competition authorities around the world in recent years. The competition authorities involved have adopted different approaches and reached different substantive and procedural outcomes, sometimes in proceedings that concern the application of the same legal rule to the same practice of the same company. This is best demonstrated by the line of investigations against certain online travel agents in Europe. This article posits that such diverging approaches lead to legal and business uncertainty, as well as to procedurally unfair and substantively incorrect assessments. In an effort to rectify this suboptimal situation, the article provides a comprehensive, principled approach for the assessment of platform MFC clauses under competition law – in particular, under EU competition law.