European Competition Authorities Research Articles

The Privacy/Antitrust Curse: Insights from GDPR Application in Competition Law Proceedings

In response to the emergence of large online platforms whose business model revolves around the collection and processing of personal data, it is usually suggested that competition and data protection are synergistic, hence requiring an integrated approach. In this respect, Europe represents the testing ground for evaluating how privacy breaches may inform antitrust investigations. Indeed, the General Data Protection Regulation (GDPR) on the one side and the German Facebook antitrust decision on the other side are considered the benchmarks of this new stance aimed at linking market power and data power. This paper tests the concrete viability of such an approach, analyzing how data protection rules and principles have been applied in antitrust proceedings by the European Commission and national competition authorities. Notably, the paper aims at demonstrating the fallacy of the narrative which describes the relationship between privacy and antitrust in terms of synergy and complementarity. Furthermore, the paper maintains that the principles recently affirmed by the European Court of Justice in Meta do not appear conclusive in addressing the issue. The strategic use of privacy as a business justification to pursue anticompetitive advantages currently addressed in the numerous Apple ATT investigations indeed shows the tension between these areas of law. Therefore, rather than strengthening the antitrust enforcement against gatekeepers and their data strategies, the inclusion of privacy harms in antitrust proceedings turns out to be a potential curse for competition authorities, providing players with an opportunity for regulatory gaming to undermine the antitrust enforcement. JEL Codes: D83, K21, L12, L4

Broad collection of consumer data by Big Tech: exclusionary or exploitative abuse?

ABSTRACT The ability to gather and process large amounts of personal data is primarily held by a small group of companies. Some regulators, scholars, and practitioners have expressed concerns that major advertising-based platforms such as Google and Facebook may abuse their dominant position in the data market by requiring users to agree to the intensive collection of their data as a condition to the free access and use of those platforms’ core services. This raises the question of whether such broad collection of consumer data should be examined by European competition authorities as a foreclosure aiming at excluding current and potential competitors from the market of consumer data or as an excessive collection of personal data having the effect of lowering user’s privacy. This paper seeks to discuss this matter by examining the recent ruling in Meta by the European Court of Justice.

Prosecuting Excessive Pricing of Pharmaceuticals Under Competition Law

Prosecution of pharmaceutical companies for excessive pricing of products under competition law is now a reality. As recently as a decade ago, such prosecutions were virtually nonexistent. That situation has changed dramatically as competition authorities in Europe and South Africa have pursued a significant number of such prosecutions and have levied substantial fines against the
 investigated parties. While the United States has traditionally led in policing the pharmaceutical market against anticompetitive misconduct, in this specific arena it has fallen behind, principally because federal courts so far have refused to acknowledge excessive pricing as a cause of action under Section 2 of the Sherman Act.
 
 In a succession of cases European competition authorities have demonstrated concretely the way in which excessive pricing prosecutions may be pursued. This article examines those cases in some detail showing the challenges that competition authorities have faced, and how they have gone about addressing them. The successes in Europe should help put to rest arguments regarding the difficulties in ascertaining how pharmaceutical products are priced, particularly for products no longer covered by patents or regulatory market exclusivity. The South African competition authority is undertaking its second major prosecution of excessive pricing of originator products. The ongoing case involves an essential anticancer medicine the pricing of which has deprived individuals in South Africa of life-saving treatment.
 
 Methodologies for investigating and analyzing abusive pricing are being regularized. This is important because competition authorities around the world should be able to rely on generally accepted standards for pursuing misconduct. This article suggests doctrinal improvements in the form of per se baseline rules for establishing excess with respect to generics, and rule of reason balancing tests for assessing the fairness of pricing practices for originator products and generics not encompassed by per se rules. The continued evolution of excessive pricing doctrine does not depend on these improvements. More important is continuing legal, financial, and political support for the efforts of competition authorities in this area.
 
 Patents, regulatory market exclusivity and other structural features insulate the pharmaceutical market from economic pressures that ordinarily create and recreate an equilibrium that protects consumers. For the pharmaceutical market, there must be a means to redress excessive prices in themselves. Competition law enforcement is an important tool for achieving that redress.
 

The centralised sale of football media rights in Europe

ABSTRACT We analyse the competitive effects of the centralised sale of football media rights in Europe, focusing on the “Big Five” countries (England, France, Germany, Italy, Spain). Contrary to the findings of European competition authorities, we consider that there are arguments in favour of the relevant market for domestic media rights being club- or even match-specific. This raises the question of what competition is restricted by the centralised sale if the rights on offer have limited or no substitutability. We conclude that the centralised sale of media rights is unlikely to be anticompetitive and may have procompetitive effects if the media rights of different clubs are complementary instead of substitutable. In addition, there may be efficiency gains from the bundling of media rights. Under a club or match-specific market definition, a no-single-buyer rule likely reduces the benefits from the centralised sale and may harm consumers.

The Resurrection of the Comfort Letter: Back to the Future?

Pandemic-induced economic shocks saw the European Commission and national competition authorities adopt so-called comfort letters to provide guidance, assurance, and legal certainty to undertakings in order to help mitigate the detrimental effects of the crisis. Whereas it is true that desperate times may call for desperate measures, the fact that the Commission continues to issue comfort letters for initiatives with little relevance to the ongoing emergency raises questions. This article analyzes the re-emergence of comfort letters from the viewpoints of legal basis and certainty. It finds that the foundations upon which the letters are constructed are shaky, which translates into the fostering of uncertainty. In that regard, explored are alternatives for Union enforcers to deploy a robust bespoke guidance regime for the future.

Non-binding ‘recommended price’ as concerted practices—The Federal Supreme Court of Switzerland rules on recommended prices that are communicated electronically to retailers

In a recent case (Judgment 2C_149/2018 of 4 February 2021), the Federal Supreme Court of Switzerland [hereafter: FSC] assessed the conditions under which a so-called ‘recommended price’ qualifies as an unlawful vertical agreement restraining competition within the meaning of the Swiss Federal Act on Cartels and other Restraints of Competition [hereafter: CartA].1 While ‘standard’ recommended prices are typically set out in catalogues or lists, the recommended price in the case at hand was communicated to the points of sale via an electronic database system. The price automatically appeared to a retailer when he or she scanned the barcode of the product. To the best of our knowledge, this situation differs from recommended price cases that have been assessed under EU law to date. In particular, cases in which a manufacturer or distributor communicates its recommended price to retailers directly via the operator of an electronic database system are not considered by the Commission either in the actual2 nor in the draft3 version of its Guidelines on vertical restraints. The FSC thinking for this type of recommended price is therefore potentially of great interest to European competition authorities and to the practice.

The (Ab)use of Soft Law in Shaping EU Competition Law: Undermining the Effectiveness of Leniency Programmes

One of the defining features of EU competition provisions is that they are enforceable and applicable by the authorities and courts of the European Union and those of its Member States. The European Commission and national competition authorities participate in the application of EU competition law to differing degrees. Different legal mechanisms are adopted to apply Article 101 TFEU, including leniency programmes aimed at pursuing cartels, considered to be the greatest risk to free competition in the European Union. These programmes are implemented using non-binding mechanisms of soft law, which has generated a number of issues for the European Commission and the administrative competition authorities of the Member States when applying European and national competition laws.

The Centralised Sale of Football Media Rights in Europe

We analyse the competitive effects of the centralised sale of football media rights in Europe, focusing on the “Big Five” countries (England, France, Germany, Italy, Spain). Contrary to the recent findings of European competition authorities, we consider that there are arguments in favour of the relevant market for domestic media rights being club- or even match-specific. This raises the question of what competition is restricted by the centralised sale if the rights on offer do not compete. If the media rights of different clubs are indeed complementary and because of the potential efficiency gains from bundling, we conclude that the centralised sale of media rights is unlikely to be anticompetitive and may have procompetitive effects. We further show that under a club or match-specific market definition, a no-single-buyer rule likely reduces the benefits from the centralised sale and may be to the detriment of consumers.

Active Choice vs. Inertia? An Exploratory Analysis of Choice Screens Applied in the European Microsoft Antitrust Case

In March 2010, Microsoft started displaying a choice screen to its users whose default web browser was Internet Explorer (IE). This screen included the 12 most widely-used web browsers that run on Windows and was imposed as a consequence of an antitrust investigation in which the European competition authorities accused Microsoft of extending its monopoly from the operative system market to the web browsers market by including IE as Windows’ default web browser. After March 2010, when the choice screen started operating, IE’s market share did go down. It seems straightforward to attribute IE’s decline in Europe to the choice screen itself. However, considering publicly available data from StatCounter, a common trend among developed countries is quite noticeable. IE’s market share was going down before Microsoft started displaying the choice screen in Europe. In fact, IE’s decline, which continues in the following years, is also evident in the U.S., Australia, Canada, among many other countries that did not display choice screens. A differences-in-differences analysis shows that when considering these other jurisdictions as a comparison group to assess the choice screen’s effect on IE’s market share drop, the impact of the intervention is negligible. When the U.S. serves as the control group, the choice-screen leads to a change in IE’s between -1.76% and 0.08%, depending on the time frame considered as pre-post. And only the difference of -1.76% with a 6-month time frame is statistically significant. However, when considering the average of the U.S., Canada, and Australia as the control group, the choice screen’s impact is between -0.16% and -0.69% and not statistically significant. This preliminary finding invites us to assess how sticky default applications can be. Consumers have become more sophisticated 25 years after the first U.S. Microsoft case. Thus the theory of harm and the remedies that may address consumers’ inertia should be re-examined. In particular, what types of consumers may stick to default applications, whether the choice-screen design has been ineffective, as well as the reach of choice screens.

Explaining Dawn Raids: A Soft Law Perspective into European Competition Authorities’ Explanatory Notes on Unannounced Inspections

For anyone tasked with ensuring an undertaking’s legal protection, competition authorities’ (CA) unannounced inspections or ‘dawn raids’ constitute an exceptionally challenging investigative measure.1 In attempting to find out what exactly happens during dawn raids, however, one quickly discovers that not much information is available. Considering the nature of the investigative measure and its potential implications to undertakings, the scarcity of scholarship in particular is striking.2 Powers of inspection constitute an exception to the right to privacy.3 An unannounced inspection is likely to disturb the day-to-day operations of the undertaking targeted, and key personnel may need to be involved over several business days. Legislation applicable to unannounced inspections regulates procedure on too crude a scale to truly understand practical procedure. What actually happens once inspectors from a CA show up at your office? What are the rights and obligations of inspectors, or those of the undertaking and...

Gun Jumping in Selected SEE Countries – an Obvious Risk in M&A Transactions

Gun jumping is a term which describes the premature realization of a merger before obtaining a merger clearance from the relevant competition authorities. In the last years, the European Commission and national competition authorities have demonstrated an increased interest in investigating and punishing gun jumping cases. Recognizing this interest and the need for practical guidance, the article first gives an overview of gun-jumping evolution through case law. It then points to different merger filing thresholds in the region, and implications they could have for gun-jumping issues, to show that despite the commercial and historical common ground in the region, merger filing thresholds do differ significantly between the countries, in a way which requires a cautious and sometimes challenging structuring of M&A activities with regional reach. Based upon an overview of individual gunjumping cases in the region, but taking into account the EU precedents, the article provides recommendations how to avoid gun-jumping risks.

Doktryna cartel facilitator – początek oraz rozwój w praktyce decyzyjnej zagranicznych organów ochrony konkurencji oraz orzecznictwie sądów unijnych

The purpose of the article is to present the issue of the ‘cartel facilitator’ doctrine based on the decision-making practice of the European competition authorities and the case-law of EU courts. The article is an attempt to approximate the behaviour of third parties, which have so far been assessed in terms of their compliance with competition law, as well as the criteria developed in EU judicial decisions, which must be met in order to be able to hold such entities liable for violations of competition law.

Assessing Abuse of Dominance in the Platform Economy: A Case Study of App Stores

While online platforms are an enforcement priority for European competition authorities, the latter are only now turning their attention to app stores (after having scrutinized, among others, hotel booking websites, search engines and online marketplaces). However, app stores can be characterized as the quintessential multisided platform market, where a few players (Apple and Google) serve as intermediaries between third-party suppliers (app developers) and consumers in exchange for a commission fee. Moreover, these app stores are embedded in intricate mobile ecosystems with varying degrees of ‘openness’ to third parties. Increasingly, these third parties are complaining about allegedly anticompetitive practices. In particular, the operators of app stores—which are vertically integrated into the supply of apps—are said to preference the distribution of their own apps over those of competitors. Such ‘self-preferencing’ can take many forms. Music streaming app Spotify, for example, complains that it is being treated unfairly in comparison with Apple’s music app because of exorbitant commission fees, delayed approvals, restricted promotions, and limited integration with Apple’s broader ecosystem. Other apps claim they have simply been removed when the app store operator introduced its own competing app. App stores thus constitute the ideal case study to clarify the assessment of abuse of dominance in the platform economy. Firstly, this implies correctly delineating markets: do app stores operate in one or multiple markets (one for each ‘side’ of the platform)? Secondly, one needs to establish market power: do network effects entrench the market power of app stores, or is any market power transient in a digital context? Thirdly, under which theory of harm should one qualify the conduct of app stores: refusal to supply, margin squeeze, tying — or perhaps an independent theory of self-preferencing? Fourthly, can seemingly anticompetitive practices not be justified by the need for effective platform management? And finally, how does the new P2B Regulation impact the freedom of app store operators? In answering these questions, this paper offers a guide to both authorities and concerned businesses, when it comes to app stores as well as other multisided platforms.

Is There a Consensus on Antitrust for the Big Tech?

The European Commission and Competition Authorities of Germany, United Kingdom, France and Australia as well the Stigler Center of the University of Chicago have published major reports on competition policy in digital markets. The paper compares the approaches of these reports to identify consensus in characterizing these markets, identifying market failures and proposing policies and remedies for Digital Platforms (DPs). We identified nine areas of consensus using a maximum common denominator methodology. From merger control to platform and data interoperability, these reports explore the frontier of economics and law to underline the under-enforcement that has taken place across jurisdictions. There is a widespread dissatisfaction in the enforcement area, so the paper looks at several landmark cases to learn lessons for the future implementation of competition policy. We emphasize the large Transatlantic divide in enforcement of abuses of dominance between the US and EU and the fault lines in the US according to the administration. This shows that there is no consensus between the EU and US competition authorities. Regulatory measures have been proposed, and some have been implemented on data privacy and platform to business, sometimes in the intersection of competition policy with other policy areas, which shows the difficulty in partitioning public policies. But bringing them together is a challenge. None of the reports advocates deep structural measures, but there have been proposals by politicians and academics for the break-up of some of the big corporations of digital platforms, echoing past antitrust cases, mainly Microsoft. We discuss the pros and cons of this measure. Finally, we look at the way forward and further need to improve methodologies and processes of authorities to make them more agile and efficient.

Merger control in the telecom industry: a landscape transformed

PurposeThis paper aims to underscore how the digitization of content and the convergence in the telecommunications sector has prompted a wave of consolidation between telecom and content players.Design/methodology/approachUsing interdisciplinary insights from competition policy and business strategy, the paper draws attention to the interplay between business model innovation and merger control in the converged telecoms sector.FindingsTechnological innovation and business model innovation led to the emergence of over-the-top (OTT) services. This innovation in turn led to two key effects, first, successful commercialization of content and the emergence of the “smart pipes” that in turn has led to the second effect, which is increased mergers and acquisitions (M&As) in the converged telecommunications sector. Emergence of OTT with big data as a key advantage challenged the strategy and business models of the more established players, such as the AT&T, Time Warner, Liberty Global and Fox, which in turn led to the current trend of M&As in the sector.Originality/valueThis paper makes the following key contributions to the literature on M&As between the fixed/mobile and content players. First, it elucidates how the existing market players can benefit from competition policy, such as merger remedies to enter new and related markets. Second, it advocates that the US and the European competition authorities while assessing these M&As, take due account of innovation in business models, as business model innovation not only promotes innovation in the market but also enhances consumer welfare, considering that it offers the merged firm economies of scale and scope to offer better-quality goods and services at subsidized prices.

Tackling the Challenges Raised by the Digitalization of the Economy: Recent Experiences of the French Competition Authority

The digitalization of the economy has brought about new challenges that the French Competition Authority is determined to tackle, both through its enforcement activities and its advocacy tools. These past years the Authority has examined discriminatory practices and the use of price-parity clauses by digital platforms. It has also addressed the specifics of two-sided markets and looked into the competitive pressure exerted by online retailing. Recently, it examined a merger between two online platforms. To develop a better understanding of the particularities of the digital world, the Authority thoroughly examined the workings of the French online advertising market. It works closely with other European competition authorities to develop a shared doctrine on various issues such as open and closed ecosystems, data, or algorithms.

Differentiated Treatment in Platform-to-Business Relations: EU Competition Law and Economic Dependence

Abstract Differentiated treatment is a key focus in current competition investigations of the European Commission and national competition authorities, ranging from more prominent placement of one's own services in a ranking to preferential access to data and the favouring of businesses that pay higher levels of commission. Based on their exclusionary and/or exploitative character, the paper distinguishes three types of differentiated treatment on online platforms in order to provide an analytical framework for assessing the extent to which such practices are abusive under Article 102 TFEU, namely: pure self-preferencing, pure secondary line differentiation and hybrid differentiation. The paper points out that the main area where EU competition law currently does not offer effective protection is in the most far-reaching situation where a business is blocked from a platform without legitimate justification. To address harm in such cases, the paper suggests giving a stronger role to economic dependence both within and outside EU competition law and explores possible measures building upon the Platform-to-Business (P2B) Regulation as well as the notion of fairness of platform-to-business relations.

Is It Too Early Wrong?: The Court of Justice of the EU Clarifies the Concept of Gun-Jumping

In the judgment handed down in the E&Y case, following a preliminary question referred to it under Article 267 TFEU, the Court of Justice of the EU for the first time dealt with the issue of gun-jumping. Applying the ‘change of control’ test, the Court made it clear that the parties to a merger duly notified to the European Commission or other national competition authorities do not infringe the standstill obligation in Article 7(1) of the Regulation (EU) No. 1039/2004 or in corresponding national provisions when, while the regulatory review is still pending, they implement a reverse integration by cutting the links between them and a third party.

Civil Liability for Single and Continuous Infringements

Infringement decisions by one of the European competition authorities constitute either irrefutable evidence or prima facie evidence of an antitrust violation in cases brought before a national court. As a result, evidentiary rules applicable to investigations have a direct impact on the scope of potential damages exposure in civil litigation. The legal concept of the single and continuous infringement is an example of such an evidentiary rule. This construct has alleviated the burden for authorities to prove the existence of cartels whose membership and activities may have evolved over time. However, in order to ensure that defendants are not paying for harm they have not caused or could not have prevented, appropriate limiting principles are necessary.

The Recent Evolution in EU MNO Telecom Mergers

The European mobile telecoms industry bears a heavy burden. It is tasked by the European Digital Single Market Strategy to invest in an environment where digital networks and services flourish,1 play an important part of our daily lives, remain at a fair price,2 and maintain its competitiveness against US and Asian rivals. All under public and political scrutiny policed by the European Commission and national competition authorities. In the last two years, the Commission has had ample opportunity to scrutinise and develop its assessment of mobile telecom deals with further consolidations across Europe. In a number of high-profile deals concerning mobile network operators (MNOs), the Commission prohibited a merger between two MNOs in the United Kingdom (May 2016),3 cleared a merger between two MNOs subject to remedies in Italy (September 2016),4 and unconditionally cleared the acquisition of a Swedish Mobile Virtual Network Operator (MVNO5) by an MNO (October 2016).6 In addition, the Commission investigated a merger between MNOs on the Danish market, but the parties withdrew their notification in light of the Commission’s opposition.7