Exclusionary Abuses Research Articles

Data Protection Considerations in Competition Law Assessments: A Qualitative Document Analysis of EU Decision Texts

Abstract Personal data are both protected by a fundamental right and serves as a source of market power. As such, a complex interplay between data protection and competition law arises, sparking debate among policymakers and scholars on whether to incorporate data protection considerations (DPCs) in competition law assessments. Proponents argue that competition cases involving such an interplay require a normative contribution from data protection law, while opponents emphasize the practical challenges of considering data protection as a non-economic public policy objective. We identify nine ways in which data protection might ultimately surface in competition law assessments, categorized into five areas: (i) competition enforcement actions, (ii) existing legal and regulatory framework, (iii) personal data collection, (iv) exclusionary abuses, and (v) alleviation of competition concerns. Using a multiple-step approach for qualitative document analysis, we explore how these considerations have surfaced in the European Commission’s decisional practice through a dataset of 2.041 EU competition decision texts based on articles 101 TFEU and 102 TFEU and the EU Merger Regulation. We identify 53 decisions where DPCs have surfaced, especially in the information and communication industry, where they are more frequently subjected to commitments. In line with the evolving literature, we observe an increasingly integrationist trend as these considerations surface more frequently, particularly since the adoption of the General Data Protection Regulation in 2016 and the Digital Markets Act proposal in 2020. We also find a pattern where data protection provisions are included in commitments as a ‘tick-the-box’ exercise. Several influential alleviations of competition concerns suggest that the Commission is more comfortable using data protection to approve transactions unconditionally rather than as a substantive argument for commitments. We conclude by making a case for a more collaborative approach based on the European Court of Justice’s recent Meta Platforms (2023) judgment. Data protection should be considered in competition law assessments if its normative contribution is required. Such a stance would simply align with the internal logic of competition law without unlawfully expanding its material scope.

Rethinking the ‘as efficient competitor’ test: assessing the wider impact of the CJEU’s judgment in Unilever Italia and its implications in shaping the European Commission’s agenda to reform Article 102 TFEU

Recently, the European Commission published a communication indicating amendments to its Article 102 TFEU Guidance Paper in light of the latest EU Courts’ judgments on exclusionary abuses. In the Amended Guidance and the accompanying Policy Brief, the Commission provides some guidance related to changes in four main areas: the definition of anti-competitive foreclosure, the ‘as efficient competitor’ test, the assessment of loyalty rebates, and the treatment of refusals to supply and margin squeezes. The analysis in this article reflects on the evolution of the application of the ‘as efficient competitor’ test, focused on the most recent CJEU judgment in Unilever Italia. The article discusses the extent to which competition authorities must examine economic evidence submitted by the dominant company, and whether such evidence can be refuted without in-depth analysis. The article concludes that further clarification is imperative regarding outstanding ambiguities surrounding the appropriate role and use of the as efficient competitor price-cost test in assessing potentially abusive conduct under Article 102 TFEU.

How to Fix a Failing Art. 102 TFEU: Substantive Interpretation, Evidentiary Requirements, and the Commission’s Future Guidelines on Exclusionary Abuses

How to Fix a Failing Art. 102 TFEU: Substantive Interpretation, Evidentiary Requirements, and the Commission’s Future Guidelines on Exclusionary Abuses

Quantum Antitrust – A Unified Exclusionary Abuse Theory

Now that the judgments in Servizio Elettrico Nazionale and Unilever have made sense of previous case-law, a unified analytical framework can be predicated for all exclusionary abuses. It is made up of two limbs (artificiality/conduct deviating from competition on the merits and potential exclusionary effect/capability of foreclosing). The two limbs are two sides of the same coin, which consists of ascertaining whether the plausible rationale (in the sense of nature and economy) behind a dominant company’s conduct is to derive an advantage that equally efficient competitors cannot either derive by doing the same (first limb–artificiality) or offset by other means (second limb–potential effect). This exclusionary rationale, which is a cognitive state in the dominant company’s mind rather than an ontological reality, is objectivised by holistically judging the dominant company’s conduct against the backdrop of the relative efficiency of its competitors, which is the link between both limbs: if the inherent features of the company’s conduct and all the relevant circumstances surrounding it allow equally efficient competitors to either derive a similar advantage or to defeat its exclusionary effect by some other means, the conduct does not make anticompetitive sense (exclusion is not its plausible rationale). Owing to the very Darwinian nature of competition law, relative efficiency is the common “quantum” and, therefore, a useful yardstick for abuse from the historical, legal, teleological and practical perspectives, as well as from the points of view of causality and reality. Finally, plausibility would be the single standard of proof that could be rebutted by disproving either of the two limbs (in an Intel II-like fashion), either by providing an alternative non-exclusionary explanation that breaks the casual link or by putting forward an objective justification. All other tests and standards merely reflect the extent to which either the artificiality or the potential effects of the conduct can be presumed based on economic judgement or experience (as happened in merger control following CK Telecoms)–thus reconciling per se rules, consisting of an Art. 101-like cursory analysis, with a more economic approach.

ECONOMIC PRINCIPLES FOR THE ENFORCEMENT OF ABUSE OF DOMINANCE PROVISIONS

Abstract The European Commission (EC) has recently announced its intention to issue Guidelines on exclusionary abuses. In this paper, we explain how economics can and should be used to inform a sound and effects-based approach in the enforcement of Article 102 TFEU. In particular, the EC should be guided only by a consumer welfare standard; exclusive dealing and exclusivity rebates should be subject to a (rebuttable) presumption of harm; price–cost tests are meaningful only for predation and other practices that do not reference rivals; essentiality of the input should not be a requirement for vertical foreclosure cases of any type, but such cases should be limited only to dominant firms that satisfy certain criteria.

The risks of a form-based approach to exclusionary abuses of dominance – an economic perspective

The European Commission has initiated the process of changing how exclusionary abuses of dominance are evaluated, moving towards a more ‘form-based’ approach compared to the current ‘effects-based’ approach. This article explains that, if not implemented correctly, its planned approach risks worsening consumer outcomes. This article outlines the Commission’s existing approach to taking enforcement action against exclusionary abuses, and the two actions taken by the Commission to develop this approach. Then, it explores three cases where the false positives that arise from a form-based approach, rather than an effects-based approach, risk worsening outcomes for consumers. It suggests that, while an effects-based approach has its limitations, the Commission should ensure that it does not err too far into adopting a completely form-based approach as it develops updated rules on exclusionary abuses.

Legal Restraints on Single-Firm Conduct in the Digital Age: The Global Antitrust Institute’s Comment on the European Commission’s “Call for Evidence” and Concurrent Announcements Regarding Exclusionary Abuses of Dominance Under Article 102, Treaty on the Functioning of the European Union

Legal Restraints on Single-Firm Conduct in the Digital Age: The Global Antitrust Institute’s Comment on the European Commission’s “Call for Evidence” and Concurrent Announcements Regarding Exclusionary Abuses of Dominance Under Article 102, Treaty on the Functioning of the European Union

Competition Law and Digital Markets: Adaptation of Traditional Categories or New Rules? Some Reflections Arising from the Amazon Cases Regarding the Access to Non-Public Data

The present paper is intended to analyse if alleged exclusionary abuses perpetrated by big digital platforms, with particular reference to the access to non-public data dealt with in the Amazon Marketplace case, can be assessed applying the legal standards that the Court of Justice developed around the refusal to deal and the margin squeeze practices. It also shows how the new Digital Markets Act, despite representing a step forward in the regulation of the activity of these economic operators, still leaves a few questions open, especially regarding its non-sectoral approach. Finally, the interplay between access to data and privacy rules is investigated. Digital single market, digital platforms, competition law, abuse of dominance, selfpreferencing, access to non-public data, essential facilities doctrine, margin squeeze, digital markets act, GDPR

Self-Preferencing and Competitive Damages: A Focus on Exploitative Abuses

Conceived as a theory of competitive harm, self-preferencing has been at the core of recent European landmark cases (e.g., Google Android, Google Shopping). In the context of EU competition law, beyond the anticompetitive leveraging effect, self-preferencing may lead to vertical and horizontal exclusionary abuses, encourage exploitation abuses, and generate economic dependence abuses. In this paper, we aim at characterizing the various forms of self-preferencing, investigating platforms’ capacity and incentives to do so through their dual role, by shedding light on the economic assessment of these practices in an effects-based approach. We analyze the different options for remedies in this context, by insisting on their necessity, adequacy, and proportionality.

Facebook’s exploitative and exclusionary abuses in the two-sided market for social networks and display advertising

Abstract The German Facebook case has directly addressed the contentious interplay between data protection and competition law for the first time. The Bundeskartellamt’s theory of harm, which directly linked privacy violations to the strengthening of Facebook’s market power, proved controversial: it elicited strong criticism from the appeals court, but then was partially endorsed by the Bundesgerichtshof (German Federal Supreme Court). This article shows that an enforcement action against Facebook under Article 102 TFEU need not be controversial. We present empirical evidence confirming that Facebook’s ‘envelopment by privacy policy tying’ strategy exploits consumers, as it causes clear consumer harm on the market for social networks in the form of lack of choice and degradation of quality. In turn, such consumer harm on the ‘free’ side leads to a weakening of the competitive market structure and foreclosure of competitors on the ‘paid’ market for display advertising and other adjacent markets. This strategy falls neatly within the scope of Article 102 TFEU, irrespective of whether it also violates EU data protection law. In addition, the enveloping by privacy policy tying forms part of an overall anti-competitive strategy over which the Commission can assert jurisdiction and prosecute as a single and continuous infringement.

PREDATORY PRICING: SINGLE- FIRM DOMINANCE, EXCLUSIONARY ABUSE AND PREDATORY PRICES (PART 2)

Important pronouncements of legal principle were recently made by the Competition Appeal Court and Constitutional Court on the determination of predatory pricing under section 8 of the Competition Act 89 of 1998. These pronouncements must now be seen in the context of the subsequent commencement of certain provisions of the Competition Amendment Act 18 of 2018, which affect predatory pricing cases under section 8 of the Act. In light of these developments, the main aim of this series of three articles is to evaluate the law relating to the economic concept of predatory pricing under the Competition Act. In this context, the main constituent elements of a predatory pricing case – namely dominance, identifying an exclusionary abuse, and predatory prices – are discussed in three parts. Part 1 has critically evaluated the law on the determination of single-firm dominance under section 7 of the Competition Act. Part 2 starts to focus on the abuse analysis and discusses the basic forms of abuse, the meaning of abuse, tests that have been developed to identify exclusionary abuse, the criticism of the traditional theory of predatory pricing, the main strategic economic theories of predatory pricing and non-pricing theories of predation. Part 3 then specifically deals with the law of predatory prices under section 8(c) and (d)(iv) of the Competition Act. Pursuant to section 1(3) of the Competition Act, when interpreting or applying the Competition Act, appropriate foreign and international law may be considered. This is complementary to section 1(2)(a), which directs that the Competition Act must be interpreted in a manner that is consistent with the Constitution and gives effect to the purposes set out in section 2. In light hereof, where appropriate, the South African position is mainly compared with the position in the European Union and the United States.

Data Processing as an Abuse of Market Power in Multi-Sided Markets – The More Competition-Oriented Approach in the German Federal Supreme Court’s Interim Decision KVR 69/19 – Facebook

Abstract The relationship between competition law and data protection law has been a highly controversial issue following the German Competition Authority’s (Bundeskartellamt, hereinafter ‘Competition Authority’) decision with regard to Facebook’s data processing policy. The Competition Authority’s theory of harm was centered around an exploitative abuse of market power through the imposition of a data processing policy which is in conflict with the data protection rules. In the interim court proceedings, the OLG Düsseldorf criticized the Competition Authority’s decision. The German Federal Supreme Court (Bundesgerichtshof, hereinafter ‘Federal Supreme Court’) upheld the Competition Authority’s decision. However, the Federal Supreme Court did not derive the exploitative abuse primarily from a mere violation of data protection law. Instead, the Court referred to the users’ lack of freedom of choice. The Court developed a modified theory of harm by identifying elements of an exploitative abuse but also of an exclusionary abuse. The Court’s line of argument is more competition-oriented and accounts for the particular economic features of multi-sided markets. In this line of reasoning, an actual violation of the data protection rules is not a necessary prerequisite for finding a violation of competition law.

Can Competition Protect Privacy? An Analysis Based on the German Facebook Case

The increasing collection of personal data by online platforms causes concerns among regulators and consumers. Due to privacy-related market failures in multi-sided markets, the question of possible remedies arises. This article aims to determine if a contribution of competition law is needed to enhance data protection rules. The first part will discuss the possible types of datarelated abuses of dominance in the context of the pioneering attempt of the German competition authority. The second part will analyse the drawbacks of the German Facebook case and possibilities to reconcile it with EU competition law. In addition, the article will analyse other ways to tackle privacy issues, including the proposal for a Digital Markets Act (DMA). It is suggested that an intervention of competition law in data protection matters is unnecessary. We argue that it may prevent the emergence of innovative products and services, ultimately harm consumer welfare and competition, as well as put an undue burden on dominant undertakings. It is submitted that a coherent regulation allowing for legal certainty could serve the objective of consumer welfare while preserving the interests of undertakings. Article 102 TFEU, data protection law, personal data, privacy, GDPR, exploitative abuse, unfair trading conditions, German competition law, Digital Markets Act, exclusionary abuse, Facebook case

Predatory Pricing: Single-Firm Dominance Exclusionary Abuse and Predatory Prices (Part 1)

Important pronouncements of legal principle were recently made by the Competition Appeal Court and Constitutional Court on the determination of predatory pricing under section 8 of the Competition Act 89 of 1998. These pronouncements must now be seen in the context of the subsequent commencement of certain provisions of the Competition Amendment Act 18 of 2018, which affect predatory pricing cases under section 8 of the Act. In light of these developments, the main aim of this series of three articles is to evaluate the law relating to the economic concept of predatory pricing under the Competition Act. In this context, the main constituent elements of a predatory pricing case – namely, dominance, identifying an exclusionary abuse and predatory prices – are discussed in three parts. Part One critically evaluates the law on the determination of single-firm dominance under section 7 of the Competition Act. Part Two starts to focus on abuse analysis and discusses the basic forms of abuse, the meaning of abuse, tests that have been developed to identify exclusionary abuse, criticism of the traditional theory of predatory pricing, the main strategic economic theories of predatory pricing and non-pricing theories of predation. Part Three then specifically deals with the law of predatory prices under section 8(c) and 8(d)(iv) of the Competition Act. Pursuant to section 1(3) of the Competition Act, appropriate foreign and international law may be considered when interpreting or applying the Competition Act. This is complementary to section 1(2)(a), which directs that the Competition Act must be interpreted in a manner that is consistent with the Constitution and that gives effect to the purposes set out in section 2. In light hereof, where appropriate, the South African position is compared, mainly with the position in the European Union and the United States.

Hayek’s Meaning of Competition in a Digital Age

Friedrich A. von Hayek’s (1899-1992) view of competition as a discovery process is well known but little used. His central thesis is that a competitive pricing system is the most effective way to coordinate economic activity and economise on the information held by market participants in a world of generalised ignorance and change. But do the tremendous advances in computing and data management undermine Hayek’s claim that the market is superior? Does his focus on prices make his view of competition less relevant to the digital economy? Even Hayek had doubts. Unlike most ‘Austrian economists’ Hayek saw a need for antitrust to deal with the exclusionary abuses of ‘non-privileged monopolies’ and restraints of trade. Yet the conceptual basis for this is vague and it jars with Hayek’s view of liberal market law as spontaneously created. Here I critically assess Hayek’s views on competition, monopoly and antitrust, and their relevance to the ‘digital economy’.

Why There Is No Antitrust Case against Apple's App Store: A Response to Geradin & Katsifis

Apple’s App Store has been a boon to app developers in Europe and throughout the world. The App Store offers a highly attractive sales and distribution channel allowing even the smallest start-up instant access to hundreds of millions of iOS users. Nevertheless, various criticisms have been leveled against Apple’s App Store practices under European Union competition rules. We find that Apple has no case to answer. Apple is not dominant on any appropriately defined market, as developers have numerous other options for acquiring customers and distributing digital content, including other mobile app stores, as well as other channels to reach the users of Apple iOS devices (i.e., iPhones and iPads). Nor do we see any indication that the way Apple monetizes the App Store – i.e., the charging of a commission on developer sales of digital content to iOS users through the App Store – or the rules and policies that underpin this business model, could be characterized as exploitative, exclusionary or discriminatory abuses under Article 102 TFEU. Similarly, we see no evidence that Apple’s non-price-related practices, such as the privacy settings on iOS devices, Apple’s app review process, or the App Store search algorithm raise competition concerns. Apple’s commission and associated policies appear in line with numerous benchmarks, leave ample means for distribution through other channels, do not appear to correspond to any anti-competitive motive, and are readily explicable based on a legitimate desire to protect user privacy, obtain a reasonable return on Apple’s extensive investments in the App Store, and maximize the success of the iOS platform and ecosystem as a whole.

The Antitrust Regulation on Abuse of Dominant Market Position in the Field of Big Data：From the Perspective of Methodological Improvement

The provision of prohibiting abuse of dominant market position in China’s antitrust law is limited to such types of behavior as “monopoly pricing” and “limited transaction”, which not only narrows the scope of regulation, but also blurs the criteria of regulation. A lot of anti-competitive behaviors in the field of big data are not stipulated by the antitrust law, which may lead to a lack of supervision. Furthermore, the current regulatory methods do not focus on the analysis of big data market behaviors, but use the deductive method from general to individual, tending to assume the type of monopoly behaviors on the basis of law. The double failure of legal provisions and interpretation methods contrasts strongly with the regulatory requirements in the field of big data. To tackle this problem, the traditional regulatory methodology needs to be adjusted in accordance with the characteristics of the big data market from the three aspects: market power identification, abuse behavior screening, and competition damage effect analysis.First of all, we should take the data value chain as the basis, and fully consider the network effect, cross-border competition, dynamic competition and many other characteristics of the big data market, to evaluate the market power. Secondly, with the help of the infringement identification of “exclusionary abuse” and “exploitative abuse”, we may quickly identify and summarize the behavior types of market dominant position abuse in the field of big data. Lastly, we should establish specific identification methods and competitive damage analysis to regulate those anti-competitive behaviors associated with big data such as “restricting interoperability” and “excessive collection and use of data”.As China’s anti-monopoly law is being comprehensively revised and improved, we should take this opportunity to modify the existing provisions and improve the regulatory methodology in view of the development of the digital economy. For one thing, the legislature should summarize special factors according to the characteristics of big data industry in the legal provisions defining relevant markets and evaluating market power. For another thing, China should refer to the legislative model of the EU competition law and determine “exclusionary abuse” and “exploitative abuse” as the basic types of the abuse of dominant market position, so as to expand the scope of application of antitrust laws. In addition, China should issue antitrust law enforcement guidelines, summarize the types of abuses common in the field of big data, and formulate corresponding antitrust law enforcement methods and regulatory measures.

Lines of Business Restrictions

Line of business restrictions (LOBRs) are antitrust remedies or regulatory restrictions that limit the activities that a firm can undertake. They include separation restrictions ranging from structural to behavioural separation (accounting, functional or legal). However, there are also alternative behavioural restrictions such as mandating access, non-discrimination obligations and mandatory standards on portability and interoperability. LOBRs are used to address concerns that competition is likely to be prevented, restricted or distorted in a number of different ways. These include concerns that dominance is leveraged to exclude rivals in another downstream market, for example through discriminatory selfpreferencing (equivalent to margin squeeze) or refusal-to-deal. The risk of such exclusionary abuses also arises from mergers that might make such conduct likely. Each type of LOBR has enjoyed success in certain circumstances; the challenge is therefore identifying the right LOBR for the specific problem. For example, if the theory of harm is that access is being denied to an essential facility, and a loss of competition as a result of such an explicit refusal-to-deal is established, then the solution will need to focus on allowing access, and applying a duty-to-deal. Hence, the appropriate LOBR might include mandatory access on FRAND terms, or structural separation to achieve the same access. In contrast, if the regulatory or antitrust concern is not that the firm refuses-to-deal, but that it deals on terms that foreclose through raising rival costs or predation (via some form of margin squeeze, or equivalently a merger leading to margin squeeze), then the solution (were one required) would not focus on mandating access. Instead, the response might be a non-discrimination obligation (without necessarily imposing a duty-to-deal on FRAND terms) or to mandate standards for portability and interoperability. Notably, in the case of digital platforms, it would appear that refusal-to-deal is not driving the concerns (thus far), and so imposing a duty-to-deal seems unlikely to be the right answer. Instead, the concerns appear to relate to foreclosure through self-preferencing that raises rivals’ costs, meaning that non-discrimination obligations are the more likely LOBR. Moreover, digital platforms are not natural monopolies in which competition cannot take place. Therefore, the approach should not be to write off the possibility of competition in platform markets and focus solely on preserving the possibility of competition downstream (or upstream) markets (as in regulated infrastructure monopolies). Instead, behavioural LOBRs including standards for portability and interoperability could facilitate competition within these markets (and thereby begin to resolve the foreclosure risk in downstream markets). However, it may nevertheless be sensible to reinforce these with further LOBRs, for example non-discrimination obligations, in these downstream (upstream) markets to preserve competition while competition in these ‘core’ markets is strengthened.

Old abuses in new markets? Dealing with excessive pricing by a two-sided platform

Abstract Exploitative abuses, especially excessive pricing, have been one of the most debated forms of abuse of dominant position. Unlike exclusionary abuses, they have been prohibited only under certain jurisdictions and on rather rare occasions. In Europe there have been few recent decisions and investigations that have reiterated existing approaches and tests for establishing excessive pricing. The Turkish Competition Authority’s Sahibinden.com decision has come at such a time where the discussion on excessive pricing has been somewhat revived. However, this decision stands out as it is the first one where a competition authority has found prices to be excessive and therefore abusive in the context of a two-sided platform. Competition in platform markets display unique dynamics that may be very different from what may be observed in traditional markets especially in terms of pricing strategies. This article aims to demonstrate, through the Turkish Competition Authority’s recent decision, the difficulties in applying existing tests and criteria on excessive pricing to a two-sided platform. A thorough analysis of this decision demonstrates that competition enforcement in what may be called ‘new’ platform markets necessitates new approaches or adjustments of existing ones.

A critical analysis of the competition authorities’ treatment of the element of causation in exclusionary abuse cases

It is trite law that in order for an impugned act to be condemned in terms of the exclusionary abuse prohibition, entrenched under the Competition Act 89 of 1998, there must be evidence evincing that the said act caused some anti-competitive effect and that the anti-competitive effect caused by the said act outweighs any procompetitive effect caused by it. This position makes the element of causation of central importance in the determination of whether or not to condemn an impugned act in terms of the exclusionary abuse prohibition. However, despite the pivotal role played by causation in the resolution of exclusionary abuse cases, the competition authorities have repeatedly neglected to, inter alia, expound the framework of causation envisaged under the exclusionary abuse prohibition and state the legal principles upon which their conclusions of causation are based. This neglect has caused some competition law commentators to argue that the competition authorities have failed to assess the element of causation in exclusionary abuse cases. This paper examines exclusionary abuse case law through the lens of the common-law framework and tests for assessing causation and demonstrates that, despite the criticism levelled against the competition authorities, first, the authorities do in fact have a framework of causation and tests for assessing causation; secondly, the authorities have been employing the framework referred to above consistently since its first appearance in the case law; and thirdly, the said framework is consistent with the framework of causation envisaged, or apparently envisaged, under the exclusionary abuse prohibition entrenched in the Competition Act 89 of 1998.