National Competition Authorities Research Articles

Assessing media mergers and acquisitions: The power pyramids of regulatory cooperation

Due to the media goods’ dual economic and cultural role, merger and acquisition (M&A) assessments are complex and differ from M&As in other sectors. An additional layer of complexity is added to the assessment when various authorities are involved. An even more complicated matter is when the authorities have different remits. These authorities mostly comprise National Competition Authorities that enforce competition law, focused on economic considerations, and National Regulatory Authorities that enforce and oversee the application of media law, focused not only on setting rules and limitations on the media market but also on considering non-economic elements such as plurality. In certain countries, ministries and government authorities can intervene in these assessments. There have been discussions on the need for cooperation between authorities, however, mostly at the international level. Thus, little is known about the current cooperation procedures at the national level. The article proposes a typology of cooperation at the EU member states level and the United Kingdom and introduces the concept of the ‘power pyramid’ to represent the hierarchical relationships between authorities. Cooperation proves that competition policy and media-specific regulation are intertwined and are complementary. Furthermore, the article shows that having more than one authority assessing media M&As leads to media pluralism being more often explicitly one of the criteria used in the assessments, and thus providing a more holistic approach.

Digital merger control: adapting theories of harm

ABSTRACT The rising concentration in digital platform markets raises the question to what extent traditional merger control is effective in these market environments. This contribution sheds a light on ways in which national competition authorities throughout the European Union and in the United Kingdom have adapted their analyses to the specific characteristics and complexities of digital markets. Through detailed case studies, I offer insights into ways in which horizontal, vertical and conglomerate theories of harm were made relevant to digital markets. At the same time, the case analysis shows areas in which competition law should further develop theories of harm in line with the insights into these market environments, particularly as regards ecosystem theories of harm.

Sped-Pro: The Impact of Rule-of-Law Backsliding on the Enforcement of (EU) Competition Law

Abstract The Sped-Pro judgment concerns an action for annulment of an EU Commission decision rejecting a complaint alleging the abuse of a dominant position by the Polish state-owned railway company PKP Cargo. In this judgment, the General Court for the first time established a direct link between systematic deficiencies in the legal order of a Member State and the ability of its competition authority to investigate and take enforcement action under EU law. The General Court addressed issues of the rule of law as an element of effective competition law enforcement and the case allocation principles between the Commission and National Competition Authorities (NCAs) under the decentralised enforcement system of Regulation 1/2003. The General Court now requires the Commission to examine, when handling complaints, whether an NCA can actually enforce EU law effectively.

EU Antitrust Fines and Managerial Liability – A Legal and Economic Analysis

Should companies that have been fined for EU antitrust infringements be allowed to recover such fines from their (former) directors or employees? On the basis of an analysis of the EU Treaty provisions, legislation and case law on antitrust fines, as well as of the economic nature of antitrust infringements and the economic rationale of fines on undertakings/companies, this paper argues that it would appear contrary to EU law to allow undertakings/companies that have been fined by the European Commission or by a national competition authority(NCA) for infringements of Articles 101 and/or 102 TFEU to recover such fines from the companies’ (former) directors or employees, as such recovery would significantly impair the full effectiveness of those fines. EU competition law, antitrust fines, deterrence, corporate liability, management liability, undertakings and companies, directors and employees, recovery of fines, incentives, agency problems

The Investigative Powers of the President of the Office of Competition and Consumer Protection and Directive (EU) 2019/1 of the European Parliament and of the Council: Selected Issues

Abstract Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018, to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market, obliges Member States to harmonize the law governing, amongst others, the powers of national competition authorities, including investigative powers. The Act aimed at the transposition of this directive was passed in Poland with a significant delay. This article analyses the provisions of the Act of 16 February 2007 on competition and consumer protection, in force on 4 February 2021 (the deadline for the transposition of Directive 2019/1), regulating the investigative powers of the president of the Office of Competition and Consumer Protection (UOKiK), and the changes in the relevant scope adopted by the Act of 9 March 2023 amending the Act on competition and consumer protection and some other acts. The research problem includes determining whether the regulations that were in force between 4 February 2021 and 20 May 2023 governing the investigative powers of the UOKiK president, in connection with proceedings for infringement of the prohibition of competition-restricting practices, were in line with the requirements of Directive 2019/1 and whether the abovementioned amendment act removed any existing discrepancies.

Taking aim at innovation-crushing mergers: a killer instinct unleashed?

Abstract The European Union (EU) has assigned competition policy an important role as part of an extensive new agenda to stimulate innovation, including by fostering the growth of small and medium-sized enterprises (SMEs). The ability of EU merger control to be receptive and responsive to innovation harms has therefore come under scrutiny, with some observers doubting its capacity to address innovation-crushing ‘killer acquisitions’ of innovative SMEs. This article reflects on several recent developments that have shaped the EU’s response to these doubts. Substantively, the more central role afforded to innovation considerations in the European Commission’s recent enforcement practice may well demonstrate its willingness to engage with innovation theories of harm in mainstream merger control going forward, although questions remain about the standards and methodology it can adopt under the EU Merger Regulation (EUMR). Jurisdictionally, the recalibrated approach to the Article 22 EUMR referral mechanism—assisted, in certain circumstances, by the new pre-merger information obligation for digital gatekeepers under Article 14 DMA—is capable of bringing an almost boundless range of cases before the Commission. The Towercast judgment casts the net further still, by confirming the potential for below-threshold mergers to face ex post reviews at the national level under the Article 102 TFEU abuse of dominance prohibition. The effect of these developments is that the Commission and national competition authorities may now be better equipped to unleash a killer instinct when faced with innovation concerns arising from killer acquisitions. However, an unwelcome pendulum swing towards over-enforcement risks untold harm to legal certainty, merger activity, and innovation itself.

The Elephant in the Room Turns Twenty: The Effect on Trade and the Enforcement of the EU Competition Law by the National Competition Authorities

The Elephant in the Room Turns Twenty: The Effect on Trade and the Enforcement of the EU Competition Law by the National Competition Authorities

Multiplicity of tools for antitrust and consumer protection in digital markets: the Italian experience and the road ahead

ABSTRACT This article discusses the role of national competition authorities in the digital sector in the lights of new legislative initiatives in Europe. It argues that the availability of multiple tools offers new opportunities to balance objectives such as flexibility, harmonization, timeliness and legal certainty, helping to enhance effectiveness. Further, it discusses the recent enforcement experience of the Autorità Garante della Concorrenza e del Mercato (AGCM), which has the dual mandate to enforce competition and consumer protection rules in Italy. The AGCM has used antitrust tools to empower consumers with choice, through a number of landmark digital cases on issues related to access and visibility in online marketplaces, refusal to deal and interoperability, data value and portability, privacy and advertising, and unfair negotiations. The AGCM has used consumer protection tools to guide consumers in the selection process, concluding numerous digital investigations on online architecture, misleading information, dark patterns and choice pressure.

RETRACTED: Digital Markets in EU Competition law

Abstract Online marketplaces’ expansion has completely transformed the way in which products and services are traded, benefiting both consumers and companies in a variety of ways. However, the decentralized nature of online markets, the problem of market domination, and the growing use of big data in digital marketplaces, has brought many difficulties related to competition law. Further complicating matters is the growth of platform-to-business (P2B) partnerships. This manuscript discusses recent competition cases involving online platforms and offers an outline of the difficulties faced by competition authorities in dealing with competition concerns in digital markets. The specific applicability of Articles 101 and 102 of the Treaty on the Functioning of the European Union to concerns involving digital platforms will be thoroughly examined. There will also be discussion of potential fixes for the concerns mentioned. The study outlines the raised concerns and offers potential solutions. Thus, it will provide a glimpse into a potential future strategy that the European Union competition authorities, including the Commission and National Competition Authorities, may adopt about online platforms.

Excessive Pricing in Pharmaceuticals under Article 102 TFEU

Abstract High pharmaceutical pricing practices in Europe have been increasingly on the radar of the European Union, academia and civil society as a risk to Member State health budgets. It is therefore hardly surprising that, in recent years, competition authorities have resuscitated the excessive pricing prohibition contained in Article 102(a) TFEU. Focusing on this phenomenon, this piece highlights the diverse ways in which the United Brands test has been applied in pharmaceuticals by conducting a comparative study of the decisional practice of national competition authorities. Several observations and arguments are then derived therefrom, demonstrating that, while difficult (most notably in respect to patent-protected products), competition authorities and courts have established sophisticated ways of determining whether a pharmaceutical price is excessive in the sense of Article 102(a) TFEU. These findings should encourage hesitant competition authorities and private plaintiffs to at least carry out preliminary investigations when they suspect excessive pricing in pharmaceuticals is taking place.

Incorporating privacy considerations into EU data-driven merger review

ABSTRACT In recent years, large digital companies have been gobbling up hundreds of smaller highly innovative firms involved in the collection and the processing of data. Some regulators, academics and practitioners have expressed concerns that Big Tech might use the increased market power and the greater concentration of consumers’ personal data stemming from data-driven mergers to harm consumers in the form of lower privacy protection. They wonder whether and to what extent the EU Commission and/or national competition authorities should take into account data protection considerations when reviewing transactions under the Merger Regulation and/or national merger control rules. The Commission’s decisional practice points towards three possible routes for integrating privacy concerns into competition analysis. Given their respective shortcomings, we explore the possibility of using the German Federal Cartel Office’s line of reasoning in its Facebook decision as a model for the incorporation of privacy considerations into EU data-driven merger analysis.

CARTELS IN THE DIGITAL ERA: CHALLENGES AND OBSTACLES

Cartels agreements are contracted between market participants with the aim of hindering, restricting or distorting competition. The paper first provides a definition of cartel agreements and their categorization, with reference to the most common types of cartel agreements. The author elaborates on the price algorithm, as one of the most prevalent forms of competitors' collusion in the digital domain. Given that the digital age provides infinite opportunities for contracting illegal agreements and competition distortion, the author presents the challenges and obstacles enountered by national competition authorities in various countries, and describes how they established effective mechanisms to combat cartels. In particular, the author refers to the amended German Act against Restraints of Competition, by means of which Germany became the first country in Europe to introduce radical measures in the battle against technological giants, whose economic power frequently exceeds the power of states. Finally, the author underscores the need for the states to work together to combat digital cartels.

(Dis)Respect for Fundamental Rights in EU Competition Law Enforcement Proceedings Before National Authorities: In What Way Does Article 3 of the ECN+ Directive Prove To Be too Open-Ended?

The ECN+ Directive gives national competition authorities more power in order to make them more effective enforcers of EU competition law. However, Art. 3 of the ECN+ Directive counterbalances this by requiring that appropriate safeguards are in place to ensure that undertakings’ fundamental rights are respected in EU competition law enforcement proceedings. The aim of this article is to critically reflect on the requirements of the ECN+ Directive with respect to safeguards for the fundamental rights that fall within the ambit of Art. 3 of the ECN+ Directive and the implementation of those requirements by EU Member States. To this end, the article first provides an overview of this provision. Second, by means of an overview of national laws, it analyses whether the very general Art. 3 is capable of harmonising the safeguards in question. A set of comparative examples from EU Member States, including in particular examples Poland and the Czech Republic, shows how the wording of Art. 3 invites national legislatures to misuse the potential of this provision. This results in undertakings continuing to face disparity in the extent to which their fundamental rights are protected in competition law enforcement proceedings before the various national competition authorities.

Article 3 of Regulation 1/2003: a historical and empirical account of an unworkable compromise

Abstract Combining historical, conceptual, and empirical approaches, this article studies one of the most fundamental, yet underexplored, questions surrounding Regulation 1/2003: What limits European Union (EU) competition law places on the adoption and application of national competition and other laws? The relationship between EU competition and national laws was supposedly settled with the adoption of Regulation 1/2003. There are two exceptions to the rule in Article 3(1), under which national competition authorities and courts must apply EU competition law when applying their national competition laws, with primacy for EU provisions: Article 3(2) leaves room for ‘stricter’ national competition rules on unilateral conduct, and Article 3(3) for national rules pursuing a ‘predominantly different objective’. The solution offered by Article 3 is not workable. Through a historical study of the political discussions preceding Article 3’s adoption, a conceptual analysis of potential interpretations, and a systematic content analysis of French and German practice, this article reveals the lack of a dividing line between the notions of national competition laws and other laws. It calls for reform of Article 3 to ensure that conduct that should be governed by EU law is not assessed under national rules and standards that differ from one Member State to another.

Antitrust Fines and Limitation Periods After the Implementation of Directive (EU) 2019/1 Throughout Member States: Focus on French and Polish Perspectives

The article focuses on the issue of implementation of Directive 2019/1 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market. It discusses recent developments in competition law with a special focus on fining powers of the national competition authorities (NCAs). The article compares different approaches adopted by EU Members States, with a special focus on Poland and France, to implement provisions of the ECN+ Directive referring to antitrust fines and limitation periods. The article sheds light on the process of implementation and problems encountered by national legislators. This article analyses steps taken towards uniformity in this area of law within the EU. It contributes to the research on how NCAs approach the enforcement of competition law and ensure the deterrent effect of antitrust fines. The conclusions cast doubt on the effectiveness of raising the level of fines as a means of enhancing enforcement if it is not supported by other measures such as a coherent fining policy or sanctions ensuring compliance. The methodology used in the article includes descriptive research based on an analysis of relevant provisions of national law and EU law relating to fining powers of NCAs.

A new regime for below threshold mergers in EU competition law? The Illumina/Grail and Towercast judgments

Abstract The Illumina/Grail and Towercast rulings of July 2022 and March 2023 create new avenues for the control of concentrations below the European Union (EU) and national turnover thresholds. These new avenues concern (i) a referral to the European Commission by a national competition authority (NCA) and (ii) a review under the EU provision on abuse of dominance by an NCA. In both cases, the rationale seems predominantly based on the need to have effective competition law oversight on the so-called killer acquisitions of emerging competitors and undertakings that aim to extend their dominance by acquiring existing (small but) effective or particularly innovative competitors. The obvious drawback of increasing possibilities of the ex-post merger control is that this comes at a cost to legal certainty and the one-stop-shop principle that has characterized the EU merger control so far. Especially the Towercast judgment calls into question the structure, purpose, and merits of merger control in the EU over the past 35 years. Looking forward, much will depend on how the NCAs and the European Commission will use their new-found powers; some reorganization of merger vetting procedures at the national level may be required. However, it appears likely that the system of merger control in the EU will come to focus more sharply on mergers that raise serious competitive concerns and less on providing a system of comprehensive administrative review, based mainly on size. This may also provide opportunities to rationalize the application of public enforcement capacity.

Big tech’s acquisition challenge to EU merger control

ABSTRACT In recent years, there has been a tidal wave of merger filings involving large digital firms acquiring low turnover but high value start-ups. The vast majority of those transactions have flown under the radar of EU and National Competition Authorities and, among the few which have been reviewed, none has been blocked. Competition scholars wonder whether there has been a systematic bias towards under-enforcement against acquisitions of start-ups by already dominant tech firms. Some Member States are calling for a reform of the EU merger control’s notification system and an adaptation of the substantive test to effectively address cases of potentially predatory acquisitions.

Enforcing the Digital Markets Act: institutional choices, compliance, and antitrust

Abstract This article discusses how the European Commission can achieve the goal of effectively implementing the Digital Markets Act. Based on legal and economic reasoning, we highlight the important role of the gatekeeper’s compliance report, and discuss how to incentivize gatekeepers to write useful reports. In addition, we develop recommendations regarding the internal organization of the Commission, the prioritization of cases, and how to effectively use the concurrent enforcement powers of the Digital Markets Act and Article 102 of the TFEU. We illustrate the principles we develop using four different EU antitrust cases. Furthermore, we discuss coordination between the Commission and National Competition Authorities and the need to already develop an independent evaluation process for the Digital Markets Act.

Glosa do wyroku Sądu Unii Europejskiej z 9 lutego 2022 r. w sprawie T-791/19 – Sped-Pro S.A. przeciwko Komisji Europejskiej – „Zasada państwa prawnego a współpraca krajów członkowskich Unii Europejskiej w obszarze ochrony konkurencji”

The aim of this case comment is to discuss whether it was justified that the General Court in its judgment dated 9 February 2022 in the case Sped-Pro (T-791/19) annulled the European Commission’s Decision No. C(2019) 6099 final dated 12 August 2019 r. (case AT.40459) connected to the potential abuse by PKP Cargo of a dominant position on the market for rail freight in Poland. In this judgement, the General Court argued on the basis of the rule of law principle and applied analogically the judgment on the European Arrest Warrant. In this regard, the analysis starts with the rule of law principle, the judicial independence of courts and administrative authorities, the obligation of loyal cooperation between European Union and member states to ensure fulfilment of the obligations arising out of this Treaty, both in the light of Union law and European courts case law.The next part of this case comment attempts to assess whether the General Court was justified in analogically applying the judgement dated 25 VII 2018 r. C-216/18 PPU Minister for Justice and Equality on the European Arrest Warrant in the field of European policy on competition. The analysis ends with the description of the practical consequences of the Commission’s finding that the President of UOKiK and the Court of Competition and Consumer Protection are not independent. In the last part of the text, the author also indicates the consequences of the proper implementation of the Directive ECN+ for analysing the scope of independence of the President of the Office of Competition and Consumer Protection. The author indicates the necessity to separate in future analysis the issue of the independence of the President of the Office of Competition and Consumer Protection (national administrative competition authority) and the Court of Competition and Consumer Protection, which in Polish is a common court.

Survey—Competition Law Enforcement in the Fashion and Luxury Sector

Following the technological development and the increase of online sales triggered by the Covid-19 pandemic, the fashion and luxury industry has grown enormously, becoming the fourth largest sector of the global economy.1 With this development, the relevance of competition law and the awareness thereof has also increased significantly. The fashion and luxury industry has been facing increased exposure to competition law enforcement over the past years with significant impact on the sector’s business models.2 This survey sets out the European Commission’s (Commission) and national competition authorities’ (NCAs) enforcement practices of Article 101 of the Treaty of the Functioning of the European Union (TFEU) with a focus on 2020–2022 and under consideration of the latest legislative changes (Section II). Article 101 TFEU prohibits anticompetitive agreements between competitors, referred to as horizontal agreements, as well as between companies operating at different levels of the distribution chain, referred to as vertical agreements. The focus is particularly on vertical agreements between brand owners and their distributors and resellers, as those agreements play a key role in the fashion and luxury industry. An overview of the recent decisional practice over the past 3 years is also provided with regard to Article 102 TFEU which prohibits the abuse of dominant position but which played so far no major role in the fashion and luxury industry (Section III). Section IV addresses the recent developments with regard to transactions subject to merger control rules in the fashion and luxury sector.