National Competition Authorities Research Articles

Struggling with Article 101(3) TFEU: Diverging approaches of the Commission, EU Courts, and five Competition Authorities

The decentralized enforcement regime of EU competition law is based on the assumption that the obligation to apply the same Treaty provisions is sufficient to ensure a uniform administration of the law. This paper questions this assumption. Based on a systematic analysis of a large database of cases, it presents empirical evidence indicating that the Commission, EU courts and five national competition authorities have followed very different interpretations of the law when applying Article 101(3)TFEU. The paper uses the debate over the types of benefit that can be examined under Article 101(3) TFEU as an illustrative example of the struggle between the different competition authorities in shaping the future of EU competition policy.

The French Competition Authority Holds That Platform Bans Outside the Luxury Sector May Not Breach Competition

The decision handed down by the French Competition Authority in the Stihl case is one of the first online sale restraint cases decided by national competition authorities of EU Member States after the judgment the Court of Justice of the EU rendered in Coty Germany. Stihl is noteworthy because it clarifies some issues that were left unsettled by Coty Germany. Importantly, the French Competition Authority has ruled that the principles set out in Coty Germany as for the competition assessment of online sales ban applies beyond the luxury sector. It also held that, under certain circumstances, a supplier can legitimately prohibit distributors admitted to its selective distribution network from selling its products from third parties’ e-commerce platforms (platform bans).

The Implementation of the ECN+ Directive in Hungary and Lessons Beyond

In order to facilitate national competition authorities (NCAs) in their application of EU competition rules, the EU legislator adopted Directive 2019/1/EU. The Directive’s aim is to empower the competition authorities of the Member States to be more effective enforcers of competition law and to ensure the proper functioning of the internal market. The so-called ECN+ Directive introduces minimum harmonisation rules allowing competition authorities to have common investigative, decision-making (notably fining decisions) and enforcement powers. The Directive, furthermore, sets minimum safeguards for the NCAs’ independence, accountability and resources as well as harmonizes leniency programmes including the coordination of national leniency programmes with each other and with that of the European Commission. This paper critically analyzes the legal and policy developments that paved the way for the adoption of this Directive. Moreover, it examines the changes the implementation of the Directive is likely to generate in current Hungarian law and policy of competition protection. The focus of the paper’s assessment is on the institutional aspects of the Directive and the enforcement of Articles 101 and 102 TFEU, in particular the mechanisms for ensuring independence and accountability of the NCAs. Through the assessment of the Hungarian implementation, the paper aims to shed light on a broader context of the Directive and the enforcement of EU competition law in EU Member States. The paper shows that the implementation of the Directive may fail to translate into (more) effective enforcement without an effective institutional capacity on the side of the NCAs, and in the broader legal and constitutional context of competition law and its multilevel enforcement

EU Merger Control

This in-depth analysis covers the history of the EU Merger Control as well as its jurisdiction, thus focusing on the European Commission Merger Regulation (ECMR) and its importance and application in complementing Articles 81 and 82 of the EC Treaty (Treaty of Rome) which by themselves were considered inadequate to control mergers. The ECMR gives the European Commission (EC) jurisdiction to cover mergers, acquisitions and full-function joint ventures with economic impact beyond the territory of a Member State. The study also offers a substantive assessment as to the potential competition impediment and existing procedural issues and judicial reviews of EU merger decisions. Effectively, the ECMR provides a ‘one-stop shop’ to the benefit of the EC who has exclusive jurisdiction to examine concentrations with a Community dimension to the exclusion of national competition authorities (NCAs) in the Member States. Where the relevant jurisdictional thresholds are not met, NCAs will examine concentrations under their own national merger control rules. The mechanisms put in place by the ECMR to maximise the benefits of this 'one-stop-shop' principle thus ensure that the best-placed authority reviews a concentration. Ultimately, the Commission has the power to block those mergers that it determines would ‘significantly impede effective competition, in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position’.

To Discriminate or Not to Discriminate? Personalised Pricing in Online Markets as Exploitative Abuse of Dominance

The advent of big data analytics has favoured the emergence of forms of price discrimination based on consumers’ profiles and their online behaviour (i.e. personalised pricing). The paper analyses this practice as a possible exploitative abuse by dominant online platforms. The paper argues that, in view of its “mixed” effect on consumers’ welfare, personalised pricing requires a case-by-case assessment under EU competition law and thus it should not be banned a priori. However, in view of the recent case law of the European Court of Justice on price discrimination, the National Competition Authorities (NCAs) and the European Commission would face a high burden of proof to sanction this conduct under Art. 102(c) TFEU. Finally, the paper argues that, due to its case-by-case approach, competition law seems more suitable than omnibus regulation to tackle the negative effects that personalised pricing could have on consumers’ welfare. In particular, an NCA/the European Commission could negotiate with online platforms different kinds of behavioural commitments: transparency requirements, limits on data collection/user profiling, rights to opt out of personalised pricing and the obligation to share customers’ data with competitors could significantly tame the risks of personalised pricing.

Új játék, új szabályok: Az e-kereskedelemmel kapcsolatban alakuló európai versenyjogi gyakorlat

The rapid development of e-commerce leads to specific new phenomena in the distribution chain of goods and services, businesses are trying to adapt this new distribution channel to their products and existing distribution methods and make use of it or to restrict its use. The intensity of the development of e-commerce in Europe is not uniform. Due to the diff erent characteristics of national markets and their structure, certain features of e-commerce are more problematic in some Member States than elsewhere. It can also be observed that where e-commerce is more widespread, national competition authorities are also more active. The purpose of this study is to comprehensively review the current European competition regulatory framework and cases concerning the vertical aspects of online distribution of goods and to present the emerging European jurisprudence and competition policy in this context. The main conclusion of the study is that currently many issues related to e-commerce, which are relevant from the competition law point of view, are still open. In many cases, it is unclear whether the restraints observed distort competition at all, and whether the benefi ts may compensate consumers for the disadvantages caused by restrictions. Th e future assessment of these issues and the responses given to them at European level are, to a large extent, influenced by the competition law enforcement of competition authorities of the Member States and the current review of vertical rules.

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.

The Application of Extraterritoriality Principle in ASEAN Economic Community Era: Challenge and Feasibility

The Application of Extraterritoriality Principle in ASEAN Economic Community Era: Challenge and Feasibility Dr. jur. Udin Silalahi, SH., LL.M Abstract Most of the ASEAN member states (AMSs) have their own competition law, with the exception of Cambodia. Competition is clearly an important aspect of ASEAN?s vision of regional economic integration. Competition law ensures that all entities do their business activities in every country of AMSs. Every undertaking shall not harm the competition, but in fact, an undertaking could harm the competition in the domestic market through cross-border anticompetitive practices. The question is whether cross-border anticompetitive practices occur in the ASEAN region and whether national competition law can be applied to foreign companies with domiciles abroad. There is no ASEAN regulation about this issue because there is no specific law that regulates cross-border anticompetitive practices. In the AEC era, there is a possibility of cross-border anticompetitive practices. This article discusses and elaborates on the challenge and feasibility of the application of extraterritorial jurisdiction in the ASEAN region and how it should be applied by national competition authorities in the ASEAN region Full Text: PDF DOI: 10.15640/jble.v7n1&2a1

Implementing the ECN+ Directive in Lithuania: Towards an Over-enforcement of Competition Law?

In 2018, the ECN+ Directive was issued with a goal to grant stronger powers to national competition authorities while enforcing competition law. This article analyses how the legal provisions of the ECN+ Directive have already been implemented in the Lithuanian Law on Competition, and considers what further changes may need to be made in order to fully implement the ECN+ Directive in the national law. It elaborates on the legal challenges while implementing the aforementioned Directive and provides a critical view on some of the amendments that have already been made.

Competition Law Enforcement in Italy after the ECN+ Directive: the Difficult Balance between Effectiveness and Over-enforcement

Almost fifteen years after its adoption, the system of decentralized enforcement laid down in Regulation 1/2003 has shaped competition law in a way that could hardly be predicted, in terms of both magnitude and quality of the activities of National Competition Authorities. More recently, the so-called ‘ECN+ Directive’ was adopted to address the shortcoming of such system, namely a perceived lack of independence and accountability of several NCAs and a certain degree of divergence within the European Competition Network. In this scenario, the Italian Competition Authority has frequently been depicted as a well-equipped, independent and effective enforcer and – with a few notable exceptions – the international debate concerning such reform has mostly overlooked its possible impact within the Italian legal system. This paper aims to assess whether, and to what an extent, the ECN+ Directive should affect the enforcement of competition law in Italy and, in particular, those fundamental guarantees of independence and effectiveness that form the core of the rule of law in the field of EU competition law.

Independence of National Competition Authorities – Problem Solved by Directive 2019/1? Example of the Antimonopoly Office of the Slovak Republic

This paper analyses the independence of National Competition Authorities under legislation before Directive 2019/1 and after Directive 2019/1. The aim of the paper is to find out whether Directive 2019/1 addresses the problem of independence properly or not. In order to answer the question, it discusses what does the term ‘independence’ actually mean, especially in the view of scholars. Several aspects of independence are identified. Subsequently, this paper zooms in on what are current imperfections when it comes to the independence of National Competition Authorities. The Antimonopoly Office of the Slovak Republic (AMO) is discussed in particular. The paper then finds out what are the requirements set out by Directive 2019/1 and whether these requirements address the imperfection identified above. The paper confirms that these imperfections are covered only partially

Cumulative Enforcement of European and National Competition Law and the Ne Bis In Idem Principle Case Comment to the Judgement of EU Court of Justice of 3 April 2019 Powszechny Zakład Ubezpieczeń na Życie S.A. v Prezes Urzędu Ochrony Konkurencji i Konsumentów (Case C-617/17)

The judgement of EU Court of Justice in response to the request for a preliminary ruling by the Polish Supreme Court confirms that the principle of ne bis in idem, enshrined in Article 50 of the Charter of Fundamental Rights of the European Union, must be interpreted as not precluding a national competition authority from fining an undertaking in a single decision for an infringement of national competition law and for an infringement of Article 82 EC (now Article 102 TFEU). In that regard it can be concluded that the judgement does not have anything new and is just a confirmation of settled case-law. Unfortunately, this case represents a lost opportunity to review the ‘double barrier’ doctrine and to clarify if the relationship between European and national competition law is one of ‘bilateral specialty’ or not.

The EU Court of Justice Clarifies the Role of the Full-Function Criterion in the Interaction Between Article 3(1)(b) and 3(4) of the EU Merger Regulation

Case note: C-248/16 Austria Asphalt GmbH & Co OG v Bundeskartellanwalt, Judgment of the Court of Justice of the European Union of the 7th of September 2017. Joint venture is a common business strategy that provides companies with benefits in scale economies, R&D, operational efficiencies and synergies. Joint ventures can be potentially harmful for the state of free competition in a market if they coordinate with their parent companies or if their operation can restrict access to the market for other competitors. Within the Internal Market, joint ventures fall under the scrutiny of two pieces of competition legislation in a non-cumulative way: the EU antitrust provisions and the EU Merger Regulation (EUMR) under Article 3(1)(b) and 3(4). Before the Austria Asphalt preliminary ruling, the Commission, despite its ambiguous decisional practice, considered those two paragraphs to constitute two different jurisdictional criteria applying to two different types of notifiable transactions. In Austria Asphalt the CJEU examined the correlation of those two paragraphs. It interpreted Article 3(4) as a restriction of Article 3(1)(b) by considering that the full-function criterion set by Article 3(4) should apply to all concentrative joint ventures: those newly created by a transaction as well as to those resulting from a change in the control of an existing company. In practice, the CJEU’s view limits the one-stop shop principle of the EUMR in favour of national competition authorities.

An EU Competition law Analysis of Online Display Advertising in the Programmatic Age

Online display advertising, whereby publishers display visual-based advertisements (e.g. texts, images or videos) on their website against remuneration, represents a large source of revenues for publishers, large and small, offering valuable content to Internet users. But for online display advertising, many such publishers would not subsist, and the Internet would be impoverished. Display advertising is also critical to advertisers, in particular when they seek to raise “brand awareness” among consumers. Because of its vital importance to advertisers and publishers, healthy competition in the advertising ecosystem is desirable. Yet, despite the spectacular growth of online display advertising, the picture is not entirely rosy. In the “programmatic” era, where ad inventory is sold through computerized decision-making processes managed by “ad tech” intermediaries, the online display advertising sector is characterized by a high degree of opacity, and publishers and advertisers have expressed concerns about the so-called “ad tech tax”, i.e. the large and opaque fees applied by various intermediaries. Moreover, while the ad tech sector comprises a wide variety of intermediaries, its main segments are dominated by Google, with concerns being expressed that it may engage in both exploitative and exclusionary strategies. It is thus not surprising that several national competition authorities are looking closely at the competitive dynamics in online advertising, and in November 2018 the French Competition Authority has announced that it would open proceedings in this area. Even so, at this stage, there is little information in the public domain regarding the competition issues that may arise in the display advertising sector and there is no scholarly paper devoted to this subject. Against this background, the purpose of this paper is to explore the display advertising ecosystem and discuss the competition law issues that may arise in this sector as a result of Google’s control of the ad tech value chain. The paper describes the display advertising ecosystem with a focus on the technologies and tools comprising the ad tech market. It then identifies the competition law issues that may arise in the ad tech markets. It first discusses market definitions and shows that Google may be dominant on several ad tech markets, and then describes the way in which programmatic display advertising functions in practice. Finally, the paper identifies several Google conducts which may amount to abuse of a dominant position in breach of Article 102 TFEU.

Detecting Market Power Along Food Supply Chains: Evidence and Methodological Insights from the Fluid Milk Sector in Italy

Concerns about the functioning of food supply chains have been raised by the European Commission over past years, calling for more effective and coordinated action by National Competition Authorities (NCAs). To fill this knowledge gap, an equilibrium displacement model is used to screen conduct along the supply chain, combining the advantages of asymmetric price transmission (APT) studies and structural models. The test was carried out on the Italian fluid milk supply chain following market monitoring action by the NCA. Three periods (1996–2003; 2000–2008 and 1996–2008) have been examined, finding imperfect competition over 1996–2008 and 2000–2008, while no conclusions may be drawn over the time span 1996–2003. In the testing process, the model’s peculiarities and certain limitations emerged, and related suggestions for its improvement are discussed. This approach may be used as a preliminary “fast” test for competition policy screening, as a complement to other methodologies. However, further theoretical and empirical model validation is necessary.

Antitrust Price Remedies May Facilitate Collusion in Global Commodity Markets

Difficulties of competition policy at the global level are widely debated by academics and policy-makers. However, recent discussions do not pay enough attention to those instruments of antitrust enforcement that target local companies in domestic markets. This type of antitrust price remedies becomes popular in Russian competition law enforcement towards large exporters that dominate in home markets. In this article we explain the circumstances under which antitrust price remedies imposed by national competition authorities on one exporter in a determined country may limit competition in global commodity markets. In particular, antitrust price remedies, which impose the cap on domestic prices using export or global prices of the commodity as a benchmark, increase the sustainability of collusion, either explicit or tacit. Being primarily designed to support domestic buyers, antitrust price remedies may also increase domestic welfare by facilitating collusion abroad and creating additional profits for large national producers.

Recent Developments of the National Enforcement of EU Competition Law

This article provides a practical overview of the most recent and interesting developments arising from the national enforcement of EU competition law. It is not only the preliminary rulings by the Court of Justice of the European Union that highlight interesting competition cases taking place at national level. For example, as will be discussed in this article, other important developments such as the recognition of compliance programmes and the first pricing algorithm case also occurred at national level. It appears that national competition authorities (NCAs) are more opened to ensure consistency between competition and other policies, such as the protection of personal data (e.g. the Facebook case in Germany) and the promotion of small and medium sized enterprises. NCAs can more rapidly adapt to the changing competition policy context, as can be seen, for example, in their treatment of mergers involving targets not possessing high enough turnover but having significant market potential. The ECN Directive provides NCAs with a minimum common tool-kit and effective enforcement powers for the implementation of EU antitrust rules in many important areas. However, there are still significant areas (e.g. regarding the admissibility of criminal evidence and multiple filings) where further improvements would be desirable in the future.

Where do we stand after Coty?

An area of uncertainty, and with differences of approach between competition authorities, is whether brand owners can prevent distributors from reselling their products via online marketplaces such as Amazon. This article considers the European Court of Justice's judgment in Coty and its implications for distribution arrangements, as regards both the application of Article 101 TFEU and the Vertical Restraints Block Exemption Regulation to selective distribution arrangements and restrictions on internet sales via third-party platforms. It also considers the European Commission's response to the Coty judgment (including its application to non-luxury goods) and the approach taken by national courts and competition authorities.

The Right of Defence in the Decentralized System of EU Competition Law Enforcement: A Call for Harmonization from Central and Eastern Europe

The article compares the application of the right of defence in competition law proceedings by seven National Competition Authorities (NCAs) of Central and Eastern Europe (CEE). In particular, the article focuses on four sub-rights that are part of the right of defence: right to be informed; right to access the file; privilege against self-incrimination (PASI) and legal professional privilege (LPP). The article shows that the NCAs selected as case studies generally provide lower procedural guarantees in comparison to DG Competition of the European Commission. The findings of the article are relevant in view of the Directive aiming at harmonizing the powers of NCAs (‘ECN Directive’). The legislation aims at strengthening the investigatory tools of NCAs, while it pays limited attention to the procedural guarantees followed by NCAs. In view of the diverging application of the right of defence by the NCAs selected as case studies, the article challenges such policy choice, claiming that stronger investigative powers should be counterbalanced by a more homogenous application of the right of defence by NCAs of the EU Member States.

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.