Showing papers in "Journal of European Competition Law & Practice in 2019"

Exploitative Conducts in Digital Markets: Time for a Discussion after the Facebook Decision

Abstract: The recent interim ruling of the Dusseldorf Higher Regional Court in the Facebook case shows the difficulties that a competition authority might face when it comes to sanctioning exploitative abuses in digital markets. - Rather than adopting infringement decisions, competition agencies should conclude behavioural commitments with the dominant online platform. - Competition authorities may borrow from the European data protection regime a number of behavioural remedies to tackle forms of privacy degradation unilaterally imposed by online platforms.

Article 102 and Exclusivity Rebates in a Post-Intel World: Lessons from the Qualcomm and Google Android Cases

Abstract: The paper summarises the state of the law on exclusivity rebates after the Court of Justice’s ruling on Intel. It concludes that the Intel judgment sets out a framework for the appraisal of exclusivity rebates within the European Union but leaves a margin of appreciation for enforcing authorities in deciding which tools to use to prove an infringement. The recent decisions by the European Commission in Qualcomm (Exclusivity Payments) and Google Android provide good illustrations of which tools enforcement agencies can use to prove the capability of exclusivity rebates to foreclose competition.

Legal Tests in EU Competition Law: Taxonomy and Operation

Abstract: • There is not a unique legal test in EU competition law. There is conduct that is prima facie unlawful irrespective of its effects, and conduct that is lawful. In between, some practices are prohibited where actual or likely effects can be shown. • This paper seeks to map the various tests by which conduct is assessed under Articles 101 and 102 TFEU and to explain the rationale and operation in practice of these tests. • The analysis explains, inter alia, how firms can rebut the presumption that practices are capable of having restrictive effects in light of the relevant economic and legal context of which they are a part. • The paper also explains why indispensability is an element of the legal test in the context of some practices (for instance, refusals to deal) but not others (for instance, 'margin squeeze' and tying conduct). In this sense, it is submitted that, as the law stands, the nature of the remedy determines the application of one test or the other.

Closeness of Substitution for ‘Big Data’ in Merger Control

Abstract: Recent merger cases involving the transfer of control over “big data” concluded that these mergers would not lead to competition problems because there was a sufficient number of other data sources available to the various players in the market. These merger cases implicitly accepted, but never carefully analysed, that these big datasets were close substitutes. As such big data is often not traded, one should look at the big data value chain and assess the closeness of substitution between such big datasets by evaluating to what extent the users of the insights derived from them view those insights as close substitutes. This new approach is illustrated through the examples of the Microsoft/LinkedIn and the Facebook/WhatsApp mergers.

Individual Behaviour, Regulatory Liability, and a Company’s Exposure to Risk: The Deterrent Effect of Individual Sanctions in UK Competition Law

Abstract: UK competition law authorities primarily target companies. Such a strategy exposes companies to the risk of liability and loss, and its lack of effectiveness in deterring anti-competitive behaviour has led to the introduction of individual sanctions, which were greatly expected to deter wrongdoing directors. They however have not achieved the desired deterrent effect on wrongdoing directors, since there have been few cases in which individuals have been targeted. This illustrates either that serious obstacles faced by UK competition law authorities in cracking down on individuals, or that there is considerable reluctance from both these authorities and the courts to enforce the tools and convict. In either scenario, companies are left with no option but to mitigate the risk arising from the anticompetitive behaviour of directors.

Changing South Africa's Competition Law Regime: A Populist Departure from International Best Practices

Abstract: The Amendment Bill alters key provisions of the South African Competition Act focusing specifically on the redistribution of wealth and transformation of ownership in lieu of pursuing traditional antitrust goals. The Bill provides for greater ministerial intervention at the initial stage of a merger (based on national security), during the merger investigation (based on public-interest grounds) and broadens the right of appeals to parties outside the merger control review. The Bill lowers the standard that the South African Competition Commission must meet to prosecute cases and foreshadows a risk of increased third-party interventionism more generally. The departure from a traditional substantial lessening of competition (SLC) test to an adverse effects-based test, which takes public interests considerations into account, is likely to result in the injection of greater subjectivity into the decision-making process and parties’ increased difficulty in self-assessment of conduct particularly in relation to dominant firms.

Price Pressure Indices, Innovation, and Mergers Between Commonly Owned Firms

Abstract: The potentially anticompetitive effects of common ownership are being discussed controversially. While the US agencies still display reluctance, the Commission has already invoked common ownership has part of a theory of harm in Dow/DuPont and Bayer/Monsanto. In our paper we focus on how common ownership can bear on the application of price pressure indices in unilateral effects analysis of horizontal mergers between portfolio companies. We do not assess whether the underlying premise of common ownership to lead to an internalization of shareholders’ expectations of high overall market returns is convincing. Rather, we hypothesize such common shareholder influence. Our main conclusion is that common ownership should still not be considered a general circumstantial factor indicating competitive harm with respect to post-merger price increases or effects on innovation competition. Rather, it calls for case-by-case analysis.

Tackling Algorithmic-Facilitated Tacit Collusion in a Proportionate Way

Abstract: For the use of price-matching algorithms to facilitate exploitative price coordination the common adoption by all rival online-sellers may be required. At the same time, this common course of conduct may be justified by the need to reduce the risk of being undercut and so being unable to recover fixed costs. Ultimately, antitrust enforcers should rely on established price-cost tests in order to establish when the use of such algorithms is illegitimate. The paper also questions whether e-marketplace platforms should face antitrust scrutiny if retailers use algorithms.

Daimler/BMW/Car Sharing JV: New Mobility and the Platform Economy

Abstract: The Commission conditionally cleared the creation by subsidiaries of BMW and Daimler of six joint ventures in the field of new mobility and, in particular, in (free-floating) car-sharing services.