Market and Competition Law Review

Editorial

Laura Zobolli — 2023-10-25

Recalibrating the compass: towards effective competition law enforcement on mixed markets

Jasper P. Sluijs — 2023-10-25

The undertaking, a cornerstone of EU competition law, has consistently been approached as a functional concept. Any entity engaged in economic activity should be considered an undertaking, thereby ensuring consistent application of competition law across competitors. However, current national enforcement practice reveals a departure from the functional approach to the undertaking on mixed markets, where public and private firms compete. Particularly, allegedly anticompetitive behaviour by public entities has evaded competition law scrutiny in the Netherlands, because competition law was found not to apply to these public entities. Drawing on a jointly interpreted string of CJEU cases in competition law and state aid law – which this article coins as the “Compass doctrine” – the Dutch competition authority and courts found that economic activity by public entities is exempt from competition law when connected to the exercise of public power. Analysis of the Compass doctrine cases reveals how a number of case-specific outcomes taken together have allowed for an undermining of the functional approach to the undertaking. It is demonstrated how the sum of the Compass doctrine is larger than its individual parts, which seems to have been unforeseen by the CJEU. This article demonstrates how the Compass doctrine has two adverse consequences: (1) because it undermines the functional approach to the undertaking as the subject of competition law, it impedes effective enforcement; (2) the Compass doctrine enables public firms to behave anticompetitively on mixed markets. The CJEU never anticipated the advent of commercial behaviour by public entities, who with the Compass doctrine in hand can infringe competition law with impunity. Experiences in the Netherlands to this effect should be regarded as a canary in the coal mine for mixed markets across the EU. Therefore, it is incumbent on the CJEU to revisit the Compass doctrine in future cases, which may follow from preliminary references. This article recommends the CJEU to (re)emphasize that once an entity is engaged in economic activity, it can no longer escape competition law scrutiny by being connected to the exercise of public authority. To protect the level playing field on mixed markets, all economic activity should explicitly be subject to EU competition law.

The value of liability tests in abuses of dominance

Mariateresa Maggiolino — 2023-10-25

Currently, there is a debate in the European Union regarding the European Commission’s approach in assessing the behaviour of dominant firms. It is argued that as digital ecosystems become more powerful, there is increasing pressure on the Commission to act against their practices, regardless of whether they meet the test established by the European Courts to find out liability. This article aims to demonstrate that the Commission’s approach, which occasionally deviates from liability tests, is legitimate, because it aligns with the effects-based notion of abuse and the teleological interpretation of treaty rules. Moreover, this article maintains that if such liability tests were unalterable, their individual components would be elevated to essential elements of the concept of abuse, which directly contradicts the current interpretation of this notion. Finally, the article asserts that the liability tests used thus far represent a collection of factual circumstances that hold substantial evidential value in demonstrating the effects of dominant firms’ practices. It however acknowledges that, while this evidential value has remained high over time, it may still vary depending on the circumstances. This is why the particular circumstances that make up the elements of these tests can be substituted with alternative circumstances, depending on the specific scenario being analysed.

Unbalanced power relationship in digital markets between platforms and their complementors: can consumers come to the rescue?

Jeanne Mouton — 2023-10-25

Acknowledging the unbalanced power relationship between online platforms and their complementors, the economic dependence relationship and fear of retaliation may prevent complementors from fighting against economically harmful practices implemented by online dominant platforms. The economic dependence relationship and fear of retaliation are illustrated by past antitrust cases on both sides of the Atlantic. Having set the scene in which complementors might be disincentivised to take up legal actions facing anticompetitive practices, this paper takes the example of two distortions of information practices, implemented by dominant online platforms, that are harmful to both consumers and complementors: dark patterns and ranking biased by fake reviews. Under the angle of consumer empowerment (through direct complaints) and consumer-oriented enforcement (relying on competition law, the UCPD, and the Digital Services Act Package), this paper shows that consumer empowerment and consumer-oriented enforcement of distortion of information practices can produce a positive externality for complementors. Sole claims for damages have the lowest probability of producing a positive externality unless they act as a signal against an obligation non-implemented by an online platform. Injunctions and commitments have the highest probability of producing a positive externality for complementors. However, one of the constraints of this proposal may be the limited detectability of these practices by consumers.

Limits, limitations, and outer boundaries of antitrust: censorship, free speech, and dominance

Jan Polański — 2023-10-25

Big Tech undertakings have much power over what information becomes available online. Concerns have been voiced in this context that some of their content moderation practices may amount to private censorship and a restriction of free speech. Antitrust enforcement could be looked at as one of possible remedies to the risks associated with the use of market power to stifle free speech, since the prohibition of abuse of dominant position is very open-textured. Still, even assuming that an undertaking is dominant, antitrust has its limits and limitations which put free speech cases closer to the outer boundaries of antitrust rather than its core. This article explores those outer boundaries of antitrust and speculates whether private censorship could be framed as an abuse of dominant position. To do so, it discusses the limits and limitations of antitrust and then provides five perspectives from which private censorship could be looked at under antitrust. It concludes that while free speech might seem to constitute a political interest of no relevance to orthodox antitrust enforcement, it is possible to consider it under antitrust to relieve some social tensions generated by mostly unchecked power of large undertakings over speech. While a classic consumer welfare standard perspective can be preserved, more novel types of approaches also remain available, yet they would likely face similar problems as those discussed in the article, i.e., the problem of designing workable standards of assessment.

Verticalization of data sharing and the difficult path to eunnovation

Selçukhan Ünekbaş — 2023-10-25

Data sharing has been offered as a useful tool to open up impregnable markets to competition. EU law has a rich tradition in enabling business-to-business data sharing in a sector-specific (or vertical) fashion, which has formed the basis of the quest for an internal market where data flows freely. Two recent legislative instruments, the Digital Markets Act and the Data Act, contain industry- and actor-specific data sharing provisions. By unleashing troves of data hoarded by large incumbents, the Acts aspire to empower small and medium-sized enterprises, unlocking organic innovation. Notwithstanding the normative desirability of such a goal, it is unclear whether verticalized rules on data sharing can foster innovation by entrants and smaller undertakings. This Article legally and economically appraises the Acts to shed light on this issue. Read together, the data sharing provisions under the Digital Markets Act and the Data Act pursue the common aim of spurring disruptive (market creating) and complementary innovation. However, the Acts suffer from legal uncertainty and are liable to produce unintended economic consequences, such as diminishing the ability of complementors to satisfy consumers whilst simultaneously strengthening incumbent platform operators. The conclusions cast doubt on whether the vertical data sharing rules of the Acts can achieve their intended objectives, that is, ensuring the contestability of digital markets by promoting organic innovation by smaller scale firms.

Patent portfolios and pharmaceuticals: a european perspective

Sílvia Bessa Venda — 2023-10-25

The book deals with a complex subject, although far from new, which is the intersection between intellectual property (IP) and competition law. Indeed, exclusive rights confer market power and restrict competition temporarily. Along these lines, Emanuela Arezzo, Associate Professor of Commercial Law at the Faculty of Law of the University of Teramo (Italy) and winner of the Jean Monnet Chair in EU Innovation Law & Policy (2023-2026), focuses on the pharmaceutical sector, mostly from the point of view of European Union Law and its Institutions (as opposed, in particular, to the regime of the United States of America). The book highlights recent behaviour trends in this sector, specifically, the building and exploration of patent portfolios.