European Union: Abuse of dominance and article 102 of the TFEU


Lisa Kaltenbrunner, Ropes & Grey

That is an extract from the 2023 version of the Europe, Center East and Africa Antitrust Assessment. The entire publication is out there right here.

In abstract

This text discusses current choices by the European Fee (EC), in addition to judgments and preliminary references by the Courtroom of Justice of the European Union referring to article 102 of the Treaty on the Functioning of the European Union (TFEU). It finds that, based mostly on current decisional apply and the evolving idea of exclusion in Europe, the EC’s 2009 Steering on Article 102 TFEU might require updating.

Dialogue factors

  • Article 102 TFEU
  • How European decisional apply and jurisprudence in relation to article 102 TFEU has developed, and the way the prescribed conduct and potential client hurt of practices corresponding to self-preferencing, information leveraging, bare restrictions, extreme pricing and anticompetitive disparagement might now not be adequately addressed within the EC’s Steering
  • As well as, it addresses whether or not conventional types of anticompetitive practices referenced within the EC’s Steering might profit from revision in gentle of the CJEU’s case regulation in Intel 2017 and Intel 2022

Referenced on this article

  • Circumstances C-413/14 P, Intel v Fee; AT.39740, Google Search (Purchasing); T-612/17, Google and Alphabet v Fee (Google Purchasing; AT.40703, Amazon Purchase Field; AT.40462, Amazon Market; AT.40680, Google Adtech; AT.40437, Apple App Retailer Practices, Music Streaming; C-377/20, Servizio Elettrico Nazionale v Autorità Garante della Concorrenza e del Mercato; AT.40220, Qualcomm; AT.40394, Aspen; C-372/19, SABAM v Weareone.World

The European Fee’s steering on article 102 TFEU: improve required?

This text discusses current choices by the European Fee (EC), in addition to judgments and preliminary references by the Courtroom of Justice of the European Union (CJEU) referring to article 102 of the Treaty on the Functioning of the European Union (TFEU). It finds that, based mostly on current decisional apply and the evolving idea of exclusion in Europe, the EC’s 2009 Steering on Article 102 TFEU (the EC’s Steering) [1] might require updating.

Article 102 TFEU governs practices by firms capable of act independently of, and with a level of immunity from, regular aggressive market circumstances. It prohibits not solely these practices that immediately trigger hurt to customers (eg, exploitative abuses), but additionally practices that trigger client hurt by their impression on competitors (eg, exclusionary practices). [2]

The vast majority of circumstances investigated by the EC in recent times underneath article 102 TFEU, and reviewed by the CJEU on attraction, relate to alleged anticompetitive conduct not mirrored within the EC’s Steering. These embrace:

  • self-preferencing: the place a vertically built-in dominant firm makes use of its personal asset, corresponding to its platform, to favour the positioning or sale of its personal items or providers on the expense of rivals; [3]
  • information leveraging: the place a dominant firm restricts entry to information that it holds because of its inherent dominance out there, to profit its personal services or products on the exclusion of its rivals. [4]
  • bare restrictions: the place a dominant firm engages in conduct with the only objective of excluding its rivals; [5] and
  • extreme pricing: the place a dominant firm imposes extreme costs on its prospects. [6]

As well as, nationwide competitors companies in Europe investigated circumstances referring to anticompetitive disparagement by a dominant firm – conduct additionally not addressed within the EC Steering.

As mentioned in additional element on this article, the prescribed conduct and potential client hurt of those developed types of anticompetitive abuses usually are not adequately addressed within the EC’s Steering. As well as, conventional types of anticompetitive practices which can be referenced within the EC’s Steering, corresponding to fidelity-inducing loyalty rebates, might require revision in gentle of the CJEU’s case regulation in Intel v Fee 2017 and Intel v Commission 2022. [7]

The developed types of anticompetitive abuses affirmed in current CJEU jurisprudence usually are not adequately mirrored within the EC’s Steering

The EC’s Steering

The EC’s Steering units out the EC’s enforcement priorities when making use of article 102 TFEU to exclusionary conduct by a dominant firm. Its objective is to supply larger readability and predictability of the EC’s common framework of research, when figuring out whether or not it ought to pursue an exclusionary case. [8]

In its Steering, the EC ‘limits itself to exclusionary conduct, which, based mostly on its experiences, look like the most typical’. [9] These particular types of abuses embrace: (1) unique dealing (ie, unique buying obligations or rebates); (2) tying and bundling; (3) predation; (4) refusal to provide; and (5) margin squeeze.

Nonetheless, based mostly on the EC’s current enforcement actions, it seems that these sort of abuses are now not the one frequent types of exclusionary abuse. As an alternative, present enforcement of article 102 TFEU primarily pertains to novel types of abuses which can be both not addressed, or solely mentioned to a really restricted extent, within the EC’s Steering.

Self-preferencing

In its 2021 judgment in Google Purchasing, the Normal Courtroom (GC) confirmed, for the primary time, that self-preferencing by a dominant firm might quantity to an abuse of article 102 TFEU. [10]

Google’s conduct

In June 2017, the EC discovered that Google’s extra beneficial positioning and show, in its common search outcomes pages, of its personal comparability buying service in comparison with competing comparability buying providers infringes article 102 TFEU. Particularly, the EC discovered:

that whereas outcomes from competing comparability buying providers might seem solely as generic outcomes, that’s to say, easy blue hyperlinks that had been additionally vulnerable to being demoted by adjustment algorithms, outcomes from Google’s personal comparability buying service had been prominently positioned on the prime of Google’s common outcomes pages, displayed in wealthy format and incapable of being demoted by these algorithms, leading to a distinction in therapy within the type of Google’s favouring of its personal comparability buying service. [11]

The checklist of abusive practices infringing article 102 TFEU is just not exhaustive

On attraction, the GC upheld the EC’s discovering that self-preferencing, in different phrases, the place a dominant firm is ‘alleged to be favouring its personal providers on the expense of its opponents’ providers’, can represent an abuse of dominance underneath article 102 TFEU. [12] Additional, the GC discovered that ‘[t]he checklist of abusive practices contained in Article 102 TFEU is just not exhaustive.’ [13]

The GC discovered that the apply of self-preferencing, even when engaged by a dominant firm, was not prohibited per se by article 102 TFEU. [14] Nonetheless, on this case, the GC discovered that Google’s apply didn’t represent competitors on the deserves.

Referring to the EC’s choice, the GC set out that because of (1) the significance of internet site visitors generated by Google Purchasing; (2) the behaviour of customers when looking out on-line; and (3) the truth that diverted site visitors accounted for a big proportion of the site visitors going to competing providers, Google’s self-preferencing ‘was liable to result in a weakening of competitors available on the market’. [15]

Google’s conduct ‘led to a discount within the visibility of outcomes from competing comparability buying providers and, on the identical time, elevated the visibility of outcomes from Google’s personal comparability buying service. Thus, the practices at difficulty enabled Google to spotlight its personal comparability buying service on its common search outcomes pages whereas leaving competing comparability buying providers just about invisible on these pages, which, in precept, is just not per the supposed objective of a common search service.’ [16]

On that foundation, Google’s behaviour couldn’t be justified as competitors on the deserves. [17] Additional, even when Google’s conduct led to a services or products enchancment, that doesn’t imply the conduct couldn’t represent an abuse. Any enhancements must be assessed when contemplating any goal justifications or effectivity features. [18]

The GC additionally discovered that Google’s conduct was not commercially rational, however motivated by a want to exclude opponents. [19] The GC discovered that, in contrast to conventional infrastructures, whose worth to the proprietor lies within the proprietor’s capability to exclude others, the inherent worth of Google’s ‘infrastructure’ (ie, search engine) lies in its capability to generate site visitors to different web sites and to be open to outcomes from third events, together with these of competing comparability buying providers. The GC thus discovered that for a search engine to restrict the scope of its outcomes to its personal providers ‘entails a component of danger and isn’t essentially rational’, aside from in a state of affairs like the current, the place Google’s dominance and limitations to entry are already so excessive, that no danger of imminent market entry or aggressive response exists. [20]

Self-preferencing is its personal class of abuse, and never a refusal to provide

The GC additionally handled Google’s submission that, based mostly on the EC’s reasoning, any obligation to provide could possibly be characterised as self-preferencing, with out the necessity to meet the indispensability situation established by the European Courtroom of Justice (ECJ) in Bronner. [21] As held by the ECJ in Slovak Telecom, Bronner doesn’t apply the place a dominant firm made entry to its infrastructure topic to unfair circumstances. [22]

In Google Purchasing, the GC additionally discovered that within the absence of an categorical refusal to provide, Google’s conduct shouldn’t be analysed on the idea of the strict circumstances set out in Bronner, even when the conduct in the end resulted in an implicit refusal to provide. In any other case, any exclusionary apply would solely infringe article 102 TFEU, if it associated to indispensable items or providers. Self-preferencing constitutes a separate infringement of article 102 TFEU. [23]

The EC doesn’t have to use the as-efficient-competitor take a look at in self-preferencing allegations

The GC additionally held that the EC was not required to show that an as-efficient-competitor (AEC) would have been foreclosed from the market. The GC discovered that for non price-related exclusionary practices, the applying of the AEC take a look at was not warranted. [24]

A roadmap for a dominant firm to rebut the anticompetitive results of self-preferencing

Self-preferencing is just not mentioned within the EC’s Steering. Maybe in recognition of the breadth of the idea, the GC made clear {that a} dominant agency might nonetheless rebut the presumed anticompetitive results of self-preferencing. Particularly, the dominant firm should display that: [25]

  • the effectivity features are enough to counteract the damaging results on competitors and client welfare that can end result from the restriction of competitors;
  • there’s a causative hyperlink between the apply and the profit recognized;
  • the apply is critical for attaining the effectivity features relied upon; and
  • the apply doesn’t remove efficient competitors by eliminating all or most competitors, both precise or potential.

The following technology of self-preferencing circumstances

The EC is presently investigating quite a few vertically built-in platforms for probably anticompetitive self-preferencing practices. These investigations embrace investigations into Amazon Purchase Field [26] and Amazon Marketplace. [27]

In Amazon Purchase Field, the EC is investigating whether or not Amazon’s standards for choosing the winner of the Purchase Field led to preferential therapy of Amazon’s personal retail enterprise or the sellers that use Amazon’s logistics and supply providers. [28] Amazon’s ‘Purchase Field’ is displayed prominently on Amazon’s web sites and permits prospects so as to add objects from a selected retailer immediately into their buying carts. The EC preliminary views Amazon’s Purchase Field as essential to sellers on Amazon, because of its outstanding positioning and the truth that it generates ‘the overwhelming majority of all gross sales.’ [29]

In Amazon Market, the EC is investigating whether or not Amazon’s use of personal third-party information favours Amazon’s personal retail arm over its rivals, for instance, by focusing its gives on the best-selling merchandise throughout product classes and adjusting its gives in gentle thereof.

Equally, the EC’s investigation into Google Adtech, [30] opened in June 2021, evaluations whether or not Google allegedly favoured its personal on-line show promoting know-how providers within the ‘advert tech’ provide chain, to the detriment of competing suppliers of promoting know-how providers, advertisers and on-line publishers.

In App Retailer Music Streaming, [31] the EC preliminarily discovered that Apple abused its dominant place within the distribution of music streaming apps by its App Retailer. In its preliminary findings, the EC raised considerations that the obligatory use of Apple’s personal proprietary in-app buy system and the restrictions on builders’ capability to tell iPhone and iPad customers of different cheaper buying potentialities exterior of apps infringes article 102 TFEU.

The EC’s preliminary view was that Apple’s guidelines distort competitors by elevating the prices of competing music streaming app builders, resulting in greater costs for customers. It stays to be seen whether or not the EC categorises Apple’s conduct as self-preferencing or one other novel type of abuse.

Knowledge-leveraging

Servizio Elettrico Nazionale [32] considerations a request for a preliminary ruling from the Italian Council of State to the ECJ referring to the interpretation and utility of article 102 TFEU in reference to allegedly abusive conduct by the Italian incumbent electrical energy provider, Servizio Elettrico Nazionale (SEN) to hinder new aggressive entry.

SEN and the Enel Group’s conduct

Following a criticism by the Italian affiliation of power wholesalers and merchants (AIGET), the Italian Competitors Authority (AGCM) opened an investigation into an allegedly exclusionary technique ‘designed to “switch” SEN’s buyer base (SEN being the operator on the protected market) to EE (energetic on the free market).’ [33] EE is a subsidiary of the Enel Group.

In anticipation of the upcoming liberalisation of the Italian marketplace for the sale of electrical energy, the Enel Group’s alleged technique was to forestall SEN’s prospects from shifting to new suppliers. [34] SEN’s prospects had been requested to consent to receiving industrial gives from the Enel Group, in addition to from different third events. Nonetheless, prospects had been made to consider that such consent was obligatory with respect to the Enel Group, whereas voluntary with respect to different suppliers. This led to fewer consents for the latter, limiting the quantity of buyer information out there to Enel Group’s opponents within the free market. [35]

The Enel Group used SEN’s buyer information to difficulty focused industrial gives to prospects, with a view of transferring them from SEN to the Enel Group. The ACGM discovered that the information constituted a ‘strategic, non-replicable asset’, [36] permitting EE to focus on these prospects solely, taking greater than 40 per cent of the contestable demand. [37]

The request for a preliminary ruling

The AGCM issued an infringement choice in December 2018, which Enel Group appealed to the Italian regional administrative court docket of first occasion in Lazio, which confirmed the discovering of an abuse. The court docket of first occasion’s judgment was appealed to the referring court docket, the Italian Council of State, with a request for a preliminary ruling from the ECJ.

The ECJ delivered its judgment in Might 2022, additional to Advocate Normal (AG) Rantos’ opinion of December 2021 on whether or not the apply of data-leveraging is anticompetitive if carried out by a dominant firm. [38] The dialogue beneath focuses on the Italian Council of State’s first query, fourth half – referred to by AG Rantos as follows:

By the fourth half, the referring court docket asks the Courtroom, in essence, to attract a transparent line between practices which come throughout the scope of so-called ‘regular’ competitors and people which don’t. This query thus goes to the guts of what constitutes abuse throughout the that means of Article 102 TFEU, and seeks to find out whether or not the conduct at difficulty in the primary proceedings constitutes such abuse. [39]

In his opinion, AG Rantos discovered that, whereas the Enel Group must be allowed to interact in practices to retain its prospects and that ‘information assortment within the context of the shopper relationship stays, in precept, a wholly “regular” operation in a regular aggressive course of,’ [40] Enel Group ‘should not undertake practices which, by exploiting the benefits stemming from the statutory monopoly, are able to having exclusionary results on new opponents thought-about to be as environment friendly as it’s itself.’ [41]

The ECJ seemingly agreed with AG Rantos on this assertion, because it confirmed that, if a dominant firm used belongings or assets that had been inherent to the holding of such a place within the context of the liberalisation of a market [42] and that weren’t accessible to an as environment friendly competitor available on the market to broaden its dominance from one market to a different market, this doesn’t represent competitors on the deserves. [43] A previous market incumbent couldn’t interact in discriminatory practices to its personal benefits. [44]

Thus, in response to the Italian Council of State’s first query, the ECJ confirmed {that a} apply carried out by a dominant firm must be characterised as unlawful if it has foreclosing results and depends on a apply that doesn’t represent competitors on the deserves. Nonetheless, even when these two standards are met, the dominant firm should display that its apply was objectively justified or counterbalanced and even outweighed by client efficiencies. [45]

Bare restrictions

Sure practices by a dominant firm usually are not able to having pro-competitive results and can’t generate results aside from proscribing competitors.

The EC’s Steering describes such practices as follows:

There could also be circumstances the place it’s not vital for the Fee to hold out an in depth evaluation earlier than concluding that the conduct in query is prone to end in client hurt. If it seems that the conduct can solely increase obstacles to competitors and that it creates no efficiencies, its anti-competitive impact could also be inferred. [46]

The EC’s Steering additionally gives examples of such practices, specifically: ‘if the dominant enterprise prevents its prospects from testing the merchandise of opponents or gives monetary incentives to its prospects provided that they don’t take a look at such merchandise, or pays a distributor or a buyer to delay the introduction of a competitor’s product.’ [47]

Such practices are also known as bare restrictions. Within the EC’s 2009 choice in opposition to Intel, the EC discovered that Intel’s funds to OEMs to delay or cancel the launch of a product line incorporating a rival product had been bare restrictions. [48] This was confirmed on attraction by the GC since:

Such bare restrictions fall exterior the scope of competitors on the deserves and the anti-competitive object of the practices established their abusive nature to the requisite authorized commonplace. [49]

In Lithuanian Railways, the GC upheld the EC’s choice that Lietuvos geležinkeliai AB (LR) had abused its dominant place and infringed article 102 TFEU by dismantling 19 kilometres of monitor connecting Lithuania and Latvia. [50]

LR is a vertically built-in firm managing each the railway infrastructure, in addition to offering rail transport providers in Lithuania. Orlen Lietuva AB (Orlen) operates crude oil refineries in Lithuania and distributes refined oil merchandise to Lithuania and Latvia through LR’s community.

Following a industrial dispute between LR and Orlen, Orlen rearranged its route to incorporate the Latvian nationwide railway firm (LDZ), utilizing ‘the Quick Path to Latvia’. Shortly thereafter, LR suspended site visitors on a 19-kilometre-long part of the Quick Path to Latvia following the identification of a defect within the rail monitor. [51] LR then continued to take away the monitor in its entirety.

The EC discovered that LR had abused its dominant place as railway infrastructure supervisor in Lithuania by eradicating the monitor. [52] Particularly, the EC discovered ‘that, by eradicating the monitor in its entirety, LR had had recourse to strategies aside from these which situation regular competitors.’ [53] This was for the next causes:

  • LR was conscious of Orlen’s plans to change providers;
  • LR had eliminated the monitor in nice haste, with out securing the mandatory funds and with out taking any of the traditional preparatory steps for its reconstruction;
  • the removing of the monitor was opposite to straightforward apply within the sector;
  • LR was conscious of the chance of shedding all of Orlen’s enterprise if the monitor had been rebuilt; and
  • LR had taken steps to persuade the Lithuanian authorities to not rebuild the monitor. [54]

Whereas the GC didn’t explicitly discuss with LR’s apply constituting a per se infringement of article 102 TFEU or a unadorned restriction, the GC did discuss with the EC initially having thought-about the abuse as a restriction by object. [55] The GC additionally famous that the EC merely needed to display that the conduct could be able to giving rise to anticompetitive foreclosures results. Primarily based on this evaluation, it’s tough to see how the removing of the tracks in haste to forestall a competitor from getting into the market couldn’t represent a unadorned restriction underneath article 102 TFEU. [56]

The EC’s current choice in Qualcomm and Google Android additionally gives helpful examples of arguably bare restraints to mirror within the EC’s Steering.

In Qualcomm, the EC discovered that Qualcomm had infringed article 102 TFEU by providing vital exclusivity funds to its key buyer Apple, on the idea that Apple wouldn’t supply provides from opponents, however would solely use Qualcomm LTE baseband chipsets in its iPhones and iPads. [57] Had Apple launched a tool with a chipset equipped by another supplier, Qualcomm would have ceased funds, and Apple would have been required to return some funds to Qualcomm.

The EC discovered that Qualcomm’s practices denied its rivals the likelihood to compete for Apple’s enterprise and likewise denied enterprise alternatives with different prospects which will have adopted from securing Apple as a buyer. [58]

In Google Android, the EC fined Google for its exclusivity agreements across the Android working system and making funds to authentic gear producers (OEMs) and cell community operators on the situation that they didn’t pre-install competing common search providers on any machine inside an agreed portfolio. [59] The EC discovered that this harmed competitors by considerably decreasing prospects’ incentives to pre-install competing search apps and denying rival search engines like google and yahoo the likelihood to compete on the deserves. [60]

Takeaways and expectations

Though the EC’s Steering notes that there could also be circumstances the place it’s not vital for the EC to hold out an in depth results evaluation earlier than concluding that the conduct is anticompetitive, such practices usually are not explicitly known as bare restrictions. Nor does the EC Steering clarify the idea of what might represent bare restrictions, or present examples intimately.

Whereas the EC didn’t discuss with the entire above practices as bare restrictions, the EC’s decisional apply now gives examples that could be mentioned in revised steering.

Extreme pricing

The EC’s Steering solely briefly refers to exploitative abuses:

Conduct which is immediately exploitative of customers, for instance charging excessively excessive costs or sure behaviour that undermines the efforts to realize an built-in inside market, can be liable to infringe Article 82. […] For the aim of offering steering on its enforcement priorities the Fee at this stage limits itself to exclusionary conduct and in, specific, sure particular forms of exclusionary conduct which, based mostly on its expertise, look like the most typical. [61]

Whereas this can be reflective of the EC enforcement priorities and European jurisprudence, and traditionally, the EC might have shied away from extreme pricing circumstances as a ‘market value’ is notoriously tough to find out, current EC choices have supplied helpful steering which may be mirrored in revised tips. For instance, the EC’s dedication choice in Aspen gives helpful perception on how dominant firms might wish to assess pricing choices in apply. [62]

Aspen was discovered to have abused its dominant place in quite a few nationwide markets by charging extreme costs for important off-patent most cancers medicines. The EC’s preliminary evaluation of Aspen’s revenues and prices confirmed that, after the value will increase, Aspen had persistently earned very excessive earnings from its gross sales of most cancers medicines in Europe, each in absolute phrases and when put next with the revenue ranges of comparable firms within the trade. Aspen’s costs exceeded its related prices by nearly 300 per cent on common, together with when accounting for an inexpensive price of return, though variations did exist between merchandise and international locations.

To evaluate whether or not Aspen had carried out ‘extreme’ costs, the EC carried out a benchmark evaluation, evaluating Aspen’s prices, revenues and profitability with that of 20 different pharma firms of the identical dimension and profile. [63] The EC additionally thought-about that Aspen didn’t present authentic justifications for these excessive revenue ranges, on condition that the medicines had been off-patent for 50 years, demonstrating that the R&D funding was lengthy recouped. Aspen dedicated to decreasing the value of six off-patent most cancers medicines instantly and cap these for 10 years.

One other evaluation of what constitutes an extreme value was supplied by the ECJ in SABAM. [64] SABAM, a Belgium collective administration organisation (CMO), had elevated its tariffs for sure concert events and music festivals and was sued by a number of festivals and the federation of Flemish music festivals. Following a preliminary reference by the Brussels Business Courtroom, the ECJ handed down its preliminary ruling in November 2020 on whether or not sure tariffs imposed by a CMO might represent an abuse of dominance.

In response to the questions from the Brussel’s court docket, the ECJ discovered that there was no abuse of a dominant place, if a CMO calculated its tariffs on the idea of gross receipts from ticket gross sales, with out all prices referring to the organisation of such occasions being deducted from these receipts, so long as their financial worth is mirrored, which is for the nationwide court docket to display. The ECJ additionally discovered that the CMO wouldn’t abuse its dominant place by adopting a tariff construction system to find out which of the musical works carried out belonged to the CMO or had been a part of the CMO’s repertoire, so long as there was no different technique that may decide the related tariff extra exactly, attaining the identical aim (defending the artists’ rights) with out leading to disproportionate prices for the CMO. This was for the nationwide court docket to evaluate, taking account the out there information and technical techniques. [65]

On that foundation, the EC’s Steering might profit from an iteration that explains the idea of extreme pricing in additional element, specifically by offering perception as to what’s deemed an extreme value.

Anticompetitive disparagement

The EC Steering might also wish to mirror practices discovered abusive by European nationwide competitors companies – for instance, the Danish Competitors and Shopper Company’s anticompetitive disparaging case, Falck. Falck, an emergency response and healthcare service, was discovered to have abused its dominant place by implementing a scientific, covert communication technique designed to hinder a competitor’s capability to compete. [66] The Company discovered that Falck’s disparagement technique didn’t represent competitors on the deserves and was abusive.

Equally, the French Competitors Authority discovered that Novartis had abused its dominant place by main a world communication marketing campaign focusing on ophthalmologists, medical doctors, associations and most of the people to discredit the off-label use of Avastin (marketed by Roche) to deal with age-related macular degeneration, to favour its personal therapy. [67]

The standard types of anticompetitive practices addressed within the EC’s Steering might also require revision

The 5 circumstances of Intel

Following the CJEU’s judgment in Intel 2017 and Intel 2022, plainly even these types of anticompetitive practices which can be already addressed within the EC’s Steering, corresponding to fidelity-inducing loyalty rebates, would profit from further readability and steering.

By the use of background, in 2009, the EC discovered that Intel had abused its dominant place by imposing fidelity-inducing loyalty rebates. Intel appealed the EC choice, which the GC upheld in 2014. [68] Nonetheless, on attraction, the ECJ discovered that the GC had wrongly accepted the EC’s line of argument concerning the required authorized method to fidelity-inducing loyalty rebates that confer exclusivity. [69]

In January 2022, the GC handed down its revised judgment, discovering that the place a dominant firm implements a system of fidelity-inducing loyalty rebates, the rebuttable presumption is that the rebates prohibit competitors and have foreclosing results. [70] Nonetheless, such loyalty rebates are ‘not a per se infringement of Article 102 TFEU’ and it doesn’t ‘relieve the Fee in all circumstances of the duty to look at whether or not there have been anticompetitive results’. [71]

On the contrary, the GC discovered:

  • the place a dominant firm adduces proof rebutting the EC’s allegations, the EC should assess, on the idea of the 5 standards set out by the ECJ, whether or not an abuse happened; and
  • the place the dominant firm adduces proof for an AEC take a look at, the EC should analyse that as nicely. [72]

Related standards to find out whether or not fidelity-inducing rebates infringe article 102 TFEU

When figuring out whether or not loyalty rebates infringe article 102 TFEU, the EC should take note of: [73]

  1. the extent of the corporate’s dominant place on the related market;
  2. the share of the market coated by the contested apply;
  3. the circumstances and preparations for granting the rebates in query;
  4. their period and their quantity; and
  5. the potential existence of a method aiming to exclude opponents which can be at the least as environment friendly because the dominant enterprise from the market.

Primarily based on the above standards, the GC discovered that the EC had not correctly assessed standards (2) and (4). First, the GC discovered that it was inadequate to easily conclude that sure prospects had been strategically extra necessary than others, and that subsequently, the abusive practices needed to be considered vital. As an alternative, the EC ought to have examined ‘the share coated by the contested apply’. [74] Second, the GC discovered that the EC had failed to look at the period of the rebates. [75]

If the dominant firm places ahead an AEC take a look at, the EC should assess it

The GC discovered that when assessing loyalty rebates, the EC was not required to hold out an AEC take a look at. Nonetheless, ought to the EC determine to hold out such take a look at, or ought to the dominant firm put ahead arguments in relation to an AEC take a look at, the EC should assess it and carry it out appropriately and robustly.

In Google AdSense, [76] the EC, counting on Intel 2017, discovered that it didn’t must display that Google’s exclusivity obligation clause was able to proscribing competitors, however nonetheless carried out an in depth evaluation. [77] Finishing up such an evaluation whereas stating that it was not required to take action, probably suggests an absence of conviction within the authorized commonplace.

Formalising the above standards within the EC’s Steering and offering additional examples when loyalty rebates or exclusivity clauses could also be anticompetitive, in addition to guiding dominant firms by the applying of the AEC take a look at would supply extra readability and predictability.

The necessity for an replace

Primarily based on the route of the EC’s current enforcement of article 102 TFEU, it’s honest to conclude that the enforcement of article 102 TFEU has developed. The EC’s enforcement now targets a broader vary of abuses, corresponding to self-preferencing, data-leveraging, bare restrictions and extreme pricing circumstances. Abuses which can be both not adequately addressed or not even talked about within the EC’s Steering.

Even in relation to types of abuses which can be already mirrored within the EC’s Steering corresponding to loyalty rebates, the EC Steering would enormously profit from iteration.

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