In the past several months, two state courts in the District of Columbia and California decided motions to dismiss in cases alleging that the use of certain revenue management software violated state antitrust laws in the residential property rental management and health insurance industries. In both industries, parallel class actions are pending in federal court alleging that the same software products facilitate per se illegal hub-and-spoke price-fixing conspiracies under Section 1 of the Sherman Act. These two state court decisions may preview how federal courts handle similar questions in the federal cases.Continue Reading State Courts Dismiss Claims Involving the Use of Revenue Management Software in Residential Rental and Health Insurance Industries
ECJ’s Google Shopping Judgment: The End of a Long Saga
The European Court of Justice released its long-awaited judgment1 in the Google Shopping saga last week, finally putting to bed close to fifteen years’ of scrutiny into Google’s practices of favouring its own comparison shopping service (Google Shopping) over rival shopping services.
In its ruling, the ECJ upheld the General Court’s earlier judgment2 which had rejected Google’s appeal over the European Commission’s decision3 to fine it €2.42 billion for abusing its market dominance as a search engine by systematically favouring Google Shopping in its general search results.
The overall outcome of the ECJ’s reasoning in Google Shopping is perhaps unsurprising to competition law practitioners – given the unwavering direction of travel of the case. The ECJ judgment nevertheless raises a number of interesting points and leaves a number of questions unanswered.
Key takeaways
- Refusal to supply. The judgment confirmed that not every issue of access necessarily requires the application of the Bronner test of refusal to supply. The ECJ found the Bronner doctrine applies in circumstances where a dominant firm refuses to grant a competitor access to infrastructure which it has developed for its own business needs. However, the ECJ ruled that the Bronner test is not applicable in cases where there is no outright refusal of access to infrastructure – but rather access granted on discriminatory terms (such discrimination being assessed under separate forms of potential abuse).
- Competition not on the merits. The ECJ accepted Google’s arguments that, to establish an abuse of dominance under Article 102, a two-pronged test applies: (i) that actual or potential anticompetitive effects arise from the abusive conduct; and (ii) that the conduct falls outside of “competition on the merits”. However, in assessing the latter requirement, the ECJ rejected Google’s arguments that only circumstances relating specifically to Google’s conduct are relevant to the assessment. Instead, the ECJ held that, in assessing “competition on the merits”, relevant circumstances regarding the characteristics of the market or the nature of competition are capable of characterising the conduct as falling outside of the scope of competition on the merits.
- Causality and counterfactual. The ECJ maintained that the causal link is one of the essential elements of a competition law infringement and that, as a result, the burden of proof for such causal link (and hence the counterfactual analysis) lies with the Commission. However, the ECJ found that the counterfactual analysis is just one way to establish causality. Where establishing a credible counterfactual may be “arbitrary or even impossible” (para 231), the Commission cannot be required to systematically establish a counterfactual and can rely on other evidence to establish causality.
- “As-efficient competitors”. The ECJ reiterated earlier case law that it is not the objective of Article 102 to ensure that less efficient competitors remain on the market but also remarked that this statement did not imply that an abuse of dominance finding does not always require a showing that the conduct was capable of excluding an as-efficient competitor. With respect to the AEC test, the Court held that this is just one way to establish an abuse of dominance.
Continue Reading ECJ’s Google Shopping Judgment: The End of a Long Saga
ECJ decides that EU Member States cannot refer below-threshold transactions to the European Commission (Illumina/Grail v Commission)
On 3 September 2024, the European Court of Justice (“ECJ”) published its highly-anticipated judgment in Illumina/Grail v Commission (Joined Cases C‑611/22 P and C‑625/22 P) (“ECJ Judgment”), regarding the scope of application of Article 22 of the EU Merger Regulation (“EUMR”).
The ECJ set aside the EU General Court (“GC”) judgment (Case T‑227/21) and ruled that the European Commission (“Commission”) does not have jurisdiction over transactions referred to it by the national competition authorities of EU Member States (“NCAs”) if the transactions do not meet the national thresholds of the referring EU Member States.
Key takeaways
- Based on a historical, contextual, and teleological interpretation of Article 22 EUMR and the EUMR itself, NCAs cannot ask the Commission to examine transactions which do not meet their national thresholds.
- Article 22 EUMR provides for a corrective function regarding the allocation of competences between the Commission and NCAs, and is to limit the possibility of multiple parallel notifications, providing legal certainty and facilitating the one-stop shop principle.
- An amendment of the EUMR thresholds and/or referral rules to capture below-threshold transactions would likely entail a burdensome legislative process and complex negotiations with EU Member States.
- The Commission can still rely on (i) new thresholds which have by now been introduced in some EU Member States to catch transactions outside the scope of their traditional turnover-based thresholds, and (ii) the possibility for NCAs to review these transactions by means of Article 102 TFEU, which prohibits abuses of a dominant position.
From Concept to Precedent: The 2024 Draft Guidelines on Article 102
The European Commission’s draft guidelines on exclusionary abusive conduct by dominant firms under Article 102 TFEU (the “Draft Guidelines”) were published on 1 August 2024. They show a marked change from the 2009 Article 82 [now Article 102] Enforcement Priorities Guidance (the “Priorities Guidance”): economic concepts have largely been replaced with the Commission’s interpretation of the European Courts’ caselaw.
The consultation on the Draft Guidelines is open until 31 October 2024. Practical suggestions rooted in and developing the caselaw appear more likely to influence the Commission’s final version of the Draft Guidelines than statements of economics.Continue Reading From Concept to Precedent: The 2024 Draft Guidelines on Article 102
D.C. District Court Finds Google Monopolized Online Search Text Ads Markets
On August 5, 2024, Judge Amit Mehta of the U.S. District Court for the District of Columbia concluded that Google has monopolized markets for online searches and search text advertising and unlawfully engaged in exclusionary conduct in those markets. Specifically, the court found that Google used revenue sharing agreements with web browser developers, mobile device…
Continue Reading D.C. District Court Finds Google Monopolized Online Search Text Ads MarketsThe 2024-2029 Commission Political Guidelines: Where Is Competition Policy Likely Headed?
On 18 July 2024, the current President of the European Commission (“Commission”), Ursula von der Leyen, was reconfirmed by the European Parliament for a second 5-year term. As part of her reconfirmation, President von der Leyen delivered a speech before the European Parliament, complemented by a 30-page program, which lays down the Commission’s political program for the next five years.
A key pillar of the program – “A new plan for Europe’s sustainable prosperity and competitiveness” – has the objective of combining competitiveness and prosperity with the achievement of the European Green Deal goals.
Specifically on competition policy, according to President von der Leyen, a new approach is needed to achieve this objective. This blog post projects where competition policy is likely headed in the 2024-2029 period by commenting on the most relevant paragraphs of the program.Continue Reading The 2024-2029 Commission Political Guidelines: Where Is Competition Policy Likely Headed?
Texas District Court Enjoins FTC’s Rule Banning Non-Compete Clauses
On July 3, 2024, Judge Ada Brown of the United States District Court for the Northern District of Texas granted the motions for a preliminary injunction—filed by Ryan LLC and several trade associations, including the U.S. Chamber of Commerce—to prevent the FTC’s rule banning non-compete clauses from going into effect, but the court’s order only…
Continue Reading Texas District Court Enjoins FTC’s Rule Banning Non-Compete ClausesFederal Trade Commission asserts significant anticompetitive harms in Interim Staff Report on the pharmacy benefit manager industry
On July 9, 2024, the Federal Trade Commission (“FTC”) voted 4-1 (with Commissioner Melissa Holyoak dissenting) to release an Interim Staff Report (the “Interim Report”) entitled: Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies. The Interim Report describes what FTC staff has uncovered to date during…
Continue Reading Federal Trade Commission asserts significant anticompetitive harms in Interim Staff Report on the pharmacy benefit manager industryThe Commission amends regional aid rules to foster support for strategic technology projects
On 31 May 2024, the European Commission (“Commission”) adopted an amendment to its Regional aid Guidelines (“RAG”), allowing EU Member States to grant higher amounts of aid to investment projects falling into the Strategic Technologies for Europe Platform’s (“STEP”) objectives in disadvantaged areas of the EU. STEP is an EU initiative designed to boost the EU’s industrial competitiveness and reinforce EU sovereignty by supporting critical and emerging strategic technologies and their respective value chains.
Key takeaways
- In the EU, large businesses can only receive State aid from Member States for their large investment projects (“LIPs”) in production facilities if their projects take place in disadvantaged areas of the EU. The conditions to access such State support and the maximum aid amount are laid down in the RAG.
- STEP’s objectives are to support the development and the manufacturing of clean tech, digital technologies, and bio-tech.
- The amendment to the RAG allows Member States to grant large businesses higher amounts of aid for their LIPs where they contribute to the STEP objectives.
The UK’s New Digital Markets Regime: Some Key Takeaways
This year, the UK’s Competition and Markets Authority (“CMA”) is set to gain a range of new enforcement powers under the Digital Markets, Competition and Consumers (“DMCC”) Act (the final text is now available here). The DMCC Act received Royal Assent on 24 May 2024. However, with certain exceptions, the Act’s provisions will not come into force until secondary legislation is passed. The CMA initially expected its new responsibilities to become operational in the Autumn, but this timeline may be delayed due to the UK’s election on 4 July. On the same day as the DMCC Act became law, the CMA published for consultation its new Digital Markets Competition Regime Guidance.
An outline of the key provisions of the DMCC Act can be found here. As the CMA sets the groundwork for exercising its powers under this new regime, this blog post considers five practical considerations for firms active in the UK.
Key takeaways:
- The CMA will administer the new regime through a specialist Digital Markets Unit, which was established over three years ago.
- The DMCC Act may diverge from the EU’s Digital Markets Act, both in the companies being designated, and the obligations imposed on designated companies.
- The interplay between the DMCC regime and existing regulatory obligations – particularly the GDPR – is likely to raise practical challenges.
- We expect the CMA to exercise its powers under the digital markets regime alongside existing antitrust tools (which the DMCC Act amends).
- The CMA’s jurisdictional thresholds to review mergers under the UK’s merger control regime will change as a result of the DMCC Act.
Continue Reading The UK’s New Digital Markets Regime: Some Key Takeaways