Calls to end geo-blocking have grown more audible since the start of the European Commission mandate in 2014 and its digital single market strategy. But does the reality live up to the rhetoric? The commission's new Geo-blocking Regulation sets out certain situations where treating consumers differently is unjustifiable (eg, online and offline sales of goods and services) and applies only to transactions that have a cross-border element.
The European Commission recently imposed a record fine of €4.34 billion on Google. The commission identified a number of abuses and concluded that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system. In such an innovative and competitive industry, a decision and fine on this scale arguably sends the wrong message.
Discriminatory pricing as an abuse is a little-deployed area of EU antitrust law and there has been no recent enforcement at the European Commission level. The few existing cases concern extreme facts, involving natural or statutory monopolies such as airports or copyright collecting societies. A recent European Court of Justice judgment offers welcome clarification of the case law. It starts with the premise that not all price differences are illegal.
The General Court has confirmed that suppliers may restrict aftermarket access to authorised repairers for their spare parts. Suppliers can refuse unauthorised repairers access, even if they are considered to have a dominant market position over those parts. The case clarifies that even if suppliers are considered to be a monopoly supplier of spare parts or consumables for their installed base of customers, they are still entitled to control how their parts or consumables are distributed.
The European Court of Justice recently dismissed an appeal against a General Court judgment which largely upheld the European Commission's prohibition decision taken against Telefónica and Portugal Telecom for a non-compete covenant in a share purchase agreement. The non-compete agreement purported to restrain the parties from competing in Portugal and Spain "to the extent permitted by law".
The European Commission's decisions in the abuse of dominance cases against Samsung and Motorola in 2014 and the European Court of Justice judgment in Huawei v ZTE in 2015 clarified the limits of standard-essential patent (SEP) holders' rights to seek injunctions against implementers under EU competition law. However, these cases left a number of important issues unresolved. As such, the European Commission recently presented its guidance on SEP licensing.
Under certain strict conditions, agricultural producers can coordinate their pricing and quantities without falling foul of the EU competition rules. However, the European Court of Justice recently confirmed that not all practices by agricultural producer organisations and their associations are automatically excluded from the application of those rules. This judgment is a timely reminder that the EU competition rules apply broadly to the agricultural sector and that any exclusions will be interpreted restrictively.
The European Court of Justice recently clarified a number of thorny issues regarding excessive pricing, which had been otherwise unaddressed by previous case law. The ECJ offered answers to the questions of how many countries must be surveyed when seeking to demonstrate excess through cross-border comparisons, how relative purchasing power should be taken into account and whether a defendant can claim that average prices are fair even if specific customer rates are not.
The European Union has proposed a new EU framework for screening foreign investment that raises security and public order concerns for the European Union and its member states. The commission intends to launch, and possibly complete, the proposed framework by the end of 2018. Opposition by several member states means that it is unclear whether the proposal will be approved by the Council of the European Union.
In its recent ruling on the European Commission's 500-page Intel decision, the European Court of Justice revisited 40 years of jurisprudence as to when a dominant company's rebate scheme may be abusive. Though not a final decision, the case marks a potentially major departure from the arguably form-based approach to rebates advocated by the European Union's lower court.
Although enshrined in the EU treaties since inception, 'unfair pricing' as an abuse of market power was a little-used tool in enforcers' armoury. The few cases that were brought tended to be based on exceptional circumstances, and many failed on the facts. A May 2017 EU probe has brought the abuse back to the enforcement agenda. However, this is unlikely to denote a new trend; it is too early to say that this is the new normal.
The European Commission continues to expand the concept of selectivity – the key feature of any state aid measure – to outlaw member states' measures as state aid. It has done so in its high-profile tax rulings cases, and the European Court of Justice refused to curtail this expansive approach in its judgment in the Spanish goodwill cases.
A recent European Court of Justice decision confirms that businesses can be liable for cartelising products that they do not even have in their portfolio and in jurisdictions in which they are not active, provided that there is an anti-competitive agreement with an overall plan covering multiple products and geographies and that the undertaking participated directly in the execution of some parts of the agreement and was aware of the other parts of the agreement.
A recent General Court judgment illustrates that an appeal to the courts on fine calculation methodology can be successful, notwithstanding the admissions of liability made during the settlement process. The judgment follows a European Commission decision against a number of parties for coordinating sales prices, allocating customers and exchanging competitively sensitive information in relation to stock and catalogue envelopes and special printed envelopes of all shapes, colours and sizes.
Third parties often complain that commitment decisions – where antitrust defendants offer binding remedies to end an EU investigation without penalties – fail to resolve antitrust issues or have a damaging effect on third parties. A recent judgment confirms how difficult it is to successfully appeal a commitment decision.
The European Commission is consulting on procedural and jurisdictional changes to EU merger control. One big proposed change is set to introduce a value-of-transaction threshold as a trigger for notification, which could potentially bring into the commission's net all deals where the global value of the transaction meets the commission's test. As notification is burdensome and can involve substantial delays to a deal, many companies may object that this is extra-territorial overreach.
In contrast to the position taken in Post Danmark II, in Intel Advocate General Wahl called for a common-sense approach to Article 102 of the Treaty on the Functioning of the European Union and its recentring within mainstream economic thought. Wahl's opinion offers a welcome reappraisal of the spirit and intent of Article 102's analysis of rebate schemes. However, it remains to be seen whether the European Court of Justice will accept this recommendation to revise and revisit old case law.
The EU General Court recently opined for the first time on the legality of reverse payment settlement agreements. However, those waiting for practical guidance and clear guidelines delineating lawful from unlawful settlements will be disappointed. The judgment is a muddle of conflicting ideas about patents and competition law from which no coherent counselling standard emerges. It is hoped that the inevitable appeals will produce a clearer standard by which to judge settlements.
Is collective bargaining exempt from European Economic Area competition law and free movement principles? While early case law from the European Court of Justice indicates that collective bargaining falls outside Article 101 of the Treaty on the Functioning of the European Union, a recent European Free Trade Association Court judgment serves as a timely reminder that the exception from antitrust scrutiny is limited.
A recently published decision of the European Commission has potentially far-reaching implications for how transactions involving state-owned enterprises (SOEs) should be assessed for the purposes of European (and potentially third-country) merger control review. The decision does not create a binding precedent, but suggests how the commission will treat transactions involving SOEs.