Indispensability in Google Shopping: what the Court did, and did not, address in Slovak Telekom
Slovak Telekom was eagerly awaited, to a significant extent, because of its impact on Google Shopping, currently pending before the General Court. The question of whether the legality of the behaviour in the latter should be assessed in light of the Bronner conditions is arguably the most important aspect of the case.
Last month’s judgment provides some valuable clarifications concerning the conditions under which the Bronner conditions apply. A careful and dispassionate assessement of Slovak Telekom reveals, however, that some issues remain open.
It does not seem possible to claim, categorically, that the judgment unequivocally supports one conclusion or the other. Depending on how some open questions are interpreted, both outcomes (i.e. that indispensability is required and that it is not) seem in principle defensible.
What the Court held in Slovak Telekom
Dominant firms are in principle able to engage in self-preferencing: In paras 45-46, the Court holds that, at least in principle, there is nothing inherently abusive in the fact for a dominant firm to develop an infrastructure for its own needs. In particular, it is not unlawful for a dominant firm to favour itself by refusing to conclude an agreement with a rival.
The indispensability and elimination of all competition conditions are required where intervention would force a firm to conclude a contract: In line with the relevant case law since Commercial Solvents (see here) the Court confirms that the Bronner conditions are relevant where intervention would require a firm to conclude a contract (paras 46-47). The applicability of the indispensability and elimination of all competition conditions depends, in other words, on the nature of the remedy required to bring the infringement to an end. If intervention demands a duty to deal with third parties with which the dominant firm had chosen not to deal, the lawfulness of the behaviour would be assessed in light of Bronner.
Freedom of contract and long-term incentives to invest and innovate explain the ruling: The Court is explicit about the reasons why the Bronner conditions are sometimes required. Forcing a firm to conclude a contract interferes with firms’ freedom of contract and their right to property, and should therefore be confined to exceptional circumstances.
Open questions in Google Shopping
Is it for an authority to decide when the Bronner conditions are applicable?
Interestingly, the Google Shopping decision shared the point of principle summarised above: the Bronner conditions are applicable where intervention would require a firm to ‘transfer an asset or enter into agreements with persons with whom it has not chosen to contract‘ (para 651 of the decision, which refers to Van den Bergh Foods).
More controversially, the Commission argued that the above question hinges on what the decision formally requires. The first open question is therefore whether this is an appropriate interpretation of Van den Bergh Foods and Slovak Telekom.
I have explained elsewhere why the Commission’s interpretation of the case law is not wholly uncontroversial. If it were followed, it would give a competition authority the discretion to decide when the Bronner conditions are applicable and when they are not. Insofar as it turns an issue of law into one of discretion, it does not find easy accommodation in the EU legal order.
Similarly, if one were to follow the Commission’s approach, a competition authority would be able to circumvent the Bronner conditions simply by avoiding the specification of the remedy.
As I have already argued, a more satisfactory understanding of Van den Bergh Foods and Slovak Telekom is to focus on what a decision requires in effect (as opposed to what it formally demands). This interpretation would be consistent with the role of the Court of Justice in the EU legal order and would place substance above form (a key leitmotif of EU competition law since its inception).
Do organic search results count as ‘access’ within the meaning of Slovak Telekom?
There is an important, and potentially decisive, difference between Google Shopping and Slovak Telekom. The technology behind Google’s search engine does not require the firm to deal with rivals. Accordingly, the display of Google’s generic search results involves strictly unilateral conduct (the underlying technology is explained, by the way, in paras 15-17 of the Commission decision).
In this sense, Google Shopping is different from the practices at stake in Slovak Telekom. In the latter, the provision of services by downstream rivals necessitated an access agreement between new entrants and the incumbent. In Google Shopping, on the other hand, the concerns related to the fact that comparison shopping sites only aspired to feature as ‘generic search results’ (para 344 of the decision).
Against this background, the question is whether featuring in Google’s generic search results counts as ‘access’ within the meaning of Slovak Telekom. In one sense, one could argue (as I presume the Commission and the complainants will) that it does. There are, on the other hand, reasons to take the opposite view, and claim that ‘access’ within the meaning of Slovak Telekom presupposes an agreement between the dominant firm and its rivals. These reasons are sufficiently compelling to make the issue interesting from a legal standpoint.
As explained by the Court in para 51 of Slovak Telekom, the question is whether intervention would interfere with the firm’s freedom of contract. Action under Article 102 TFEU would not interfere with such freedom where there is an ongoing contractual relationship with third parties (whether this is the result of voluntary dealing or of a regulatory obligation).
No such ongoing contractual relationship would exist, on the other hand, where the dominant firm unilaterally operates a service such as a search engine. In fact, only following intervention by the Commission in Google Shopping did the firm conclude an agreement with third parties. Which takes me to the last open question.
What about remedies that are effective alternatives to a duty to conclude an agreement?
In Google Shopping, the Commission did not specify a remedy. One may thus be tempted to argue that, even though intervention led to Google concluding agreements with third parties and granting them access to a feature it had reserved for its own use, such an outcome was not mandated by the decision. According to this view, Bronner would not be relevant. Shared access to a feature was the choice of the firm, not a requirement.
One may reach a different conclusion, however, if one considers that there is a gap in the case law, which Google Shopping exposed. Cases like Bronner and Slovak Telekom focused on one possible way in which refusal to deal cases can be remedied: by requiring the firm to provide access.
However, such cases can be remedied in two other ways, which are equally effective. First, by mandating the structural separation of the two activities (separating, for instance, the infrastructure and the services running on the infrastructure). Second, by asking the dominant firm to close a division (for instance, by no longer providing the services and merely operating the infrastructure).
Since all three remedies (mandating access, structural separation, closing down of a division) are functionally equivalent, and since they all intrude with firms’ freedom of contract and their right to property, I struggle to think of a reason why they should be treated differently from a legal standpoint.
In the same vein, one could define the scope of Bronner as follows: the indispensability and elimination of all competition conditions are part of the legal test where intervention would amount, in effect, to any of the three remedies above. Whether the remedies are spelled out in the decision would be immaterial. The relevant question would be whether bringing the infringement to an end would require, in effect, either a duty to conclude an agreement, the structural separation of two adjacent activities or the closing down of one of the activities.
I very much look forward to your thoughts on how best to make sense of Slovak Telekom, in particular if you see things differently. As you know, I have nothing to disclose.
Chillin'Competition 
Very interesting!)
Livia Lorenzoni
2 April 2021 at 11:35 pm
You raise some interesting points to once more defend your co-blogger’s client Google. However, the analysis ignores crucial facts which – under your suggestes analysis – would only confirm the EC’s reading: Firstly, the EC did not make its decision against applying Bronner dependent on the formal remedy imposed. There was no such discretion for the EC because mandated ‘access’ was not on the table as any required option. As you rightly point out, Google had always voluntarily provided its intermediation service to competing CSSs. It displayed them not only in generic results. CSSs had also entered into contractual agreements with Google to be displayed in paid ads (Google Ads). All that EC and complainants were concerned about is that Google continues to provide this intermediation service in a competitive manner, i.e. by not nudging searchers to its own service. This has nothing to do with mandating access. It is not about competing CSSs wishing to get more. It is about Google diverting all demand to its own service. Secondly, because CSSs had entered into contracts for their display via Google Ads on general results pages, there have always been ongoing ‘access’ agreements in your terminology. Following the Compliance Mechanism, CSSs book Product Listing Ads (in Shopping Units) through the same mechanism and interface that they previously (and still) book Google Ads. Hence, the core argument in the blog post collapses. Thirdly, and according to your analysis most importantly, to bring the abuse to an end, Google did neither have to grant or continue any ‘access’ to its service, nor did it have to structurally separate general search from its comparison shopping service or even close down the latter. All it would have had to do is to continue
intermediating and displaying the offerings of all competing CSSs, including its own, in a non-discriminatory manner (as it had originally promised to searchers by the way). It could, for instance, have kept its specialised Shopping Units and filled it with the most relevant product offerings of any CSSs. There was no need to limit it to products from its own CSS. Overall, the Slovak judgment shutters Google’s defence. I represent complainants. But this is also my personal reading.
Thomas Höppner
3 April 2021 at 8:25 am
Thanks, Thomas, for sharing your point of view. This is the debate I was hoping the post would trigger.
And thanks very much for disclosing your interest in the case. I am sure our readers will appreciate it as much as we do.
I know that, in addition to your busy practice, you have a distinguished academic career. I would invite you to put your academic hat on when discussing legal issues with me. I have no dog in this fight (and no interest whatsoever in having a dog in this or, indeed, in any other fight).
I find the reference to Google Ads intriguing and most interesting. As you know, the abuse, as described by the Commission, only concerned generic search results. But perhaps you are right and Google Ads will play a role in the case. We will have to wait and see, I guess.
Pablo Ibanez Colomo
3 April 2021 at 11:40 am
Thanks. I also had my academic hat on when I wrote. As could be best observed in the IMS Health case, the indispensability criterion was developed to justify obliging a company that has never shared assets which it developed for the purpose of its business (infrastructure, raw materials etc.) with third parties seeking to use these assets to compete with the company. The equivalent situation here would be if a competing general search engine sought access to Google’s algorithm, index or search related data – in order to compete with Google in general search. The Shopping case, instead is about a dominant company altering the way it provides its multi-sided service to its customers with a view to promoting a new downstream service. It can hardly be argued that Google developed its general search service, let alone its various types of search results as tool to compete in the special market for comparison shopping services.
The EC assessed the effects of Google’s conduct in terms of traffic from generic search results. However, Article 1 of the Decision defines the abuse broader as “positioning and displaying more favourably, in Google Inc’s general search results pages, Google Inc’s own comparision shopping service”. Also the definition of “more favourable positioning and display” in footnote 1 refers to “Google’s general search results pages”. According to Recital (10), “general search results pages” encompass all “different categories of search results, including generic search results [..] and specialised search results [..] and online search advertisements” (Google Ads). Accordingly, the Decision’s abuse and remedy (equal treatment in general search results, see Recital (699-700) does not only concern generic search results. By the way, if the latter was the case, Google’s non-compliance with the Decision would be even more apparent: The Compliance Mechanism left the way generic search results are generated entirely untouched. It only altered the way in which specialised ads in Shopping Units are chosen.
Thomas Höppner
3 April 2021 at 12:54 pm
Three points below: why does everyone revere freedom of contract in the EU/U.K. over other rights in issue? Have we confused US thinking and pre Lisbon values with the current law? What does indispensability mean?
Freedom of contract – what about other rights that are guaranteed and enjoyed by others under human rights law and preserved and protected by the read across provisions in the EU treaty of Lisbon? For certain freedom of contract was more important to those that framed the Sherman act and codified what were previous English common law values – where freedom of contract was based on a world of freedom to exploit and values and ideas of justice that are over a century out of date. We now seek to protect individual rights and do suggest that the greatest good for the greatest number but injustice for the rest is not ok. So reference to property right may now be regarded as one of many rights to be taken into account and now include and concern the protection of the individual and, in all events where is the balancing of invasion of privacy and stripping away of personal data and rights to that data under exploitative contract terms?
Have we confused our law under Lisbon Treaty with US law? The ideas around freedom of contract make some sense in a system such as in the US where a parallel regulatory system can impose an obligation of supply. Also, US antitrust does not deal with exploitative abuse – leaving that for regulation. So, in that system, but only in that system, forcing a company to supply looks like overstepping a role that the legislature has reserved to itself. See Trinko vsVerizon.
Where ( as here in the EU and U.K.) the system of law expressly prohibits exploitation then the exploitative terms imposed on consumers of a platform can be an abuse of dominance and an invasion of privacy. Similarly, where there is no effective choice over who to deal with there is no ability to freely enter into a contract and how can there be a loss of contractual right or freedom where no contract can be said to be entered into? (at least in English law consumers need to be exercising free choice to enter a binding contract a contract entered under duress is not a contract and a contract where there is no choice can’t be used as evidence of consent to allow the use of personal data. This is the case under English law and probably in civil law systems as well – but you would know more than me there).
So where is the infringement of a right to deal with property in the EU and U.K. system? I would suggest that maybe the duty imposed on a dominant firm does encompass a duty to treat all fairly and in a non discriminatory fashion. That duty typically means not discriminating in favour of own products and services in downstream divisions ( Telia Sonera), not bundling things into the existing supply or extending the contract to products that users don’t want (Hilti) and not treating some customers differently from others without objective justification/proportionality rationale. Does it impose an obligation to deal? For existing customers the answer is a clear yes. That is in the form of an obligation to continue to supply. In the case of ubiquitous platforms the enquiry normally ends there since they are ubiquitous and any upgrade or variation or provision of the same service is covered by the non-discrimination obligation – all need to be supplied and the withdrawal or refusal to supply would be an abuse. Where Dom co decides to launch a new product – like Google launching a driverless car, there is little basis for imposing the obligations of a dominant player on the new supplier/ customer relationship. Provided no cross subsidy and competition on the merits is observed.
What does indispensability mean? Problem with word like indispensability is who makes the decision? Entrant or Dom co? What does it mean? Some people regard some things as being more dispensable than others… is it capable of being qualitified with consumer research?
Tim Cowen
3 April 2021 at 12:06 pm
Thanks, Tim, for your thoughtful comments. I am particularly grateful that you raise points of principle.
I am less surprised than you are that the Court, in Slovak Telekom, showed concerns with interfering with a firm’s freedom of contract and its right to property. As explained in the judgment itself, these are two necessary ingredients for long-term prosperity.
It does not seem to me that this position is alien to the European tradition. This is after all the rationale behind confining to exceptional circumstances the instances in which competition law interferes with a firm’s freedom of contract and right to property.
You should also bear in mind that the Court has consistently signalled that the EU legal order ensures a high level of protection of intellectual property, which is part of the same philosophy.
More generally, the Court, over the years, has scrupulously protected fundamental rights.
On the other points you make: I do not believe dominant firms have a general duty to deal with rivals on non-discriminatory terms and conditions. On the notion of indispensability: I believe Bronner and IMS Health provide an operational approach to it.
Pablo Ibanez Colomo
5 April 2021 at 8:32 am
Pablo – and data ? It’s not a simple question of contract rights and entry as it was in Bronner is it? Or do you think that the case law means that the personal contractual rights and intellectual property ownership are more important than consumer rights and the consumer’s interests in protecting their own data??
With kind regards,
Tim
Tim cowen
6 April 2021 at 12:28 am
Pablo – re reading your comments I realised that you suggested that I may have raised the idea that there is a general duty to deal. I thought I was quite clear that withdrawal of supply would be an issue but that imposing obligations on dominant companies for the supply of new products is not likely to be an issue. Where did you think that I suggested a general duty to deal?
With kind regards,
Tim
Tim Cowen
6 April 2021 at 12:42 am
Very interesting post Pablo!
I do wonder about two points
From what I gather you argue that the formal instructions in the remedy should not be decisive for the kind legal test the commission should use in its case. I tend to agree with this since the opposite situation would indeed give the commission perhaps too much freedom to avoid some legal hurdles it would normally be required to overcome (for good reason). I am not certain however whether the selected legel tests / type of abuse used in each should be so strictly interconnected as you note. Does the imposition of a remedy that has the effect on access to a facility by third parties always mean we can only apply the Bronner case law to it?
If I look for example at Apple and it’s App Store one could argue ( as I do) that Apple is considered to tie/bundle the App Store with iOS with respect to both consumers and app developers. In the hypothetical case that such a tying abuse would be established it would commonly be remedied by removing the obligatory link between the two. This would very likely have the effect of giving access to third party app stores to iOS – otherwise there can be no untying / unbundling. But based on what you mention in your post this would mean that the Commission would require to rely on the Bronner case law to find an abuse and not on the case law on tying. If that is the case that seems to restrict the Commission a bit too much in the types of abuses it can pursue outside the scope of Bronner no ?
A second thing I wonder about is what concerns the matter of agreement / or lack of it (for the purpose of access) in the case of Google. I am not so much concerned with the facts of the case but rather I would like to know what would count as an agreement for this purpose in your opinion? E.g. the definition of agreement/contract in EU law / national law ?
Daniel Mandrescu
3 April 2021 at 3:15 pm
Spot on, Daniel! Thanks so much.
On your first point: I would simply point out that pretty much any refusal to deal case can be seen as a form of tying. A refusal to deal with downstream rivals amounts, in effect, to tying the upstream and downstream products when sold to end-users.Think of Magill, Bronner or IMS Health.
Against this background the question is how we can distinguish between refusal to deal and tying cases. And there, the remedy becomes the fundamental factor. In a traditional tying case, bringing an infringement to an end does not involve forcing the dominant company to conclude an agreement with rivals. So if a case involve an access agreement it is, in all likelihood, and as per Slovak Telekom a refusal to deal case.
On the second point: I would in fact be interested in your views! My intuition and my fondness for consistency make me believe that the notion of agreement within the meaning of Article 101(1) TFEU is the most sensible approach, but I might be wrong.
Pablo Ibanez Colomo
5 April 2021 at 8:38 am
Thank you Pablo,
Your point on tying vs. refusals is very interesting and I can agree with you to the extent a remedy that imposes dealing may show an abuse that is a refusal to deal. However, when I try to think about this solution more generally, I see two challenges. First, what would be the consequence for tying cases similar to Google Android where access was not denied but ended up as part of the remedy? The choice screen is in essence an obligation to deal with competitors in a manner that was not previously required.
Second, what would be the implications for private enforcement of such an approach? Going back to the example of Apple, the consequences of following the argument through would be that app developers that consider being harmed by the tying of the App Store to iOS would not be able to rely on such abuse in their claim against Apple. Instead, they would be required to rely on Bronner.
This would be a bit odd since their harm does not result from Apple denying them access to iOS (in contrast to third-party app stores) but rather from the fact that their access to iOS is subject to another condition: going via the app store. In such a case the remedy could be to allow third-party app stores access to iOS but also to allow individual apps to be downloaded directly. The latter remedy does not involve granting access to parties previously denied but simply changing the mode of access / conditions of access so relying on the tying argument should be possible.
Such a case would then create a bit of a strange mix of claims and use of legal tests:
1. third party app stores must rely on Bronner,
2. ‘regular’ app developer can rely on tying,
3. the Commission must rely on Bronner if it wants to open up iOS to third-party app stores but it can use
tying instead if it will only impose on Apple to allow direct downloads.
How do you see this all working together?
On the previous matter of agreement, I tend to agree my default choice would also be the definition of an agreement under 101 TFEU. I just wonder what this would do for the concept since it would definitely subject to many ‘stretch’ attempts in such cases. I will have to get back to you on this at a later point in time.
Daniel Mandrescu
5 April 2021 at 11:12 am
Those are really great points, Daniel. It would be wonderful to explore them further beyond this comment section.
On your first point, re the choice screen. The failure of the Media Player remedy and the need to resort to the choice screen remedy in Internet Explorer make it clear, in my view, that the Microsoft ‘tying’ cases were in reality about refusal to deal. The fact that the traditional remedy in tying cases failed makes it clear that the case was not about tying at all.
On the second point: I am fairly relaxed about setting different thresholds. It is one thing to deal with the unfair terms within the ecosystem as designed by the platform operator and another one to rely on competition law to alter the ecosystem in question (for instance by forcing modularity at one level of the value chain that the platform operator had chosen to keep for itself).
When app developers or app stores seek to open up the app store layer to competition, they would essentially seek to alter the ecosystem. The logic of Slovak Telekom suggests they would need to show that the Bronner conditions are satisfied. The method through which the layer is open (direct downloads or app stores) makes no difference from my perspective.
Pablo Ibanez Colomo
5 April 2021 at 7:01 pm
I am less hopeful for Google than you are.
In Slovak Telecom, it is noted that “where a dominant undertaking gives access to its infrastructure but makes that access, provision of services or sale of products subject to unfair conditions, the conditions laid down by the Court of Justice in paragraph 41 of the judgment in Bronner do not apply” (para 50). Such practices “cannot be equated to a simple refusal to allow a competitor access to the infrastructure, since the competent competition authority or the national court will not have to force the dominant undertaking to give access to its infrastructure, as that access has already been granted” (para 51).
Stricto sensu, this paragraph is difficult to reconcile with the potential applicability of the essential facility theory in the Google Shopping case.
After all, Google did not refuse to give access to its platform in the market for comparison shopping services but rather gave access under its own terms. In that regard, according to the EC, “Google positions and displays, in its general search results pages, its own comparison shopping service more favorably compared to competing comparison shopping services”. Can giving access to a feature be equated with giving access to an essential facility? Not really, if you read the paragraphs cited above.
However, the ECJ’s reading is fundamentally dangerous because it implies that a dominant company is better off openly refusing to negotiate than granting access under alleged “unfair” terms. This different test tilts the balance towards more power for antitrust authorities which can simply apply a formalistic approach and only apply Bronner in the case of a blatant refusal to deal.
In my humble opinion, the Google Shopping case remains (as the case law stands) a question of access to an essential facility. I have a less complex legal test in mind to justify it. In fact, the remedy in Google Shopping is a FRAND access to the platform and a FRAND access is the last part of the essential facility theory (as reminded by Microsoft II). Thus, the EC bypassed the Bronner/Magill/IMS legal test and instead focused solely on the discrimination criterion.
As a side note, something which could go against the applicability of IMS Health/Microsoft is the “limitation of technical development throughout the market” condition (since the test would then be nonsensical in relation to the facts in question), but only if real IP rights would be at stake (which at first sight isn’t the case, inasmuch as it seems to be presented as a question of fair contractual terms/self-preferencing).
The EC can play the role of Dr. Jekyll, indeed it is its duty to remedy new potential market failures. But in that case, because it is against legal certainty (no legal precedent really grounds the EC’s legal assessment and the “competition on the merits” standard is as blurry as “fairness”), the EC should not impose a 2.4 billion fine and only require remedies. In that regard, legitimate expectations are not legal niceties, they are central to our legal system. The EC cannot have its cake and eat it. You cannot create new legal standards and blame companies to not respect them. If the EC really wanted to fine Google, they could have used tying or the essential facility, but they didn’t take that path.
Similarly, the undertaking should also be able to challenge this new legal test and it is up to the Court to decide whether the new legal test makes sense.
I would obviously be glad to have your comments and thanks for sharing your thoughts in this amazing blog.
As a side note, I will note re the comment above by Thomas Höppner, that while it is good that he shares his views, it is much more debatable that he wrote articles as a scholar paid by public universities (taxpayer money) to help clients of his own private practice, but this is another question…
BE
5 April 2021 at 1:14 am
Thanks for the thoughtful comment, BE.
On the question of access: if you think about it, the operation of Google’s generic results is not about ‘access’ in the sense that it does not involve an agreement between Google and the pages displayed therein. Chillin’ and LSE Law pop up in Google’s search results, but this is just how the search engine works.
In reality, the Google Shopping case is about the design of a product. The question, more precisely, is whether a dominant firm is under a duty to design a product in a non-discriminatory manner and, if so, under what circumstances. My point is: insofar as the design of a product is a strictly unilateral conduct, it does not seem to get into the freedom of contract considerations mentioned by the Court in Slovak Telekom.
This said, perhaps the Court rules that it is a distinction without a difference, as you seem to suggest. The point is that it is an open legal question, and that the fate of Google Shopping does not follow logically and unequivocally from Slovak Telekom. We will have to wait and see,
Thanks again!
Pablo Ibanez Colomo
5 April 2021 at 8:45 am
On the question of access, I’m thinking there is some significance in the concept of “decision-making autonomy” introduced by the CJEU in para. 58 of the judgment. Questions about the design of a product are generally within the “decision-making autonomy” of a firm, absent some applicable duty to design a product in a non-discriminatory manner … it seems a bit absurd to argue that once a firm opens up any single element, feature or functionality of a platform for competition, they are then prevented from reserving to themselves all other elements. It doesn’t work that way with technology licenses.
Kay
11 April 2021 at 6:25 pm
Dear “BE”, I agree with your first paragraph (only). The high EFD abuse threshold appreciates an undertaking’s freedom to decide whether to share its assets with rivals or not (and to thereby open a new market or not). Where it has decided voluntarily to do so, even though under “unfair” terms, this freedom requires no further protection and the higher threshold is no longer justified. Instead, having opened-up a new market, the undertaking then needs to adhere to the legal requirements that apply to the provision of any service by a dominant undertaking: refrain from imposing unfair conditions and from discriminating (see Art. 102 lit. c) and d)). Not least in the interest of legal certainty, these requirements should not be any lower just because the service concerns some sort of granting access (by requiring indispensability for an abuse).
FRAND criteria are not part of the legal requriements for finding an abuse under the EFD concept, neither in US nor EU law. Developed in the context of IP standardization disputes, FRAND is a common remedy that has been applied to a variety of situations to ensure fair dealings, including in mergers and licensing deals that have nothing to do with the EFD. One must not confuse the possible set of suitable remedies to bring an identified abuse effectively to an end with the legal criteria for finding an abuse in the first place. In order to restore competition, the remedy can exceed the original abuse (= go further than to cease-and-desist). In Shopping, the identified abuse was classical leveraging, carried out, in this case, by a new mechanism: self-preferencing in search results. The natural remedy for that was an obligation of treat intermediated conted equally in search results pages (as this is what search engines would do in a competitive situation). This remedy, however, does not suddenly turn the case into an EFD or standardization case.
Finally, referring to your “side note”, while I wish that any public university would pay me for any article that I write :), this is not how things work. I have never received any taxpayers’ money for articles that may help victims of an abuse that I advise. The accusation seems particularly odd coming from someone that does not even dare revealing its own name.
Thomas Höppner
5 April 2021 at 10:18 am
Thomas – good points and well made. I agree. Importantly, Shopping is not a new form or abuse; it’s the same old story warning new clothes, at most..
Best
Tim Cowen
Tim Cowen
6 April 2021 at 12:23 am
Thank you for an interesting post and for the discussion. It is an unusually clear debate on an issue that appears to be central to this case.
Thank you also to Mr. Hopner for exposing his arguments. The debate is interesting, but I find it delicious that he pretends his views are academic and independent when his professional life depends on this case, and yet accuses a real academic of bias by proxy. That does not seem to be fair, elegant, academic or necessary.
I do agree with Mr. Hopner’s point that no public university would pay for such articles, particularly when they are already paid by other third parties. Multi-sided funding might be uncommon, but undisclosed funding sadly is not.
Tom
6 April 2021 at 11:01 am
Let’s take a step back.
Essential patents, as the name suggests, are essential, i.e. indispensable. Most EC’s decisional practice regarding behavioral commitments stems primarily from agreements with the EC (i.e., not from case law) and, even in that context, they were a means of ensuring that after a merger an essential asset is available to competitors. In the telecommunications sector, regulatory obligations have been imposed on dominant firms to share infrastructure on FRAND terms because they owned essential infrastructures (e.g. Regulation No 2887/2000).
While FRAND is not and never will be part of the conditions, it does give a clear indication of what they are/should be. As the name implies, remedies cure a problem, and it’s best to know the disease before you give the medicine.
The EFT was one of the paths the EC could have taken. It did not do so and based its assessment on a new line of legal reasoning (self-preferencing) that has never been sanctioned in the past.
BE
6 April 2021 at 11:12 am
Dear Tom, please note that I revealed my bias from the very beginning. My academic background was brought into the debate by others. I cannot help that my personal, academic and professional believes match in this case. By the way: I have made the arguments above since 2005 – long before any Google case (see here https://www.amazon.de/Abuse-Market-Dominance-Refusal-Competitors/dp/3639141415
I did not accuse Pablo of any unethical bias. If it came across this way, I do apologise. Because I enjoyed so many of his other great articles and contributions, I was just a bit sad to see that we do not agree on this topic as well and may have drawn the wrong conclusions. No offense meant! Thank you Tom for pointing it out.
Thomas Höppner
6 April 2021 at 11:46 am
Aupa Pablo, very hot discussion as usual, I keep coming back to the example I know well, brick&mortar retailers: no one could force Ikea to host third-party brands (assuming it was dominant) unless the Bronner test was met (which cannot of course). However, if a dominant supermarket executes discriminatory category-management (see par. 210 VGL) in order to self-favour its own brand over third-party brands it has freely chose to stock, this scenario is a different monster and the Court has recalled that in this case. In this case, the unfairness considerations I always talk about match the competition law assessment. The real challenge is when the platform does not meet the dominance test even though it is able to exert bargaining power over its suppliers/business users and “abuse” its dual role.
Best
J&B
7 April 2021 at 12:08 pm
Difficult to disagree with your interpretation of Slovak Telekom. Your example captures effectively the gist of the judgment (subject to a proper assessment of anticompetitive effects). Saludos!
Pablo Ibanez Colomo
8 April 2021 at 1:48 pm