Chillin'Competition

I have uploaded on ssrn a new paper (see here) a paper that discusses the judgment of the Court of Justice in Android Auto as well as its substantive and institutional implications. I am pleased that the paper received yesterday the AdC Competition Policy Award, organised every year by the Portuguese Competition Authority.

The way in which Android Auto has changed the law of refusal to deal, it seems to me, may not have been fully appreciated. To make this point, it is sufficient to apply the Court’s reasoning in Android Auto to the facts at stake in Bronner. The latter would have been decided differently; evidence of indispensability would not have been required to establish an abuse.

As I explain in the paper, this difference is a function of the way in which Android Auto (re)interprets the indispensability condition. In Bronner and Magill, whether or not the dominant firm had kept the assets ‘for the needs of its own business‘ was assessed by reference to the relevant market concerned by the refusal. It was therefore irrelevant that the TV channels in Magill were licensing their copyright to newspapers (but not weekly magazines) or that Mediaprint was printing and distributing another publication in Bronner at the time of the facts.

The analytical approach followed in Android Auto construes the indispensability condition differently. According to the new doctrine, where the dominant firm is dealing with a third party in market A, it can no longer invoke indispensability in relation to a refusal concerning market B. For the same reason, the judgment has significantly reduced the scope of the refusal to deal case law.

This transformation has obvious implications for digital markets. Dominant players in these markets often run systems that are partially open and partially closed. This said, the criteria followed by the Court suggest that the ruling is likely to have an impact in other industries and markets.

In any event, the implications of the judgment go beyond the shrinking of the refusal to deal doctrines. Android Auto allows for intervention that is not confined to a mere duty to deal. A dominant firm may indeed be required not just to share an input or infrastructure with third parties, but to redesign its assets by taking into account the demands of the said third parties. In this sense, the operation of the infrastructure becomes a cooperative venture.

I look forward to your comments on the paper. And thanks again to the AdC!