Chillin'Competition

In competition law terms, last year was marked by Android Auto. Following the judgment, the applicability of the Magill and Bronner doctrines depends on two questions: (i) whether the dominant firm has developed the assets ‘solely for the needs of its own business‘ and (ii) whether a duty to deal would ‘fundamentally alter the economic model‘ on which the development of the assets relied.

The refusal to deal doctrines are only relevant where these two cumulative conditions are met. Where either of these conditions fails, the potentially abusive nature of the refusal will be evaluated in light of the standard effects analysis that applies as a default under Article 102 TFEU.

A central question that was never tackled by the Court in Android Auto is whether Enel and Google are competitors in the relevant adjacent market (and, similarly, whether Enel’s app and Google Maps were rival products).

The whole analysis is carried out on the assumption that Enel and Google are indeed competitors in the said adjacent market, even if the latter is merely hypothetical or has shifting boundaries.

There were good reasons for the Court to make this assumption. After all, the Magill and Bronner doctrines only provide support for intervention where the dominant firm and the one requesting access are actual or potential competitors.

As the law stands, there is no basis in the case law to support the idea that Article 102 TFEU can be relied upon to compel a dominant firm to deal with a non-competitor – what I call an exploitative refusal to deal.

It would therefore be necessary to develop an ad hoc doctrine extending the range of instances where an undertaking can be order to share an asset with a firm with which it has chosen not to deal. In the alternative, the Court could choose to expand the reach of Android Auto.

In a sense, Android Auto lends itself quite naturally to an extension along these lines. The fundamental idea behind the judgment, after all, is that a dominant firm having developed a (partially) open platform must accept that firms operating in and around the platform become involved in its design.

In such circumstances, the only twist that would be needed relates to the assessment of anticompetitive effects. Instead of exclusionary, such effects would be exploitative.

One could argue, for instance, that, by failing to feature a particular application (or category thereof), end-consumers would be deprived of more attractive functionalities without an objective justification.

Where the dominant firm is already giving access to another provider in the relevant category, one could argue, in addition, that refusing to deal with another provider amounts to exploitative discrimination within the meaning of Article 102(c) TFEU.

Such an expansion would not be wholly uncontroversial. A potential argument against it is that it would probably amount to compelling a firm to deal in virtually every scenario (so long as there are no technical reasons justifying the refusal, that is). In the same vein, the exploitation route would allow claimants and authorities to circumvent the need to establish the exclusionary effects of the refusal.

It is difficult to say whether the scope of Article 102 TFEU will expand in this direction. What one can certainly say is that it would not be surprising if the expansion occurred. The legal shift would bear all the hallmarks of the new EU competition law, and in particular the trend towards regulatory-like intervention and the blurring of lines between exploitation and exclusion.