Chillin'Competition

The first instalment of this series on the judgment in Android Auto discussed the metamorphosis of the case before the Court: a preliminary reference concerning the interpretation of the indispensability condition was turned into an analysis of whether the Bronner criteria were applicable in the relevant circumstances.

Beyond institutional issues, the judgment is notable in that it introduces a number of substantive innovations that represent a move away from Magill (which was the first providing a structured framework to refusals to deal), Bronner (which extended this framework to tangible property) and IMS Health. One may add to this list Slovak Telekom and Google Shopping, which did not depart from (in fact, they embraced) the same approach.

One can identify three main areas where Android Auto carves its own path and reframes the case law. To begin with, the judgment departs from the logic underpinning the legal framework introduced in Magill. Second, it changes the interpretation of a crucial point of law, which has the effect of significantly reducing the scope of Magill and Bronner. Third, it allows for more far-reaching intervention.

Android Auto and the logic underpinning the refusal to deal case law

The rationale underlying the refusal to deal case law and, specifically, the indispensability condition had been clear from the outset, and were effectively summarised by Advocate General Jacobs in his Opinion in Bronner. If anything, the Court has been more explicit about this logic in recent years.

There are two main reasons why Magill, and then Bronner, set the bar so high. The first relates to the fact that imposing a duty to deal on firms amounts to a major interference with their right to property and their freedom of contract. It should therefore only happen, the Court has consistently explained, in genuinely ‘exceptional circumstances’.

The second reason has to do with the consequences that such interference has on firms’ incentives to invest and innovate (that is, on dynamic competition). The fundamental premise behind Magill and Bronner is that dynamic competition is more beneficial for citizens and society than its short-term counterpart. Against this background, requiring evidence of indispensability was deemed to be a reasonable means to ensure that the latter does not impact negatively the former.

The Court moves away from this logic in Android Auto. Indispensability is not an element of the legal test even though intervention in the case amounts not just to compelling a firm to deal with a third party, but even to changing the operation of its platform.

The indispensability condition, therefore, is no longer universally applied as a filter to ensure that intervention does not affect dynamic competition. By the same token, the judgment strikes a new, different balance between static rivalry and firms’ incentives to invest and innovate.

How Magill and Bronner are reinterpreted in Android Auto

The Court, in Android Auto, attaches a great deal of importance to the fact that the platform had not been solely developed for the ‘needs of [Google’s] own business but with a view to enabling third-party undertakings to use that infrastructure’ (paras 44 and 49). Where the platform is a partially open one, the ECJ concludes, the indispensability condition is not an element of the legal test. This is so, the judgment suggests, even when access to ‘third-party undertakings’ has been given for purposes other than the one for which access is requested.

It is sufficient to take a cursory look at Magill to realise how this position departs from the preceding three decades of case law, including Bronner. The TV operators in Magill had enabled ‘third-party undertakings’ to use the programming listings at issue in the case. As explained by the Commission in its decision, RTE, BBC and ITV had not kept their inputs for their ‘own use’. They were already licensing their intellectual property to newspapers, free of charge, when the Commission started its investigation. What TV operators kept for the ‘needs of [their] own business’ was not the input generally speaking but a particular application of the input (the publication of weekly listings, as opposed to daily ones).

In spite of the above, indispensability was found to be an element of the legal test in Magill. What mattered was not whether the TV operators had licensed the listings to ‘third-party undertakings’ in a market unrelated to the one at issue in the case (daily listings), but whether the dominant firm had kept for the ‘needs of its own business’ the activity for which access was requested (weekly listings).

Android Auto introduces a new interpretation of Article 102 TFEU. It suggests that if access is requested for application A, indispensability will not be an element of the legal test when access is requested for application B. Once the platform is partially open to ‘third-party undertakings’, Magill and Bronner will no longer be the relevant framework to assess the abusive nature of a refusal, irrespective of the adjacent market concerned.

The implications of this rereading of the case law are significant. It necessarily reduces the scope of the Magill and Bronner doctrines, which are now confined to instances where the integrated dominant firm has not dealt with rivals in any market or in relation to any actual or potential use of the input or infrastructure to which access is requested.

Crucially, it is not obvious that this new interpretation is limited to digital platforms. It is easy to think of instances where an input or platform can be used for a variety of purposes, and nothing suggests that the new reading of Bronner will vary based on the relevant sector.

This interpretation was not expressly acknowledged or contrasted with the facts at stake in Magill, whether by the Court of by Advocate General Medina in her Opinion. It was treated as a novel point of law in the judgment. This technique reminded me of some recent refinements of the case law in the context of Article 101 TFEU (and discussed here).

How Android Auto goes beyond Magill and Bronner

It is worth mentioning, finally, that the judgment in Android Auto goes beyond Magill and Bronner, in the sense that it allows for a deeper and more significant interference with a dominant firm’s right to property.

In both Magill and Bronner, the Court ruled that there may be circumstances where a firm can be compelled to deal with rivals. Android Auto suggests that a firm may be forced not just to deal with third parties, but to change the operation of its infrastructure to accommodate rivals (and this, without the need to establish that the said infrastructure is indispensable).

The Commission had already suggested expanding the scope of Article 102 TFEU to require firms to invest to adjust their property and accommodate rivals (in particular in energy markets, as in ENI). Its approach is now vindicated. In a sense, in fact, the shift heralded in Android Auto has been decades in the making. I will elaborate on this issue in the next instalment. In the meantime, your comments would be very much welcome.

The “revolution”, “counterrevolution” and most debates around Article 102 TFEU over the past couple of decades have revolved around the notion of an “effects-based approach”. Yet, there remains considerable uncertainty as to the meaning of “effects” in abuse of dominance cases. This is remarkable given the Court’s clarification that a finding of abuse presupposes that the conduct at issue “at the very least, is capable of producing exclusionary effects” (Superleague, para. 130). Indeed, establishing exclusionary effects/foreclosure is the bottom line in every case. If the notion of effects is too narrow or demanding, effective enforcement may be compromised. If, on the contrary, there are no discernible limitations to the notion of effects, then this paves the way to discretionary enforcement and legal uncertainty. We should arguably avoid either extreme.

In the Policy Brief launching the process for the future adoption of Guidelines on Article 102 TFEU (titled “A dynamic and workable effects-based approach to abuse of dominance”) the Commission acknowledged that “[t]he effects-based approach promoted by the Commission is clearly reflected in [case law developments]” (p.2), but also raised “the question of whether the heightened substantive legal standard that the Union Courts have accorded to it may inadvertently lead to undesired outcomes”, expressing concern that “the bar for intervention [could be set] at a level that would render enforcement against practices that restrict competition unduly burdensome or impossible” (p.4).

The desire to “consolidate the case law” in such a way as to make the effects-based approach more “workable” also inspired the March 2023 amendments to the Guidance Paper on exclusionary abuses. With those amendments, the Commission replaced the notion of “anticompetitive foreclosure” that the Commission had publicly committed to follow since the original 2008 version of the Guidance Paper, and which was consistent with that used under merger control (see e.g. the Commission’s non-horizontal merger guidelines, para. 18). This significant amendment, which implied not only signposting for the future, but arguably also an element of goalpost-moving, received scarce attention at the time.

The draft Guidelines now take several additional steps to alleviate the Commission’s burden of having to establish exclusionary effects:

First of all, it is noteworthy that under the approach set out the Commission would not need to establish anticompetitive effects in cases involving “naked restrictions” (Draft Guidelines, para. 60.c) or conduct otherwise “presumed to lead to exclusionary effects” (including exclusivity agreements, conditional rebates, predatory pricing, margin squeeze and certain forms of tying; Draft Guidelines, para. 60.b)). This reliance on presumptions has already been the subject of much commentary (see, e.g., here, here, here, or here).

But for the purposes of this post I will focus on the analytical framework that the Draft Guidelines propose to follow in relation to the only category of practices that the Commission itself describes as “conduct for which it is necessary to demonstrate a capability to produce anticompetitive effects” (Draft Guidelines, para. 60.a):

If one connects what the Draft Guidelines say regarding capability, causality and appreciability together with their definition of exclusionary effects, my reading is that even in the subset of cases where the Commission would be required to establish effects, the Commission would only need to show that conduct by a dominant firm is capable, considered together with other factors, of potentially increasing the likelihood that rivals (including in some cases less efficient rivals) may find it somewhat more difficult to compete against a dominant undertaking (e.g. by increasing barriers to entry), even if the added difficulty is minimal or not appreciable.

Query: Can anyone think of any conduct outside the scope of competition on the merits that would not meet this test?

I can’t. And if every conduct deviating from competition on the merits (itself a controversial and vaporous filter, as discussed here or here) would meet this test then, arguably, the requirement that conduct must be capable of having exclusionary effects to fall within the scope of Article 102 TFEU would constitute an empty filter.

There are, I suppose, three possible counterarguments to my observation, namely (a) that my reading of the Draft Guidelines is an oversimplification; (b) that the Draft Guidelines are simply and objectively based on established case law; and/or (c) that, in practice, the Commission would in any case exercise self-restraint. So let’s address those:

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The Court of Justice delivered yesterday its much awaited judgment in Android Auto, which I followed from the early stages (see here for a comment of the AGCM’s decision from four years ago). It exemplifies, better than any other, the uncertain future of the Magill/IMS Health and Bronner doctrines in the current economic and technological landscape.

Android Auto could have a very substantial impact on the relevance and scope of these two doctrines (far more substantial than Google Shopping, for instance). I write ‘could’ for the simple reason that the meaning of the judgment is only likely to be fully teased out following subsequent references to the Court.

Before addressing substantive matters strictly speaking, it makes sense to start by focusing on an issue that is potentially of interest to EU lawyers at large (and arguably the most intriguing in this particular case).

Yesterday’s judgment deals extensively with the conditions under which the Bronner doctrine is applicable. However, Bronner is not even cited in the original AGCM decision. The authority’s analysis was based on Magill and IMS Health instead (which is a similar, but not identical, doctrine).

More importantly (and unlike Google Shopping), the dispute at the national level was never about whether the Magill/IMS Health (or indeed Bronner) conditions were applicable in the circumstances of the case.

It revolved, instead, around the interpretation, by the AGCM, of the Magill/IMS Health doctrine, which was deemed to provide the appropriate analytical framework to evaluate the abusive nature of the practice. The AGCM’s choice of legal test was unsurprising. It was, after all, an outright, plain-vanilla refusal to deal.

One could argue, on the other hand, that the AGCM’s interpretation of Magill/IMS Health was somewhat unorthodox. It was therefore reasonable (and to be expected) for the Consiglio di Stato to refer a number of questions to the Court of Justice.

To begin with, it was unclear, in light of the available facts, whether access to Android Auto was indispensable within the meaning of IMS Health (this ruling provides, in paragraph 28, the canonical definition of the condition). Enel’s app had in fact been launched and was offered to end consumers even though it did not have access to the said platform (see paras 8 and 9 of the Court’s judgment in Android Auto).

The first and the second questions referred by the Consiglio di Stato addressed this issue. One of the questions related to the very meaning of the condition (does indispensability mean indispensability or does it mean convenience instead?). The other focused on the fact that Enel’s app and, indeed, rival apps had been offered to end users even though they were not accessible via Android Auto, thereby suggesting that the demanding threshold set in Magill and IMS Health had not been met.

The judgment in Android Auto does not interpret the indispensability condition. The Court, instead, reformulated the questions asked by the Consiglio di Stato (see para 33) and examined, following this exercise, whether the Bronner doctrine was applicable in the context of the case.

The reformulated question (para 36) was whether Article 102 TFEU can apply to a refusal to deal in the circumstances of the case (that is, one involving access to a digital platform) and this even though the platform in question is not indispensable but can make a product more attractive to consumers.

It is on the basis of this new question that the Court provided its interpretation of Article 102 TFEU. I will discuss the substantive aspects of the ruling (and how it potentially entails a shift in some points of law that had remained unaltered since Magill) in the next instalments.

For the time being, the fact that the dispute in Android Auto was transformed (from a case about the interpretation of Magill/IMS Health to one about the applicability of Bronner) raises a number of issues that are worth discussing.

Android Auto shows, first, the extent to which the substantive and institutional aspects of a legal discipline are intertwined. This is one of the overarching themes of my research. I have come to realise, over and over, that institutions often influence (if not shape) substance. This judgment is one on which I will rely in the future to illustrate this interaction.

A second point relates to EU law: it is fascinating that disputes coexist at various levels and that the EU incarnation of a case sometimes acquires a life of its own. As soon as new actors become involved in the dispute and provide their perspective, the discussion before the Court can drift apart from the national one and end up in a different place.

As a result, third, the judgment may be more consequential for disputes other than the one at stake in Android Auto. By focusing on the applicability of Bronner instead of the interpretation of Magill/IMS Health, the judgment may not necessarily shed much light on the specifics of the case. On the other hand, it is very likely to pave the way for intervention in other disputes relating to digital platforms.

The first instalment of this series (see here) – and the paper on which it is based (see here) – identify a mismatch between the reality of contemporary enforcement – where the adequate design and implementation of remedies is crucial to its success – and the ‘law in the books’, which assume a world in which the difficulty lies with detecting and establishing an infringement.

The obvious follow-up question is how the ‘law in the books’ (which is another way of saying Regulation 1/2003) can be changed to ensure that remedial intervention is effective.

The first step towards effectiveness is to acknowledge that ‘principles-based remedies’ hinder, rather than facilitate, enforcement. This point was already discussed at some length last time. The new iteration of Regulation 1/2003 should require the European Commission to provide the details of how the infringement is to be brought to an end.

The above point could draw inspiration from the framework that is already followed in relation to commitment decisions. The context is obviously different, but the fact that the obligations are specified in detail under Article 9 provide a clear template on what remedies should look like, in particular in cases that demand regulatory-like action. A quick look at recent decisions (such as this one) shows how granular the specification of commitments can get (as they should, given the concerns they address).

A second step towards effective enforcement would be to introduce a specific framework for the design of the remedies. This aspect is so central to the meaningful application of Articles 101 and 102 TFEU that is cannot be an afterthought in a procedure primarily conceived to establishing an infringement.

Again, this dedicated framework could draw inspiration from the one already applying when a firm proposes commitments to the European Commission.

Another source of inspiration is the Digital Markets Act, if only because this instruments acknowledges that a regulatory obligation is not always the end of the road, and that effective enforcement occasionally requires specification (as well as a formal apparatus allowing for it, such as the various avenues enshrined in Article 8 of the DMA).

The introduction of a formal framework for the specification of remedies would improve the current landscape in two ways (in addition to improving the effectiveness of remedies, that is). Third parties, who are not currently involved in the design of the remedy in any meaningful way, would be allowed to participate in the process.

The move would also provide greater clarity to firms subject to the remedies. By specifying, ex ante and in detail, how an undertaking is to meet its obligations, the state of perpetual uncertainty around compliance (which has become apparent in some recent cases) would be avoided.

The proposed framework is designed to balance these concerns with the requirements of the case law (pursuant to which the Commission cannot require the firm to bring the infringement to an end in a particular way if there are less intrusive means to achieve the same result)

The framework is summarised in the figure below.

The Commission would specify in detail the (structural or behavioural) obligations it plans to impose to bring the infringement effectively to an end, which would then be subject to a market test (along the lines of what is already done under Article 9 of Regulation 1/2003).

Following the market test, the Commission would give the chance to the undertaking subject to the proceedings to present a counterproposal to the (potentially revised) remedies. Only following this step (intended to bring the framework in line with the case law) would the Commission make the final version of the remedies binding upon the undertaking.

The Vodafone/Three merger, cleared last month by the UK Competition and Markets Authority, has been widely discussed, and for good reasons. For a long time, competition agencies insisted on structural remedies as a non-negotiable first-best. Any concerns would need to be addressed from the outset and without the need of subsequent monitoring.

The authorities’ traditional approach reflect the very logic of merger control, which is after all to prevent the harmful effects of lasting changes to market structures. It was therefore inevitable that the sort of behavioural remedies imposed in Vodafone/Three would spark discussions within the community.

Are the remedies in Vodafone/Three even legally consistent with the essence and objectives of the merger control regime? Can effective compliance with a commitment to invest and to cap prices be guaranteed in the first place? What are the consequences for the system if such remedies become the bread-and-butter of merger control and authorities’ resources are increasingly dedicated to monitoring activities?

These are all fascinating questions that should be, and will be, discussed at length. My immediate reaction focused on a different aspect, which is the relationship between competition law and regulation. The outcome of this investigation reflects particularly well the trends towards the ‘blending’ of competition law and regulation, which I addressed in The New EU Competition Law.

A great deal of scholarly energy has been devoted to identifying differences between competition law and regulation and/or to determining whether discrete instruments, such as the Digital Markets Act, are best characterised as the former or the latter.

My impression has long been that these discussions are ultimately immaterial. Formal regulatory instruments often replicate the logic and operation of competition law. It is not infrequent, moreover, that their objectives are aligned with those of antitrust.

Conversely, competition law, precisely because it is so malleable, often mimics regulatory regimes. It can intervene both ex ante and ex post and can be both prescriptive and proscriptive. Remedies, moreover, have become increasingly regulatory-like across both antitrust and merger control.

As a result of these parallel trends, where competition law becomes more like regulation and vice versa, the lines between one and the other become blurred, and agencies are likely to have recourse indistinctly to one or the other (just think of action by the European Commission against Big Tech).

Vodafone/Three is but an example of this trend. From now on, mobile telephony activities in the UK will be regulated in the country not just by means of formal regulatory instruments, but also via the administration of remedies imposed in the context of a merger investigation.

When the EU Regulatory Framework for electronic communications was adopted, it was hoped that, over time, regulation would roll back as markets become effectively competitive and the need for ex ante intervention decreases. Effective competition, it was hoped, would keep prices down and investments up.

The regime did not foresee that markets might become less competitive after reaching ‘peak effective competition’ and that re-regulation might be necessary as a result. If the trend towards consolidation is followed on the other side of the Channel, regulation through merger control might become the new normal across Europe.

What would keep investments up and prices down in such a landscape would not be effective competition, but explicit obligations imposed upon operators. And competition law and regulation would turn into an indistinct blend where it is not easy to tell where one starts and the other finishes.

The edited ‘version of record’ of the paper on Remedies in EU Antitrust Law has now been published and is available for download in Open Access here.

As explained in a previous post, the paper addresses the mismatch between the centrality of remedies in the current landscape, on the one hand; and the ‘law in the books’, on the other. More than ever before, effective enforcement depends on the adequate design and implementation of remedies. However, they remain relatively misunderstood.

One of the main ideas developed at length in the paper is that ‘principles-based’ remedies, which have featured so prominently in some recent landmark cases, are unlikely to deliver on their promises and could sometimes even undermine effective enforcement.

The first, and arguably most important point I make is that a ‘principles-based’ approach to remedies is not in any way mandated by law, as sometimes suggested or implied. It is true that an authority cannot require firms to cease the infringement in a particular way if there is more than one route to achieve compliance. It does not follow from this doctrine, however, that the said authority must refrain from specifying a remedy.

The second idea that the paper advances in this regard is that the alleged advantages of a ‘principles-based approach’ are a mirage. It is often claimed that it makes sense to follow this approach insofar as it dispenses competition authorities with the need to engage in the complex technical assessments that the adequate design and implementation of remedies demands.

The experience of the past decades suggests that, sooner or later, competition authorities are likely to end up dealing with the complex issues this approach was meant to spare. Consider the Microsoft saga, where the Commission, by means of a series non-compliance decisions, had to eventually engage with thorny questions, such as what amounts to a reasonable and non-discriminatory price.

This saga is also useful in that it is a valuable reminder that a ‘principles-based’ approach can affect the effectiveness of remedies and might significantly delay compliance. This fact, alone, would negate any of its supposed advantages.

More recent developments have exposed other drawbacks of ‘principles-based’ remedies. Since they do not specify the way in which the firm is to bring the infringement to an end, the issue of compliance is left permanently in limbo (at least for as long as the authority does not issue a non-compliance decision).

As a result of the built-in uncertanty that the approach creates, the compliance question may linger long after the adoption of the decision. It is submitted that such a reality does not benefit any of the actors in the system.

‘Principles-based’ remedies may not work for third parties benefitting from the decision, as they might find themselves unable to meaningfully evaluate compliance. It may not work for firms subject to the obligation either, as the may never be fully certain that their efforts bring the infringement effectively to an end

In fact, this approach may not be in the interest of competition authorities, which (understandably) may be willing to turn the page on the case and devote their resources to new questions but may find themselves caught in limbo.

The paper submits that ‘principles-based’ remedies may not provide the optimal approach to ensure compliance. It submits, in addition, that the current reality may require some tweaks to Regulation 1/2003 (which is not surprising, given that the sort of complex, regulatory-like remedies that are all the rage today are mostly a novelty and had never played an important role under Regulation 17).

What these tweaks are is something I will address in a future instalment of this series. In the meantime, it would be wonderful to get your comments (on the above or the paper at large).

Of the many judgments addressing the notion of ‘by object’ infringement that came out last year (and which I discuss here), FIFA v BZ is particularly significant, not just because of the issues at stake and the way the Court addressed them, but because of the hints it gives about the future of Article 101(1) TFEU.

In several respects, the enforcement of EU competition law is entering a new era, and FIFA v BZ heralds the new times. There are, in my view, three main lessons to draw from the judgment.

The resilience of the Court’s approach to restrictions by object

The first lesson is that the Court’s methodological approach to identify restrictions by object is proving to be remarkably resilient. It is clear from the case law that, in order to determine whether an agreement infringes Article 101(1) TFEU by its very nature, it is necessary to consider not just its content, but also its objective aims and the economic and legal context of which it is a part.

More importantly, this methodological framework is not an abstract formula. As FIFA v BZ exemplifies, the Court walks the talk. You will find in the judgment a meticulous contextual evaluation of, inter alia, the content of the rules (in that regard, the Court found that there was a mismatch between the legitimate aims pursued and the breadth of the restraints), the discretion they gave FIFA (and therefore the ability to decide which aims to pursue case by case) and the latter’s position.

The resilience of the case law is notable considering the tendency among some actors in the system to rely on shortcuts that disregard the methodology mandated by the case law. The instinct to establish a ‘by object’ infringement on the basis of form alone (e.g. the fact that the practice amounts to ‘price-fixing’ or ‘market sharing’) remains particularly strong, even thought it has been consistently rejected by the Court.

Every now and then, some actors also display a tendency to infer a ‘by object’ infringement from the effects of an agreement. Object and effect are two separate, fundamentally different stages. However, it is tempting to claim that a practice is restrictive by its very nature where it is deemed to have substantial effects on competition, and conversely, to claim that no ‘by object’ violation exists based on the absence of an appreciable impact.

FIFA v BZ confirms that the two stages must not be conflated, even when doing so comes across as intuitively right. Object is not, and has never been, a presumption of effects (as the Expedia judgment clarified). The effects of an agreement (or the unlikelihood of such effects) is not a reliable guide of its object.

From public to private enforcement

The judgment also reveals that a new generation of cases is reaching the Court. The landmarks of the past decade addressing the notion, including Cartes Bancaires, Generics, Budapest Bank and Super Bock, all originated in cases before a competition authority, whether the Commission or an NCA.

The new generation of cases, including not just FIFA v BZ, but also Superleague and the recent ruling in Booking, originated in disputes between private parties. The rise of private enforcement is testament to the success of Regulation 1/2003.

The change in the nature and profile of litigants is not without consequences. By necessity, the objectives and incentives of private litigants differ from those of a public authority. This difference is likely to be manifested across a number of fronts, from the nature of the cases that reach the Court to the way the arguments are framed.

There is a chance, accordingly, that issues pertaining to the notion of restriction by object, will be approached in novel and unprecedented ways (and thus that the resilience of the case law will be tested from new angles).

A second consequence of the rise of private litigants is decentralised enforcement. The latter, in turn, risk affecting the uniformity in the interpretation and application of Article 101 (and 102) TFEU. For the same reason, the resilience of the Court’s methodology to identify ‘by object’ infringements is likely to be put to the test more frequently than in the past.

In a decentralised landscape, the inclination to rely on discredited methodological approaches is likely to be more frequent (by the same token, the risk of substantive fragmentation is likely to increase).

A more explicit style when ruling?

A salient aspect of FIFA v BZ (and Booking) relates to the approach when delivering rulings. In the context of a preliminary reference, it is for the national court to apply the law, as interpreted by the Court, to the facts of the case. However, the Court, in both judgments, was explicit about the legal characterisation of the practices at stake (holding, in FIFA v BZ, that the rules were restrictive by object and, in Booking, that the clauses were not ancillary restraints).

This tweak in terms of style is reasonable if one considers the risk of fragmentation mentioned above. It is an effective means to ensure that a preliminary ruling is not interpreted differently from one court to another and, similarly, to avoid that the same issues keep coming back before Court.

There is a chance that, for these very reasons, the Court will also be more explicit (and/or more structured) about certain aspects of the methodology it follows to identify restrictions by object. At the very least, doing so would contribute to ensuring that national courts do not fall into the old trap of formalism when conducting their analysis.

One of the most significant developments of the past few years is the comeback of competition on the merits (as I had the chance to discuss here). For a long time (and certainly during the past decade), competition on the merits was nothing other than an abstract aspiration (a ‘general umbrella’, as Heike Schweitzer and Simon de Ridder crisply put it here), with no real substantive content.

There has been a push, very recently, to turn this abstract idea (with which it is hard to disagree) into an operational one. Instead of a ‘general umbrella’, it was hoped that competition on the merits would become a working tool allowing courts and authorities to draw the line between lawful and abusive conduct in individual cases.

The origins of this attempt are easy to trace in the case law. Competition on the merits was invoked by defendants in some cases (namely Google Shopping and Servizio Elettrico Nazionale) in the hope that it would (i) reduce the scope of Article 102 TFEU and/or (ii) make it harder for competition authorities to discharge their burden of proof.

The hopes behind this push have not materialised. It is clear after Google Shopping that conduct that is not inherently at odds with competition on the merits can be caught by Article 102 TFEU in a particular economic and legal context.

It is also clear that a competition authority cannot be required to show, always and everywhere, that the potentially abusive practice departs from competition on the merits. Where there is an established legal test, showing that the conditions enshrined therein are satisfied will be sufficient to prove an abuse to the requisite legal standard.

The attempt to turn competition on the merits into an operational concept has failed and might have backfired. This nebulous notion can be easily used against defendants (casting conduct as departing from competition on the merits is effective, if only as a rhetorical tool, to imply that it is necessarily abusive).

It may have failed, but the attempt to revive of competition on the merits has left a trail of confusion with which the competition law community has to live. The Commission, for one, could not avoid engaging with the concept in its Draft Guidelines. It was not an easy hand.

The Draft Guidelines are particularly helpful when they clarify that it is not necessary to show that a practice departs from competition on the merits in all circumstances. The question will typically be subsumed into the legal test if there is one already in place. This is an important, if uncontroversial, clarification.

On the other hand, the Draft Guidelines do not dispel the impression that the notion of competition on the merits is a source of confusion and duplication. This is not a criticism of the document: it is a criticism of the attempts to turn competition on the merits into something that it is not.

We have known for decades that competition on the merits cannot and will never be an operational concept. As I had the chance to discuss with Heike Schweitzer, Ordoliberals became aware, early on, of the limits of the concept and that it could not assist the sort of granular assessment that individual cases demand. It did not take long before it was abandoned (other than as a ‘general umbrella’, that is).

The Draft Guidelines illustrate the uselessness of competition on the merits as an operational concept. The overlap between Section 3.2. (‘Conduct departing from competition on the merits’) and Section 3.3. (‘Capability to produce exclusionary effects’) and the confusion to which this overlap gives rise is one of the most salient aspects of the document.

There is, for instance, duplication between the idea of competition on the merits and that of ‘naked restriction’ (or ‘by object’ abuse). Is showing that a practice departs from expression of competition on the merits not the same as showing that it is abusive by its very nature (in the sense that it has no plausible explanation other than a restrictive one)? If the former is established, what is the point of requiring proof of the latter too?

The duplication that the notion creates is, if anything, more apparent after Google Shopping. As pointed out above, the Court clarified in the judgment that some practices are only against competition on the merits in certain circumstances. This is true, for instance, of a scenario where a vertically-integrated dominant firm discriminates against rivals.

In such instances, a case-by-case assessment is warranted. The assessment, according to the ruling, will have to consider the relevant economic and legal context within which the practice is implemented.

The future Guidelines will have to account for this reality, and acknowledge that the issue of competition on the merits is context-dependent. Any future version of the document will have to distinguish between conduct that is inherently at odds with competition on the merits and that which demands a case-by-case assessment of ‘all the relevant circumstances’. This distinction necessary mirrors the framework laid down in Section 3.3.

A second, related consequence is that the issue of competition on the merits will overlap in theory and in practice with the analysis of effects (as is apparent from Google Shopping itself).

Is there a way forward, against this background? A cleaner approach that would avoid duplications would be to arrange differently the ideas currently found in Sections 3.2. and 3.3.

Google Shopping shows that it would be artificial to separate between competition on the merits and the assessment of effects. Both issues are part of the evaluation of ‘all the circumstances’ and will typically consider aspects pertaining to the economic and legal context.

It would therefore be more straightforward, more intuitive and more faithful to the case law to structure the analysis along the lines of the following:

First, naked restrictions which, by their very nature, are against competition on the merits and therefore inherently abusive. In this case, the dominant undertaking would only be able to escape the prohibition in exceptional circumstances (as discussed here).

Second, conduct which, by its very nature, is an expression of competition on the merits and as such incapable of having actual or potential effects on competition. These practices, if anything, show well how artificial it is to distinguish between Sections 3.2. and 3.3. and how intertwined the questions are. Pricing above average total costs is a valid expression of competition on the merits because it cannot be expected to exclude rivals, and vice versa.

Third, conduct that is presumptively abusive and thus at odds with competition on the merits, which would include exclusive dealing, loyalty rebates and tying in traditional (that is, non-digital) scenarios. In this context, the dominant firm may avoid the prohibition if it shows that the practice is incapable of restricting competition.

Fourth, conduct that requires a case-by-case assessment. Conduct falling within this category comes in two flavours. There are, on the one hand, those subject to a specific legal test, in which case showing that the conditions of the test will be sufficient to establish an abuse; and, on the other, those practices subject to an assessment of ‘all the circumstances’.

Even without trying, we find ourselves looking back (and forward to what is coming) by the end of every year.

As far as I am concerned, this natural inclination is compounded by the fact that it is almost exactly a year since the publication of The New EU Competition Law. I am pleased with how it has been received, and have the best memories of the few trips to discuss it with friends and colleagues.

On this occasion, the book is also an invitation to look forward. As I was working on it, I quickly realised that The New EU Competition Law is but the first part of a trilogy examining the transformation of our field. If all goes well, next year, by this time, I will be announcing the publication of the second volume.

Book aside, I have been able to get some papers and book chapters out. This year’s vintage features the following:

Competition on the merits, published in the Common Market Law Review. It came out in January, but I have not changed my mind since. Competition on the merits, as a relic of times past, is an ‘irritant’ in the case law (as apparent in the Draft Guidelines). The notion has undergone a surprising revival which (I like to believe) will be short-lived.

Restrictions by object under Article 101(1) TFEU: from dark art to predictable framework, forthcoming in the Yearbook of European Law. This is a paper that pretty much wrote itself, as the Court of Justice kept issuing major rulings interpreting the notion of ‘by object’ restriction. The central idea behind the piece stems clearly from its title: it is no longer possible to argue that the notion is unclear. The Court has developed an analytical framework that has proved resilient to pressures from all sides.

Resale price maintenance in EU competition law: understanding the significance of Super Bock, recently published in World Competition. In a sense, this piece is a companion to the preceding one. It is also a reminder that EU law cannot be fully understood without considering how it is applied at the national level by courts and authorities (as I pointed out here).

Remedies in EU antitrust law, accepted in the Journal of Competition Law & Economics. Antitrust law is now in the age of remedies: never before had the adequate design of measures ending the infringement been so central to effective enforcement. In spite of this fact, remedies remain relatively misunderstood. I discuss their nature and purpose in the article, and propose some adjustments now that Regulation 1/2003 is being reviewed.

This paper (like all the rest, really) is dedicated to the memory of Heike Schweitzer. It is impossible for me not to think of her when working on all things competition law. Honouring her memory and legacy is high up on the list for 2025 and beyond.

Last, but not least, I published a chapter on data leveraging in energy markets (jointly written with Alexis Brunelle, Adrien de Hauteclocque and Juliette Ogez) for the Research Handbook on EU Competition Law and the Energy Transition, edited by Leigh Hancher and Ignacio Herrera Anchustegui.

As to what is in store for 2025, there is, among others, a piece on Hoffmann-La Roche forthcoming in Landmark Cases in EU Law (and on which I did a great deal of research into the concept of competition on the merits) and the forthcoming and much awaited edition of EU State Aid Control: Law and Economics, where I contribute a chapter with Damien Neven on State aid as a successful legal export.

Before I forget: 2024 will always be the year the blog reached 3 million views. Thanks you all so much for reading and sharing your thoughts over so many seasons!

The latest contributions to this series (see here) dealt with the analysis of effects. The main point it made is that we need clarity about the meaning of the notion of effect: the litmus test of the whole exercise depends on whether there is clarity about what an effect is and what it is not.

There are more aspects pertaining to the analysis of effects that could benefit from greater clarity. Over and over, we see the some issues that keep coming back, Sisyphean in their persistence, even though they should have long been behind us.

The Guidelines on which the Commission is working provide an ideal chance to address some of these common misconceptions around the issue of effects. I cannot think of a better forum to convey clarity, certainty and, above all, a clean, discernible analytical framework on which national courts and authorities can rely.

As far as the fundamental issues that could be addressed, I can think of the following:

Actual and potential effects are about the time dimension of the analysis

The distinction between actual and potential effects refers to the temporal dimension of the analysis. There should be little doubt, after the Court’s careful analysis in the Servier saga (see here), that references to potential effects relate to instances in which the assessment is prospective (that is, about an effect that may materialise in the future).

Contrary to what is sometimes (read: often) suggested, ‘actual’ and ‘potential’ do not refer to different substantive thresholds (the former being more demanding than the latter). In fact, they are not really, or not exactly, about the substantive threshold (keep reading till the end for more on this).

Clarifying this point is key for a number of reasons. The most salient of these, I would say, is that it makes sense to use the vocabulary consistently across issues and provisions. Using the same words to mean different things is a recipe for opacity and confusion.

When we talk about actual or potential competitors, we refer unquestionably to the time dimension: a potential competitor is one that has not yet entered the market but may do so in the future. This is, by the way, the manner in which the concept is used in the Draft Guidelines.

It would make little sense to refer to ‘actual’ or ‘potential’ in a different way when talking about the analysis of effects.

Appreciability, de minimis and significant effects

The Court of Justice has held unambiguously that, in the context of Article 102 TFEU, it is not necessary to show that the effects on competition are significant or appreciable. In other words, there is no such thing as a de minimis doctrine when the concept of abuse is at stake.

I do not believe there is anything controversial in this position. Because the application of Article 102 TFEU presupposes a finding of dominance, there is by definition no scope for de minimis doctrine.

This is a point on which the final version of the Guidelines could be even more explicit (ideally with a reference to Völk, where the Court explained that the doctrine applies on account of the ‘weak position’ of the parties in the relevant market, and which is not mentioned in the Draft).

The fact that the de minimis doctrine has no role to play in the context of Article 102 TFEU does not mean (this is another major source of confusion and misunderstandings) that every practice implemented by a dominant firm and/or every competitive disadvantage it inflicts upon rivals necessarily has an anticompetitive effect.

The rejection of the de minimis doctrine simply means that effects, when established, will necessarily be appreciable. But this fact does not dispense the authority or claimant from the need to establish these effects to the requisite legal standard in light of factors such as the coverage of the practice.

The substantive threshold of effects

An additional aspect on which the Draft Guidelines is silent, and about which a conversation is as necessary as it is indispensable, relates to the substantive threshold of effects. The issue is bound to be discussed sooner or later and it would be best if it were openly addressed by the Commission.

It has already been mentioned that effects may be potential. The Court of Justice has clarified, moreover, that the practice must be ‘capable’ of having such effects. These points do not say anything, however, about the requisite threshold of probability.

When the analysis is prospective, is it enough to show that the practice is a plausible source of anticompetitive effects? Is it necessary to show that it is likely to do so (that is, a probability of >50%)?

The case law is not unequivocal on this point and there is room for interpretation. One thing is clear: it is not necessary to show that the practice is certain to affect competition. I have always been of the Opinion that AG Kokott is on the money here and that the substantive threshold is one of likelihood (probability >50%).

As I say, the Draft Guidelines would be the right forum to address this matter once and for all. It would also be a great opportunity to make it clear (if only in a footnote) that the substantive threshold of effects is different from the standard of proof (even if both are expressed in probabilistic terms and even though they are, all too often, conflated).

I very much look forward to your comments, on this post and the rest of the series (see here, here and here).