abuse of dominance · guidance paper not binding and does not apply, decision still in line with it...
TRANSCRIPT
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10 April 2018
Abuse of dominance - recent
developments
Mette Alfter, Frontier Economics
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2frontier economics
Two very hot topics…
… and one a bit less hot perhaps
Effects-based approach in
rebates cases
How to handle “internet giants”?
Revival of excessive pricing
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3frontier economics
Agenda
Mette Alfter
1 The Intel rollercoaster
2 What about Qualcomm?
3 The Google cases
4 Facebook in Germany
5 Excessive pricing back from the dead?
6 Conclusions
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4frontier economics
1 The Intel rollercoaster
2 What about Qualcomm?
3 The Google cases
4 Facebook in Germany
5 Excessive pricing back from the dead?
6 Conclusions
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5frontier economics
Conditional
Rebates /
Naked Restraints
What the case was about
Exclusivity
Payments
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6frontier economics
What the EC said
… fined Intel €1.06 billion
▪ Intel dominant in x86 CPU market
▪ Rebates/payments de facto exclusive
▪ Case law: exclusivity rebates by a
dominant firm = abuse
▪ Guidance Paper not binding and does not
apply, decision still in line with it
▪ Analysis of likely effect not necessary, still
did it and confirmed finding
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7frontier economics
What the GC said
Category 1
Quantity rebates
Category 2
Exclusivity rebates
Allowed
Category 3
Target rebatesEffects-based analysis
Prohibited
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8frontier economics
Ongoing
What the ECJ said
Category 1
Quantity rebates
Category 2
Exclusivity rebates
Allowed
Category 3
Target rebatesEffects-based analysis
… the same as Advocate General Wahl
Effects-based analysis
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9frontier economics
“The §139 factors”
“[…] the Commission [needs to analyse…]
▪ the extent of the undertaking’s dominant position on the relevant
market […]
▪ the share of the market covered by the challenged practice […]
▪ the conditions and arrangements for granting the rebates in question,
their duration and their amount […]
▪ the possible existence of a strategy aiming to exclude competitors that
are at least as efficient as the dominant undertaking from the market […]
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10frontier economics
So what’s the verdict?
But but but
Challenge
No help on the fundamental question whether the very
form of an exclusivity rebate could itself constitute
proof of capacity to foreclose
Define boundary
Its been done before: Art 101
“The EC
Guidance Paper
is back from the
dead!”
“The return to
effects-based
analysis in
rebates cases!”
“The EC
Guidance Paper
is alive!”
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11frontier economics
1 The Intel rollercoaster
2 What about Qualcomm?
3 The Google cases
4 Facebook in Germany
5 Excessive pricing back from the dead?
6 Conclusions
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12frontier economics
Very similar to Intel
Exclusivity
Rebates (again!)
Extent of
dominance
Amount of
rebates
Conditions
Apple internal
documents
Key customerMarket
coverage
(own) AEC
or other
price-cost
test
+ But
no
Decision
EC fined Qualcomm €997M, decision to be published soon
Enough?
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13frontier economics
1 The Intel rollercoaster
2 What about Qualcomm?
3 The Google cases
4 Facebook in Germany
5 Excessive pricing back from the dead?
6 Conclusions
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14frontier economics
Ongoing
Investigations…
The Google saga
EU fines Google €2.4bn
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15frontier economics
Google Shopping
Giving prominent
placement to its own
comparison shopping
service
Demoting rival
comparison shopping
services in its search
results via its algorithms
The EC looked at effects…
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16frontier economics
Traffic to competing sites decreased…
EC Decision, Graph 29
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17frontier economics
... traffic to its own site increased
EC Decision, Graph 54
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18frontier economics
Google Android
EC Press Release
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19frontier economics
What about Apple?
Promote competition in search –
has that ship sailed?
Wider innovation in mobile space –
too speculative?
Potentially more difficult for the Commission?
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20frontier economics
1 The Intel rollercoaster
2 What about Qualcomm?
3 The Google cases
4 Facebook in Germany
5 Excessive pricing back from the dead?
6 Conclusions
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21frontier economics
BKartA vs. Facebook
▪ Facebook collects user data
“on-Facebook” and
“off-Facebook”
▪ Off-Facebook data usage rights
unreasonable
▪ “Konditionenmissbrauch”?
Scraping the barrel?
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22frontier economics
Part of a wider debate
Internet giants Big data Competition v regulation
Competition authorities
of the view that existing
tools are enough
But
▪ Chief Technology Officer / Digital Task Force
▪ Considering new rebuttable presumptions (BKartA)
▪ Putting in place some “light-touch regulation” (EC)
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23frontier economics
1 The Intel rollercoaster
2 What about Qualcomm?
3 The Google cases
4 Facebook in Germany
5 Excessive pricing back from the dead?
6 Conclusions
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24frontier economics
What’s new?
Collecting society
Pharma
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25frontier economics
Spoiler alert!
… several appeals pending
It’s still
United Brands
(1978!)
Leg 1
The difference between costs and the
price is excessive
and,
if so,
Leg 2
The price is either unfair in itself or when
compared to competing products
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26frontier economics
1 The Intel rollercoaster
2 What about Qualcomm?
3 The Google cases
4 Facebook in Germany
5 Excessive pricing back from the dead?
6 Conclusions
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27frontier economics
So what?
The rebate saga continues
… but don’t hold your breath!
Regulating internet giants?
One to watch!
Excessive pricing: much ado about nothing?
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28frontier economics
Questions?
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