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SelectedrecentdevelopmentsintheapplicationofEUcompetitionlawtoonlineplatforms

HeinHobbelen,NimaLorjéandAylinGuenay1

Section1:Introduction

Weallknowthattheriseoftheworldwidewebandevergrowingtechnologicalsophisticationhave made it increasingly easy for consumers to buy goods and services online and forbusinessestotargetconsumergroupswithtailor-madeoffers.Inlinewiththesedevelopments,onlineplatformsintheformof,forinstance,searchengines,socialmediaandpricecomparisonwebsites have emerged and are now omnipresent. Online platforms: we use them, we likethem, we hate them and lawyers debate them. Almost any seminar, even if only remotelyrelatedtotelecommunicationsandmedia,hasonlineplatformsontheagenda.

Sowhyanotherarticleonthesubject?Well,becauseitissimplyfascinatingfromaneconomicandsociologicalperspective -entire sectorsarebeing revolutionised, leading to fundamentalshiftsintheworldeconomy.Forexample,althoughmanyworldclasscompanies(andstart-ups)are in the EU (including the Netherlands), according to the European Commission(Commission),theEUrepresentsonly4%ofthetotalmarketcapitalisationofthelargestonlineplatforms - the vast majority originate in the US and Asia. In addition, from a legal, andspecifically a competition law perspective, online platforms are generally believed to raise anumberofnovelsituations,questionsandenforcementchallenges.

First,questions thatarise in thedebate include:whata correctdefinitionof the termonlineplatformentails;inwhichmarketormarketsonlineplatformsoperate;andevenwhetherthesearemarkets in the firstplace.Moreover,as faras theactualmarketanalysis isconcerned, incases involving online platforms, due to their (often)multi-sided nature, competition usuallyencompasses the analysis of several (neighbouring) markets, making a legal assessmentpotentiallymorechallenging.

Second,newlevelsofsophisticationinpotentialcartelbehaviourmayariseintheoperationofonline platforms. Online platforms can, for instance, be used to exchange commerciallysensitive information or collude through “innovative” and potentially less easily detectablemeans. This raises new compliance challenges for companies which are part of platformstructures, as well as enforcement challenges for competition authorities. For example, the

1 FreshfieldsBruckhausDeringerAmsterdam/Brussels.Theauthorswould like to thankMaartenvandenEndeandRobert Jones for their

contributiontothisarticle.Thisarticlebuildsuponapresentation“Platformsasfacilitatorsofconcertedpractices”givenbyHeinHobbelenin December 2015 in the ENTraNCEworkshop on Antitrust enforcement in traditional v. online platforms at the European UniversityInstitute in Florence, Italy. The slides accompanying that presentation, and slides of other presentations made, can be found athttp://www.eui.eu/Projects/ENTRANCE/Workshop/AntitrustEnforcementinTraditionalvOnlinePlatforms.aspx.

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onlineplatformcanactasafacilitatorofananti-competitiveagreementorconcertedpractice,likeinthecaseofEturas,whichwewilldescribeingreaterdetailbelow.Thiscasedealtwiththequestion of what evidence is required to prove a concerted practice in a situation where adigitalsystemadministratorofanonlineplatformchannelstheillicitcommunication.Theissueoffacilitatingacompetitionlawinfringement(whilenotbeingactiveinthemarketinwhichtheprimary infringement took place) first reached the Court of Justice of the European Union(CJEU)inthecaseofTreuhand,whichisalsodiscussedinthisarticle.

Third,theassessmentofmarketpowermayraisenewquestionsandchallenges.Theincreasingimportanceofbigdata,theparalleluseofdifferentservicesandswitchingcostsforusers,thesignificant importance of both direct and indirect network effects and the sudden hugepopularityofonlineplatforms,but also theirpotentially suddendeclineas a consequenceofunprecedentedinnovation-basedpressure,areafewoftheaspectsthatcanbementionedinthisregard.

Finally, online platforms make very speedy price comparison possible which may lead toimportantshiftsinthebalanceofpowerinagivensectorandinterestingnewcompetitionlawchallenges.

Thisarticledescribesrecentdevelopments in theapplicationofEUcompetition lawtoonlineplatforms (including somecasesnot specificallydealingwithonlineplatformsbut consideredrelevantwhenanalysingthem)withaparticularemphasisonrecentcase-lawregarding:(i)theapplicationoftheprohibitionofanti-competitiveagreementsandpractices(Article101oftheTreatyontheFunctioningoftheEuropeanUnion(TFEU))2, inSection3;and(ii) investigationsintoallegedabuse(s)ofdominance(Article102TFEU),inSection4.3Thisarticledescribescasesinwhich final decisions have been adopted or judgments rendered and in addition providessomeobservationsonpendingcases,inparticularthoseregardingtheapplicationofArticle102TFEU.4Priortoadescriptionofthesecases,wewillprovidesomeobservations(inSection2)onattemptstodefineonlineplatformsandonthedebateaboutmarketanalysesincasesinvolvingonlineplatforms.Section5containssomeconclusionsandobservationsonthesecases.Wewillprovide some comments on the question of how novel the situations, questions andenforcement challenges that often come up in the online platform debate really are. As acorollary,wewillprovidesomeobservationsonthequestionastowhetherEUcompetitionlawissufficientlyequippedtodealwithanynewchallengesthatonlineplatformsareperceivedtobringabout.

2 Article 101 TFEU prohibits (horizontal and vertical) agreements and/or concerted practices that have the object or effect of hindering

competition.Insomeofthecasesreferredtointhisarticle,thenationalequivalentstoArticle101wereapplied.3 Article102TFEUprohibitscompaniesthatholdadominantpositiononacertainmarkettoabusethatposition,e.g.byusingtheirmarket

powertodrivecompetitorsoutofthemarket.4 ThearticledoesnotdealwiththeapplicationofEUmergercontrollaw.

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Section2:Someobservationsonrecentdevelopmentsinthedefinitionofonlineplatforms

Howhaveregulatorsattemptedtodefine“onlineplatforms”?

Oneoftheauthorswasrecentlyaskedbyafounderofaplatformwhy“lawyersalwayshavetodefinethings”;hethought itwasutterlydullandtime-wasting.Yet,any lawyerknowsthat inorder toproperlyassess the rightsandobligationsof legal subjects, cleardefinitionsarekey.The first question we ask ourselves is: what are online platforms? In order to be able tomeaningfullyassesstheinterplaybetweencompetitionrulesandonlineplatforms,anattemptto work from a uniform understanding of what online platforms are, is helpful. Yet, this iswherepartofthechallengelies.Differentauthoritiesandacademicshaveadoptedavarietyofdefinitionsfortheterm“platform”.

TheCommissionmadeanattemptatprovidingadefinition in apublic consultation thatwaslaunchedon24September2015.5Intheconsultationtheinitialpropositionforadefinitionoftheterm“onlineplatform”was:“anundertakingoperatingtwo(ormulti-)sidedmarkets,whichusestheInternettoenableinteractionsbetweentwoormoreinterdependentgroupsofuserssoastogeneratevalueforatleastoneofthegroups”.TheCommissionthereforeseemedtotakeas a basic proposition the idea that online platforms always relate to two- (ormore-) sidedmarkets,anideacriticisedbycertaineconomists,whichwewilltouchuponlaterinthisarticle.AlsotheBundeskartellamt(BKA)initspaperontheDigitalEconomyof1October2015definesonlineplatformsas“undertakingsthat,intheroleofanintermediary,enabledirectinteractionbetweentwoormoresidesofusers,betweenwhichthereareindirectnetworkeffects”.6

This goes a long way towards the Commission’s definition but also emphasises the role ofindirect network effects. In its recent Staff Working Document on online platforms (StaffWorkingDocument)7 that accompaniedaCommunication8earlier this year, theCommission,however,comes to theconclusion that“there isnoconsensusonasingledefinitionofonlineplatformsasaclear-cutdefinitionwouldlikelybetoonarrow,orconverselyapplytoaverywide

5 Commission consultation on the Regulatory Environment for Platforms, Online Intermediaries, Data, Cloud Computing and the

Collaborative Economy, see: https://ec.europa.eu/digital-single-market/en/news/public-consultation-regulatory-environment-platforms-online-intermediaries-data-and-cloud.

6 Bundeskartellamt Hintergrundpapier, Digitale Ökonomie – Internetplattformen zwischen Wettbewerbsrecht, Privatsphäre undVerbraucherschutz,1October2015,p.13.seealso.Bundeskartellamt,Arbeitspapier,MarktmachtvonPlattformenundNetzwerken,June2016,p.14.

7 CommissionStaffWorkingDocument,OnlinePlatforms,AccompanyingthedocumentCommunicationonOnlinePlatformsandtheDigitalSingleMarket,SWD(2016)172final.

8 CommunicationfromtheCommissionOnlinePlatformsandtheDigitalSingleMarketOpportunitiesandChallengesforEurope,COM(2016)288/2, see: https://ec.europa.eu/digital-single-market/en/news/communication-online-platforms-and-digital-single-market-opportunities-and-challenges-europe(CommissionOnlineCommunication).

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range of Internet services”.9 The Commission, instead, proposes a list of five “important”characteristicsthatmanyonlineplatformsseeminglyshare:

(i) capacity to facilitate and extract value from direct interactions or transactionsbetweenusers;(ii)abilitytocollect,useandprocessalargeamountofpersonalandnon-personaldatain order to optimise, inter alia, the service and experience of each user. This dataaggregationcapacity("economiesofscope")givesplatformsaninformationaladvantageoverindividualplatformusersandcausesinformationasymmetry;(iii)capacitytobuildnetworkswhereanyadditionaluserwillenhancetheexperienceofallexistingusers(so-called"networkeffects");(iv)abilitytocreateandshapenewmarketsintomoreefficientarrangementsthatbringbenefits to users but may also disrupt traditional ones. This includes the ability toorganise new forms of civil participation based on collecting, processing, altering andeditinginformation;and(v)relianceoninformationtechnologyasthemeanstoachievealloftheabove.10

Thesecharacteristicsarealsoreferredto intheCommissionOnlineCommunicationitself,butinterestingly, theCommission seems to favourabroaderapproach thanproposed in its StaffWorkingDocuments. It indicatesthatonlineplatformscovera“wide-ranging”setofactivitiesand refers, in what it refers to as a non-exhaustive list, to online advertising platforms,marketplaces, search engines, social media and creative content outlets, applicationdistribution platforms, communications services, payment systems, and platforms for thecollaborativeeconomy.Asetof(also“non-exhaustive”)examplesprovidedbytheCommissionincludes Google’s AdSense, DoubleClick, eBay and Amazon Marketplace, Google and BingSearch, Facebook and YouTube, Google Play and App store, Facebook Messenger, PayPal,ZalandomarketplaceandUber.11

Theaboveshowsthatthelastwordononlineplatformdefinitionshasnotyetbeenspoken.Itappears to us that in line with the Commission’s Staff Working Document, it seems to bechallenging,ifnotimpossible,todeviseasingleall-encompassingdefinitionofonlineplatforms.Theapproachadoptedby theCommissionofdescribing“onlineplatforms”by reference toanumberofcharacteristics(assetoutabove),ratherthantryingtouseasinglefixed,one-size-fits-alldefinition,thereforeseemstobeasensibleapproach.

9 CommissionStaffWorkingDocument,OnlinePlatforms,p.2.10 Ibid.11 CommissionOnlineCommunication,p.2and3.

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Onemightalsowonderwhetherincompetitionlaw,withitsmoreflexiblemechanicstodefinemarkets(thanpre-definedmarketsinsector-specificlaws),thisdebateissonovelorrelevant.We think it is as unclear definitions may raise issues of legal certainty (for example whencarryingoutself-assessmentanalysesunderArticle102TFEUwheredominancemarketshare“safehavens”maybeimportant).Debatesabouthowtodefinemarketshavehoweverexistedever since competition lawwas devised. The very characteristic of competition law is that itdoesnothavepre-fixedmarketdefinitions,suchas thosethatwesee in, forexample,sectorspecifictelecommunicationsregulation.

The definition issue may, however, become more pressing in light of the on-going debatesaboutthequestionwhetherto(further)regulateonlineplatforms.Althoughsuchdebatesareincomplete, as online platforms are already subject to existing EU rules in areas such asconsumer protection and the protection of personal data (and of course single marketfreedoms and competition law), it is indeed true that if the Commission were to proposeadditional sector-specific regulation, drafted along the lines of regulations that exist in thetelecommunications sector, the definition debate will further increase in prominence. Thequestionastowhetheraparticulargoodorservicefallsunderthescopeofsuchregulationmayobviouslyhaveamajorimpactonthetargetedbusinesses.

Themulti-sidednatureofonlineplatforms

Anotherdebatedissuerelatestothequestionofwhetheronlineplatformsarecharacterisedbymulti-sided markets. In the Staff Working Document, the Commission considers that, incontrast to usual businessmodels in which value is created by the supplier of a product orservice,a largeamountofthevalueforusersofonlineplatformsiscreatedbyotherusersoftheplatform (so-called “networkeffects”).12 In this regard, ithasbeen suggested thatonlineplatformscanbecategorisedintothreegroups:marketmakers,audiencemakers,anddemandcoordinators.‘Marketmakers’areplatformsonwhichdistinctgroupsmeetandwhichoperateby increasing the chances of amatch and limiting search costs. ‘Audiencemakers’ refers toaudiences for advertisers. ‘Demand coordinators’ regulate demand between different usergroups.13

Economistshavetraditionallydefinedmulti-sidedmarketsas“marketsinwhichoneorseveralplatformsenableinteractionsbetweenend-users,andtrytogetthetwo(ormultiple)sides‘onboard’byappropriatelychargingeachside.Thatis,platformscourteachsidewhileattemptingtomake,oratleastnotlose,moneyoverall”.14Accordingly,forinstance,paymentcardsystems

12 Ibid. 13 Ibid.14 J.-Ch.Rochet&J.Tirole,Two-SidedMarkets:AProgressReport,IDEIWorkingPaper,n.275,November2005.

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are two-sided because: (i) they serve two distinct groups of customers (cardholders andmerchants)withajointdemand(thesystemoperatesonlyifbothcardholdersandmerchantsjointlyagreetouseacardforatransaction);and(ii) theyhave“networkexternalities” (whattheCommissioncalls“networkeffects”)arisingfromthefactthatmorecardholdersmakethecard payment system more valuable for merchants, and vice versa.15 The platform“internalises” these externalities produced by the two groups of consumers that wouldotherwisebeleftapart.Suchinternalisationwouldnotbepossiblewereitnotfortheplatform,meaningthatthegroupsaredependentontheplatforms.

Importantly,theCommissionandothernationalauthoritiesappeartoagreethat(most)onlineplatformsarecharacterisedbytwo-ormulti-sidedmarketsandthisisalsoageneralnotionthatwewill take as an assumption in this article. This notion has, however, been challenged byacademics, suchasGiacomoLuchette16andmore recentlybyMarcelaMattizzuowhoarguesthat“treatingonlineplatformsastwo-sidedinallcasesdoesnotyieldthebestpossibleresultsforantitrustanalysis”.17According toMattizzuo, someonlineplatforms involve two separatetransactions: one upstreambetween the platform and users, and one downstreambetweenthe platforms and advertisers. Rather than being dependent on one another, users andadvertiserstakeadvantageofa“businessoption”thattheplatformhasitselfcreatedinordertomakemoney.Unlikewithcreditcardswhereconsumersonlyhaveanincentivetoownacardifawiderangeofbusinessesacceptthemasaformofpayment,usersaccessinge.g.Facebookdonotneedadvertstobeincentivisedtousetheseplatforms.18The“networkexternalities”aretherefore considered one-sided by these academics: more users makes the platform morevaluableforadvertisers,butmoreadvertsdonot,assuch,maketheplatformmoreattractiveto itsusers.Thus, the transaction isnot two-butone-sided,asusersprovide thedatawhilstadvertisersprovidethemwithnothingusefulinreturn.

Anotherdebatewhichismorefundamental in itselfhasarisenmainly inGermany,wheretheHigherRegionalCourtofDusseldorftooktheviewthatmarketsonwhichservicesareoffered“freeofcharge”cannotconstitutemarketsforcompetitionlawpurposes,aviewnotendorsedby the German Antitrust Authority or the Commission.19 In Germany, this has even led to a

15 FredericPradelles&AndreasScordamaglia-Tousis,TwoSidesoftheCartesBancairesRuling:AssessmentoftheTwo-SidedNatureofCard

PaymentSystemsUnderArticle101(1)TFEUandFull JudicialScrutinyofUnderlyingEconomicAnalysis,CompetitionPolicy International,Autumn2014,p.139.SeealsoL.Filistrucchi,D.Geradin,E.VanDammeandP.Affeldt,Marketdefinitionintwo-sidedmarkets:theoryandpractice,JournalofCompetitionLaw&Economics10(2),p.296.

16 GiacomoLuchetta,IsTheGooglePlatformaTwo-SidedMarket?,10(1)J.CompetitionL.&Econ.,2014,pp.185-207.17 MarcelaMattiuzzo,OnlineAdvertisingPlatformsandPersonalDataRetail: Consequences forAntitrust Law, CPIAntitrustChronical, July

2015,p.2.18 Ibid.19 HRS, decision of 9 January 2015, Ref. VI Kart 1/14 (V), para 43 – HRS, available at

http://www.justiz.nrw.de/nrwe/olgs/duesseldorf/j2015/VI_Kart_1_14_V_Beschluss_20150109.html; see also Bundeskartellamt, WorkingPaper, The Market Power of Platforms and Networks, Executive Summary, June 2016, available at:http://www.bundeskartellamt.de/SharedDocs/Publikation/EN/Berichte/Think-Tank-Bericht-Zusammenfassung.pdf?__blob=publicationFile&v=4.

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(currentlypending)proposal foramendmentstoGermanantitrust laws, includingcodificationoftheprinciplethatsuchmarketscanconstitutemarketsforcompetitionlawpurposes.

Section3:RecentdevelopmentsintheapplicationofArticle101TFEU(and/ornationalequivalents)toonlineplatforms

In this sectionwewill firstbrieflydiscuss some recentdevelopments in relation to thehotelbooking cases (without attempting a comprehensive discussion).20 In these cases, severalbookingplatformshavebeenaccusedofimposingrestrictionsonusers(hotels)oftheplatformsinordertoavoidbetterpricesonotherplatforms.Wewillthenturntorecentcaselawrelevantforacompetitiveanalysisintwo-sided(ormulti-sided)systems.WewillsummarisetherecentCourtofJustice(CJ) judgments inGroupementdescartesbancairesandMasterCardandthenturntoacaseinwhichanonlineplatformwasitselfsubjecttoanantitrustfine,Eturas.WewillconcludethischapterwithTreuhandwhichisacaseaboutfacilitationofaconcertedpractice,wherethefacilitatorwasnotactiveintheprimarymarketinwhichtheinfringementtookplaceandneverthelessfined.

3.1 Verticalpricingrestrictionsintheonlinebookingplatformsector

Verticalpricingarrangementsinthehotelbookingsectorbetweenonlineplatformsand(supplyside) usersof thoseplatformshave stirred the competition law community forquite awhilenow. Competition authorities in several EUMember States have initiated investigations intohotel booking platforms.21 These investigations revolve around the fact that several onlinebookingplatformsrequireplatformmembers toacceptacontractualclauseprohibiting themfrom offering lower prices on other platforms, including their own websites. These clausesenableonlinebookingplatforms,suchasBooking.com,toclaimthattheyalwaysofferthebestpriceavailable.

The French competition authority, the Autorité de la Concurrence, in cooperation with theDutchcompetitionauthority,theAutoriteitConsument&Markt,22andeightothercompetitionauthorities23aswellastheCommission,recentlylaunchedaworkinggroupwhichisconductingan inquiry into the effects of implemented remedies in the hotel booking platform sector.2420 These cases have been described and analysed in many articles. See for example for further reading:Maren Tamke, Kartellrechtliche

BeurteilungderBestpreisklauselnvonInternetplatformen,WirtschaftundWettbewerb,2015,pp.594et.seq.;PinarAkman,ACompetitionLawAssessmentofPlatformMost-Favoured-CustomerClauses,availableat:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2669395,1October2015;GönençGürkaynaketal.,Most-favored-nationclausesincommercialcontracts:legalandeconomicanalysisandproposalforaguideline,EurJLawEcon,2016,pp.129etseq.;MatthijsVisserandJanKeesWinters,Platgeslagenplatforms,MFN’sproblematisch?,MarktenMededinging,July2015,no.3.

21 E.g. in theUK thean investigationwas launched into IHG,ExpediaandBooking.com,seeMlexpress releaseof16September2015,UKregulatorclosesprobeintoIHG,ExpediaandBooking.com.

22 See:https://www.acm.nl/nl/publicaties/publicatie/16046/Monitoring-van-de-online-hotelboeking-sector/.23 ThecompletionauthoritiesofBelgium,France,Hungary,Ireland,Italy,theNetherlands,CzechRepublic,theUKandSweden.24 Inputcouldbesubmitteduntil8August2016.Thesurveyisavailableon:https://ec.europa.eu/eusurvey/runner/EUSurveyADLC02.

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Severalonlinebookingplatforms,includingBooking.com,havemodifiedtheiragreementswithhotels following the investigations by national competition authorities. In addition, somecountries,suchasAustriaandFrance,havelegislationinplacetobanpriceparityclausesinthehotelbookingsectoraltogether.

Whydo authorities pursue these cases? This is becausepriceparity clauses,whichprescribethat hotels are prohibited from offering lower prices on other platforms, are perceived byregulatorsashinderingcompetition.Fromacompetitionperspectivetheseclausesareusuallyseenasverticalagreementsconcludedbypartiesthatoperateatdifferentlevelsofthesupplychain.Althoughsuchagreementsaregenerallyconsideredlessharmfultocompetitionthanso-called‘horizontalagreements’inwhichcompetitorscoordinatetheirmarketconduct,theymayneverthelessrestrictcompetition,inparticularifoneorbothpartieshaveconsiderablemarketpower.TheBKAconcluded,however,inthehotelbookingplatformcases,thatthepriceparityclauses restricted competition in the horizontal relationship. It found that the price parityclauses limited the hotels from offering better prices on other booking channels andconsequently reduced the incentive for hotels to offer better prices via other channelsaltogether.Furthermore, theBKAargued that thepriceparityclauseshinderednewentrantsfrom starting online booking platforms as they were restrained from getting the same (orbetter)dealsduetothesepricerestrictions.25

A similar investigation was initiated in the banking sector in which the BKA scrutinisedprovisions of German banks, stating that these provisions discouraged online bankingcustomers fromusing their identificationcodesononlineplatformsof thirdparties.TheBKArequired banks to change their general terms because it concluded that these impededcompetitionwithalternativeonlineplatforms.26TheGermanbanksinquestionhaveappealedtheBKAdecision.27

Akeylessonfromthesecasessofar,althoughthejurisprudenceisstillbeingdeveloped,isthatcontracts imposing certain restrictions should be carefully checked, as any illegal vertical orhorizontalrestrictionsareactivelyenforcedbycompetitionauthorities.Fromthehotelbookingcasesitseemstofollowthatenforcersarelikelytoviewpriceparityclausesasanimpedimentto competition. Also, theGerman banking case shows that the BKA regards restrictions thatprohibit theuseby customersofother (in that casepayment)platformsasanti-competitive.Hence,aconcern inboth instances isthatthemeasures implementedbytheplatformhindernewentry.Onlineplatforms should thereforebe carefulwhenadoptingpricing structuresor

25 See:http://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2015/23_12_2015_Booking.com.html.26 See:

http://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2016/05_07_2016_Sofort%C3%BCberweisung.html;jsessionid=093BD2DD24F7ACF2F79550BC6E45FA02.1_cid362?nn=3591568.

27 Mlexpressreleaseof27July2016,Germanbanksappealantitrustorderononline-paymentproviders.

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conditions that could be regarded as a barrier to entry - legal review of contractualarrangementsandespeciallypricingstructures, is required.This isall themorerelevantsinceseveralcompetitionauthorities, includingtheDutchCompetitionAuthority,have listedonlineservicesandverticalrestraintsasenforcementpriorities.28

3.2 Someobservationsonrecentcase-lawregardingtwo-sidedmarkets

TheCJrecentlyprovidedguidanceontheapplicationofEUcompetitionlawincasesinvolvingmulti-sidedmarkets inGroupement des cartes bancaires29 andMasterCard.30 Although thesecasesconcernpaymentplatformsratherthanonlineplatformstheyinvolvetwo-sidedmarkets(merchantsononesideofthepaymentplatformanddebitorcreditcardholdersontheotherside) - the guidance provided by the CJ regarding multi-sided markets in these cases maythereforebeofsignificantrelevanceforonlineplatforms.

Groupementdescartesbancaires

In Groupement des cartes bancaires, the name for France’s interbank network (CB),31implemented a new fee structure requiring a (higher) fee from payment platformmemberswhose proportion of investment in the expansion of the platform (e.g. by operation ofautomatic teller machines (ATMs) and distribution of payment services to merchants) wassmaller than their issuanceof cards, compared tootherplatformmembers. Theproceedsofthesefeesweretobedistributedamongstmembersthatprovidedalargecontributiontotheplatformexpansion.Inaddition,financialincentiveswereimplementedregulatingthenumberof payment cards that a member could issue. Furthermore, CB adopted rules that imposedpaymentofadditionalfeesonmembersthatissuedsignificantlymorecardsfollowingthenewfeestructure.

The Commission concluded that these measures were anti-competitive because the feestructure was not appropriate to encourage expansion of the platform but merely imposedadditionalchargesonmembersanddiscouragedentrantsfromenteringtheplatformasthefeestructureprovidedafinancialdisincentivetoissuenewcards.32AccordingtotheCommission,therealpurposeof the feesystemwastohinderentrants, toshieldtherevenueof themainmembersof theplatformand topreventprice reductionofpayment cards. TheCommissionconsideredthenewfeestructuretobearestrictionofcompetitionbyobject.33Furthermore,

28 See:https://www.acm.nl/nl/organisatie/missie-visie-strategie/onze-agenda/acm-agenda-2016-2017/29 CJ11September2014,caseC-67/13P,Groupementdescartesbancaires,ECLI:EU:C:2014:2204.30 CJ11September2014,caseC-382/12P,MasterCard,ECLI:EU:C:2014:2201.31 Acollectiveofbanksthatoperateapaymentplatformandissuecreditanddebitcardstocustomers.32 CommissionDecisionof17October2007,CaseCOMP/D1/38606–Groupementdescartesbancaires.33 As follows from the wording of Article 101(1) TFEU, competition law prohibits “all agreements between undertakings, decisions by

associationsofundertakingsandconcertedpracticeswhichmayaffect tradebetweenMemberStatesandwhichhaveas theirobjector

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the Commission established that the fee structure had the effect of limiting competitionbecauseitresultedinareductionofissuanceofpaymentcardsbynewentrantsandpreventedpricedecreases.

In its judgment, the CJ reiterated the general rule for establishing a ‘restriction by object’.AccordingtotheCJ,sometypesofcollusionrevealasufficientdegreeofharmtocompetitionthat they, by their verynature, are consideredharmful to competition and thereforedonotrequireassessmentoftheireffects.34Toestablishwhetherthereisa‘sufficientdegreeofharm’,one should assess the content of the conduct, the objectives and the economic and legalcontextofwhich it formspart. In this regard, it isnecessary to take intoaccountall relevantaspects,inparticularthenatureofthegoodsorservicesaffectedandthe“real”conditionsofthefunctioningandthestructureofthemarketor“markets”inquestion.35

Regarding the “markets” that need to be assessed, the CJ elaborated that it is “immaterial”whether or not a relevant aspect relates to the relevantmarket.36 TheCJ stressed that suchaspectsmustinparticularbetakenintoaccount“whenthataspectisthetakingintoaccountofinteractionsbetweentherelevantmarketandadifferentrelatedmarket(…)and,allthemoreso,when(…)thereareinteractionsbetweenthetwofacetsofatwo-sidedsystem.”37Itfollowsthatasimpleanalysisofconductofonemarketinaso-calledtwo-sidedsystemisinsufficient.One has to consider interactions with the connected market (the two-sided nature of thesystem). A restriction on one side of the two-sided system may not be a restriction ofcompetition if one looks at the interactions of the system as a whole. In this regard the CJconcluded that the Commission had not sufficiently established that the object of theinfringementwastoharmcompetitionandthattheGeneralCourt(GC)waswrongtoconfirmtheconclusionsoftheCommissioninthiscase.38

MasterCard

The CJ further elaborated on multi-sided markets in MasterCard. The case concernedinterchangefeesthat,accordingtotheCommission,ledtohigherpriceschargedtomerchants

effecttheprevention,restrictionordistortionofcompetitionwithintheinternalmarket”.Objectrestrictionsaregenerallyeasiertoproveforcompetitionauthoritiesasitisnotnecessarytoinvestigatewhethersuchrestrictionshadanyanti-competitiveimpactonthemarket.This is different for restrictions by effectwhich require an assessment of the effects on themarket and are thereforemuchharder toestablish.

34 CJ11September2014,Groupementdescartesbancaires,paras.49-51.35 CJ11September2014,caseC-67/13P,Groupementdescartesbancaires,ECLI:EU:C:2014:2204,.53.36 Ibid,para.78.37 Ibid,para.79.38 TheCJ judgmentdidnotaid theapplicantmuchas theGC ruled,after thecasewas referredback to itby theCJ, that theCommission

providedsufficientevidenceofanti-competitiveeffectsanddidnotfailtotakethetwo-sidednatureofthemarketintoaccount.TheGC,forthesecondtime,confirmedtheconclusionsoftheCommissionwiththeexceptionoftheobligationthattheCommissionimposedthatCBshouldrefrainfromadoptingconductoragreementswithanidenticalorsimilar‘object’asthefeestructureinthefuture.See:GC30June2016,caseT-491/07RENV,Groupementdescartesbancaires,ECLI:EU:T:2013:438.Thisjudgmentmaystillbesubjecttoappeal.

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that offered MasterCard payment services to customers. MasterCard had implementednetwork interchange fees that applied to payment transactions on theMasterCard paymentplatform where the acquiring bank and the issuing bank had no bilateral agreement oninterchange fees.Theseso-called“fall-back”multilateral interchange fees (MIFs)wouldapplyto cross-border payments and in some EUMember States for paymentswithMasterCard orMaestro-branded payment cards. The MIFs were to be paid by the acquiring bank (thatprovides access to the payment platform to merchants) to the issuing bank (that providespaymentscards tocustomers).According to theCommission, thisamounted toaviolationofArticle 101 TFEU, because theseMIFs inflated theminimal price that acquiring banks couldcharge to merchants and therefore set a floor for the prices charged to merchants whichprovidedaguaranteedrevenuebasetoissuingbanks.39

Animportantaspectofthecasewasthatthepaymentplatformconcernedatwo-sidedsystem.Thissystemwascharacterised,accordingtoMasterCard,byindirectnetworkexternalitiesandanallocationofrevenuebythepaymentplatformthatwasbasedontheutilityofthepaymentplatformto itsusers. In this regardthepaymentplatformsubsidisedthe issuingofcards (i.e.cardholdersatonesideofthepaymentplatform)withMIFschargedtomerchants(attheothersideoftheplatform).MasterCardarguedthattheMIFswerearesultofthecompetitiveprocessontheplatformandwereefficiencyenhancingasmerchantswouldbenefitfromthenetworkeffectsontheissuingsideoftheplatform.TheCommissiondisagreedandconcludedthattheMIFs violated Article 101 TFEU. On appeal, MasterCard argued that the Commission hadincorrectlyassessedthebenefitsformerchantsandthatboththeCommissionandtheGChadfailedtocorrectlytakeintoaccountthetwo-sidednatureofthepaymentplatform.

Initsjudgment,theCJspecifiedthatonehastotake“anyfactor”intoaccountthatisrelevantfor the assessment of the restriction of competition “regardless” of the market which thatfactor concerns. “In order to determinewhether coordination betweenundertakingsmust beconsidered to be prohibited by reason of the distortion of competition which it creates, it isnecessary, (…)totake intoaccountanyfactorthat isrelevant,havingregard, inparticular, tothenatureoftheservicesconcerned,aswellastherealconditionsofthefunctioningandthestructureofthemarkets,inrelationtotheeconomicorlegalcontextinwhichthatcoordinationoccurs,regardlessofwhetherornotsuchafactorconcernstherelevantmarket”.40TheGChad,however, sufficiently reviewed the two-sided nature of the platform and had correctly ruledthatMasterCard’sargumentthattheCommissionhadnotsufficientlyreviewedthebenefitsof

39 CommissionDecisionof19December2007,CaseCOMP/34.579—MasterCard.40 CJ11September2014,caseC-382/12P,MasterCard,ECLI:EU:C:2014:2201,para.177.

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theMIFstomerchantsconcernedaso-called‘efficiencydefence’thatneededtobedealtwithunderArticle101(3)TFEU.41

Regarding the analysis of efficiencies (Article 101(3) TFEU) the CJ indicated that efficienciesmust relate to themarketonwhich the restrictionof competition isestablished.Advantagesfoundonlyononemarketofatwo-sidedsystemandnotonthemarketwheretherestrictionofcompetition takes place, cannot compensate for the restriction of competition, in particularwhere thepurchasersonbothmarketsarenot substantially the same.42MasterCardclaimedthat restriction (inflated costs formerchants) and benefit (network effects) occurred on thesamemarket.TheCJ,however,dismissedthispleabecausetheGChadconcludedthat therewasnoproofofbenefitsformerchants(intheformofnetworkeffects)derivingfromtheMIFsandMasterCardhadnotarguedthattheGChaddistortedthefactsconcerningthispoint.43

Observations

SowhatguidancecanwedrawfromGroupementdescartesbancairesandMasterCardfortheapplicationofcompetitionlawtoonlineplatforms?Someobservationsareasfollows:

First, any competitive analysis should include all relevant factors on all markets involved. Asimpleanalysisofconductinonemarketinaso-calledtwo-sidedsystemisclearlyinsufficient.One has to consider interactions with the connected market (the two-sided nature of thesystem). A restriction on one side of the two-sided system may not be a restriction ofcompetitionifonelooksattheinteractionsofthesystemasawhole.Soafirstkeyquestiontolookatinthecaseofonlineplatformsiswhether,takingintoaccounttheentireonlineplatformsystem as such, a restriction of competition is present in the first place (in that case theefficiencydebatemaynotbeneeded/opportune).

Second,ifarestrictionispresent,anyrestrictionsofcompetitionintroducedononesideofthesystem–evenifthatrestrictionisgenuinelynecessary(forinstancetocreatenetworkeffects)–cannot be offset by efficiencies on the other side of the system if those efficiencies are notpresent in the samemarket in which the restriction occurred. The burden of proof of suchefficiencieslieswiththepartyunderinvestigationandnotwiththeCommission.InMasterCard,MasterCardfailedtoprovideevidencethatbenefitsoftheMIFswerepassedontomerchantsandthereforecouldnotdemonstratetheexistenceofefficiencies.

This is relevant for online platforms, because online platforms often regulate supply anddemand onmultiple sides of the system to reach an optimum result. The reason being that41 Ibid,paras.180-182.42 Ibid,para.242.43 Ibid,para.243.

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regulating price structures can help the platform to generate network effects, regulatingvolumeontheplatform(e.g.bypricinghigheratonesideandreducingpricesattheothersideofthesystem)andcreatingvalueforitselfanditsusers.GroupementdescartesbancairesandMasterCard teach us that platforms that regulate supply and demand by introducing pricingstructuresshouldarguablyat leastensurethatefficienciesstemmingfromthatrestrictionarepresent on the samemarket and outweigh the possible negative impact to competition (i.e.meetthecriteriaofArticle101(3)TFEU).

Awordof caution though about attaching toomuch importance to these judgments. TheCJemphasisedtheimportanceintakingthenatureoftheservicesconcernedintoaccount,aswellas the real conditionsof the functioning and the structureof themarkets, in relation to theeconomic or legal context in which the coordination occurs. Arguably, the operation of (anumber of) online platforms may (strongly) diverge from the operation of the paymentplatforms at stake inCB andMastercard. Theold lesson that “every case is fact-specific andshouldbearguedonitsspecificmerits”alsoapplieshere.

3.3. Facilitation-Eturas

AcaseinwhichacompetitionauthorityfoundindicationsofcollusionbetweenmembersofanonlineplatformisEturas.44Aninterestingaspectofthiscaseisthattheplatformitselfwasalsofoundliableandfinedforfacilitatingtheinfringementofitsusers.Thefactsofthecaseareasfollows:EturasUAB,theownerandsystemoperatoroftheplatform“E-TURAS”,hadsenttwomessagestomembers(thirtyLithuaniantravelagents):oneemailof25August2009requestinga vote on limiting the online discount rate on the platform from 4% to 1-3%, and a systemmessage through the internal messaging system of the platform sent two days later.45Subsequently, a technical restrictionwas implemented automatically reducing discounts to amaximumof3%.Thefileofthecompetitionauthoritycontainedevidencethatonetravelagenthad received the emailmessage. Furthermore, some travel agents admitted to having beenawareofthesystemmessagethatwassentabitlater,whereasothersdeniedawareness.

The Lithuanian competition authority established that the travel agents and Eturas hadinfringedArticle101TFEUanditsLithuaniannationalequivalent.46Accordingtotheauthority,the travel agents read, or should have read, the message and should have understood allconsequences arising from the decision to restrict discount rates, thus establishing a

44 CJ21January2016,Eturas,caseC-74/14,ECLI:EU:C:2016:42.45 Thesystemmessagestated:“Followinganappraisalofthestatements,proposalsandwishesexpressedbythetravelagenciesconcerning

theapplicationofadiscountrateforonlinetravelbookings,wewillenableonlinediscountsintherangeof0%to3%.This“capping”ofthediscountratewillhelptopreservetheamountofthecommissionandtonormalisetheconditionsofcompetition.Fortravelagencieswhichofferdiscountsinexcessof3%,thesewillautomaticallybereducedto3%asfrom2:00pm.Ifyouhavedistributedinformationconcerningthediscountrates,wesuggestthatyoualterthatinformationaccordingly”.

46 Article5oftheLietuvosRespublikoskonkurencijosįstatymas(LawonCompetitionoftheRepublicofLithuania).

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presumptionofawareness.TheLithuanianSupremeAdministrativeCourt,however,haddoubtsas to whether the presumption used by the authority was in line with the presumption ofinnocenceenshrinedinArticle48oftheCharterofFundamentalRightsoftheEuropeanUnion(Charter).47

ItthereforereferredthecasetotheCJwiththequestionofwhetherthemeresendingofthemessageof27August2009constitutessufficientevidencetoconfirm(orraiseapresumption)thatthetravelagentskneworoughttohaveknownaboutthecontentofthemessageasanelementofaconcertedpractice.

TheanswersoftheCJprovideinterestingguidance.Beforegoingintodetail,itisimportanttokeepinmindthatitisestablishedcase-lawthataconcertedpracticerequiresthepresenceoftwoelements:(i)aconcertationbytheparticipatingundertakings,and(ii)subsequentconductonthemarketwhichisinarelationshipofcauseandeffectwiththeconcertation.48Inrespectofthesecondelement,apresumptionexistsofacausalconnectionbetweenconcertationandmarketconductofparticipatingcompanies.49Thisistheso-called‘Anicpresumption’.

WhatdidtheCJruleinEturas?

Thepresumptionofawareness

Generally, presumptions in competition cases are bad news for parties under investigationbecausetheyeffectivelylowertheburdenofprooffortheauthoritywhichcanmakeiteasiertoestablish violations. Introduction of a presumption of awareness or knowledge of acommunication (thatmaynothavebeen read)bymost companieswould therefore increaserisks for (members of) online platforms.What does the presumption of awareness entail? In short that if an anti-competitivecommunicationisdistributedamongstusersofaplatform,theusersarepresumedto:(i)haveknowledgeofthecommunication;(ii)havesubscribedtotheinfringementinthecontentofthecommunicationprovidedthattheydidnotpubliclydistancethemselvesfromtheconduct;and(iii)haveusedthatknowledgewhendeterminingmarketbehaviour(i.e.theAnicpresumption).

TheCJruled,however,that“incontrasttotheAnicpresumption”,thequestionofwhetherthemere dispatch of the first message may constitute sufficient evidence to establish that thetravel agents were or ought to have been aware of its content, does not follow from the

47 CharterofFundamentalRightsoftheEuropeanUnion,26October2012,O.J.2012C326/02.48 CJ 19 March 2015, Dole Food, case C‑286/13 P, ECLI:EU:C:2015:184, para. 126; CJ 4 June 2009, T-Mobile Netherlands, case C-8/08,

ECLI:EU:C:2009:343,para.51;CJ8July1999,Hüls,caseC-199/92P,ECLI:EU:C:1999:358,para.161.49 SeeCJ8July1999,Anic,caseC-49/92P,ECLI:EU:C:1999:356,paras.118and121.

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conceptofa‘concertedpractice’norisitintrinsicallylinkedtothatconcept.50TheCJregardeditratherasaquestionofassessmentofevidenceandstandardofproof,whichisgovernedbynationallaw.51However,asisthecasewithproceduralrulesonthebasisofwhichEUlawhasto be enforced, national law must not render the application of EU competition rulesimpossible or excessively difficult and, in particular, must not jeopardise their effectiveapplication.52Inotherwords,theEUprincipleofeffectivenessshouldbeobserved.

Consequently, the following standard of proof seems to apply: the existence of a concertedpracticeoranagreementmustbeinferredfromanumberofobjectivecoincidencesandindiciawhich, taken together, may, in the absence of another plausible explanation, constituteevidence of an infringement of the competition rules.53 Furthermore, national rules cannotpresumeawarenessof anti-competitive conducton thebasisof ameredispatchof theanti-competitivemessageonthesystem,asthiswouldfallfoulofArticle48oftheCharter.54

Sowhatistheassessmentofevidenceandthestandardofproofthatshouldapply?Theshortanswer is: national rules.55 National rules may not, however, rely on a presumption ofawarenesson thebasis that themeredispatchingof themessageon theplatform in itself issufficienttoestablishaninfringement.Suchapresumptionisonlypermissibleifthedispatchingof themessage is complementedbyotherobjectiveandconsistent indiciaandprovided thatthereisanopportunitytorebutthepresumption.56

Alsorulesconcerningtherebuttalofapresumptionofawarenessaregovernedbynationallawinterpreted in light of the EU principles. Hence, the CJ stated that a national court cannotrequire that the travel agencies take excessive or unrealistic steps in order to rebut apresumption.Itshouldforexamplebesufficientiftheyprovenottohavereceivedthemessageor that theyhavenot lookedat thesectionof thesystemcontaining themessageordidnotlookatituntilsometimehadpassedsincethedispatch.57

A questionwhich came up in the case is whether public distancing is away to get “off thehook”. It is established case-law that a party that participated in meetings where anti-competitive conduct took place is presumed to have subscribed to the infringement andthereforeparticipatedinit.Thispresumptioncanberebuttedbyprovingthatonehaspubliclydistancedoneselffromtheanti-competitiveconductorreportedtheconducttotheauthorities.

50 Ibid,para.34.51 Ibid,para.34.52 Ibid,para.35.53 Ibid,para.36.54 Ibid,para.39.55 Seerecital5ofRegulation1/2003,O.J.2003L1/1.56 CJ21January2016,Eturas,caseC-74/14,ECLI:EU:C:2016:42.,para.40.57 Ibid,para.41.

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TheCJconsideredthisissueinEturasandruledthat“inparticularcircumstances”suchasthoseinEturas,itcannotberequiredthatadeclarationbyatravelagencytodistanceitselfshouldbemadetoallcompetitorsthatreceivedtheanti-competitivecommunication,asthetravelagencywasnotinapositiontoknowwhotheaddresseesofthecommunicationwere.Itissufficient,insuchasituation,torebutthepresumptionofparticipationintheanti-competitiveconductbysendingaclearandexpressobjectiontothesystemadministrator.Moreover,inEturas,theCJindicated that the travel agents could rebut a presumption by providing evidence of “asystematicapplication”ofadiscountexceedingthe3%cap.58

Observations

Wheredoesthiscasetakeusinpractice?

First, theCJ clearly seems to signal that every casehas tobe closely assessedon its specificmerits:“inferencefromanumberofobjectivecoincidencesandindiciawhich,takentogether,may,intheabsenceofanotherplausibleexplanation,constituteevidenceofaninfringement”shouldclearlybeinterpretedassuchasignalinourview.Moreover,itseemstobeclearnowthatthemeredispatchingofamessageisnotsufficientto“trigger”thepresumption–moreisneededforthat.

Second,ifthepresumptionistriggeredtheCJfindsthattravelagenciesshouldnotberequiredto take excessive or unrealistic steps providing the required evidence for the rebuttal (forexample by proving not to have received the message). This would appear to us to be awelcomeclarificationandprovidesomecomforttoonlineplatformsaboutpotentialexposure.However, in practice, there may be challenges. How easy is it to provide evidence that amessagewasnot receivedor read, inparticular if theonlineplatformonwhich themessagewasdispatchedisownedandoperatedbyathirdparty?Onecouldperhapsthinkofsystemlog-files or witness statements if allowed as proof under national law. However, rebutting thepresumptioncontinuestoresemblesomethingofaprobatiodiabolica.

Third, the ruling that a clear objection to the system operator is sufficient to rebut thepresumption, is again a welcome clarification and may in practice play a significant role intaking away concerns about antitrust exposure. We must admit though that in the digitalenvironmentonemightwonderwhetheraformof‘publicdistancing’bysendinganobjectionto (only) the system administrator is an effective way to achieve its purpose. What is‘distancing’ worth if the users of the platform are not aware of it? Generally, the rationalebehindthedeclarationtopubliclydistanceoneselffromtheanti-competitiveconductisthatit

58 Ibid,para.49.

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would disrupt the collusion. The idea is that a party that disagrees with the behaviour, butremains silent could make the other participants believe that all subscribed to what wasdiscussed and that all would comply with it and therefore effectively encouraging thecontinuationoftheinfringementandjeopardisingitsdiscovery.59

Finally,anotherimportantclarificationprovidedbythecourtmaybethattheapplicationofasystematic different (higher) discount could rebut apresumption in such circumstances as inthis case. In practice, thismaybe an important action to carry out for anyparty in order toreduceriskwhenitfindsitselfinasimilarsituationtothatinEturas(ifconsideredcommerciallyacceptableofcourse).

3.4 Third-partyfacilitation-Treuhand

AnotherimportantrecentcasethatprovidesusefulinsightsfortheapplicationofcompetitionlawtoonlineplatformsisthatofACTreuhand.60TheCJaddressedthequestionofwhetherathirdpartythatfacilitatedcartelbehaviour,withoutitselfbeingactiveonthemarketwheretheinfringementtookplace,couldneverthelessbeheldliable.ItconcludedthatTreuhand,aSwissconsultancy firm,was liable because it had facilitated the behaviour - Treuhandwas said tohaveplayedan“essential”roleeventhoughitwasnotactiveontherelevantmarket.

Sowhatare thecriteria for thirdparty liability?TheCommissionhadestablished in its carteldecision61thatTreuhandorganised,facilitatedandmanagedmeetingsbythirdpartiesinwhichanti-competitive conduct took place. The conduct concerned two sectors: tin stabilisers andepoxidised soybean oil and esters and consisted in the allocation of markets through salesquota, allocation of customers and the exchange of commercially sensitive information.Treuhand was not active in either sector. Treuhand’s primary line of business was offeringbusinessmanagement and administration services to national and international associationsand interest groups. Itsmain activities included the collection, processing and assessmentofmarket data, presentation of market statistics and the audit of the reported figures at thepremises of the participants. Nevertheless, Treuhandwas held liable for both infringementsbecause it organised and attended meetings in which it actively participated, collected and

59 CJ 7 January 2004, Aalborg Portland, Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P,

ECLI:EU:C:2004:6,para.84.60 CJ 22 October 2015, case C-194/14 P, Treuhand II, ECLI:EU:C:2015:717. This was already a second case against Treuhand concerning

facilitationofaninfringementofArticle101TFEU.ThepreviousbeingCommissionDecisionof10December2003,CaseCOMP/E-2/37.857–OrganicPeroxides, inwhichTreuhandobtaineda (symbolic) fineof€1000.Also thatdecisionwasappealed to theEUGeneralCourtwhichappealwassubsequentlydismissed,seeGC8July2008,TreuhandI,caseT-99/04,ECLI:EU:T:2008:256.TreuhanddidnotappealthatjudgmenttotheCJ.

61 CommissionDecisionof11November2009,CaseCOMP/38589–HeatStabilisers.

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supplieddatatotheproducersonsales,actedasamoderatorintheeventoftensionsbetweentheinfringersandencouragedthemtofindcompromises.62

Treuhand contested theCommission’s findingsand lodgedanappealwith theGCwhichwasdismissed in itsentirety.63TreuhandsubsequentlyappealedtotheCJ. In itsappeal,Treuhandarguedthatasitdidnotcoordinateitsowncommercialbehaviouronthemarket,itsactionsdidnotsatisfythecriteriaofa‘concertedpractice’.

TheCJdismissedthispleaasfollows:FirsttheCJconfirmedthatinrespectofan‘agreementtorestrict competition’, infringing parties express their intention to conduct themselves on themarketinaparticularmannerandfurthermore,inrespectofa‘concertedpractice’,thateveryoperatormustdetermine thepolicy that it intends to adopton themarket independently inorder not to be liable for concerted practices.64 Second the CJ found that this does notpresupposethatamutualrestrictionofcommercialfreedomshouldtakeplaceononeandthesame market on which all infringing parties are present.65 It is sufficient if the commercialconduct of one of the parties is affected by the arrangements.66 The conduct of Treuhandcould,accordingtotheCJ,bedirectlylinkedtotheinfringementbecauseTreuhand’staskswereto negotiate and monitor the implementation of the cartel conduct.67 The CJ dismissedTreuhand’sappeal.

Observations

Thiscaseisfurtherevidencethatthirdpartieswhosupportacartelmaynotbeoffthehook(aconceptalsoknownunderDutchcompetitionlaw).WhatistherelevanceforonlineplatformsandhowdoesthisjudgmentrelatetoEturas?

First, itshouldbenotedthat inEturas itappearstohavebeentheplatformthat inducedtheanti-competitive behaviour – it sent the anti-competitive message. Eturas arguably as aplatformthatoperatesatadifferentmarket than the travelagents“facilitated” theconduct,althoughwe find the lines between the conduct of Eturas and Truehand in both respectivecasesratherblurred.

Second,Truehand seems to confirm thatmutual restrictionof commercial freedomdoesnotneedtotakeplaceononeandthesamemarketonwhichallpartiesarepresent;transposedtotheonlineworld,anonlineplatformmayarguablynotbeable togetoff thehook simplyby

62 CJ22October2015,TreuhandII,caseC-194/14P,ECLI:EU:C:2015:717,para.9.63 GC6February2014,TreuhandII,caseT-27/10,ECLI:EU:T:2014:59.64 CJ22October2015,TreuhandII,caseC-194/14P,ECLI:EU:C:2015:717,para.32.65 Ibid,para.33.66 Ibid,para.35.67 Ibid,para.38.

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arguing it isnotactiveon thesamemarketas itsmembers.Soa riskmayexist foranonlineplatformtobeheldliableforanycartelconductbeingchallengedthroughitssystem.

However,third,acrucialpointmaybethatTruehandclearlyplayedsomeformofactiveroleinthecartel–itorganisedmeetingsandactedasmoderator.Thequestionremainsastowhenanonline platform “crosses the boundary”. Would passive involvement in the form of merelyprovidingaccesstoanonlineplatformwhichissubsequentlyusedforcartelbehaviour,escapefines?Havingawarenessoftheinfringingbehaviourseemstobeimportantbuthowsignificantthe awareness has to be does not exactly become clear. The CJ referred to Treuhand’s “fullknowledge of the relevant facts” and this finding feeds in to the CJ’s reasoning regardingTreuhand’s liability.68 This is in line with in the SIA case (which did not concern third-partyliabilitybutmayberelevant inthisrespect),wheretheCJspecifiedthataconcertedpracticemaybeattributedtoapartyifthatpartywasawareoftheconductandintendedtocontributeto the concertedpracticewith its own conductor if that party could reasonably foresee theillicitconductandacceptedtheriskitentailed.

In summary, each case will have to be analysed on its specific merits. On one end of thespectrum,anonlineplatform(consciously) setuptoactivelyorganiseandmonitor illicitanti-competitiveconductwouldappeartofulfiltherequirementsoffacilitation,andwouldbeliableforfines(querywhetherthenEturasisthemorerelevantjudgmentthough?).Ontheotherendofthespectrum,onemightwonderwhetherhugeonlineplatformswithmillionsofusers(andnotspecificallysetupforillicitconduct)couldbeheldliableif,forinstance,onememberofthatplatform sends amessage to anothermember fixing prices. It appears to us that Truehandconfirmsthatsuchtotallypassivecartel-enablingconductwouldnotbeliableforfines-ifthatwasthecaseapostalcompanycouldbeheldliableiftwocompaniessenteachotheraletterfixingpriceswhich isnotwhatcompetitionenforcerswouldnormallybelievetheycando.Soagain,everycasewillhavetobeassessedonitsmerits.

Itmayberecommended,especiallyforspecifichigh-riskonlineplatforms(wecoulde.g.thinkofanonlineplatformsetupinthecontextofanindustrytradeassociation),topossiblyconsidersome form of monitoring programme (which would have to comply with privacy and otherlaws).Ifcartelbehaviourisdetected,appropriateactioncouldthenimmediatelybetaken.

In this respect,onlineplatformscouldconsider implementingprocedures, similar toso-called‘notice-and-take-down’ regimes that are applied in the context of digital hosting andinfringement of copyright. For hosting services, the Electronic Commerce Directive providesthat hosting providers are not liable for ‘illegal activity’ by third parties on their systems

68 Ibid,paras.26,38and39.

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providedthattheyareunawareoftheactivityandwhenbecomingawareofsuchillegalactivityact“expeditiously”toremoveordisableaccesstotheinfringinginformationontheirsystem.69Again,webelieveeverycasewillhavetobeassessedonitsmerits.

Section4:RecentdevelopmentsintheapplicationofArticle102TFEUtoonlineplatforms

This article would not be complete without reference to developments in some dominancecases currently pending in Brussels. In particular, although there are no final Commissiondecisions yet, the recent press releases on the adoption of Statements of Objections in thecases Google Search70 and Google Android71 provides some insight into the Commission’scurrentproposedlineofargumentationregardingtheapplicationofArticle102TFEUtowhatitappears to perceive as dominant general search engines. A vast amount of academiccommentary already exists on these cases, with important thoughts on the application ofArticle102TFEUtoonlineplatforms.Inthisarticle,welimitourselvestoageneraldescriptionofthecasesandweprovideanumberofobservations,taking intoaccountarticlesofvariousotherauthors.

GoogleSearch

InMarch2013,theCommissioninformedGoogleofitsviewthatthecompanywasabusinganalleged dominant position in the internet search market. So far, Google has offeredcommitmentstotheCommission,butnofinalagreementhasbeenreached.Initspressrelease,the Commission’s preliminary conclusion is that Google “treats and has treated morefavourably, in its general search results pages, its own comparison shopping service ‘GoogleShopping’ and its predecessor service ‘Google Product Search’ compared to rival comparisonshopping services”.72 The Commission takes the view that Google should treat its owncomparison shopping service and those of rivals the same way. The Commission furtherconcludesthatGoogle“positionsandpredominantlydisplaysitscomparisonshoppingservicesin itsgeneralsearchresultspage, irrespectiveof itsmerits”,anddoesnotapply itssystemofpenalties (which penaliseswebsites by putting them in a lower rank) to its own comparisonshopping service.73 According to the Commission, this results in a negative impact onconsumersandinnovationbecausecompetitorshavealowerincentivetoinnovateastheywill

69 Directive2000/31/ECoftheEuropeanParliamentandoftheCouncilof8June2000oncertainlegalaspectsofinformationsocietyservices,

inparticularelectroniccommerce,intheInternalMarket(Directiveonelectroniccommerce),O.J.2000L178/1,Article14.70 Commission press release, 15 April 2015, accessible at: http://europa.eu/rapid/press-release_MEMO-15-4781_en.htm; and Commission

pressrelease,14July2016,accessibleat:http://europa.eu/rapid/press-release_IP-16-2532_en.htm.71 Commissionpressrelease,20April2016,accessibleat:http://europa.eu/rapid/press-release_MEMO-16-1484_en.htm.72 Commissionpressreleaseof15April2015.73 Ibid.

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notbenefitfromthesameprominenceasGoogle’sproducts.74Furthermore,consumersmightnotnecessarilyseethemostrelevantresultstotheirsearches.75

Marketdefinition

In its press release, the Commission concludes that “Google has a dominant position inproviding general online search services”,76 indicating that it applies amarket definition thatfocuses on general search services and leaves out specialised search services. According tosome critics, the Commission’s approach ignores the fact that Google Search offers acombinationofbothtypesofservicesand,dependingontheirquery,consumersmightindeedconsiderspecialisedsearchservices (e.g. Idealo for shoppingqueriesorTripAdvisor for travelquestions)assubstitutes.77Further,suchcommentatorsarguethatbyexcludingplatformslikeAmazon or eBay from the definition of “general search markets”, the Commission fails toinclude all suppliers who can meet demand of consumers that use search engines to findproducts.Consumerssearchingforbooks,forinstance,mightturntoBol.com,Amazon,eBayorGoogle,arguablysuggesting that theseservicesdooperate in thesamemarket.According tothese critics the Commission’s approach to market definition thus creates a misleadingimpressionoftheactualmarketconditions.78

Dominance

ThecompanyisconsideredbytheCommissiontoholdadominantpositioningeneralinternetsearchserviceswithabove90%marketshareinmostEEAcountries.79WhilstitisnotyetclearfromtheinformationthatispubliclyavailablewhethertheCommissionissolelyrelyingonthisargument in establishing dominance, this aspect is already debated in academic literature.Google’shighmarketsharetogetherwiththenumberofyearsthecompanyhasmaintaineditsshares has led critics to conclude that there would be no doubt of a perceived dominantpositionwithinthegeneralsearchenginesmarket.80

However,accordingtoothers,eventhoughhighmarketsharesareusuallyausefulindicatorofdominance,it isquestionable,accordingtosome,whetherthisappliesequallyforinnovation-driven markets in which online platforms operate. In such markets innovation is often thedistinguishing competitive factor, rather than price. Indeed, the German MonopoliesCommission(Monopolkommission)initsSpecialReportoncompetitionpolicyindigitalmarkets74 Ibid.75 Ibid.76 Commissionpressreleaseof14July2016.77 See,forinstance,TorstenKörber,TheCommission’s‘NextBigThing’?,NeueZeitschriftfürKartellrecht(NZKart)2015,415-423.78 Ibid.79 SeeCommissionpressreleaseof15April2015.80 See, for instance, LisaMays, The Consequences of Search Bias: How Application of the Essential Facilities Doctrine Remedies Google’s

UnrestrictedMonopolyonSearchintheUnitedStatesandEurope,TheGeorgeWashingtonLawReviewVol.83:721,12May2015,p.748.

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statesthat:“…itwouldbeprematuretoassociate[a]highusersharewithcorrespondingmarketpower; it is necessary to take all sides of the platform and their interdependencies intoaccount”.81Arguably,highusagemarketsharesareonlyoflimitedsignificanceinthedynamicenvironmentofthedigitaleconomy,astheymayonlymeanthatthecompanyinnovatesatafasterpace than its rivals.Somehaveargued therefore thatdominancecanonlybe found insuchmarkets if thecompany inquestioncouldaffordnotto innovateandstillkeep itsusageshares.82

Microsoft

ItisalsointhiscontextthattheGooglecasesaresometimescomparedtotheMicrosoftcases-bothcasesinvolvelargemultinationaltechcompanieswhichtheCommissionaccused/accusesofbreachingArticle102TFEU.InthecaseofMicrosoft,theplatformwasMicrosoft’sWindowsoperatingsystem,whereasinthecaseofGoogletheplatformistheGooglesearchengine.Thequeryhascomeupinthedebatewhethersuchacomparisonisappropriate.

First, as pointed out by some advocates forMicrosoft, the network effectwas derived fromapplicationsprogrammed to runonWindows,whichallowedMicrosoft to chargeusers.83Bycontrast,Googleprovidesafreeservicetousersandchargesadvertisers.

Second,accordingtosome,84theusersofWindowswereoften“lockedin”astheyhadinvestedin the Windows licence and Windows-specific software and hardware and therefore werepreventedfrommigratingtootheroperatingsystemsduetohighswitchingcosts.InthecaseofGoogle,switchingcostsarearguablynegligibleasGoogleisonesearchengineamongmanyanduserscansearchforalternativesourcesofinformationontheinternetortypeinanewsetofinstructionsonabrowser.However,otherspointoutthattheextenttowhichconsumersusealternativeenginesis, infact, limited.85ThecompetitivepressureonGoogleisthussaidtobeeitherineffectiveornon-existent.

Finally,theCommissionintheMicrosoftcaseemphasisedthattherewereimportantnetworkeffects,becausemanyapplications(e.g.MediaPlayerorInternetExplorer)wereonlyavailableforWindows,andnotforotheroperatingsystems.Also,Microsoft,atthattime,didnotpermitthepre-installationof competingbrowsers, therebyactivelyplacing competingbrowsersata

81 GermanMonopoliesCommission,SpecialReport68(2015):Competitionpolicy:thechallengeofdigitalmarkets,paraS27.82 See,forinstance,TorstenKörber,TheCommission’s‘NextBigThing’?,NeueZeitschriftfürKartellrecht(NZKart)2015,415-423.83 TorstenKörber,TheCommission’s‘NextBigThing’?,NeueZeitschriftfürKartellrecht(NZKart)(2015),415-423,p.7.84 See,forinstance,JohnTempleLang,ComparingMicrosoftandGoogle:TheConceptofExclusionaryAbuse(2016)39(1)WorldCompetition,

Issue1,pp.5-28orTorstenKörber,TheCommission’s‘NextBigThing’?,NeueZeitschriftfürKartellrecht(NZKart),2015,415-423.85 See,forinstance,AncaChirita,Google’sAnti-CompetitiveandUnfairPracticesinDigitalLeisureMarkets,11(1)TheCompetitionLawReview

,July2015,pp109-131.

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competitivedisadvantageaccordingtotheCommission.86InfavourofGoogle,somearguethatdirectnetworkeffectsdonotexistbecausesearchservicesdonotgetmoreattractiveforuserswithanincreasingnumberofotherusers,butbecauseofotherfactorssuchassearchresults.Hence, some authors argue, if Google has more or more accurate information than itscompetitors, this isnotanetworkeffect,becausethenumberofusersorsearchersdoesnotaffect it at any time.87 And since users do not communicatewith one another, they lose nonetworkbenefitswhen they switch toother searchengines.The flip side to thisargument isthat (potential) competitors face significant barriers to entry due to the high fixed costs ofhaving to competewithGoogle’s data infrastructure andhaving to develop similar or bettersearchandrankingalgorithms.88

Abuse

Article 102 TFEU only comes into play if a dominant undertaking uses its power to impaireffectivecompetitionbyforeclosingitscompetitorsinananti-competitivewaytotheharmofconsumers.89AccordingtotheCommission’spressrelease,onesupposedabuseisthatGoogleprovidesinformationdirectlyaboutthemerchants’productsandservicesbutomitstoprovideinformationaboutotherspecialisedsearchenginesinitsresults-Googlewouldbe“favouring”itsownproductsoverthoseofitscompetitors.However,someauthorspointout90thatfailingto advertise competitors’ products does not create an obstacle for competing companies.Googlecouldmerelynothelpitsrivals,whichisdifferentfrom“limiting”markets,productionortechnicaldevelopmentwithinthemeaningofArticle102(b)TFEU.Inthislineofreasoning,theideaisthatEuropeancompetitionlawrulesdonotrequiredominantundertakingstohelptheircompetitors by granting them access to their resources, unless certain exceptionalcircumstancesapply,suchastheserviceinquestionbeinganessentialfacility.

A number of academics point out91 that Google cannot be regarded as an essential facility(access to its facilities is not necessary for access to the downstreammarket as per Article102b). If that is correct, its refusal to advertise its competitors’ services can likely not beconsideredanillegalrefusaltoprovideaccesstotheGoogleplatform.Somecriticshavearguedthat, in order to establish abuse,whatmatters is that traders bid online for their ads to be

86 SeeCommissionDecisionof16December2009,CaseCOMP/C/3/39.530-Microsoft(InternetExplorer),paras54etseq.87 See,forinstance,JohnTempleLang,ComparingMicrosoftandGoogle:TheConceptofExclusionaryAbuse,39(1)WorldCompetition,2016,

p.8.88 AncaChirita,Google’sAnti-CompetitiveandUnfairPracticesinDigitalLeisureMarkets,11(1)TheCompetitionLawReview,July2015,pp

109-131,p.116.89 EuropeanCommission,CommunicationfromtheCommission—GuidanceontheCommission'senforcementprioritiesinapplyingArticle

82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, 2009/C 45/02, http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52009XC0224(01)&from=EN,para.19.

90 See,for instance,JohnTempleLang,ComparingMicrosoftandGoogle:TheConceptofExclusionaryAbuse(2016)39WorldCompetition,Issue1,pp.5-28orTorstenKörber,TheCommission’s‘NextBigThing’?,NeueZeitschriftfürKartellrecht(NZKart)2015,415-423.

91 See,for instance,JohnTempleLang,ComparingMicrosoftandGoogle:TheConceptofExclusionaryAbuse(2016)39WorldCompetition,Issue1,pp.5-28.

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placedonGoogle’s“priority”listing,whichinevitablyaffectsthequalityofthegeneratedsearchresults offered freely by Google to its users. Thus, commercial advertising in one marketinterfereswithfreecompetitionintheothermarketasithasthepotentialtodistortandlimitthenatural listingof search results through the insertionofpaidads,which in turn couldbeconsideredharmfultoconsumerswhoarelookingtofindthemostrelevantsearchresults.92

GoogleAndroid

ThesearchcaseisnottheonlyheadacheforGoogle.InitslatestStatementofObjectionsintheGoogleAndroid93case,fromApril2016,theCommissionclaims(accordingtoitspressrelease)that Google “abused its dominant position by imposing restrictions on Android devicemanufacturers and mobile network operators”. 94 The Commission raises the following fourallegationsagainstGoogle:

FirsttheCommissioncriticisesthefactthatGooglemakesinstallationofAndroidconditionalontheinstallationofitsapplicationsuite.Asaresult,rivalsmayfindithardtowinoverconsumers,becausemanyofGoogle’sapplicationsarepopularandconsumersmaynotuseanoperatingsystem that does not support Google applications. Second, Google is accused of takingadvantageofthepopularityofsomeofitsapplicationstobundleitslesspopularproductswhensupplyingrequestedapplicationstooriginalequipmentmanufacturers(OEMs).Thus,accordingto theCommission,consumersmaybeusingsomeofGoogle’sapplicationsnotbecausetheyare superior, butbecause theyareeasier to access, therebymaking it harder for competitorapplication providers to attract consumers. Lastly, according to the Commission, GoogledemandslicenseestoonlyusetheversionofAndroidsupportedbyGoogle,andprohibitsthedevelopment of non-supported (amended) versions of Android. The Commission claims thatbecause many OEMs sign Google’s so-called Mobile Application Distribution Agreements(MADA) and Anti-Fragmentation Agreement in order to utilise Google’s applications, thedevelopmentofcompetingAndroid-basedoperatingsystemsishindered.

Marketdefinition

The Commission has previously rejected the notion that there are separate markets forlicensable mobile operating systems (like Android) and non-licensable mobile operatingsystems (like Apple’s iOS).95 Instead, the Commission considered a market that includes all

92 See,forinstance,AncaChirita,Google’sAnti-CompetitiveandUnfairPracticesinDigitalLeisureMarkets,TheCompetitionLawReview(Vol

11,Issue1),July2015,pp109-131.93

AndroidisGoogle’smobileoperatingsystemwhichisusedindevicessuchassmartphonesortablets.94 European Commission, Factsheet on Statement of Objections – Google Android, http://europa.eu/rapid/press-release_MEMO-16-

1484_en.htm(Accessedon14/07/2016).95 (Then) Competition Commissioner Almunia to the European Parliament on 10 February 2014, accessible at:

http://www.europarl.europa.eu/sides/getAllAnswers.de?reference=E-213-013770&language=EN.

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mobile operating systems. This broad approach to product market definition has beenwelcomedbysomeauthors.96With regard to the tyingallegations,authorshavepointedoutthat defining the markets for different tying products e.g. individual applications, suites ofapplicationsetc.andforthetiedproductse.g.otherapplicationsandrelatedservicesthatareallegedlyforcedontoOEMsandusers,willbeaverycomplextask.Astheboundariesbetweenapplications and services are blurry (e.g. most mobile services like internet search or mapnavigation do not require a specific application) it is difficult to say what constitutes therelevantmarketintheirview.97

Dominance

Again,itisnotclearyetfromtheinformationthatispubliclyavailablehowtheCommissionisgoingtostructureitsassessmentofdominance.However,considerationssimilartotheGoogleSearch caseapplyhere.Variouscommentators98pointout thatAndroid’shighmarket shares(basedonsales)maynotbeasconclusiveas inother ‘traditional’dominancecases,primarilyfor the following reasons. First, relyingon sales figureswouldnot take into account the factthatGoogledoesnotproduceAndroiddevices.Androiddevicesaremanufacturedandsoldbyindependent OEMs like Samsung or LG. These OEMs arguably control the devices’ prices,accordingtosome,whichmeansthatsalesmarketsharesshouldbeattributedtothem,nottoGoogle.Second,itisawell-knownargumentthatasmarketsinthedigitaleconomyarehighlydynamic,marketsharesareseldomstableandhenceonlyoffershort-termimpressionsofthemarket. As theCommissionnoted in itsMicrosoft/Skypedecision: “Asa result, software andplatforms are constantly being redeveloped. Innovators generally enjoy a short lead in themarket”.99 Therefore, according to some, high market shares do not necessarily lead to adominantposition.

AswithGoogleSearch,andforthesamereasons,GoogleAndroidisfrequentlycomparedtotheMicrosoft cases. In this regard, it is sometimes argued that the competitive structure of themarketsformobileoperatingsystemsandclientPCoperatingsystemsdifferconsiderably.Itisarguedthatthemobileoperatingsystemsmarketishighlydynamic.Forinstance,itiscommonforsmartphoneuserstogetanewdeviceeveryyearoreveryotheryear.Bycontrast,PCsandclientPCoperatingsystemsareusedforamuchlongerperiod.

96 See, for instance,TorstenKörber,Let’sTalkAboutAndroid-ObservationsonCompetition in theFieldofMobileOperatingSystems,Neue

ZeitschriftfürKartellrecht(NZKart),2014,378-386.97 Ibid.98 See, for instance,TorstenKörber,Let’sTalkAboutAndroid-ObservationsonCompetition in theFieldofMobileOperatingSystems,Neue

Zeitschrift für Kartellrecht (NZKart), 2014, 378-386 or Konstantinos Stylianou, Help Without Borders: How the Google Android CaseThreatens to Derail the Limited Scope of the Obligation to Assist Competitors, available athttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=2766062.

99 CommissionDecisionof7October2011,caseCOMP/M.6281–Microsoft/Skype,para.83.

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It is also argued that the creation of new mobile operation systems is far less costly thancreating a new client PC operating system and building the average application is far lesscomplicated and costly than creating a PC programme.100 Mobile application developers, incontrasttoPCprogrammedevelopers,wouldbeabletodevelopapplicationsformultimobileoperating systems (so-called “multi-homing”). Multi-homing cuts costs for applicationdevelopment and reduces users’ switching costs. Users can “multi-home” too (i.e. usemorethan one application for similar functions or services) as there are no technical or economicconstraintsthatpreventthemfromdownloadingseveralappsforthesamefunction.

Somealsoargue that switching costs forusersofmobileapplicationsarealsonegligible (thevastmajorityofappsarefreeofchargeandonlyveryfewcostmorethan5Euros)comparedtothe cost of the new device or theWindows PC ecosystem, whereas Windows programmesoften cost hundreds of Euros.101 Arguably, according to some, the Google Android andMicrosoftcasesalsodifferinthatGoogle’srulesmaybeconsideredinadifferentlighttopriorMicrosoftrequirements.Forinstance,MicrosoftissaidtorequirethatcomputermanufacturersdistributeWindows intact, without removing components that Microsoft defined as part ofWindows. Google’s rules would include the requirement that Google apps be default andpresentinprominentlocations.102

Itwillbe interestingtoseetowhatextenttheCommissionwilldifferentiatebetweenGoogleandMicrosoftandhowitwillassessandweightheabovediscussedfactorsand intricaciesofthemarketinquestion.

Abuse

A largeamountofcommentaryexistsaroundthequestionofwhetherGooglehasabused itsposition for the purposes of Article 102 TFEU. A few general points to consider are thefollowing:

Androidisfreelyavailablefor licence.Only ifOEMssigntheMADAdotheyundertaketopre-install the full suiteofGoogleapplications– theclaim thatGoogle is tying itsapplications toAndroid (which wouldmean that Android is only available with Google Apps) has thereforebeencriticisedbysomeauthorsasfactually incorrect.103Againstthismayspeak,accordingtosome, that although Android is open-source, manufacturers need Google’s certification and

100 See, for instance: http://waracle.net/how-much-does-it-cost-to-develop-a-mobile-app-for-google-android/ or

http://www.bluecloudsolutions.com/blog/cost-develop-app/.101 BenjaminEdelman,DoesGoogleLeveragemarketPowerThroughTyingandBundling?, JournalofCompetitionLaw&economics,11(2),

June2015,pp.365-400.102 Ibid.103 See,forinstance,KonstantinosStylianou,HelpWithoutBorders:HowtheGoogleAndroidCaseThreatenstoDerailtheLimitedScopeofthe

ObligationtoAssistCompetitors,availableathttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=2766062.

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approval to ship a device. Certification is required for a device to access Google PlaywhereusersobtainappsandGooglecanwithholdtheAndroidlogo/trademark.Googleissaidtohaveusedmanufacturers’relianceoncertificationtorequiremanufacturerstofavouritsservices,forinstance,bydelayingcertificationwheredevicesfeaturecompetitorsearchservices.104Further,whilstMADArestrictionsleaveopenthepossibilityofAndroiddeviceswithnoGoogleappsatall,suchdevicesappearnottobecommerciallyviableinmajormarkets.WithoutthePlayappstore,forinstance,userswouldstruggletogetappsfromGoogleorothers.105

Googleisalsoaccusedofbundlingitsapplicationstogether(horizontalbundlingamongGoogleApps).The idea is thatrivalmanufacturerswantbothAndroidandanunbundledselectionofGoogleApps.Anumberofacademics106argue that ifahorizontalbundlewasbrokenup thiscould weaken Google’s ability to compete on the merits, as it would imply that Google isobliged to help a competitor not simply by providing the platform (Android), but also byproviding itssellingpoint (i.e. inanunbundledfashion).Ontheotherhand, it isclaimedthattyingappstogetherhelpsGooglewheneveradevicemanufacturerseesnosubstituteeventoone of Google’s apps. In those sectors, where Google’s apps have no commercially viablecompetitors(e.g.devicemanufacturersmaynotperceivetheretobeasubstituteforYouTubeandthusfindapreloadedYouTubeapptobecompulsory)Googlewouldthenbeabletousetheseappsasabasisfortying,theargumentgoes,sincepre-installationofanyGoogleappsisconditioned on pre-installation of all apps Google specifies. Thus, it is argued that therestrictionsimposedbyGoogleprohibitalternativevendorsfromoutcompetingGoogle’sappsonthemeritsandpreventcompetitorsfrompayingdevicemanufacturersfordistribution.107Byrequiring thatmobile devicemanufacturersmakeGoogle search andother apps thedefault,without payment, the argument is that Google is said to prevent bidding which wouldotherwise leadtoadditionalrevenuesformanufacturerswhichcouldotherwisebepassedonassavingstoconsumers.108

104 Jun Yung, Google Faces Antitrust Complaints in South Korea on Popularity of Android, Bloomberg News, N.Y. Times (15 April 2011),

availableat:http://www.nytimes.com/2011/04/16/technology/16google.html.105 BenjaminEdelman,DoesGoogleLeveragemarketPowerThroughTyingandBundling?, JournalofCompetitionLaw&economics,11(2),

June2015,pp.365-400.106 See,forinstance,KonstantinosStylianou,HelpWithoutBorders:HowtheGoogleAndroidCaseThreatenstoDerailtheLimitedScopeofthe

ObligationtoAssistCompetitors,availableathttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=2766062.107 See, for instance,BenjaminEdelman,DoesGoogleLeveragemarketPowerThroughTyingandBundling?, JournalofCompetitionLaw&

economics,11(2),June2015,pp.365-400.Iinterestingly, intheUStheFTCdismissedallegationsthatGooglewasillegallytyingproductstoitsAndroidoperatingsystemor illegallytying such products to each other, see http://www.ftc.gov/opa/2013/01/google.shtm; http://www.ftc.gov.news-events/press-releases/2013/01/google-agrees-change-its-business-practices-resolve-ftc.TheSouthKoreanFairTradeCommissionalsodismissedclaimsby competitors that Google abused a dominant position in smartphones running Google Android in South Korea, seehttp://www.pcworld.com/article/2044695/s-korea-drops-antitrust-investigation-against-google.html. However, the Russian FederalAntimonopolyServicefinedGoogleRUB438million(approx.€6.07million)forabuseofadominantpositionaccusingGoogleofobligingmobilephonemanufacturers topre-installAndroid, seeMLexpress releaseof11August2016,Google finedEUB438millionbyRussianantitrustauthoritiesoverAndroid.

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Asfollowsfromthedebatesetoutabove,many legal (andeconomic)questionsastomarketpowerandabusestillremainunclear.ThereisnofinalCommissionpositionyetandtheabovemerely provides some arguments as set out by different sides in the debate. How theCommission is ultimately going to dealwith these cases understandably remains one of thehottesttopicsinBrusselsthesedays.Inanycase,manyauthorsgenerallycallforacase-by-caseeconomicanalysisthattakesthespecialcircumstancesofthedigitaleconomyintoaccount,inorder to answer the question ofwhether Google’s treatment of competing services violatesArticle102TFEU.

Chapter5:Finalobservationsandremarks

Inthisarticlewehavesetoutsomekeyobservationsregardingdevelopmentsinthedefinitionofonlineplatforms.Wehaveseenthat there isstilladebateabouthowtocapturetherightformula for a description of the nature of online platforms. It is clear that providing an all-encompassingdefinitionisdifficult.However,thesolutionnowproposedbytheCommission-toassesswhetherornotaplatformwouldqualifyasanonlineplatformonacase-by-casebasis,using the predefined characteristics – while potentially having disadvantages from a legalcertaintyperspectivemaynotbesoillogical.Thisremainsanareaofdebatefortheforeseeablefutureespeciallyalsoif(additional)sector-specificregulationisproposed.

That not all pricing mechanisms are considered in line with competition law, according toregulators, follows from the hotel booking cases, where parity pricing arrangements wereoutlawedinseveralEUMemberStates.Althoughinnovativepricingmechanismscanenhancecompetition, the object and effects of such mechanisms should be carefully assessed andreviewed. That this remains a primary focus follows from the fact that several nationalenforcers, includingtheDutchCompetitionauthorityandtheCommission,havesetupataskforcetodealwiththisperceivedproblem. Itwillbe interestingtoseewhatthenextstepsoftheseregulatorswillbe.

Furthermore,wehave touchedupononhow to dealwithmulti-sided systems,whichonlineplatformsoftenare.InthisregardwediscussedhowtheCJinrecentcase-lawhasassessedthemulti-sidedaspectofplatformsfromacompetition lawpointofview, intheGroupementdescartes bancaires and MasterCard judgments. In these judgments the CJ provided usefulguidanceonhowtoassessmulti-sidedmarkets.Itisclearthatconnectedmarketsofasystemneed to be assessed as a whole. Secondly, efficiencies that may arise from measures thatrestrict conduct on a particular market should relate to that particular market and cannotcompensatelossofcompetitionifthatcompetitionislostonadifferentmarketinthesystem.This is of particular importance for online platforms that, for instance, regulate supply anddemandinthesystemtogeneratevalue.

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Furthermore, we discussed the recent Eturas and Treuhand cases and the guidance the CJprovidedconcerningtheassessmentofpossiblehorizontalcompetitionlawissuesforusersofonline platforms and the platform itself. TheEturas case provides awarning for users of anonlineplatformandtheplatformitself,butitalsocarriesthemessagethatahigherthresholdmayapply forpresumptions toestablishan infringementcomparedtowhatwehaveseen inthenon-digitalworld.Truehandconfirms that facilitationofa cartelmaynotgounpunished,but some form of active involvement would need to be demonstrated by a competitionauthority.Afacts-basedanalysisforeveryspecificplatformisadvisabletoassessanyantitrustrisk.

TheGooglecasesshowthatonlineplatformsthemselves,seemtobeapriorityforcompetitionenforcers,inthismattertheCommission.Aswehavesetoutinsection4,thereisanongoinglegal (andeconomic)debateas tohowdominanceand thepossibleabuse thereof shouldbeassessed inthedigitalenvironment.TheGooglecasesseemtoformaclearchallengefortheCommission,giventheextensivedurationoftheinvestigationandthefactthatthereisstillnodecisionexpectedanytimesoon.

A question we raised in the introduction was how novel the situations, questions andenforcement challenges that often come up in the online platform debate really are andwhether EU competition law is sufficiently equipped to deal with any new challenges thatonlineplatformsareperceivedtobringabout.

Afterhavinganalysedthesedevelopmentsandrecentdecisionsandjudgments,wecanclearlyconfirm that onlineplatformsdo give rise to a lot of novel situations andquestions: how toassess the liabilityofanonlineplatform,suchas inEturas,howtoassesspriceparityclausesimplemented in the online hotel booking sector revolutionising that industry? These arefascinatingnewdevelopments.On theotherhand,questionsonhowtoattribute liability forcartelconductunderspecificcircumstancesandhowtodealwithverticalpricerestrictionsareasoldascompetitionlawitself.Wealsonotedhowremarkablywellcompetitionlawseemstobeequipped todealwith someof these situations.Akeyareawherewemaysee some realnewchallenges is enforcementof very innovativenew formsof cartel conduct.Wequestionwhethercompetitionauthoritiesare,forexample,well-equippedtodealwithsituationswherecomplex algorithms are used thatmonitor or predict competitors’ price changes and swiftlyadapttothem.Ifusersofonlineplatformsusesimilarpricingalgorithms,pricesmaydefactobefixed.Ontheotherhand,competitionauthoritiesobviouslyalsokeepupwithdevelopments:theywereabletoadaptwhenmostofthepapermaterialbecameelectronicmaterial–sowhywouldtheynotbeabletoadapttofurtherdevelopmentsinthedigitalrevolution?

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Anareawheretheapplicationofcompetitionlawinitscurrentformmaybemorechallengingis intheassessmentofdominanceandabuse issues inthecaseofonlineplatforms- thefactthattheGooglecasesarestillpending isconsideredbysomeasproofofthesechallenges. Inthat regard,acurrentlypendingproposal foramendments toGermanantitrust lawsareveryinteresting.Theproposedamendmentsincludealistofcriteriathataretobeconsideredwhenassessingmarketpowerofcompanies inmulti-sidedmarkets,apparentlybecausethecurrentanalyticalframeworkisconsideredtobedeficient.Theelementslistedinthenewproposalare:(i)directandindirectnetworkeffects;(ii)paralleluseofdifferentservicesandswitchingcosts;(iii) economies of scale in connection with network effects; (iv) access to data; and (v)innovation-basedcompetitivepressure.Asnotedabove,thispendingproposalforamendmentstoGermanantitrust lawsalso includes the codificationof thenotion thatmarketswhichareofferedfreeofchargecanconstitutemarketsforcompetitionlawpurposes.

All of this shows that the debate is here to stay – we think that theremay bemanymoreconferencestocomewhereonlineplatformsareatthetopoftheagenda.

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