European Competition Law provides a wide-ranging review of the European rules relating to competition: restrictive agreements, abuse of a dominant position, impact of intellectual property rights, procedure, merger control, State aid.

European Competition Law

The phenomenon of buyer power does not easily fit within competition law. Buyer power is generally but not exclusively applicable to distributors and concerns mainly the upstream market, i.e. relations between distributors and suppliers, whereas price theory is mainly of interest to the suppliers  of products or services and is primarily of concern to the downstream market where distributors and c …

Competition law and buyer power

From its entry into force, the EC Treaty has included among the Union objectives the establishment of a system ensuring that competition is not distorted. The new Article 3 TFEU (Treaty on the Functioning of the European Union) no longer refers to undistorted competition but only provides that the Union has exclusive competence in the establishing of the competition rules necessary for the functioning of the internal market . Within the new Treaty, exclusive competence means that only the Union has the power to legislate in the area, the role of the Member States being limited to implement Union acts, unless if they are empowered by the Union to adopt legally binding acts.

Broadly speaking, competition law ensures both freedom and fairness of competition. Most of its rules protect the market and are against restrictive agreements, abuse of a dominant position or mergers which eliminate or reduce competition between undertakings. Other rules prevent the wrongful behavior of undertakings which adopt practices that are detrimental to their competitors or their partners, without undermining the functioning of the market itself. They protect competitors rather than competition. At present, European law does not include such provisions which penalize unfair competition.

Strictly speaking, competition law is not concerned with the fairness of competition as a principle. Inspired by the example of American antitrust law, its only object is the fight against monopoly or market power, i.e. the capacity of an undertaking or group of undertakings who possesses a rather significant market share to provoke price increases by reducing supply, therefore inciting consumers to turn to other goods, at the risk of wasting scarce economic resources. Beyond the proper functioning of the market, competition law seeks to ensure both economic efficiency and the well-being of the consumer. Indifferent to the distribution of resources between operators, competition law is devoid of any equitable aim. It does not seek any objective of distributive justice and it only looks to increase the overall economic surplus. Neither does it endeavor to promote one type of economic operator over another - for example, small outlets over large distributors. In effect, the premise of classic competition theory is that optimal market conditions result from the pure and simple application of price theory and its legal corollary, the struggle against monopoly power. It results from it that only the rules mentioned in Articles 101 et 102 TFEU or in the merger control regulation fall within competition law strictly speaking. As viewed nowadays, State aid control, which also appears in the chapter of the Treaty devoted to competition rules, does not fall within the context of price theory but is rather an expression of unfair competition.

However, unlike US law, EU law has never viewed the objectives of competition law, even when understood as the rules against anticompetitive practices and mergers, exclusively in terms of economic efficiency. Relying instead on the concept of workable competition, EU law has, when necessary, readily discarded price theory doctrine, and made positive choices in favor of certain consumption plans. In the Metro ruling , the ECJ declared that “The requirement contained in Articles 3 and 85 [101 TFEU] of the EEC treaty that competition shall not be distorted implies the existence on the market of workable competition, that is to say the degree of competition necessary to ensure the observance of the basic requirements and the attainment of the objectives of the treaty...”. Thus the EU authorities sometimes prefer competition based on quality rather than on price, as they do not consider environmental protection, employment or small business, or the struggle against abuse of large distributors' buying power towards their suppliers, as external concerns. The divergence between European competition policy and economic theory is not, however, as absolute as it might first appear, since objectives falling outside the purview of strictly competitive logic include cost factors that should be taken into consideration in any comprehensive economic analysis.

The principle of free competition is furthermore viewed according to Article 3(b) TFEU only as one of the means to achieve the internal market and therefore appears rather like a subsidiary legal tool in relation to the rules relating to the freedom of movement. Article 101(1) TFEU prohibits only restrictive agreements “which may affect trade between Member States”. Likewise, Article 102 TFEU establishes the abuse of dominant position only “in so far as it may affect trade between Member States”. However, very soon, European competition law gained its autonomy. Because their consistency results from a specific economic theory, competition rules cannot have as their sole object to ensure the opening of national markets. Thus, a national trademark law confers an exclusive right upon a proprietor and necessarily constitutes an obstacle to the free movement of goods between Member States. By contrast, it may be good for competition as it allows the undertakings to develop a client base by virtue of the quality of its products and consumers can identify the origin of those products .

 According to Article 26 TFEU, the internal market, which replaces the concept of common market, comprises an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties. The Union must adopt the measures with the aim of establishing or ensuring the functioning of the internal market.

Case 26/76 Metro v Commission [1977] ECR 1875, LawLex200400002980JBJ.

Case C-10/89 17 September 1990, Hag II, ECR 3711, LawLex200900002423JBJ.

Aims of European competition law

The phenomenon of buyer power does not easily fit within competition law. Buyer power is generally but not exclusively applicable to distributors and concerns mainly the upstream market, i.e. relations between distributors and suppliers, whereas price theory is mainly of interest to the suppliers  of products or services and is primarily of concern to the downstream market where distributors and consumers come together. The rules of competition law were originally developed to address the market power of producers alone, even though concentration in the mass retail distribution sector and the strengthening of the economic power of buyers have, since the 1970s, become an ever more marked economic reality.

The existence of market power is, in practice, deduced principally from the market share held by the dominant undertaking. However, buyers (e.g. in the mass retail sector), generally only have a relatively low share of any product market and therefore rarely fall foul of traditional competition law offenses, unless a specific distribution service market can be characterized. In addition, purchasing concentration tends to be in line with competition policy, since it leads to lower prices to the benefit of consumers, even if it is also likely to result in negative effects for both consumers (standardization of products, disappearance of specific offerings, no product development etc.) and producers, who are the weaker contracting parties and often victims of abuse of buyer power.

The control authorities have nevertheless attempted, with varying degrees of success, to use the classic tools of competition law to combat the buyer power phenomenon .

1) Inefficiency of the law on restrictive practices and dominance 

Under the rules on anticompetitive agreements, the control authorities consider that joint buying agreements do not in principle have an anticompetitive object, unless they relate to prices and create a situation of buyer power. According to the Commission, it is unlikely that market power exists if the parties to the joint purchasing arrangement have a combined market share not exceeding 15% on both the purchasing and the selling markets. A market share above the 15% threshold does not automatically indicate that the joint purchasing arrangement is likely to give rise to restrictive effects on competition. An effect on competition depends on factors such as the degree of market concentration and the countervailing power of suppliers .

The rules relating to abuse of dominant position do not generally address buyer power: on the downstream services market distributors' market power is exercised in respect of consumers not producers; on the upstream product market, even very large distributors are rarely in a position to dominate a specific market insofar as they sell a wide variety of substitutable and complementary products. Where there is no domination, the rules relating to abuse of a dominant position are not applicable.

This legal vacuum has motivated a search for alternative solutions.

In the Kesko/Tuko decision , the Commission refused to clear the notified concentration on the grounds that it would increase Kesko's buying power and thereby strengthen its dominant position on downstream markets. Likewise in Rewe/Meinl , it identified the risk of a “spiral effect” by which the strengthening of the buyer power of the retail chain leads to the strengthening or the creation of a dominant position on the downstream market, and created a risk of foreclosure of some small distributors. In some decisions, the control authorities have directly tackled the market power of distributors on the upstream market and not merely by analyzing its effects on the downstream market. The Commission has thus referred to a “rate of threat” to characterize a distributor's buyer power in relation to a supplier . It asked suppliers to indicate from what percentage of their turnover they considered that the loss of a customer would represent a threat to the very existence of their businesses: the average of the responses obtained revealed a threshold of 22%. Using that mechanism, the Commission has been able to directly assess the buyer power on the upstream market: the success of this method has, however, remained  moderate.

Finally, the joint purchasing groups usually fall outside the scope of merger control which, by definition, focuses on structural changes (merger between independent undertakings, takeover of an independent undertaking by others, creation of a joint venture) which is only rarely relevant in the case of joint purchasing groups.

The classic analysis, which perceives the producer/distributor relationship as a form of delegation whereby the distributor is a mere agent of the producer, has in fact given rise to the underestimation of the services provided by distributors and the market power they possess. However, the service that the distributor adds to the product contributes greatly to its valorization by consumers. The control authorities tend now to regard the downstream market not as a product market but as a services market. Distributors therefore provide services to consumers but also to producers. If we accept the existence of a supply market, the producer must be regarded as not confronted by a homogeneous market, but rather a diversified market according to the specificities of marketing . The services rendered by the various types of distributors such as hypermarkets, supermarkets, specialized stores, small retail stores and discount retailers, are not the same in terms of packaging, presentation of products or communication. A specialist store offers a narrow but deep product assortment. The width and depth of the product range on offer is significantly greater in a hypermarket than in a supermarket, which itself has a wider and deeper assortment than a neighborhood convenience store. Likewise, a small retailer cannot use end aisle displays or organize trade events to promote products. Moreover, those types of practices are on completely different scale in hypermarkets as opposed to supermarkets. The various service offers are not therefore substitutable with each other. In order to comprehend the actual buying power of a distributor, the upstream market should be considered  as a service market rather than a product market and be broken down in exactly the same way as is implemented on the downstream market in order to take account of the services rendered by distributors. Abuse of buyer power would no longer be perceived as an abuse of economic dependence but as the expression of a market power, in accordance with the classic notions of competition law.

According to traditional theory, the distributor is transparent.

The Guidelines on the assessment of horizontal mergers takes an indirect approach stressing that countervailing buyer power may compensate for a significant impediment to effective competition as a result of a merger of two undertakings, even where they have very high market shares (pt. 64).

Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements, pt. 208.

See Commission Decision No M.784 of 19 February 1997, Kesko/Tuko, LawLex200400002561JBJ.

Commission Decision No M.1221 of 3 February 1999, Rewe/Meinl, LawLex200400002627JBJ.

Commission Decision No M.1684 of 25 January 2000, Carrefour/Promodès, not available in English; Commission Decision No M.1221 of 3 February 1999, Rewe/Meinl, cited above.

E.g. supermarkets, hypermarkets, discount stores, cash and carry stores etc., see Commission Decision No M.784 of 19 February 1997, Kesko/Tuko, LawLex200400002561JBJ; Decision No M.1221 of 3 February 1999, Rewe/Meinl, LawLex200400002627JBJ.

Competition law has been undergoing profound changes for a number of years now. Economists want to see an increasingly efficient  competition regime, which for them, means an increasingly economic approach and the progressive “economization” of competition law is undeniable. Lawyers are resisting this approach as although it may be increasingly efficient, it is also increasingly unpredictable.

Historically, the influence of the economy on competition law has followed two successive movements. First of all, the competition authorities afforded less and less significance to operators' conduct in order to focus their attention on the effects of that conduct on the market. With that approach, it did not matter whether the conduct was unfair or wrong; all that mattered were the consequences of the conduct. However, the conduct still played a role insofar as it was possible to assume that a given practice would always produce the same consequences on the market. Behavior continued to be the intermediary through which the effects could be established. Such was the case, for example, of price cartels or boycotts or loyalty rebates or coupling for abuse of dominant position cases, the effects of which were presumed to be anticompetitive.

Progressively however, the competition authorities have reached a new level by rejecting any prohibition per se and in each case checking whether the behavior was actually creating anticompetitive consequences. Instead of reducing the significance of the behavior, they directly defined that behavior by reference to its effects.

1º) Pre-eminence of effects in relation to behavior

The growing role of effects in relation to behavior affects all competition rules.

The supervisory authorities no longer take action against certain cartels where the parties are not sufficiently powerful, i.e. the effects of their behavior do not exceed a minimum threshold. Conversely, agreements that only result in themselves in a very minor restriction of competition are nevertheless prohibited where they fall within a set of similar parallel agreements entered into by third party operators. Overall market structure may therefore be the reason that an agreement that, in itself is not particularly harmful, will be sanctioned. The undertaking's conduct may only be a factor that triggers an investigation the object of which may in fact relate to the competitive structure of the market on which this conduct takes place: the undertaking may be punished due to the acts of others. The legal principles of equality before the law and foreseeable sanctions are losing out to efficiency of control, which is increasing.

Likewise, relative to the rules on abuse of dominance, the notion of “abuse” has been progressively interpreted in a more and more objective way, and now, almost any conduct, regardless of its intrinsic characteristics, is deemed abusive, where its object or effect is to maintain or strengthen the undertaking's dominant position. In fact, it is no longer the abuse that is reviewed by the authorities but the dominant position. Quite legitimately from an economic perspective, the focus of control has shifted from the assessment of the undertaking's conduct to the assessment of its market power, i.e. to the effects of such conduct on the market. For lawyers, this evolution means that the sanction is no longer the consequence of a wrongful act (which can be avoided by complying with the rules), but of the structure of the market, which may be unavoidable.

The most recent case law goes even further.

The development of the rule of reason in cartel law and the new definition of abuse in dominance law clearly show the progressive absorption of conduct by anticompetitive effects.

Initially, European competition law did not import the cost-benefit analysis that the US case law had progressively developed further to the adoption of the Sherman Act. Quite to the contrary, it integrated the “rule of reason” into a fixed legal structure by defining once and for all the conditions of prohibition and of exemption. Soon, however, the EU authorities were no longer satisfied with this strict system which obliged them to carry out a generally unnecessary twofold assessment . Restrictive agreements were no longer regarded as unlawful from the outset but were accepted or sanctioned only after an assessment of whether their positive effects, in particular from the point of view of efficiency, outweighed their negative consequences on competition.

The European Commission has published a guidance paper  on abusive exclusionary conduct. For the Commission, the overly abstract per se approach may ensure legal certainty but can also discourage undertakings from adopting a pro-competitive conduct. The new doctrine of the Commission in fact leads to an assessment, in each case, of the effects of the behavior before coming to any conclusion as to whether it is abusive.

These new approaches, which are no doubt more polished, more realistic and even more sensible, do create great legal uncertainty: if they were applied literally, undertakings would never know in advance whether their acts are sanctionable or not. This lack of foreseeability has resulted in the emergence of a number of safeguards now forming the last legal bastion against a total “economization” of the rules.

 Cf. on the processual field, the development of settlement or leniency programmes and damages actions.

In spite of the fact that this was refuted in the Métropole television case: See Case T-112/99 M6 and others v Commission [2001] ECR II-2459, LawLex200500003906JBJ.

Communication from the Commission of 3 December 2008, guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, OJ C 45, 24.02.2009, p. 7-20.

"Economization" of European competition law

Conscious of the importance of the digitalization of the economy in the fight against climate change and for a successful ecological transition, the Commission is pursuing its strategy to build a digital Europe. After the adoption of the regulations on the free movement of personal data and on cybersecurity, the Open Data Directive and the General Data Protection Regulation, on 19 February 2020 it presented its strategies for data and artificial intelligence. Reaffirming Europe's desire to become a world leader in the development of artificial intelligence systems conducive to secure uses and applications, as well as a model and a major player in the data economy, the Commission aims, on the one hand, to set up a single market for data, with a regulatory framework for the governance, accessibility and re-use of data business to business, between businesses and governments, and within administrations, and on the other hand, to facilitate the development of new generation infrastructures enabling the full potential of the data economy to be exploited.

Competition law must also respond to the challenges of digital technology. The rise of global digital platforms offering intermediation services in the daily lives of consumers and businesses, as well as the advent of new digital tools with very powerful functions (algorithms, cloud, artificial intelligence, blockchain) have created a veritable revolution. The supervisory authorities have endeavored to respond to them with the means available to them. But given the scale of the phenomenon, their reaction has been highly inadequate.

Characterized by the apparition of new tools, the digital revolution has given rise to the emergence of an economic sector with specific structural features. Among the new digital tools, the use of algorithms and blockchain are likely to involve significant anticompetitive risk.

An algorithm can be defined as a set of rules applied in a specific order to perform a specific task: an algorithm is a logical sequence making it possible to obtain a certain result from a given input. Algorithms are used for the automatic execution of repetitive tasks involving data processing and complex calculations. Today, a growing number of businesses are using algorithms to collect large volumes of data in order to monitor the market and modify their pricing policy in real time, taking into account the latest developments in the supply identified by the machine. Algorithms can therefore be a vehicle for collusion between competing operators, be provided by a third party facilitating collusion or be the driver for the collusion themselves. In the first case, undertakings agree beforehand on the principle of common pricing before using the algorithms as a tool for implementation, monitoring and concealment. In the second case, the competing undertakings use the same pricing algorithm provided by a third party (software developer) which leads to a price alignment without any contact between the competitors themselves. The Guidelines on horizontal cooperation cover information exchanges where data can be shared indirectly through a common agency or a third party (pt. 55). However, for such behavior to fall foul of antitrust law, competitors must know that they are using the same algorithm .

Competing undertakings active in oligopolistic markets may, in parallel and without any communication with each other, use algorithms, which, by their ability to self-learn, devise pricing strategies likely to lead to market alignments without any human intervention. The understanding of such a practice with regard to competition law is more delicate as concurrence of wills criterion is harder to characterize.

Algorithms can also be used in the context of a vertical agreement, to allow suppliers to monitor the prices charged by their competitors and to send new instructions to their distributors in real time or monitor the effective application of such instructions. The Commission has sanctioned this type of practice in its decisions in the area of online sales of consumer electronic products . 

On the demand side, algorithms make it possible to adopt two types of pricing strategies: i) personalized pricing, determined with regard to the client's willingness to pay a certain price level, which is itself identified by collecting information on their consumption habits, their place of residence, the use of loyalty schemes, etc.; ii) dynamic pricing, adapted in real time to current market conditions (e.g. yield management) . These discriminatory practices nevertheless remain very marginal, as the Commission showed in its final report on electronic commerce.

The use of algorithms can also constitute, in certain circumstances, an abuse of a dominant position insofar as it may, in itself, confer a market power on an undertaking, firstly, because the development of such a tool involves large investment costs and any business using it must have sufficient resources to overcome such a  barrier to entry; secondly, because an algorithm makes it possible to collect a very large volume of data, control of the access to it can lead the dominant company to adopt certain abusive behaviors (refusal of access or provision of essential information, threat of de-listing, unfair trading conditions, etc.). Other abusive behaviors that may arise include imposing excessive, predatory or discriminatory prices fixed by algorithm. 

Blockchain constitutes a mode of recording data produced continuously, in the form of blocks linked to each other in chronological order of their validation, in which each of the blocks and their sequence are protected against modification. Once integrated into a chain, the data are immutable: they are dated and can no longer be modified. Their reliability is guaranteed by their verification by the community of computers connected to the network and not by an external entity, whether a State entity or not. The data stored in a blockchain can notably be used to support a “smart contract”, which is software programmed to automate the different stages of the life of a contract, on which it is superimposed.

By magnifying market transparency, blockchain inevitably conceals a risk of coordination of behavior by its users. In horizontal relationships, smart contracts could be used by competitors who have previously agreed to the terms of a price agreement to ensure its execution and prevent any attempt at deviant behavior. Like algorithms, of which they are merely a variant, smart contracts are reduced in this hypothesis to drivers of a prior agreement, and may, when the latter aims to coordinate the behavior of its participants, be sanctioned. Smart contracts can also be used to ensure the execution of a vertical price agreement by guaranteeing the supplier that distributors will not deviate from the programmed prices. By depriving distributors of any autonomy in setting their prices, they clearly fall under Article 4 of the Vertical Restraints  Regulation.

Although blockchain facilitates the implementation of cartels, it can by boomerang effect, also be a very useful tool for the investigation services of competition authorities. By definitively fixing the elements of the price agreement and giving them a specific date, blockchain makes it easier to flush out and establsih anticompetitive behavior. In addition, blockchain can be used by the competition authorities to share information on current or already processed cases, in the spirit of collaboration recommended by Regulation No 1/2003. Finally, blockchain can be implemented to monitor compliance with commitments made by undertakings in the context of negotiated procedures.

Regarding abuse of a dominant position, blockchain could allow a dominant company to impose unfair or discriminatory pricing conditions on its customers by using “personalized pricing” techniques which, thanks to algorithms, makes it possible to modulate the price of a product, depending on the income and consumption habits of internet users - depending on their income, one person will pay less for a product while another, identified as usually paying more for online purchases, will pay more for the same product so as to compensate for the shortfall. Another risk could arise from the fact that some digital platforms create their own private blockchain to store their data in order to better refuse access to their competitors.

Going beyond the anticompetitive risks linked to the use of these new tools, the structure and characteristics of the digital sector also raise specific questions.   

The highly innovative digital sector is characterized by the presence of the US web giants, GAFA, which are digital platforms with a global dimension, which, through their technological expertise, the size of the network effects and the massive data collection and economies of scale they benefit from, have considerable market power leading to situations of ultra-dominance, and even monopolies. Able to take advantage of those convergence effects, the platforms, active on several, often two-sided markets, have created ecosystems due to the complementarity of their services, network externalities and  loyalty-building strategies which allow them to implement abusive practices - likely to eventually render consumers captive  - most often in markets separate from the monopolized market. These structural specificities, the dynamic and evolving substitutability of the services offered, but also the fact that they are free of charge  have caused the Commission to question its criteria for defining relevant markets . Concerning the geographic dimension of the market, the Commission recommends a differentiated assessment carried out on a case-by-case basis depending on the products or services. As regards the market for products or services, its preference is an enhanced examination of the potential competition from operators not located on the relevant market but likely to influence the market power of the undertaking concerned . This pragmatic approach, taking account of the interdependencies between the different services, is justified particularly in the innovative digital sector where the delimitation of the market can prove difficult or quickly obsolete and where too narrow a definition of the relevant market leading to findings of automatic dominant positions could lead to overly systematic sanctioning.

The specificities of the digital sector also impact merger law and the realization by the digital giants of numerous merger-acquisition transactions, which most often escape the control of the competition authorities because they target innovative entrants or which have not yet monetized their innovation. In practice, the digital platforms in question use this intensive hostile takeover policy, either to kill the target where the growing community of users is liable to quickly create a serious  competitor (killer acquisitions), or more frequently to integrate into their ecosystem young start-ups and develop their activity in order to increase their own community of potential users and strengthen their position in the dominated market or on neighboring markets. In all cases, potential competition is limited without these acquisitions being subject to merger control since they do not exceed the national or European thresholds for compulsory notification, although in the first case, a source of innovation which could have boosted the competitive functioning of the market and benefit the consumer is eliminated, while in the second, it is confiscated by the dominant operator who collects the benefits by depriving consumers of an alternative offer. Furthermore, the competitive analysis of concentrations carried out in the digital sector presupposes a prospective assessment of potential conglomerate effects, which proves to be complex in emerging, innovative and evolving markets.

Up to now, the classification of abuse of a dominant position has proven appropriate in respect of the behaviors of GAFA i.e. refusal of access, tied sales, the establishment of insufficient interoperability with the competing products or services or the imposition of unfair trading conditions. On the basis of Article 102 TFEU, the Commission forced Microsoft to open its operating system to allow third-party software publishers to offer software compatible with Windows  and sanctioned Google for favoring its own online price comparison site, Google Shopping , and later its Google Search application and Google Chrome browser . The Commission is soon to examine the complaint for abuse of a dominant position brought by Spotify which accuses Apple of favoring its music streaming service, Apple Music, on the App Store to the detriment of the Spotify application.

3) Do the competition rules need to change?

If recent experience shows that the competition authorities have been able to make use of existing tools to deal with new issues posed by digital development, it does appear that some adaptation would be desirable to improve the reactivity of regulators without hampering the development of new or innovative offers.

With regard to adaptation, and more specifically the rules on cartels, the Commission has announced its intention to revise the guidelines on horizontal cooperation  on data sharing and pooling arrangements. The announced modification of the Communication on the definition of the relevant market follows the same trend. To prevent irreversible situations from arising, the possibility of recourse to interim measures, even before any procedure is initiated by the victim operators, is to be welcomed. EU law has established this procedure in the ECN+ Directive .

Besides these changes to existing law, another possibility is to supplement competition law with rules specific to the digital sector.

The French Competition Authority has suggested introducing new provisions specific to “structuring digital platforms” into national and European competition law. Starting from the premise that those platforms must first be identified in order to understand their behavior, the ARCEP (telecoms regulator) proposes a general definition of the concept of “structuring digital platform” in three stages, which could then be framed by guidelines. Falling within this classification would be: 1) undertakings which provide online intermediation services with a view to exchanging, buying or selling goods, content or services, and 2) which have structuring market power a) because of their size, financial capacity, community of users and/ or the data they hold, b) allowing them to control access or significantly affect the operation of the markets in which they operate, 3) with respect to their competitors, users and/or third-party operators which depend for their economic activity on access to the services they offer. The Authority suggests establishing a list of practices raising competition concerns, while specifying that they should not be subject to an automatic prohibition but should be assessed on a case-by-case basis. Among the practices targeted would be the discrimination of competing products or services using the platform's services, hindering access to markets in which they are not dominant or structuring, the use of data on a dominated market to make access more difficult, making the interoperability of products or services or data portability more difficult or preventing multi-homing.

In matters of merger control, the French Authority is in favor of introducing a “merger control in the digital economy”, which would be based on a dual mechanism, with, on the one hand, the establishment of an obligation to inform the Commission and/or the competition authorities concerned, of any concentration operation implemented by a structuring digital platform on the territory of the European Union and, on the other hand, the addition of new notification thresholds  which may be implemented ex-ante, but also ex-post, at the request of a competition authority following competitive intelligence, provided that three conditions are met: “all undertakings or groups of natural or legal persons parties to the concentration have a total worldwide turnover of more than EUR 150 million, the operation raises substantial competition concerns identified in the territory concerned and, if applicable, the concentration does not fall within the jurisdiction of the European Commission”. The Authority argues, in support of its proposal, that such a system is already in place in Estonia, Hungary, Ireland, Lithuania, Norway, Sweden, the United States and Japan.

A different path was finally chosen, with the adoption of legislation dedicated to the digital sector in the EU.

4) Introduction of specific European rules

In order to counteract the power of the large online platforms that control major ecosystems in the digital economy, and to create a safer digital space where the fundamental rights of users are protected and a level playing field is guaranteed for undertakings, the EU has adopted a digital space package, consisting of Regulation No 2022/1925 of 14 September 2022 on digital markets , otherwise known as the DMA (Digital Markets Act) and Regulation No 2022/2065 of 19 October 2022 on digital services (DSA - Digital Services Act) . 

The DMA, which came into force on 2 May 2023 , aims to provide a better framework for the economic activities of very large platforms or gatekeepers, which play a systemic role in the internal market for important digital services and function as bottlenecks between undertakings and consumers. In particular, it aims to preserve the fair and contestable nature of digital markets, to prevent their access being foreclosed by gatekeepers through the control they exercise via their essential platform services (search engine, social media). Essential platform services provided or offered by gatekeepers to undertakings established in the EU or to end-users established or located in the EU  are thus subject to the DMA, which also lays down rules for coordination with other European legislation in the digital domain, and applies without prejudice to Articles 101 and 102 TFEU, national competition rules and Regulation No 139/2004.

To identify gatekeepers, the DMA sets a number of criteria and thresholds in terms of sales and traffic (Art. 3). Given the importance of these thresholds, GAFAM seems particularly concerned by the concept of gatekeeper. In order to enable undertakings to “effectively overcome barriers to entry and expansion, and challenge the gatekeeper on the merits of their products and services”  and to ensure a balance between the rights and obligations of gatekeepers and user undertakings, In addition, the DMA imposes behavioral and governance obligations on gatekeepers while prohibiting the practices they habitually use to strengthen their position on the internet, such as combining personal data from different platforms, prohibiting undertakings from using competing distribution channels, or requiring users to subscribe to all the services they offer (Arts. 5 to 7). The Commission is also granted powers of investigation, judgment and sanction to ensure that the practices of gatekeepers comply with the regulation (Art. 20 et seq.). 

The DSA, which came into force on 25 August 2023, introduces harmonized rules on the moderation of illegal content and transparency for online intermediaries and platforms . Like the DMA, it primarily targets GAFAMs by providing a framework for the conditional exemption from liability of intermediary service provider  and specific due diligence requirements for online platforms and intermediaries with more than 45 million users per month in the EU .

Case C-74/14 “Eturas” UAB, Judgment of 21 January 2016, LawLex201600000155JBJ.

EU Commission decision No 40181, Philips, 24 July 2018. 

Directive No 2019/1 of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market, known as “ECN+”, OJEU  L 11 of 14 January 2019, 3, Art. 11. 

From that date, the undertakings concerned had two months in which to inform the Commission of the thresholds at which they could be designated as gatekeepers. The Commission selected six (Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft) out of the seven notifying undertakings by designation decisions dated 5 September 2023, estimating twenty-two essential platform services. Meta, TikTok and Apple have contested their designations.

The gatekeeper's place of business or residence and the law applicable to the provision of services are irrelevant in determining the scope of application.

These include online marketplaces, social media, content-sharing platforms, app stores and online travel and accommodation platforms.

The DSA defines an intermediary service as an information society service such as a ‘mere conduit’ service, consisting of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network; a ‘caching’ service, consisting of the transmission in a communication network of information provided by a recipient of the service, involving the automatic, intermediate and temporary storage of that information, performed for the sole purpose of making more efficient the information's onward transmission to other recipients upon their request; a ‘hosting’ service, consisting of the storage of information provided by, and at the request of, a recipient of the service (Art. 3, g).

Regulation No 2022/1925, Art. 1(2)(a) and (b).

Yield management is for a service provider whose offering is by it nature non-stockable and limited (i.e. perishable) to maximize revenue using a variable pricing strategy for the same service, based on criteria such as consumer demand or fill rate e.g. airline seats /hotel rooms etc.

In Commission decision No AT.40009 of 20 September 2019, Google-Android, the Commission considered that the SSNIP test was not relevant in the case of free services, as is often the case on the internet, so it replace it with an SSNQD test (small but significant non-transitory decrease in quality), their outcome being that in the event of a decline in the quality of the Android system, consumers would would not necessarily switch to Apple.

Speech on 9 December 2019 at the Chillin' Competition Conference.

See aforementioned Google-Android decision, in which the indirect pressure exerted by closed mobile operating systems, deemed not substitutable for licensed operating systems (Android), was measured to assess whether it constituted a serious countervailing power to the dominant position held by Google in the Android operating systems market.

Commission decision No 2007-53 of 24 March 2004, Microsoft, LawLex200500004763JBJ. See also Commission decision of 16 December 2009, Microsoft, LawLex201700001169JBJ, in which it forced Microsoft to provide Windows with a mechanism allowing Original Equipment Manufacturers (OEMs) and end users within the EEA to activate or deactivate Internet Explorer and pre-install any web browser(s) of their choice and set it as the default web browser on the PCs they supply, and to distribute to users of PCs equipped with Windows within the EEA, via Windows Update, a software update consisting of a multi-choice screen offering them different web browsers, in order to remedy the competition problems caused by the tied sale of its “Internet Explorer” web browser, to that of its “Windows” client PC operating system. 

Commission decision No AT.39740 of 27 June 2017, Google Search. 

Commission decision No AT.40009 of 18 July 2018, Google Android. 

Communication on a European strategy for data, 19 February 2020, COM(2020) 66 final).

Competition law in the digital age.

ROTHNIE, Parallel Imports, Sweet & Maxwell, 1993; GRAYSTON, European Economics And Law: Competition, Trade, Single Market, Palladian Law Publishing, 1999; WAELBROECK & FRIGNANI, European Competition Law, Transnational Publishers, 1999; DRAHOS, Convergence of Competition Laws and Policies in the European Community, Kluwer, 2001; von QUITZOW, State Measures Distorting Free Competition in the EC, Kluwer Law International, 2001; RITTER & BRAUN, European Competition Law: A Practitioner's Guide, Kluwer, 3rd ed. 2005; VAN DEN BERGH & CAMESASCA, European Competition Law and Economics, Sweet & Maxwell, 2006; AMATO & EHLERMANN, EC Competition Law: A Critical Assessment, Hart Publishing, 2007;  KORAH, An Introductory Guide to EC Competition Law and Practice, HartPublishing, 9th ed., 2007; LANGER, Tying and Bundling as a Leveraging Concern under EC Competition Law, Kluwer, 2007; MONTI, EC Competition Law, Cambridge University Press, 2007; SCYSZCZAK, The Regulation of the State in Competitive markets in the EU, Hart Publishing, 2007; STOTHERS, Parallel Trade in Europe, Hart Publishing, 2007; BUCCIROSSI, Handbook of Antitrust Economics, The MIT Press, 2008; KOKKORIS (ed.), Competition Cases from the European Union, The Ultimate Guide to Leading Cases of the EU and all 27 Member States, Thomson/Sweet & Maxwell, 2008; RODGER, Article 234 and Competition Law. 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Conflicts of Laws and Coordination, Hart Publishing, 2012; DRAUZ & JONES (ed.), EU Competition Law (Volume II), Mergers and Acquisitions, Claeys & Casteels, 2012 ; HARRINGTON & KATSOULACOS, Recent advances in the analysis of competition policy and regulation, Edward Elgar, 2012; KERSE & KHAN, EU Antitrust Procedure, Sweet & Maxwell, 2012; MEROLA & DERENNE, The role of the Court of justice of the European Union in Competition Law Cases, Bruylant, 2012; ORTIZ BLANCO, Market Power in EU Antitrust Law, Hart Publishing, 2012; SIRAGUSA & RIZZA (ed.), EU Competition Law (Volume III), Cartels and Collusive Behaviour, Restrictive Agreements and Practices Between Competitors, Claeys & Casteels, 2012; ZIMMER, The Goals Of Competition Law, Edward Elgar, 2012; GONZALEZ-DIAZ & SNELDERS, EU Competition Law Volume V Abuse of Dominance Under Article 102 TFEU, Claeys & Casteels, 2013; LIANOS & GERADIN, Handbook of European Competition Law, Enforcement and Procedure, Edward Elgar, 2013; LIANOS & GERADIN, Handbook of European Competition Law, Substantive Aspects, Edward Elgar, 2013; LORENZ, An Introduction to EU Competition Law, Cambridge University Press, 2013 ; New frontiers of antitrust 2012, Bruylant, 2013; PATEL & SCHWEITZER, The Historical Foundations of EU Competition Law, Oxford University Press, 2013 ; ROSE & BAILEY (ed.), Bellamy & Child: European Union Law of Competition, Oxford University Press, 7th ed., 2013; FAULL & NIKPAY, The EU Law of Competition, Oxford University Press, 3rd ed., 2014; GRAELLS, Public Procurement and The EU Competition Rules, Hart Publishing, 2nd ed., 2015; TOSATO & BELLODI (ed.), EU Competition Law: Vol. I: Procedure: Antitrust - Mergers - State Aid, Claeys & Casteels, 2nd ed., 2015; VOGEL, Global Competition Law, A Practitioner's Guide, LawLex/Bruylant, 2nd ed., 2015; WIJCKMANS & TUYTSCHAEVER, Horizontal Agreements and Cartels in EU Competition Law, Oxford University Press, 2015; BENEYTO PEREZ & MAILLO GONZALES-ORUS, The Fight against Hard Core Cartels in Europe: Trends, Challenges and Best International Practices, Bruylant, 2016; EZRACHI, EU Competition Law, An Analytical Guide to the Leading Cases, Hart Publishing, 5th ed., 2016; FLYNN, PESARESI, SIATERLI, VAN DE CASTEELE, State Aid, Clays & Casteels, 2nd ed., 2016; HILDEBRAND, The Role of Economic Analysis in EU Competition Law, Wolters Kluwer, 4th ed., 2016; JONES & SUFRIN, EU Competition Law Text, Cases & Materials, Oxford University Press, 6th ed., 2016; JONES & VAN DER WOUDE, EU Competition Law Handbook, Sweet & Maxwell, 27th ed., 2016; MACNAB (ed.), Bellamy & Child: Materials on European Union Law of Competition, Oxford University Press, 2016 ; NAZZINI, Competition Enforcement and Procedure, Oxford University Press, 2nd ed., 2016; NIELS, JENKINS, KAVANAGH, Economics for Competition Lawyers, Oxford University Press, 2016; CASTILLO DE LA TORRE & GIPPINI FOURNIER, Evidence, Proof and Judicial Review in EU Competition Law, Edward Elgar, 2017; ORTIZ BLANCO & VAN HOUTTE, EU Competition Law and Regulation in the Transport Sector, Oxford University Press, 2017; PARCU, MONTI, BOTTA, Abuse of Dominance in EU Competition Law, Edward Elgar, 2017.

For comparative law see: RAFFAELLI (ed.), Antitrust Between EC Law and National Law, Antitrust fra diritto nazionale e diritto comunitario, Bruylant/Giuffre Editore, 1998;  LEVEQUE (ed.) & SHELANSKI (ed.), Antitrust and Regulation in the EU and US, Legal and Economic Perspectives, Edward Elgar, 2009 ; AMERICAN BAR ASSOCIATION, Antitrust Compliance: Perspectives And Resources For Corporate Counselors, 2010; AMERICAN BAR ASSOCIATION, Proving Antitrust Damages, Legal and Economic Issues, 2010; DABBAH, International and Comparative Competition Law, Cambridge University Press, 2010; MARCO COLINO, Vertical Agreements and Competition Law. A comparative study of the EU and US regimes, Hart Publishing, 2010; AMERICAN BAR ASSOCIATION, Competition Laws Outside The United States Vol. I, 2011; AMERICAN BAR ASSOCIATION, Competition Laws Outside The United States Vol. II, 2011; ELHAUGE & GERADIN, Global Competition Law and Economics, Hart Publishing, 2nd ed., 2011; FAURE & ZHANG, Competition policy and regulation: Recent developments in China, the US and Europe, Edward Elgar, 2011; LANDOLT & BLANKE, EU and US antitrust arbitration: A Handbook for Practitioners. Volumes 1 and 2, Kluwer Law International, 2011; AMERICAN BAR ASSOCIATION, Antitrust Law Developments, 7th ed., 2012; BLANKE & NAZZINI, International Competition Litigation, Wolters Kluwer, 2012; DABBAH & LASOK, Merger Control Worldwide, Cambridge University Press, 2012; MELISCHEK, The Relevant Market in International Economic Law, A Comparative Antitrust and GATT Analysis, Cambridge University Press, 2012; FOX & TREBILCOCK, The Design of Competition Law Institutions, Oxford, 2013; NEUMANN & WEIGAND, The international handbook of competition, Edward Elgar, 2013; SOKOL, CRANE, EZRACHI, Global Antitrust Compliance Handbook, Oxford, 2014; DUNS, DUKE, SWEENEY, Comparative competition law, Eldward Elgar, 2015; VOGEL, Global Competition Law. A Practitioner's Guide, LawLex/Bruylant, 2nd ed., 2015; WHISH & BAILEY, Competition Law, Oxford, 8th ed., 2015; AREEDA & HOVENKAMP, Antitrust Law (14 vol.), Aspen/Wolters Kluwer, 2006-2016; HOLMES & MANGIARACINA, Antitrust Law Handbook, West, 2016; TOLLEY & BAVASSO, Butterworth's Competition Law Handbook, LexisNexis, 22nd ed., 2016.

European Competition Law

2. Competition law and buyer power

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