Francisco Costa-Cabral, Leigh Hancher, Giorgio Monti and Alexandre Ruiz Feases ‘EU Competition Law and Covid-10’

This paper, which is from the whole of Tilburg’s competition department, as far as I can tell, is available here. It explores how EU competition enforcement might be affected by the COVID-19 pandemic. The authors recommend that competition authorities should be watchful of excessive prices and price discrimination, and rely on interim measures if necessary. Collusion should remain an enforcement priority, but a procedural pathway to review agreements that may be in the public interest should be adopted. In merger control, the Commission’s strict interpretation of the failing firm defence is appropriate but, in general, a more sceptical attitude towards mergers may be warranted during this period. Advocacy will play a key role: competition agencies can both point to existing regulations that limit competition and monitor proposed emergency legislation that would harm competition for no good reason. A first section provides an overview of the nature of competition law in the midst of a crisis. Competition law is a political enterprise,…

Friso Bostoen ‘Online Platforms and Pricing: Adapting abuse of dominance assessments to the economic reality of free products’ (2019) Computer Law and Security Review 35 263

What sets platforms apart is their possibility to effectively cross-subsidise between the different user groups that are party to a transaction. Platforms often treat one side as a profit centre and the other as a loss leader, or, at best, as financially neutral. As a result, platforms must choose not only a price level, but also a price structure for their service. Given this,  the present article, available here, explores how potentially abusive behaviour involving free products (both goods and services) can be assessed under competition law. Section II looks at different dimensions of offering free goods and services. Free online offerings have become ubiquitous. This reflects lower costs brought about by the existing digital infrastructure (e.g. processing power, bandwidth, storage). However, companies still want to make a profit. In practice, offering services for free has the potential to attract the critical mass of customers that will allow a company to maximise its profits across its various products. There are three…

Martin Cave ‘Platform Software Versus the Software of Competition Law’ (2019) Journal of European Competition Law & Practice 10(7) 472

The emergence of two-sided platforms challenges competition law to adapt its ‘software’—the practical way in which cases are addressed. Competition authorities carefully and conservatively manage competition policy’s operating system, but the radical nature of multi-sidedness imposes major challenges. The purpose of this article, available here, is to discuss how these challenges might be addressed in practice. This is done by reference to a two-sided platform merger inquiry that was undertaken by the UK Competition and Markets Authority (CMA) in 2017. The case concerned two merging food-ordering platforms that linked restaurants and customers, and accounted for 80% of the market (with the merger leading to a 10% increment).  A monetary transfer linked the two sides of the market – these platforms were usually rewarded by a percentage of the customers’ bill. The wider marketplace also included firms which operated ordering platforms and provided food delivery (‘food-ordering and logistics companies’), as well as restaurants and restaurant chains which themselves took orders and delivered food….

Ariel Ezrachi and Viktoria Robertson ‘Competition, Market Power and Third-Party Tracking’ (2019) World Competition 42(1) 5

Trackers on our websites and apps enable multi-sourced data gathering. While numerous operators engage in tracking, a small number of data giants controls the majority of these trackers. This article, available here, considers the rise and growth of this industry, the power it has bestowed on a handful of platforms, and the possible implications for consumer welfare and competition. Section 2 describes the pervasiveness of third-party tracking. Third-party tracking is a mechanism through which a company (the third-party tracker) hooks onto another (first-party) website or application and collects identifiable data about users, enabling the tracker to build a comprehensive profile about these users. Tracking may occur both actively and passively. It may offer generic information on usage and webpage visits, or combined and analysed information which enables the identification of the individual. The gathering of personalised data – through third-party tracking or otherwise – is primarily relied upon for four purposes in the digital realm: to provide data-based (i.e. individualized or targeted)…

Nicolas Petit ‘Are “FANGs” Monopolies? A Theory of Competition under Uncertainty’ (working paper)

This paper, available here, builds on draft sections of a forthcoming book on tech giants and public policy. It lays down the rudiments of a descriptive theory of competition among the digital tech platforms known as “FANGs” (Facebook, Amazon, Netflix and Google). The paper begins by addressing the debate over whether FANGs are monopolies. One school argues that they are indeed monopolies, reflecting FANG’s control of a large share of output in relevant product(s) or service market(s), high barriers to entry, lateral integration and strong network effects. Some of these works also discuss (novel) theories of harm such as reductions in privacy, labour market monopsony and distortions of the democratic process. A different current argues that traditional monopoly harms are not manifest in FANGs. To the contrary, FANGs would outperform textbook monopolies by observable metrics of prices, output, labour or innovation. In addition, the tech industry is arguably rife with examples of once dominant later irrelevant companies like AOL, MySpace or…

Julien Briguet ‘The State’s Invisible Hand: Chinese SOEs Facing EU Antitrust Law‘ (2018) World Competition Law 52(5) 839

Chinese outbound merger and acquisition (M&A) activity has surged in Europe during the last decade. Chinese companies, particularly state-owned enterprises (SOEs) were the key drivers of this surge, amounting to 70% of these investments in Europe. This paper, available here, argues that the way the European Commission looks at mergers involving Chinese state-owned enterprises (SOEs) suffers from several flaws. These arise primarily from inconsistency in how the single economic entity doctrine has been applied to these companies – sometimes a single Chinese SOE is taken to be the relevant economic unit, sometimes all SOEs active in a specific industry were said to comprise the acquiring undertaking. The author argues that a more systematic application of the single economic entity doctrine is required to restore consistency to the case law, address the realities of China’s State capitalism and protect the principle of competitive neutrality at the core of EU competition law. Section two reviews how the single economic entity doctrine applies…

William E. Kovacic, Robert C. Marshall and Michael J. Meurer on ‘Serial collusion by multi-product firms’ (2018) Journal of Antitrust Enforcement 6 96

This paper, available here, is long and so, I am afraid, is the review. In short, the authors of this paper take issue with the assumption that each cartel in which a given firm participates is a single instance of conduct that is independent of other cartel conduct by the firm. Evidence of serial collusion by major multi-product firms is readily observable from the public record in a number of sectors, such as chemicals, electronics, car-parts, financial products or graphite. Further, collusion persists in at least three of these industries, with new investigations having recently been opened into collusion in the chemical, auto parts, and financial products markets. The paper provides empirical evidence that many multi-product firms have each participated in several cartels over the past 50 years. It argues that traditional assumptions regarding how cartelists operate, and consequent enforcement strategies, are deficient in many aspects. Reflecting this, the authors make policy recommendations to reign in serial collusion. The article is structured as…

UK Furman Report – Unlocking digital competition, Report of the Digital Competition Expert Panel,

This Report, which can be found here, follows a review ordered by the UK’s Treasury to make recommendations on changes to competition and pro-competition policy to help unlock the opportunities of the digital economy. The report’s recommendations build on a number of propositions, namely that: the digital economy is creating substantial benefits; that a number of digital markets are prone to tipping and being ‘winner-takes-all’; market concentration in these markets both creates benefits and incurs costs; but government policy and regulation have limitations. In the light of this, the report found that the standard tools of competition policy, evaluating whether mergers can proceed and whether antitrust action is warranted to remedy abuses by companies, could play a role in helping to promote competition and the associated better outcomes for consumers and innovation. To do so, competition policy will need to be updated to address the novel challenges posed by the digital economy. Some of these updates can happen within current powers,…

Jerome Pouyet and Thomas Trégouët ‘Assessing The Impact Of Vertical Integration in Platform Markets’ (2018) Competition Policy International Antitrust Chronicle December

This technical economics paper, which can be found here, argues that, in the context of vertical mergers, indirect network effects create a form of demand complementarity downstream that softens the anticompetitive effects of vertical integration. At the same time, vertical integration creates various sources of market power. How such market power is exerted, and its impact on competition, depends on how the integrated firm balances its price instruments to harness indirect network effects. This depends, in turn, on how each side of the market values the participation of users from the other side, or, in short, the structure of indirect network effects. The authors show, in particular, that there is no systematic correlation between stronger upstream market power and foreclosure of competitors or consumer harm. The paper is structured as follows: Section II introduces a framework to analyse vertical integration with two-sided network effects. The literature on vertical integration between an upstream input supplier and a downstream manufacturer has highlighted…

Reuben Binns and Elettra Bietti ‘Acquisitions in the Third-Party Tracking Industry’

This working paper, which can be found here , draws attention to one particularly complicated kind of digital data intensive industry: third party tracking, in which a firm does not (only or primarily) collect and process personal data of its own customers or users, but focuses instead on collecting data of users of other ‘first party’ services. The authors focus on mergers and acquisitions of third-party tracking firms because they raise some unique challenges which are often missed in regulatory decisions and academic discussions of data and market concentration. The paper is structured as follows: Section 1 contains a brief overview of the technical elements of third party tracking and of the business practices associated with it. This description is somewhat long because it provides a good overview of these business practices; you may want to skip it if you are familiar with them. ‘Tracking’ refers to a range of data collection and processing practices which aim to collate the behaviours…