Viktoria Robertson on ‘Excessive Data Collection: Privacy Considerations and Abuse of Dominance in the Era of Big Data’ (2020) Common Market Law Review 57 161

It is debatable whether EU competition law already contains – or could and should potentially develop – antitrust theories of harm that apply to third-party tracking of personal user data on the web. Focusing on data gathering, this paper – available here – assesses two scenarios under which EU competition law may deem the vast amounts of data gathered by certain digital platforms excessive: excessive data “prices” and unfair data policies. In both cases, the competition law assessment is autonomous from other areas of the law: while a breach of data protection rules is not automatically a breach of competition law, a company adhering to data protection rules may still violate competition laws. The paper finds that EU competition law already possesses the necessary tools to address excessive data collection, while data protection rules provide much-needed context for this type of exploitative abuse. Section II discusses data gathering through third-party tracking. Tracking occurs both on the web and in applications (apps) for electronic…

Daniele Condorelli and Jorge Padilla ‘Harnessing Platform Envelopment through Privacy Policy Tying’ (working paper)

Entry into platform markets subject to strong network effects and high switching costs can occur in two ways. First, by offering drastically new functionality (i.e. through Schumpeterian innovation). Second, through “platform envelopment” whereby a provider in one platform market – the origin market – enters another platform market – the target market – and combines its own functionality with that of the target in a multi-platform bundle that leverages shared user relationships and/or common components. Envelopers capture market share by foreclosing an incumbent’s access to users; in doing so, they harness the network effects that previously had protected the incumbent. This working paper, available here,  revisits the economics of “platform envelopment”, with a focus on data-related strategies. In particular, it analyses the logic and effects of “privacy policy tying”, a strategy whereby the enveloper requests the consumers’ consent to combining their data in both origin and target markets. This allows the enveloper to fund the services offered to all sides…

Wolfgang Kerber ‘Data Sharing In IoT (Internet of Things’) Ecosystems And Competition Law: The Example Of Connected Cars’ (2019) Journal of Competition Law & Economics (forthcoming)

In Internet of Things (IoT) ecosystems, one firm often has exclusive control over the data produced by a smart device, as well as of the technical means of access to this device. Such a gatekeeper position can empower firms to eliminate competition for aftermarket and other complementary services in these ecosystems. This paper, available here, analyses whether competition law can help address problems concerning access to data and interoperability in this context, by reference to connected vehicles. In short, it argues that, while competition offers some solutions to these data access problems, on its own it is insufficient to fully address these problems. As such, additional solutions such as data portability requirements, data access rights or sector-specific regulation might also be needed. Section II provides a brief overview of the economics of digital ecosystems and of data interoperability. Data tends to be non-rivalrous in use. It follows that data should be used as much as possible to maximise its value….

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…

David S. Evans  ‘Basic principles for the design of antitrust analysis for multisided platforms’ (2019) Journal of Antitrust Enforcement 7 319

Competition agencies and courts have increasingly had to deal with multiplatform businesses – and have started to incorporate economic insights on their operation into their decisions. Nonetheless, many questions concerning the design of antitrust analysis involving platform businesses remain unsettled. This article, available here, develops three basic principles for conducting the antitrust analysis of multisided platforms in light of economic learning, as follows: Section II explains how multisided platforms increase welfare by reducing transactions costs and resolving externalities among economic agents. Platforms lower transaction costs by bringing potential traders to a common place for interacting, thereby solving a collective action problem. The economics literature often relies on simple indirect network effects to explain how two-sided platforms create value. Positive indirect network externalities arise because the presence of additional numbers of the right counterparties increases the likelihood of good exchanges. In practice, however, the externality issues addressed by platforms are broader and subtler. Platforms also often deal with negative network externalities…

Gunnar Niels ‘Transaction Versus Non-Transaction Platforms: A False Dichotomy In Two-Sided Market Definition’ (2019) Journal of Competition Law & Economic

It is commonly accepted that market definition is more complex in two-sided markets than in normal (single-sided) markets. A proposal to simplify this exercise is to distinguish between transaction and non-transaction platforms. Two-sided transaction platforms such as payment card systems, online marketplaces and auction houses, are characterised by the presence and observability of a transaction between the two groups of platform users, so that the platform operator can impose a per transaction charge or two-part tariff (for joining and using the platform). In contrast, non-transaction platforms, including most media platforms, have no such transaction between the two sides. It follows that, while  in non-transaction markets one must define two (interrelated) markets, while a single market encompassing both sides should be defined for transaction platforms. The author argues here that this distinction is inapposite, particularly in the context of the hypothetical monopolist test. This article addresses the various theoretical and practical arguments put forward in support of the distinction between transaction and non-transaction,…

Francesco Ducci ‘Procedural implications of market definition in platform cases’ (2019) Journal of Antitrust Enforcement 7 419

One of the most important questions raised by the economics of platforms, particularly for the adjudication of competition law disputes, is how to structure a legal framework that incorporates multi-sidedness while remaining consistent with the general principles guiding a rule of reason/effects-based analysis. Such framework becomes more complex in platform cases because the presence of multiple sides with interrelated demand coordinated by an intermediary platform raises additional questions that need to be confronted. This include: (i) How many markets should be defined, a single platform market or separate markets on each side? (ii) Should one aggregate the welfare effects on different users on the various sides of a platform, or should effects on each market side be treated in isolation? (iii) How should the burden of proof of anticompetitive and pro-competitive effects be allocated? Depending on whether the relevant market includes the platform as a whole or just one side, the boundary of the relevant market has fundamental consequences for…

Alfonso Lamadrid ‘Shortcuts in the Era of Digitisation’ (2019) CPI Antitrust Chronicle – October

Competition law is arguably one of the areas of least importance when it comes to the major societal challenges posed by digitalisation. Nonetheless, competition law has been advertised as a sort of miraculous tool that would right all wrongs. In this context, the idea of entrusting a Report to three independent Special Advisers before advancing a reorientation of the competition rules was a very sensible initiative on the part of the European Commission. However, the author does not really agree with the report’s conclusions. He explain why in a paper that can be found here. Section two discusses what are the specific problems that digital markets raise for competition law. The first question to ask is whether there is consensus about competition problems in digital markets. If the answer is in the affirmative, we then need to ask whether we can address those problems while still preserving the benefits flowing from digitisation. The Report and other similarly-timed initiatives suggest that there…

Peter Alexiadis and Alexandre de Streel  ‘Designing an EU Intervention Standard for Digital Gatekeepers’ (working paper)

This paper is quite long and dense, so I am afraid this review will be both as well. A series of studies and reports on digital platforms have suggested that antitrust policy requires an overhaul. This view is driven by the belief that, as regards digital markets, the risk of making “Type 2” errors (i.e., under-enforcement) is greater than the risk of making “Type 1” errors (i.e., over-enforcement); and that, in addition to competition enforcement, there may be a role for regulation as well. While the authors take the view that the imperative for radical change is less pressing in the European Union than elsewhere, it is nonetheless appropriate to develop a blueprint for intervention against digital platforms both ex post and ex ante. This blueprint is developed as follows: A first section outlines the principles governing when to intervene in the digital economy. The Internet has generated significant levels of consumer welfare. Digital markets nevertheless have characteristics which lend…

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….