Jay Matthew Strader ‘Google, Monopolization, Refusing to Deal and the Duty to Promote Economic Activity’ (2019) International Review of Intellectual Property and Competition Law 50(5) 559

Almost no consumers have the resources to assess the quality of information online. Search engines seek to remedy asymmetries in information, effectively providing a quality certification service to consumers. Google claims to rank organic results ‘‘scientifically’,’ based strictly on relevance and the quality of the listings. Ninety two percent of all Google search traffic occurs on the first page, encompassing the top ten organic results and paid ads, which reflects high levels of consumer trust.   This paper, available here, argues that Google’s search engine is indispensable for innumerable companies, which cannot compete effectively when Google fails to rank organic results according to relevance. However, Google’s ad-based business model creates incentives for it to promote paying advertisers or its own business, in particular by lowering the rank of more relevant results. This leads to lower quality in the search market, to lower output in downstream markets and, ultimately, to lower consumer welfare – independently of whether Google operates downstream or…

John Ratliff ‘Unilateral conduct in the energy sector: An overview of EU and national case law’ (2019) Concurrences Special Issue Energy & Dominance

This paper, available here, provides an overview of European Commission (“EC”) and European national competition authorities’ (“NCAs”) practice as regards the application of competition rules to unilateral conduct in the energy sector. It covers more than 120 cases, including national court judgments and investigations up to June 2019. While the article divides the various practices into 19 different sections, I will do so as follows: In the introduction, the author summarises European and national approaches, as well as recent developments. The 2007 EU Energy Sector Inquiry prompted much enforcement of Art. 102 TFEU in the energy sector. Most of enforcement concerned traditional foreclosure practices in relation to infrastructure capacity, access to the infrastructure, capacity hoarding and withholding of generation capacity. Other cases have dealt with new types of abuse, such as strategic underinvestment and market manipulation, and there have also been cases on excessive pricing. Energy markets remain a priority for the European Commission. Recent developments include closing investigations against…

Pietro Crocioni ‘On the Relevant Cost Standard for Price-Cost Tests in Abuses of Dominance’ (2018) Journal of Competition Law & Economics 14(2) 26

This article, available here, reviews the use of cost standards in selected European abuse of dominance cases. It shows that a variety of cost standards were employed until recently, and criticises the ECJ’s case law for ignoring challenges with identifying the appropriate cost standard for each case. To address such challenges, it is important to identify the key questions a price–cost test should answer, and agree on the features of such a test. The paper is structured as follows: Section II summarises current knowledge on price-cost tests. This knowledge is outlined in the European Commission’s Article 102 Enforcement Guidance, which puts forward two widely accepted concepts: Average Avoidable Cost (AAC) and Long Range Average Incremental Costs (LRAIC). These tests provide the benchmarks for predatory behaviour in Europe. There is a legal (but rebuttable) presumption that prices below AAC anticompetitively foreclose competition; that prices above LRAIC do not to raise concerns; and that prices between AAC and LRAIC require consideration of…

Or Brook ‘Struggling with Article 101(3) TFEU: Diverging Approaches of the Commission, EU Courts and Five Competition Authorities’ (2019) Common Market Law Review 56: 121

Since May 2004, the European Commission and national competition authorities (NCAs) have applied the EU competition provisions in parallel. Nowadays, almost 90% of antitrust investigations are carried out by NCAs. This decentralised enforcement regime builds on the assumption that the obligation to apply the same competition provisions is sufficient to ensure the uniform administration of the law. This paper, available here, argues that this assumption does not hold, as least as regards efficiency justification/defences. Since the application of the EU competition provisions involves a wide margin of discretion, national, economic and political traditions risk leading to the fragmented application of competition law. The paper presents empirical evidence that the Commission, EU courts and five national competition authorities have followed very different interpretations of Article 101(3) TFEU, which regulates efficiency justification/defences in Europe. The paper is structured as follows: Section 2 outlines the study’s empirical methodology. The paper uses a database comprising: (i) all European Commission and court decisions until 2017;…

Peter Davies ‘Economic Evidence and Procedural Fairness’ (2018) Journal of Competition Law & Economics 14(1) 1

Economists have a large stake in the judicial and competition systems getting the scope and nature of disclosure right, both as a matter of public policy and as a practical matter. Access to information in the form of data, documents and analyses is critical to economists engaging with the substance of competition and regulatory cases. However, the extent and nature of information available to each party to a competition investigation varies widely, and is affected by important practical and legal considerations. In particular, the extent of disclosure is influence by a multiplicity of factors, such as the relevant statute, competition agency practice and the nature of judicial oversight of competition agency decision making. This paper, available here, considers the extent of disclosure required to ensure a fair process, while taking into account the practical realities of undertaking economic and econometric analyses in competition cases. It does so as follows: Section II explains why disclosure is fundamental to the application of…

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…

EU group of experts, ‘Competition Policy for the digital era’

This Report, which can be found here, explores how competition policy should evolve to continue to promote pro-consumer innovation in the digital age. It is structured as follows. Chapter 2 describes the digital world and markets. The report focuses on three key characteristics of the digital economy: extreme returns to scale, networks externalities and role of data. Regarding returns to scale, the cost of production of digital services is disproportionate to the number of customers served. While this aspect is not novel as such (bigger factories or retailers are often more efficient than smaller ones), the digital world pushes it to the extreme and this can result in a significant competitive advantage for incumbents. Concerning network externalities, the convenience of using a technology or a service increases with the number of users that adopt it. Consequently, it is not enough for a new entrant to offer better quality and/or a lower price than the incumbent does; it also has to…

Stigler Center (University of Chicago) Report on Digital Platforms

This Report, which can be found here, was written by a working group who came together to address specific problems arising from the digital platforms’ reach, scale, scope, and use of data. They examined concerns stemming from the market structure contemporary platforms have created, and to investigate their competitive behaviour, including the consequences of network effects that can create barriers to entry for new innovators and entrench incumbents. The theme that runs throughout the report is the difficulty of entry into digital platform businesses once an incumbent is established. Whether the entrant is vertical or horizontal, has succeeded to some degree, is nascent, is a potential entrant, or is a large platform in an adjacent space, market entry improves consumer welfare by either providing more choice, different features, and a chance of higher quality, or creating a threat that spurs the incumbent to provide lower prices, higher quality and innovation, and to do so more quickly. The Report is structured…

Christian Catalini and Catherine Tucker ‘Antitrust and Costless Verification: An Optimistic and a Pessimistic View of the Implications of Blockchain Technology’

This paper’s basic argument is that the blockchain holds both promises and threats for antitrust. There is reason to think that the decentralised nature of some blockchain implementations may reduce the need for antitrust enforcement, as it prevents the accumulation of market power by digital platforms. But there is also reason to believe that the technology may pose practical challenges for antitrust enforcement. Antitrust law is set up on the premise that there is a clearly demarcated firm (or set of firms) that may try to seek market power. The decentralised nature of the technology means that identifying an entity to prosecute or hold responsible for any degree of market power (or its abuse) is impossible, and that collusion and price setting between competitors may be harder to detect. The paper begins by describing the blockchain, and why it should matter for antitrust. From an economics perspective, an implementation of blockchain technology has two key characteristics: (i) a set of…

Andres Caro ‘Leveraging market power online: the Google Shopping case’ (2018) Competition Law Journal 17(1) 49

The Google Shopping case raises many important questions, such as: how do we deal with the leveraging of market power in digital markets? How do we weigh the benefits to consumers against the potential harm to competition? And, lastly, what are the appropriate remedies for this type of behaviour? In addressing these questions, this paper is structured as follows: A first section describes the background to the Google Shopping decision by the European Commission. Google aggregates, sorts, displays and provides direct access to retailers’ webpages in exchange for a fee through Google Shopping. Other online platforms, including Nextag, Foundem and Shopzilla, offer similar services. However, until early 2018 ‘while competing comparison shopping services can appear only as generic search results and are prone to the ranking of their web pages in generic search results on Google’s general search results pages being reduced (‘demoted’) by certain algorithms, Google’s own comparison shopping service is prominently positioned, displayed in rich format and is…