Herbert Hovenkamp ‘Platforms and the Rule of Reason: The American Express Case’ (2019) Columbia Business Law Review, 1 34

In Ohio v. American Express Co. (“Amex”), the Supreme Court had its first explicit opportunity to apply the rule of reason to an allegedly anticompetitive practice on a two-sided platform– i.e. a business that depends on relationships between two different, noncompeting groups of transaction partners (e.g. newspapers, as regards readers and advertisers). This article, available here, considers how the rule of reason should be applied to an exclusionary practice on a platform market. It considers the rule of reason’s basic burden-shifting framework, unique elements of market delineation on platform markets, and the relevance of placing production complements into the same “market.” It criticises the Supreme Court’s unjustified conclusion that a market definition is necessary in an antitrust challenge to a vertical practice; its odd treatment of free rider problems; its lack of attention to the record and to economic analysis; and its confusion of total with marginal harms and benefits. Finally, it looks at the implications of the Court’s decision for market…

Cani Fernández ‘Presumptions and Burden of Proof in EU Competition Law: The Intel Judgment’ (2019) Journal of European Competition Law & Practice 10(7)

Some of the procedural tools used by competition authorities and courts (in particular, presumptions) present an inherent link to the burden of proof and to the rightful exercise of the rights of the defence. In principle, the use of presumptions can be an efficient response to the enforcement of competition policy both in situations where a given behaviour usually amounts to an infringement or where it is competitively innocuous. In any rule of law system, presumptions of illegality must be rebuttable. Indeed, a resort to presumptions not surrounded by proper procedural guarantees may infringe the presumption of innocence and undertakings’ rights of defence. The Intel judgment provides a good opportunity to discuss the role of presumptions under Article 102 TFEU and their implications for the burden of proof. In addition to this, this article, available here, analyses how defendants in exclusivity rebate cases can rebut the presumption of illegality in practice, with a special focus on the efficiency defence. It does so…

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…

Sean Ennis ‘Price Abuses: An overview of EU and national case law’ (2019) Concurrences

Pricing abuses can be viewed as a hybrid between regulation and competition law enforcement, since they raise questions of principle over when pricing that takes advantage of market power should be prevented by competition law action, by regulation or simply left unchallenged. In many cases – e.g. in predation, margin squeeze, rebates and excessive pricing cases – companies may have practical difficulties in assessing ex ante whether their pricing policies are illegally low (in the case of predation and rebates), illegally high (in excessive pricing cases) or some combination of both (in margin squeeze). This has the potential to influence those companies’ incentives significantly, an effect compounded by lack of predictability as to when such cases will be brought. As such, it is important to have a clear view of what types of cases have been brought recently. This is the object of this paper, available here, which reviews recent instances of price abuses in Europe. Section 2 looks at…

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…

Michael Funk and Christian Jaag ‘The More Economic Approach to Predatory Pricing’ (2018) Journal of Competition Law & Economics 14(2) 292

This paper, available here, argues that legal requirements and economic reasoning are not aligned as regards predatory pricing. Predation is not a strategy predominately used by ex ante dominant firms, but rather a strategy to gain ex post dominance. Consequently, the current legal practice in Europe and other jurisdictions, which requires ex ante dominance to pursue predatory pricing, makes the prosecution of predatory pricing virtually impossible because it overlooks the basic economic rationale for predatory pricing. This inconsistency has become even more severe because the adoption of a “more economic approach”: in fact, the more accurate the economic assessment is, the less probable is a conviction of harmful predation under the current legal framework. The authors suggest prohibiting predatory pricing independently from other exclusionary abuses. Instead, predatory pricing should be subject to the same analytical framework as mergers, where a similar economic and business logic applies. Since recoupment of predation is akin to the unilateral effects arising from the merger…

Miroslava Marinova ‘What Can We Learn About the Application of the as Efficient Competitor Test in Fidelity Rebate Cases from the Recent US Case Law?’ (2018) World Competition 41(4) 523

The treatment of fidelity rebates is one of the most difficult and controversial topics in EU competition law and US antitrust law. Unlike in the EU, where a number of fidelity rebates are deemed abusive without the need to engage in detailed economic analysis, in the US it is consensual that rebates should be subject to an effects-based analysis. Nonetheless, the legal assessment of fidelity rebates in the US remains controversial. Some courts have adopted an exclusive dealing framework, while others have used price-cost tests; others still have applied a mix of the two frameworks. This diversity of approaches has led to intense academic debate in US scholarship, which finds a parallel in debates regarding whether the appropriate approach to fidelity rebates should be based on predation or on a raising rivals’ cost (RRC) framework. This paper, available here, compares the EU and US approaches to fidelity rebates, and seeks to draw lessons from the US experience and apply them…

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…

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…

Edward Iacobucci and Francesco Ducci ‘The Google Search Case In Europe: Tying and the Single Monopoly Profit Theorem in Two-Sided Markets’ (2018) European Journal of Law and Economics 47 15

According to the authors, the European Commission in its Google Shopping case did not outline which theory of foreclosure justified its finding of infringement. Likewise, there is no consensus in the literature about which theory of harm may best justify the decision. In the light of this, the authors seek to develop such an economic and legal theory of harm in this paper, which can be found here. They argue that, by tying its search and shopping platforms, Google became able to serve customers with whom it would have not dealt otherwise. However, this may divert trade from potentially more efficient vertical platforms. By tying its shopping search to its general search service through visual prominence, Google can attract additional advertisers on its search platform that would otherwise have possibly advertised on competing search platforms. Thus, the effect of tying is a restriction on competition in vertical search that deserves antitrust scrutiny. The paper is structured as follows: Section 2 reviews the…