Pinar Akman

A Competition Law Assessment of Platform Most-Favoured-Customer Clauses

Most-favored-customer (MFC) clauses adopted by online platforms in their relevant contractual relationships guarantee to an online platform that a supplier will treat the platform as favorably as the suppliers most-favored-customer concerning price, availability, and similar terms of a given transaction. These clauses are a fundamental aspect of the business models of some of the worlds leading companies such as Apple, Amazon, Expedia, and the like. The competition law implications of these clauses have been one of the key concerns of more than a dozen competition authorities around the world in recent years. The competition authorities involved have adopted different approaches and reached different substantive and procedural outcomes, sometimes in proceedings that concern the application of the same legal rule to the same practice of the same company. This is best demonstrated by the line of investigations against certain online travel agents in Europe. This article posits that such diverging approaches lead to legal and business uncertainty, as well as to procedurally unfair and substantively incorrect assessments. In an effort to rectify this suboptimal situation, this article provides a comprehensive, principled approach for the assessment of platform MFC clauses under competition law—in particular, under EU competition law.

Online RPM and MFN Under Antitrust Law and Economics

Depending on the legal framing, behavior that might in some circumstances resemble online resale price maintenance (RPM) agreements in other circumstances may instead resemble online most favored nation (MFN) agreements. Together, the cases that involve online RPM and MFN can be viewed as a natural experiment of how antitrust economics and law can adapt to an online world. Thus far, enforcement across jurisdictions has been based on economic theories that do not always match up with legal doctrine. Doctrinal confusion can thwart business practices that may be efficient. This paper makes a number of contributions. We distinguish issues of online RPM from traditional RPM and online RPM from online MFN. Then, we apply the economic learning on RPM and analyze the antitrust cases of online RPM and MFN to date across the United States, Europe and Australia. The last part of this paper offers policy recommendations that reduce the confusion in current legal doctrine.

The Theory of Abuse in Google Search: A Positive and Normative Assessment Under EU Competition Law

In its investigation into Google’s search practices, Google Search, the Commission alleges that Google abuses its dominant position on the web search market by giving systematic favourable treatment to its “comparison shopping product” (namely, “Google Shopping”) in its general search results pages. This Article analyses whether the conduct in question in Google Search can be an abuse under Article 102TFEU (prohibiting the abuse of a dominant position in the EU) and, if so, under what conditions. This Article proceeds by first providing a positive assessment of the application of Article 102TFEU and the relevant case law to the issues involved in Google Search on the assumption that the Commission may seek to place the facts under an existing category of abuse. Three categories of abuse are analysed to this end: refusal to deal (including the essential facilities doctrine), discrimination, and tying. The article then proceeds to a normative assessment of the circumstances under which Article 102TFEU should be applied in Google Search under a principled conceptualisation of “abuse,” one which requires exploitation, exclusion, and a lack of an increase in efficiency. The Article finds that the facts in Google Search do not meet the requirements of the existing law to be found abusive unless the established frameworks for the types of abuse examined are unjustifiably disrupted. It also finds that under the principled conceptualisation of abuse adopted in this Article, the facts in Google Search do not represent the type of conduct that should be found abusive either.

A Most-Favoured-Customer Clause with a Twist

A most-favoured-customer (MFC) clause guarantees a seller’s customer to be treated at least as well as its “most favoured” customer. When related to prices, the clause ensures that the former will not pay a higher price than the latter. The academic literature has identified a tension between the evident fairness of these clauses to customers and their less obvious potential anti-competitive effects. In this regard, they can be deemed non-discriminatory and fair since all customers are guaranteed to be offered the same price for the same product. Nevertheless, this does not necessarily mean that they pay a competitive price. While MFC clauses have been the source of several US antitrust cases, the effects of MFC clauses have as yet only been discussed extensively in one competition case in the UK, concerning their use in the market for foreign package holidays. The ambiguous effects on customers make it interesting to study in some detail the arguments put forward in that case which promise to shed light on similar usages of the clause. The case grew out of the Monopolies and Mergers Commission (MMC) analysis of the supply in the UK of travel agents’ and tour operators’ services in relation to foreign package holidays. The resulting report1 led to the enactment of the Foreign Package Holidays (Tour Operators and Travel Agents) Order 1998,2 making it unlawful for tour operators to include particular restrictive terms in their contracts with travel agents, referred to as MFC clauses in the MMC Report. Thomson Holidays (Thomson) sought to challenge the validity of April 2006 European Competition Journal 57

The Tests of Illegality Under Articles 101 and 102 TFEU

This article aims to assess one of the many contributions of Economics and the Interpretation and Application of U.S. and E.U. Antitrust Law by Richard Markovits to our understanding of U.S. and EU antitrust laws. That specific contribution is the tests of illegality adopted in Markovits’s study to interpret Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). This article also examines the claim that none of these tests is an economic-inefficiency test of illegality. In order to achieve its aim, the article first comments on the “specific-anticompetitive-intent test” that is proposed to be the test of illegality under the object branch of the prohibition of Article 101 TFEU and under the abuse prohibition of Article 102 TFEU, before moving on to separate discussions of the tests of illegality in the specific contexts of Article 101 TFEU and subsequently of Article 102 TFEU. The article finds that there is still considerable ambiguity concerning some of the most fundamental concepts of antitrust law such as “competition on the merits” at least in the EU but perhaps also in the U.S. The article reaches the conclusion that there is significant scope for discussion and disagreement on what makes a conduct anticompetitive, irrespective of whether such conduct is of the type prohibited under Article 101 TFEU or of the type prohibited under Article 102 TFEU.

European Competition Law Annual 2007: A Reformed Approach to Article 82 EC. Claus-Dieter Ehlermann and Mel Marquis (eds).

The book consists of both the written contributions presented and the transcripts of the debates that took place at the 12th Annual EU Competition Law and Policy Workshop (2007) on “A Reformed Approach to Article 82 EC” at the Robert Schuman Centre for Advanced Studies of the European University Institute in Florence. The Workshop annually brings together a group of policy makers, practitioners and scholars to discuss specific competition law related issues. Its proceedings are published the following year, sharing the exchange of ideas with the wider community as the Workshop is a closed-door event. That the subject of discussion at the 2007 Workshop was Article 82EC can be seen as a rather natural reaction of the Institute to the widespread discussions taking place on Article 82EC, accompanying the EC Commission’s attempted modernisation of its approach to Article 82EC. The EC Commission had started its “reform” of Article 82EC, which prohibits the abuse of a dominant position on the Common Market, in 2004–05 and the Institute had hosted another Workshop on Article 82EC in 2003.1 Thus, it is welcome that the subject was revisited, especially because it took place before the EC Commission adopted its Guidance document on Article 82EC at the end of 2008.2 In fact, it was apparently the conscious aim of the 2007 Workshop to help complete this reform.3 Whether or not the contributions of the academics and practitioners at the Workshop—or anywhere else for that matter—were taken into account by the EC Commission when preparing the Guidance is a separate issue, but at least, the contributions were timely in this sense.4 The Workshop, and thus the book, comprises 26 substantial written contributions spread across three main sessions. Each session consists of two panels, August 2009 European Competition Journal 623

To Abuse, or not to Abuse: Discrimination between Consumers

This paper questions whether discrimination between consumers by a dominant undertaking can and should constitute an abuse of a dominant position under Article 82EC. By finding that it can, the paper challenges the traditional interpretation of the discrimination ban under that provision, namely that discrimination constitutes abuse only when directed against the intermediate customers of the dominant undertaking. As such, the paper seeks to clarify the scope of Article 82EC as regards discrimination, and elaborate on whether discrimination between consumers should be abusive. This is done from both a law and an economics perspective, in order to put forward a proposal to ensure that competition law does not prohibit discrimination where economics finds it potentiall welfare enhancing.