How Does the EU Protect Competition in the Digital Platform Economy?

Lundqvist, Björn

doi:10.1007/978-3-030-63672-2_5

Björn Lundqvist⁵

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Abstract

This chapter asks whether a framework for regulating digital platforms can be developed under EU competition law, which requires a discussion on the harm to competition presently caused by platforms. The main issue is to identify what types of exclusionary unilateral practices are harmful in the digital economy and, hence, should be prohibited under competition law. The chapter analyses the application of competition law to digital platforms collecting large amounts of personal and non-personal data. May competition law be used to gain access to data held by the intermediaries, and to limit the inherent power of data and the intermediaries, thus restrict leveraging data into market power? The chapter concludes that current competition law is ill suited to address the problems inherent in the platform economy. To create a functioning digital economy, new ideas and initiatives need to be imagined.

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Notes

1.
See, for example, the Google and Amazon feud which ended with a truce regarding streaming technology and features. Google will let Amazon have a real YouTube app on its Fire TV platform, and Amazon will expand Prime Video support to Chromecast and all Android TV devices (Whitwam 2019). See also Spotify’s complaint to the European Commission regarding ‘the Apple tax’ (Lunden 2019).
2.
The directive on the reuse of public sector information Directive (EU) 2019/1024 of the European Parliament and of the Council of 20 June 2019 on open data and the reuse of public sector information, OJ L 172, 26.6.2019, pp. 56–83 (the old PSI directive: Directive 2003/98/EC, known as the ‘PSI Directive’) entered into force on 31 December 2003. It was revised by Directive 2013/37/EU, which entered into force on 17 July 2013.
3.
See also The German and French Competition Authorities joint paper (2016). See, regarding Open Data, Lundqvist et al. (2011).
4.
Google is involved in several investigations in several jurisdictions regarding the company’s business conduct. For example, the Commission Statement of Objections to Google on Android operating system and applications, 20 April 2016. Cf. European Commission (2016).
5.
European Commission (2016).
6.
Nowcasting is the capacity of a company to use the velocity at which a data set grows to discern trends before others do. Nowcasting enables a firm not only to track trends in users’ conduct in real time, but also to monitor trends in (potential) competitors’ conduct, and to respond more quickly, which helps it push or nudge the market.
7.
The European Commission (2020a) data strategy from February 2020 states the following: ‘Imbalances in market power: Beside the high concentration in the provision of cloud services and data infrastructures, there are also market imbalances in relation to access to and use of data, for example when it comes to access to data by SMEs. A case in point comes from large online platforms, where a small number of players may accumulate large amounts of data, gathering important insights and competitive advantages from the richness and variety of the data they hold. […] The high degree of market power resulting from the “data advantage” can enable large players to set the rules on the platform and unilaterally impose conditions for access and use of data or, indeed, allow leveraging of such “power advantage” when developing new services and expanding towards new markets. Imbalances may also arise in other situations, such as with regard to access to co-generated IoT data from industrial and consumer devices.’
8.
See also European Commission (2020a) data strategy from February 2020, which states that ‘[t]he high degree of market power resulting from the “data advantage” can enable large players to set the rules on the platform and unilaterally impose conditions for access and use of data or, indeed, allow leveraging of such “power advantage” when developing new services and expanding towards new markets. Imbalances may also arise in other situations, such as with regard to access to co-generated IoT data from industrial and consumer devices’. The European Commission also found that Google in Google Adsense required third-party publishers to exclusively use Google and not transfer advertisement to other providers, which implies that such providers would not get access to the data generated by the ads of these publishers. Cf. case AT.40411 Antitrust: Commission fines Google €1.49 billion for abusive practices in online advertising. The European Commission has begun investigations based on European competition law into Amazon’s European marketplaces, in particular into Amazon’s collection and (exclusive) use of transaction data originating from business providers. Also, the Germany Competition Authority has initiated an investigation into the conduct of Amazon (Bundeskartellamt 2018). See also Satariano (2019).
9.
See Australian Competition and Consumer Commission (2019); BRICS Competition Law and Policy Centre (2019); Committee for the Study of Digital Platforms (2019); Crémer et al. (2019); Federal Ministry for Economic Affairs and Energy (2019a); Furman Report: HM Treasury (2019).
10.
Examples of suggested sector-specific rules provided by the expert reports potential measures to open up the search market, such as access to click and query data and limiting Google’s ability to be the default search engine on devices and browsers; requiring Facebook to connect more seamlessly with rival social networking sites; measures to address the conflicts of interests and lack of transparency in digital advertising and requiring platforms to allow people to turn off personalised advertising. The Stigler researchers (Committee for the Study of Digital Platforms 2019) believe the standard tools of competition policy, evaluating whether mergers can proceed and whether antitrust action is warranted to remedy abuses by companies, can play a role in helping to promote competition and the associated better outcomes for consumers and innovation. Accordingly, 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, but legal changes are important to ensure that this job can be done effectively. The biggest gains, however, will come from going beyond these tools to focus on policies that actively promote competition, foster entry by new competitors and benefit consumers. This will entail a code of conduct for the most significant digital platforms, measures to promote data mobility and systems with open standards, and expanding data openness. By working with businesses and other stakeholders to set up predictable rules in advance, this can create a regime that allows competition and innovation to thrive.
11.
Regulation (EU) 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services (Text with EEA relevance) PE/56/2019/REV/1 EUT L 186, 11.7.2019, s. 57–79.
12.
See also the proposed P2B regulation (European Commission 2017; European Commission 2018).
13.
The new EU rules could be modelled after the German bill for amending the unfair competition rules. According to the German Bill, once the Bundeskartellamt has identified an undertaking with ‘paramount cross-market relevance’, it may issue an order prohibiting this undertaking from any of the following (exhaustive) practices:
1. 1.
  Self-favouring: treating the offers of competitors differently from its own offers when providing access to supply and sales markets
2. 2.
  Impeding competitors by leveraging market power: directly or indirectly impeding competitors on a market in which the respective undertaking can rapidly expand its position even without being dominant, provided that the impediment is likely to significantly obstruct the competitive process
3. 3.
  Using third-party data to create barriers to entry: creating or raising barriers to market entry, or impeding other undertakings in another way by using data relevant for competition that has been collected from the other side on a dominated market, also in combination with other data relevant for competition from sources beyond the dominated market, or demanding terms and conditions that permit such use
4. 4.
  Hindering interoperability and data portability: making the interoperability of products or services or data portability more difficult and thereby impeding competition
5. 5.
  Insufficient information about performance of customers: informing other undertakings insufficiently of the scope, the quality or the success of the performance they provide or commission, or making it difficult in other ways for them to assess the value of such performance
According to point 5, some data information could be made available upfront for these firms. The German Bill also includes a broadening of the possibility to access data under the rules addressing firms with relative market power vis-à-vis dependent companies. Also, firms with little bargaining power may be exposed to unfair impediment if not been granted access to data. However, as with general competition law, it will be difficult to enforce these rules, and much litigation will be needed for obliging firms to give access to data. Moreover, the firms should be remunerated for the data they transfer.
14.
In reference to Public Sector Bodies, the issue has been whether they can be regarded as undertakings. Firstly, the data holder’s activities with the data need should be analysed in order to establish whether the holder has an undertaking in reference to Article 102 TFEU. Is the activity under scrutiny an economic activity, that is, a commercial activity, conducted on a market? This may only be established if the end market, where the undertaking is facing its ‘customers’, is scrutinised. Of course, when dealing with private entities such as Google and Facebook, establishing whether they are undertakings or not may not cause a concern. However, when dealing with public sector bodies, it may cause problems. See the Compass case (C-138/11 – Compass-Datenbank ECLI:EU:C:2012:449) discussed in Lundqvist (2013), where, according to CJEU, an activity consisting in the maintenance and making available to the public of the data thus collected, whether by a simple search or by means of the supply of printouts, in accordance with the applicable national legislation, also does not constitute an economic activity, since the maintenance of a database containing such data and making that data available to the public are activities which cannot be separated from the activity of collection of the data.
15.
Joined cases C-241/91 and C-242/91, RTE, ITP & BBC v. Commission, 1995 E.C.R. II-485.
16.
Moreover, as Drexl (2018) points out, the Magill case could no longer arise as a matter of harmonised copyright law. According to the case law of the CJEU on the concept of a copyrightable work, the mere listings of TV programmes, which are defined by the programming schedule, could no longer be considered as protected by copyright. Drexl (2018, 32) making reference to inter alia Joined Cases C-403/08 and C-428/08, Football Association Premier League and Murphy, ECLI:EU:C:2011:631, paras 96–98 (holding that football matches are not protected by copyright).
17.
An issue discussed infra is whether general competition law (more specifically the exceptional circumstance doctrine) will be applicable to access general personal data, that is, the personal information that people are generating by utilising the internet, has not yet been conclusively scrutinised by any competition law court. Nonetheless, it can be questioned whether a court would find the exception circumstance doctrine applicable in these circumstances. The doctrine may in a few cases be applicable; it depends on the data set collected. It will also depend on the actual size and magnitude of the data collected. We do not really know the extent of the personal data collected by the current e-platforms and e-ecosystems.
18.
Case C-311/84 Centre belge d’études de marché—Télémarketing (CBEM) v Compagnie luxembourgeoise de télédiffusion SA (CLT) & Information publicité Benelux SA [1985] ECR 3261.
19.
Case C-311/84 Centre belge d’études de marché—Télémarketing (CBEM) v Compagnie luxembourgeoise de télédiffusion SA (CLT) & Information publicité Benelux SA [1985] ECR 3261, para 27.
20.
Case AT.39740 Google Search (Shopping) Commission Decision, C (2017) 4444 final (27 June 2017), para 339.
21.
See Australian Competition and Consumer Commission (2019); BRICS Competition Law and Policy Centre (2019); Committee for the Study of Digital Platforms (2019); Crémer et al. (2019); Federal Ministry for Economic Affairs and Energy (2019a); Furman Report: HM Treasury (2019).
22.
It took the European Commission seven years to render a decision in the Google shopping case, and the case is still lingering in the courts. Also, the Microsoft case saga was long. Few if any think that in the end Google or Microsoft for that matter will lose their market power as an effect of the decision rendered by the European Commission.
23.
Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) and Microsoft Corp v Commission (2007) T-201/04, ECLI:EU: T: 2007:289.

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Department of Law, Stockholm University, Stockholm, Sweden
Björn Lundqvist

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Faculty of Law, Stockholm University, Stockholm, Sweden
Antonina Bakardjieva Engelbrekt
Department of Government, Uppsala University, Uppsala, Sweden
Karin Leijon
Department of Government, Uppsala University, Uppsala, Sweden
Anna Michalski
University of Agder, Kristiansand, Norway
Lars Oxelheim

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Lundqvist, B. (2021). How Does the EU Protect Competition in the Digital Platform Economy?. In: Bakardjieva Engelbrekt, A., Leijon, K., Michalski, A., Oxelheim, L. (eds) The European Union and the Technology Shift. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-63672-2_5

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