Competition policy and e-commerce: Learning from the sector inquiry and decisional practice. The role of the EU Commission and NCAs

Transcription

1 Competition policy and e-commerce: Learning from the sector inquiry and decisional practice. The role of the EU Commission and NCAs Introduction Prof. Dr. Heike Schweitzer, LL.M. (Yale) Freie Universität Berlin, Germany

2 I. Introduction 2

3 I. Introduction - Sector Inquiry: Insights into state of EU comp law regarding vertical restraints in e-commerce Finding: Important differences between NCAs regarding interpretation of Art. 101 TFEU; and enforcement; Nonetheless: little centralized enforcement by EU Commission - Purpose of the panel: (1) Bring experience of different NCAs together: What differences? Why? (2) Is divergences between NCAs good (experimentation)? Or bad (unlevel playing field; legal uncertainty)? Different levels of unity/divergence: (1) law/interpretation; (2) enforcement/priorities Legal setting under Reg. 1/03 on uniformity and divergence / centralisation and decentralisation: (1) Uniformity of the law NCAs must apply EU comp law in parallel to national comp law; NCAs must not apply stricter national comp law little scope for different national comp law traditions / high degree of legal uniformity But: SI shows that divergence in interpretation of EU comp law has persisted. 3

4 I. Introduction Decentralized enforcement: No monopoly for the Commission in applying comp law; NCAs can pursue different enforcement priorities Very different priorities in e-commerce/ different intensity of enforcement at national level Coordination within the framework of the ECN (case allocation, information sharing, policy discussion) Some; but limited Are coordinated enforcement priorities needed for e-commerce? Or strong factual differences between MS justify decentralized enforcement? EU Commission s role: In principle: EU Commission takes large / multi-jurisdictional cases; cases that raise new issues; reviews NCA decisions Not much activity in e-commerce so far What s the right policy in e-commerce? E-commerce = model for dealing with vertical restraints. How much leeway for NCAs? - Goal of my presentation: Overview of SI themes with a view to diverging interpretation of comp law and enforcement practice what s the state of antitrust federalism in EU? 4

5 II. Centralization vs national experimentation in e- commerce: Interpretation and enforcement of Art. 101 TFEU with a view to vertical restrictions of e-commerce overview 5

6 II. Vertical restrictions of e-commerce 1. Clear law, centralized enforcement on EU level; (almost) no national enforcement: The example of Geo-Blocking - Def.: Blocking access to e-commerce-websites; re-routing customers to websites targeting their home Member State; refusing to deliver cross border or to accept cross-border payments Major theme of SI direct conflict with internal market goal to promote cross-border (e-)commerce SI (paras. 342, 368): Geo-blocking is wide-spread 38 % of retailers collect location information to implement geo-blocking measures 12 % of retailers have contractual cross-border sales restrictions EU Competition law: Art. 101 or Art. 102 TFEU can apply law is relatively settled Proposed Geo-blocking Regulation: prohibit unilateral geoblocking irrespective of market power Enforcement of competition law: EU Commission IP/17/201 of 2 Feb 2017: 2 investigations into suspected geo-blocking, NCAs: little enforcement action so far. Explanation? Enforcement action directed specifically at promoting internal market = priority of EU Commission, but not of NCAs? 6

7 II. Vertical restrictions of e-commerce 2. Uncertain law / different interpretations by NCAs, active decentral enforcement: The example of MFNclauses as used by digital platforms - Wide MFNs = retailers must not offer lower price on other marketplaces or on own website; - Narrow MFNs = retailers must not offer lower price on retailer s own website Not VERY frequent; but, e.g., hotel booking platforms; private motor insurance market in UK - Reasons for MFNs: avoid free-riding of retailers / recoup investment for platform - Effects of MFNs: reduce intra-brand comp + comp betw. retailers/marketplaces; market entry more difficult - EU competition law: Consensus: wide MFNs infringe Art. 101(1) No consensus between NCAs: Do narrow MFNs infringe Art. 101(1)? o o o BKartA: Yes booking.com; France, Sweden, Italy (coordinated approach); and similar: UK, Ireland, Denmark, Netherlands, Greece: No EU Commission: No; but no centralization of enforcement (P): Unacceptable legal uncertainty? Or beneficial experimentation with different national approaches / empirical assessment of effects? Do platforms adopt different approaches in different MS? Currently: joint monitoring project effects of removal of wide MFNs on competition in the hotel market 7

8 II. Vertical restrictions of e-commerce 3. Uncertain law, different interpretations, strong decentralized enforcement action in some MS, no enforcement in others: The example of restrictions to sell on online marketplaces - Growing relevance of online market places (with some differences between MS?) - Various forms of restrictions to sell on online marketplaces (e.g. ban of all or some platforms; different conditions for using platforms) According to SI: Varying relevance of restrictions in different MS. Germany 32 % of retailers; UK: 15 % For EU-wide economic significance: Copenhagen Economics (2016) => Bruno Basalisco - Reasons for restrictions on use of online marketplaces: typically protection of brand image / luxury image - EU comp law: High degree of legal uncertainty ECJ Pierre Fabre: Ban for retailers to sell online = restriction by object; not covered by VBER Complete ban to use online platforms: selective distribution vs non-selective distribution Non selective distribution: Art. 101(1) (+) possible justification? Selective distribution: infringement of Art. 101(1)? Or legitimate qualitative selection criteria? o Pending reference to ECJ (by Higher Regional Court of Frankfurt a.m.): Case C-230/16 Coty (luxury cosmetics) Are restrictions to sell on online marketplaces covered by VBER? Or hardcore restriction under Art. 4 (b) and/or (c) VBER? o Pending reference to ECJ: Case C-230/16 - Coty 8

9 II. Vertical restrictions of e-commerce - NCA action BKartA: very active enforcement; rather strict stance E.g. BKartA, 27 June 2014 B3-137/12 Adidas (ban on sales via open online platforms that also sell used and damaged goods, e.g. ebay/amazon): Infringement of Art. 101(1); not justified under Art. 101(3) E.g. BKartA, 26 August 2016, B2-98/11 ASICS: assessment of online platform sales ban left open legal uncertainty. But obiter dictum: per se prohibition of sales via online marketplace is a considerable restraint on sales to end customers within the meaning of Art. 4(c). In UK: CMA, SO against Ping (online sales ban for Ping golf clubs) - High degree of legal uncertainty / high practical relevance / different levels of enforcement Legal issues will be clarified by ECJ: Case C-230/16 Coty Need for a coordinated enforcement strategy? 9

10 II. Vertical restrictions of e-commerce IV. Novel types of restrictions, with little NCA enforcement / no Commission enforcement so far: The example of restrictions on the use of price comparison tools / pricing restrictions implemented with the help of algorithms 1. Restrictions on the use of price comparison tools: Price comparison tools widely used by retailers (SI: 36 % of retailers feed into price comparison tools) + consumers; variation by sector (particular important in services, e.g. flights, insurance, energy) Some manufacturers try to prevent the use (negative effect on brand image; over-emphasis on price competition instead of quality etc.) E.g. BKartA, 26 August 2016, B2-98/11 ASICS: : Prohibiting retailers to support price comparison sites = infringement of Art. 101(1) / major restriction of online sales. Not justified by qualitative considerations. Not justified as solution to free rider problem offline/online CMA: market study of the role of digital comparison tools (final report: September 2017) Q: Area for EU Commission action? Issue only just evolving policy still to be developed? 10

11 II. Vertical restrictions of e-commerce 2. Pricing restrictions - Vertical pricing restriction: Where to draw the line between price recommendation / minimum price fixing: Combination of manufacturers price recommendation (wide-spread) with manufacturers use of price-tracking software (widely used SI: 38 %) (understanding market trends, decide on future recommended price, on product positioning etc.; but risk of retaliation)? What s new: Automatic monitoring as a particularly effective tool Line between price recommendation / price fixing somewhat blurry; some variation between NCAs (e.g. BKartA: particularly strict e.g. CIBA Vision) - Horizontal price fixing? Clear infringement of Art. 101(1): Price fixing agreements monitored by software (e.g. CMA, , Case CE/ ) Clear infringement of Art. 101(1): Collusion by use of pricing software by online retailers that automatically adapt retail prices to those of leading competitors (EU Commission, investigation opened on 2 Feb 2017 (IP/17/201) against Asus, Denon & Marantz, Philips and Pioneer) Open issue: Anti-competitive collusion by industry-wide adoption of the same / a similar algorithm that may lead to interdependent action or by the use of algorithms that due to self-learning and experimenting are capable of independently determining the means to optimise profit, e.g. by sustaining conscious parallelism? No cases yet. Decentralized experimentation or joint policy? 11

12 III. Preliminary conclusions 12

13 III. Preliminary Conclusions - Reg. 17/62: Left room for some variation in national comp law approaches as long as they did not conflict with the general policy line of EU competition law No EU influence on national public enforcement policies experimentation under national law Role of EU Commission in Art 101-cases: Notification requirement good grasp of business practices evolving across Europe at an early point of time / possibility to develop a European policy line early on - Reg. 1/03: Uniform interpretation of Art. 101(1) TFEU, binding for all NCAs (and to be applied in parallel) In practice: Room for different approaches in particular with regard to vertical restraints Regarding public enforcement: some coordination (ECN); but broad variations NCAs compete / position themselves, e.g.: BKartA: Forerunner in favor of strict application of Art. 101(1) to vertical restraints in e-commerce CMA: More conceptual approach France / Italy? Role of EU Commission? Less of a day-to-day overview regarding evolving business practices; no use made of Art. 11(6) Reg. 1/03 (hierarchical intervention); instead: SI (information gathering / debate) EU Commission develops its own policy line at a rather late point of time Q: problems in fast moving markets like e-commerce? Or rather benefits of experimentation? 13