Tag: Competition Law

Beyond the Digital Markets Act: much more than a piece of legislation

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Inês Neves (Lecturer at the Faculty of Law, University of Porto | Researcher at CIJ - Centre for Legal Research | Member of the Jean Monnet Module team DigEUCit - A Digital Europe for Citizens. Constitutional and policymaking challenges) and Luísa Amaro de Matos (LL.M. in European Legal Studies – College of Europe, Bruges)
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On 6 September 2023, the European Commission (‘EC’) designated a first set of six gatekeepers in relation to 22 core platform services(‘CPS’)[1]. These undertakings must ensure compliance with the positive and negative obligations set out in the Digital Markets Act (‘DMA’)[2] by March 2024.[3]

Meanwhile, the DMA is already having an impact, with Facebook and Instagram, for instance, offering European users ‘the choice’ to pay a monthly subscription to use their social networks without any advertising (ads).[4]

On 17 November 2023, the Court of Justice of the European Union (‘CJEU’) confirmed that Apple, Bytedance and Meta had brought actions challenging the designation of (some of) their core platform services,[5] namely Titktok as regards Bytedance (T-1077/23); Facebook Marketplace and Messenger concerning Meta (T-1078/23), and App Store and iMessage for Apple (Cases T-1079/23 & T-1080/23).

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Summaries of judgments: Ryanair DAC/Commission (T-388/20)

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Summaries of judgments made in collaboration with the Portuguese judges and référendaire of the General Court (Maria José Costeira, Ricardo Silva Passos and Esperança Mealha)
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Judgment of the General Court of 14 April 2021 (Tenth Chamber) Case T‑388/20 Ryanair DAC v Commission

State Aid – Aid granted by Finland to Finnair in the context of the COVID-19 pandemic – Decision not to raise any objections- Compatibility with Article 107(3)(b) TFEU – Measure intended to remedy a serious disturbance in the economy of a Member State – Equal treatment – Freedom of establishment – Freedom to provide services – Duty to state reasons

1. Facts

On 13 May 2020, Finland notified the Commission of an aid measure in the form of a State guarantee in favour of the Finnish airline, Finnair, aimed at helping the latter obtain a loan of €600 million from a pension fund to cover its working capital needs. The guarantee, which was supposed to cover 90% of that loan, was limited to a maximum duration of three years.

Referring to its communication on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak, the Commission classified the guarantee granted to Finnair as State aid which is compatible with the internal market in accordance with Article 107(3)(b) TFEU. Under that provision, aid intended to remedy a serious disturbance in the economy of a Member State may, under certain circumstances, be considered to be compatible with the internal market.

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Summaries of judgments: Ryanair DAC/Commission (T-259/20)

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Summaries of judgments made in collaboration with the Portuguese judges and référendaire of the General Court (Maria José Costeira, Ricardo Silva Passos and Esperança Mealha)
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Judgment from General Court (Tenth Chamber, Extended Composition) of 17 February 2021, T – 259/20, Ryanair DAC/Commission

State aid – French air transport market – Deferral of payment of civil aviation tax and solidarity tax on airline tickets due on a monthly basis during the period from March to December 2020 in the context of the Covid-19 pandemic – Decision not to raise any objections – Aid intended to make good the damage caused by an exceptional occurrence – Free provision of services – Equal treatment – Criterion of holding a license issued by the French authorities – Proportionality – Article 107(2)(b) TFEU – Duty to state reasons

1. Facts

On 24 March 2020, French Republic notified the Commission of an aid scheme in the form of a deferral of the payment of civil aviation tax and solidarity tax on airline tickets due on a monthly basis during the period from March to December 2020, accordingly with Article 108(3) TFUE. This aid is designed to guarantee that the airlines holding an operating license issued in France are able to maintain sufficient liquidity until the restrictions, prohibitions on movement are lifted, and normal commercial activity is resumed. With this measure, the French Republic differs the referred tax payment until the 1 January 2021 and then spreads payments over a period of 24 months, until 31 December 2022.

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Summaries of judgments: Lietuvos geležinkeliai AB v. Commission

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Summaries of judgments made in collaboration with the Portuguese judges and référendaire of the General Court (Maria José Costeira, Ricardo Silva Passos and Esperança Mealha)
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Judgment from General Court (First Chamber Extended Composition) of 18 November 2020, T-814/17, Lietuvos geležinkeliai AB v. Commission

Competition – Abuse of a dominant position – Rail freight market – Decision finding an infringement of Article 102 TFEU – Access by third-party undertakings to infrastructure managed by Lithuania’s national railway company – Removal of a section of railway track – Concept of “abuse” – Actual or likely exclusion of a competitor – Calculation of the amount of the fine – 2006 Guidelines on the method for setting fines – Remedies – Proportionality – Unlimited jurisdiction

Facts

Lietuvos geležinkeliai AB (LG) is a Lithuanian national railway company responsible for the management of the Lithuanian railway and provides rail transport services for freight and passengers. The Lithuanian undertaking Orlen Lietuva AB (Orlen) is specialized in refining crude oil and distributing refine oil products. Both had since 1999 an agreement according to which LG provided to the last undertaking transport services on the Lithuanian rail network, more precisely on the shorter route to Latvia. However, in 2008, following a commercial dispute between both undertakings regarding the rates paid by Orlen to LG for its transport services, Orlen explored the possibility of contracting the undertaking LDZ for rail transport services of its freight to Latvia.

In September 2008, LG suspended the traffic on a 19km long section of the shorter route to Latvia after identifying a defect in the rail track and later, in October 2008, LG proceeded with the complete removal of the entire track.

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Summaries of judgments: Casino, Guichard-Perrachon and AMC v. Commission |Intermarché Casino Achats v. Commission | Les Mousquetaires and ITM Entreprises v. Commission

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Summaries of judgments made in collaboration with the Portuguese judges and référendaire of the General Court (Maria José Costeira, Ricardo Silva Passos and Esperança Mealha)
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Judgments from General Court (Ninth Chamber Extended Composition) of 5th October 2020: T – 249/17, Casino, Guichard-Perrachon et Achats Merchandises Casino SAS (AMC)/Comission, T- 254/17, Intermarche Casino Achats/Comission e T- 255/17, Les Mousquetaires e ITM Entreprises/Comission

Competition – Administrative Procedure – Decision ordering an inspection– Illegality of Article 20 of Regulation (CE) n.º 1/2003 – Right to an effective remedy – Principle of equality of arms – Obligation to state reasons for the inspection decisions – Right to inviolability of the home – Sufficient strong evidence – Proportionality – Refusal to protect the confidentiality of data relating to private life

Facts

After receiving information about the existence of change of information between several undertakings and associations of undertakings from the food and non-food distribution sector the Commission in the scope of the powers conferred by Article 20, paragraphs 1 and 4 of Regulation (CE) no 1/2003 adopted, in February 2017, several decisions requesting inspections to several undertakings.

Within the scope of those inspections, Commission visited the undertakings offices and obtained copies of the IT records.

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Competition and corona crisis in Spain

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 by María Pilar Canedo Arrillaga, Professor of Law, University of Deusto

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1. Spain is one of the countries that has been more seriously affected by the COVID19. In order to protect the health of citizens, the Spanish Government adopted some rules that radically limit the social and economic activity in Spain imposing the obligation to stay at home for citizens for a long period and ordering what has been called “the hibernation of the economic activity” for 15 days in all the non essential sectors (mostly health services, security and food)[i]. Those rules are having a dramatic effect in the economy especially in the labour market. This has implied the most relevant rise in the unemployment figures in Spain since the arrival of democracy in 1978[ii]. Also, they are having huge implications in the protection of legal certainty and social and personal rights of the citizens. Those consequences have a more relevant impact in the weaker actors in society both from the social and economic perspective and therefore the Government has decided to take measures with the aim of reducing the impact of the crisis in economy in general and, in particular to help those more harmed by the situation[iii].

2. It is evident that the most relevant overriding reason of general interest, which is human life, needs protection. That implies limits in the rights of the people that we could not foresee some months ago and those radical changes in social and economic behaviours will have impact in our business and industrial economy not only in the short term.

In these circumstances we can hear more radical voices claiming for a change in our economic model towards one in which the public sector controls different aspects of society, including company’s ownership[iv]. Others claim for public control of economic activity and/or business behaviour[v]. Others claim for higher protection to the companies so they can contribute to lower the destruction of employment[vi].

Also, we can witness some (infrequent) business behaviours that profit the situation of need and legal exception and maximize their benefits in abusive ways that fall under different prohibitions of the law. Some of them, with criminal implications, others, with labour, tax, social security or competition law[vii].

Dealing with the latter, there is an increasingly relevant movement that asks for a more lenient application of the competition law rules and principles in reference both with the administrative and legislative measures adopted to tackle with this situation and its application and with the enforcement activities conducted by the competition authorities.
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Google (again) and advertising on the web. Comment on the European Commission Decision of 20th March 2019

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 by Pedro Madeira Froufe, Editor

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Much of the creation of wealth through the digital economy (individualized advertising, anticipation of reactions from consumers to new products, etc.) depends on the knowledge of our tastes and ways of life, knowledge of our profiles and even the knowledge of how our brain reacts to advertising messages (that’s what “neuromarketing” is about) [1]. And of course, the scale counts! There is a kind of return of “economies of scale” in the field of advertising services. That is, there is a large / global business communication that is simultaneously individualized, as, as a result of the knowledge and algorithmic use of personal data of each of us, can adapt and address each group (increasingly small) of consumers, with messages tendentially personalized.
Individualized advertising, enhanced by the use of algorithms, is one of the activities that has grown the most and has created the propulsion of wealth (directly and indirectly) in the digital era.

It is in this context that we should place the last “Google decision” of the European Commission, dated March 20, 2019, regarding the use of the Google / AdSense for Search platform to raise and broker advertising associated with online surveys. The Commission has, in effect, decided to impose a financial penalty on Google and Alphabet Inc. (the parent company of Google LLC, formerly Google Inc.) amounting to EUR 1,490,000 for abuse of a dominant position (infringement of Article 102 of the TFEU).
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A (in)definition of public service through the State aid rule

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 by Ana Filipa Afonseca, member of CEDU

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The State often reveals itself (or is said to be) incapable of pursuing the public interest through its own resources. This is the reason why the economic operators are compensated for the public activities they provide, in the so-called Services of General Economic Interest (SGEI), according to Article 14 of TFEU.

Beyond all the political discussion about the raison d’être of the State underlying this rule, the limit between an incompatible State aid and this compensation is often too thin and unclear.

Naturally, several questions arise about the (good or bad) management of state resources – which the CJEU gradually solves. These issues already go beyond the choice of the private entity or even the overcompensation (which is politically the most contested by citizens and the Court always claims to be against EU law) but they also bring up a discussion on the definition of public service of general economic interest.

The case T-92/11 RENV, which opposed Jorgen Anderson to the European Commission, initiated in Denmark concerning public transportation. In that country there are two systems of transport services: the free traffic system, commercially exploited, and the public traffic system, negotiated with public entities through a public contract.
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Competition law and tofu – the denomination of products

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 by Filipa Afonseca, member of CEDU
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Competition law does not have a strict goal that is objectively qualifiable and quantifiable. This is an old debate, but it has subtly brought new life to the discussion about the functions of competition law. So, what does it have to do with veganism and vegetarianism? Everything, as shown by the Tofu Town’s ruling of the CJEU, Case C-422/16, of 14th June 2017.

The issue was that the 100% plant-based products of Tofu Town were marketed under the denomination of “milk”, “yoghurt” or “cheese”. The Court of Justice ruled favorably on the German company Verband’s argument that such expressions are reserved for products of animal origin, so that even an auxiliary expression such as “oat milk” or “soy yoghurt” would not exempt the risk of consumer confusion. According to the Court, consumers’ expectations could be affected as well as concluding that the proper identification of a product is a form of fair competition in the European Union.

In fact, this argument is not new. It reminds us of the well-known distinction of whisky and wine in the Port Charlotte case, in which the Court stated that white Oport wine does not run the risk of being confused with whiskey.

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Editorial of July 2017

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Machine Life Speed Curb Gear Mechanics

by Maria José Costeira, Portuguese Judge at the General Court of the CJEU

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The transposition of the Private Enforcement Directive: a critical perspective

On 26th November 2014 the Directive 2014/104/EU of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union was approved. That directive, usually called Directive Enforcement, has to be transposed into national law by Member States until the 27th December 2016 (Article 21).

In Portugal, the National Competition Authority (Autoridade da Concorrência – AdC) entity in charge of preparing the transposition, presented, on the 22nd June 2016, the last proposal of a preliminary draft[i] for the transposition, which resulted from a process of public discussion.

Here, I intend to draw attention to some aspects that could be improved in the proposal.

Article 2 of the proposal gives the definition of cartel as “the agreement or concerted action between two or more competing companies which aims at coordinating their competition behaviour in the market or influencing the relevant competition standards through acts such as, namely, fixing or coordinating the prices of acquisition or sell or other conditions of transactions, including in relation to rights of intellectual property, attribution of production or sell quotas, sharing markets and clients, including the concertation in auctions and public procurements, restricting importations or exportations or conducting anti-competitive acts against other competitors as prohibited by Article 9 of the Law nº. 19/2012, of 8th May, and if applicable by Article 101, TFEU”.

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