Twin antitrust probes into Google’s Play Store

 

Twin antitrust probes into Google’s Play Store

Google has confirmed that the European Commission is investigating its Play Store in an abuse of dominance inquiry.

This confirmation was made in a filing to the US Securities and Exchange Commission. It comes on the heels of the launch by the UK Competition and Markets Authority of a similar probe in June.  The European Commission has not yet confirmed its investigation at this stage, although it is usual for it to announce the opening of a formal investigation.

It appears that the Commission’s investigations relates to Google’s requirement that app developers use its own payment system or they will be removed from the App Store.  A similar theory of harm runs through the statement of objections that the Commission sent to Apple in 2021 concerning the music streaming market.

The CMA’s latest probe into Google’s Play Store is accompanied by its final report in its mobile ecosystem market study.  This found that Apple and Google have a ‘stranglehold’ over certain markets due to their effective duopoly in mobile ecosystems.

Google has also confirmed that it is bringing an appeal to the European Court of Justice against the General Court’s finding that upheld the major part of the Commission’s Google Android decision.

Google also confirmed in its regulatory filing that it is appealing to the European Court of Justice against the General Court’s ruling last month that largely upheld the commission’s Google Android decision.

https://app.quotemedia.com/data/downloadFiling?webmasterId=90423&ref=117011882&type=HTML&symbol=GOOGL&companyName=Alphabet+Inc.&formType=10-Q&formDescription=General+form+for+quarterly+reports+under+Section+13+or+15%28d%29&dateFiled=2022-10-26&CK=1652044

European Commission issues statement of objections in abusive patent filing case

 

European Commission issues statement of objections in abusive patent filing case

The European Commission has sent a statement of objections to Teva alleging that it has abused its dominant position contrary to Article 102 TFEU through conduct that is intended to block or delay competition with its multiple sclerosis drug, Copaxone.

The Commission has made a provisional finding that Teva engaged in abusive practices in the markets for glatiramer acetate which is the active ingredient in Copaxone, in Belgium, Czechia, Germany, Italy, the Netherlands, Poland and Spain.

Teva's basic patent for glatiramer acetate expired in 2015.  The Commission contends that Teva has artificially extended patent protection for Copaxone by strategically filing and withdrawing secondary patent applications (for divisional patents).  According to the Commission this caused competitors to have to bring new legal challenges which delayed their market entry with an alternative.

The exclusionary effect of (patent) filing strategies on competition between incumbents and new entrants was examined in detail by the Commission as early as 2008 in its Pharmaceutical Sector Inquiry.  It is not surprising that owners of patents develop commercial strategies that are aimed at and have the effect of extending the breadth and duration of their IPR protection which affects the ability of new entrants to enter and expand on the market. The question is whether this is abusive.

A dominant company may not use regulatory procedures in such a way as to prevent or make more difficult entry of competition in a market, unless it can as an undertaking engaged in competition on the merits, rely on grounds relating to the defence of legitimate interests or objective justification.

The case has some parallels with the Commission’s finding that AstraZeneca infringed Article 102 TFEU through two practices: (1) making misleading representations before the national patent offices and before the national courts in order to obtain supplementary protection certificates for its Losec drug (which extend patent protection); and (2) filing requests for deregistration of marketing authorisations combined with the withdrawal from the market of Losec capsules with the intent of blocking the entry of generic products or preventing parallel trading. C-457/10 P AstraZeneca v Commission, ECLI:EU:C:2012:770

The Teva case represents an uptick in the Commission’s enforcement strategy against abusive conduct in the context regulatory procedures in the pharma sector.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_6062

 

 

Ofcom launches market study into cloud services

 

Ofcom launches market study into cloud services

Ofcom has launched a market study into the provision of cloud services in the UK.

Cloud services are services related to the provision of remote access to computing resources (compute, storage and networking).

The main suppliers of cloud services in the UK are Amazon Web Services, Microsoft and Google (known and ‘the hyperscalers’).

Cloud services are important to businesses across the economy, especially in telecoms and broadcasting.  Ofcom wants to examine whether there is any feature of the market that could limit competition and harm consumers and intends to focus on the ‘public cloud’.  It will consider whether any feature of the market might favour the hyperscalers and make it more difficult for others to enter and expand.

Ofcom seeks comments including on whether it should make a market investigation reference to the Competition and Markets Authority, by 3 November 2022.

Ofcom expects to publish an interim report for consultation in around six months’ time.

Ofcom says that it is doing this as part of a new programme of work to ensure that digital communications markets are working well for people and businesses in the UK.

 

https://www.ofcom.org.uk/consultations-and-statements/category-3/cloud-services-market-study

EU Guidelines on the application of competition law in the gig economy

 

EU Guidelines on the application of competition law in the gig economy

The European Commission has set out Guidelines on the application of EU competition law to collective agreements. The Guidelines concern the conditions of solo self-employed persons.

Collective bargaining between employees and employers is outside the scope of EU competition law.

However, the self-employed are considered to be "undertakings" under EU law and an agreement between them risks being in breach of Article 101 of the Treaty on the Functioning of the European Union (TFEU).

The Commission's Guidelines set out the circumstances in which solo self-employed are comparable to workers and therefore not subject to Article 101 of the TFEU.

The Commission also sets out the conditions where it will not intervene against collective agreements that aim to correct a clear imbalance in the bargaining power of solo self-employed persons and the other contracting party and which, by their nature and purpose, aim to improve working conditions.

The Commission has stated that it renew its guidelines on collective agreements for the self-employed by 2030.

https://ec.europa.eu/commission/presscorner/detail/en/IP_22_5796

Digital Regulation Cooperation Forum

 

Digital Regulation Cooperation Forum

The Competition and Markets Authority (CMA) has published terms of reference of the Digital Regulation Cooperation Forum (DRCF).

The DRCF was launched by the CMA, the Information Commissioner’s Office (ICO) and Ofcom in July 2020. The Financial Conduct Authority joined in April 2021.

The Secretary of State for Culture, Media and Sport has written to the DCRF setting out the role of the DRCF in delivering the government's vision of a strategic, pro-innovation approach to digital regulation.

The terms of reference of the DRCF set out that it has the goal of promoting greater coherence, working collaboratively to jointly address complex problems, and working together to build capabilities. It is a voluntary cooperation forum to facilitate engagement between the members and does not provide formal advice or direction to its members.

The DCRF is one of a growing number of bodies and initiatives set up to promote wider cross-sector engagement on competition and economic issues in a digital landscape. Digital transformation is supporting all sectors of the economy

The International Telecommunication Union (ITU) has identified how collaborative regulation represents a fundamental change in the way that governments develop regulatory frameworks and rules.

In 2016 at the General Symposium for Regulators ITU presented the concept of collaborative or fifth generation (G5) regulation under the generations of regulation model

G5 involves a new system of cross-sectoral regulation involving harmonised rules with holistic and collaborative approaches as well as high level principles. A collaborative approach recognises the interplay between digital infrastructure, services and content across industries. While there are some ‘quick wins’ that can be achieved with some ease, other institutional constraints will need to be considered and demand more reflection and time.

https://www.gov.uk/government/publications/drcf-terms-of-reference/terms-of-reference

 

CMA review of liner shipping block exemption

 

CMA review of liner shipping block exemption

The Competition and Markets Authority is reviewing the retained EU Liner Shipping Consortia Block Exemption Regulation (Commission Regulation 906/2009) (Shipping Block Exemption).

The Competition (Amendment etc.) (EU Exit) Regulations 2019 preserved the existing EU block exemption regulations as retained law.  These regulations also allowed the Secretary of State to renew or replace the retained EU block exemptions.

The UK’s review of block exemptions can occur in parallel with the EU review or expiration of the underlying block exemptions or it can occur independently.

The Shipping Block Exemption provides an automatic exemption for agreements between liner shipping companies allowing for joint services to be provided through consortia.  It does not allow liner shipping companies to agree to fix prices, otherwise limit capacity or sales, or allocate markets or customers.

The Shipping Block Exemption is due to expire on 25 April 2024. Meanwhile the European Commission has launched a review on whether the EU block exemption continues to be fit for purpose. 

In carrying out its own review the CMA will consider whether the Shipping Block Exemption serves the interests of UK businesses and consumers taking account of the features of the UK market. Not least, this takes place against a background of global supply chain disruptions. 

The CMA is expected to consult further on the UK Shipping Block Exemption in retained form in 2023.

Meanwhile the CMA is undertaking reviews of a number of other EU block exemptions existing as retained EU law in the UK. This includes a review of the retained Vertical Block Exemption Regulation (November 2021) and the retained Horizontal Block Exemption Regulations (June 2022). The CMA also consulted, in July 2022, on its proposed recommendation on the retained Motor Vehicle Block Exemption Regulation.

https://www.gov.uk/cma-cases/liner-shipping-consortia-block-exemption-regulation

Competition Appeal Tribunal upholds appeal in first ever MFN infringement case

 

Competition Appeal Tribunal upholds appeal in first ever MFN infringement case

 

The Competition Appeal Tribunal has ruled in favour of BGL (Holdings) Limited, BGL Group Limited, BISL Limited and Compare the Market Limited (Compare The Market) in its challenge to the decision of the Competition and Markets Authority (CMA) imposing penalties on Compare The Market of around £18 million for breach of Article 101 TFEU and the Chapter I prohibition.

The CMA found that Compare The Market had imposed wide “most favoured nation” (MFN clauses in its agreements with home insurers providers in relation to the use of its price comparison website (PCW).  

The CAT found that the CMA had made errors in defining the relevant market as a single market.  The CAT considered that the CMA should have defined two separate markets identifying the two sides of the platform relating to the supply of customer introduction services to home insurance providers and the supply of home intermediation services to consumers.

The CAT also found material errors in the CMA’s analysis of the effect on competition; in particular the CMA had failed to assess the significance of other channels for the purchase of home insurance by consumers.

The CAT was unable to test much of the evidence relied on by the CMA stating that much of it was anecdotal.  It was not convinced that MFNs had a potential anti-competitive effect on promotional discounts.

The CAT upheld the appeal and set aside the CMA's decision.

BGL (Holdings) Limited and others v Competition and Markets Authority [2022] CAT 36