#396 Is EU Law on Abuse of Dominance Now Clear? The ECJ's Judgment in Google Android

Well, Thomas, thank you for joining.

As listeners will know, the EU competition prohibition on abuse of dominance is contained in Article 102 of the Treaty on the Functioning of the European Union, or the TFEU.

It's, of course, not the holding of a dominant position that is a problem, but abuse of that dominance.

In July 2018, the European Commission fined Google over €4 billion for several different abuses of its dominant position in various dominant positions in various markets in the EU, including general internet search.

Those abuses were considered to be aimed at cementing Google's dominant position in the general search market.

Google appealed to the EU general court, which largely upheld the abuse, removing part of one of the abuses.

And then Google appealed onwards to the European Court of Justice, which is the judgment we are going to be discussing with Thomas today.

So Thomas, as I mentioned, the European Commission indeed paused its review of its very important guidelines on Article 102 for two years to await this judgment.

Why did it do so? What makes this judgment so important for the European consideration of abuse of dominance and maybe for antitrust law more generally?

Yes, thank you for that question.

Indeed, the fact that the Commission waited so long suggests that there must be something in the judgment they really wanted to wait for.

And ultimately, the judgment really relates to the entire evolution of Article 102 in Europe.

As you rightly pointed out, not the monopoly as such, the creation or maintenance of that is prohibited, but the abuse.

Now, there's no exhaustive list of what constitutes an abuse.

And over the years, the strategy in identifying such abuses slightly shifted.

By now, it's kind of common ground that you need two components.

You need conduct that deviates from competition on the merits.

And secondly, that conduct must be capable of having anti-competitive effects.

But how to assess whether these two requirements are fulfilled is not written in stone.

And in the early years of Article 102, the authority and then the courts tended to to assume that you can kind of categorize conducts that are either good or bad, and that then by using these categories, it's easy in the future to then fit new cases into these categories and finding them as being allowed or abusive.

However, over the years, it quickly materialized that The same conduct can be pro-competitive under certain circumstances while being anti-competitive in other circumstances.

So you need a case-by-case analysis.

And that led to the shift from a more formal category type analysis to a more flexible analysis that looked at the actual impact of of a particular conduct.

So a shift to what they called a more economic approach, where the focus is more on the effects that a conduct has on market developments rather than the qualification of the conduct as such.

And at the heart of this more economic approach was the as efficient competitor test and economic tool to analyze whether certain conduct is capable of foreclosing equally efficient competitors or not.

Well, Thomas, thank you for joining.

As listeners will know, the EU competition prohibition on abuse of dominance is contained in Article 102 of the Treaty on the Functioning of the European Union, or the TFEU.

It's, of course, not the holding of a dominant position that is a problem, but abuse of that dominance.

In July 2018, the European Commission fined Google over €4 billion for several different abuses of its dominant position in various dominant positions in various markets in the EU, including general internet search.

Those abuses were considered to be aimed at cementing Google's dominant position in the general search market.

Google appealed to the EU general court, which largely upheld the abuse, removing part of one of the abuses.

And then Google appealed onwards to the European Court of Justice, which is the judgment we are going to be discussing with Thomas today.

So Thomas, as I mentioned, the European Commission indeed paused its review of its very important guidelines on Article 102 for two years to await this judgment.

Why did it do so? What makes this judgment so important for the European consideration of abuse of dominance and maybe for antitrust law more generally?

Yes, thank you for that question.

Indeed, the fact that the Commission waited so long suggests that there must be something in the judgment they really wanted to wait for.

And ultimately, the judgment really relates to the entire evolution of Article 102 in Europe.

As you rightly pointed out, not the monopoly as such, the creation or maintenance of that is prohibited, but the abuse.

Now, there's no exhaustive list of what constitutes an abuse.

And over the years, the strategy in identifying such abuses slightly shifted.

By now, it's kind of common ground that you need two components.

You need conduct that deviates from competition on the merits.

And secondly, that conduct must be capable of having anti-competitive effects.

But how to assess whether these two requirements are fulfilled is not written in stone.

And in the early years of Article 102, the authority and then the courts tended to to assume that you can kind of categorize conducts that are either good or bad, and that then by using these categories, it's easy in the future to then fit new cases into these categories and finding them as being allowed or abusive.

However, over the years, it quickly materialized that The same conduct can be pro-competitive under certain circumstances while being anti-competitive in other circumstances.

So you need a case-by-case analysis.

And that led to the shift from a more formal category type analysis to a more flexible analysis that looked at the actual impact of of a particular conduct.

So a shift to what they called a more economic approach, where the focus is more on the effects that a conduct has on market developments rather than the qualification of the conduct as such.

And at the heart of this more economic approach was the as efficient competitor test and economic tool to analyze whether certain conduct is capable of foreclosing equally efficient competitors or not.