A conversation on the Google Android judgment with Pablo Solano and Giulio Federico

Maybe let's delve into this aspect that Pablo already mentioned, and that is these relative efficiencies.

And we talk a lot about efficiencies in 102, now also the merger guidelines.

But Pablo, you wrote a piece for EOLA Live on this relative efficiency criterion.

In this case, so in Google Android, maybe you can explain a bit what is relative efficiency vis-a-vis other forms of efficiency.

Maybe that's something we can discuss now.

Sure.

First of all, a word of caution, because we are discussing here with an economist.

This use of the word efficiency is not really the economic one.

So by efficiency, what I mean here is what case law identifies with merits or attractiveness, meaning that the advantage that the dominant company gets.

as opposed to other competitors, is linked to the superiority of their products.

So lower prices, higher quality, higher innovation, higher choice, et cetera.

So that's the sense in which I'm using the word efficiency here.

That said, I came up with the term relative efficiency, which I think is probably my invention, and some people might disagree with the use of the word relative as well, in an attempt to find a concept that was more palatable and less contaminated than the insufficient competitive principle, which, like I said, I don't like so much.

um it alludes to the same reality let me jump in here why

don't you like it so much like what what is the difference you said it's it can be similar but like relative efficiencies as efficient competitive test competition on the merits is it just a word jungle or like where the where the barrier is

Exactly.

So the as-efficient competitive principle, in my view, alludes to the same reality as the relative efficiency criterion, but I'm trying to move away from the large misinterpretation that the as-efficient competitive principle has come for.

By using the relative efficiency criterion, I try to remove both the halo associated with the world principle, which I don't like for a starter, and the emphasis on the competitor.

Because like I said at the beginning, I would like to pinpoint that the dominant company's own efficiency is what we're using as a benchmark to see if the advantage that they're taking comes from their own efficiency or from dominance, rather than competitors.

So we're not talking about competitors, really.

To be more precise, in my reading of previous case law, not only Google Android, because like I said, this follows the path of Acerbisio Letico Nacionales, Super League, Google Shopping, and Android Auto, The court is acknowledging something that is quite obvious and it has been acknowledging from very early case law, which is aggressive, exclusionary or even exploitative unilateral conduct, unlike anti-competitive agreements, is usually competition on the merits.

That is normal competition.

I'm introducing here the concept of competition on the merits that you mentioned.

So excluding competitors and keeping the spoils is the whole point of competition in the end.

Therefore, only if a link between the exclusionary or exploitative effect of the conduct on the one hand and the use of dominance on the other hand can be established, and it needs to be objective because, as we all know, abuse is an objective concept, then the conduct can be abusive.