Convergence in approaches taken by both East & West to tackle Digital Platforms Anti-Competitive Practices
DOI:
https://doi.org/10.25007/ajnu.v1n1a1941Keywords:
Big Tech; Antitrust / Competition Law; Abuse of Dominance; Comparative Competition; Public & Private Antitrust Enforcement; Innovation & Digital PlatformsAbstract
This Article focuses on how East and West are taking steps to combat the dominance of major online platforms. The piece considers several major judicial and regulatory decisions from China, USA, and Europe in an effort to assess the level of success or failure enjoyed by antitrust regulators in recent investigations where they seek to attempt to maintain competition in digital marketplaces, by subjecting global digital platforms’ terms of business and business practices to antitrust scrutiny. The outcomes are sometimes not as expected, and some antitrust decisions by regulatory bodies have been reversed by the courts from time to time.
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FOOTNOTES
UNCTAD, 2019.
e.g., Apple, Amazon, Apple, Google, Meta/Facebook.
Vassallo, M., 2022.
OECD, 2021.
US Department of Justice, 2020.
Feiner, L., 2020.
FTC v. Facebook, Inc.’, 2022.
US Department of Justice, 2023.
‘Google and Alphabet v Commission (Google Android)’, 2022.
EU Commission, 2022.
ACM, 2022.
Van Dorpe, S., 2022.
Opt-out action in the antitrust context concerns the situation whereby class litigation action can be pursued on behalf of a group of unnamed and unidentified claimants who have been harmed by anti-competitive conduct carried out by undertakings. Everyone in the group should be entitled to compensation if the litigation is successful, unless they make clear that they do not participate in the litigation by “opting-out”.
See details in Section 3.2 below.
SAMR, 2021.
AML 2022, Arts 9 & 22.
See details in Section 3.2 below.
“Apple’s market power is durable due to high switching costs, ecosystem lock-in, and brand loyalty”: see Investigation of Competition in Digital Markets 2020. CP 117–8 116th Cong., Comm.
Caminade, J. and von Wartburg, M., 2022.
ibid, at 1.
Pierce, D. and Birnbaum, E., 2020.
Patel, N., 2020.
Van Dorpe, S., 2022.
The 15% fee is for App developers with less than $1 million in annual net sales in the Apple Store: see Leswing, K, 2020.
‘Epic Games, Inc. v. Apple Inc.’, 2021.
Bostoen, F. and Mândrescu, D., 2020.
‘In re Apple iPhone Antitrust Litig.’, 2013; note that this line of litigation which went all the way to the Supreme Court is also known as Apple v Pepper.
The Sherman Act of 1890, 15 U.S.C. § 2.
‘In re Apple iPhone Antitrust Litig.’, 2017: the Ninth Circuit on appeal held that the complainants “[...] are direct purchasers of iPhone apps from Apple under Illinois Brick and that they therefore have standing to sue.”
CALERA (2021), S.26A(e)(7).
Nylen, L, 2020.
i.e., app developers earning less than 1 million dollars in annual app sales through the App Store.
‘Epic Games, Inc. v. Apple Inc.’, 2021.
“Apple’s App Store is the only method to distribute software applications on iOS devices”: see Investigation of Competition in Digital Markets 2020. CP 117–8 116th Cong., Comm.
The Sherman Act of 1890, 15 U.S.C. §§ 1&2; Kovovic, T., 2021.
i.e., United States District Court, Northern District of California.
Brief for the United States of America as Amicus Curiae in Support of Neither Party on ‘Epic Games, Inc. v. Apple, Inc.’, 2022.
“The District Court committed several legal errors that could imperil effective antitrust enforcement, especially in the digital economy […] The court read Sections 1 and 2 of the Sherman Act narrowly and wrongly, in ways that would leave many anticompetitive agreements and practices outside their protections”: see Goudsward, A., 2022.
“If Apple is allowed to step between any company with online services and users of iPhones, few areas of the vast mobile economy will be safe from Apple’s interference and eventual dominance. Consumers and innovation will suffer—indeed, they already have”: see McGee, P., 2022.
BBC, 2022.
Brief for the United States of America as Amicus Curiae in Support of Neither Party on ‘Epic Games, Inc. v. Apple, Inc.’, 2022.
Beijing News Reporter, 2017.
AML 2007, Art. 19(1), now renumbered as AML 2022, Art. 24(1).
The Anti-Monopoly Guidelines on the Platform Economy, Art. 11 Finding of Dominant Market Position: “[...] In light of the characteristics of platform economy, the following factors may be specifically taken into consideration: (1) The market share [...] (2) The undertaker’s ability to control the market [...] (3) Undertation’s financial resource and technical condition [...] (4) The extent of reliance of other undertakings on such undertaking [...] (5) The difficulties for other undertakings to enter the relevant market [...]”.
‘United Brands v. Commission’, 1978.
‘Hoffmann-La Roche & Co v. Commission’, 1979.
EU Commission, 2020.
A mobile wallet is also known as a digital wallet and e-wallet, which is a way to pay for products or services without using cash or a physical card.
EU Commission, 2022.
In 2021, the Commission accused Apple of abusing its dominant position contrary to Art. 102 TFEU by restricting competition for music streaming services by raising the costs of competing music streaming app developers. In 2022, the Commission accused Apple of abusing its dominant position contrary to Art. 102 TFEU by restricting competition in the mobile wallets market on Apple devices by insistence on purchases using Apple Pay. Apple must now respond to these allegations before the Commission reaches a formal Decision in the matter. See EU Commission, 2021.
Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation, Art. 33; Timmins, B., 2022.
Wang, J. and Guo, M.T., 2021.
i.e., selling commodities at unfairly high prices#; tying products; refusing to trade, and restricting trading counterparties to trade only with Apple Store: AML 2007, Art. 17, now renumbered as AML 2022, Art. 22.
UK Gov’t, 2021.
Competition Act 1998, s.18: Abuse of Dominant Position.
BBC, 2021.
CMA, 2022.
ACM, 2022.
Van Dorpe, S, 2022.
Gurman, M, 2022.
Though there are some situations where such finding has been upheld: for example ‘Hoffmann-La Roche & Co v. Commission’, 1979; ‘Telefónica and Telefónica de España v. Commission’, 2012; ‘Tetra Pak Rausing SA v. Commission’, 1990; ‘Huawei Technologies Co. Ltd v. ZTE Corp. and ZTE Deutschland GmbH’, 2015.
“Over 20 million UK households have home insurance and more than 60% of new policies are found on price comparison sites”: see CMA, 2018.
S.2(1) prohibiting price-fixing.
UK Gov’t, 2020.
‘Wikingerhof GmbH & Co. KG v Booking.com BV’, 2020. In Germany the Düsseldorf Court of Appeal in Booking.com BV v Bundeskartellamt (FCO) held major accommodation booking platform Booking.com’s use of nMFN clauses was acceptable because they did not seek to prevent the hotels using Booking.com from offering lower prices to consumers via other price comparison websites, apart from the hotels’ own websites.
‘BGL (Holdings) Limited & Others v Competition and Markets Authority’, 2021 with the appeal claiming inter alia that “the CMA [… failed to properly analyse the counterfactual to the existence of CTM’s [ComparetheMarket.com’s] WMFNs [wide MFN clauses]”.
Office of the Attorney General for the District of Columbia, 2021.
‘District of Columbia v. Amazon.com, Inc.’, 2021.
Office of the Attorney General for the District of Columbia, 2022.
[70] State of California Department of Justice, 2022.
Office of the Attorney General for the District of Columbia, 2022.
Decision on Administrative Punishment 2021. No.28, SAMR.
AML 2007, Art. 17 (now renumbered as AML 2022, Art. 22): “A business operator with a dominant market position shall not abuse its dominant market position to conduct the following acts: […] (4) without justifiable reasons, requiring a trading party to trade exclusively with itself or trade exclusively with a designated business operator(s) without any justifiable cause […]”
2017-2020 China Online Retail Market Data Monitoring Report, 2021. By comparison, Alibaba’s next nearest competitor, JD.com, held around 30% market share in the same period.
SAMR, 2020.
Decision on Administrative Punishment 2021. No.74, SAMR.
The Anti-Monopoly Guidelines on the Platform Economy (China), Art. 15.
Case AT. 40462 Amazon Marketplace 2019.
Gilbert, R.J., 2021.
Case AT.40703 Amazon Buy Box 2020.
Grasso, C, 2020.
Investigation of Competition in Digital Markets 2020. CP 117–8 116th Cong., Comm.
Ibid, 274-82.
EU Commission, 2020.
Espinoza, J, 2022.
CMA, 2022.
S.18 Abuse of dominant position.
Hern, A., 2022.
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