ABUSE OF DOMINANCE IN TECHNOLOGY - ORBi

Apr 3, 2013 - accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services [2007]. OJ L344/65, para 7. 36. On the analysis of dynamic markets in general see G Sidak and D Teece, “Dynamic Compe-.
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April 2013

European Competition Journal

1 DOI:10.5235/17441056.9.1.1 Abuse of Dominance in Technology-Enabled Markets DOI:10.5235/17441056.9.1.1

ABUSE OF DOMINANCE IN TECHNOLOGYENABLED MARKETS: ESTABLISHED STANDARDS RECONSIDERED? MIGUEL RATO AND NICOLAS PETIT*

A. INTRODUCTION This paper seeks to examine whether the legal standards underpinning the application of Article 102 of the Treaty on the Functioning of the European Union (TFEU) need to be revisited in light of the alleged specificities of technology-enabled markets. To this end, the paper is divided into seven parts. Following this short introduction (A), the paper offers first a definition of the very notion of technology-enabled markets (B). It then questions whether competition agencies should depart from conventional enforcement techniques when reviewing conduct in fast-moving, technology-enabled markets, and follow new, expedited enforcement procedures as proposed recently by several highranking officials (C). After this, the paper turns to substantive issues. It begins by reviewing the intricacies of market definition and dominance in technologyenabled markets (D). It then offers some general thoughts on whether a new, general legal standard for the determination of unlawful abuse is needed in technology-enabled markets (E). Finally, the paper considers six categories of abusive conduct in the high-tech sector and shows that, faced with a variety of applicable legal standards for each of them, competition agencies, courts and plaintiffs have—understandably—almost always invoked and applied the loosest possible test in support of their allegations or findings. We suggest, in turn, that under existing case law stricter standards could and should be applied, and that this is particularly important in the context of technology-enabled markets for the simple reason that it is in these markets that the most common pitfalls and shortcomings of the EU law on abuse of a dominant position are magnified (F).

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Miguel Rato is Partner with Shearman & Sterling LLP, Brussels. Nicolas Petit is Professor of Law at the University of Liège and Director of the Global Competition Law Centre of the College of Europe (GCLC). The authors are grateful to Norman Neyrinck and Collette Rawnsley for their useful comments on a previous version of the paper. All URLs were last accessed on 15 March 2013.

Electronic copy available at: http://ssrn.com/abstract=2387357

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Abuse of Dominance in Technology-Enabled Markets

ECJ VOL.

9 NO 1

B. IN SEARCH OF A WORKABLE DEFINITION OF T ECHNOLOGY -E NABLED M ARKETS Recent competition law literature is rife with references to a new type of markets which would arguably require specific treatment under the EU competition rules. The labels used to describe these markets vary: high-technology industries,1 dynamically competitive industries,2 innovative industries,3 the digital economy,4 the innovation economy,5 etc. One common feature of all of these expressions is that they seek to encompass the “new economy,”6 ie sectors as diverse as microprocessors, computer software, online distribution, the internet, etc. Maybe more importantly, another feature common to all of these notions is that, in those industries, technology plays a pivotal role in the competitive process. Hence, in the remainder of this paper, we refer to those markets as “technology-enabled markets”. Against this background, we consider that it is not possible to answer the question whether established legal standards should be reconsidered in technology-enabled markets without first understanding what those markets really are, what they comprise and what makes them special. The first step in our assessment should therefore consist in trying to circumscribe as precisely as possible the notion of a technology-enabled market. In layman’s terms, technology is defined as the use of science for industrial and commercial purposes. Because most m