European Union: Abuse of dominance and article 102 of the TFEU

In summary

This article discusses recent decisions by the European Commission (EC), as well as judgments and preliminary references by the Court of Justice of the European Union relating to article 102 of the Treaty on the Functioning of the European Union (TFEU). It finds that, based on recent decisional practice and the evolving concept of exclusion in Europe, the EC’s 2009 Guidance on Article 102 TFEU may require updating.

Discussion points

• Article 102 TFEU
• How European decisional practice and jurisprudence in relation to article 102 TFEU has evolved, and how the prescribed conduct and potential consumer harm of practices such as self-preferencing, data leveraging, naked restrictions, excessive pricing and anticompetitive disparagement may no longer be adequately addressed in the EC’s Guidance
• In addition, it addresses whether traditional forms of anticompetitive practices referenced in the EC’s Guidance may benefit from revision in light of the CJEU’s case law in Intel 2017 and Intel 2022

Referenced in this article

• Cases C-413/14 P, Intel v Commission; AT.39740, Google Search (Shopping); T-612/17, Google and Alphabet v Commission (Google Shopping; AT.40703, Amazon Buy Box; AT.40462, Amazon Marketplace; AT.40680, Google Adtech; AT.40437, Apple App Store Practices, Music Streaming; C-377/20, Servizio Elettrico Nazionale v Autorità Garante della Concorrenza e del Mercato; AT.40220, Qualcomm; AT.40394, Aspen; C-372/19, SABAM v Weareone.World

The European Commission’s guidance on article 102 TFEU: upgrade required?

This article discusses recent decisions by the European Commission (EC), as well as judgments and preliminary references by the Court of Justice of the European Union (CJEU) relating to article 102 of the Treaty on the Functioning of the European Union (TFEU). It finds that, based on recent decisional practice and the evolving concept of exclusion in Europe, the EC’s 2009 Guidance on Article 102 TFEU (the EC’s Guidance) ^[1] may require updating.

Article 102 TFEU governs practices by companies able to act independently of, and with a degree of immunity from, normal competitive market conditions. It prohibits not only those practices that directly cause harm to consumers (eg, exploitative abuses), but also practices that cause consumer harm through their impact on competition (eg, exclusionary practices). ^[2]

The majority of cases investigated by the EC in recent years under article 102 TFEU, and reviewed by the CJEU on appeal, relate to alleged anticompetitive conduct not reflected in the EC’s Guidance. These include:

• self-preferencing: where a vertically integrated dominant company uses its own asset, such as its platform, to favour the positioning or sale of its own goods or services at the expense of rivals; ^[3]
• data leveraging: where a dominant company restricts access to data that it holds as a result of its inherent dominance in the market, to benefit its own products or services at the exclusion of its rivals. ^[4]
• naked restrictions: where a dominant company engages in conduct with the sole purpose of excluding its rivals; ^[5] and
• excessive pricing: where a dominant company imposes excessive prices on its customers. ^[6]

In addition, national competition agencies in Europe investigated cases relating to anticompetitive disparagement by a dominant company – conduct also not addressed in the EC Guidance.

As discussed in more detail in this article, the prescribed conduct and potential consumer harm of these evolved forms of anticompetitive abuses are not adequately addressed in the EC’s Guidance. In addition, traditional forms of anticompetitive practices that are referenced in the EC’s Guidance, such as fidelity-inducing loyalty rebates, may require revision in light of the CJEU’s case law in Intel v Commission 2017 and Intel v Commission 2022. ^[7]

The evolved forms of anticompetitive abuses affirmed in recent CJEU jurisprudence are not adequately reflected in the EC’s Guidance

The EC’s Guidance

The EC’s Guidance sets out the EC’s enforcement priorities when applying article 102 TFEU to exclusionary conduct by a dominant company. Its purpose is to provide greater clarity and predictability of the EC’s general framework of analysis, when determining whether it should pursue an exclusionary case. ^[8]

In its Guidance, the EC ‘limits itself to exclusionary conduct, which, based on its experiences, appear to be the most common’. ^[9] These specific forms of abuses include: (1) exclusive dealing (ie, exclusive purchasing obligations or rebates); (2) tying and bundling; (3) predation; (4) refusal to supply; and (5) margin squeeze.

However, based on the EC’s recent enforcement activities, it appears that these type of abuses are no longer the only common forms of exclusionary abuse. Instead, current enforcement of article 102 TFEU primarily relates to novel forms of abuses that are either not addressed, or only discussed to a very limited extent, in the EC’s Guidance.

Self-preferencing

In its 2021 judgment in Google Shopping, the General Court (GC) confirmed, for the first time, that self-preferencing by a dominant company may amount to an abuse of article 102 TFEU. ^[10]

Google’s conduct

In June 2017, the EC found that Google’s more favourable positioning and display, in its general search results pages, of its own comparison shopping service compared to competing comparison shopping services infringes article 102 TFEU. In particular, the EC found:

that while results from competing comparison shopping services could appear only as generic results, that is to say, simple blue links that were also prone to being demoted by adjustment algorithms, results from Google’s own comparison shopping service were prominently positioned at the top of Google’s general results pages, displayed in rich format and incapable of being demoted by those algorithms, resulting in a difference in treatment in the form of Google’s favouring of its own comparison shopping service. ^[11]

The list of abusive practices infringing article 102 TFEU is not exhaustive

On appeal, the GC upheld the EC’s finding that self-preferencing, in other words, where a dominant company is ‘alleged to be favouring its own services at the expense of its competitors’ services’, can constitute an abuse of dominance under article 102 TFEU. ^[12] Further, the GC found that ‘[t]he list of abusive practices contained in Article 102 TFEU is not exhaustive.’ ^[13]

The GC found that the practice of self-preferencing, even if engaged by a dominant company, was not prohibited per se by article 102 TFEU. ^[14] However, in this case, the GC found that Google’s practice did not constitute competition on the merits.

Referring to the EC’s decision, the GC set out that due to (1) the importance of web traffic generated by Google Shopping; (2) the behaviour of users when searching online; and (3) the fact that diverted traffic accounted for a large proportion of the traffic going to competing services, Google’s self-preferencing ‘was liable to lead to a weakening of competition on the market’. ^[15]

Google’s conduct ‘led to a reduction in the visibility of results from competing comparison shopping services and, at the same time, increased the visibility of results from Google’s own comparison shopping service. Thus, the practices at issue enabled Google to highlight its own comparison shopping service on its general search results pages while leaving competing comparison shopping services virtually invisible on those pages, which, in principle, is not consistent with the intended purpose of a general search service.’ ^[16]

On that basis, Google’s behaviour could not be justified as competition on the merits. ^[17] Further, even if Google’s conduct led to a product or service improvement, that does not mean the conduct could not constitute an abuse. Any improvements would have to be assessed when considering any objective justifications or efficiency gains. ^[18]

The GC also found that Google’s conduct was not commercially rational, but motivated by a desire to exclude competitors. ^[19] The GC found that, unlike traditional infrastructures, whose value to the owner lies in the owner’s ability to exclude others, the inherent value of Google’s ‘infrastructure’ (ie, search engine) lies in its capacity to generate traffic to other websites and to be open to results from third parties, including those of competing comparison shopping services. The GC thus found that for a search engine to limit the scope of its results to its own services ‘entails an element of risk and is not necessarily rational’, other than in a scenario like the present, where Google’s dominance and barriers to entry are already so high, that no risk of imminent market entry or competitive response exists. ^[20]

Self-preferencing is its own category of abuse, and not a refusal to supply

The GC also dealt with Google’s submission that, based on the EC’s reasoning, any duty to supply could be characterised as self-preferencing, without the need to meet the indispensability condition established by the European Court of Justice (ECJ) in Bronner. ^[21] As held by the ECJ in Slovak Telecom, Bronner does not apply where a dominant company made access to its infrastructure subject to unfair conditions. ^[22]

In Google Shopping, the GC also found that in the absence of an express refusal to supply, Google’s conduct should not be analysed on the basis of the strict conditions set out in Bronner, even if the conduct ultimately resulted in an implicit refusal to supply. Otherwise, any exclusionary practice would only infringe article 102 TFEU, if it related to indispensable goods or services. Self-preferencing constitutes a separate infringement of article 102 TFEU. ^[23]

The EC does not have to apply the as-efficient-competitor test in self-preferencing allegations

The GC also held that the EC was not required to prove that an as-efficient-competitor (AEC) would have been foreclosed from the market. The GC found that for non price-related exclusionary practices, the application of the AEC test was not warranted. ^[24]

A roadmap for a dominant company to rebut the anticompetitive effects of self-preferencing

Self-preferencing is not discussed in the EC’s Guidance. Perhaps in recognition of the breadth of the concept, the GC made clear that a dominant firm may nevertheless rebut the presumed anticompetitive effects of self-preferencing. In particular, the dominant company must demonstrate that: ^[25]

• the efficiency gains are sufficient to counteract the negative effects on competition and consumer welfare that will result from the restriction of competition;
• there is a causative link between the practice and the benefit identified;
• the practice is necessary for achieving the efficiency gains relied upon; and
• the practice does not eliminate effective competition by eliminating all or most competition, either actual or potential.

The next generation of self-preferencing cases

The EC is currently investigating a number of vertically integrated platforms for potentially anticompetitive self-preferencing practices. These investigations include investigations into Amazon Buy Box ^[26] and Amazon Marketplace. ^[27]

In Amazon Buy Box, the EC is investigating whether Amazon’s criteria for selecting the winner of the Buy Box led to preferential treatment of Amazon’s own retail business or the sellers that use Amazon’s logistics and delivery services. ^[28] Amazon’s ‘Buy Box’ is displayed prominently on Amazon’s websites and allows customers to add items from a specific retailer directly into their shopping carts. The EC preliminary views Amazon’s Buy Box as crucial to sellers on Amazon, due to its prominent positioning and the fact that it generates ‘the vast majority of all sales.’ ^[29]

In Amazon Marketplace, the EC is investigating whether Amazon’s use of non-public third-party data favours Amazon’s own retail arm over its rivals, for example, by focusing its offers on the best-selling products across product categories and adjusting its offers in light thereof.

Equally, the EC’s investigation into Google Adtech, ^[30] opened in June 2021, reviews whether Google allegedly favoured its own online display advertising technology services in the ‘ad tech’ supply chain, to the detriment of competing providers of advertising technology services, advertisers and online publishers.

In App Store Music Streaming, ^[31] the EC preliminarily found that Apple abused its dominant position in the distribution of music streaming apps through its App Store. In its preliminary findings, the EC raised concerns that the mandatory use of Apple’s own proprietary in-app purchase system and the restrictions on developers’ ability to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps infringes article 102 TFEU.

The EC’s preliminary view was that Apple’s rules distort competition by raising the costs of competing music streaming app developers, leading to higher prices for consumers. It remains to be seen whether the EC categorises Apple’s conduct as self-preferencing or another novel form of abuse.

Data-leveraging

Servizio Elettrico Nazionale ^[32] concerns a request for a preliminary ruling from the Italian Council of State to the ECJ relating to the interpretation and application of article 102 TFEU in connection with allegedly abusive conduct by the Italian incumbent electricity supplier, Servizio Elettrico Nazionale (SEN) to hinder new competitive entry.

SEN and the Enel Group’s conduct

Following a complaint by the Italian association of energy wholesalers and traders (AIGET), the Italian Competition Authority (AGCM) opened an investigation into an allegedly exclusionary strategy ‘designed to “transfer” SEN’s customer base (SEN being the operator on the protected market) to EE (active on the free market).’ ^[33] EE is a subsidiary of the Enel Group.

In anticipation of the upcoming liberalisation of the Italian market for the sale of electricity, the Enel Group’s alleged strategy was to prevent SEN’s customers from moving to new suppliers. ^[34] SEN’s customers were asked to consent to receiving commercial offers from the Enel Group, as well as from other third parties. However, customers were made to believe that such consent was mandatory with respect to the Enel Group, while voluntary with respect to other suppliers. This led to fewer consents for the latter, limiting the amount of customer data available to Enel Group’s competitors in the free market. ^[35]

The Enel Group used SEN’s customer data to issue targeted commercial offers to customers, with a view of transferring them from SEN to the Enel Group. The ACGM found that the data constituted a ‘strategic, non-replicable asset’, ^[36] allowing EE to target these customers exclusively, taking more than 40 per cent of the contestable demand. ^[37]

The request for a preliminary ruling

The AGCM issued an infringement decision in December 2018, which Enel Group appealed to the Italian regional administrative court of first instance in Lazio, which confirmed the finding of an abuse. The court of first instance’s judgment was appealed to the referring court, the Italian Council of State, with a request for a preliminary ruling from the ECJ.

The ECJ delivered its judgment in May 2022, further to Advocate General (AG) Rantos’ opinion of December 2021 on whether the practice of data-leveraging is anticompetitive if carried out by a dominant company. ^[38] The discussion below focuses on the Italian Council of State’s first question, fourth part – referred to by AG Rantos as follows:

By the fourth part, the referring court asks the Court, in essence, to draw a clear line between practices which come within the scope of so-called ‘normal’ competition and those which do not. This question thus goes to the heart of what constitutes abuse within the meaning of Article 102 TFEU, and seeks to determine whether the conduct at issue in the main proceedings constitutes such abuse. ^[39]

In his opinion, AG Rantos found that, while the Enel Group should be allowed to engage in practices to retain its customers and that ‘data collection in the context of the customer relationship remains, in principle, an entirely “normal” operation in a standard competitive process,’ ^[40] Enel Group ‘must not adopt practices which, by exploiting the advantages stemming from the statutory monopoly, are capable of having exclusionary effects on new competitors considered to be as efficient as it is itself.’ ^[41]

The ECJ seemingly agreed with AG Rantos on this statement, as it confirmed that, if a dominant company used assets or resources that were inherent to the holding of such a position in the context of the liberalisation of a market ^[42] and that were not accessible to an as efficient competitor on the market to expand its dominance from one market to another market, this does not constitute competition on the merits. ^[43] A prior market incumbent could not engage in discriminatory practices to its own advantages. ^[44]

Thus, in response to the Italian Council of State’s first question, the ECJ confirmed that a practice carried out by a dominant company should be characterised as illegal if it has foreclosing effects and relies on a practice that does not constitute competition on the merits. However, even if these two criteria are met, the dominant company may still demonstrate that its practice was objectively justified or counterbalanced or even outweighed by consumer efficiencies. ^[45]

Naked restrictions

Certain practices by a dominant company are not capable of having pro-competitive effects and cannot generate effects other than restricting competition.

The EC’s Guidance describes such practices as follows:

There may be circumstances where it is not necessary for the Commission to carry out a detailed assessment before concluding that the conduct in question is likely to result in consumer harm. If it appears that the conduct can only raise obstacles to competition and that it creates no efficiencies, its anti-competitive effect may be inferred. ^[46]

The EC’s Guidance also provides examples of such practices, namely: ‘if the dominant undertaking prevents its customers from testing the products of competitors or provides financial incentives to its customers on condition that they do not test such products, or pays a distributor or a customer to delay the introduction of a competitor’s product.’ ^[47]

Such practices are often referred to as naked restrictions. In the EC’s 2009 decision against Intel, the EC found that Intel’s payments to OEMs to delay or cancel the launch of a product line incorporating a rival product were naked restrictions. ^[48] This was confirmed on appeal by the GC since:

Such naked restrictions fall outside the scope of competition on the merits and the anti-competitive object of the practices established their abusive nature to the requisite legal standard. ^[49]

In Lithuanian Railways, the GC upheld the EC’s decision that Lietuvos geležinkeliai AB (LR) had abused its dominant position and infringed article 102 TFEU by dismantling 19 kilometres of track connecting Lithuania and Latvia. ^[50]

LR is a vertically integrated company managing both the railway infrastructure, as well as providing rail transport services in Lithuania. Orlen Lietuva AB (Orlen) operates crude oil refineries in Lithuania and distributes refined oil products to Lithuania and Latvia via LR’s network.

Following a commercial dispute between LR and Orlen, Orlen rearranged its route to include the Latvian national railway company (LDZ), using ‘the Short Route to Latvia’. Shortly thereafter, LR suspended traffic on a 19-kilometre-long section of the Short Route to Latvia following the identification of a defect in the rail track. ^[51] LR then continued to remove the track in its entirety.

The EC found that LR had abused its dominant position as railway infrastructure manager in Lithuania by removing the track. ^[52] In particular, the EC found ‘that, by removing the track in its entirety, LR had had recourse to methods other than those which condition normal competition.’ ^[53] This was for the following reasons:

• LR was aware of Orlen’s plans to switch services;
• LR had removed the track in great haste, without securing the necessary funds and without taking any of the normal preparatory steps for its reconstruction;
• the removal of the track was contrary to standard practice in the sector;
• LR was aware of the risk of losing all of Orlen’s business if the track were rebuilt; and
• LR had taken steps to convince the Lithuanian government not to rebuild the track. ^[54]

While the GC did not explicitly refer to LR’s practice constituting a per se infringement of article 102 TFEU or a naked restriction, the GC did refer to the EC initially having considered the abuse as a restriction by object. ^[55] The GC also noted that the EC merely had to demonstrate that the conduct would be capable of giving rise to anticompetitive foreclosure effects. Based on this assessment, it is difficult to see how the removal of the tracks in haste to prevent a competitor from entering the market could not constitute a naked restriction under article 102 TFEU. ^[56]

The EC’s recent decision in Qualcomm and Google Android also provides useful examples of arguably naked restraints to reflect in the EC’s Guidance.

In Qualcomm, the EC found that Qualcomm had infringed article 102 TFEU by offering significant exclusivity payments to its key customer Apple, on the basis that Apple would not source supplies from competitors, but would exclusively use Qualcomm LTE baseband chipsets in its iPhones and iPads. ^[57] Had Apple launched a device with a chipset supplied by an alternative provider, Qualcomm would have ceased payments, and Apple would have been required to return some payments to Qualcomm.

The EC found that Qualcomm’s practices denied its rivals the possibility to compete for Apple’s business and also denied business opportunities with other customers that may have followed from securing Apple as a customer. ^[58]

In Google Android, the EC fined Google for its exclusivity agreements around the Android operating system and making payments to original equipment manufacturers (OEMs) and mobile network operators on the condition that they did not pre-install competing general search services on any device within an agreed portfolio. ^[59] The EC found that this harmed competition by significantly reducing customers’ incentives to pre-install competing search apps and denying rival search engines the possibility to compete on the merits. ^[60]

Takeaways and expectations

Although the EC’s Guidance notes that there may be circumstances where it is not necessary for the EC to carry out a detailed effects analysis before concluding that the conduct is anticompetitive, such practices are not explicitly referred to as naked restrictions. Nor does the EC Guidance explain the concept of what may constitute naked restrictions, or provide examples in detail.

While the EC did not refer to all of the above practices as naked restrictions, the EC’s decisional practice now provides examples that might be discussed in revised guidance.

Excessive pricing

The EC’s Guidance only briefly refers to exploitative abuses:

Conduct which is directly exploitative of consumers, for example charging excessively high prices or certain behaviour that undermines the efforts to achieve an integrated internal market, is also liable to infringe Article 82. […] For the purpose of providing guidance on its enforcement priorities the Commission at this stage limits itself to exclusionary conduct and in, particular, certain specific types of exclusionary conduct which, based on its experience, appear to be the most common. ^[61]

While this may be reflective of the EC enforcement priorities and European jurisprudence, and historically, the EC may have shied away from excessive pricing cases as a ‘market price’ is notoriously difficult to determine, recent EC decisions have provided useful guidance that may be reflected in revised guidelines. For example, the EC’s commitment decision in Aspen provides useful insight on how dominant companies may want to assess pricing decisions in practice. ^[62]

Aspen was found to have abused its dominant position in numerous national markets by charging excessive prices for critical off-patent cancer medicines. The EC’s preliminary analysis of Aspen’s revenues and costs showed that, after the price increases, Aspen had consistently earned very high profits from its sales of cancer medicines in Europe, both in absolute terms and when compared with the profit levels of similar companies in the industry. Aspen’s prices exceeded its relevant costs by almost 300 per cent on average, including when accounting for a reasonable rate of return, although differences did exist between products and countries.

To assess whether Aspen had implemented ‘excessive’ prices, the EC conducted a benchmark analysis, comparing Aspen’s costs, revenues and profitability with that of 20 other pharma companies of the same size and profile. ^[63] The EC also considered that Aspen did not provide legitimate justifications for those high profit levels, given that the medicines had been off-patent for 50 years, demonstrating that the R&D investment was long recouped. Aspen committed to reducing the price of six off-patent cancer medicines immediately and cap these for 10 years.

Another assessment of what constitutes an excessive price was provided by the ECJ in SABAM. ^[64] SABAM, a Belgium collective management organisation (CMO), had increased its tariffs for certain concerts and music festivals and was sued by several festivals and the federation of Flemish music festivals. Following a preliminary reference by the Brussels Commercial Court, the ECJ handed down its preliminary ruling in November 2020 on whether certain tariffs imposed by a CMO could constitute an abuse of dominance.

In response to the questions from the Brussel’s court, the ECJ found that there was no abuse of a dominant position, if a CMO calculated its tariffs on the basis of gross receipts from ticket sales, without all costs relating to the organisation of such events being deducted from these receipts, as long as their economic value is reflected, which is for the national court to demonstrate. The ECJ also found that the CMO would not abuse its dominant position by adopting a tariff structure system to determine which of the musical works performed belonged to the CMO or were part of the CMO’s repertoire, as long as there was no alternative method that would determine the relevant tariff more precisely, achieving the same goal (protecting the artists’ rights) without resulting in disproportionate costs for the CMO. This was for the national court to assess, taking account the available data and technical systems. ^[65]

On that basis, the EC’s Guidance may benefit from an iteration that explains the concept of excessive pricing in more detail, in particular by providing insight as to what is deemed an excessive price.

Anticompetitive disparagement

The EC Guidance may also want to reflect practices found abusive by European national competition agencies – for example, the Danish Competition and Consumer Agency’s anticompetitive disparaging case, Falck. Falck, an emergency response and healthcare service, was found to have abused its dominant position by implementing a systematic, covert communication strategy designed to hinder a competitor’s ability to compete. ^[66] The Agency found that Falck’s disparagement strategy did not constitute competition on the merits and was abusive.

Similarly, the French Competition Authority found that Novartis had abused its dominant position by leading a global communication campaign targeting ophthalmologists, doctors, associations and the general public to discredit the off-label use of Avastin (marketed by Roche) to treat age-related macular degeneration, to favour its own treatment. ^[67]

The traditional forms of anticompetitive practices addressed in the EC’s Guidance may also require revision

The five conditions of Intel

Following the CJEU’s judgment in Intel 2017 and Intel 2022, it seems that even those forms of anticompetitive practices that are already addressed in the EC’s Guidance, such as fidelity-inducing loyalty rebates, would benefit from additional clarity and guidance.

By way of background, in 2009, the EC found that Intel had abused its dominant position by imposing fidelity-inducing loyalty rebates. Intel appealed the EC decision, which the GC upheld in 2014. ^[68] However, on appeal, the ECJ found that the GC had wrongly accepted the EC’s line of argument regarding the required legal approach to fidelity-inducing loyalty rebates that confer exclusivity. ^[69]

In January 2022, the GC handed down its revised judgment, finding that where a dominant company implements a system of fidelity-inducing loyalty rebates, the rebuttable presumption is that the rebates restrict competition and have foreclosing effects. ^[70] However, such loyalty rebates are ‘not a per se infringement of Article 102 TFEU’ and it does not ‘relieve the Commission in all cases of the obligation to examine whether there were anticompetitive effects’. ^[71]

To the contrary, the GC found:

• where a dominant company adduces evidence rebutting the EC’s allegations, the EC must assess, on the basis of the five criteria set out by the ECJ, whether an abuse took place; and
• where the dominant company adduces evidence for an AEC test, the EC must analyse that as well. ^[72]

Relevant criteria to determine whether fidelity-inducing rebates infringe article 102 TFEU

When determining whether loyalty rebates infringe article 102 TFEU, the EC must take into account: ^[73]

1. the extent of the company’s dominant position on the relevant market;
2. the share of the market covered by the contested practice;
3. the conditions and arrangements for granting the rebates in question;
4. their duration and their amount; and
5. the possible existence of a strategy aiming to exclude competitors that are at least as efficient as the dominant undertaking from the market.

Based on the above criteria, the GC found that the EC had not properly assessed criteria (2) and (4). First, the GC found that it was insufficient to simply conclude that certain customers were strategically more important than others, and that therefore, the abusive practices had to be regarded as significant. Instead, the EC should have examined ‘the share covered by the contested practice’. ^[74] Second, the GC found that the EC had failed to examine the duration of the rebates. ^[75]

If the dominant company puts forward an AEC test, the EC must assess it

The GC found that when assessing loyalty rebates, the EC was not required to carry out an AEC test. However, should the EC decide to carry out such test, or should the dominant company put forward arguments in relation to an AEC test, the EC must assess it and carry it out correctly and robustly.

In Google AdSense, ^[76] the EC, relying on Intel 2017, found that it did not have to demonstrate that Google’s exclusivity obligation clause was capable of restricting competition, but nevertheless carried out a detailed assessment. ^[77] Carrying out such an assessment while stating that it was not required to do so, potentially suggests an absence of conviction in the legal standard.

Formalising the above criteria in the EC’s Guidance and providing further examples when loyalty rebates or exclusivity clauses may be anticompetitive, as well as guiding dominant companies through the application of the AEC test would provide more clarity and predictability.

The need for an update

Based on the direction of the EC’s recent enforcement of article 102 TFEU, it is fair to conclude that the enforcement of article 102 TFEU has evolved. The EC’s enforcement now targets a broader range of abuses, such as self-preferencing, data-leveraging, naked restrictions and excessive pricing cases. Abuses that are either not adequately addressed or not even mentioned in the EC’s Guidance.

Even in relation to forms of abuses that are already reflected in the EC’s Guidance such as loyalty rebates, the EC Guidance would greatly benefit from iteration.

Notes