Competition Flashback Q3 2023: EU and Dutch competition law developments
This is the Competition Flashback Q3 2023 by bureau Brandeis, featuring a selection of the key EU and Dutch competition law developments of the past quarter (see the original version here).
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Overview Q3 2023
- Commission fines seller (Grail) for the first time for gun-jumping, buyer (Illumina) receives record fine of € 432 million
- Rotterdam court confirms ACM’s ban on PostNL takeover of Sandd
- CJEU nuances SIEC-test in appeal CK Telecoms/Hutchison and refers back to General Court
- CJEU clarifies scope of FDI Screening Regulation and possible restrictions of freedom of establishment
- Overview highlights merger cases
Cartels and vertical restraints
- Rotterdam court upholds € 82 million cartel fine for cigarette manufacturers
- Television manufacturer LG receives a fine of nearly € 8 million for resale price maintenance
- Court confirms multi-million fine for Valve over geo-blocking
- ACM fines traffic sign cartel
- Commission imposes € 1.2 million fine on Diehl for participating in hand grenade cartel
- Jan Linders becomes franchisee of Albert Heijn subject to commitments
Abuse of a dominant position
- ACM reduces fine Leadiant for excessive pricing of CTX-drug by over € 2.5 million
- European Commission re-imposes fine on Intel after annulment by General Court
- Breach of data protection rules can be taken into account when assessing competition law infringements
Damage claims for competition law infringements
Regulated markets and consumer law
- European Commission designates six gatekeepers under the DMA
- American Express and Visa appeal over interchange fees inadmissible
- Outsourcing to call centres does not preclude liability for unfair trading practices during marketing calls
Commission fines seller (Grail) for the first time for gun-jumping, buyer (Illumina) receives record fine of € 432 million
The Commission launched an in-depth investigation into this transaction in 2021 based on a referral from several European Member States under Article 22 of the EU Merger Regulation (“EUMR”) (see our blog on Article 22 here). The General Court of the European Union (“General Court”) had already confirmed, in its judgment of 13 July 2022, that the Commission was entitled to exercise this power under Article 22 EUMR. Subsequently, the Commission decided to prohibit the transaction in its entirety (for more on this, see Competition Flashback (“CF”) Q3 2022).
In parallel with the substantive assessment of the transaction, the Commission opened an investigation into a possible violation of the standstill obligation by Illumina in 2021 and already imposed interim measures at that time. During the Commission’s investigation, Illumina publicly announced that it had completed its acquisition of Grail. In its decision of 12 July 2023, the Commission confirmed its preliminary view that Illumina and Grail knowingly breached the standstill obligation.
According to the Commission, there was a deliberate strategy on Illumina’s part, as it strategically weighed the risk of a gun-jumping fine against the risk of paying a considerable breakup fee if it did not acquire Grail. The Commission considered this to be an unprecedented and very serious infringement that undermines the effective functioning of the European merger control system. Therefore, a high and deterrent fine is justified. Additionally, the Commission decided to impose a symbolic fine of € 1,000 on target Grail for its active role in the infringement. This marks the first time that a target in a transaction has been fined by the Commission for violating the standstill obligation (read more here).
Rotterdam court confirms ACM’s ban on PostNL takeover of Sandd
On 29 September 2023, the Rotterdam District Court ruled that the Dutch Authority for Consumers and Markets (Autoriteit Consument en Markt, “ACM”) rightly decided not to grant postal operator PostNL a licence to acquire rival postal operator Sandd in 2019. At the time, the ACM refused to grant a licence because PostNL’s takeover of Sandd would strengthen PostNL’s dominant position. The ACM also expected a price increase for business mail of 30% to 40% after the transaction. The ACM’s market investigation also showed that, although the volume of physical mail will decrease, there will still be a substantial demand for physical mail in the long term.
PostNL requested the Minister of Economic Affairs and Climate Policy (“Minister”) to still grant a licence under Section 47(1) and (2) of the Dutch Competition Act and also appealed the ACM’s decision. The hearing of that appeal was suspended until the licence application was irrevocably decided by the Minister. On 27 September 2019, the Minister granted a licence, which was subsequently reversed by the court of first instance and on appeal (see also CF Q2 2022). With that, PostNL’s appeal against the ACM’s decision revived, which has now been decided by the court.
The court declared PostNL’s appeal unfounded. The court ruled that the ACM had correctly defined two national markets for consumer mail and business mail. Contrary to PostNL’s argument, the ACM was indeed allowed to use data from its quantitative and qualitative research as well as internal PostNL documents, as PostNL also used these itself in its strategic documents and forecasts. In addition, the court held that the ACM correctly assumed the counterfactual that PostNL would remain profitable in the short and long term, whilst Sandd would continue to exert competitive pressure if the acquisition did not take place.
The possible horizontal effects of the merger on the markets for business mail and consumer mail – such as the elimination of the only competitor with a national network and an increase in the price for bulk mail – have also been made sufficiently plausible by the ACM. The same applies to the vertical effects for business mail, namely the ability and incentive for PostNL to foreclose competitors from its delivery network. According to the court, the efficiency defence raised by PostNL was also thoroughly examined and rightly rejected by the ACM. Finally, the court agreed that PostNL had not convincingly demonstrated that it could not perform the universal postal service (profitably) absent the merger. The court thus fully upheld the ACM’s decision not to grant a licence.
CJEU nuances SIEC-test in appeal CK Telecoms/Hutchison and refers back to General Court
This summer, the Court of Justice of the European Union (“CJEU”) overturned the General Court’s controversial judgment in CK Telecoms v Hutchison, which set a high standard of proof and strict requirements for prohibiting mergers in oligopolistic markets. In 2020, the General Court annulled the Commission’s decision to prohibit the merger between the two mobile network operators in the United Kingdom. In 2016, the Commission found that the 4-to-3 merger would lead to a significant impediment to effective competition (“SIEC”) in three different markets. Upon appeal, the General Court held that the Commission had not applied the SIEC-test correctly and that its analysis could not support the conclusions in the prohibition decision.
The CJEU overturns the General Court’s judgment. It ruled that the same standard of proof applies to both the prohibition and the approval of a merger. Given the inherent uncertainty of prospective analyses, it is sufficient for the Commission to demonstrate that it is more likely than not that a merger will lead to a restriction of competition. The SIEC-test has no specific, cumulative requirements. With regard to the concepts of ‘important competitive force’ and ‘close competitors’ as included in the Horizontal Merger Guidelines, the CJEU agrees with the Commission that the General Court applied too strict a standard. The General Court ruled that (one of) the merging parties must hold a special position, for example by a particularly aggressive pricing policy, and that the parties should be ‘particularly close competitors’. However, within an oligopolistic market, several companies can actually exert significant competitive pressure, and not only with regard to prices, the CJEU states. Furthermore, the General Court disregarded the function of efficiency benefits in merger control when it ruled that the Commission should automatically take them into account in its assessment. The CJEU emphasises that concentrations do not automatically lead to efficiency benefits and it is up to the merging parties to substantiate these. Assuming that efficiency benefits (can) occur would wrongly lead to a reversal of the burden of proof.
Lastly, the CJEU finds that the General Court failed to fully weigh all the Commission’s evidence before annulling the prohibition decision. Due to the gross disregard of the law and the failure to discuss various grounds at first instance, the CJEU refers the case back to the General Court.
CJEU clarifies scope of FDI Screening Regulation and possible restrictions of freedom of establishment
In response to a preliminary reference from a Hungarian court, the CJEU clarifies that Regulation 2019/452 (“FDI Screening Regulation”) applies only to direct investments by foreign companies, and determines that a prohibition decision based on a broad screening mechanism may violate the freedom of establishment. In 2020, the Hungarian Minister of Innovation and Technology prohibited the acquisition of the raw materials extraction company Janes es Tarsa (“JeT”) by construction materials company Xella Magyarország (“Xella”). Since Xella is indirectly owned by a top holding company registered in Bermuda, the acquisition was seen as a risk to the security of supply of these strategic raw materials, as stated by the minister. Xella challenged this prohibition decision before the national court, which had to assess whether there this infringes the FDI Screening Regulation and/or the provisions on free movement.
First, the CJEU determines that the FDI Screening Regulation does not apply in this case, as it only covers foreign direct investments and Xella is a Hungarian undertaking. Although the regulation provides that the ownership structures of the acquiring party can be taken into account, the CJEU clarifies that this pertains to whether the investor is (in)directly controlled by the government of a third country.
Since Xella, as a Hungarian undertaking, is prohibited from acquiring a shareholding in another EU company, the CJEU concludes that there is a restriction on the free movement of establishment. Such a restriction is only permissible if justified. According to the CJEU, the protection of public order and/or public security can serve as justification only in the case of a genuine and sufficiently serious threat to a fundamental interest of society. The CJEU has previously found justifications in cases involving companies providing public services in the petroleum, telecommunications, and energy sectors. In the case at hand, the CJEU finds that the objective of ensuring the security and continuity of supply to the construction sector does not constitute a public security reason. Moreover, the CJEU does not consider the risks outlined by the minister to be plausible, as Xella already purchases 90% of JeT, and the market value of these raw materials is relatively low compared to the transport costs, so that it is unlikely they would be withdrawn from the Hungarian market.
Overview highlights merger cases
By its decision of 25 September 2023, the Commission prohibited Booking Holdings’ (“Booking”) acquisition of online travel agent (“OTA”) Flugo Group Holdings AB (“eTraveli”). The Commission finds that this acquisition of the ‘best-in-class’ flight OTA enables Booking to strengthen its dominant economic position on the hotel OTA market and further expand its ecosystem of travel services. It considers that, as the first step in planning a trip, a flight OTA acts as an important customer acquisition channel and generates significant traffic for Booking’s website(s). Additionally, Booking is already active in the market for metasearch services, primarily through its price comparison platform KAYAK. The Commission considers that the acquisition would thus enhance network effects and raise barriers to entry and expansion in the hotel OTA market, potentially resulting in higher prices for hotels and consumers.
During the second-phase investigation, Booking proposed to display a ‘carousel’ of offers from various competing hotel OTAs (“Carousel”) on the confirmation page after booking a flight. Given that the Carousel would only be displayed on the flight confirmation page (and therefore does not exclude other cross-sell opportunities), and would be driven by Booking’s own, non-transparent KAYAK algorithm, the Commission found that the Carousel did not fully address its concerns and subsequently decided to prohibit the acquisition altogether. Booking has already announced that it will appeal the prohibition decision.
* Bas Braeken, Demi van den Berg and Jade Versteeg represented an OTA in formulating its objections to this transaction.
Following an extensive Phase II-investigation (see also CF Q4 2022), Broadcom was given green light to acquire VMware, yet subject to conditions. Broadcom is mainly active in hardware (such as Fibre Channel Host-Bus Adapters (“FC HBAs”), Network Interface Cards and storage adapters). VMware is a provider of virtualisation software that can be used with a wide range of hardware, including Broadcom’s hardware.
In the second-phase investigation, the Commission found that the transaction would restrict competition in the global market for the supply of FC HBAs. To address the Commission’s concerns, Broadcom committed that competitor Marvell Technology and other potential future competitors would have access to the source code of FC HBAs for ten years. In doing so, Broadcom committed that the FC HBAs it now offers will remain interoperable with VMware virtualisation software. In view of the Commission, this sufficiently addresses its competition concerns.
Rotterdam court upholds € 82 million cartel fine for cigarette manufacturers
On 18 July 2023, the Rotterdam District Court declared the appeals of Philip Morris, JT International, British American Tobacco and Van Nelle Tabak against the tobacco cartel decision of the ACM, unfounded. In 2020, the ACM imposed fines on the four cigarette manufacturers for exchanging information on future prices of cigarette packs through wholesalers. By asking wholesalers for future price information from competing manufacturers and/or not objecting to receiving this information, the ACM found there was a concerted practice aimed at restricting competition in the Dutch cigarette market.
In their appeals, the manufacturers challenge, inter alia, the existence of a concerted practice, a single and continuous infringement, and a restriction of competition by object. According to the manufacturers, the excise tax system makes the market highly regulated and transparent, and there was a legitimate reason to provide the future price lists to wholesalers. The court rejects all of these arguments and endorses the ACM’s view that this does not prevent the qualification of a restriction of competition by object and the seriousness of the violation. According to the ACM and the court, the core of the infringement consists of maintaining a practice of indirect information exchange, thereby removing uncertainty in the market.
The manufacturers also objected against the amount of the fine imposed by the ACM and the way the ACM conducted its investigation. The court does not follow these arguments either. However, the manufacturers’ argument that the ACM wrongly applied the 2009 Fining Guidelines when the 2007 Penalty Code was in force for part of the infringement period does succeed. Since the application of the old policy rules would nevertheless not have led to a more favourable result for the manufacturers, the court still declared the manufacturers’ appeal unfounded in its entirety.
Television manufacturer LG receives a fine of nearly € 8 million for resale price maintenance
After Samsung, the ACM has now also decided to impose a fine of nearly € 8 million on television manufacturer LG for influencing resale prices of seven large retailers of LG televisions. LG provided retailers with a recommended price and monitored whether retailers adhered to the recommendation. It did this partly by monitoring retailers’ price comparison websites and web shops. LG was also tipped off by competing retailers. When a retailer maintained a lower price than the recommended price, LG contacted the relevant retailer via email or Whatsapp and urged him to adjust the different price to LG’s desired level. According to the ACM, LG hereby coordinated the consumer price level for LG televisions in the Netherlands and tried to prevent price drops.
According to LG, the price recommendations were in fact, only recommendations. LG also argued that it did not exercise coercion and did not offer incentives to actually adjust the price to the recommended price. The ACM nevertheless held that exercising coercion and giving incentives are not imperative in order to induce retailers to adhere to the ‘recommended price’, as they trusted other retailers to do the same. This secured their margins.
When calculating the fine, the ACM took into account as an aggravatig circumstance that LG systematically and frequently intervened in the pricing of televisions over a long period of time; almost three years. As a mitigating circumstance, the ACM does consider the lack of coercion and/or incentives and that it has not previously imposed a fine for resale price maintenance during the infringement period. While Samsung was fined for a similar infringement in 2021, LG’s infringement period had already ended by then. Finally, the ACM sees reason to further mitigate the fine due to the particularly long period (almost two years) between the investigation report and the fining decision. This eventually resulted in a fine of € 7.9 million.
Court confirms multi-million fine for Valve over geo-blocking
The General Court recently confirmed the fine imposed by the Commission in 2021 on Valve – the company behind the video game platform Steam – for engaging in geo-blocking practices with five game publishers: Bandai Namco, Capcom, Focus Home, Koch Media (now Plaion) and ZeniMax. The fines in total amount to almost € 8 million. The game publishers decided not to challenge their fines.
According to the Commission’s decision, these game developers restricted cross-border sales of PC video games by placing territorial restrictions on certain PC games. By doing so, they tried to prevent PC games from being bought in countries where prices were lower, notably the Baltic States and some countries in central and eastern Europe, while subsequently being played elsewhere.
According to the General Court, the Commission correctly concluded that there was an agreement or concerted practice having the object of restricting trade between Member States. The geo-blocking therefore did not pursue an objective of protecting the copyright of the game publishers, as Valve argued. The General Court stressed that although copyright intends to ensure that the holders thereof can commercially exploit their protected material – for example, by licensing it – it does not guarantee them the opportunity to claim the highest possible remuneration or to artificially create price differences by partitioning national markets. That is irreconcilable with the internal market. The General Court dismisses the action brought by Valve.
ACM fines traffic sign cartel
On 20 July 2023, the ACM fined traffic sign manufacturers Brimos and Agmi for fixing prices in four different tenders for the production of traffic signs. The National Guide Signing Service (an alliance of the different government bodies in the Netherlands, in Dutch: Nationale Bewegwijzeringsdienst) regularly calls for tenders from a number of companies to produce traffic signs. In 2020, Brimos and Agmi agreed on the prices they would charge in their tenders prior to submitting them. They also discussed who should win which tender.
Brimos reported the agreements to the ACM through a leniency application and was therefore granted a complete exemption from a fine of € 135,000. Following dawn raids by the ACM, Agmi also submitted a leniency application and cooperated in a simplified settlement procedure. Agmi was therefore granted a 60% reduction of the fine and ended up paying € 56,000.
Commission imposes € 1.2 million fine on Diehl for participating in hand grenade cartel
The Commission has imposed a € 1.2 million fine on defence company Diehl for participating in a cartel in military hand grenades. Diehl and competitor RUAG entered into market-sharing agreements for 14 years, and sought mutual consent to conduct business within each other’s territories. This fine is the first in the defence sector, serving as a clear signal that cartelisation will not go unpunished, even within strategic sectors amidst shifting geopolitical dynamics. Notably, the Commission has deviated from the standard method of calculation in its Guidelines, and has imposed a higher fine to create a stronger deterrent effect.
The investigation into this cartel began after RUAG applied for leniency with the Commission in mid-April 2021. After the Commission conducted a dawn raid on Diehl on November 13, 2021, Diehl also applied for leniency. As RUAG was the first to file a leniency application, it escaped a fine of approximately € 2.5 million. Diehl received a 50% reduction. This is a significant reduction, but justified by the timing of Diehl’s cooperation and the extent to which it provided essential evidence, according to the Commission. Moreover, the Commission reduced the fine by 10% due to the acknowledgement of involvement and liability by both cartel participants in this regard. This is in line with its Notice on Settlement Proceedings in Cartel Cases.
Jan Linders becomes franchisee of Albert Heijn subject to commitments
ACM, decision of 31 August 2023
In its decision of 31 August 2023, the ACM declared the commitments of Albert Heijn and Jan Linders, relating to a proposed cooperation, binding. The two supermarket chains entered into a cooperation agreement on 13 December 2022 as a result of which Jan Linders will operate its stores as a franchisee of Albert Heijn. Additionally, Jan Linders will sell its distribution centre to Albert Heijn. Furthermore, as part of the franchise agreement, Albert Heijn is selling ten shops to Jan Linders to be operated as Albert Heijn franchises; this acquisition has already been approved by the ACM.
During the informal investigation into the cooperation agreement, the ACM raised potential competition risks in several local markets within the catchment areas surrounding five Jan Linders supermarkets. For the purpose of a quick resolution and to avoid further investigation, Jan Linders agreed to sell the five supermarkets in question to competitors. Moreover, Jan Linders and Albert Heijn will not operate these divested supermarkets for a period of ten years. One of these shops will continue as a Spar franchise, the sale of the remaining four shops to Jumbo has already been approved by the ACM.
ACM reduces fine Leadiant for excessive pricing of CTX-drug by over € 2.5 million
In its decision on objection of 22 June 2023, the ACM reduced the fine imposed on pharmaceutical company Leadiant by over € 2.5 million. In 2021, the ACM fined Leadiant over € 19.5 million for charging excessive prices for its drug ‘CDCA-Leadiant,’ which is a life-saving drug for patients suffering from the rare metabolic disease cerebrotendinous xanthomatosis (“CTX”). Where the first CDCA-based drug (Chenofalk) was sold by Leadiant for € 46 per package in 2008, the price for the CDCA-Leadiant launched in 2017 amounted to € 14,000 per package (representing € 153,300 per patient per year). As Leadiant was granted the exclusive right to supply a CDCA-based drug in the European market from June 2017 to December 2019, and no alternative medicines were available during that period, the ACM concluded that Leadiant held a dominant position, and had abused this position by the excessive and unfair price of € 14,000 per package.
In its objection, Leadiant argues, inter alia, that there was a collective boycott on the part of health insurers, that the ACM used incorrect calculation methods, and that the ACM wrongly included the prices of the earlier versions of the CTX-drug in its assessment. The ACM did not accept these arguments. Although the ACM took into account the required investments and financial risks involved with Leadiant’s exclusive right, it concludes that any calculation method would result in an excessive and unfair price. The ACM does, however, accept the argument that between 1 April 2018 and 26 July 2018, a magistral (pharmacy-prepared) version of the CDCA-drug was also available in the Netherlands, which means that Leadiant was not dominant during that period. This leads to an adjustment of the established infringement period, and thus, the total amount of the fine.
European Commission re-imposes fine on Intel after annulment by General Court
The Commission has re-imposed a fine on Intel for the company’s abuse of its dominant position in the market for computer chips. Intel, one of the largest producers of computer chips, gave rebates to computer manufacturers on the condition that they would buy (almost) all of Intel’s chips. In addition, Intel paid them to halt or delay the launch of specific products containing chips of competitors, so-called ‘naked restrictions’.
The abuse was previously identified and fined by the Commission: it already fined Intel for € 1.09 billion in 2009. However, this decision was overturned by the General Court in January 2022. The General Court held that the Commission had made an incomplete analysis regarding the conditional rebates so that it could conclude that this practice brought about (potential) anticompetitive effects. The General Court subsequently held that, because of the partial annulment of the decision in so far it relates to the conditional rebates, it was not in a position to establish the amount of the fine relating to the ‘naked restrictions’. The General Court therefore annulled the fine in its entirety.
The Commission has now imposed a new fine on Intel of € 376 million which only relates to the ‘naked restrictions’. The appeal against the General Court’s judgment annulling the decision on the conditional rebates is still pending before the CJEU.
Breach of data protection rules can be taken into account when assessing competition law infringements
In response to preliminary questions referred by a German court, the CJEU rules that a (national) competition authority must take into account any decision or investigation by the competent data protection authority. In 2019, the German competition authority, the Bundeskartellamt (“Bka”), decided that Meta Platforms Ireland (“Meta”) abused its dominant position on the market for social networks by collecting and combining data about Facebook users’ activities inside and outside its social network. Users had to accept these terms and conditions in order to use Facebook. By collecting, using and merging this data, Meta violated the General Data Protection Regulation (“GDPR”) and also abused its dominant position, according to the Bka. Meta contested this decision before the German court, who questioned whether the Bka – as part of its investigation into the abuse of dominance – was entitled to test whether the data processing violated the GDPR.
The CJEU ruled that a competition authority, in this case the Bka, may be required to check whether certain conduct complies with legal standards other than those concerning competition law, including the GDPR. In doing so, the Bka does not take the place of the authority supervising the GDPR, as it only assesses the compliance with the GDPR to determine whether there is an abuse of dominance. However, the CJEU stresses that consultation and sincere cooperation between competition and data protection authorities is crucial. If the data protection authority has already taken a decision on the conduct in question, the competition authority should not deviate from it.
Court assumes international jurisdiction against Apple and declares a foundation inadmissible
The District Court of Amsterdam intends to refer preliminary questions to the CJEU on the relative jurisdiction of national courts in situations where different national courts have relative jurisdiction at the same time. In this case, foundations RCJ, ASC and CCC brought collective actions, so-called WAMCA claims, against Apple for charging (too) high commission rates in the Apple App Store and the fact that in-app payments could only be made through Apple’s own payment system. According to the foundations, these practices violate Articles 101 and 102 TFEU.
RCJ, ASC and CCC represent the interests of consumers and/or app developers. RCJ was the first to issue its writ of summons on 4 October 2021, which initiated the three-month period for filing a competing class action. The second foundation, ASC, and third foundation, CCC, issued their writs of summons later, after those three months. Only ASC, however, had requested an extension of the three-month period. The court held that this extension did not have general effect, so that it could therefore not be invoked by CCC. The court consequently held that CCC had no cause of action.
The court further assumed international jurisdiction based on the Handlungsort and the Erfolgsort, because the place of the harmful event could be located in the Netherlands. Although commission fees are charged in the App Store worldwide, the existence of a Dutch App Store demonstrates that there is a Dutch market. Even if the geographical market in which the abuse of dominance is implemented is broader than (just) the Netherlands, the Dutch court has jurisdiction as part of that market, the court said. Moreover, Apple deliberately targeted the Dutch market by setting up several storefronts, including the one in the Netherlands (Handlungsort). The place where the damage occurred is also in the Netherlands for Dutch consumers (Erfolgsort).
The court is, however, less certain about its relative jurisdiction. The underlying consumers represented by the foundations are spread all over the Netherlands and there is no concrete indication pointing to a single district court. Since Article 7(2) of the Brussels I bis Regulation simultaneously designates the absolute and relative competent court, this would mean that possibly every district court in the Netherlands would have relative jurisdiction, which would not benefit procedural economy and efficiency. The court is therefore considering asking the CJEU for some guidance on this issue.
European Commission designates six gatekeepers under the DMA
On 6 September, 2023, the Commission officially designated six gatekeepers under the Digital Markets Act (“DMA”). Under the DMA, gatekeepers are companies that have consistently provided a core platform service over at least the past three years, that serves as an important gateway for business users to reach end users. This is presumed to be the case if the undertaking has at least 45 million monthly active end users and 10,000 yearly active business users within the EU. Additionally, a gatekeeper must have a size that impacts the internal market, which is presumed at an annual turnover in the EU of € 7.5 billion, or a market value of € 75 billion, while also providing a core platform service in at least three Member States. Core platform services include, for example search engines, online social networking services, web browsers, operating systems and online intermediation services such as app stores.
Alphabet, Amazon, Apple, ByteDance (TikTok), Meta and Microsoft have all been designated as gatekeepers for various core platform services. Collectively, they offer a total of 20 core platform services that must comply with the DMA’s rules of conduct and obligations. The primary goal of these rules is to foster an open and fair European digital market (outlined in our blog of 22 December 2022). The DMA imposes both positive obligations, for example in the context of interoperability and data portability, as well as negative obligations, including bans on self-preferencing and the combining of personal data. Also, gatekeepers must inform the Commission of any proposed concentration in the digital sector. These designated gatekeepers have until 6 March 2024 to align their services and behaviour with the provisions of the DMA.
It’s worth noting that the Commission decided not to classify Apple and Microsoft as gatekeepers in relation to Apple’s messaging service (iMessage) and Microsoft’s web browser (Bing), following protests by the two tech giants. The Commission initiated market surveys to further assess the arguments presented by Apple and Microsoft in that regard. Furthermore, the Commission is investigating whether Apple should be designated as a gatekeeper for its iPadOS, despite that this service does not meet the quantitative criteria from the DMA mentioned above.
The Trade and Industry Appeals Tribunal (“CBb”) recently declared American Express’ and Visa’s appeal against the annulment of the order subject to penalty payments imposed on Mastercard and ICS inadmissible. By decision of 22 October 2020, the ACM imposed an order subject to penalty payments on Mastercard and ICS for charging excessive interchange fees for handling transactions within a four-party payment card scheme with co-branding partner Bijenkorf. In first instance, the court ruled that the interchange fees paid by ICS to Bijenkorf and Mastercard to ICS were not covered by the Regulation on interchange fees for card-based fees and therefore did not have to comply with the maximum fee of 0.3% of the transaction value per transaction set by that regulation. Since this case involved four parties as well as a co-branding partner, the Regulation was not applicable as such, and exceeding the 0.3% limit for payments to co-branding partners did in this case not lead to consumer harm, the court said.
American Express and Visa appealed the annulment of the order subject to penalty payments. In its recent ruling, the CBb declared the appeal inadmissible as the Bijenkorf Card had since then been cancelled and, thus, there was no longer a violation. Enforcement action is therefore no longer possible, according to the CBb.
Outsourcing to call centres does not preclude liability for unfair trading practices during marketing calls
The Rotterdam District Court recently upheld the € 400,000 fine imposed by the ACM on energy supplier DGB for conducting unfair trading practices during phone calls made by call centres on behalf of DGB. In an attempt to recruit more consumers, DGB decided to actively target sales to consumers through telemarketing calls. The court agreed with the ACM that essential information was not provided during these call, or was provided too late. For example, the commercial purpose of the call was not always disclosed. Also, it was not always clear on whose behalf the call centre agent was calling and information regarding the product, any associated actions, and the right of withdrawal was not provided or was provided too late. All this information should be provided to the consumer right at the beginning of the marketing call, and telemarketers should not slowly entrap consumers by providing faulty information, the court said.
DGB argued that the ACM wrongly attributed the conduct of the commissioned call centres to DGB. The court disagreed and ruled that DGB was aware of the practice, or in any case, could have been aware. Moreover, as could reasonably be required of a legal person, DGB enjoys a duty of care to supervise the call centres and prevent the conduct in question. The fact that DGB had outsourced customer acquisition to a call centre does not affect DGB’s liability under the Dutch Drijfmest-criteria, the court said.
For all your questions regarding (EU) competition law, bureau Brandeis would be happy to assist.