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Digital Markets - Lecture 02

This document provides an overview of EU competition law and digital markets. It discusses the goals and legal framework of EU competition law, including the scope of its application. It also examines key concepts like undertakings, the internal market, and the single economic entity doctrine.

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31 views17 pages

Digital Markets - Lecture 02

This document provides an overview of EU competition law and digital markets. It discusses the goals and legal framework of EU competition law, including the scope of its application. It also examines key concepts like undertakings, the internal market, and the single economic entity doctrine.

Uploaded by

xiuyanglyu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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EU Competition Law and Digital Markets

dr. Miłosz Malaga


[email protected]

law.amu.edu.pl
A week in competition & digital markets

6 March 2024 –
The D(MA) Day
Overview of the course

1. Characteristics of digital markets and market actors


2. Primary rules and objectives of EU competition law
3. Specific competition challenges in digital markets and reactions in the light of
traditional legal framework
4. Specific competition challenges in digital markets: case studies (I)
5. Specific competition challenges in digital markets: case studies (II)
6. The Digital Markets Act: the need for specific regulation. Objectives and key concepts.
Social and economic role of digital services and online platforms regulation
7. The Digital Markets Act: specific obligations for gatekeepers
8. Competition rules in the Digital Services Act
9. Enforcement: general competition law, Digital Markets Act and Digital Services Act
10. Coherence and effectiveness of the new competition rules in digital markets
Internal market

Article 3 (3) TEU


The Union shall establish an internal market. It shall work for the sustainable development
of Europe based on balanced economic growth and price stability, a highly competitive
social market economy, aiming at full employment and social progress, and a high level of
protection and improvement of the quality of the environment. It shall promote scientific
and technological advance.

Protocol (no 27) on the internal market and competition


THE HIGH CONTRACTING PARTIES,
CONSIDERING that the internal market as set out in Article 3 of the Treaty on European
Union includes a system ensuring that competition is not distorted,
HAVE AGREED that:
To this end, the Union shall, if necessary, take action under the provisions of the Treaties,
including under Article 352 of the Treaty on the Functioning of the European Union.
This protocol shall be annexed to the Treaty on European Union and to the Treaty on the
Functioning of the European Union.
Internal market

Article 26 (2) TFEU


The internal market shall comprise an area without internal frontiers in which the free
movement of goods, persons, services and capital is ensured in accordance with the
provisions of the Treaties.
Goals of EU Competition Law

Since the creation of the European Union, competition policy has contributed to preserving
and fostering the Union’s economic prosperity. Vigorous competition enforcement has
served European consumers and customers – citizens and businesses – by empowering
them to make choices in the market place and benefit from innovative products and
services at affordable prices. It has helped nurture the dynamic and vibrant fabric of our
European economy, made up of entrepreneurs, start-ups and global industry leaders of all
sizes, from small and medium-sized enterprises (SMEs) to multinational conglomerates.
Communication from the Commission – A competition policy fit for new
challenges (18.11.2021)
https://ec.europa.eu/transparency/documents-
register/detail?ref=COM(2021)713&lang=en
Goals of EU Competition Law

Strong competition enforcement is fundamental for businesses and consumers to reap the
full benefits of our Single Market. It gives businesses of all sizes a fair chance to compete.
It makes sure businesses are challenged to deliver the best, most innovative solutions for
consumers.
And it gives customers a choice of products and services, contributing to reliable and
diverse supply chains.
That's why effective competition policy is needed now, more than ever, to give the
European economy the agility and drive to overcome the challenges it faces. At the same
time, competition rules have an in-built flexibility to adapt.
M. Vestager, https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6101
Goals of EU Competition Law

• Safeguarding allocation mechanisms in a market economy


• Safeguarding adequate quality / price relationship
• Providing safeguards against abuse of dominant positions by private companies in free
enterprise democracies
• Market integration by prohibition of export restrictions or excessive territorial protection
Legal framework

International standards (OECD, International Competition Network)


EU Law
• Anti-competitive agreements: Article 101 TFEU
• Abuse of dominant position: Article 102 TFEU
• Mergers: EU Merger Regulation
• State aid: Article 107 TFEU
National laws of EU Member States
National laws of other countries
Constraints on the use of competition policy as a major
instrument for economic regulation:

• The need for political stability


• The need for effective enforcement
• A system based on self assessment and ex-post enforcement
• The difficulties of using competition law in small open economies
Scope of application of EU Competition Law: ratione materiae

Same scope of application as the Treaty, but specific implementing


legislation in respect of agriculture and transport.
Scope of application of EU Competition Law: ratione loci

TFEU rules of competition apply to agreements and acts restricting


competition within the Common market (territoriality principle), but:
• the implementation test
• the qualified effects test
The Commission will mostly try to act against non EU companies by acting
against subsidiaries or branches in the EU.
In a merger control case, the Court of Justice of the EU clearly applied the
effects doctrine, which is now followed in the EU Merger Regulation.
Scope of application of EU Competition Law: ratione
personae
Undertakings:
• regardless of their legal structure
• acting as autonomous market operators

Agents:
• agents who bear no commercial risks are assimilated with the
principal
• while agents bearing commercial risk are market operators in their
own right
Undertaking

• No legal definition
• The Court’s case-law
• C-41/90 Hofner and Elsner
The concept of undertaking encompasses every entity engaged in an economic
activity regardless of the legal status of the entity and the way in which it is
financed.

• C-180/98 Pavlov
Any activity consisting in offering goods or services on a given market is an
economic activity.

• C-309/99 Wouters
[Competition rules] do not apply to activity which, by its nature, (…) does not
belong to the sphere of economic activity ot which is connected with the exercise of
the powers of a public authority.
Undertaking

• Functional approach
• Classification as an undertaking depends on particular activity
• C-49/07 MOTOE
• The classification as an activity falling within the exercise of public
powers or as an economic activity must be carried separately for
each activity exercised by a given entity.
Undertaking

• Engaged in an economic activity


• Offering goods or services on a given market
• No need for a profit-motive or economic purpose
• Regardless of the legal status of the entity and the way it is financed
• State entities
• Activities that are not economic
• Solidarity (social protection, e.g. social security, pensions,
health insurance, health care)
• Exercise of the powers of a public authority
• Procurement that is ancillary to a non-economic activity
Single Economic Entity

• Meaning
• The test of decisive influence
• Implications
• Agreement between SEE is not caught by Article 101 TFEU
• Parent company may be held liable for infringement conducted by its
subsidiary
• Also action for damages may be brought against the parent company or
subsidiary

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