European Commission and English Competition and Markets Authority open two proceedings against Facebook
With a press release dated June 4, 2021, the European Commission announced that they have opened an investigation into Facebook, for two conducts amounting to a potential breach of Articles 101 and/or 102 TFEU.
The first relates to a potential unfair use of advertising data (among which information on users' preferences) provided by classified online ads platforms which advertise their services on Facebook and with which the latter directly compete within certain markets, such as online classified ads services through its platform Facebook Marketplace.
The investigation will clarify whether Facebook unfairly uses data gathered from competing platforms to benefit Facebook Marketplace to the disadvantage of the latter.
The second conduct detected by the Commission relates to a potential illegitimate tie-in of the online classified ads service (Facebook Marketplace) to the Facebook social network, into which it is embedded and that could give a competitive advantage in reaching new customers, foreclosing potential competitors.
On the same date, the English Competition and Markets Authority (CMA) opened an investigation into Facebook for a potential abuse of a dominant position in the markets of social media or digital advertising services.
Similarly, the proceedings are aimed at assessing whether Facebook has unfairly used data collected while providing digital advertising services and from the so-called "single sign-on option" (the service that allows Facebook users to sign into other websites, apps and services through Facebook log-in details) to benefit its platforms akin to Facebook Marketplace and Facebook Dating.
The Commission and the CMA have predicted cooperation during the respective investigations. After Brexit, the proceedings might represent an interesting testing ground of future mutual dependence between the EU and UK antitrust proceedings.
A new chapter of the relationships between intellectual property rights and antitrust: ICA opens investigation into Roxtec for alleged abuse of dominance
With a decision of April 13, 2021 published on June 14, 2021, the Italian Competition Authority (ICA) has opened an investigation into Roxtec Italia Srl and the parent company Roxtec AB, for an alleged abuse of a dominant position in breach of Article 102 TFEU.
The ICA suspects that Roxtec, previously the holder of a patent relating to multi-diameter fairlead modules, has been carrying out certain conducts which may potentially distort competition to prevent competitors from producing and marketing the aforementioned products, even following the expiry of the patent (which happened in 2010).
According to the ICA's assumptions, Roxtec, even though exploiting in principle legitimate administrative and judicial proceedings, used them in a pretextual way to implement an exclusionary plan aimed at maintaining a substantial monopoly in the market after the expiry of its industrial property right. The ICA investigation will establish whether Roxtec:
- lodged with the European Union Intellectual Property Office multiple applications for registration of EU trademarks, whose pretextual and specious character is inferred by the ICA because some were following declared invalid by the EUIPO Board of Appeal;
- filed specious legal claims against potential new competitors, letting its customers know of the ongoing claims;
- obtained several safety certifications to make potential competitors bear massive investments not necessary to enter the market.
The deadline of the proceedings has been set for April 30, 2022.
European Commission publishes preliminary report of its consumer Internet of Things sector inquiry
On June 9, the European Commission published a Report presenting the preliminary results of its competition sector inquiry into markets for consumer Internet of Things (IoT) related products and services.
The evidence brought by the Report – which gathers information and contributions received by the Commission from several players of the sector – mainly relates to:
- the characteristics of consumer IoT products and services;
- the features of competition in these markets; and
- the main areas of potential concern in relation to the functioning of consumer IoT markets.
With reference to the first issue, the European Commission has detected a rapid growth of the Internet of Things markets and in particular of so-called voice assistants.
With reference to the second issue, many participants to the inquiry have pointed out that technology investment costs constitute the main barriers to entry in the markets at issue, in particular within the voice assistants segment. With reference to the latter sector, many respondents have highlighted the difficulties in competing with the vertically integrated undertakings, that, in addition to the provision of the main mobile devices, are the principal providers of voice assistance services, thus building an ecosystem with which services and products provided by competitors hardly manage to operate and integrate.
Among the main competition concerns, the Report has detected the following:
- the presence of tying and exclusivity conducts which hamper the possibility to use competing services on the same device;
- obstacles to the relationships with end-users, due to the intermediation of voice assistants and operating systems which restrict the user's possibility to discover and use competing services;
- obstacles to the interoperability, mainly due to the prevalence of proprietary technologies, technological fragmentation and a lack of applicable common standards.
The Report presenting the preliminary inquiry will be subject –to a public consultation to which any interested parties can participate until September 1, 2021. The Commission's aim is to publish the final Report in the first half of 2022.
European Commission approves EUR800 million Italian scheme to support companies in the context of COVID-19
With a press release of June 8, the European Commission announced that it has approved, as part of the "Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak," the EUR800 million scheme, notified by Italy, addressed to companies performing priority projects under so-called "Development Contracts," which are administered by the National Agency for Inward Investment and Economic Development S.p.A. (Invitalia).
The Commission found that the aid measures notified by Italy complied with the EU state aid rules as they are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107, par. 3, lett. b) TFEU or to fight the health crisis, in line with Article 107, par. 3, lett. c) TFEU.
The aid scheme will provide support to companies of all sizes and active in all sectors – except the financial, primary production of agricultural products, fishery and aquaculture, construction, insurance and real estate sectors – affected by the effects of the COVID-19 outbreak, so they can direct their activities to research and production of essential products to address the health emergency.
The aid measures will include:
- direct grants and loans up to EUR1.8 million per company;
- direct grants for COVID-19 pandemic related research and development (R&D);
- direct grants and repayable advances for testing and upscaling infrastructures which contribute to the development of coronavirus relevant products; and
- direct grants and repayable advances for the production of COVID-19 relevant products.
The state aid will be granted by December 31, 2021.
French Autorité de la Concurrence fines Google for abuse of dominant position in the market for online advertising
With decision n. 21-D-11 of June 7, 2021, following a settlement procedure, the French Autorité de la Concurrence fined Google EUR200 million for having abused its dominant position in the market for advertising servers for publishers of online sites and mobile applications. The proceeding was initiated after complaints made by several editors who monetize the content of their websites and mobile applications through the advertising technologies offered by Google.
The Autorité found that Google entered into two distinct conducts aimed at favoring both its Doubleclick for publishers (DFP) ad server, which allows editors to publish ads on websites and applications and to manage the sale of advertising space, and its platform for the sale of advertising space, Doubleclick AdExchange (AdX), where publishers wishing to sell advertising space and potential buyers meet through special bidding mechanisms between the prices proposed by advertisers.
Firstly, according to the findings of the proceedings, the DFP ad server provided information on the price offered by competing platforms for the sale of advertising space to AdX, which used such information to optimize the bidding process for the sale of advertising space.
Secondly, the AdX platform was only partially interoperable with DFP's competing ad servers. Indeed, Google had imposed technical and contractual limitations on the access to AdX by customers of third-party ad servers, to the detriment of publishers who use AdX but not the Google ad server.
With its settlement decision, the Autorité, in addition to the fine, made the commitments submitted by Google mandatory for a duration of three years. Those are mainly aimed at:
- improving the interoperability between the DFP ad server and third-party platforms for the sale of advertising spaces to ensure effective competition between the AdX platform and the competing platforms for the sale of advertising space; and
- guaranteeing real-time access to the AdX platform for publishers who use third-party ad servers.
Originally Published 1 July 2021
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