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Week Recap 2

Christophe Carugati

11 Oct 2022

In this week's recap, Big Tech won court challenges, Microsoft/Activision sounds like a data-driven merger, Germany might release a new merger control law, and Vestager spoke again about fairness.

Big tech Victory

Antitrust decisions with big fines often hit the news. But not this week. Courts in Italy and France overruled two major cartel cases.

In Italy, the Italian competition division launched in 2020 a cartel investigation against Apple and Amazon. It found in 2021 that they allegedly colluded through restrictions on sales of Apple and Beats products on Amazon and fined them millions of euros. The appeal Court completely annulled the decision for procedural reasons: the competition division did not give enough time to the parties to defend themselves—a problem of procedural fairness.

In France, the French competition division imposed in 2020 on Apple the highest fine of its history—1.1 billion euros—after more than 8 years of investigations. It found that Apple and two of its wholesalers allegedly colluded through restrictions in Apple’s distribution network of electronic products, except the iPhone, including agreements on price-fixing, and a division of products and customers. It also considered that Apple allegedly abused the situation of dependency on its trade partners by imposing unfair conditions. It is no longer the highest fine. The appeal Court substantially reduced the fine by 2/3 to 372 million euros, mainly due to the overruled of the price-fixing agreement.

A new data-driven merger

The EU competition division does not only care whether gamers could still play the famous Activision game call of duty on Microsoft Xbox and Sony PlayStation. But it also cares whether Microsoft could use Activision’s user data to develop new games. For sure, it could use data of my favorite military clothes from call of duty to develop a clothing simulator game—not sure it is the same audience, though.

Germany loves antitrust bills

When it comes to the innovation of rulemaking on digital competition, Germany is the frontrunner. Since 2017 and the 9th amendment of the German competition Act on merger control that introduced the transaction-value threshold and new criteria to assess market power in digital markets, the German government proposed not less than two additional amendments. First, the famous 10th amendment in 2021 imposed a list of interdictions on large online platforms. Second, the proposed draft 11th amendment in 2022 would introduce a market investigation tool allowing the German competition division to impose changes like its British counterpart. It might be a way to circumvent the restrictions of the DMA on national authorities to impose further obligations on designated gatekeepers. But it is not the end. Recently, a working group on merger control in the digital age suggested adapting merger control again to the digital economy through stricter requirements. “The Working Group on Competition Law has also looked into possible solutions to the current problems faced by merger control in the digital age. The introduction of stricter merger control rules for companies with paramount significance across markets could be an expedient approach, as was recently also stated by the Association of German Jurists. Stricter merger control in the digital sector could reasonably complement the extended abuse control rules (Section 19a GWB) which came into effect in early 2021.” What stricter rules mean, I do not know. Still, I will think about it around German beers and spirits—perhaps the secret to innovate on digital competition regulation (the rapporteur of the DMA at the Parliament is also German, by the way).

Vestager spoke again about fairness

The commander in chief of the EU competition division reminded us in Prague that fairness is an objective of competition law. Yes, competition laws deal with fairness. But we already knew that for a while. She repeated several speeches that dated back to 2018. A German would have been perhaps more innovative.

Some news about the website

I completely refreshed the website. I hope you like the new design. I also added a tracker of digital antitrust cases in Europe. Contributions and feedback are welcome. Feel free to share short sarcastic articles, data, and your events in Brussels.

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