The Evolution of the Law and Policy on Tying: A European Perspective From Classic Leveraging to the Challenges of Online Platforms
(2016-2017) 26 Journal of Transational Law and Policy
46 Pages Posted: 6 Feb 2018 Last revised: 3 Apr 2018
Date Written: 2016
The abuse of market power by dominant firms continues to be one of the most controversial areas of EU competition law and tying is perhaps the most complex and intractable abuse. The European Commission investigation into suspected infringements of EU competition law by Google in relation to alleged tying practices concerning the Android open source operating system brings once again this abuse into sharp focus. In the Android case, the European Commission has a unique opportunity to clarify the test for tying. The EU case law is still, formally, adhering to a pre-Chicago understanding of tying resting on the simplistic idea that an undertaking dominant in market A can exclude competitors in market B if it forces customers buying A to buy also B. The weakness of this framework is that it lacks a robust assessment of the anti-competitive effects of tying and a realistic approach to the legitimate objectives that tying may pursue. This article demonstrates that the practice of the European Commission has moved on from such an approach and that even the EU Courts have never rejected a more sophisticated analysis of tying. Contrary to what the vast majority of commentators believe, in the assessment of tying under EU competition law, the European Commission has systematically taken into account the structural features of the tied market that make anti-competitive tying plausible and has carried out a thorough analysis of the anti-competitive effects of tying, which is two-fold: (1) first, tying must be likely to exclude equally efficient competitors from the tied market and, (2) second, it must be likely to lead to the acquisition, maintenance, or strengthening of market power on an affected market (the tying market, the tied market, or a related market). Finally, dominant undertakings are always permitted to plead in their defence that tying pursues a legitimate objective, is suitable to achieving such an objective, is the least restrictive way of doing so, and that the pro-competitive effects of tying outweigh its anti-competitive effects. Provided that the dominant undertaking adduces sufficient evidence to substantiate its defence, it is for the competition authority or claimant to prove that the tying under review is, on balance, anti-competitive. This analysis is fully consistent with the post-Chicago economic theories of tying and with the case law of the EU Courts on tying and on exclusionary abuses more generally.
Keywords: Tying, Online Platfroms, EU Competition Law, Antitrust Policy
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