EU Competition Law Enforcement Vis-À-Vis Exploitative Conducts in the Data Economy Exploring the Terra Incognita

90 Pages Posted: 5 Jun 2018

See all articles by Marco Botta

Marco Botta

Max Planck Institute for Innovation and Competition

Klaus Wiedemann

Max Planck Institute for Innovation and Competition

Date Written: May 24, 2018

Abstract

This paper analyses the enforcement of EU competition law vis-à-vis exploitative conducts by dominant online platforms. Firstly, it looks at the case law of the Court of Justice of the European Union (CJEU) concerning excessive and discriminatory pricing, as well as unfair contract clauses under Art. 102 TFEU. Afterwards, the challenges faced by National Competition Authorities (NCAs) and the EU Commission in investigating exploitative conducts in data markets are discussed with a view to the CJEU case law. Finally, the paper looks at potential remedies that NCAs and the EU Commission could design in relation to exploitative conducts in data markets. The paper does not discuss the definition of the relevant market and the issue of market power of online platforms.

It is argued that the data economy is characterized by a number of market failures that, in principle, justify EU competition policy intervention. Contrary to a view expressed in the literature, the authors argue that EU competition law should be enforced in digital markets, in spite of the overlaps with data protection and consumer law. In particular, it is argued that these three policy areas pursue different goals, have different scopes of application and different enforcement structures.

Consequently, in spite of their “family ties”, one policy area should not prevent the enforcement of the others. At the same time, the authors recognize that – in view of the CJEU case law – Art. 102 TFEU should only be enforced vis-à-vis exploitative conducts in exceptional circumstances – i.e. in relation to “super dominant” online platforms and in markets characterized by high and stable entry barriers. Secondly, the paper argues that in view of the existing CJEU case law on excessive and discriminatory pricing, the NCAs and the EU Commission would face a very high burden of proof to sanction these practices in data markets. At the same time, the enforcement of Art. 102 TFEU might indeed be expected as regards unfair contractual terms. The current investigations by the Bundeskartellamt in the Facebook case and the recent Facebook/WhatsApp merger case could indicate a new enforcement trend to this regard. Finally, in terms of remedies, the paper argues in view of the lack of precedents in this area that NCAs and the EU Commission should conclude behavioural commitments with dominant online platforms, rather than imposing financial penalties coupled with cease and desist orders. In particular, when designing these remedies, the NCAs and the EU Commission should take into consideration the new General Data Protection Regulation (GDPR), in order to fill the gaps in the current regulatory system via behavioural commitments.

This is a working paper and, as such, subject to change.

Keywords: EU competition law; Art. 102 TFEU; excessive pricing; discriminatory pricing; unfair contractual clauses; exploitative abuse; data markets; data-driven economy; digital economy; data protection law; General Data Protection Regulation; GDPR; privacy paradox

Suggested Citation

Botta, Marco and Wiedemann, Klaus, EU Competition Law Enforcement Vis-À-Vis Exploitative Conducts in the Data Economy Exploring the Terra Incognita (May 24, 2018). Max Planck Institute for Innovation & Competition Research Paper No. 18-08. Available at SSRN: https://ssrn.com/abstract=3184119 or http://dx.doi.org/10.2139/ssrn.3184119

Marco Botta (Contact Author)

Max Planck Institute for Innovation and Competition ( email )

Marstallplatz 1
Munich, Bayern 80539
Germany

Klaus Wiedemann

Max Planck Institute for Innovation and Competition ( email )

Marstallplatz 1
München, Bayern 80539
Germany

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