Platforms under the spotlight – recent cases and a new consultation on the cards
Published on 7th Oct 2015
As demonstrated by the Commission’s focus on platforms as part of the Digital Single Market initiative, the importance of platforms as gatekeepers to internet services has been a hot topic. We see this reflected in investigations across the EU, covering a range of practices.
Restrictions on online sales via third party platforms
Car manufacturers (Germany) – April 2015
The BKA is investigating suggestions that Ford Motor, Opel and PSA Peugeot Citroen are employing restrictions on how their vehicles are sold on internet platforms.
The case follows the Seinheser case, where Seinheiser dropped its practice of refusing to supply online platforms after the BKA launched an investigation into the restrictions.
Cartel conduct through use of online platforms
In 2012 the Lithuanian competition authority fined 29 tour operators for agreeing that they would cap the discount offered over the third party booking plat-form (RE-Turus) at 3%. The authority analysed the arrangement as a series of resale price maintenance restrictions.
Europe’s highest court is now considering whether this conduct might also constitute a collaboration between competitors, amounting to a cartel (May 2015).
When using third party platforms, companies should be alive to the risk that co-ordination of anti-competitive conduct could lead to a finding of a cartel, exposing them to fines. In some countries, the individuals involved may also be liable to director disqualification and even personal criminal liability.
Most Favoured Nation (MFN) and price parity clauses
When looking at the conduct of platforms, MFN clauses – particularly in respect of pricing – are high on the list. This is because they can dampen competition between the platforms, with the potential to increase prices for consumers.
Numerous investigations into the use of price parity clauses by hotel online booking providers have been undertaken by national competition authorities across Europe. Such investigations have resulted in several of these providers, including Booking.com, making binding commitments to remove some types of price parity clauses (which mean that hotels must not offer rooms at rates lower than those shown on the price comparison sites) from their contracts.
The willingness of these providers to make such commitments has led to several competition authorities ending their enquiries, with the UK CMA suspending its investigation while it monitors the situation. However, there is still no consensus across Europe on the compliance of price parity clauses with competition law and this will continue to be an area to watch.
New investigation into E-books price parity (EU)
In the latest investigation into e-books, the European Commission has opened an antitrust investigation into MFN clauses in the agreements between Amazon and several book publishers, which the Commission says “seem to shield Amazon from competition from other e-book distributors”. These include clauses granting Amazon:
- the right to be informed of more favourable or alternative terms offered to its competitors; and/or
- the right to terms and conditions at least as good as those offered to its competitors.
Although there does not appear to be any allegation of collusion this time around, this is a good example of how MFNs can dampen competition, particularly in concentrated markets – and/or where MFNs are standard.