No. 46: Scope of Article 102 TFEU: Protection of Competition or Protection of Competitors?

Details

Author(s):
  • Bianca Simina Duca
Publish Date:
June 7, 2020
Publication Title:
European Union (EU) Law Working Papers
Publisher:
Stanford Law School
Format:
Working Paper
Citation(s):
  • Bianca Simina Duca, Scope of Article 102 TFEU: Protection of Competition or Protection of Competitors?, EU Law Working Papers No. 46, Stanford-Vienna Transatlantic Technology Law Forum (2020).
Related Organization(s):

Abstract

The present paper aimed to tackle the question whether the goal of Article 102 TFEU [Treaty on the Functioning of the European Union] is to protect competition on the market or the competitors of the dominant undertaking. Since it is a rather difficult question which raises many issues, which even the responsible institutions rarely succeed in answering, a straightforward conclusion is difficult to draw.

The paper has presented an extensive background on the enforcement policy of Article 102 in the EU and the main theses revolving around the debate protection of competition v protection of competitors, with the aim of better understanding the approach of the European Commission and of the EU Courts in dominance abuse cases. It has been shown that the initial scopes of the rules on dominance abuse had little to do with such discussions. Instead, Article 102 has been used as an instrument to achieve certain political goals and to further promote and strengthen the internal market. The text of Article 102 alone says little about its aims. It is the inconsistent caselaw of the European Commission and of the EU Courts that has sparked the debate which represents the main topic of the present paper.

The European Commission has become aware of the fact that there are certain issues arising in cases involving Article 102, namely that such cases lack effects analysis, are not orientated towards achieving increased consumer welfare and seem to be more concerned with protection of competitors. Therefore, the European Commission, in 2005, has announced that it will pursue a more economic approach as regards Article 102 cases, meaning that the fining decisions will be based on thorough economic and market analysis. However, it seems that the results of this modernization process are yet to be delivered. The Microsoft decision issued shortly after the proclamation of the “more economic approach” is only one of the negative examples demonstrating an exact opposite approach.

Furthermore, the list of cases failing to demonstrate effects on the market seems to increase with the 3 recent Google decisions. The Google cases are also perceived as rather disappointing because the European Commission seems, once again, to be more concerned with protection of the competitors of the dominant undertaking, rather than pursuing an effects-based analysis of the alleged abusive conduct in question.

Indeed, it looks like Article 102 comes to protect (also) competitors, but it is unfair to say that it protects only competitors. It rather seems that the European Commission considers protection of competitors as an immediate, facile instrument for finding abusive conducts and not necessarily as a per se goal. Moreover, it is not unlikely that the enforcement policy of Article 102 is further influenced by various subsidiary goals. The Google decisions demonstrate this. Google is a big American tech company which poses some threats to the well-being of the European internal market and to the very existence of actual or potential competitors in the digital market. Issues like privacy and competition in the digital markets have been under the review of the European Commission for some time already. And the Google decisions have served their purpose, which is to demonstrate that the EU praises healthy competition on such markets, including the existence of competitors. After all, can we talk about competition where there are no more competitors left because the dominant undertaking has systematically driven these out of the market?