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The Evolution of Classical Evaluation Standards in Competition Law: The Legal Assessment of Tying in View of Challenges Raised by Digital Markets

100%

Musielak M.

Studia Prawa Publicznego

2021

vol. 3

issue 35

113-139

This paper provides a detailed review of evaluation standards for the legal assessment of tying. This practice, which constitutes an abuse of a dominant position, is a significant breach of competition law. The mechanism of this type of abuse is based on taking advantage of market power in the supply of one product to create packed offerings capable of precluding competition from superior rival solutions. Tying occurs when one product, the “tying product”, is sold only with another product, the “tied product”. In the prevailing number of cases, tying serves to consolidate the company’s dominant position on the tied product market, which usually aims to share the tying product’s large customer group with the less-desired product. However, tying is not illegal per se. In many cases, it does not lead to any anti-competitive concerns, and might be beneficial for consumers. This is why each assessment of this conduct must be carefully evaluated with special attention given to the effects, in accordance with the generally applied effect-based approach, and also potential efficiencies. An analysis of the case-law and literature reveals the basic mechanisms for conducting a legal assessment of tying. However, the use of these mechanisms will not be possible without their adaptation to the ongoing changes caused by technological development. Digital markets not only generate incremental revenues, but are also the sources of new or unusual legal arrangements. It will more frequently be the case that existing provisions will not be able to address every new practice accurately without new acts. The Digital Markets Act aims to adapt the existing legal framework to contemporary market realities and to become a modern tool for enforcing competition law rules on digital markets. The European Commission is seeking to broaden its powers to intervene at the earliest possible stage, before an undertaking affects the competition on a market.

The Role of Economic Efficiency in Competition Law

85%

Jurczyk Z.

Yearbook of Antitrust and Regulatory Studies

2017

vol. 10(16)

107-126

The main focus of the paper is the function of economics in the current application of competition law. While advocating further economization of the law, it is seen as necessary to widen the extent to which aspects of economic efficiency encompassing static and dynamic efficiency are taken into consideration in an antitrust analysis. Much attention is devoted to these issues, while clarifying what is meant by them, how they are to be understood and implemented in the practice of antitrust authorities, as well as discussing their importance for the promotion of innovation. It is noted that accounting for the economic efficiency aspects differently in the light of competition law allows for the assessment of the market behavior of dominant companies, which traditionally has been seen as anticompetitive. This main issue of the paper is analyzed extensively and explained using the case of Microsoft, a company accused by the US and EU antitrust authorities of abusing its dominant position on the market of operating systems in that it integrated the sale of its base product Windows OS exclusively with other applications (Media Player and Internet Explorer). The differences presented in the research part of the paper as to the way Microsoft was treated by these authorities originated in their different methodology of analysis and assessment of the effects of the sales model launched by Microsoft for products offered to the PC manufacturers and their users, in spite of the US and EU antitrust authorities adopting the same evaluation standard – consumer welfare. Aspects of dynamic efficiency adequate in the assessment of the behavior of innovative firms holding a dominant position proved to be deciding. On the other side of the Atlantic, taking into account the aspects of dynamic efficiency was crucial in coming up with a lighter assessment of Microsoft’s tying compared to the European authorities’ assessment which was based largely on the structural analysis, where the benefits arising from dynamic efficiency are not visible. It is clear from the decisions made by the Commission that it favours regulation over effects generated by competition forces at a later time.

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The Evolution of Classical Evaluation Standards in Competition Law: The Legal Assessment of Tying in View of Challenges Raised by Digital Markets

The Role of Economic Efficiency in Competition Law