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Case Study European Union Law | Cijfer: 8,5
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Caste Study European Union Law 2021/2022 over de prohibition of cartels/abuse of a dominant position
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1.1 Within the European Union (EU) law, rules have been developed to discourage undertakingsfrom engaging in anti-competitive practices. Article 101 TFEU is an example of such a rule.
According to this article, conducts from undertakings that prevent, restrict or distort competition
within the internal market are prohibited. The legislator has set out several cumulative conditions
to examine whether a certain conduct constitutes a violation of Article 101 TFEU.
The first condition concerns the question whether the entities involved can be classified as an
undertaking. Case law explains that every entity engaged in an economic activity, regardless of the
legal status and the way in which it is financed, is considered an undertaking. 1 The term entity is a
broad concept under which natural persons, legal persons, liberal professions, States and public
bodies can be grouped. This is no different for Spotify and Amazon. The second part of the notion
describes that these entities must engage in an economic activity by offering goods or services on
the market in order to make profit. Spotify and Amazon are both active in a market in which digital
services are offered, namely the service to stream music. In addition, Spotify offers advertisers the
possibility to reach listeners through audio and video ads while they are streaming music. These
circumstances lead to the conclusion that both entities can be classified as undertakings.
Agreements between undertakings, decisions by an association of undertakings and concerted
practices are conducts falling within the scope of Article 101 TFEU. In the absence of the first two
forms, the latter offers a possibility when individualised commercially sensitive information has
been exchanged. For a concerted practice to be assumed, mental consensus amongst Spotify and
Amazon on mitigating the competition between one another must be present. This consent
presents itself in the purpose of their meeting which was served to share good practices on
consumer protection standards, future innovations in consumer choice and innovations in targeted
online advertising. In order to get the best input from Amazon during this meeting, Spotify directly
shared commercially sensitive information encompassing its data and insights on online
advertising. Amazons’ access to this information has subsequently led to a situation that is in
contrary to the normal blind bidding process. Amazons’ knowledge has given her an advantage in
comparison to the other bidders and encouraged her to bid in such a way to ultimately win 70 per
cent of Spotify’s ad space.
The collusiveness of a conduct reveals itself when it restricts competition either by object or effect.
Since the purpose of the concerted practice does not reveal a sufficient degree of harming the
competition in its wording, a restriction by object cannot be proven. This does not prevent this
third condition from being proven, because restrictions by object and restrictions by effect are
alternatives.2 In the hypothetical situation where the concerted practice between Spotify and
Amazon never has taken place, the blind auction would not differ from any other blind auction
organized by Spotify. Unlike the current situation, none of the bidders would have information on
the amount offered by other bidders. Such restriction by effect can however circumvent the
prohibition if the aggregate market share held by Spotify and Amazon does not exceed de minimis.
The Commission held that agreements between competitors do not appreciably restrict competition
if the aggregate market share does not exceed 10%. 3 This rule offers no solution, now that
Amazons market share of 10.3% exceeds this minimis independently.
Once the collusiveness of the concerted practice can be presumed, examined must be whether it
directly or indirectly, actually or potentially affects trade between Member States in an appreciable
manner.4 Trade involves all cross-border activities, under which online activities. These activities
are only capable of affecting trade appreciably when two cumulative conditions are met, the first
being that the aggregate market share of the undertakings concerned exceed 5% and their
aggregate annual Community turnover exceeds 40 million euro. 5 As noted, Amazons market share
on itself exceeds the minimis and had a revenue of over 13.9 billion euros in 2021.
_______
1
(Höfner and Elser) C-41/90, 23 april 1991, paras 21-22.
2
(Consten and Grundig) C-56/64 and 58/64, 13 july 1966.
3
Commission Notice, Notice on agreements of minor importance which do not appreciably restrict
competition under Article 101(1) of the Treaty of the Functioning of the European Union [2014] OJ
C 291, para 1.
4
(Société Technique Minière) C-56/65, 30 june 1966, para 249; (Consten and Grundig) C-56/64
and 58/64, 13 july 1966.
5
Commission Notice, Guidelines on the effect on trade concept contained in Articles 81 and 82 of
the Treaty [2004] OJ C 101, para 81.
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