Renfe: commitment decision online train ticket sales in Spain
On 17 January 2024, the Commission closed an investigation into Renfe, Spain's national train operator, with binding commitments. The Commission suspected Renfe of abusing its dominant position due to its dual role as a train operator and Mobility as a Service (MaaS) provider. Renfe allegedly excluded competing ticket sellers, including other MaaS platforms, from access to their full ticket offerings and real-time mobility data. To address the Commission's concerns, Renfe made some commitments that have now been made binding:
- from 29 February 2024, Renfe must give competitors access to its entire ticket offering and all real-time mobility data;
- no unfair, unreasonable or discriminatory conditions may be imposed that make access more difficult; and
- new content, dates and technical changes should be announced well in advance.
In March, the Commission fined Apple more than €1.8 billion for abusing its dominant position in the market for the distribution of music streaming apps to iPhone and iPad users ("iOS users"). According to the Commission, Apple hindered music streaming app developers from informing iOS users about cheaper subscriptions outside the App Store (so-called "anti-steering" clauses).
Apple is the sole provider of an App Store that allows developers to distribute apps to iOS users in the European Economic Area. Apple sets the conditions app developers must meet to offer their services through the App Store. The Commission found that Apple banned app developers from:
- Inform iOS users about subscription prices outside the App Store;
- indicate within the app price differences between subscriptions through Apple and alternative options elsewhere;
- include links that allowed users to navigate to cheaper alternatives outside the App Store.
It said these clauses were unfair and harmed app developers and consumers alike. The measures resulted in higher subscription costs and limited choices for iOS users. In addition, users often had to actively search for alternative subscription options themselves, which reduced ease of use. In addition, the practices may have led to higher prices for music streaming subscriptions, as app developers passed on Apple's commissions to consumers. At the same time, users were discouraged from considering alternative and often cheaper options, which negatively impacted their freedom of choice.
Apple commitment to allow competitors access to 'tap-and-go' technology
On 11 July 2024, the Commission accepted a binding commitment from Apple to open up iPhones' 'tap and go' technology to competitors. The Commission accused Apple of abusing its dominant position by denying competitors access to near-field communication (NFC) technology, allowing Apple Pay to favour itself. NFC is a wireless communication technology that allows devices such as smartphones, payment cards and other NFC-compatible devices to exchange data over a short distance, usually no more than 10 centimetres.
Apple's commitments include:
- free access to NFC technology for payment app developers;
- the ability for users to easily set up a default payment app; and
- extension of payment options to other certified terminals.
The commitments have a 10-year term. Apple has said that Apple Pay and Apple Wallet will remain available, alongside the new options for developers.
Servier - "pay-for-delay" remains relevant in the pharmaceutical industry
Servier is the maker of the drug perindopril, which is used against certain cardiovascular diseases. Around the year 2000, the patent for the active ingredient in perindopril expired, but Servier applied for a new patent (EP 947) relating to the manufacturing process of perindopril. This patent was granted in 2004.
A number of generics manufacturers - who also wanted to use the active ingredient of perindopril in medicines - argued that patent EP 947 should not have been granted and initiated several proceedings against the aforementioned patent. Eventually, Servier entered into a settlement agreement with these generics manufacturers. In this agreement, it was agreed that the generics manufacturers would not challenge patent EP 947 further, and that Servier would pay the generics compensation for this.
Initially, the General Court annulled some of the infringements identified by the Commission including the abuse of a dominant position by Servier as well as one particular settlement agreement with the company Krka. However, on appeal, the Court reversed the majority of these earlier decisions (27 June 2024) only referring one settlement agreement back to the General Court for closer review.
Google Adsense and Google Shopping
A victory and defeat in one year for the Commission in its competition law battles with Google will presumably have caused mixed feelings at the Commission. On the one hand, the CJEU on appeal upheld the General Court's earlier decision on Google Shopping, but on the other hand, the General Court ruled that the fine in the AdSense case could not be upheld.
- Google Shopping: In the Google Shopping case, the European Commission accused Alphabet (Google's parent company) of artificially favouring its own price comparison service "Shopping" at the expense of other price comparison services. This was classified as abuse of a dominant market position under Article 102 TFEU, upon which Alphabet was imposed a record fine of €2.42 billion. Google's price comparison service was given a prominent position at the top of search results. At the same time, price comparison services from other providers were actually placed lower in the rankings.
With this ruling (10 September 2024), the Court addresses the important question of whether self-preferencing can constitute an abuse of a dominant position. The Court rules that such a strategy can be abusive, but each case will have to be assessed on its individual circumstances. The decisive factor here is the effect of this behaviour, namely whether the practice is likely to have negative effects on competition.
- Google AdSense: Google operates an advertising platform called AdSense, through which it has developed various online advertising intermediation services. One of these services is AdSense for Search ("AFS"). AFS enabled publishers of websites with integrated search engines to display ads related to users' searches. This allowed publishers to receive a share of the revenue generated by these ads. To use AFS, publishers with sufficient revenue could, among other things, enter into a 'Google Services Agreement' ("GSA") with Google. However, these GSAs contained clauses that restricted or even prohibited the display of ads from competing services.
The Commission initiated proceedings and claimed that these clauses could exclude competing services from AFS. Although Google has since removed or amended the clauses in question, this did not prevent the Commission from imposing a fine. However, the General Court (18 September 2024) found that the Commission made errors in assessing the duration of the various clauses and the relevant market. As a result, the clauses did not lead to an abuse of a dominant position in the sense of Article 102 TFEU.
On 18 July 2019, the European Commission fined Qualcomm over €242 million for violating Article 102 TFEU. Qualcomm was accused of abusing its dominant market position by supplying mobile telecommunications chips below cost to two major customers between 1 January 2009 and 31 December 2011 with the aim of distorting competition.
Qualcomm appealed, arguing that:
- It had incorrectly defined the market by not using a SSNIP test;
- The benchmarks used for the price-cost test were incorrect;
- There was no intention to squeeze competitors out of the market;
- The Commission had not applied an "as efficient as" test.
The General Court rejected all these arguments on 18 September 2024 and ruled as follows::
- The SSNIP test is not the only method to delineate a market;
- The benchmarks used worked in Qualcomm's favour;
- Qualcomm's intent is irrelevant to a finding of abuse;
- The "as efficient as" test had indeed been carried out as part of the price-cost test.
Although the General Court endorsed the Commission's substantive arguments, it reduced the fine to a little less than €240 million, because the Commission had departed from its own 2006 fining guidelines in calculating the original fine.
The Court closed an important chapter in the long-running Intel saga in October 2024. On 24 October 2024, after 15 years of legal battle, the Court finally annulled the €1.06 billion fine imposed by the Commission on Intel in 2009. For overview, a short timeline of all court proceedings in the case:
2009: Commission fines Intel €1.06 billion for abusing its dominant market position by giving illegal rebates to computer manufacturers.
2014: The General Court dismisses Intel's first appeal.
2017: the court annuls the 2014 General Court decision and refers the case back.
2022: The General Court annuls the section on Intel's rebates in the Commission's decision and sets aside the €1.06bn fine.
2023: The Commission imposes a new lower fine of €376 million on Intel for violating market rules between 2002 and 2006. Intel's anti-competitive practices consisted of payments to three computer manufacturers (HP, Acer and Lenovo) to delay or stop the launch of specific products with competitors' x86 CPUs and to restrict the available sales channels for these products.
2024: The Court finally dismisses the Commission's appeal against the General Court's 2022 decision, confirming the annulment of the original fine of €1.06 billion.
The Court's final judgment concerns the allegation of abuse of a dominant position by Intel in the market for x86 microprocessors by, among other things, offering loyalty discounts to customers. In its ruling, the Court confirms that the granting of loyalty rebates by a dominant company may fall under Article 102 TFEU, but that the Commission is obliged to examine whether these rebates actually restrict competition. This is particularly true if the company can demonstrate, with evidence, that its behaviour had no negative impact on competition.
The court stressed that the Commission should not only examine the dominance and rebates themselves, but also assess whether the strategy is intended to exclude competitors. Furthermore, the Commission justified the contested discounts as potentially harmful to competition on the basis of the "as efficient as" test, which showed that even an equally efficient competitor would not be able to make the required supplies without incurring losses. On this criterion, the Court held that it plays an important role in assessing whether there is an abuse of a dominant position, but is not necessarily required for all rebate schemes. If the Commission does decide to rely on the test to reach certain conclusions, it needs to conduct the test properly.
Teva and Vifor misuse of patent applications and badmouthing competitors
The Commission penalised Teva on 31 October 2024 with a fine of €426.6 million for abusing the patent application system. Teva holds several patents for the active ingredient of the drug Copaxone, which is used worldwide for the treatment of Multiple Sclerosis. However, Teva tried to extend the duration of the patents artificially, with the aim to prevent generic pharmacists from marketing Copaxone as well, which would ensure a lower (consumer) price. Teva used the following strategies which the Commission found abusive:
- Abuse of patent application process: As the original patent neared expiry, Teva filed several successive patent applications. These additional patents focused on aspects such as the manufacturing process and dosage schedule, creating a complex network of secondary patents. Competitors challenged these secondary patents, but in the meantime Teva maintained these patents. If Teva was about to lose one of the proceedings, Teva would strategically withdraw the patent to avoid a formal declaration of invalidity, which could have set a precedent for other patents. The result of this tactic was long legal proceedings, high costs, and - ultimately - an artificial extension of the duration of the patents;
- Slander campaign: Teva also disseminated misleading information about the safety, efficacy and therapeutic equivalence of the rival drug.
This second type of behaviour was also investigated by the Commission in the Vifor case, which lead to a commitments decision. Vifor was the main supplier of intravenous iron medicines and launched a disparagement campaign aimed at healthcare professionals to convince them that a rival drug from Vifor’s main competitor would be less effective. Vifor offered to publish a rectification campaign as well as refraining from making disparaging statements about the rival drug in the future.
Fine for tying Facebook Marketplace and unfair terms of trade
By the end of the year (14 November 2024), the Commission fined Meta (Facebook's parent company) over €797 million for linking its online advertising service Facebook Marketplace to its personal social network. The fine also covered the unfair trading conditions that Meta imposed on online ad service providers.
The Commission found that Meta linked Facebook Marketplace to Facebook by automatically giving all Facebook users access to, and regular exposure to, Facebook Marketplace, regardless of whether they wanted to use it. It also found that Meta imposed unfair trading conditions on other advertisers. Meta did this by using used ad data from other online advertising services on its platforms, such as Facebook and Instagram, exclusively for the benefit of Facebook Marketplace.
The Commission's decision seems to fit into a broader trend of stricter scrutiny at the intersection of competition and data protection law. Similar to the case against Facebook in Germany in 2019, authorities increasingly seem to be cracking down on practices where dominant platforms use their market power to collect and use consumer data in ways that restrict competition.
In May 2024, the Commission fined Mondelēz, the producer of well-known brands such as Oreo, Milka and Toblerone, €337.5 million for impeding cross-border trade in chocolate, biscuits and coffee products within the EU. The Commission found that Mondelēz engaged in two types of anti-competitive practices.
First, between 2012 and 2019, Mondelēz restricted the territories and customers to which seven wholesale customers (traders/"brokers") were allowed to resell its products. One agreement even instructed customers to charge higher prices for exports than for domestic sales. These practices affected all EU markets. In addition, between 2006 and 2020, Mondelēz prevented 10 exclusive distributors in certain EU member states from answering sales requests from customers in other member states without prior consent. These arrangements also affected all EU markets.
The Flavors and Fragrances case has shown (once again) how costly it can be to delete digital traces during a competition law investigation. Flavors and Fragrances was fined €15.9 million by the Commission on 24 June 2024 for deleting WhatsApp messages during an inspection carried out in March 2023. During an unannounced inspection by the Commission, a senior employee of the company deleted WhatsApp chats with a competitor that contained business information.
The Commission regards these actions as a serious breach of the duty to cooperate. Companies are required by law to cooperate fully with competition investigations and may not destroy or withhold relevant evidence. Flavors and Fragrances acknowledged the violation and cooperated extensively in the follow-up investigation. As a result, the original fine was reduced by 50%.
In 2019, the Portuguese competition authority fined 14 banks for violating competition rules. The banks allegedly agreed on prices and strategies in the credit sector; particularly in the area of home loans. The Portuguese competition authority categorised the conduct as an agreement having the object of restricting competition. The Portuguese court subsequently referred questions to the Court for a preliminary ruling and the Court ruled on 29 July 2024.
The case revolved around an extensive, monthly information exchange between competing credit institutions in highly concentrated markets with high barriers to entry. This exchange concerned sensitive data, including current and future commercial conditions (such as credit spreads and risk variables) and individualised production figures of the parties involved.
The court now rules that such an information exchange must be categorised as an agreement that restricts competition by object.
The Commission on 23 October 2024 fined the Czech and Austrian railways (ČD and ÖBB respectively) €48.7 million for colluding with the goal to restrict competition. The two railway companies allegedly colluded to prevent new market entrant RegioJet from buying used wagons, which severely restricted competition in the rail passenger transport market.
It signalled that ČD and ÖBB:
- Strategised the sale of used wagons so that RegioJet remained sidelined;
- ÖBB's sales procedures manipulated so ČD could buy the wagons instead of RegioJet;
- Agreed on alternative buyers for wagons in which ČD was not interested, as long as it was not RegioJet;
- Exchanged confidential information about bids and the interest of other potential buyers.
On 28 November 2024, the Commission handed down a fine in the fashion sector. French fashion house Pierre Cardin and its largest licensee, German company Ahlers, were jointly fined €5.7 million for violating EU competition rules
Pierre Cardin and Ahlers had entered into agreements between 2008 and 2021 to restrict cross-border sales. They banned other licensees from selling to consumers in Ahlers' territories and to retailers with low prices, such as discounters. The aim was clear: to ensure absolute territorial protection for Ahlers. What makes this case special is the distribution of the fine. Ahlers, as a licensee, was fined €3.5 million more than Pierre Cardin itself, which has to pay €2.2 million.
