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Competition

Vestager accuses Apple of abusing its role as gatekeeper in music streaming market

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The European Commission accuses Apple of abusing their position as a gatekeeper in the music streaming market.

In its ‘statement of objections’ the Commission says music streaming app developers who want to reach Apple device users (iPhone, iPad) have to use Apple store and are charged a 30% commission fee on all subscriptions. They are also obliged to follow Apple’s ‘anti-steering provisions’, which limit developers from informing consumers of alternative purchasing possibilities outside of apps. 

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “Our preliminary finding is that Apple is a gatekeeper to users of iPhones and iPads via the App Store. With Apple Music, Apple also competes with music streaming providers. By setting strict rules on the App store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition. This is done by charging high commission fees on each transaction in the App store for rivals and by forbidding them from informing their customers of alternative subscription options.”

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Markus Ferber MEP, European People’s Party group spokesman on economic affairs welcomed the development: “There is always a big risk of abuse for a platform operator like Apple to give preference to its own services on its platform compared to competing services. 

“Apple has been using its App Store for a while to keep its competitors at bay by using dodgy contractual clauses and exorbitant fees. By making use of these anti-competitive practices, gatekeepers such as Apple are preventing true competition from emerging in the first place.”

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Long overdue

Ferber also called the Commission’s action long overdue: “It took years for EU competition authorities to get their act together. Apple’s competitors have had to take the hit in the meantime. We urgently have to move from ex-post competition enforcement to ex-ante prevention of market abuse. The Digital Markets Act can be a powerful tool in this regard.”

Competition

Competition: Commission publishes findings of evaluation of Market Definition Notice

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The European Commission has published a Staff Working Document that summarises the findings of the evaluation of the Market Definition Notice used in EU competition law.

The aim of the evaluation was to contribute to the Commission's assessment of the functioning of the Market Definition Notice, in order to decide whether to repeal the Notice, leave it unchanged or revise it.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “We need to analyze the market and the boundaries of the market where companies compete. The Market Definition Notice is very useful in that context. The evaluation has confirmed that it provides clarity and transparency to stakeholders on how we approach market definition. The basic principles of the Market Definition Notice, based on the case law of the EU courts, remain sound today. At the same time the evaluation indicates that the Notice does not fully cover recent evolutions in market definition practice, including those related to the digitalisation of the economy. We will now analyse if and how the Notice should be revised to address the issues we have identified.”

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The Commission launched the evaluation of the Market Definition Notice in March 2020. During the evaluation, the Commission collected evidence to understand how the Notice has performed since its adoption in 1997. The evidence collected includes, among others, contributions by stakeholders gathered in a public consultation that took place between June and October 2020. In addition, the Commission consulted the EU national competition authorities and proactively engaged with experts and representatives from stakeholder groups. Finally, the Commission requested an external evaluation support study, which reviewed relevant practices in other jurisdictions, as well as legal and economic literature, in relation to four specific aspects of market definition: (i) digitalization, (ii) innovation, (iii) geographic market definition and (iv) quantitative techniques.

The findings of the evaluation

The evaluation has shown that the Market Definition Notice remains highly relevant as it provides clarity and transparency to companies and other stakeholders on the Commission's approach to market definition - an important first step of the Commission's assessment in many antitrust and merger cases.

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The results of the evaluation indicate that the Market Definition Notice is effective in providing correct, comprehensive and clear guidance on key issues of market definition and on the Commission's approach to it.

At the same time, the evaluation also suggests that the Notice does not fully reflect developments in best practices in market definition that have taken place since 1997, including latest developments in EU case law. For example, the Commission has refined its approach to market definition in line with the prevailing market conditions, which today are increasingly digital and interconnected, and the sophistication of available tools, such as improved processing of large numbers of documents or refined quantitative techniques. Furthermore, since when the Notice was adopted, the Commission has also gathered more experience in analysing markets that are potentially global or at least broader than the European Economic Area.

 According to the evaluation, areas where the Market Definition Notice might not be fully up-to-date include: (i) the use and purpose of the SSNIP (small significant non-transitory increase in price) test in defining relevant markets; (ii) digital markets, in particular with respect to products or services marketed at zero monetary price and to digital ‘ecosystems'; (iii) the assessment of geographic markets in conditions of globalisation and import competition; (iv) quantitative techniques; (v) the calculation of market shares; and (vi) non-price competition (including innovation).

The Commission will reflect on the need and on how to address the issues that were identified in the context of the evaluation.

Background

Market definition is a tool to identify the boundaries of competition between undertakings. The objective of defining the relevant product and geographic market is to identify the actual competitors that constrain the commercial decisions of the undertakings concerned, such as their pricing decisions. It is from this perspective that the market definition makes it possible, among other things, to calculate market shares that convey meaningful information for the purposes of assessing market power in the context of merger or antitrust proceedings.

Market definitions reflect market realities. Therefore, they differ across sectors and may evolve over time. Geographic market definitions, for example, may range from national or local markets – such as for the retail sale of consumer goods – to global markets, such as for the sale of aviation components. As market realities evolve over time, the Commission's market definitions also evolve over time.

The Market Definition Notice provides guidance on the principles and best practices of how the Commission applies the concept of relevant product and geographic market in its enforcement of EU competition law.

More information

See the dedicated webpage of DG Competition, which contains all stakeholder contributions submitted in the context of the evaluation, summaries of the different consultation activities and the final report of the evaluation support study.

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Competition

Car companies fined €875 million for collusion against NOx removing technologies

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The European Commission has found that Daimler, BMW and the Volkswagen group (Volkswagen, Audi and Porsche) breached EU antitrust rules by colluding on technical development in the area of NOx cleaning. 

The Commission has imposed a fine of €875 million. Daimler was not fined, as it revealed the existence of the cartel to the Commission. All parties acknowledged their involvement in the cartel and agreed to settle the case.

Commission Executive Vice President Margrethe Vestager, in charge of competition policy, said: “The five car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions [but] they avoided competing on making use of this technology's full potential. Competition and innovation on managing car pollution are essential for Europe to meet our ambitious Green Deal objectives.” 

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The car manufacturers held regular technical meetings to discuss the development of the selective catalytic reduction (SCR)-technology which eliminates harmful nitrogen oxide (NOx)-emissions from diesel passenger cars through the injection of urea (also called “AdBlue”) into the exhaust gas stream. For over five years (2009 - 2014), the car manufacturers colluded to avoid competition using this new technology.

This is the first cartel prohibition decision based solely on a restriction of technical development and not on price fixing, market sharing or customer allocation.

Whistleblower tool

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The Commission has set up a tool to make it easier for individuals to alert it about anti-competitive conduct while maintaining their anonymity. The tool protects whistleblowers' anonymity through a specifically designed encrypted messaging system that allows two-way communications. The tool is accessible via this link.

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Competition

Competition: European Commission publishes 2020 Report on Competition Policy

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The European Commission has published a Report on Competition Policy for 2020, presenting the key policy and legislative initiatives undertaken last year, as well as a selection of decisions adopted. In 2020, EU competition policy significantly contributed to the Commission's efforts to respond to the coronavirus outbreak, both in terms of the healthcare emergency, as well as on its impact on the livelihoods of citizens. The state aid Temporary Framework, adopted at the beginning of the crisis, has enabled member states to use the full flexibility foreseen under State aid rules to support the economy in the context of the coronavirus pandemic. In the area of Antitrust, the Commission published a Communication providing guidance to companies cooperating on projects aimed at addressing supply shortages of essential coronavirus-relevant products and services, such as medicines and medical equipment.

Furthermore, despite the challenges brought forward by the changed working conditions, in 2020, the Commission took several decisions in this field, among which three cartel decisions and 5 antitrust ones. It has also launched an antitrust inquiry into the sector of Internet of Things (IoT) for consumer-related products and services in the EU. Also in the area of merger control, the Commission adopted over 350 merger decisions and intervened in 18 cases (including 13 mergers cleared subject to commitments in first phase and 3 cleared with remedies after a second phase). The Commission also adopted a proposal for a Digital Markets Act to addresses the negative consequences arising from certain behaviours by platforms acting as digital 'gatekeepers' to the single market, and published a White Paper, to develop tools and policies to better tackle the distortive effects of foreign subsidies in the internal market. The full text of the Report (available in EN, FR, and DE and other languages) and the accompanying staff working document (available in EN) are available here.

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