COMPETITION & EU

The Grand Chamber seized the moment to further clarify (in line with its prior decision in Case C‑48/22 P, Google Shopping) that the Bronner line of case-law was “justified by the specific circumstances of that case, which consisted in a refusal by a dominant undertaking to give a competitor access to infrastructure that it had developed for the needs of its own business”.

Following this restatement of the case-law, the Court established that the strict indispensability criteria, developed in Bronner, applies whenever the infrastructure of the dominant undertaking: (i) was developed for the needs of its own business; and (ii) is owned by that undertaking.

As per the ECJ, if the infrastructure was developed not only for the needs of its own business but with a view to enable third-party undertakings to use it, the duty to provide access does not fundamentally alter the economic model underlying the development of that infrastructure and, hence, the imposition of an interoperability obligation may not have a chilling effect on companies’ incentives to invest in the development of high-quality products.

In essence, the Court found that the refusal by a dominant undertaking to ensure interoperability with a downstream competitor’s app may constitute an abuse, regardless of the fact that that platform is not indispensable for the app’s commercial operation on a downstream market, but is “such as to make that app more attractive to consumers, where that platform has not been developed by the undertaking in a dominant position solely for the needs of its own business”.

With regard to the analysis of anticompetitive effects, the Court restates its previous decisions (in Unilever and Servizio Elettrico Nazionale) and considered that it is not necessary to demonstrate that the conduct has, effectively, driven competitors out of the market and, hence, prove an actual exclusionary effect of rivals.

Rather, competition authorities must demonstrate, based on tangible evidence which establish beyond mere hypothesis, that the conduct in question is actually capable of producing such effects.

As such, the fact that Enel continued to be active on the market and grew its position, even though it did not benefit from such interoperability, does not in itself mean that the practice is incapable of producing anticompetitive effects, but rather may constitute evidence that the conduct was incapable of having such exclusionary effect.

All in all, the fact that the dominant undertaking’s competitor was not foreclosed from the market and even improved its position, while not being granted access to the infrastructure in question, does not constitute irrefutable evidence that the conduct is not capable of having an exclusionary effect, but is rather one of the elements that should be duly considered by competition authorities.

Furthermore, Google argued that the refusal to grant interoperability with its platform was objectively justified since it could compromise the security of the network, and, on the date of Enel’s request, there was no template for the category of apps in question, thus, Google was obliged to develop such a template.

In this vein, the Court endorsed the Advocate General’s Opinion and found that a refusal to ensure interoperability may be justified where to grant such interoperability would “compromise the integrity or security of the platform concerned, or where it would be impossible for other technical reasons to ensure that interoperability”.

However, the fact that there is no template for the category of apps concerned or the difficulties involved in its development “cannot in themselves constitute an objective justification for that undertaking’s refusal to grant access”.

That being said, the Court observed that under specific circumstances (e.g., technical difficulty, resources or regulatory constraints), the dominant undertaking may need to devote a reasonable period of time to develop the technical solutions necessary to ensure interoperability and that, up to some extent, may manage the priority of the requests received.

In addition, Article 102 TFEU allows the dominant undertaking to require an appropriate financial compensation (fair, proportionate and cost-oriented) from the undertakings requesting interoperability.

The ECJ’s Grand Chamber decision makes it clear that Article 102 TFEU applies to refusals to ensure interoperability with a downstream competitor’s app, irrespective of whether access to the platform is indispensable for the app’s commercial operation on a downstream market, provided that the infrastructure in question was designed to be open to third-party undertakings.

With respect to the analysis of foreclosure effects, the Court restated its recent case-law and considered that an exclusionary conduct is capable of having an anticompetitive effect, even though competitors remained active in the market and grew their position without the requested access.

Finally, a refusal may be objectively justified if granting interoperability would compromise the platform's security or integrity, or if there were technical obstacles that impede it. In the absence of those justifications, the dominant undertaking is obliged to develop, within a reasonable period of time, the necessary solutions to ensure interoperability and may charge an appropriate financial compensation (fair, proportionate and cost-oriented) from the undertakings requesting interoperability.