Marc Abenhaïm Sidley Austin LLP 19 September 2014 LIDC Congress 2014 – Torino Marc Abenhaïm Sidley Austin LLP 19 September 2014

Introduction “New” practices online may, or may not, distort competition. However, divergent regulatory approaches to one and the same type of business practices online do distort competition within the internal market. The same online practices necessarily call for uniform – or at least consistent – regulatory responses across the 28 Member States. Whether new practices online distort competition depends on the content of the contractual terms, their objectives, their economic and legal context, the nature of the goods or services affected, as well as the market structure (see ECJ, 11/09/2014, Groupement des Cartes Bancaires, para. 53) Platform ban: a clause prohibiting a distributor from selling the contract goods/services via a particular online platform/websites.

My problem today: Online practices, pan-European economic models & different regulatory approaches: what stimulates competition, what distorts it?

Outline Divergent regulatory approaches between national competition authorities: the case of MFC clauses Divergent responses between national competition- like provisions and Art. 101 TFEU: the example of online reverse auctions

Divergent regulatory approaches to MFC clauses MFC clauses: definition(s) The online booking cases – a regulatory “patchwork” The German approach: one prohibition decision, currently under appeal, and a parallel investigation into the same practices The UK approach: one negotiated outcome, also currently under appeal Other Member States : multiple investigations underway

Divergent regulatory approaches to MFC clauses Considerable scope for divergent approaches to: the decision to intervene; the substantive legal analysis; the type of procedure; and the possible outcomes. Internal market objective & need for consistency Consistency and Art. 11(6) Reg. 1/2003. Consistency and case allocation. Consistency and Art. 11(6) Reg. 1/2003: the initiation of proceedings by the Commission automatically relieves Member States of their competence; this is “essential” to the consistent application of EU law (Recital 17 Reg. 1/2003). Consistency and case allocation : Commission particularly well placed “if one or several agreement(s) or practice(s), including networks of similar agreements or practices, have effects on competition in more than three Member States”. (Notice on cooperation within the network, point 14)

Divergent regulatory approaches to MFC clauses Divergences & consequences: if, for one and the same issue, regulatory approaches vary across Member States, the online booking industry might be forced to move away from a single, pan-European economic model, towards… a fragmented network of different terms & conditions. Consistency and Art. 11(6) Reg. 1/2003: the initiation of proceedings by the Commission automatically relieves Member States of their competence; this is “essential” to the consistent application of EU law (Recital 17 Reg. 1/2003). Consistency and case allocation : Commission particularly well placed “if one or several agreement(s) or practice(s), including networks of similar agreements or practices, have effects on competition in more than three Member States”. (Notice on cooperation within the network, point 14)

Reverse auctions: divergence between national law & EU competition law Online reverse auctions (or “E-procurement”) Definition Pro-competitive aspects Art. L 442-10 French Commercial Code provides for the nullity … ... of agreements potentially compatible with Art. 101 TFEU

Reverse auctions: divergence between national law & EU competition law Compatibility with Art. 3(2) of Reg. 1/2003? The principle: an agreement authorized under Art. 101 TFEU may not be prohibited under national law, and vice versa. The exception: national legislation, which protects other legitimate interests “[i]n so far as such national legislation pursues predominantly an objective different from that of protecting competition on the market.” Does Art. L 442-10 “predominantly” pursue an objective different from that of competition?...

Is this all really doing any good for the EU’s internal market? Conclusion Various competition authorities are tackling the same issue, and the Commission has no obligation to take up the case… National “specificities” potentially conflicting with Art. 101 TFEU… Is this all really doing any good for the EU’s internal market?

Thank you. Marc Abenhaïm Sidley Austin LLP 19 September 2014