Presentation given during the 2016 Summer School on Internet Law organized by the University of Geneva

1. Dr. Adrien Alberini
LL.M. in Law, Science & Technology (Stanford)
Swiss Qualified Lawyer (Geneva)
INTERNET L@W
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Giants / Fights
Antitrust intervention?

3. Fundamentals
Online sale of
products
Online
services
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Flipped
classroom
Team work
Focus on EU law
Some references to US law
Global best practices

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Low prices
(short term)
Innovation
(long term)
Protection of competition
Tension

7. 3setsofsubstantiverules
Unlawful
agreements
Abuse of
dominance
Merger control
Substantive assessment:
Negative effect?
Positive effect?
 Economic analysis
Main tool:
market definition
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P PP P
D
d
C
e-book price
conspiracy

9. • Dominant position
• Ability to behave independently in the market
• Abuse of a dominant position
• 2 types of strategies: exploitation or exclusion
• Legitimate business reason
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Notification
triggered by
thresholds
(generally in
terms of
turnover)
Gun jumping
Assessment
Corrective
measures
Merger
Acquisition of
sole or joint
control
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11. • Strong administrative
enforcement (EU Commission,
national agencies, ECN)
• Limited private enforcement
EU
• Administrative enforcement
(FTC, DOJ)
• Strong private enforcement
US
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12.  Tangible products
 Digital goods
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Retailer 1
(France)
Retailer 2
(Italy)
Retailer…
(Germany, UK,
etc)
Selective distribution - physical space and presence of a qualified
pharmacist required (= no sales over the internet)
Assessment
Negative
impact?
Positive
impact?
Cosmetics and
personal care
products

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Retailer 1 Retailer 2 Retailer…
Selective distribution - physical space and presence of a qualified
pharmacist required (= no sales over the internet)
Limitation of
cross-border
sales within
the EU
Restriction
by object
No objective
justification
Cosmetics and
personal care
products
Pierre Fabre
(ECJ, C-439/09)

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What solution would you suggest in order to
take into consideration the interests of the
supplier?

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 Imposition of a graphic charter providing a visual
representation of the products in accordance with
their brand image
 Control of content of website
 Control of adequate stock to ensure satisfactory
delivery deadlines
 Obligation of having a physical outlet
 Minimum turnover in physical outlet
 Open issues:
 Dual pricing?
 Prohibition of sales on online auction
platforms such as eBay?

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Assessment
Negative
impact?
Positive
impact?
Publisher Publisher Publisher
d d
These clauses require publishers to inform Amazon about more favorable or
alternative terms offered to Amazon’s competitors and/or offer Amazon similar
terms and conditions than to its competitors, or through other means ensure that
Amazon is offered terms at least as good as those for its competitors.

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Difficult for
distributors
to compete
Stifling of
innovation
Publisher Publisher Publisher
d d
These clauses require publishers to inform Amazon about more favorable or
alternative terms offered to Amazon’s competitors and/or offer Amazon similar
terms and conditions than to its competitors, or through other means ensure that
Amazon is offered terms at least as good as those for its competitors.
Investigation by EU
Commission

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 Search engine
 Social network

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Note: FTC closed the case

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 Prominent display of own specialized web search services

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What is/are the relevant market(s)?
Think about the different market players
Think about the different services
Is Google dominant?
Think about actual/potential competitors
Think about Google’s features

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Advertisers
What is/are the relevant market(s)?
Users
Google search engine
Payment /
Display of ads
No free lunch!
Market for
specialized
search
services
Market for
search
advertising
Interactions

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Is Google dominant?
Google
search
engine
90%
market
share
Top
algorithm
Network
effects
Brand
loyalty

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What is the impact of Google prominently
displaying itsown specialized web search
services?
Think about access to users by Google
competitors

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Advertisers
What is the impact of Google prominently
displaying its own specialized web search
services? Exclusion of competitors?
Users
Google search engine
Market for
specialized
search
services
Market for
search
advertising
Competitors

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Prominent display of own specialised web search
services - Links to three rival specialised search
services?

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Situation:
FB grows, incumbent company
Start-up companies develop products and
services based on FB (use of FB on their own
websites)
FB redesigns its website and blocks
technologically the access to its website
Start asking yourself: Why is FB doing this?
Hint: think of FB’s business model

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 Facebook v. Power Ventures (N.D. Cal., 2010)
 Power Ventures business model
 Integration of all social networking
contacts into a single site (Power.com)
 Scrapping information off FB and display
on Power.com
 FB alleges:
 Violation of terms of services
 Violation of state and federal statutes
 Note: FB asks users to provide it with
information to access third party websites (e.g.
gmail)…
 Antitrust counterclaim: refusal to deal with rival,
design of website to be incompatible with
competitors, refusal to enable data portability

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Sambreel Holdings v. Facebook (S.D. Cal. 2012)
Sambreel business model
Development of PageRage, a user-
installed browser plug-in that
customizes the display of FB’s pages
Sambreel alleges:
Organization by FB of advertiser
boycott
Removal of plug-ins to access FB
Sambreel claims antitrust violation

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What is/are the relevant market(s)?
Think about the different market players
Think about the different services
Is Facebook dominant?
Think about actual/potential competitors
Think about FB’s features
Hint: draw a parallel with the Google case

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Advertisers
What is/are the relevant market(s)?
Users
Social network
Payment /
Display of ads
No free lunch!
Market for
social
network?
Market for
non-search
advertising?
Interactions

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Is FB dominant?
FB social
network
Market
share?
Network
effects?
Brand
loyalty?
Dynamic markets?

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Facebook v. Power Ventures (N.D. Cal., 2010)
Sambreel Holdings v. Facebook (S.D. Cal. 2012)
Antitrust claims dismissed

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 Policy:
 No general prohibition of powerful
position on the market
 Surgical strikes by competition authorities
 Practice:
 Assess potential antitrust issues in relation
to all online strategies, deals, contracts,
T&C, etc.
 Always think from an economic
perspective / Understand the impact of
practices
 Antitrust means high risks, but is also a
powerful weapon

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