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BA (Honours) Business StudiesFinal Exam QuestionsTitle .docxwilcockiris
BA (Honours) Business StudiesFinal Exam Questions
Title: International Business Law I
Academic year: 2nd
Time allowed: 2h
Semester: 2
Date of Exam: 28 May 2020
Staff: Dr Alexandra von Westernhagen
Instructions: Closed book exam.
Material allowed:
Access to internet resources
Student Number :___________________________________________
Receipt of Submission
Date:
Student Number:
Signature of Student:
Exam Subject:
Invigilator:
Invigilator Signature:
50% Final written exam to assess the understanding and knowledge of the entire syllabus. This assessment addresses learning outcomes 4, 5, & 6.
I. EU business laws - General
1. What are the main difference between Directives and Regulations? (5%)
2. Business Laws EU: Name three different EU business laws (3%)
3. The internal market: Which are the four freedoms that belong to the internal market?(2%)
II. Competition Law in the Digital Era
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https://ec.europa.eu/competition/antitrust/cases/dec_docs/39740/39740_14996_3.pdf
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5. In your opinion, what are these remedies trying to achieve? (10%)
III. Public procurement
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http://www.legislation.gov.uk/uksi/2015/102/contents/made
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7. What is the main difference between the restricted and open procedure? (5%)
IV. State aid law
8. You have a company for IT software solutions in Belgium. The Belgium government would like to help you with your expansion plans. It therefore agrees to give you a credit at the annual rate of 5%. You think that the interest rate is rather high and enquire with Fortis and other banks whether they would give a credit under better conditions. Fortis Bank offers you a credit for the same term but for an interest rate of 7%. You go back to the Belgian government and take them up on their offer.
Is this in principle state aid? Why? Why not? (5%)
9. You own a small hospital in a rural area of Germany. Your clinic provides general health care services to the local population. Records show that there a no patients from other EU countries and also that there a no plans to open another hospital nearby.
The local council decides to provide you with EUR1 million for the refurbishment of your hospital? Is this state aid? Please cite the conditions of aid and answer in particular, whether this affects trade between EU member states. (5%)
Annex
1. SUMMARY Google Shopping Case
(1) In essence, the Decision establishes that the more favourable positioning and display by Google Inc. (‘Google’), in its general search results pages, of its own comparison shopping service compared to competing comparison shopping services, infringes Article 102 TF.
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130717 expert report of david franklyn and david hyman
1. 1
Review of the likely effects of Google’s proposed Commitments dated April 25, 2013
July 1, 2013
Professors David J. Franklyn ("Franklyn") and David A. Hyman ("Hyman")1
1. Introduction
Google has been charged with limiting choice in Internet search by (among other things) giving
Google’s services (including Google Shopping, Google Places and Google Flights) more
prominent page placement than it gives to its rivals in these areas. Google has proposed to settle
these charges by providing more prominent placement for selected competitors’ websites (“three
rival links,”) and by adding a label and disclosure that would indicate which services are and are
not provided by Google. The stated purpose of these proposals is to give consumers the option
to choose from among Google’s and rivals’ services.
We were retained by Clifford Chance, advisors to FairSearch Europe (hereinafter “Fairsearch”),
to render opinions in this matter as to the likely impact of Google's proposals on Internet
users/shoppers. To test Google’s proposals, we designed and conducted an online survey in the
United Kingdom which measured the likelihood that consumers would click on any of the
proposed “three rival links.” If consumers are not likely to click on the proposed three rival
links, then Google’s proposed remedy would not be likely to draw consumers to rivals and
therefore would not be likely to increase competition in these areas.
The survey also measured whether respondents recognized and understood Google’s proposed
label and disclosure. If consumers do not recognize and understand Google’s label and
disclosure, then they would not be likely to exercise a meaningful choice between Google’s
services and those offered by Google’s competitors.
As explained more fully below, we found that the three rival links, as proposed by Google, had
no significant impact on consumer behavior. A trivial number of survey respondents clicked on
the rival links when presented in the format proposed by Google. We conclude that the “three
rival links” remedy proposed by Google would not draw consumer attention to rival websites and
thereby increase competition in this space.
We also found that substantial numbers of survey respondents were confused or mislead by the
label and disclosure that Google proposes to differentiate its own search results and services
from those of its rivals. Consumers already show a high level of ignorance of the nature and
1
Experts’ background and qualifications are detailed in an Appendix. A copy of Franklyn's Curriculum Vitae is
attached as Exhibit A. A copy of Hyman’s Curriculum Vitae is attached as Exhibit B. Franklyn and Hyman have
written two law review articles about consumer perceptions and the Internet, including an article published in
Spring, 2013 in the Harvard Journal of Law and Technology, and a forthcoming article on search bias and search
neutrality. Copies of these articles are attached as Exhibits C & D.
2. 2
source of search results, and we found evidence that the proposed label and disclosure would
increase, not decrease, this type of consumer confusion.
We further found that modifications that do not materially affect page layout are unlikely to
change preexisting competitive dynamics in search. Modifications in page layout may or may
not have an impact, depending on their design attributes. Stated differently, we find the highest
degree of consumer attention and competition for clicks when rival links are displayed in a
manner that is comparable to the manner in which Google Shopping results are normally
displayed. We find that the proposals offered by Google in its Commitments would have no
significant impact and may in fact further confuse consumers.
2. Survey Methodology
Between June 18 and June 22, 2013, we completed an on-line survey of almost 1,900
respondents residing in the United Kingdom to determine the impact of Google’s proposal (as
described in Google’s Commitments).2
More specifically, using a series of simulated searches,
the survey examined:
• Whether the Commitments resulted in a material number of clicks on any of the
proposed “rival links”;
• The effect of other modification to search page layout and labeling on click
patterns;
• The effectiveness of the disclosure accompanying the rival links in
communicating basic information.
To examine these issues, we designed a multi-part interactive internet survey. As Table 1
reflects, our data is based on responses from individuals who completed the entire survey, and
took more than 5 minutes to do so. 36% of those invited to begin the survey quit without
answering a single question; of those that actually started the survey, approximately 60% quit
before completion, or were excluded because they failed to answer all the questions or completed
the survey from an IP location outside the U.K. Thus, we were left with a sample of 1,888
respondents – meaning that that the margin of error on the figures we report is +2.3% for a 95%
confidence interval.
The survey began with a series of questions designed to measure participants’ knowledge of the
layout and labeling of search results. We then asked respondents how they would go about
obtaining information if they were interested in purchasing a Nikon camera or finding an Italian
restaurant in Madrid. Tables 2A and 2B contain the breakdown of responses to this question.
We found that a Google search was the most common response to both questions.
Survey respondents were then asked to run three sets of searches – one for “Nikon camera,” one
for “flights to Madrid,” and one for “Italian restaurants in Madrid.” We chose these three
searches in order to test a sample product (here Nikon camera), a sample flight search (here, a
2
The survey was administered by Survey Sampling International (SSI) to a demographically representative sample
of Google users in the United Kingdom. We excluded from the analysis surveys that were not completed from an IP
address in the UK.
3. 3
hypothetical trip to Madrid by a person residing in the UK) and a sample restaurant search (here
a hypothetical search for an Italian restaurant while in Madrid). Respondents were asked to click
on the link they would have selected if they were trying to buy a Nikon camera, find a flight to
Madrid, or trying to find an Italian restaurant at which to eat in Madrid.3
For each set of
searches, respondents first viewed a “native” page of search results (i.e., the search results that
would have appeared if an actual Google search had been run) followed by a series of modified
search results.
In order to advance through the survey, respondents had to repeatedly run the search query, and
then click through on whatever link they selected. Respondents were not allowed to go back to
an earlier question after progressing past it, nor could they progress without clicking on
something. Because respondents had to click on something to advance, our results represent an
upper-bound on clicks in a search environment where users can simply close the page without
clicking on anything.
After viewing the Google native page for each of these three searches, respondents saw, in
random order, search results pages incorporating either the “three rival links” or the mobile
“other sites” link specified in the Commitments. For inclusion in our “three rival links,” we
chose well-known companies that would qualify for rival link placement under the terms of
Google’s Commitments. We used Kelkoo, Pricerunner and Bizrate as our primary “three rival
link” test sites, because of their prominence in the U.K.
To validate our findings on the proposal offered by Google in the Commitments, we also tested
several variations in which we modified the page layout and labeling of the search results page.4
Respondents were presented with these variations after re-running various Google searches.
Respondents were asked to click on the site where they were most likely to find what they were
looking for, i.e., a Nikon camera, or an Italian restaurant in Madrid.
After completing these tasks, we asked respondents if they knew whether the Shopping region
was paid or unpaid content, and evaluated the effectiveness of the label and disclosure specified
in the Commitments. We also asked respondents whether they remembered seeing the three
rival links and the mobile link, along with a number of other labels, and concluded with a series
of questions about the demographics of those completing the survey.
3
After completing the survey, we discovered that the image mock-up we were using to test the impact of adding
three rival links to Google Flights did not, in fact, represent the actual appearance of Google Flights. More
specifically, if one goes to the Google UK Flights page at http://www.google.co.uk/flights/ one sees a map and
pricing pop-ups for flying to different destinations. This visually rich display is quite different than the version of
Google Flights that one currently sees in the U.K. after running a search. However, we used the current version of
Google Flights as the basis for our mock-up. Accordingly, we dropped Google Flights from the analysis.
4
Our goal in testing these variations was to provide a baseline for assessing the impact of layout and labeling on
consumer search behavior. Because our primary task in this engagement was to test the actual Commitments, we
focus on the results for them in this report.
4. 4
3. Results
Table 3 presents the results for Nikon for the native search results, the search results including
three rival links, and the search results including the mobile link.5
As Table 3 indicates, the three
rival links and the mobile link attracted a trivial number of clicks – 0.1 to 0.5% of all clicks on
the search results page, and 0.5-2.5% of the combined clicks on (Shopping + Commitments).6
Thus, for Google Shopping, we find no evidence that the Commitments, at least in their current
form, will actually increase competition in the search space for products.
Table 4 presents similar results for Google Places. As with Google Shopping, we find a
substantial number of clicks on Google Places, and a trivial number of clicks (both in absolute
and percentage terms) on the three rival links and mobile link specified in the Commitments.
Thus, for Google Places, we find no evidence that the Commitments, at least in their current
form, will actually increase competition in search.
We then evaluated whether respondents actually knew whether Google Shopping was paid
content or not, and evaluated the impact of the label and disclosure statement included in the
Commitments. We began by showing respondents a search results page with the Google
Shopping region labeled, and asked them why the links in question appeared in that region.
Table 5, Panel A indicates that notwithstanding the label, relatively few people understand that
Google Shopping is paid content. Only 34% of respondents correctly responded that the content
in Google Shopping represents paid Ads. More than 50% of respondents thought Google
Shopping was unpaid content.7
Table 5, Panel B indicates that the disclosure added by the Commitments does not materially
improve the situation. After having their attention called to the disclosure (by presenting it in a
red-bordered box), 21% of respondents switched from the “wrong” answer to the “right” answer
but 13% of respondents switched from the “right” answer to the “wrong” answer. Fully 56% of
respondents either gave the “wrong” answer or did not know whether Google Shopping was paid
or not. Table 6 similarly indicates that the disclosure added by the Commitments did not make it
clear to respondents that the three rival links in question were the “other relevant providers”
referenced in the disclosure. Only 19% of respondents correctly recognized that the rival links
were “listed at the bottom of the box in the center column labeled ‘Shop for nikon camera on
Google,’ just below the ‘Shop by Price’ line.” Finally, we examined whether respondents
remembered various labels they had encountered over the course of the survey. On average,
respondents correctly identified less than 50% of the labels they had seen.
Tables 7-9 include background information on respondent demographics, and self-reported
knowledge of search page layout and labeling, and familiarity with computers.
5
Examples of the Google Shopping and Google Places Commitments variations we tested are attached as Exhibit E.
6
The figures presented in the text and attached tables reflect the cumulative clicks on all three of the rival links.
Calculations using the combined clicks on (Google Shopping + Commitments) as a denominator are intended to
demonstrate the “market share” of the clicks attracted by the three rival links.
7
To test the extent of consumer knowledge, we included a “distractor control.” This control stated that the content
in Google Shopping was unpaid, but also indicated the links were selected by Google’s “Special Marketing Team,”
a made-up entity. Fully 28% of respondents selected this option, indicating considerable consumer confusion as to
how Google operates.
5. 5
4. Summary/Conclusions:
• Google search dominates all other sources for obtaining information on products, flights,
and locations. That is, respondents are more likely to start a product, place or flight
search on Google than any other source.
• We found no material click-through on any of the proposed rival links specified in the EC
Commitments for Google Shopping and Google Places. And, as noted previously, since
respondents had to click on a link in order to advance through the survey, our results
likely over-state the extent to which the proposed EC Commitments would actually be
clicked on by users in the field. Based on these findings, we do not believe that the EC
Commitments are likely to command consumer attention or improve competition for
either Google Shopping or Google Places.
• We find that Google Shopping commands a high degree of consumer clicks and attention
because of its location and visually-rich display (e.g., photographs and mini-boxes within
a box). Confirming our earlier work, based on our current study, we find that page layout
and design is more important than search result labels in determining click-through rates
for Google Shopping.
• Modifications that do not materially affect page layout are unlikely to change preexisting
competitive dynamics in search. Modifications in page layout may or may not have an
impact, depending on their design attributes. Stated differently, we find the highest
degree of consumer attention and competition for clicks when rival links are displayed in
a manner that is comparable to the manner in which Google Shopping results are
normally displayed.
• We also find that the popularity and visibility of the rival link’s trade name or trademark
matters in determining click prevalence. Controlling for position, more famous brands
command higher click rates.
• We find that the proposed disclosure statement does not effectively communicate the
necessary information (i.e., whether the region in question is paid v. unpaid, and the
location and significance of the “rival links.”) Indeed, the proposed language seems to
confuse many respondents.
In summary, we find that the proposals offered by Google in the Commitments are highly
unlikely to materially increase consumer attention, offer consumers meaningful choices or
improve competition. By testing various alternatives, we identified several factors that are more
likely to draw consumer attention to rival links, offer consumers meaningful choices and thereby
improve competition in this space. Google has not, in our view, offered a viable alternative. We
also found that Google’s proposed label and disclosure – which is aimed at improving
consumers’ ability to differentiate Google search results from rivals’ search results – are actually
likely to be confusing or misleading to a substantial number of consumers.
Submitted this 1st
day of July, 2013
Professors David J. Franklyn & David A. Hyman
6. 6
Tables
Table 1. Overall Completion Statistics
Number
% of those who
Clicked
into
survey
Answered
> 1
question
Began Survey 7,465 100% -
Quit without answering any questions 2,719 36% -
Started but didn’t complete 2,375 32% 50%
Completed Survey 2,371 32% 50%
Usable with T >5 minutes 1,888 25% 40%
Table 2A. Preferred Strategy for Locating Products
Google search 60%
Amazon search 16%
Go to the website for product mfg./Tm owner 10%
eBay search 6%
Preferred search engine (other than Google) 5%
Preferred search engine (other than Google) 5%
Run a search on a price aggregator website (e.g.,
Kelkoo or Pricerunner) 2%
Other 1%
Query Facebook 0%
Table 2B: Preferred Strategy for Locating Restaurants
Google search 78%
Run a search on TripAdvisor 10%
Preferred search engine (other than Google) 7%
Other 3%
Run a search on Yelp or Qype 1%
Query Facebook 1%
7. 7
Table 3. Nikon Camera Results – Native and EC Commitments
Type of Link Native
EC Commitments: TM/Label
"Kelkoo, Price-
runner, or Bizrate" "Other Sites”
Organic 54.2% 50.4% 51.3%
Ads 20.7% 27.1% 25.8%
Google Shopping 23.1% 20.9% 21.3%
EC Commitments N/A 0.5% 0.1%
Other 2.0% 1.2% 1.5%
Commitments/
(Google Shopping +
Commitments) N/A 2.5% 0.5%
Table 4. Google Places Results
Type of Link Native
EC Commitment: TM/Label
“Qype, TripAdvisor, or
Yelp” “Other Sites”
Organic 83.9% 79.9% 79.0%
Ads 0.0% 0.0% 0.0%
Google Places 15.5% 19.2% 19.6%
EC Commitments N/A 0.2% 0.1%
Other 0.6% 0.7% 1.3%
Commitments/
(Google Places +
Commitments) N/A 1.1% 0.5%
8. 8
Table 5. Google Shopping: Paid v. Unpaid and Impact of Disclosure
Panel A: Why do links appear in Google Shopping Region?
Links selected by Google's computer formula (algorithm). The
listed companies do not pay Google to appear in this section 25%
Links selected by Google's special marketing team. The listed
companies do not pay Google to appear in this section. 28%
Links for which the listed companies pay Google to appear in this
section 34%
Don't know/Not sure 13%
Other [Specify]: 1%
Panel B: Impact of Disclosure on Paid v. Unpaid
Yes
I thought it was unpaid, and now I think it is paid. 21%
I thought it was paid, and now I think it is unpaid. 13%
No
I thought it was unpaid, and I still think that. 16%
I thought it was paid, and I still think that. 33%
Don't know/none of the above. 17%
The “correct” answers in Table 7 are bolded.
Table 6. Who Are the “Other Relevant Providers” in the Google Shopping Disclosure?
Listed in the right column of search results, under the label “Ads” 18%
Listed in the shaded box in the top middle column 10%
Listed at the bottom of the box in the center column labeled
“Shop for nikon camera on Google,” just below the “Shop by
Price” line. 19%
Listed underneath the box in the center column labeled “Shop for
nikon camera on Google.” 26%
Other/Don't know. 27%
The “correct” answers in Table 8 are bolded.
9. 9
Table 7: Demographics of Survey Respondents
Age
18 – 24 12%
25 – 34 20%
34 – 44 23%
45 – 54 20%
55 – 64 15%
65 – 74 9%
75+ 1%
Marital Status
Single 41%
Married 43%
Living together / Domestic partners 15%
Race
Caucasian / White 89%
Afro-Caribbean 2%
Latino / Hispanic / Mexican 0%
Asian / Pacific Islander 4%
Mixed race 2%
Other 3%
Income
Prefer not to say 15%
Less than £25,000 36%
£25,000-£49,999 34%
£50,000 - £74,999 10%
£75,000-£99,999 3%
£100,000 - £199,999 2%
More than £200,000 0%
Preferred Search Engine
Bing 2%
Google 89%
Yahoo 6%
Other 3%
10. 10
Table 8: Familiarity with search page layout and labeling
Extremely familiar 15%
Very familiar 27%
Moderately familiar 35%
Slightly familiar 12%
Not at all familiar 11%
Table 9: Computer knowledge/expertise
I am afraid to modify my computer system and software
for fear I might break it and be unable to repair it 7%
I can follow instructions and install / change things, but I
don't know what I'm doing 40%
I know what I'm doing with computers and I know how to
get what I want 38%
People acknowledge me as a resource for computer help
and I help them with their problems 14%
11. 11
Appendix
Franklyn is a tenured, full professor of law, specializing in trademark law, at the University of
San Francisco School of Law (“USF”). Franklyn is the Executive Director of the McCarthy
Institute for Intellectual Property and Technology Law at USF and Director of the Center for the
Empirical Study of Trademark Law (CEST). The McCarthy Institute, of which Franklyn is
Executive Director, conducts wide-ranging empirical research on consumer perception issues in
both the United States and Europe. Franklyn is also the Director of the Masters of Law Program
for U.S. and foreign lawyers in Intellectual Property Law at USF. Franklyn teaches and writes
primarily about trademark law and consumer perception issues. Franklyn is editor-in-chief and
co-author of McCarthy’s Desk Encyclopedia of Intellectual Property Law.
Franklyn works in collaboration with Professor McCarthy on a number of projects, including his
treatise on trademark law. Professor McCarthy is the author of a seven-volume treatise on
trademark law. It is the most-widely cited treatise on trademark law in the United States, having
been cited by courts in over 3,500 judicial opinions, including in a recent decision by the United
States Supreme Court in a case in which Franklyn was retained as an expert.
Franklyn has consulted and/or served as an expert witness on behalf of numerous clients in
numerous cases involving consumer perception issues, including in matters in the United States,
Asia, the European Union, the Middle East and South America. Franklyn has been retained as
an expert in several matters involving the issue of consumer perceptions. Franklyn was recently
was retained by the International Olympic Committee to provide trademark advice and advice
regarding the consumer impact of various logos regarding the 2016 Olympic Games. Franklyn is
a licensed attorney in Illinois and California. Franklyn has written several law review articles
about consumer perceptions on the Internet. Franklyn has also acted as a consultant to several
clients in matters related to trademark law, consumer perceptions and the Internet.
Hyman is the H. Ross and Helen Workman Chair in Law and Professor of Medicine at the
University of Illinois. He is tenured in both the College of Law and the College of Medicine.
He heads the Epstein Program in Health Law and Policy at the University of Illinois College of
Law. He teaches and writes about empirical law and economics, principally involving the
regulation of health care, and competition law and policy. He is the author of more than 100
articles in student edited law reviews, and peer-reviewed medical, health policy, and law
journals.
In competition law and policy, Professor Hyman served as Special Counsel to the Federal Trade
Commission from 2001-2004. In that capacity, Professor Hyman was principal author and
project leader for the first joint report ever issued by the Federal Trade Commission and
Department of Justice, “Improving Health Care: A Dose of Competition” (2004). He has also
published numerous other articles involving competition law and policy, including a series of
articles with Professor William Kovacic, the former Chairman of the United States Federal Trade
Commission.
Hyman has been deposed in various cases involving health care fraud and pharmaceutical
pricing, and has testified in one case involving pharmaceutical pricing.