In a case that has drawn much attention, the EU's General Court recently confirmed the fine of more than €1 billion that the European Commission had imposed on the processor manufacturer Intel for granting loyalty discounts (rebates) to computer manufacturers and making payments to the retailer Media-Saturn in exchange for exclusivity. This conduct made it more difficult for other processor manufacturers to compete with Intel. The General Court confirmed, among other things, that the ban on abusing a dominant position is an open concept and there is no exhaustive list of practices that can be classified as abuse.
Fines for abuse of a dominant position, such as in the case against Intel, are relatively exceptional. When competition authorities deal with abuse of dominant position cases, these increasingly result in commitment decisions. These are decisions in which the competition authority formally records a commitment by the undertaking in a decision but does not impose a fine. The advantage of a commitment decision is that a competition authority does not have to invest significant resources in an in-depth investigation and the undertaking in question has the certainty that in exchange for its commitment it shall not be fined.
A good example of this is the complaint made by Douwe Egberts Master Blenders (DE) against Nespresso to the French competition authority (Autorité de la Concurrence (Autorité)). Nespresso was accused of excluding other coffee capsule manufacturers from Nespresso machines. The contested conduct involved intentionally making technical changes to Nespresso machines that rendered useless the capsules of other manufacturers. Following an investigation by the Autorité, Nespresso made various commitments to adapt its conduct; for instance, to give coffee capsule manufacturers three months' advance notice of technical changes to the machines in the future. The Autorité was prepared to close the investigation in exchange for these commitments.
The Nespresso case ties in well with the European Commission's approach in complex antitrust cases. In the last decade, the Commission has disposed of 34 cases with commitment decisions, including various investigations into abuse of a dominant position. One such example occurred in 2011 when the Commission closed its investigation into the conduct of the server manufacturer IBM in the mainframe market with a commitment decision. In 2014, the Commission accepted commitments made by the electronics group Samsung to end the investigation into abuse of a dominant position by means of standard essential patents. The Commission also recently announced its intention to end the investigation into abuse by Google in the area of online searches and advertising with commitments.
The number of commitment decisions being made by national competition authorities due to abuse of a domination position is also on the rise. In addition to the Nespresso case, the Autorité also recently ended an investigation into abuse of a dominant position by the rail operator SNCF after SNCF made commitments. The Danish competition authority did the same after commitments from the payment service provider Nets Holding. Last month, the British authority also ended its investigation after the technology developer Epyx Ltd made various commitments.
The Netherlands Authority for Consumers & Markets (ACM) also regularly uses the instrument of a commitment decision. Examples include the decisions on the Amsterdam hospitals, the National Association of General Practitioners (LHV) and mobile operators. All these decisions stem from investigations into cartel arrangements. We previously drew attention to ACM's limited investigative capacity and the fact that it focuses mainly on anticompetitive practices between competitors (ban on cartels). This seems to have been at the expense of attention to enforcing the ban on abusing an economically dominant position. The enforcement of this ban has really been put on the back burner in the Netherlands for years. But could we be seeing a shift in position now? The ACM was recently given a commitment by the credit card company Mastercard that it would reduce its rates for credit card payments for the next two years. ACM's investigation into Mastercard was aimed both at enforcing the ban on cartels and the ban on the abuse of a dominant position. ACM also recently investigated the possible abuse of a dominant position by the Dutch Performance Rights Organization (Buma/Stemra) in the copyright management sector. This investigation was prompted by a complaint from a music author. Buma/Stemra gave a commitment, among other things, to offer more choice to composers and lyricists for the management of their performing rights.
By using commitment decisions, supervisory authorities are able to handle more cases because they can limit themselves to an overall investigation into the position and conduct of the party involved. Compared to its European counterparts, the ACM still exercises restraint when dealing with complaints about the abuse of a dominant position. This does not mean that such abuse happens less frequently in the Netherlands, but rather that the ACM has limited resources and other priorities. This approach has been regularly criticised in the past. If the ACM were to use a commitment decision more often in abuse of dominant position cases, it would be able to strike a better balance between the efficient use of its scarce resources on the one hand, and putting an end – or having others to put an end to – potential exclusionary conduct by parties with a very dominant market position on the other hand.