European Commission publishes Inception Impact Assessment on revision of Regulation 330/2010

On October 23, the European Commission published an “Inception Impact Assessment” as part of the review process of Regulation (EU) No 330/2010 (Regulation on the application of Article 101.3 TFEU to categories of vertical agreements and concerted practices) in force until 31 May 2022.

The Commission intends to assess policy options for the review of those critical areas of the Regulation identified in the Staff Working Document published on September 8 (September edition of the newsletter) and mainly related to online sales. In this context, the Commission has identified four main issues that will be covered by the review:

  • “Dual distribution”: the Commission will alternatively assess whether to limit the scope of the vertical exemption to scenarios that are unlikely to raise horizontal concerns, or to remove the block exemption in cases of dual distribution, thus requiring an individual assessment under Article 101 TFEU;
  • Active sales restrictions: the Commission envisages a review focusing on extending the exemption to all or only certain categories of restrictions on active sales;
  • Online sales restrictions: the Commission will consider whether to make the measures differentiating online channels from offline channels lawful, such as dual pricing and the elimination of the “equivalence principle”, while providing for competition safeguards; and
  • Parity obligations: in view of the anti-competitive effects of such clauses identified by national competition Authorities and national Courts, the Commission will consider whether to remove the exemption for all or only certain categories of parity obligations.

The Commission intends to launch an open public consultation by the end of 2020 to gather feedback on the policy options proposed and their ability to tackle the issues identified in the Staff Working Document. In 2021, the Commission will publish a first draft of the revised Regulation and Guidelines.

Investigation by the Antitrust Authority against Google for alleged abuse of its dominant position in the display advertising market

On October 20 the Antitrust Authority launched an investigation against Google to ascertain whether certain conduct by the company in the display advertising market could result in abuse of its dominant position.

With the measure launching the investigation, the Authority assumes that Google – a vertically integrated entity present in the various markets that make up the online advertising chain and in the offer of services allowing the acquisition of data crucial for the targeting of display advertising campaigns – has engaged in conduct liable to hinder its non-integrated competitors and to maintain and further strengthen its market power in display advertising, in violation of Article 102 TFEU.

In particular – according to the AGCM’s preliminary analysis – Google has engaged in conduct of internal-external discrimination, involving the refusal to provide Google ID decryption keys and the foreclosure of the possibility of tracking third-party pixels, against the simultaneous use, by its internal divisions, of tracking tools that allow Google to achieve a targeting capacity that other equally efficient competitors are not able to replicate.

Interested parties may intervene in the procedure within 30 days of the publication of the measure launching the procedure in the official bulletin of the Authority (which took place on 2 November 2020).

The Authority’s Press Release and the measure launching the investigation are available here.

Online resale price fixing: Spanish Antitrust Authority launches an investigation

On November 2, the Spanish antitrust authority (Comision National de los Mercados y la Competencia (CNMC)) launched a formal investigation against ISDIN S.A., a well-known Spanish dermo-cosmetics company, to establish a possible infringement of Article 101 TFEU, involving fixing online resale prices, at least for sunscreen products. The investigation was launched following a complaint made by a distributor of over-the-counter body and healthcare products.

The proceedings are part of the trend of increasing attention on restrictions on online sales by European antitrust authorities, as outlined in the March edition of the newsletter. Last July, the Italian Antitrust Authority also launched an investigation on possible restrictions on sales of electronics products on online marketplaces.

President of the EU General Court outlines the boundaries of the Commission’s antitrust powers

With two orders of 29 October 2020, the President of the EU General Court ruled out on the interim measure actions brought by Facebook in relation to two formal requests for information issued by the Commission in the context of two antitrust investigations – concerning, in particular, anti-competitive data collection practices by Facebook and distortion of the online classified ads market through the Facebook Marketplace service integrated into the platform – which would capture documents and information unrelated to the investigations (eg documents containing purely personal information, documents containing personal opinions and political engagement, Facebook’s proprietary information).

The President of the General Court considered that the requests for information at issue are very similar to an inspection, since the addressee has been required to produce a large number of documents collected on its servers on the basis of search terms. Moreover, the relevance of these documents will be assessed by the Commission only at a later stage.

In the President’s view, it is therefore necessary to ensure a level of protection for the applicant’s rights equivalent to the one guaranteed during inspections.

With regard to the disclosure of personal data, the orders clarified that, despite the fact that the GDPR does not prevent the transmission of information containing personal data to EU institutions, the collection and processing of such data must be necessary and proportionate to the exercise of the Commission’s powers.

In the light of the above, the President of the General Court imposed the following ad hoc measures for the safe collection of documents and information falling within the scope of the contested requests for information:

  • Facebook shall identify and communicate the sensitive personal data to the Commission on a separate electronic medium;
  • those documents shall then be placed in a virtual data room which shall be accessible to a limited number of members of the team responsible for the investigation, in the presence (virtual or physical) of an equivalent number of Facebook’s lawyers;
  • the members of such team shall examine and select the documents in question, while giving Facebook’s lawyers the opportunity to comment on them before placing the documents on the file; and
  • in the event of disagreement as to the classification of a document, Facebook’s lawyers shall have the right to explain the reasons for their disagreement. In the event of continuing disagreement, Facebook may ask the Director for Information, Communication and Media at DG Competition to resolve the disagreement.

Examination of witnesses in antitrust proceedings

On 22 October 2020, the EU Court of Justice (CJEU) rejected the appeal proposed by certain undertakings operating in the retail food packaging sector against the ruling of the General Court confirming the Commission’s decision by which the undertakings concerned were fined for an anti-competitive agreement.

The appellants claimed, inter alia, a violation of the procedural guarantees and the rights of the defense enshrined in Article 6 of the ECHR and in Articles 47 and 48 of the Charter of Fundamental Rights of the EU, since the General Court had not summoned a witness in order to hear him, confining itself to taking into consideration only the minutes of his statements.

The CJEU established that it falls to the General Court to assess the relevance of a request for the examination of witnesses to the subject matter of the dispute and that, as such, the need to examine the witnesses named is left to the General Court’s discretion.

In the CJEU’s opinion, Article 6(3) of the ECHR does not require every witness to be called, but is aimed at full equality of arms, ensuring that the procedure in issue, considered in its entirety, gave the accused person an adequate and proper opportunity to challenge the suspicions concerning them.