Two-minute Recap of Competition Law Matters Around the Globe – January 2023

Germany opens MFN probe into PayPal

Germany’s Bundeskartellamt has opened an investigation to decide whether PayPal has taken advantage of its dominant position by using most-favored-nation clauses that limit competition in the online payments market. Bundeskartellamt expressed concerns about specific provisions in PayPal’s user agreement, which prevents merchants from offering lower prices to customers who select a cheaper payment method than PayPal. Another concern that the authority stated is that sellers are not able to make alternative methods more attractive to customers, which in turn prevents entry into the market.

Czech enforcer issues first penalty for restricting online sales

The Czech Republic’s Office for the Protection of Competition has imposed a penalty (EUR 532,467) on a consumer goods company (Eurona) for fixing online resale prices and preventing retailers from making sales through their websites. The authority discovered that the company monitored retailers to ensure they were adhering to set catalogue prices and sent emails to those who were not in compliance with this rule to ensure compliance with the set prices. This is the first time the watchdog has penalised restrictions on online sales in the Czech Republic.

Canada issues draft wage-fixing and no-poach guidance

Canada’s Competition Bureau began a review of proposed guidelines for incoming criminal restrictions on wage-fixing and no-poach agreements. The Competition Bureau recently announced that it is seeking public input on guidelines that outline its enforcement of anti-competitive agreement in the labor market. The Canadian government’s amendment to the Competition Act last year, which made wage-fixing and no-poach agreements between employers illegal and subject to criminal penalties, will come into force on 23 June. In this context, the Canadian authority will consider these agreements as per se illegal within the scope of the guidelines. It should nonetheless be noted that the draft guidelines foresee that wage-fixing or no-poaching agreements will not be criminally pursued if they are ancillary to mergers, joint ventures or strategic alliances, unless said transactions or collaborations are a sham or the restrictions are broader than necessary.

FTC proposes ban on worker non-compete clauses

The Federal Trade Commission of the United States stated that non-compete clauses are harmful to both the labor market and innovation, and the proposed regulation would make them illegal. Lina Khan, the chairperson of the FTC, said that “Workers that are currently stuck in place, effectively, would be able to freely move to another job.” She has also noted that research shows that labor markets have become much more concentrated and that the primary aim with this proposal is to get competition over workers among employers to a higher level so that higher wages and better working conditions can be attained by workers. If the regulation enters into force as proposed, it would be completely prohibited for employers to have or keep non-compete agreements with their employees, and they would have to inform their workers that any existing non-compete agreements would be invalid.

Ruling on the first margin squeeze case in Korea

The Seoul High Court has rejected an appeal from two telecommunication companies (LG U+ and KT), which were jointly accused of margin squeezing. This is the first ruling in Korea that clearly states that this behavior constitutes an abuse of dominance. The Korean Fair Trade Commission issued its first abuse of dominance fine for the margin squeeze in November 2014. The companies appealed against that decision and the Court overturned the Commission’s fine in January 2018. However, the Supreme Court decided that the Commission’s decision was legitimate and it was correct to penalise the squeezing of competitors’ profits in 2021. Finally, the Seoul High Court dismissed the companies’ request to overturn the Commission’s decision in January 2023.

Tagged with: Gen & Temizer | Özer, Bulut Girgin, Simru Tayfun, Orçun Horozoğlu, Competition