Two-minute Recap of Competition Law Matters Around the Globe - September 2024

Google loss: European Commission’s Decision Upheld

The Court of Justice of the EU has upheld a EUR 2.4 billion fine imposed on Google by the European Commission for favouring its comparison shopping service Google Shopping. After the General Court previously upheld that decision, Google (and its owner Alphabet) lodged an appeal before the Court of Justice. The Court of Justice stated that EU law does not sanction the existence of a dominant position but the abusive exploitation thereof; as Google’s actions have the effect of hindering competition on the merits they must be prohibited.

Google win: General Court overturns AdSense fine

In better news for the company, the General Court has overturned a EUR 1.49 billion fine imposed by the European Commission. The court found the Commission failed to prove the alleged unlawful clauses in Google’s AdSense contracts excluded competitors, deterred innovation, harmed consumers, or assisted Google in maintenance of its dominant position. The Court pointed out that the decision failed to consider all relevant factors when determining duration of the contract clauses and did not properly substantiate the exclusionary effect Google’s conduct had on competing advertising intermediary platforms. However, it upheld the Commission’s definition of the relevant advertising markets and its designation of Google as the dominant player in said markets.

VMware investigated in Japan

The Japan Fair Trade Commission is investigating VMware, a cloud computing company, for alleged tie-in sales and abuse of dominance. The antitrust enforcer also intends to launch an investigation into VMware’s parent company Broadcom. In April this year, EU antitrust officials began examining potential changes to VMware’s licensing terms after the European Commission’s granted conditional approval.

Massive deal in Peru’s fiber optic market conditionally approved

Indecopi, Peru’s competition authority, has imposed several conditions on verifying that Pangeaco, a joint venture between investment fund Kohlberg Kravis Roberts, Telefónica Hispanoamérica, and Entel Perú, could generate barriers to the entry or expansion of competitors in the country’s wholesale fiber optic access network market.

The conditions imposed on the parties are as follows:

» Duration of non-compete clauses for wholesale services reduced from 15 to 3 years.

» Exclusive purchase obligation period reduced from 15 to 5 years.

» Right of first offer, right to match, and retail non-compete clauses eliminated entirely.

» Pangeaco’s new exclusivity agreements with telecommunications operators for wholesale services must be submitted for review in timely fashion.

» Compliance officer to report to Indecopi regarding above conditions.

Visa hit with antitrust debit card suit

The US Department of Justice (DoJ) has filed an antitrust complaint against Visa alleging the payment giant used exclusionary contracts, and other anticompetitive tactics, to monopolize the US debit card market thus stifling competition, hindering innovation, and forcing higher fees on merchants. The suit claims Visa secured its dominant position by entering into contracts with merchants, issuers, and acquirers. Its contracts allegedly include “cliff pricing” and early termination penalties which make shifting even a portion of their business to competitors prohibitively expensive for merchants.

The DoJ contends that these practices have unlawfully preserved Visa’s monopoly in violation of the Sherman Act. The agency also accuses Visa of paying off potential tech sector rivals to prevent development of competing products. The suit asserts Visa entered into agreements with companies, including Apple and PayPal, to dissuade them from offering alternative payment solutions that could threaten Visa’s dominance and further limiting competitive opportunities in the market.

DoJ takes aim at Google’s “killer acquisition” tactics

The DoJ alleges Google used its dominance in the ad tech market to acquire and suppress a potential rival when it paid more than USD 400 million to acquire AdMeld, a rising star and rival in the sector, despite estimating its value between USD 182 to 355 million.

As Google shut down AdMeld after acquiring it, the DoJ argues the deal was a “killer acquisition” whereby the company uses its vast economic resources to eliminate competitors. The agency also pointed to Google’s acquisitions of several rising tech stars, such as DoubleClick and Invite Media, and argues the strategy has directly led to Google’s Ad Manager enjoying a 91 percent share of the ad server market and its respective use by 90 and 80 percent of publishers and advertisers. Google denies the claims.