The single most important development of this year, in my view, is the judgment in Case C‑525/16, MEO. The case has gone relatively unnoticed, perhaps because, on its face, it concerns an exploitative practice (discrimination). As I understand it, however, the judgment introduces important clarifications for the understanding of Article 102 TFEU and the EU competition law system at large.
We have discussed the effects-based approach for many years now. Still, it is not very clear – if not entirely unclear – what an anticompetitive effect is, and what the notion means. Does a competitive disadvantage – any competitive disadvantage – amount to an anticompetitive effect within the meaning of Article 102 TFEU? Is any practice that makes rivals’ life more difficult one that meets the threshold of effects under that provision?
It may seem surprising, but we do not have, as of yet, a clear and explicit answer to these questions from the Court. Importantly, EU competition law can look very different depending on how these questions are answered. If any competitive disadvantage is deemed to amount to an effect, then it would be very easy to establish it in practice, and the difference between object and effect would be meaningless. If we move to the other side of the spectrum and we argue that harm to consumer welfare is necessary to show an effect, the bar would be set at a very high (perhaps prohibitively high?) level.
However, MEO provides an important clarification. It is not sufficient to show that a practice puts some firms at a disadvantage to show an anticompetitive effect. Something else is necessary. The consequences of this clarification are important. After all, many potentially abusive practices put, by definition, rivals at a disadvantage. Just think of tying, ‘margin squeezes’, rebates and exclusive dealing. Following MEO, it is clear that the inherent consequences of these practices are insufficient to establish an abuse.
The clarification is very much in line with recent case law. After all, Intel shows that even an exclusivity obligation may be shown to be incapable of having anticompetitive effects. And Post Danmark I suggests that, so long as rivals retain their ability and incentive to fight in the marketplace, a practice has no effects within the meaning of Article 102 TFEU.
The clarification is also important in that it suggests that, after all, there are no big differences between Article 102 TFEU, on the one hand, and merger control and Article 101 TFEU on the other. In the field of merger control, we already knew, since GE/Honeywell and Tetra Laval/Sidel (the two involving dominant players, one must bear in mind), that a mere competitive disadvantage cannot justify declaring the incompatibility of a merger with the internal market. Perhaps the EU competition law system is more consistent than many commentators appear to concede?
There is still much that we ignore after MEO, but we are certainly wiser following this judgment.
Happy New Year to all!
Pablo Ibáñez Colomo holds a Chair in Law at the London School of Economics and is Visiting Professor of Law at the College of Europe (Bruges).