Over the last decade, many countries have demonstrated remarkable development in their competition regimes, and the regimes of the Member States of the Association of Southeast Asian Nations (ASEAN) ...are no exception. Since effective competition policy for the digital economy has become an important topic across the world, it is time to discuss desirable guidance for digital competition law and policy in the ASEAN region. There are notable obstacles to providing digital policy guidance for the ASEAN Member States. Most Member States have distinctive objectives of competition law, such as associating the non-economic goals of fair competition with unique substantive rules on unfair trade practices. Moreover, the dissimilar level of law enforcement among the Member States requires ASEAN to provide applicable standards for the appraisal of conduct in digital cases so as not to distort competition in the ASEAN region. This article aims at providing suggestions for ASEAN guidelines for the digital economy, which has not been discussed before, by analysing the cases and legislation in several competition regimes.
We analyze history-based price discrimination in an asymmetric industry, where an incumbent, protected by switching costs, faces an entrant who does not have access to information about consumers’ ...purchase histories. We demonstrate that consumer surplus is higher with uniform pricing than with history-based price discrimination. We find that the entry decision is invariant to whether the incumbent implements history-based pricing or uniform pricing. This implies that the potential abuse of market dominance imposed by history-based price discrimination is exploitation, not exclusion. Finally, we establish that the profit gain to the incumbent from history-based pricing exceeds the associated loss to consumers.
The Internet of Things is advancing as a new technological paradigm with enormous economic and societal implications. Network connectivity provides the basis. With this in mind, past and current ...conflicts surrounding the licensing and enforcement of standard essential patents (SEPs) in the information and communications technology (ICT) sector cast a shadow over IoT development. Focusing on the European approach based on competition law, this article explores the extent to which the existing legal framework, which has been mainly developed against the backdrop of problems in the mobile industry, will be capable of responding adequately to the challenges raised by the IoT.
In this paper, we analyze a recent antitrust case of abuse of dominance that was decided by a Chinese administrative enforcement agency under China’s Anti-Monopoly Law (“AML”). A key issue in this ...case involved the impact of loyalty rebate programs used by a dominant firm. We provide an overview of the case, highlight the main points of the decision, and focus on the assessment of loyalty rebates. As the first antitrust ruling in China involving loyalty discounts, we expect that the decision will serve as an important reference in antitrust enforcement in China.
Since the turn of the millennium, digitalisation has not only radically changed economies across the world but also allowed for the rise and proliferation of digital platforms. While clearly ...adaptable, a perception has emerged that existing competition laws are inadequate to accommodate tech giants’ unique market positions and market power, feeding calls to not rely solely on these. The European Union (EU) has replied by adopting the Digital Markets Act (DMA), allowing for the designation of digital gatekeepers based on turnover and user numbers. In contrast, Asian countries like Korea and Japan have opted to rely on the notion of ‘superior bargaining power’ to check market power in the digital realm. While serving the same objective, the Asian approach differs by replacing the need to identify dominance as a precondition for enforcement actions. In contrast, the DMA will be applicable on an ex-ante basis but allow for concurrent policing under traditional competition law ex-post. This paper explores the matter of market power in the digital sphere and the different paths chosen to control it in Europe and Asia, focusing on the example of Korea with respect to the latter. Through a comparative study, we conclude that they are perhaps less different than initially perceived, diverging mostly in their form rather than their content or reach. However, the DMA also serves to suppress the proliferation of national legislation thwarting the European Single Market and debasing competition law. The latter could be a consequence of pressing competition laws to accommodate the special particularities of the digital economy.
In this article we introduce the abuse of dominance provisions in China's Anti-monopoly Law (AML) that was enacted in 2007, and we put this in context by briefly describing the laws on the abuse of ...dominance that existed before the AML, and their relationship with the provisions in the AML. We then discuss the interpretation and enforcement of the AML's abuse of dominance provisions, on the one hand generally in the context of China's new market competition environment and its political-legal system, and on the other hand specifically through a consideration of some recent antitrust cases on the abuse of market dominance. Finally, we offer a preliminary appraisal of the law and its enforcement.
All-unit discounts (AUD) are non-linear pricing schemes whereby buyers who reach a specific quantity threshold get rebates also retroactively for all units bought before. This sets high incentives ...for buyers to meet the quantity threshold, and may also have foreclosure effects on potential entrants. In a model where an incumbent faces second-period competition by entrants, we show that AUD can indeed be abused to shift rents from entrants. In contrast to exclusive dealing which is usually seen as very similar to AUD, inefficient quantity distortions may arise even with perfect information if and only if there is sufficiently intense competition among potential entrants.
This article examines the criteria for assessing anti-competitiveness of selfpreferencing practices by vertically integrated online platforms such as Google, Naver, and Amazon. Self-preferencing ...practices refer to the preferential treatment of the platform’s own products or services over those of its rivals in downstream markets. It is considered an exemplary type of exclusionary conducts by market dominant online platforms.
This article analyzes the different approaches adopted by various competition law jurisdictions in assessing the anti-competitiveness of self-preferencing practices by comparing various competition law cases including Google Search case and Naver Shopping case of the European Union (EU), the United States (US), and Korea, etc. It is found that each competition law jurisdiction has taken quite a different approach to self-preferencing practices. This article also analyzes the monopoly leverage theory and prohibition of discriminatory treatment under competition law and related case laws.
This article highlights that while there are differences in the approaches of various competition law jurisdictions in assessing the anti-competitiveness of self-preferencing practices, a balance between the effect of restraining competition and that of enhancing consumer welfare of self-preferencing practices should be struck. Hence, it concludes that competition authorities and courts should take a more balanced and contextual analysis that takes into account the specific characteristics of the online platforms and contexts of self-preferencing practices at issue. This suggests that competition authorities and courts should adopt a case-by-case approach and be vigilant to the potential consumer welfare-enhancing effects as well as anti-competitive effects of self-preferencing practices by vertically integrated online platforms.
Before Brexit, the UK could manage the national market competition under the implementation of EU competition law. At the same time, the UK competition regime contributed to the modernisation of EU ...competition law, which is the shift from the form-based approach to the effects-based approach. Since the UK left the EU, the UK Competition and Markets Authority (CMA) has shown its efforts to develop its competition law and policy on the digital economy, which indicates its independence from the EU competition regime. In particular, the CMA has published a number of reports of market study, including ‘Online platforms and digital advertising’ in July 2020. Moreover, the CMA has opened an investigation into Google’s Privacy Sandbox that has the proposals to remove third party cookies and other functionalities from Google’s Chrome browser. In effect, the European Commission also announced its investigation on the similar case. Therefore, it is meaningful to discuss the CMA’s approach to the digital advertising, which will be useful when we compare it with the EU’s approach. Then, it would be possible to find a level of convergence between the UK and the EU in competition law enforcements in the digital sector.
In particular, the recent discussions on the business models in the ad tech become important. Since the German Facebook case, critics have asserted that the infringement of privacy should be regarded as an exploitative abuse. On the contrary, Google’s Privacy Sandbox plan aims to protect privacy (i.e., to avoid any possible exploitative abuse or data protection rule), but competition authorities, including the CMA, consider this privacy protection policy as an exclusionary abuse. In effect, Privacy Sandbox may be necessary from data protection regulation perspectives. The application of competition law to Privacy Sandbox may conflict with the rule of data protection law. In sum, there are notably complex conflicts and overlaps between the objectives of an exploitative abuse rule and an exclusionary abuse rule and between competition law and data protection law. This can be regarded as a ‘privacy protection paradox’. Moreover, the complicated framework in the ad tech of open display advertising market has brought discussions on the foreclosure by large gatekeepers in the vertically integrated structure. This issue involves the case of Privacy Sandbox.
Lastly, it is also important to discuss the future of UK competition regime. The concept of Ordoliberalism, which heavily affects the formalistic approaches in unilateral conducts, continues to influence the development of EU competition law and policy. The idea of social market economy, relating to Ordoliberalism, is clarified in Article 3 of the Treaty on the European Union as an important value and goal of the EU. However, the UK does not have to accept these notions in the implementation of competition rules as the regime left the EU. Whether the UK competition regime continues to accept the concept of special responsibility that is from Ordoliberalism and social market economy will be one of the important topics after Brexit. This article aims to discuss the CMA’s recent approaches to the digital advertising sector, focusing on the Privacy Sandbox, thereby forecast further developments of the UK competition regime.
The purpose of this study is to examine the significance and limitations of the 2019 Seoul High Court judgment on the Qualcomm II case after defining the case as a case of applying the Monopoly ...Regulation and Fair Trade Act in Korea (“MRFTA”) to the business model of the holder of standard essential patents (“SEP”), on the premise that Qualcomm is the holder of SEPs for patents by mobile communication standards. The decision of the Seoul High Court in the Qualcomm II case poses many challenges about how the standards and methods for determining the illegality of competition restrictions when applying the regulations on the abuse of market dominance under the MRFTA to the business model of the holder of the SEPs are structured and, accordingly, what evidence and arguments The Korea Fair Trade Commission (“KFTC”) should present. This is not only a problem limited to the business model of the holder of SEPs, but also a problem that can affect exclusionary abuse in general.
In the Qualcomm II case, the KFTC is taking issue with the following three types of conduct. ① Acts of refusal or restriction of SEP licenses to competing modem chipset manufacturers, ② Acts of linking the supply of modem chipsets to mobile phone manufacturers and licenses, ③ Acts of imposing certain conditions in a patent license agreement with mobile phone manufacturers. For each of the acts ① through ③, the KFTC faithfully followed the analytic framework of case law in judging that competition restrictions were recognized by enumerating all factors that can be considered for judging anti-competitiveness by the intent or purpose and the effect, which are two elements of anticompetitiveness suggested by precedent and jurisprudence. The characteristic of the judgment structure taken by the KFTC in this case was that it presented stand-alone judgment elements for each of the actions ① and ③, but also presented judgment elements linking ① and ② acts and ①, ② and ③ acts. The point is that the reinforcement effect was expected according to the linkage between the acts in the judgment of competition-restrictiveness. However, at least at the stage of the Seoul High Court, the illegality of the acts ① and ② was recognized, but the illegality of the act ③ was not recognized, ending up only half successful so far.
In particular, the Supreme Court is expected to declare a clear jurisprudence on two issues, namely, the relationship between exploitative abuse and exclusionary abuse, and the related issue of the combined anti-competitive judgment issue. Depending on what clear position the Supreme Court will take on these issues in its ruling on the Qualcomm II case, it is expected that there will be significant changes in the development of legal principles regarding abuse of market dominance and its enforcement in the future. Meanwhile, The U.S. Federal Court of Appeals for the 9th Appeal of the United States issued a ruling not recognizing the restrictions on competition for conducts ① and ② in 2020, but the possible impact on the application of MRFTA to this case should be limited considering the differences in content, system, and jurisprudence between the Korean Competition Law and the U.S. Antitrust Law.
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