C. Phelps, here.
Wednesday, April 09, 2014
Old friends in new frocks? MFN clauses in the online hotel booking sector/3
(All Episodes here).
Whereas the German investigation specifically focuses on HRS’ contracts with its hotel partners, retail MFNs clauses are employed also by Booking.com and Expedia, the other two significant competitors in the hotel booking platform market. Not only the combined market share of the three platforms is around 90%, but most hotels “multihome”, i.e. make their offers available on more than one platform. The German Competition Authority considers that the broad adoption of similar rate parity policies by the three platforms amplifies the negative effects on competition seen above.
Second,
according to the German competition watchdog, the existence of the retail MFN clause enforced by HRS leads
to foreclosure. Due to the already mentioned indirect network effects, a hotel booking platform entering the market must attract a critical mass of both
hotels and hotel customers (chicken-egg
problem) if it wants to succeed. The retail MFN adopted by HRS makes it
practically impossible for a competing online hotel booking operator to
adopt an aggressive, low-price commercial strategy in order to acquire
customers, because hotels cannot charge lower prices on its platform.
Moreover, the existence
of the MFN clause prevents sellers from rewarding more innovative
platforms by agreeing on a different pricing model, thus reducing the incentives for
incumbents and entrants to innovate. For instance, a specific platform could be
in a position to offer cost-savings or other quality-based innovations to
hotels, and this
would justify a lower price for consumers using that platform than if they used
another platform. This
sort of innovation has the potential to offer customer benefits through lower
hotel prices, with the prospect of generating more sales for the platform. Without
MFN constraints, such innovation would lead to the seller offering lower hotel
prices through that platform, reflecting the cost savings and the other
benefits to the hotel due to the platform’s innovation. However, if the hotels
cannot offer cheaper hotel rooms via innovative platforms because of the
existence of retail MFN obligations with well-established platforms, this would
reduce the incentive for a platform to innovate as the platform could not
receive a greater market share from offering cheaper hotel rooms relative to its
competitors. Hotels could still reward innovative platforms with higher
commission fees in exchange for a better quality, but
this would not lead to increased trade volumes and a higher platform’s market
share. Put differently, the benefits of the platform’s innovation could be passed
to the hotel partners but not to the users on the other side of the market, i.e. the consumers.
Finally,
HRS’ retail MFN clause restricts competition among hotels. As already
mentioned, lower commission fees are not passed through to consumers in the
shape of lower hotel room prices and, more generally, hotels cannot engage in
price differentiation strategies. Not only are hotels constrained by rate
parity with regard to all of their online offerings, with the inclusion of their
own website, but this obligation extends to the offline distribution of hotel
rooms as well.
Interestingly, the
Office of Fair Trading (OFT), one of UK’s Competition Authorities recently absorbed
by the Competition and Markets Authority (CMA), has been investigating the same
pricing policies practiced by online hotel booking platforms since 2010 as
well. A small hotel reservation platform complained to the OFT that hotels prevented her from offering hotel rooms at discounted prices. Instead of assessing the anti- and procompetitive effects of retail MFN
clauses, however, the OFT focused on whether
an online hotel booking platform allowing hotels to set the room prices
sold through that platform was engaging in resale price maintenance. The
parties investigated are the InterContinental Hotels Groups (IHG), the largest international hotel chain measured by room numbers (675, 982 rooms world-wide, 41,340 in the UK), and two online travel agents,
Expedia and Booking.com. According to the OFT, in separate arrangements with
IHG it was stipulated that Expedia and Booking.com were prevented from discounting
hotel rates set by IHG and displayed to customers via the platforms. The OFT provisionally concluded that such
arrangements were potentially in breach of Article 101(1) TFEU. As a result, the parties gave commitments in order to remove the alleged anticompetitive
effects, which the OFT accepted on January 31, 2014.
(To be continued)
Retos y desafíos de la Ley de Federal de Competencia Económica (México)
Mesa de diálogo, Video aquì.
Tuesday, April 08, 2014
Old friends in new frocks? MFN clauses in the online hotel booking sector/2
(All Episodes here).
Following a three-year long investigation, the German Competition Authority concluded that the retail MFN clause practiced by HRS in its contracts with hotels was a vertical agreement restricting competition in the sense of Article 101(1) TFEU, and that neither the Vertical Block Exemption Regulation applied, nor there were reasons to justify an individual exemption. The theory of harm put forth in the German decision is fourfold. First, in the absence of MFN clauses, hotel booking platforms are likely to compete with one another on the commission fees they charge to hotels. A hotel booking platform could thus decide to offer lower commission fees to its hotel partners, in the hope that hotels will be offering lower hotel room prices to consumers, and, as a consequence, the platform will grow its trade volume. Moreover, a platform is likely to be constrained in the commission fee it charges to hotels by the fear that a higher fee would lead to higher hotel room prices on that platform and therefore to a loss of market share. A retail MFN clause, however, lifts the competitive constraints on the inflation of commission fees paid by hotels. In fact, a platform wishing to gain sales has hardly any incentive to do so by lowering the commission fee charged to hotels, because the hotels are not in a position to lower hotel rooms prices offered to consumers (i.e. to "invest back" the commission saved into lower prices charged on that platform). Moreover, a platform with a retail MFN which is considering a rise in the commission fee will not have to worry that such a rise will make its offering less attractive to consumers, since any pass-through of the rise in commission fees will need to be applied to all other distribution channels covered by the retail MFN clause. In other words, the platform’s fear of the negative consequences of higher hotel room prices in terms of market shares and revenue is substantially reduced, since the platform knows that it will always be at least as competitive as any distribution channel included in the scope of the MFN (other web based platforms, hotel own-website, direct sale to customers at the hotel’s physical desk). Overall, competition among platforms is softened: there is less incentive to reduce commission fees, as there is less incentive not to raise them. The likely result are higher commission fees and, if these higher fees are passed through by hotels, higher hotel room prices available to customers.
(To be continued).
Monday, April 07, 2014
Old friends in new frocks? MFN clauses in the online hotel booking sector/1
Most-favoured-nation (MFN) provisions are found in vertical arrangements and stipulate some sort of preferential treatment in favour of specific market participants. Thus, an MFN clause widely used in industry and commonly analysed by competition authorities and courts imposes on a seller the contractual obligation to treat a customer that is party to the agreement no worse than all other customers. In this respect, the MFN clause at issue embodies the seller’s promise to treat a specific buyer as the seller treats her most-favoured customer (also called most-favoured-customer clauses - MFCs). Typically, these MFNs are employed in markets for intermediate goods, and ensure that the buyer at some stage of the supply chain will pay a specific input no more than the other customers of the same supplier. Some MFN clauses that have attracted the attention of competition policy enforcers concerned the sale of turbine generators, of lead-based anti-knock gasoline additives, of synthetic substances belonging to groups of vitamins, the distribution of digital music, of gas, and were found also in dental plan contracts between dental care service providers and dental practices and in healthcare contracts between a health insurance provider and hospitals.
While traditional MFNs ensure that one party to the agreement gets terms at least as favourable as any other party in an analogous position, a so called retail (price) MFN requires the seller to sell a good or service via a specific intermediary at a price that is not higher than the price the seller charges via other intermediaries (and/or direct). In this case, the end-buyer of the good or service is not a party to the agreement, as was always the case with the more traditional MFNs previously mentioned, and she may not even be aware that such an agreement exists between the seller and the intermediary. It follows that the buyer has no right to obtain redress if the seller does not satisfy the terms of the retail MFN clause.
Recently, adherence to retail MFN clauses has emerged as a popular pricing policy in the online world. Specifically, the seller undertakes not to charge on a specific electronic trade platform a price that is higher than the price that she charges on other platforms, creating “price parity” across platforms (Across-Platform Parity Agreement – APPA). National competition authorities in various countries have opened investigations into the price parity agreements commonly found in the online hotel booking sector. In December 2013, the German Competition Authority (German Federal Cartel Authority, Bundeskartellamt) issued a decision prohibiting HRS, leader in the German market for hotel bookings, from applying a retail MFN clause in its relationships with providers of hotel services, and ordered HRS to delete this clause from its terms and conditions. The clause investigated in the context of the German proceedings obliged providers of hotel services to offer their lowest room prices and other conditions, e.g. relating to cancellation policy, also through HRS’ platform. Moreover, the clause prevented hotels offering cheaper hotel rates and better conditions via their own websites - and even to customers directly at hotel receptions. Prior to the German Competition Authority’s decision, in February 2012, the Düsseldorf District Court of Appeal had already enjoined HRS from enforcing the retail MFN clause.
(To be continued).
While traditional MFNs ensure that one party to the agreement gets terms at least as favourable as any other party in an analogous position, a so called retail (price) MFN requires the seller to sell a good or service via a specific intermediary at a price that is not higher than the price the seller charges via other intermediaries (and/or direct). In this case, the end-buyer of the good or service is not a party to the agreement, as was always the case with the more traditional MFNs previously mentioned, and she may not even be aware that such an agreement exists between the seller and the intermediary. It follows that the buyer has no right to obtain redress if the seller does not satisfy the terms of the retail MFN clause.
Recently, adherence to retail MFN clauses has emerged as a popular pricing policy in the online world. Specifically, the seller undertakes not to charge on a specific electronic trade platform a price that is higher than the price that she charges on other platforms, creating “price parity” across platforms (Across-Platform Parity Agreement – APPA). National competition authorities in various countries have opened investigations into the price parity agreements commonly found in the online hotel booking sector. In December 2013, the German Competition Authority (German Federal Cartel Authority, Bundeskartellamt) issued a decision prohibiting HRS, leader in the German market for hotel bookings, from applying a retail MFN clause in its relationships with providers of hotel services, and ordered HRS to delete this clause from its terms and conditions. The clause investigated in the context of the German proceedings obliged providers of hotel services to offer their lowest room prices and other conditions, e.g. relating to cancellation policy, also through HRS’ platform. Moreover, the clause prevented hotels offering cheaper hotel rates and better conditions via their own websites - and even to customers directly at hotel receptions. Prior to the German Competition Authority’s decision, in February 2012, the Düsseldorf District Court of Appeal had already enjoined HRS from enforcing the retail MFN clause.
(To be continued).
Friday, April 04, 2014
Old friends in new frocks? MFN clauses in the online hotel booking sector
New WavesBlog serialized research effort starting on Monday!
Text and Data Mining
Report from the Expert Group, EC Directorate-General for Research and Innovation, here.
Thursday, April 03, 2014
Wednesday, April 02, 2014
Tuesday, April 01, 2014
Privacy and competitiveness in the age of big data:The interplay between data protection, competition law and consumer protection in the Digital Economy
European Data Protection Supervisor Preliminary Opinion, here
Procedural fairness in competition proceedings + Workshop on Competition Policy
2014 ASCOLA Conference, Warsaw, Preliminary Programme here (Docx download)
Are Restrictions of Competition by Sports Associations Horizontal or Vertical in Nature?
O. Budzinski, S. Szymanski, here.
Graf interviewing Wright: "Can antitrust authorities contribute to fixing the dysfunctional patent system?"
New Frontiers of Antitrust 2014 Conference, here.
Monday, March 31, 2014
Serious Invasions of Privacy in the Digital Era
Australian Law Reform Commission, Discussion Paper, here.
Saturday, March 29, 2014
Friday, March 28, 2014
Thursday, March 27, 2014
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Wednesday, March 26, 2014
Tuesday, March 25, 2014
Monday, March 24, 2014
Friday, March 21, 2014
Searching for Physical and Digital Media: The Evolution of Platforms for Finding Books
M. Baye, B. De Los Santos, M. Wildenbeest, here (pdf download).
Thursday, March 20, 2014
¿Habrá reclamaciones de daños por el cártel de las desmotadoras de algodón?
Wednesday, March 19, 2014
Tuesday, March 18, 2014
Verbraucher Tracking
J. Schallaböck im Auftrag der Bundestagsfraktion Bündnis 90/Die Grünen, hier (pdf download).
Monday, March 17, 2014
Enervit: impegni presentati all'AGCM
Testo degli impegni qui.
In merito alla distribuzione online: autonomia nel determinare i prezzi di rivendita ma necessità di rispettare l’immagine il valore dei marchi di Enervit.
In merito alla distribuzione online: autonomia nel determinare i prezzi di rivendita ma necessità di rispettare l’immagine il valore dei marchi di Enervit.
General insurance add-ons: Provisional findings of market study and proposed remedies
UK Financial Conduct Authority, here.
Friday, March 14, 2014
Making merger control simpler and more consistent in Europe – A “win - win” agenda in support of competitiveness
Thursday, March 13, 2014
Small Businesses As Consumers: Are They Sufficiently Well Protected?
ESRC, A Report for The Federation of Small Businesses, here.
Wednesday, March 12, 2014
Tuesday, March 11, 2014
Vertical agreements: a new priority in antitrust enforcement
Conference organized by the Italian Competition Authority (6 March 2014), Programme and Presentations here.
Distortions and Disincentives in Intellectual Property and Communications Law
Sixth Annual Conference on Innovation and Communications Law
Leeds, England - 2-3 July, 2014
Call for papers here.
Leeds, England - 2-3 July, 2014
Call for papers here.
King my Candy, Crush my Heart: The Weird World of Trademark Registrations
Aaronsanderslaw.com, here.
Monday, March 10, 2014
Friday, March 07, 2014
Thursday, March 06, 2014
Wednesday, March 05, 2014
Droits d’auteur sur les vidéos : « L’âge d’or des “YouTubeurs”, c’est fini »
Rue89.nouvelobs.com, ici.
Behavioural economics and its impact on competition policy
Oxera for the Netherlands Autoriteit Consument & Markt, here.
Tuesday, March 04, 2014
Whither Symmetry? Antitrust Analysis of Intellectual Property Rights at the FTC and DOJ
J. Wright, D. Ginsburg, here.
Intellectual Property Valuation
Expert Group, EC Directorate-General for Research andInnovation, here.
Monday, March 03, 2014
Friday, February 28, 2014
Thursday, February 27, 2014
Wednesday, February 26, 2014
Tuesday, February 25, 2014
Monday, February 24, 2014
Friday, February 21, 2014
Thursday, February 20, 2014
Ruling dismissing on-line booking price parity class action claim in the US
Online Travel Company (OTC) Hotel Booking Antitrust Litigation, U.S. District Court for the Northern District of Texas, 12-cv-3515-B, 18 February 2014, here.
Review of the technology transfer rules – update after public consultation
A. Vernet, Presentation here.
Wednesday, February 19, 2014
Tuesday, February 18, 2014
Friday, February 14, 2014
Hyperlinks, making available and the 'new public' -- or just a dead end?
The1709blog.blogspot.ch, here.
Thursday, February 13, 2014
Contractual arrangements applicable to creators (in selected EU Member States)
Study for the European Parliament, here.
EU Secretary General’s decision on Privacy Surgeon’s DG-COMP appeal (Google Search)
PrivacySurgeon.org, here.
CJEU on Hyperlinking: Svensson Reference
Press Release, C-466/12, here. Judgment here.
Why no Advocate General's opinion on these very delicate issues (despite mentioning AG Sharpston on the Curia website, - as noticed by IPkat) ?
Previous @wavesblog posts on hyperlinking here.
Why no Advocate General's opinion on these very delicate issues (despite mentioning AG Sharpston on the Curia website, - as noticed by IPkat) ?
Previous @wavesblog posts on hyperlinking here.
Wednesday, February 12, 2014
Patients’ Needs, Medicines Innovation and the Global Public’s Interests
M. Lundeby-Grepstad, D.Tordrup, T. Craig and D. Taylor, here.
Tuesday, February 11, 2014
Copyright, Competition and Development
Max Planck Institute for IP and competition law for WIPO, here.
Le Conseil d'État suspend le délai de 15 minutes pour les VTC
Ordonnance du 5 février 2014, SAS Allocab et autres
N° 374524, 374554, ici.
11. Considérant toutefois que le moyen tiré de ce que le simple fait d’accepter, pour un véhicule en circulation sur la voie publique, une réservation par téléphone ou par Internet en vue d’un départ aussi rapide que possible, ne fait pas partie des activités légalement réservées aux taxis et que, par suite, l’administration n’est pas fondée à justifier l’introduction d’un délai d’attente propre aux voitures de tourisme avec chauffeur par la nécessité de protéger l’exercice légal de la profession de taxi, est de nature, en l’état de l’instruction, à créer un doute sérieux sur le bien fondé du premier motif invoqué par l’administration ;
12. Considérant, en second lieu, qu’il résulte de l’instruction, et notamment des échanges ayant eu lieu lors de l’audience publique, que le moyen tiré de ce que l’introduction d’un délai de quinze minutes entre la réservation d’une voiture de tourisme avec chauffeur et la prise en charge de son client n’aura aucun effet notable sur la fluidité du trafic est également, en l’état de l’instruction, de nature à créer un doute sérieux sur le bien fondé du second motif invoqué par l’administration ;
13. Considérant qu’il résulte de ce qui précède que, sans qu’il soit besoin d’examiner les autres moyens soulevés par les sociétés requérantes, le moyen tiré de ce que les dispositions du décret contesté qui introduisent, pour les voitures de tourisme avec chauffeur, un délai minimal de quinze minutes entre la réservation du véhicule et la prise en charge effective du client, portent à la liberté du commerce et de l’industrie une atteinte qui n’est ni nécessaire à un objectif d’intérêt général ni proportionnée à l’atteinte d’un tel objectif est, en l’état de l’instruction, de nature à créer un doute sérieux sur la légalité de ces dispositions.
V. aussi Avis du Conseil de la concurrence,Voitures de tourisme avec chauffeur (VTC), ici.
N° 374524, 374554, ici.
11. Considérant toutefois que le moyen tiré de ce que le simple fait d’accepter, pour un véhicule en circulation sur la voie publique, une réservation par téléphone ou par Internet en vue d’un départ aussi rapide que possible, ne fait pas partie des activités légalement réservées aux taxis et que, par suite, l’administration n’est pas fondée à justifier l’introduction d’un délai d’attente propre aux voitures de tourisme avec chauffeur par la nécessité de protéger l’exercice légal de la profession de taxi, est de nature, en l’état de l’instruction, à créer un doute sérieux sur le bien fondé du premier motif invoqué par l’administration ;
12. Considérant, en second lieu, qu’il résulte de l’instruction, et notamment des échanges ayant eu lieu lors de l’audience publique, que le moyen tiré de ce que l’introduction d’un délai de quinze minutes entre la réservation d’une voiture de tourisme avec chauffeur et la prise en charge de son client n’aura aucun effet notable sur la fluidité du trafic est également, en l’état de l’instruction, de nature à créer un doute sérieux sur le bien fondé du second motif invoqué par l’administration ;
13. Considérant qu’il résulte de ce qui précède que, sans qu’il soit besoin d’examiner les autres moyens soulevés par les sociétés requérantes, le moyen tiré de ce que les dispositions du décret contesté qui introduisent, pour les voitures de tourisme avec chauffeur, un délai minimal de quinze minutes entre la réservation du véhicule et la prise en charge effective du client, portent à la liberté du commerce et de l’industrie une atteinte qui n’est ni nécessaire à un objectif d’intérêt général ni proportionnée à l’atteinte d’un tel objectif est, en l’état de l’instruction, de nature à créer un doute sérieux sur la légalité de ces dispositions.
V. aussi Avis du Conseil de la concurrence,Voitures de tourisme avec chauffeur (VTC), ici.
Private Enforcement Under EU Law: Abuse of Dominance and the Quantification of Lucrum Cessans
F. Maier-Rigaud, U. Schwalbe, here.
Monday, February 10, 2014
Sunday, February 09, 2014
Disruptive Competition Part 2: What Role for Regulators and Competition Policy?
Judoeconomics.wordpress.com, here.
Saturday, February 08, 2014
Friday, February 07, 2014
Gare d’appalto per l’acquisto aggregato di farmaci antitumorali: possibile intesa anticoncorrenziale
AGCM, Provvedimento di avvio qui.
Thursday, February 06, 2014
Richtlinie Big Data
Datenschutzstelle (DSS) der Landesverwaltung des Fürstentums Liechtenstein, hier.
A profile of current and future audiovisual audience
Attentional, Headway International and Harris Interactive for the European Commission, here.
Wednesday, February 05, 2014
Mergers after cartels: How markets react to cartel breakdown
S. Davies, P. Osmosi, M. Graffenberger, here.
Tuesday, February 04, 2014
“Human Rights” Protection for Corporate Antitrust Defendants: Are We Not Going Overboard?
A. Sánchez Graells, F. Marcos, here.
Monday, February 03, 2014
TeleCinco v. YouTube
Andiencia Provincial Civil de Madrid, Sentencia n. 11/2014, 14 de enero de 2014, aquì.
Sunday, February 02, 2014
Saturday, February 01, 2014
Friday, January 31, 2014
Copyright, Permissions, and Fair Use among Visual Artists and the Academic and Museum Visual Arts Communities
Issues Report to the College Art Association, here.
AG Kokott on cartelists' civil liability for "umbrella pricing"
Case C‑557/12, KONE AG and Others, here.
Thursday, January 30, 2014
Wednesday, January 29, 2014
Secondary Liability for Trademark Infringement On the Internet
Kernochan Center, Columbia Law School, Symposium, Video here.
Tuesday, January 28, 2014
Access to data protection remedies in EU Member States
FRA– European Union Agency for Fundamental Rights, here.
Monday, January 27, 2014
Regulating Smart Metering in Europe: Technological, Economic and Legal Challenges
G. Cervigni, P. Larouche, here.
Saturday, January 25, 2014
Friday, January 24, 2014
Connected Televisions - Convergence and Emerging Business Models
OECD Digital Economy Papers No. 23, here.
Judge Rules in Favor of DOJ Finding Bazaarvoice / PowerReviews Merger Anticompetitive
McDermott Will & Emery, here.
Thursday, January 23, 2014
Wednesday, January 22, 2014
Graduated Response Policy and the Behavior of Digital Pirates: Evidence from the French Three-Strike (Hadopi) Law
M. Arnold, E. Darmon, S. Dejean, T. Pénard, here.
Open Experience : Quels modèles économiques pour l’Open dans l’Art et la Culture ?
Scinfolex.wordpress.com, ici.
Tuesday, January 21, 2014
Assessing Innovation Effects in U.S. Merger Cases: An Empirical analysis
B. Kern, R. Dewenter, W. Kerber, here.
Les processus de normalisation et de certification sont-ils pro-concurrentiels?
Autorité de la concurrence, ici (avis à rendre).
Norms and Values in Digital Media: Rethinking Intellectual Property in the Digital Age
World Economic Forum, here.
Monday, January 20, 2014
Sunday, January 19, 2014
Friday, January 17, 2014
Open Data : ouverture et partage des données publiques culturelles
C. Domange, Ministère de la Culture et de la Communication, ici.
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Don't look for it in Rome... Nearly two months on, the Commission’s DMA non-compliance decision against Meta was finally published... -
And two seconds later she did block me 😇- nothing personal, ofc. Just belonging myself to one of those DMA groupies as annoying as mosqu... -
P. Samuelson, here.
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D. Baldacci, here.
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Orf.at, hier (Max Schrems ab 9:34).
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Podcast, here.
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T. Höppner, here.
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Not the usual Competition Commissioner's statement. Whole-of-Commission Approach? EC, here . [Dutch company buying an US company, mind...