The Relation Between EU Competition Policy and Consumers in Online Multi-Sided Platform Market: An Analysis Based on Consumer Welfare Standard
Dr. Erman EKİNGEN
Table of Contents
Abstract................................................................................................v
Acknowledgements.............................................................................vi
Table of Contents............................................................................. vii
Table of Figures............................................................................... xiii
Table of Legislation...........................................................................xv
Table of Cases...................................................................................xix
The List of Abbreviations............................................................. xxiii
CHAPTER 1
INTRODUCTION, METHODOLOGY AND
STRUCTURE OF THE BOOK
1.1.The Issue .....................................................................................1
1.2.Research Questions .....................................................................4
1.3 Structure of the Book ..................................................................5
1.4 Research Methodology................................................................7
1.4.1 Doctrinal Legal Research Methodology............................8
1.4.1.2 The Concept of ‘Consumer Welfare’..................10
CHAPTER 2
THE APPEARANCE OF THE ONLINE
MULTI-SIDED PLATFORM MARKETS IN EU
COMPETITION LAW
2.1 Current Status of the Digital Markets in EU Competition Law
and Their General Features.......................................................18
2.2 Online Multi-Sided Platforms in General .................................24
2.2.1 Detailed Points on Online Multi-Sided Platforms...........30
2.2.1.1 Differences Between Online Multi-Sided
Platforms and Retailers.......................................30
2.2.1.2 Difference Between Business to Business and
Business to Consumer Relations in terms of
Online Multi-Sided Platforms.............................33
viii
2.2.2 Importance of Consumers in Online Multi-Sided
Platforms .........................................................................34
2.3 Main Features of Online Multi-Sided Platform Relationships..37
2.3.1 Existence of More Than One Customer Group with
Different Demand Structures ..........................................38
2.3.2 Existence of Indirect Networks Effects...........................38
2.3.3 Existence of a Platform That Creates Inter-Group
Relationships...................................................................40
2.3.4 Existence of Downstream-Actors-Oriented Consumer
Concept............................................................................40
2.4 Different Types of Online Multi-Sided Platforms ....................51
2.4.1 Consumer Transaction Platforms ....................................54
2.4.2 Consumer Info Platforms.................................................56
2.5 Reasons to Evaluate Online Multi-Sided Platform Markets
Differently.................................................................................59
2.5.1 Market Definition ............................................................59
2.5.2 Market Power...................................................................60
2.5.3 Chicken-Egg Problem......................................................62
2.5.4 Cartel Activities...............................................................62
2.5.5 Pricing Strategies and Price Discrimination ....................63
2.5.6 Externalities and Skewed Pricing ....................................64
2.6 Conclusion.................................................................................67
CHAPTER 3
GEO-BLOCKING IN EU COMPETITION LAW
3.1 Geo-Blocking in General ..........................................................72
3.1.1 Methods of Geo-Blocking ...............................................73
3.1.2 Distinction Between Justified and Unjustified GeoBlocking ..........................................................................76
3.1.3 The Circumvention of Geo-Blocking ..............................77
3.2 Geo-Blocking as Part of European Digital Single Market
Strategy.....................................................................................79
3.2.1 The Validity of Geo-Blocking Practices in EU
Cometition Law...............................................................80
3.2.1.1 Articles 101 and 102 TFEU ................................80
ix
3.2.1.2 EU Sources Related to Geo-Blocking Before the
Launch of the EU Digital Single Market
Strategy ...............................................................81
3.2.1.3 EU Sources Related to Geo-Blocking After the
Launch of the European Digital Single Market
Strategy ...............................................................82
3.2.1.4 The Regulation on Unjustified Geo-Blocking ....85
3.3 Geo-Blocking for Copyrighted Content: Competition vs.
Copyright ..................................................................................87
3.3.1 Sides of Online Multi-Sided Platforms which Include
Copyrighted Works as Content .......................................90
3.3.1.1 Consumer Definition in these Platform
Relationships.......................................................92
3.3.2 Reasons Why Geo-Blocking Should be Eliminated for
Copyrighted Content from an EU Competition Law
Perspective in Light of the Consumer Welfare Standard 93
3.3.2.1 Price.....................................................................97
3.3.2.2 Quality and Choice............................................101
3.3.2.4 Innovation..........................................................110
3.4 Language as a Natural Barrier for Cross-Border Trade of
Copyrighted Content...............................................................112
3.5 Conclusion...............................................................................114
CHAPTER 4
TYING AND BUNDLING IN EU
COMPETITION LAW
4.1 Tying and Bundling in General...............................................119
4.1.1 Methods of Tying and Bundling Practices ....................120
4.1.2 Impacts of Tying and Bundling Practices:
Anticompetitive vs Procompetitive...............................121
4.1.3 Main Criteria of Tying and Bundling ............................124
4.1.3.1 Difference Between Tying and Tied Goods or
Services.............................................................124
4.1.3.2 The Existence of the Dominant Position of an
Undertaking in the Market ................................125
4.1.3.3 The Existence of Compulsion or Coercion against
Consumers.........................................................126
x
4.1.3.4 Foreclosure of Competition in the Market ........126
4.1.3.5 No Legal Justification for the Practice..............127
4.2 Tying and Bundling in Online Multi-Sided Platform
Markets...................................................................................127
4.2.1 Sides of Online Multi-Sided Platforms which Apply
Tying and Bundling Practices.......................................128
4.2.1.1 Consumer Definition in these Platform
Relationships.....................................................131
4.2.2 The Consumer Welfare Standard in Online Multi-Sided
Platforms which Apply Tying and Bundling Practice ..133
4.2.2.1 Price...................................................................135
4.2.2.2 Quality and Choice............................................139
4.2.2.3 Innovation..........................................................144
4.3 The Need for Effect-Based Approach to Analyse Tying and
Bundling Practices in Online Multi-Sided Platforms.............146
4.4 Conclusion...............................................................................149
CHAPTER 5
MOST-FAVOURED-NATION CLAUSES IN EU
COMPETITION LAW*
5.1 MFN Clauses in General .........................................................153
5.1.1 Impacts of MFN Clauses: Anticompetitive vs
Procompetitive ..............................................................154
5.1.2 The Difference Between Traditional MFN Clauses and
Platform MFN Clauses..................................................157
5.1.2.1 The Distinct Types of Platform MFN Clauses..158
5.2 The Validity of MFN Clauses in EU Competition Law..........159
5.3 MFN Clauses in Online Multi-Sided Platforms......................165
5.3.1 Sides of Online Multi-Sided Platforms which Include
MFN Clauses.................................................................165
5.3.1.1 Consumer Definition in these Platform
Relations ...........................................................168
5.3.2 The Consumer Welfare Standard in Online Multi-Sided
Platforms which Include MFNs ....................................169
5.3.2.1 Price...................................................................173
5.3.2.2 Quality and Choice............................................179
5.3.2.3 Innovation..........................................................183
xi
5.4 A Discussion on Whether the Free-Riding Defence Can be Used
to Justify MFNs ......................................................................184
5.5 Conclusion...............................................................................188
CHAPTER 6
THE NEED FOR NEW RULES AND TOOLS, AND THE
PROPOSED DMA AS A NEW INSTRUMENT IN EU
COMPETITION LAW
6.1 Consumer Welfare Oriented Competition Analysis in Online
Multi-Sided Platform Markets................................................193
6.2 The Need for New Rules and Tools for the Application of
Competition Law to Online Multi-Sided Platform Markets...195
6.2.1 New Approach to EU Competition Policy in Applying
EU Competition Law to Online Multi-Sided Platform
Markets..........................................................................201
6.2.1.1 Online MSP is a Distinct Business Model ........201
6.2.1.2 End-Users Should be Treated as Consumers in
Online MSP Relationships................................202
6.2.1.3 Case-by-Case Analysis of Practices of Online
MSPs is Needed ................................................203
6.2.1.4 The Practices and Behaviour of Not Only
Dominant Undertakings but Also Other
Undertakings Should be Considered.................203
6.2.2 The General Characteristics of the Proposed Digital
Services Act and Digital Markets Act and The Place of
the Consumer Welfare Standard Therein ......................205
6.2.2.1 Geo-Blocking in the DMA................................211
6.2.2.2 Tying and Bundling in the DMA ......................212
6.2.2.3 MFN Clauses in the DMA ................................213
6.3 Conclusion...............................................................................214
CHAPTER 7
FINAL CONCLUSION
BIBLIOGRAPHY ...........................................................................223
