Antitrust Outlook 2022 – what’s in the stars for big tech, sustainability and competition in general?

Where did 2021 leave us?

In this article, we will take a closer look at some of the main developments that we expect to take place in 2022.

In spite of these many changes, we only expect the developments of EU competition law to accelerate further in 2022. Just like in 2021, we expect regulation of the tech industry, especially “Big Tech”, to be at the crux of efforts by both the European Commission and national regulators to tackle anticompetitive concerns in relation to the largest tech companies.

The main developments for the tech industry that we expect in 2022 are inter alia:

• Introduction of ex ante regulation in combination with continued enforcement of (ex post) competition rules to tackle the ‘tech giants’;
• Revision of the market definition notice;
• Entry into force of the new competition law regime for distribution (‘vertical’) agreements
• Consultation of a proposed regime (block exemptions and guidelines) for horizontal agreements, i.e. cooperation between actual or potential competitors.
• Several new enforcement decisions from the Commission and appeal judgments from the EU Courts; and
• A stronger focus on ‘below thresholds’ acquisitions of innovative companies in the tech and pharma sectors (especially ‘killer acquisitions’).

In addition to the focus on competition law, sustainability remains a debated topic in competition law, where several national competition authorities have provided input through 2021. In 2022, we expect the European Commission to pick up the glove and make official announcements on its position on the assessment of sustainability.

New Block Exemption regulations

It is a safe bet that the EU competition rules for supply and distribution system will significantly change in 2022 to accommodate to the impact of e-commerce, multi-channel distribution strategies, development of online sales channels and the increased use thereof since the current regime came into force in 2010.

Specifically, the explosive growth in e-commerce up to and especially during the COVID-19 pandemic, but also the development of online distribution and the negative effects of its almost unrestricted growth over the past decade, has prompted several changes to the new Vertical Block Exemption Regulation (“VBER”), which will enter into force on 1 June 2022 along with revised Guidelines to supplement the VBER. The new regime is envisaged to provide a legal framework going beyond the next decade, until 2034, and concludes an extensive consultation and review process of more than 2 years.

This is for example the case in relation to the regulation of dual pricing for online and offline sales, which will be relaxed, whereas restrictions on the effective use of the internet, such as bans on price comparison tools, key words for online advertising and search engines, will be restricted further.

Bird & Bird has previously provided an analysis of the main changes in the proposed draft VBER and Guidelines in this article.

While companies subject to the VBER will have an additional one-year period until May 2023 to ensure that their distribution contracts comply with the new VBER, the new VBER provides a less rigid framework than the current regulation and is certain to be an area of opportunity, and thus change, for companies at all levels of the supply chain throughout 2022.

In addition to the VBER, the European Commission will also make public its findings in its assessment of the Horizontal Block Exemption Regulations concerning R&D and Specialisation agreements (the “HBERs”). The current HBERs will expire on 31 December 2022 along with the Horizontal Guidelines.

While not much is known yet about concrete measures in this revision, the European Commission has already stated in its Staff Working Document that the Horizontal Guidelines “are not fully adapted to economic and societal developments of the last ten years, such as digitisation and the pursuit of sustainability goals.”

Accordingly, the European Commission is considering introducing specific guidance in new areas such as data sharing and data pooling initiatives, where uncertainty still remains for companies following the European Commission’s recent Statement of Objections for restriction of access to a data sharing platform.

Competition law enforcement in digital markets

In accordance with the focus on Big Tech and digitalisation, several of the key decisions from the European Commission and judgments from the Courts are expected to clarify important aspects of competition law, especially in relation to Article 102 TFEU. These include:

• The ongoing investigation into whether Amazon’s (i) potential use of non-public marketplace seller data and (ii) preferential treatment of Amazon’s own retail business or of the sellers that use Amazon’s logistics and delivery service constitutes an infringement of Article 102 TFEU;
• The ongoing investigation into Apple’s terms of use for its App Store constitutes an infringement of Article 102 TFEU;
• The General Court’s judgment in the Google Android case concerning restrictions imposed on Android device manufacturers;
• The question of whether the use of legitimately collected customer data may constitute an abuse of a dominant position in the General Court’s judgment in Servizio Elettrico Nazionale.

We can therefore expect significant developments in the case law, especially concerning Article 102 TFEU in 2022.

However, we also expect important new case law in other areas, such as the lawfulness of the European Commission’s new claim to the right to review certain mergers which would not ordinarily be notifiable pursuant to Article 22 of the Merger Regulation but are considered strategic because they concern innovative processes or technology, particularly in digital markets and the pharmaceutical industry. These questions will be looked into by the General Court in the Illumina/Grail appeal.

Sustainability and competition

Just like in 2021 (see Bird & Bird’s outlook on sustainability and competition here), sustainability and competition will be heavily debated. It is especially the Dutch national competition authority that is pushing this discussion. In 2021 they published newly revised draft guidelines on sustainability (see Bird & Bird’s article on these guidelines here) with the explicit aim of pushing the EU-wide debate on this topic. In addition to these guidelines they also published a ‘legal memo’ on their interpretation of the ‘fair share’ criterion later in 2021.

The main discussion on sustainability and competition law regards the ‘fair share’ in the efficiencies generated for consumers in article 101(3) TFEU. This article provides for an exemption to the cartel prohibition, but only if – amongst other requirements – a fair share of the benefits from the agreement between undertakings flows to the consumers. The million-dollar question is whether companies working together to realise climate goals or to reach other sustainability objectives should and/or could benefit from the exemption from article 101(3) TFEU if their cooperation means that competition between them is somehow restricted in the process whilst being beneficial to society at large.

As described above, the European Commission has already acknowledged the need for more guidance on this, so we expect that the European Commission’s revised Horizontal Guidelines will bring more clarity on this matter in 2022.

In addition to this discussion, further discussion can be expected on other topics such as the state aid guidelines and ‘green efficiencies’ in merger control. In September 2021 the European Commission published a policy brief on a Competition Policy in Support of Europe’s Green Ambition. We can derive from this document that – at least in the short term – most amendments will be made in reviews of existing guidelines, such as the revision of the horizontal guidelines.

The Digital Markets and Digital Services Act

The Digital Markets Act (“DMA”) and the Digital Services Act (“DSA”) are promising to get into their final shape in 2022 – with the aim of protecting end-users and regulating large online platforms. Although these regulations are not strictly speaking competition rules but a form of ex ante sectoral regulation, the basic principles and measures are based on decades of competition law enforcement, particularly relating to Article 102 TFEU.

DMA

The DMA is aimed at so-called ‘gatekeepers’ – very large online platforms. Only platforms that fulfil certain criteria (based on their market position and number of users) are designated as gatekeepers and have to comply with certain measures and rules of conduct. For instance, these far-reaching rules oblige gatekeepers to allow third parties to be able to inter-operate with their services and to ensure non-discrimination between their own goods and services and those of third parties.

The most interesting discussion regarding the DMA to follow in 2022 will be on the scope of the DMA. It is clear that Big Tech-companies like Google, Apple and Facebook will be caught by the DMA, but this is not sure to be the case for European companies like booking.com and Spotify. See Bird & Bird’s previous article on the position of the Council of Ministers and the European Parliament.

The DMA has entered into the ‘trialogue’ negotiations between the Council of Ministers, the European Parliament and the European Commission. The European Commission hopes to reach consensus by the summer of 2022, with the DMA entering into force by the end of this year.

A twist in the plot came when the German legislator did not wait for EU-wide regulation and introduced its own gatekeeper-regulation in national law in 2021. Facebook, Amazon, Apple and Google are all subject to examinations whether they should be designated as a gatekeeper in Germany. The investigation into Google has been closed: they are designated as a gatekeeper and are now subject to national scrutiny in Germany on the basis of these national rules. The examinations of Facebook, Amazon and Apple will most likely be concluded in 2022.

DSA

The DSA creates regulations for providers of intermediary services (such as internet access providers), hosting providers and online platforms. Various measures are put in place by the DSA, such as measures to counter illegal goods, services and online content, transparency measures for online platforms and far-reaching obligations for very large online platforms to take risk-based action to prevent the misuse of their platform.

The DSA is still subject to change – mainly on the obligations that will apply to online platforms. The DSA has not got as far as the DMA in the legislative process. The European Parliament still has to adopt the amendments as proposed by the Internal Market & Consumer Protection Committee’s Report on the DSA. This will most likely take place this month (January 2022) after which the trialogue negotiations will commence. See Bird & Bird’s previous article on the current state of play.

Conclusion

We expect 2022 to be an action filled year in the field of competition law. The expected and announced changes in competition law outlined above show that competition law is in a state of considerable flux at the moment, leaving no time to rest for competition lawyers or companies subject to EU competition law!