Competition Law In The Digital Economy In EU & USA

Author: LawSphereX

Category: Technology, Cyber & Privacy

Published: 2026-08-23T18:52:38.198158+00:00

Updated: 2026-08-26T17:11:44.417+00:00

COMPETITION LAW IN THE DIGITAL ECONOMY IN EU &

USA

Ashwani Kant Singh, B.A., LL.B., Dr. Bhimrao Ambedkar University Agra, LL.M. (Corporate Laws), National Law University, Jodhpur (Rajasthan)

1. INTRODUCTION

Liberalization, Privatization & Globalization, these three words are no ordinary terms and will go down in history as responsible for the dawn of the Internet age. 1A quarter century ago, it wouldn`t have been possible to imagine that anything called Internet would take the world by storm, at the beginning of the century no ordinary person would have believed that internet can help us shop online without leaving the comfort of our home, a score of decades ago no ordinary person believed that there would be a thing called smartphone or there would be a social networking via internet or there would be an all mighty search engine and that they all would go on to monopolize the internet.

Advances in technology has created a disruption which has provided each individual with an opportunity to showcase their talent, which ultimately for consumers have increased their choices and for market, the competition. While the competition soared in the brick and mortar business, the virtual world in recent years has seen little to no competition for digital behemoths or digital disruptors. 2 It is no coincidence that world`s largest five companies by market value – Amazon, Alphabet (Google), Apple, Facebook and Microsoft are tech companies. 3Today, with advent of technology and internet, few taps on our smartphone, tablet or laptop could help us discover myriads of products, their reviews and prices. It doesn`t matter how large the world is, with internet it is a click away.

Whether it is finding your lost way through google maps or a place to stay in a stranger land through Airbnb or connecting with friends or finding your future spouse through Facebook or purchasing something you didn`t even know existed via Amazon or auctioning items via e-bay or learning anything via Google; the world has become a global village, where everything and everyone is

1 Bill

Gates, Shaping the Internet Age,

MICROSOFT

STORIES (Dec. 01, 2000), https://news.microsoft.com/2000/12/01/shaping-the-internet-age/. 2 Jonathan Barrett Westbrook Tom, Australia to probe Facebook, Google over media disruption, REUTERS (Dec. 4, 2017), https://www.reuters.com/article/us-australia-antitrust-alphabet-idUSKBN1DY00T.

3 Andreas Mundt, Protecting Competition in a Digital World, PROJECT SYNDICATE (Dec. 26, 2019),

https://www.project-syndicate.org/onpoint/germany-digital-competition-policy-by-andreas-mundt-2019-12.

connected (or can be connected) online. Freed from the restrictions of boundaries and haggling at the brick and mortar system continued through generations – we are better off in this digital age. If all these have been achieved in just over 2 decades, imagine what our future beholds. On the other hand, as the competition grew further in the last decade, "the antitrust enterprise underwent an intense bout of soul-searching”. 4 The concept of digital tech disruptors is very wide in terms and IT industry being as vast as ocean in itself, we must find a river bank or rather a specific domain in the tech disruptor world. Digital disruption can be understood as the transformation caused by tech companies using the emerging digital technologies to change the whole landscape of the entire industry.

These companies either create a niche sector of their own like Uber or Facebook and disrupt the sector through their unconventional services like Google services. In this age of digital economy or rather sharing economy, the services are generally based on the digital platforms and they mostly prove to be intermediary between consumers and sellers. As the companies grow the competition grows and thus we see the emergence of tech companies who are now the tech giants and rule the internet. It is not the argument here that these disruptors have disrupted the economy for good or bad, but it`s just that they have changed the whole basic concept of “market”. There has been the advantages, as stated earlier, but there are slight disadvantages too.

There have been several reports across the world including that of Germany wherein they have warned against big tech monopolies being created and abusing their dominant position in market. The perils of power lying in hands of few, poses a significant problem for democracies across world. As the nations are sovereign entity, they have the authority over not only the national boundaries but digital boundaries as well. They have the authority over data and data infrastructure as well in the territory apart from the people and companies of the nation who use or control the data. This is where the regime of competition law comes into place. Competition law is the way for government to regulate the market and to ensure fair competition takes place between the companies in the market.

The digital economy relies on the tech companies who dominate the market and become the gatekeeper of the internet in their particular industry. The ease of access to market through rise of e-commerce industry or online advertising has really helped the market grow and competition thrive. This has been one of the key drivers for economic growth in recent times. Owing to the breakneck speed with which the digital market appears to be evolving, markets may just be tipping towards a single player or

4 John M. Newman, Antitrust in Digital Markets, 72 Vanderbilt L. Rev. 1497, 1499 (2018),

https://scholarship.law.vanderbilt.edu/vlr/vol72/iss5/2/.

very few of the players in a provided market. The government here must intervene but the problem appears that if the government intervenes where do they draw a line? Should they just be limited to superficial intervention and let market take care of it`s own or should they start deep investigation going as far as to breaking down the tech giants and retaining control over the people`s data. As stated earlier, the advent of digital economy has seriously changed the landscape of market and it is now perplexing to categories a particular digital service into traditional categories of market. The tech companies can`t be categorized into just one bracket, as the competition in digital world is different from traditional market. The competition is driven by “winner takes all approach” and the companies survive only because of their fast paced innovation and high investments.

The nature of the digital market is almost cyclic and owing to that, the companies who achieved success in their business have acquired significant market power. These companies are what we call a dominant company enjoying significant market power i. e. in a dominating position. It is not just about numbers anymore, it is about the power you exert in the market with your authority. The competition laws of nations may differ in aspects, but the underlying idea of abuse of dominant position in market has remained significantly similar throughout the world, including USA. The road to monopolization begins with dominance and advances once it`s abused. But, the question that one may ask is big is not always bad, right?

While this may be true in other traditional markets, in the world of digital markets the big tends to run towards the path of monopoly, whether it is natural or not is a different matter, but generally in digital market the big companies tend to move towards a monopoly. Thus, we may also say that there is “virtual loop of dominance” in digital markets. 5 With great power comes great responsibility and with dominance comes the power, so the company must act responsibly and not abuse it`s power. The abuse and disruption, it is the traditional market that has been affected gravely. Uberisation is the new norm and the old ways are fading into oblivion.

It is not disputed that technology is the greatest gift humans gave to themselves, it is also not disputed that if no action is taken now to stop these digital behemoths, the internet will continue to move towards monopolization, ending the virtual competition. 6

5 Spencer W. Waller, The Role of Monopolization and Abuse of Dominance in Competition Law, 20 LOY.

CONSUMER L. REV. 123 (2008), http://lawecommons.luc.edu/lclr/vol20/iss2/4. 6 Ulrich Heimeshoff & Justus Haucap, Google, Facebook, Amazon, eBay: Is the internet driving competition or market monopolization?, 83 ECONSTOR 1, 4 (2013), https://www.econstor.eu/bitstream/10419/68229/1/ 73435858X.pdf

Having stated, the benefits of digital world, we must also look at this from the perspective of competition law and specifically from perspective of abuse of dominant position. The situation gets much more complex as the dynamic and technical nature of the digital market makes it very difficult for competition law to analyze the relevant market and thus making the process more complex than usual. In this paper, I shall not conduct my analysis with broad framework but rather within the narrower background of relevant market power, so that I could evaluate the possible regulatory interventions through competition law. The goal is to study and single out the issues plaguing competition law & abuse of dominant position in the digital market.

The issues shall be addressed so as to suggest possible novel competition policy measures and how two major digital economies - USA & EU could learn from the experience of the same. It is true that digital world is vast, especially when it comes to highly advanced and competitive markets in USA and EU, hence I shall be limiting myself to the abuse of dominant position by giant tech companies like Facebook, Google. These 2 companies represent three different domains of industry and are synonyms with the term digital disruptors. It is not to say that they are not innovators but lately they all have been accused of abusing their dominant position in their respective field.

7 As the digital market, is failing to self-correct itself and is also attempting to facilitate creation and maintenance of a sustainable market power, the paper argues that it may very well be time to end the laissez-faire. In the next chapter we shall see the legal challenges being faced by these companies and how competition law is dealing with the same. We shall attempt to understand and unravel the diversity of the digital world and the legal challenges posed to them.

2. ABUSE OF DOMINANT POSITION

It has been over a century since enactment of the antitrust laws, but little has changed in wordings of the antitrust laws of USA. In 2002, at the urging of government, the Congress passed a footnote to Section 1 of the Sherman Act, the Antitrust Modernization Commission Act of 2002 (AMCA).8 The AMCA directed for creation of a commission to meet the needs of creating a modernized antitrust laws and hence Antitrust Modernization Commission (AMC) was created “to examine whether the need exists to modernize the antitrust laws . . .”9 It was 7 Investigation sin several countries are under way for abuse of dominant position including India and USA. See Jay Greene & Reed Albergotti, Apple, Google, Amazon and Facebook face civil suits forcing antitrust issues, THE

WASHINGTON

POST

(2020), https://www.washingtonpost.com/technology/2020/08/21/big-tech-lawsuitsantitrust/.

8 Antitrust Modernization Commission Act of 2002, § 11054(h), Pub. L. No. 107-273 (USA).

9 DOUGLAS F. BRODER, U.S. ANTITRUST LAW AND ENFORCEMENT: A PRACTICE INTRODUCTION, 2 (Oxford

expected that sweeping changes would be recommended to the archaic antitrust laws, but the AMC’s report saw little need for change in the basic antitrust legal and enforcement apparatus aside from repealing the Robinson-Patman Act. 10 If we are to discuss abuse of dominant position we must first discuss the regulatory agencies first. European Union is a vast group of countries hence pinpointing single laws of each of the country is a tedious task at hand hence, I shall mostly limit it to Germany and overall EU laws that concern with digital market. First let`s understand what really antitrust law means and then we see the USA and Europe`s way of dealing with anti-competitive behavior.

2.1 USA

Antitrust laws are the most important statutes in the arsenal of any country and the United States of America (USA) is no different. Home to the world`s top companies the antitrust laws for the USA, are it`s one of the most important federal economic regulatory scheme. 11 There are three major Federal antitrust laws: • The Sherman Antitrust Act • The Clayton Act • The Federal Trade Commission Act The term antitrust is derived from set of centralized legal tools or practices that were created in the name of “trust” to circumvent the then laws which prohibited corporations from buying stocks of other company. There is no standard set of definition anywhere in any statue as to what exactly is antitrust but there is a general understanding that the laws primary focus is the marketplace competition.

USA`s democracy has major Federal characteristics, hence not only the Centre but also States have a role to enact the laws. Thus, antitrust laws are a collection of federal and state laws that regulate the alleged and possible anti-competitive practices of the University Press 2nd ed. 2012).

companies or corporations. The federal government enforces the federal antitrust laws while states maintain their own antitrust laws. Essentially, these laws aim to prohibit anti-competitive practices that bereft the consumers and other competitors from joy of fair market practices, resulting in fair prices for the products. As stated earlier, there has been almost no change in the wordings of the antitrust laws since the enactment of the statutes. The Sherman Act, 1890 was one of the first statutes in the world on the antitrust issue, followed by Clayton Act in 1914. The acts may be referred to as archaic, but right from AT&T12 to Standard Oil case13 to Microsoft`s case14 to tech conglomerates being sued for antitrust violations15, time and again the US antitrust legislation has withstood the test of time.

The recent antitrust complaint against Google by Department of Justice16 (DOJ) and state attorneys17 is pegged to be the most anticipated case of the century since DOJ`s win against Microsoft18, two decades ago. Both the complaints state that Google has violated the Section 2 of the Sherman Act19 for alleged violation of “unlawfully maintaining monopoly” in the market of online search services & advertising. With google and it`s other tech conglomerates being 12 United States v. AT&T, 552 F. Supp. 131 (D. D. C. 1982). This was the antitrust case in the United States that led to the 1984 Bell System divestiture, the breakup of the old American Telephone & Telegraph into the new, seven regional Bell operating companies (RBOC)s and the much smaller new AT&T. 13 Standard Oil Co. of New Jersey v. United States, 221 U. S. 1 (1911).

This was a case in which the Supreme Court of the United States found Standard Oil Co. guilty of monopolizing the petroleum industry through a series of abusive and anticompetitive actions. The Court's remedy was to divide Standard Oil into several geographically separate and eventually competing firms. The case is important for our discussion for the call for breaking up big tech industries is growing louder with every passing year. 14 Most previous antitrust cases involving personal computers had involved, at least in part, hardware markets. See United States v. Microsoft Corp. (Microsoft III), 253 F. 3d 34, 91 (D. C. Cir. 2001). 15 Press Release, Colorado Attorney General, Colorado Attorney General Phil Weiser leads multistate lawsuit seeking to end Google’s illegal monopoly in search market (Dec. 17, 2020), https://coag.

gov/press-releases/12- 17-20/ [Herein after referred to as “Colorado AG Press Release”]. Also See Press Release, New York Attorney General, Attorney General James Leads Multistate Lawsuit Seeking to End Facebook’s Illegal Monopoly (Dec. 9, 2020), https://ag. ny. gov/press-release/2020/attorney-general-james-leads-multistate-lawsuit-seeking-endfacebooks-illegal. [Herein after referred to as “NYAG Press Release”]. Reuters Staff, Amazon faces class-action lawsuit over eBook pricing, REUTERS (Jan. 15, 2021), https://www. reuters. com/article/us-tech-antitrust-amazonidUSKBN29K06P. 16 Press Release 20-1124, Department of Justice, Justice Department Sues Monopolist Google For Violating Antitrust Laws (Oct. 20, 2020), https://www. justice. gov/opa/pr/justice-department-sues-monopolist-googleviolating-antitrust-laws. [Herein after referred to as “DOJ Press Release”].

17 Colorado AG Press Release, supra n. 15

18 United States v. Microsoft Corporation, 253 F.3d 34 (D.C. Cir. 2001)

19 Sherman Anti-Trust Act, 15 U.S.C. § 2 (1890) (USA).

termed as “the gatekeepers for the internet”20, the lawsuits21 or investigations22 against them is already termed as the biggest antitrust news ever and some are already alluding these cases or investigations equivalent to that of Standard Oil23 - alluding data as the new oil. All the cases (landmark judgments in the history of United States antitrust law) as stated above have one thing in common, the monopolistic companies against who complaints were filed were either divided into small companies or were suggested to break up into small companies, later being overruled24. Page in his book25 writes about how Microsoft was almost broken up into 2 different companies. He writes “After a widely publicized trial, Judge Thomas Penfield Jackson ruled for the United States on virtually all of its liability claims and accepted its proposed remedy, ordering Microsoft broken up.

In the central decision of the litigation, however, the court of appeals in 2001 reversed Judge Jackson’s remedial order and some of his liability rulings, and remanded to a different trial judge. ” In many ways the case of abuse of dominant position by google is along the same lines as that of Microsoft case, for DOJ is heavily relying on the judgment and that shows the sign that USA is finally moving away from the prisons of Chicago School. 26 What is most interesting to notice is that the term “abuse of dominant position” is missing from the statutes of antitrust laws. It is not to say that the doctrine is not used in the country, but it is implied via market power. It is tested with respect to the company enjoying the market power, which may also imply monopoly power. 27 The question that arises for discussion now is what constitutes a monopoly?

Justice Hand in his judgment28 explains as to what percentage actually constitutes a monopoly-

20 STAFF OF H. COMM. ON ANTITRUST, COMMERCIAL AND ADMIN. LAW OF THE H. COMM. ON THE JUDICIARY, 116TH

CONG., INVESTIGATION OF COMPETITION OF DIGITAL MARKETS: MAJORITY STAFF REP. AND

RECOMMENDATIONS 10 (Comm. Print 2020) [hereinafter Majority Staff Report]

21 supra n. 15

22 Majority Staff Report, supra n. 20.

23 DOUGLAS F. BRODER, supra n. 9, at 25.

24 Justice Jackson`s opinion was to accept DOJ`s recommendations and order Microsoft to divide into 2 companies, one for Windows and the other for other softwares. The judgment was overruled on appeal in D.C Circuit federal court of appeals. See United States v. Microsoft Corporation, 253 F.3d 34 (D.C. Cir. 2001)

25 WILLIAM H. PAGE AND JOHN E. LOPATKA, THE MICROSOFT CASE: ANTITRUST, HIGH TECHNOLOGY AND

CONSUMER WELFARE ix (The University of Chicago Press 2007) 26 Adherents of the Chicago School deplored what they viewed as the economically unsound excesses of many of the government enforcement actions and the Supreme Court antitrust decisions of the previous twenty years, especially in the areas of monopolization and mergers. See DOUGLAS F. BRODER, supra n. 24

27 Market Power, Black`s Law Dictionary (9th ed. 2009).

28 United States v. Aluminium Co. of Am., 148 F.2d 416, 424 (2d Gr. 1945)

"Ninety percent is enough to constitute a monopoly: it is doubtful whether sixty or sixty four percent is enough; and certainly thirty three percent is not. " Section 2 of the Sherman Act establishes three offences, which can be termed as “monopolization, ”attempted monopolization,” and “conspiracy to monopolize. ”29 Now, it can`t be disputed that Google enjoys dominant position in the general search services market,30 but surely that is not an offence in itself. One may also wonder, if it`s free how is it really harming the consumers? To answer that, we must refer to the Majority Staff report31 where they have answered the same question – “the online platforms’ dominance carries significant costs. It has diminished consumer choice, eroded innovation and entrepreneurship in the U. S. economy, weakened the vibrancy of the free and diverse press, and undermined Americans’ privacy.

” Thus, it can be answered easily that as Google enjoys over 90% of search services market and Facebook enjoys over 80% of the market of social network market32, they both enjoy a dominant position, which borders to monopoly in the market. When we are to consider the case against Facebook33, the accusation is of creating a monopoly via data advantage obtained through acquiring its competitors, weakening other firms, misinformation to public resulting in dismal privacy protection. When considering the case against Google34, the accusation is of maintaining an interlocking monopoly through a series of anticompetitive practices, which includes, undermining other vertical search providers, extorting users for distribution of web traffic channels, anticompetitive contracts (android and pre-installed apps) and other services.

29 Sherman Anti-Trust Act, 15 U.S.C. § 2 (1890) (USA)

30 Google in recent years has accounted for nearly 90 percent of all general-search-engine queries in the United States, and almost 95 percent of queries on mobile devices. See DOJ Press Release, supra n. 36

31 Majority Staff Report, supra n. 20

32 Id.

33 Press Release, Fed. Trade Commission, FTC Sues Facebook for Illegal Monopolization, (Dec. 9, 2020), https://www.ftc.gov/news-events/press-releases/2020/12/ftc-sues-facebook-illegal-monopolization.[Herein after referred to as “FTC Press Release”]. Also See Majority Staff Report, supra n. 20 34 See Colorado AG Press Release, supra n.15. Also See 34 Press Release 20-1124, Department of Justice, Justice Department Sues Monopolist Google For Violating Antitrust Laws (Oct. 20, 2020), https://www.justice.gov/opa/pr/justice-department-sues-monopolist-google-violating-antitrust-laws.[Herein after referred to as “DOJ Press Release”]. Also See Majority Staff Report, supra n. 20

While, Google and Facebook were sued or investigated for abuse of monopoly power or dominant position, the case of Amazon appears different. The investigation against Amazon35 is related to deep discounting, acquiring competitors and exploiting seller`s data and information for anticompetitive purposes. Given the fact that Amazon serves as “essential infrastructure across the internet economy”, it remains to be seen whether the elements of “public utility” combined with “essential facilities” can be applied to the case of Amazon to prove it`s monopolist nature. 36 Unlike European Union (EU), where for abuse of dominant position, there is a comprehensive guideline for determining relevant market or exclusionary conduct by dominant undertakings, in the form of Article 102 of the Treaty on the Functioning of European Union, in USA there is no such guidelines.

In what has been over a century, the definitions and interpretations of the act has been solely dependent on the catena of decisions given by the U. S. Supreme Court. Broadly, the interpretations may be on similar lines when compared to EU court`s decisions, but philosophical differences do exist. As the abuse of the monopoly power or dominant position is difficult to prove via direct evidence, the cases are decided based on the indirect or circumstantial evidence present. The question which we must answer in following chapters is whether online search engine or social networking can be considered as relevant market within the definition of Market power under antitrust law? Can these tech giants be considered as natural monopoly? If these questions are answered in yes, then can the digital disruptors be said to abuse their monopoly power or abuse their dominant position in the market?

These questions are important because the term relevant market is not static and may change depending upon circumstances, as evident from Alcoa case. 37

2.2 EUROPEAN UNION

Unlike USA, European Union uses the term abuse of dominant position specifically and is one of the four pillar of their competition policy. European Union`s Competition law can be said to derive its powers mostly from Articles 101 to 109 of the Treaty on the Functioning of the European Union (TFEU), along with other Regulations and Directives. The 4 pillars of EU

35 Majority Staff Report, supra n. 20

36 Lina M. Khan, Amazon`s Antitrust

Paradox, Yale L.J. 710, 797-802 (2017), https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=5785&context=ylj 37 The District Court had computed Alcoa’s market share to be about 33%; however after re-defining the relevant market, the Circuit Court computed the share to be over 90%. See United States v. Alcoa, 148 F.2d 416 (2d Cir. 1945).

Competition Policy are- • Cartels, or collusion – Art. 101 TFEU. • Market dominance, or to inhibit the abuse of an entity`s dominant market position – Art. 102 TFEU. • Mergers, regulating proposed mergers, acquisitions and joint ventures as per European Union Merger Law. 38 • State aid, and other direct or indirect aids supported by the Member States of the European Union to the entities under Art. 107 TFEU. Having stated the fact that sovereigns under EU have different laws of their own and vary from country to country, but EU also has it`s own competition law with the “Commissioner for Competition” a member of the European Commission responsible for regulating the competition. The European Commission and its Directorate General for Competition is the primary authority responsible for regulating competition law within the European Union.

For the digital market, it is the abuse of dominant position that is more prevalent than any other provision. Even when it comes to merger, it boils down to proving abuse of dominant position. Case in point being Facebook acquiring WhatsApp. EU has been most active in terms of competition and when it comes to digital market, they have been hyper active. We shall look later as to what all cases EU is deciding but first we must understand how the term has been interpreted by courts and legislations. As per Art. 102 "Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market insofar as it may affect trade between Member States. This can mean,

38 Council Regulation (EC) No 19/2004 of 20 January 2004 on the control of concentrations between

undertakings (the EC Merger Regulation)

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; (b) limiting production, markets or technical development to the prejudice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. " The aim of EU competition law can be put succinctly in words of the former Commissioner for Competition, Neelie Kroes, who mentioned that: “First, it is competition, and not competitors, that is to be protected. Second, ultimately the aim is to avoid consumer harm”.

The same can also be deduced from “Guidance on Article 102 Enforcement Priorities”, which was published to act as guide for courts and commission whilst dealing with Abuse cases. Mark39 in his book explains that “In applying Article 102, the Commission must consider two points. Firstly, it is necessary to show that an undertaking holds a dominant position in the relevant market and, secondly, there must be an analysis of the undertaking's behavior to ascertain whether it is abusive. ” Analyzing or finding dominance can be said to be a question of whether an entity behaves "to an appreciable extent independently of its competitors, customers and ultimately of its consumer. ” If an entity acquires a large market share or power in the market then that entity can be termed to be in a dominant position. If any firm enjoying dominant position in the market, crosses the threshold of 39.

7% of market share then there is "a special responsibility not to allow its conduct to impair competition on the common market". 40 Same as with collusive conduct, market shares are determined with reference to the particular market in which the firm and product in question is sold. If we are to categorize the abuse of dominant position as interpreted by EU Commission and

39 MARK-OLIVER MACKENRODT, BEATRIZ CONDE GALLEGO & STEFAN ENCHELMAIER, ABUSE OF DOMINANT

POSITION: NEW INTERPRETATION, NEW ENFORCEMENT MECHANISMS? (2008).

40 Id.

Courts, we may differentiate them in 3 different forms, which has been explained by Mark41 as “Firstly, there are exploitative abuses, whereby a dominant firm abuses its market position to exploit consumers – for example by reducing output and increasing the price of its goods or services. Secondly, there are exclusionary abuses, involving behaviour by a dominant firm which is aimed at, or has the effect of, preventing the development of competition by excluding competitors. Finally, there exists a possible third category of single market abuse, which concerns behaviour that is harmful to the principles of the single market more broadly, such as the impeding of parallel imports or limiting of intra-brand competition. ” Though there exists 3 forms, it is generally the exclusionary and exploitative conduct that is applied into digital sector.

But, much of Article 102 and the Guidance of commission is limited to the exclusionary conduct. Some examples of abuse include that of exclusionary conduct, granting exclusive rebates, tying agreements or bundling, predatory pricing, price discrimination, etc.

2.2.1 DIGITAL DISRUPTORS & ABUSE OF DOMINANT POSITION

When Facebook acquired WhatsApp, it was well known at that moment that data was the main reason behind the acquisition. The acquisition would have had serious consequences in the social media market. The question arose and this sparked debates about big tech companies acquiring other competitors. Case in point can be Facebook acquiring WhatsApp. At the time the threshold as per merger laws was not met, so Facebook was not mandated to take prior permission of Commission, but as 3 member states i. e. Portugal, Spain and the UK`s threshold limits 42were crossed, Facebook applied to commission for approval of acquisition. This blind spot led to furor among other member states and Germany was the first to amend it`s merger laws and include transactional values as one of the jurisdictions. Austria followed the suit.

As per the official press release of EU, the facts are clearly stated as “When Facebook notified the acquisition of WhatsApp in 2014, it informed the Commission that it would be unable to establish reliable automated matching between Facebook users' accounts and WhatsApp users' accounts. It stated this both in the notification form and in a reply to a request of information from the Commission. However, in August 2016, WhatsApp announced updates to its terms of

41 Id.

42 Bram Visser, The Facebook:WhatsApp merger case. European Commission’s lucky break or proof of

impermeable system of merger control?, August 16, 2017.

service and privacy policy, including the possibility of linking WhatsApp users' phone numbers with Facebook users' identities....... The Commission has found that, contrary to Facebook's statements in the 2014 merger review process, the technical possibility of automatically matching Facebook and WhatsApp users' identities already existed in 2014, and that Facebook staff were aware of such a possibility. ” 43 This led to Facebook being fined for €110 million for “for providing incorrect or misleading information during the Commission's 2014 investigation” This is not the limit as to where they stop, as recently as in January 2021 Germany introduced it`s 10th Amendment to the German Act against Restraints of Competition ("ARC"), also known as the "Gesetz gegen Wettbewerbsbeschränkungen" ("GWB").

The act introduces plethora of new restrictions for the platforms with special focus on areas such as “unilateral conduct, new administrative procedures, and expands the powers of antitrust authorities to redress perceived antitrust law violations. ”44 The most significant of all the changes that are brought in can be said to be the enforcement rules focused against the “unilateral activities of digital platform companies” who allegedly abuse their dominant position. It was back in 2016, way before the world knew about Cambridge Analytica scandal, that rocked the reputation of Facebook and trust laws across world, Germany launched an investigation into Facebook for “profiling of users for targeted advertising and abuse of its dominant position”.

45 The Bundeskartellamt president Andreas Mundt in his press address said: “For advertisingfinanced internet services such as Facebook, user data are hugely important. For this reason it is essential to also examine under the aspect of abuse of market power whether the consumers are sufficiently informed about the type and extent of data collected. ” He further stated that “Dominant companies are subject to special obligations. These include the use of adequate terms of service as far as these are relevant to the market. ”

43 European Commission Press Release IP/17/1369, Mergers: Commission fines Facebook €110 million for

providing misleading information about WhatsApp takeover, https://ec.europa.eu/commission/presscorner/detail/pl/IP_17_1369 Adam Warner, Germany’s New Competition Rules for Tech Platforms, JonesDay, https://www.jonesday.com/en/insights/2021/01/germany-adopts-new-competition-rules (last visited Apr 28, 2021).

45 Facebook facing German cartel probe over suspected data protection abuses, THE GUARDIAN (2016),

http://www.theguardian.com/technology/2016/mar/02/facebook-german-cartel-probe-suspected-data-protectionabuses (last visited Apr 28, 2021).

It was after 3 complete years of investigation, on 7 February 2019, the Bundeskartellamt (the competition regulatory authority in Germany) completed the investigation and concluded that: (i)Facebook held a dominant position in the German market for social networks; and (ii) Facebook had infringed competition law by abusing this dominant position through its data collection practices. 46 After describing the conduct as “exploitative business practice”, the Bundeskartellamt noted that “other services such as LinkedIn, YouTube and Snapchat were not sufficiently comparable to a social network to fall within the same market, despite some similarities, and despite the existence of frequent “multi-homing” (i. e. use of multiple social networks) by users.

” It can be said that the definition of market was interpreted very narrowly which made the Bundeskartellamt to come to conclusion that Facebook held a market share of over 90%. Apart from Facebook, there are many other companies like that of Google who are facing investigation from the European Commission for abuse of dominant position. On 20 March 2019, The European Commission announced that it has fined Google €1. 49 billion (1. 29% of Google's turnover in 2018) for violating the EU`s competition laws and rules. As per the commission “Google has abused its market dominance by imposing a number of restrictive clauses in contracts with third-party websites which prevented Google's rivals from placing their search adverts on these websites. ” As per the statement of Commissioner of Competition in the Press release47: "Today the Commission has fined Google €1.

49 billion for illegal misuse of its dominant position in the market for the brokering of online search adverts. Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti- competitive contractual restrictions on third-party websites. This is illegal under EU antitrust rules. The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate - and consumers the benefits of competition. ” 46 Bristows LLP-Matthew Hunt & Sophie Lawrance, German competition authority pushes the boundaries of abuse of dominance with infringement finding on online data collection | Lexology, https://www. lexology. com/library/detail. aspx? g=5a9decf5-1038-4a03-9947-e4af6dbfeef5 (last visited Apr 28, 2021). 47 European Commission Press Release IP_19_1770, Antitrust: Commission fines Google €1.

49 billion for abusive practices in online advertising, https://ec. europa. eu/commission/presscorner/detail/en/IP_19_1770

As stated earlier, like USA the dominance per se is not illegal but abuse of the same is. The decision maintains the principle that dominant companies have special responsibility of not abusing their market power and instead of restricting promoting competition. The decision concludes that “Google is dominant in the market for online search advertising intermediation in the EEA since at least 2006. This is based in particular on Google's very high market shares, exceeding 85% for most of the period. ” As there is very high barrier to the entry combined with requirement of significant investment required to enter into the search engine market and maintaining the technology also is expensive thus not everyone can enter into the market.

Thus the commission came to conclusion that “Google has abused this market dominance by preventing rivals from competing in the online search advertising intermediation market. ” This is not the first time that Google was fined for abusing its dominance, in June 2017 as well the Commission “fined Google €2. 42 billion for abusing its dominance as a search engine by giving an illegal advantage to Google's own comparison shopping service. ” In July 2018, the Commission “fined Google €4. 34 billion for illegal practices regarding Android mobile devices to strengthen the dominance of Google's search engine. ”

3. CONCLUSION

If we are to compare USA and EU, we see that EU has been proactive even before USA could realize the impact of digital economy on competition law. While USA has successfully investigated the cases of abuse of competition law and not just dominant position by behemoth tech companies via different committee reports such as Stigler Committee report48 and Majority Staff Report49, EU has taken more direct approach by successfully resolving not just one but many cases including the likes of Google and Facebook. They all have been fined for their actions of abuse of dominant position. While USA is slow in start and is steadily gaining pace via lawsuits being filed for antitrust violations against these big tech giants and committee hearings at regular intervals, but it has yet to take any significant step that may cause them to worry.

USA can also be said to adopting 48 FILIPPO LANCIERI & PATRICIA SAKOWSKI, Competition in Digital Markets: A Review of Expert Reports (2020), Stigler Center Working Paper Series No. 303, FORTHCOMING, Stan. J. L. Bus. & Fin. 1, (2020), https://www. chicagobooth. edu/-/media/research/stigler/pdfs/digital-platforms---committee-report---stiglercenter. pdf

49 Majority Staff Report, supra n. 20

the approach of all bark and no bite, wherein huge uproar and furor has been created but no action is taken. EU has realized the importance of data and is future ready by adopting the trial and error approach, if we may say that, as Germany has already amended it`s competition laws after Instagram and WhatsApp acquisition by Facebook to now include data as an important factor in analyzing Mergers and Acquisitions. While EU is busy adopting to the failed chances, the world including the USA is waiting patiently and only launching futile investigations after investigations into the big tech giants. It is true that innovations is to be taken as a big factor in analyzing competition all the while maintaining the sanctity of antitrust laws, but USA must learn from EU and not leave everything to courts.

The USA legislature by their actions are screaming that they are too timid in nature to take action by amending laws and will leave everything in court`s lobby to handle. On the other hand, this won`t be the first time in USA that court`s help is sought to resolve such actions. Microsoft case is evidence of the fact that digital economy can be saved even without altering legislations and without sacrificing company`s core structure. The digital economy is booming at great length and with it the innovation will also grow by leaps and bounds, EU has realized the same and is attempting to go with the flow of time and into the future, meanwhile USA appears to be stuck between prioritizing innovation and competition.

Both EU and USA are progressive countries and must learn from each other`s experience to adopt a new framework that will not only incorporate user privacy but also protect competition in market. Solution needs to be found for this digital abuse of power and monopoly. If not for government intervention, the advocates will have hard time proving nonnatural monopolistic nature of google or other companies. Owing to the paucity of time and other constraints, we cannot analyze all the aspects of digital economy and competition law, in single project as entire books have been written over these topics. What we have attempted to analyze in the current project is but one small part but heavy and impactful part of competition law domain.

It is not easy proving anti competitive practice as there is rarely any price involved and data being a new commodity that is yet to be recognized by laws of all nations, the future sure seems interesting.