On 11 June 2018, the European Commission (“Commission”) published DG Competition’s 2017 Annual Activity Report (“Report”) to provide an overview of its pursuit of its competition policy objectives and enforcement of EU competition rules in 2017. In its Report, the Commission indicates that it has continued to prioritise competition on the merits and that it has focused interventions in the light of priorities outlined in its Political Guidelines, as well as on promoting competition culture and international cooperation. The different enforcement areas mentioned in the Report, certain key figures and the Report’s focus on the Digital Single Market are discussed below.
Enforcement areas and key figures
DG Competition uses the Report as a means of offering accountability; consequently it is replete with estimates of customer benefits resulting from its enforcement policy. In this vein, the Commission estimated total customer benefits resulting from cartel prohibition decisions and merger interventions in 2017 as between 3.9 and 6.2 billion EUR (i.e. 0.03%- 0.04% of EU GDP), without including the unquantifiable benefits of deterrence and non-price effects.
With regard to cartel decisions, in 2017 the Commission adopted seven cartel decisions, imposing fines totaling approximately 1.95 billion EUR, the same figure as in 2016. Total customer benefits for 2017 are said to vary between 1.4 and 2.1 billion EUR, which is well below the figures claimed for 2013 and 2016, but in line with other years. Unsurprisingly, the Report, emphasizes the gravity of anti-competitive agreements and the continued priority it gives to cartel decisions.
In 2017, the number of mergers notified to the Commission – 380 – was the second highest on record. In each year between 2010 and 2016, the corresponding figure was 306. The Commission took 377 final decisions, of which approximately 73% were approved after the simplified procedure. The Commission intervened in 24 cases where it either cleared the merger subject to commitments or prohibited the merger. The Commission estimates total customer benefits resulting from merger interventions as between 2.4 and 4.1 billion EUR, which is a substantial decrease compared to 2016 and possibly surprising given the increase in the number of notified mergers.
Finally, in relation to state aid cases, the Commission reports that between 1 January 1999 and 31 December 2017, a total of 13.3 billion EUR of illegal and incompatible state aid was recovered by member states, with 261.4 million EUR being collected in 2017 alone. Six new recovery decisions were adopted in 2017, and by the end of December, 44 recovery cases were pending in respect of a total of 18.4 billion EUR.
The Digital Single Market
The Digital Single Market emerges clearly as of particular focus for current and future competition policy, assisted by the final report of the e-commerce sector inquiry, which enables it better to understand that market and better target the enforcement of EU competition rules.
Particular emphasis is placed on the need to prevent dominant companies from harming innovation. In 2017, the Commission demonstrated that it is willing to intervene, fining Google 2.42 billion EUR for abusing its search engine dominance by promoting its own comparison shopping service in its search results to the detriment of rivals (Google shopping case). Only recently, the Commission fined Google 4.34 billion EUR for illegal practices regarding Android mobile devices to strengthen dominance of Google’s search engine (Android case). Another investigation of Google’s practices remains ongoing: search and advertising intermediation on third party websites (AdSense case).
Amazon’s distribution agreements with e-book publishers in the EU were the subject of binding commitments, which ban the company from enforcing or establishing non-price and price-parity clauses in the EEA for 5 years (Amazon E-books MFNs case).
Investigations are ongoing inter alia in relation to cross border online sales of merchandising products and retail price restrictions, discrimination on the basis of locations and geo-blocking. The Commission is specifically targeting these practices, because the preliminary results of the e-commerce sector inquiry show these restrictions are applied widely throughout the EU.
Parallel to the enforcement in the Digital Single Market, the Commission continued to develop its thinking on the interaction between competition policy, algorithms and data issues, emphasizing that algorithms cannot shield companies from competition liability.
The Report shows that DG Competition had a productive year in 2017, and its focus on the Digital Single Market continues in 2018.