In last year’s edition of The Dominance and Monopolies Review, we noted that abuse of dominance rules appeared to be entering a phase of more rapid development. For once, our predictions were not far off the mark. 2017 saw authorities reach decisions imposing record fines based on novel theories of harm applied to rapidly changing markets; overlapping parallel investigations have become the norm, rather than the exception; and ‘hipster antitrust’ – a call to replace the consumer welfare standard with a broader public interest test – has emerged as a serious challenge to contemporary economic orthodoxy. Carl Shapiro recently went so far to claim that ‘antitrust is sexy again’.1

The sixth edition of The Dominance and Monopolies Review seeks to navigate these choppy waters. As with previous years, each chapter summarises the abuse of dominance rules in a jurisdiction, provides a review of the regime’s enforcement activity in the past year, and offers a prediction regarding future developments. From the thoughtful contributions of the specialist chapter authors, we identify four trends.

First, we observe growing clamour on both sides of the Atlantic for more competition enforcement. In May 2017, Senator Elizabeth Warren stated: ‘It’s time for us to do what Teddy Roosevelt did – and pick up the antitrust stick again. Sure, that stick has collected some dust, but the laws are still on the books.’ In September, The Economist argued that ‘the world needs a healthy dose of competition to keep today’s giants on their toes and to give others in their shadow a chance to grow’. And The New York Times has associated declining competition with rising inequality: ‘with competition in tatters, the rip of inequality widens’.

These statements are sometimes accompanied by a plea to abandon consumer welfare as the lodestar of antitrust in favour of a broader, multi-factored public interest test – and even a ‘fairness’ test.2 The underlying concern is that large corporations wield too much influence, collect too much data and undermine traditional industries by siphoning off the large majority of profits. The response, it is argued, should be to break up these companies, which would, according to Scott Galloway, ‘oxygenate’ the economy and ‘prune [the] firms [that have] become invasive, cause premature death and won’t let other firms emerge’.3

We are concerned that many of these calls seek to address broader societal problems – such as widening wage inequality, declining democratic institutions, and rising global populism and intolerance – rather than a problem in the competitive process.4 We do not think that a reduction of competition is the cause or effect of these societal issues. Attempting to use antitrust to address problems not directly related to competition would backfire. Antitrust laws are ill-suited for remedying political problems in society, and introducing political objectives into antitrust risks politicising enforcement, reducing legal certainty, and undermining confidence in the foundations of antitrust.

Instead, enforcement should always focus on whether a dominant firm engages in conduct that departs from legitimate competition on the merits and that excludes equally efficient rivals. That is a fact-intensive inquiry that requires balancing procompetitive business justifications with exclusionary conduct. The analysis turns on the specific conduct at issue and its effects in the market,5 not the size of a firm or its success or reach into other areas, or political issues.

In April 2018, Daniel Crane published a fascinating case study applying modern antitrust principles to the rise of fascism in 1930s Germany.6 The study is especially germane given today’s calls to broaden the consumer welfare standard to help arrest the decline in contemporary democracy. Crane argues that applying contemporary economically-orientated antitrust principles could have prevented the rise of IG Farben – the chemical cartel that supported the rise of Nazism and the perpetuation of its atrocities. He concludes: ‘If the Farben story can be generalized—an important caveat since this is just the beginning of an inquiry—that would suggest that antitrust law need not be reformulated to safeguard political liberalism, that what is good for consumers is good for democracy.’

Secondly, the past year has seen authorities pursue an increasing number of excessive pricing cases. In the UK, the Competition and Markets Authority (CMA) fined Pfizer and Flynn £85 million for suddenly increasing the prices of an anti-epilepsy drug; the CMA has two other excessive cases against Actavis and Concordia in the pipeline. In China, the National Development and Reform Commission imposed fines on two companies for engaging in excessive pricing in the pharmaceutical sector. In Italy and in Spain, and at the European Commission, excessive pricing cases concerning Aspen’s pricing of cancer drugs are ongoing.

Excessive pricing cases present the familiar paradox that it is not illegal to hold a monopoly; the natural consequence of a monopoly is to price above the competitive level; and finding a price above the competitive level to be illegal treats the monopoly as illegal. The excessive pricing cases observed during the past year traverse this paradox by following specific fact patterns in the pharmaceutical industry. In each case:

  • a the price rises were sudden and substantial;
  • b the products concerned were essential or had very high demand inelasticity;
  • c the products had been in the market for a long time; and
  • d the price rise does not appear to be explained by cost or market changes.

It is not obvious that these findings could be transposed to other situations. Hence, in his opinion in AKKA/LAA (the Latvian collecting society case), Advocate General Wahl advised: ‘there is simply no need to apply that provision [excessive pricing] in a free and competitive market: with no barriers to entry, high prices should normally attract new entrants. The market would accordingly self-correct.’ Accordingly, in our view, excessive pricing cases will (and should) remain rare and exceptional, other than where there are long-term barriers to entry, as in patents that are essential for standards. We hope that the renewed appetite to bring such cases does not stretch the concept of an exploitative abuse to address policy issues beyond the scope of competition law.

Thirdly, the past year was notable for the European Court of Justice’s long-awaited judgment in the Intel case. Intel had offered customers discounts if they exclusively installed its chipsets in categories of their computers. The European Commission found this to be abusive and imposed a €1 billion penalty. The EU General Court upheld the European Commission’s decision, treating Intel’s arrangements as akin to per se abusive. The Court of Justice has set that judgment aside, making clear that competition rules do not seek to protect less-efficient rivals or prevent them leaving the market. Instead, what matters is an ‘exclusionary effect on competitors considered to be as efficient’ as the dominant firm.

Advocate General Wahl in his Orange Polska opinion and the Court of Justice in its subsequent MEO judgment have reaffirmed the importance of establishing anticompetitive effects as a necessary element of an infringement of Article 102 TFEU, emphasising once more that only the exclusion of equally-efficient competitors is problematic. This mantra now appears to be firmly entrenched in the minds of the EU courts, and it will be interesting to see how the European Commission and national authorities react.

The European Commission, for example, appears to take the view that Intel largely imposes a procedural requirement, with Commissioner Vestager noting that ‘in practical terms, our main conclusion is that you won’t see fundamental change’. The European Commission has also argued that ‘The benefit of ascertaining whether something is, in fact, true, is not necessarily worth the cost’.7 However, an effects analysis can be conducted quickly and efficiently: in last year’s Ice Cream case, for example, the UK CMA opened and closed an investigation in six months, and conducted an effects analysis in a 13-page decision. The European Commission, for its part, frequently conducts detailed economic analyses – under significant time pressures – when assessing mergers. Stricter standards ought to apply when analysing unilateral conduct, because rights of defence are fully engaged.

Fourthly, we could not let this editorial pass without commenting on the divergent global approach to investigating Google’s conduct in search. Over the past few years, courts and authorities in the UK, Germany, Brazil, Canada, the US and Taiwan have held that Google’s search designs are procompetitive. Last year, the Competition Commission of India joined the consensus by rejecting complaints against Google’s search designs and ranking of search results (the CCI identified a narrow concern with the way that Google labels its Flights Commercial Unit, asking for Google to display an enhanced disclaimer). Similarly, in December 2017, the Russian Federal Antimonopoly Service authority dismissed complaints against Google’s search designs.

Against this background, the European Commission’s decision to impose on Google a record-breaking fine of €2.42 billion looks increasingly like an outlier, and perhaps a politically inspired one. The European Commission considers that the different way that Google ranks and displays groups of ads for product offers compared to free results for comparison shopping services amounts to unlawful favouring.

Google has appealed the decision to the General Court in Luxembourg. In Google’s view, the product ads at issue are enhanced ad formats that help users find relevant products and are more efficient for advertisers. Showing ads in clearly marked advertising space separate from free results is not favouring; it is how Google monetises the free search service it offers to users. In addition, Google has no obligation to supply rivals with access to its search results pages because it is not an essential facility. Google also points to a thriving product search space, where Amazon (not Google) is the leading player. Finally, while the Court of Justice has espoused the equally efficient competitor benchmark, nowhere does the European Commission’s Shopping decision discuss whether supposedly marginalised comparison shopping services were equally efficient.

As in previous years, we would like to thank the contributors for taking time away from their busy practices to prepare insightful and informative contributions to this sixth edition of The Dominance and Monopolies Review. We look forward to seeing what the next year holds.

Maurits Dolmans and Henry Mostyn

Cleary Gottlieb Steen & Hamilton LLP


May 2018

1 Carl Shapiro, ‘Antitrust in a Time of Populism’, 24 October 2017, available at

2 M Dolmans and W Lin, ‘Fairness and Competition Law, a Fairness Paradox’, Concurrences No. 4-2017 4, 2017, available at

3 Scott Galloway, ‘The Case for Breaking Up Amazon, Apple, Facebook and Google,’ 8 February 2018, available at

  1. 4 M Dolmans, R Zimbron, J Turner, ‘Pandora’s box of online ills: technology solutions, regulation, or competition law?’, Concurrences No. 3-2017 (colloquium, Pembroke College, Oxford, 22 May 2017), available at

5 Alexander Waksman, ‘Bad Science, Abuse and Effects in Online Markets’, CPI, 29 November 2017, available at

6 Daniel Crane, ‘Antitrust and Democracy: A Case Study from German Fascism’, Law and Economics Research Paper Series, University of Michigan, Paper No. 18-009, April 2018.

7 European Commission submission to OECD, Roundtable on Safe Harbours and Legal Presumptions in Competition Law, 5 December 2017, ¶ 15.