Overview
On September 5, Advocate General (AG) Medina rendered her opinion in Alphabet and Others, (Opinion) suggesting the Court of Justice not to apply the strict Bronner 2criteria for assessing Google’s refusal to grant access to its Android Auto platform for an app providing a set of features for charging electric vehicles.
Instead, AG Medina concludes that a dominant company that owns a platform and which excludes, obstructs or delays access of an app developed by a third-party infringes Article 102 TFEU, provided that such behaviour gives rise to anticompetitive effects to the detriment of consumers and cannot be objectively justified.3
Importantly, AG Medina breaks new legal ground in that she believes that a refusal to grant access to a platform cannot be objectively justified by the “mere fact that the dominant undertaking must develop a software template taking into account the specific needs of the operator requesting access.” In other words, just granting access to a platform is not enough, certain changes to facilitate access have to be undertaken.
In Depth
JuicePass is an app developed by Enel X that offers a set of features for charging electric vehicles. Android Auto is a platform that enables drivers to use Android apps, such as Google Maps, via their vehicle’s own display, instead of on their mobile phone device.
Google had informed Enel X Italia (EXI) that its electric car charging app, JuicePass, could not be published on Android Auto due to security concerns and resource allocation. For apps to interoperate with Android Auto, Google needs to develop specific templates. Google claimed that it did not have the resources at that time to create the template. Only templates for media and messaging apps were available.
On 27 April 2021, the Italian Competition Authority (ICA) imposed a fine on Google for infringing Article 102 TFEU by refusing to supply, and, specifically, not allowing JuicePass to be published on Android Auto.
Google appealed the ICA’s decision, at the Regional Administrative Court of Lazio, Italy, which upheld the ICA’s decision. Google subsequently appealed the judgment before the Consiglio di Stato (Italian Council of State) who made a preliminary ruling request seeking clarification on the following questions:
1. Does Article 102 TFEU require that access to a product be indispensable for a specific activity in a neighbouring market, or is it enough that access makes the product or service more convenient to use, especially if the product’s main function is to enhance convenience?
2. Can behavior be considered abusive under Article 102 TFEU if the requesting undertaking was already active and growing in the market, and other competitors continued to operate, despite the lack of access to the requested product?
3. Should Article 102 TFEU consider the non-existence of a product at the time of the request as an objective justification for refusal? Must a competition authority analyse the time needed for a dominant undertaking to develop the product, or must the dominant undertaking inform the requester of the development time?
4. Does Article 102 TFEU require a dominant undertaking controlling a digital platform to modify or develop new products for those requesting access? Should the undertaking consider general market requirements or the specific needs of the requester, and establish objective criteria for reviewing and prioritizing requests?
5. Should the competition authority in question previously define the relevant market or is it sufficient to consider a potential product market?
I. AG Opinion
On 5 September 2024, AG Medina issued its much-anticipated Opinion.
Essential facilities case law (‘Bronner criteria’) is not applicable
The AG confirms that the starting point is that a dominant undertaking in principle is free to refuse to grant access to a product, service or infrastructure that it has developed for its own needs4. Only in exceptional circumstances, i.e., (i) when the access request concerns a product or service indispensable to the exercise of an economic activity on a neighbouring market; (ii) the refusal is likely to eliminate all competition in that market; and (iii) the refusal is not capable of being objectively justified5, a right of access must be granted.
In cases like Bronner, where access to infrastructure is requested for something that was created and used internally, the high threshold is appropriate because forcing access might deter the dominant firm from making future investments.
In the case of Android Auto, the AG concludes that the Bronner conditions do not apply because the platform was not developed exclusively for Google’s internal use. Quite to the contrary, Android Auto was created as an open platform to facilitate the use of third-party apps in a vehicle’s infotainment system. Thus, Android Auto is not the type of essential infrastructure covered by Bronner.
Since Android Auto was designed to host third-party apps, the refusal to integrate JuicePass is less about protecting proprietary infrastructure and more about controlling access to a shared platform.
This changes the competitive dynamic and calls for a different legal approach; the refusal should be assessed based on whether the owner of the platform excludes, obstructs or delays the requested access of an app developed by a third-party, creating anticompetitive effects to the detriment of consumers, and which cannot be objectively justified6.
The fact that the access requesting party remained active on the neighbouring market is not relevant for the abuse analysis
The AG concluded that, even if Enel X has survived and continued to operate on the market, Google cannot rely on this to “escape” liability. The Opinion repeats the known mantra that the mere fact that competition on the market had been maintained or had even increased as such does not prove that the dominant company’s behaviour had no anti-competitive effects. It is up to the dominant company to prove that the absence of such actual effects is the consequence of the fact that the conduct under investigation was unable to produce such effects.
Objective justifications for refusing access to a platform and management of access requests
The AG made a detailed analysis of whether the absence of a template for allowing apps such as JuicePass to interoperate with Android Auto can constitute an objective justification for refusing access and – one step further – whether a dominant undertaking can be required to develop such a template.
The Opinion recalls that an exception to a rule of EU law must be interpreted restrictively. This implies, in the realm of Article 102, that exceptions to the prohibition of an abuse of a dominant position must be interpreted equally restrictively.
In the context of a refusal to grant access to a platform and where such refusal gives rise to anticompetitive effects – and in the Opinion the AG assumes both those conditions are met – only circumstances that compromise the functioning and purpose of that platform may be accepted. This implies that any objective justification that is invoked by Google, but that does not relate to compromising of the functioning and purpose of the platform can never be successfully invoked. The AG acknowledges that where the development of a template is technically impossible, this could constitute an objective justification.
The AG then lays out the burden of proof dynamic in this type of objective justification discussions. It is for a competition authority to prove the existence of an infringement of Article 102 TFEU. However, it is then for the dominant company to invoke any objective justifications, and to support it with concrete evidence and arguments. It is only then back on the competition authority to demonstrate that the arguments and evidence adduced cannot prevail and that the justification cannot be accepted.
Google had argued that creating the required template would have taken time and resources, and it was not possible to immediately facilitate JuicePass’ integration. The AG recalled that an undertaking may invoke an objective justification for refusing access, provided that it is necessary and proportionate. As to time constraints, Google cannot simply invoke them. Google must demonstrate it has informed the third-party requesting access of the time needed to develop the template. It can take as long as objectively required. Also other factors – such as the COVID-19 – may be taken into account to assess the time frame. If then the competition authority concludes that the time frame is not justified, it cannot constitute an objective justification for refusal of access.
The same, the AG argues, is true for resources. This boils down to discussions about costs for developing a template and who has to bear those costs. Those costs have to be estimated objectively, but it is not required that the dominant company bears those costs. They can be borne by the entity requesting access. Again, if a competition authority then concludes that such costs are inappropriate or disproportionate, the justification put forward by the dominant company based on resources cannot be accepted.
Regarding the fourth question, the AG held that the special responsibility of dominant firms, under EU competition law, does not extend to creating or altering infrastructure for each third-party request. Also, the AG stated that Google must consider such requests fairly but implementing objective criteria for managing access requests is not necessary, unless failing to do so results in unjustified delays or discrimination.
No need to precisely define the neighbouring markets
Lastly, referring to the fifth question, the AG explained that, when defining the relevant downstream market to assess whether the conduct of the dominant undertaking was capable of restricting competition, in particular in the case of conduct consisting in refusing access, it is acceptable to identify a hypothetical or potential relevant market (paragraph 84). In an interesting development, the AG also acknowledged that the downstream market in this case is still evolving and that, given the rapid development of digital markets, defining the relevant market with precision may prove to be a difficult task (paragraphs 87-88).
II. Conclusion
The Opinion clearly shows that for platforms such as Android Auto competition authorities should not apply the essential facilities case law in order to force Google to grant access to its platform.
However, also under general refusal of access case law in an Article 102 TFEU context, dominant companies will be requested to facilitate access to a platform that is aimed at being nourished by third-party apps. If it can be shown that a refusal of access excludes, obstructs or delays access by the app developed by that third-party operator resulting in anticompetitive effects to the detriment of consumers, the dominant undertaking’s behaviour is an abuse of a dominant position, unless where that dominant undertaking can successfully invoke objective justifications.
The duty to ensure access is far-reaching with the dominant company even having to develop templates to facilitate access. However, the costs for such development can be charged to (one or more) third-party app developers, provided such costs are not disproportionate and templates are developed within a reasonable timeframe.
