Abuse of a dominant position in digital markets exemplified by free services offered by online platforms

Can (and, if so, to what extent) online platforms offering high-quality free services to consumers, such as search engines, social media, or e-commerce platforms, harm competition? The digital economy has led to the development of new markets which have impacted society as a whole. The growth and importance of online platforms has been widely recognised, and their role in society has been thoroughly assessed by regulatory bodies across the European Union. In 2014, the value of online platforms in Europe was estimated at 26 billion dollars, the value of purchases made in the 28 Member States of the Union on these platforms exceeded 270 billion dollars, while the estimated value of time saved by making these purchases on platforms was over 140 billion dollars. However, despite the fact that dynamic market interactions in the digital economy can intensify competition in a way that increases consumer welfare (e.g., by increasing market transparency or lowering search and transaction costs), there are concerns that the most popular online platforms tend to be "digital giants" with significant market power. These platforms have achieved significant market shares in a relatively short period. They are at the top of the list of the most visited websites globally, with search engines, social media, and e-commerce platforms being the most frequently visited types of platforms. With such a significant increase in their use, there will undoubtedly be more opportunities requiring the enforcement of competition law to counteract potential anti-competitive consequences resulting from holding such a strong market position.

Consequently, in this project, I will investigate how existing competition law tools and concepts can ensure that the benefits of online platform innovations and free online services are reaped, while mitigating the associated risks of competition restriction. I will also indicate that online platforms possess specific characteristics that make them unique and still contested under competition law provisions. Antitrust authorities, enforcing these provisions, face numerous challenges, particularly regarding the analytical stages and instruments used to assess the relevant market and dominant position, starting from the definition of a given digital market, followed by an analysis of market power and the identification of anti-competitive behaviour. A research hypothesis is put forward stating that although online platforms have specific characteristics that must be taken into account in competition law analysis, the tools used to define the relevant market and assess a dominant position are flexible enough to be appropriately applied to this type of service. The project's topic is gaining increasing importance in competition law practice and underpins some of the most significant recent cases. In June 2017, the European Commission imposed a record fine of EUR 2.42 billion on Google for abusing its dominant position in the search engine market by promoting its own price comparison service in search results and demoting competitors’ offerings.

To achieve the aforementioned objective, hypothetical scenarios of abuse of dominant position, drawn from legal and economic literature, own observations, and the activities of antitrust authorities, will be examined. The research will focus on the analysis of free online services and the rivalry of undertakings based on non-price factors (so-called non-price competition). Although the results of the conducted research will be applicable to numerous digital markets, particular attention will be paid to three of them – search engines, social media, and e-commerce services. This choice is dictated by the immense role of these free services in the digital economy. Firstly, selected digital markets will be defined, and hypothetical scenarios of non-price market practices that may constitute an abuse of dominant position will be developed. Subsequently, it will be investigated whether (and, if so, how) classic antitrust tools and concepts can be applied to the aforementioned markets and practices. The work will involve identifying the current state of play as a starting point for the undertaken research, and then indicating proposed mechanisms and methods for resolving existing problems. Preliminary research results have indicated that the aforementioned platforms may abuse their market power particularly by creating barriers to market entry, transferring market power to other, adjacent markets, and by preventing competitors from gaining access to essential information, data, or resources for anti-competitive reasons.