Many patent assertion entities (PAEs) hide behind multiple unknown subsidiaries or shell companies with obscure ownership. Meanwhile, the United States Patent and Trademark Office (USPTO), like many other patent offices, does not impose a strict time period for recording the change of ownership of a patent, allowing the holder to gain an advantage by controlling the timing of its ownership disclosure. In this paper, we study to which extent PAEs delay the recording of the U.S. patent reassignments of patents that they will subsequently use in infringement patent lawsuits. On average, PAEs notify the change of ownership more quickly than producing firms, but this is not the case for the patents that they will litigate relatively far in time. In particular, the correlation between the recording lag of the patent transaction and the litigation spell is higher when the patent acquirer is a PAE (than when it is a producing firm) or when the acquirer will litigate the patent in the Eastern District of Texas, famously home to opportunistic litigations. Finally, we find that transactions involving unknown subsidiaries of PAEs are recorded at the USPTO significantly later than those involving PAE parent companies or their known subsidiaries.
{"title":"Patent Assertion Entities and Patent Ownership Transparency: Strategic Recording of Patent Transactions at the Uspto","authors":"Valerio Sterzi","doi":"10.1093/JOCLEC/NHAB013","DOIUrl":"https://doi.org/10.1093/JOCLEC/NHAB013","url":null,"abstract":"\u0000 Many patent assertion entities (PAEs) hide behind multiple unknown subsidiaries or shell companies with obscure ownership. Meanwhile, the United States Patent and Trademark Office (USPTO), like many other patent offices, does not impose a strict time period for recording the change of ownership of a patent, allowing the holder to gain an advantage by controlling the timing of its ownership disclosure. In this paper, we study to which extent PAEs delay the recording of the U.S. patent reassignments of patents that they will subsequently use in infringement patent lawsuits. On average, PAEs notify the change of ownership more quickly than producing firms, but this is not the case for the patents that they will litigate relatively far in time. In particular, the correlation between the recording lag of the patent transaction and the litigation spell is higher when the patent acquirer is a PAE (than when it is a producing firm) or when the acquirer will litigate the patent in the Eastern District of Texas, famously home to opportunistic litigations. Finally, we find that transactions involving unknown subsidiaries of PAEs are recorded at the USPTO significantly later than those involving PAE parent companies or their known subsidiaries.","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2021-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48710234","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article analyses the crucial role of user data for digital markets contestability and presents policy proposals devised to address growing concerns about the dominance of data-rich incumbents in digital markets. To this end, we discuss a data-driven theory of harm that would warrant ex-ante data access regulation and highlight that niche entry and growth should be the primary economic policy objective in digital markets characterized by strong data-driven network effects. We then evaluate regulatory data access remedies with respect to the involved economic trade-offs and their effectiveness for promoting niche entry and growth. Firstly, we analyse remedies that would limit the collection of user data by data-rich incumbents such as data silos and line of business restrictions. Secondly, we consider remedies that facilitate sharing of (user) data by opening up access to raw behavioural user data collected by data-rich incumbents. In particular, we propose a dual approach with two complementary types of data access remedies: bulk sharing of broad anonymized raw user data and continuous, real-time data portability of deep raw data that contain personally identifiable information. Finally, we comment on the recent proposal for a Digital Markets Act by the European Commission with respect to our findings.
{"title":"Big Data and Digital Markets Contestability: Theory of Harm and Data Access Remedies","authors":"Jan Krämer, Daniel Schnurr","doi":"10.1093/joclec/nhab015","DOIUrl":"https://doi.org/10.1093/joclec/nhab015","url":null,"abstract":"This article analyses the crucial role of user data for digital markets contestability and presents policy proposals devised to address growing concerns about the dominance of data-rich incumbents in digital markets. To this end, we discuss a data-driven theory of harm that would warrant ex-ante data access regulation and highlight that niche entry and growth should be the primary economic policy objective in digital markets characterized by strong data-driven network effects. We then evaluate regulatory data access remedies with respect to the involved economic trade-offs and their effectiveness for promoting niche entry and growth. Firstly, we analyse remedies that would limit the collection of user data by data-rich incumbents such as data silos and line of business restrictions. Secondly, we consider remedies that facilitate sharing of (user) data by opening up access to raw behavioural user data collected by data-rich incumbents. In particular, we propose a dual approach with two complementary types of data access remedies: bulk sharing of broad anonymized raw user data and continuous, real-time data portability of deep raw data that contain personally identifiable information. Finally, we comment on the recent proposal for a Digital Markets Act by the European Commission with respect to our findings.","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2021-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138513978","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The article analyses the meaning of the nondiscriminatory principle in disputes concerning Standard Essential Patents (SEPs) under EU competition and contract law (that is, ND prong). The article reviews the economics literature, looking at the welfare effect of price discrimination and the interpretation of the ND prong provided by a number of economists. Secondly, the article analyses the case law of the EU Court of Justice on Art. 102(c) TFEU and recent rulings by the German and British courts concerning the scope of the application of the ND prong. A strategy of discrimination in regard to royalty rates may be sanctioned, both under competition and contract law. However, Art. 102(c) requires a higher burden of proof than contract law. As a consequence, it is unsurprising that no case of royalty rate discrimination has ever been sanctioned in Europe as an abuse of dominance. While courts and economists generally agree that the ND prong is applicable only when licensees are “similarly situated,” to date, there is no common understanding of the meaning of this expression. In particular, it is unclear whether, and to what extent, licensees are “similarly situated” if they are not competitors in the downstream market.
{"title":"Nondiscrimination in Standard Essential Patents; ND Prong V. Art. 102(C) TFEU","authors":"M. Botta","doi":"10.1093/JOCLEC/NHAB011","DOIUrl":"https://doi.org/10.1093/JOCLEC/NHAB011","url":null,"abstract":"\u0000 The article analyses the meaning of the nondiscriminatory principle in disputes concerning Standard Essential Patents (SEPs) under EU competition and contract law (that is, ND prong). The article reviews the economics literature, looking at the welfare effect of price discrimination and the interpretation of the ND prong provided by a number of economists. Secondly, the article analyses the case law of the EU Court of Justice on Art. 102(c) TFEU and recent rulings by the German and British courts concerning the scope of the application of the ND prong. A strategy of discrimination in regard to royalty rates may be sanctioned, both under competition and contract law. However, Art. 102(c) requires a higher burden of proof than contract law. As a consequence, it is unsurprising that no case of royalty rate discrimination has ever been sanctioned in Europe as an abuse of dominance. While courts and economists generally agree that the ND prong is applicable only when licensees are “similarly situated,” to date, there is no common understanding of the meaning of this expression. In particular, it is unclear whether, and to what extent, licensees are “similarly situated” if they are not competitors in the downstream market.","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2021-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46222118","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Rankings increasingly dominate our world. We use them to choose just about everything—from which pizza or ice cream to buy, to which doctors to trust with our health, to which universities to trust with our intellectual growth and flourishing. But should we trust them? Taking popular academic rankings as an example, such as the U.S. News rankings, this article contends not necessarily, for several reasons. First, because as this article argues, the U.S. News rankings may mislead rather than inform consumers. Second, by fueling a prestige battle between universities, the U.S. News rankings incentivize universities to harm cultural and economic diversity—important facets of educational quality. These conclusions, critical in their own right, raise additional important but underexplored questions for antitrust law. Should universities be allowed to boycott the U.S. News rankings so that they can free themselves of the prestige battle in which they participate? Can an “antirankings boycott” be justified by antitrust law on the basis that it may allow universities to promote diversity and increase access to the underserved? Although these questions are not easy to address, they are at the heart of this article.
{"title":"Equality of Opportunity and Antitrust: The Curious Case of College Rankings","authors":"Theodosia Stavroulaki","doi":"10.1093/JOCLEC/NHAB008","DOIUrl":"https://doi.org/10.1093/JOCLEC/NHAB008","url":null,"abstract":"\u0000 Rankings increasingly dominate our world. We use them to choose just about everything—from which pizza or ice cream to buy, to which doctors to trust with our health, to which universities to trust with our intellectual growth and flourishing. But should we trust them? Taking popular academic rankings as an example, such as the U.S. News rankings, this article contends not necessarily, for several reasons. First, because as this article argues, the U.S. News rankings may mislead rather than inform consumers. Second, by fueling a prestige battle between universities, the U.S. News rankings incentivize universities to harm cultural and economic diversity—important facets of educational quality. These conclusions, critical in their own right, raise additional important but underexplored questions for antitrust law. Should universities be allowed to boycott the U.S. News rankings so that they can free themselves of the prestige battle in which they participate? Can an “antirankings boycott” be justified by antitrust law on the basis that it may allow universities to promote diversity and increase access to the underserved? Although these questions are not easy to address, they are at the heart of this article.","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2021-07-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42269466","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Designing around patents is prevalent but not often appreciated as a means by which patents promote economic development through competition. We provide a novel empirical study of the extent and timing of designing around patent claims. We study the filing rate of incandescent lamp-related patents during 1878–1898 and find that the enforcement of Edison’s incandescent lamp patent in 1891–1894 stimulated a surge of patenting. We studied the specific design features of the lamps described in these lamp patents and compared them with Edison’s claimed invention to create a count of noninfringing designs by filing date. Most of these noninfringing designs circumvented Edison’s patent claims by creating substitute technologies to enable participation in the market. Our forward citation analysis of these patents shows that some had introduced pioneering prior art for new fields. This indicates that invention around patents is not duplicative research and contributes to dynamic economic efficiency. We show that the Edison lamp patent did not suppress advance in electric lighting and the market power of the Edison patent owner weakened during this patent’s enforcement. We propose that investigation of the effects of design around patents is essential for establishing the degree of market power conferred by patents. JEL: D21 - Firm Behavior: Theory, D22 - Firm Behavior: Empirical Analysis, K11 - Property Law, K21 - Antitrust Law, L12 - Monopoly; Monopolization Strategies, N8 - Micro-Business History, O31 - Innovation and Invention: Processes and Incentives, O32 - Management of Technological Innovation and R&D, O33 - Technological Change: Choices and Consequences, O34 - Intellectual Property and Intellectual Capital
{"title":"Exclusive Rights Stimulate Design Around: How Circumventing Edison’s Lamp Patent Promoted Competition and New Technology Development","authors":"Ron D Katznelson, John Howells","doi":"10.1093/joclec/nhab010","DOIUrl":"https://doi.org/10.1093/joclec/nhab010","url":null,"abstract":"Designing around patents is prevalent but not often appreciated as a means by which patents promote economic development through competition. We provide a novel empirical study of the extent and timing of designing around patent claims. We study the filing rate of incandescent lamp-related patents during 1878–1898 and find that the enforcement of Edison’s incandescent lamp patent in 1891–1894 stimulated a surge of patenting. We studied the specific design features of the lamps described in these lamp patents and compared them with Edison’s claimed invention to create a count of noninfringing designs by filing date. Most of these noninfringing designs circumvented Edison’s patent claims by creating substitute technologies to enable participation in the market. Our forward citation analysis of these patents shows that some had introduced pioneering prior art for new fields. This indicates that invention around patents is not duplicative research and contributes to dynamic economic efficiency. We show that the Edison lamp patent did not suppress advance in electric lighting and the market power of the Edison patent owner weakened during this patent’s enforcement. We propose that investigation of the effects of design around patents is essential for establishing the degree of market power conferred by patents. JEL: D21 - Firm Behavior: Theory, D22 - Firm Behavior: Empirical Analysis, K11 - Property Law, K21 - Antitrust Law, L12 - Monopoly; Monopolization Strategies, N8 - Micro-Business History, O31 - Innovation and Invention: Processes and Incentives, O32 - Management of Technological Innovation and R&D, O33 - Technological Change: Choices and Consequences, O34 - Intellectual Property and Intellectual Capital","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2021-06-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138524287","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Common ownership exists when investors concurrently hold partial and significant shares in related firms. In this paper, I compile, document, and taxonomize 30 separate cases of intervention to demonstrate how common owners influence firm behavior. Although previous literature has identified a link between common ownership and product market outcomes, critics have questioned a common owner’s ability and incentive to alter the behavior of portfolio firms. Missing from the debate are observable interventions from common owners and the mechanisms through which common owners exercise their influence. This paper compiles relevant case studies from media coverage, regulatory proceedings, policy groups, and annual stewardship reports to uncover these channels.
{"title":"Interventions by Common Owners*","authors":"Shekita N.","doi":"10.1093/joclec/nhab006","DOIUrl":"https://doi.org/10.1093/joclec/nhab006","url":null,"abstract":"<span><div>Abstract</div>Common ownership exists when investors concurrently hold partial and significant shares in related firms. In this paper, I compile, document, and taxonomize 30 separate cases of intervention to demonstrate how common owners influence firm behavior. Although previous literature has identified a link between common ownership and product market outcomes, critics have questioned a common owner’s ability and incentive to alter the behavior of portfolio firms. Missing from the debate are observable interventions from common owners and the mechanisms through which common owners exercise their influence. This paper compiles relevant case studies from media coverage, regulatory proceedings, policy groups, and annual stewardship reports to uncover these channels.</span>","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2021-05-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138524289","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Apple App Store is the only channel through which app developers may distribute their apps on iOS. First launched in 2008, the App Store has evolved into a highly profitable marketplace, with overall consumer spend exceeding $50 billion in 2019. However, concerns are being increasingly expressed on both sides of the Atlantic that various practices of Apple with regard to the App Store may breach competition law. The purpose of this paper is to examine whether this is indeed the case and, if so, how these concerns can be addressed. With these aims in mind, the paper first introduces the reader to the app ecosystem and the Apple App Store, with a focus on Apple’s in-app payment policies and the 30 percent commission charged for in-app purchases. After engaging critically with the distinction between apps selling “digital” and apps selling “physical” goods or services, we consider such distinction is unclear, artificial, and unprincipled.
{"title":"THE ANTITRUST CASE AGAINST THE APPLE APP STORE","authors":"Damien Geradin, Dimitrios Katsifis","doi":"10.1093/joclec/nhab003","DOIUrl":"https://doi.org/10.1093/joclec/nhab003","url":null,"abstract":"The Apple App Store is the only channel through which app developers may distribute their apps on iOS. First launched in 2008, the App Store has evolved into a highly profitable marketplace, with overall consumer spend exceeding $50 billion in 2019. However, concerns are being increasingly expressed on both sides of the Atlantic that various practices of Apple with regard to the App Store may breach competition law. The purpose of this paper is to examine whether this is indeed the case and, if so, how these concerns can be addressed. With these aims in mind, the paper first introduces the reader to the app ecosystem and the Apple App Store, with a focus on Apple’s in-app payment policies and the 30 percent commission charged for in-app purchases. After engaging critically with the distinction between apps selling “<em>digital</em>” and apps selling “<em>physical</em>” goods or services, we consider such distinction is unclear, artificial, and unprincipled.","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2021-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138524288","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The recent controversy on the intersection of competition law with the protection of privacy, following the emergence of big data and social media is a major challenge for competition authorities worldwide. Recent technological progress in data analytics may greatly facilitate the prediction of personality traits and attributes from even a few digital records of human behaviour. There are different perspectives globally as to the level of personal data protection and the role competition law may play in that context, hence the discussion of integrating such concerns in competition law enforcement may be premature for some jurisdictions. However, a market failure approach may provide common intellectual foundations for the assessment of harms associated with the exploitation of personal data, even when the specific legal system does not formally recognize a fundamental right to privacy. The paper presents a model of market failure based on a requirement provision in the acquisition of personal information from users of other products/services. We establish the economic harm from the market failure and the requirement using the traditional competition law toolbox and focusing more on situations in which the restriction on privacy may be analysed as a form of exploitation.
{"title":"Restrictions On Privacy and Exploitation In The Digital Economy: A Market Failure Perspective","authors":"Nicholas Economides, Ioannis Lianos","doi":"10.1093/joclec/nhab007","DOIUrl":"https://doi.org/10.1093/joclec/nhab007","url":null,"abstract":"The recent controversy on the intersection of competition law with the protection of privacy, following the emergence of big data and social media is a major challenge for competition authorities worldwide. Recent technological progress in data analytics may greatly facilitate the prediction of personality traits and attributes from even a few digital records of human behaviour. There are different perspectives globally as to the level of personal data protection and the role competition law may play in that context, hence the discussion of integrating such concerns in competition law enforcement may be premature for some jurisdictions. However, a market failure approach may provide common intellectual foundations for the assessment of harms associated with the exploitation of personal data, even when the specific legal system does not formally recognize a fundamental right to privacy. The paper presents a model of market failure based on a requirement provision in the acquisition of personal information from users of other products/services. We establish the economic harm from the market failure and the requirement using the traditional competition law toolbox and focusing more on situations in which the restriction on privacy may be analysed as a form of exploitation.","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2021-03-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138524292","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Common ownership exists when investors concurrently hold partial and significant shares in related firms. In this paper, I compile, document, and taxonomize 30 separate cases of intervention to demonstrate how common owners influence firm behavior. Although previous literature has identified a link between common ownership and product market outcomes, critics have questioned a common owner’s ability and incentive to alter the behavior of portfolio firms. Missing from the debate are observable interventions from common owners and the mechanisms through which common owners exercise their influence. This paper compiles relevant case studies from media coverage, regulatory proceedings, policy groups, and annual stewardship reports to uncover these channels.
{"title":"Interventions by Common Owners","authors":"Nathan Shekita","doi":"10.1093/joclec/nhab006","DOIUrl":"https://doi.org/10.1093/joclec/nhab006","url":null,"abstract":"Common ownership exists when investors concurrently hold partial and significant shares in related firms. In this paper, I compile, document, and taxonomize 30 separate cases of intervention to demonstrate how common owners influence firm behavior. Although previous literature has identified a link between common ownership and product market outcomes, critics have questioned a common owner’s ability and incentive to alter the behavior of portfolio firms. Missing from the debate are observable interventions from common owners and the mechanisms through which common owners exercise their influence. This paper compiles relevant case studies from media coverage, regulatory proceedings, policy groups, and annual stewardship reports to uncover these channels.","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2021-03-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138524286","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Apple App Store is the only channel through which app developers may distribute their apps on iOS. First launched in 2008, the App Store has evolved into a highly profitable marketplace, with overall consumer spend exceeding $50 billion in 2019. However, concerns are being increasingly expressed on both sides of the Atlantic that various practices of Apple with regard to the App Store may breach competition law. The purpose of this paper is to examine whether this is indeed the case and, if so, how these concerns can be addressed. With these aims in mind, the paper first introduces the reader to the app ecosystem and the Apple App Store, with a focus on Apple’s in-app payment policies and the 30 percent commission charged for in-app purchases. After engaging critically with the distinction between apps selling “digital” and apps selling “physical” goods or services, we consider such distinction is unclear, artificial, and unprincipled. The paper then critically reviews several practices of Apple that appear to be at odds with competition law and in particular Article 102 TFEU. We first analyze the issue of market definition and dominance with regard to the App Store. We find that Apple is a monopolist in the market for app distribution on iOS, as it is not subject to any meaningful competitive constraint from alternative distribution channels, such as Android app stores. The result is that Apple is the gateway through which app developers have to go to reach the valuable audience of iOS users. This bottleneck position affords Apple the power to engage in several prima facie anticompetitive practices. A first concern is that Apple may exploit app developers by charging excessive fees for the services it provides and by imposing unfair trading conditions. Second, based on four case studies, the paper illustrates how Apple may use its control of the App Store or iOS to engage in exclusionary behavior to the detriment of rival apps. These practices should be investigated by competition authorities, as they are likely to result in considerable consumer harm, be it in the form of higher app prices, worse user experience or reduced consumer choice. The paper finally proposes a combination of concrete remedies that would address the competition concerns identified.
{"title":"The Antitrust Case Against the Apple App Store","authors":"Damien Geradin, Dimitrios Katsifis","doi":"10.1093/joclec/nhab003","DOIUrl":"https://doi.org/10.1093/joclec/nhab003","url":null,"abstract":"The Apple App Store is the only channel through which app developers may distribute their apps on iOS. First launched in 2008, the App Store has evolved into a highly profitable marketplace, with overall consumer spend exceeding $50 billion in 2019. However, concerns are being increasingly expressed on both sides of the Atlantic that various practices of Apple with regard to the App Store may breach competition law. The purpose of this paper is to examine whether this is indeed the case and, if so, how these concerns can be addressed. With these aims in mind, the paper first introduces the reader to the app ecosystem and the Apple App Store, with a focus on Apple’s in-app payment policies and the 30 percent commission charged for in-app purchases. After engaging critically with the distinction between apps selling “digital” and apps selling “physical” goods or services, we consider such distinction is unclear, artificial, and unprincipled. The paper then critically reviews several practices of Apple that appear to be at odds with competition law and in particular Article 102 TFEU. We first analyze the issue of market definition and dominance with regard to the App Store. We find that Apple is a monopolist in the market for app distribution on iOS, as it is not subject to any meaningful competitive constraint from alternative distribution channels, such as Android app stores. The result is that Apple is the gateway through which app developers have to go to reach the valuable audience of iOS users. This bottleneck position affords Apple the power to engage in several prima facie anticompetitive practices. A first concern is that Apple may exploit app developers by charging excessive fees for the services it provides and by imposing unfair trading conditions. Second, based on four case studies, the paper illustrates how Apple may use its control of the App Store or iOS to engage in exclusionary behavior to the detriment of rival apps. These practices should be investigated by competition authorities, as they are likely to result in considerable consumer harm, be it in the form of higher app prices, worse user experience or reduced consumer choice. The paper finally proposes a combination of concrete remedies that would address the competition concerns identified.","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2021-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138524279","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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