The Requirements of the Digital Marketplaces’ Agreements with Business Users from the Perspective of Inter-Platform Competition Law

Rahbari, Ebrahim; Masoudi Tafreshi, Arian

doi:10.48308/eclr.2024.233712.1038

The Requirements of the Digital Marketplaces’ Agreements with Business Users from the Perspective of Inter-Platform Competition Law

Document Type : Original Article

Authors

Ebrahim Rahbari ¹

Arian Masoudi Tafreshi ²

¹ Assistant Professor of Law, Shahid Beheshti University

² LL.M in Intellectual property law from Shahid Beheshti university

https://doi.org/10.48308/eclr.2024.233712.1038

Abstract

Common barriers for entering the digital marketplaces, i.e. the platform users' network effect and service providing economies of scale, leave newly established marketplace platforms with few strategies for user acquisition and competition with pioneers to achieve market share. Accordingly, analyzing digital marketplaces agreements with commercial users reveals some clauses which may impede market entry strategies and weaken inter-platform competition. However, these contractual conditions can also have some important efficiency. The commercial user parity clause (MFNs) towards the platform, the exclusive dealing condition and clauses offering loyalty incentives are the most significant clauses which digital marketplaces operating in Iran, such as "Snappfood", "Digikala", "Alibaba", "Fidibo" and "Café-Bazaar," may include in their commercial users agreement.
This article aims to evaluate these contractual clauses from Iran’s competition law perspective through considering their potential anti-competitive effects and possible efficiencies by studding recent anti-competitive cases in Iran, European Union and the U.S. The findings show that in the newly published competition policy document of Iran Supreme Council of Cyberspace in 1399 and some of the Iran Competition Council's decisions, these clauses have not been properly distinguished and consequently some adopted positions have been inefficient and without considering important legal and economic components. This article seeks to rectify these deficiencies.

Keywords

Digital marketplace

Competition law

Inter-platform competition

Platform terms of use

Platform markets

Article
1. Baker, Jonathan and Morton, Fiona M., “Antitrust Enforcement Against Platform MFNs”, Yale Law Journal, No.7, 2018.
2. Edelman, B. and Geradin, D., “Android and competition law: exploring and assessing Google’s practices in mobile”, European Competition Journal, No.12(2-3), 2016.
3. Ezrachi, Ariel, "The competitive effects of parity clauses on online commerce”, European Competition Journal, No.11(2-3), 2015.
4. Klingler, Désirée and Bokemeyer, Jonathen et al, "Amazon’s theory of harm", Thurman Arnold Project, Digital Platform Theories of Harm, No.1, 2020.
Thesis
1. Graef, Inge, “Data as Essential Facility: Competition and Innovation on Online Platforms”, Ph.D. thesis, KU Leuven Faculty of Law, 2015-2016.
Report and Market Study
1. Competition Commission of India, “Market study on e-commerce in India (Key Findings and Observations)”,India, 2020.
2. European Commission, “Commission Staff Working Document Accompanying the document Report from the Commission to the Council and the European Parliament Final report on the E-commerce Sector Inquiry (SWD/2017/0154 final)”, Brussels, 2017.
3. European Commission, “Report from the Commission to the Council and the European Parliament Final Report on the E-Commerce Sector Inquiry (SWD(2017) 154 final)”, Brussels, 2017.
4. The Competition and Markets Authority, “Mobile ecosystems market study (Appendix E: Google’s agreements with device manufacturers and app developers)”,The United Kingdom, 2021.
Antitrust Cases and Regulations

10. Bundeskartellamt, “Bundeskartellamt v. HRS.de ("Best Price" clauses of HRS hotel portal violate competition law)”, Case summary, 2014.
1. Council of the European Union, “Regulation (EU) 2019/1150 of the European parliament and of the council of 20 June 2019 on Promoting Fairness and Transparency for Business Users of Online Intermediation Services”, Brussels, 2019.
2. European Commission, Google Android (CASE AT.40099), Commission decision, 2018.
3. European Parliament, “Regulation (EU) 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services”, Brussels, 2019.
4. European Parliament, “Regulation (Eu) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on Contestable and Fair Markets in the Digital Sector and Amending Directives (Eu) 2019/1937 and (Eu) 2020/1828 (Digital Markets Act)”, Brussels, 2022.
5. European Parliament, “Regulation (Eu) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market for Digital Services and Amending Directive 2000/31/Ec (Digital Services Act)”, Brussels, 2022.
6. Germany Federal Court of Justice, “Bundeskartellamt v. Booking.com (Case No. 099/2021)”, Decision No. KVR 54/20, 2021.
7. United States District Court for the Eastern District of Michigan, “United States of America and the State of Michigan v. Blue Cross Blue Shield of Michigan (Case No. 2:10-cv-14155-DPH)”, Ruling of the Court, 2010.
8. United States District Court of Washington at Seattle, “Frame-Wilson v. Amazon Inc. (Case No. 2:20-cv-00424-RAJ)”, Order, 2023.
Internet sources
1. Agarwal, A., “Assessing the Impact of MFNs or PPCs on Competition in Online Marketplaces: An Indian Competition Law Perspective”, 2021, Available at: https://competition-forum.com/assessing-the-impact-of-mfns-or-ppcs-on-competition-in-online-marketplaces-an-indian-competition-law-perspective/ ,Last visited: 2024/01/06.
2. Amazon Inc., “Amazon Marketplace Fair Pricing Policy”, 2023, Available at: https://sellercentral.amazon.com/help/hub/reference/external/G5TUVJKZHUVMN77V ,Last visited: 2023/10/05.
3. Amazon Inc., “Amazon Services Business Solutions Agreement (Selling on Amazon terms)”, 2018, Available at: www.abilityone.gov/laws,_regulations_and_policy/documents/Amazon%20Services%20Business%20Solutions%20Agreement.pdf ,Last visited: 2023/10/05.
4. Batchelor, Bill, “EU General Court Overturns Intel Antitrust Fine”, 2022, Available at: https://www.skadden.com/insights/publications/2022/02/eu-general-court-overturns-intel-antitrust-fine ,Last visited: 2024/01/06.
5. European Commission, “Antitrust: Commission fines Google €1.49 billion for abusive practices in online advertising”, 2019, Available at: https://ec.europa.eu/commission/presscorner/detail/en/IP_19_1770 ,Last visited: 2023/10/05.
6. European Commission, “Antitrust: Commission fines Google €4.34 billion for illegal practices regarding Android mobile devices to strengthen dominance of Google's search engine”, 2018, Available at: https://ec.europa.eu/commission/presscorner/detail/en/IP_18_4581 ,Last visited: 2023/10/05.
7. European Parliament, “Fact Sheets on the European Union (Competition policy)”, 2019, Available at: https://www.europarl.europa.eu/factsheets/en/sheet/82/competition-policy , Last visited: 2024/01/06.
8. Federal Trade Commission, “Monopolization Defined”, 2019, Available at: https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined , Last visited: 2024/01/06..
9. Italian Competition Authority, “Commitments Offered by Booking.Com: Closed the Investigation in Italy, France and Sweden”, 2015, Available at: https://en.agcm.it/en/media/press-releases/2015/4/alias-2207 ,Last visited: 2024/01/06.
10. Ozgokcen, Hakan, “Footsteps of Change: Preliminary Report on the E-Marketplace Sector Inquiry”, 2021, Available at: https://www.esin.av.tr/2021/06/10/footsteps-of-change-preliminary-report-on-the-e-marketplace-sector-inquiry/ ,Last visited: 2024/01/06.