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Short Reads

Consumers and Sustainability: 2020 competition enforcement buzzwords

Consumers and Sustainability: 2020 competition enforcement buzzwords

Consumers and Sustainability: 2020 competition enforcement buzzwords

06.02.2020 NL law

The ACM will include the effects of mergers on labour conditions in its review. It will also investigate excessive pricing of prescription drugs. As well as these topics, the ACM has designated the digital economy and energy transition as its 2020 focus areas. Companies can therefore expect increased enforcement to protect online consumers, and active probing of algorithms.

The ACM’s investigation into mobile app stores will be finalised, and Big Tech firms on the Dutch payments market will remain under scrutiny. More guidance on sustainability initiatives and investigation of sustainability claims are on the way; as is a study into price differences between sustainable and non-sustainable products in the agrifood sector. These topics, alongside the ACM’s call for compliance with consumer protection rules, may mark a move towards a more social side to competition enforcement and more intense consumer protection. Consumers and sustainability are likely the 2020 buzzwords.

Digital Economy

In the focus area of the Digital Economy, the ACM will investigate whether large online platforms use unfair access conditions. It will also pay particular attention to topics such as:

  • Algorithm transparency – the ACM will launch a study into companies’ use of algorithms and will publish a working paper on mechanisms for self-learning algorithms to calculate supra-competitive prices. In addition, the ACM will issue a procedure on how it investigates or studies algorithms in practice.
  • Big Tech – the ACM will continue its market study into Big Tech firms on the Dutch payments market. According to the ACM, big tech firms could leverage their strong positions on one market into another market, to prevent other (smaller) providers from entering payments markets (see our December 2019 newsletter).
  • App stores – the ACM will finalise its further investigation into mobile app stores. In its initial market study, the ACM identified three examples of conduct which required further investigation: (i) favouring own apps over apps from other providers, (ii) unequal treatment of apps in general and (iii) lack of transparency (see our May 2019 newsletter). The ACM’s investigation into whether Apple abuses its market position through the App Store is still ongoing.

Consumer protection

Within the focus area of ‘Digital Economy’, the ACM intends to intensify its fight to protect consumers online. It will do so by focusing its enforcement on misleading online practices through, for example, investigating rankings, fake reviews and fake likes. Meanwhile, companies can check the thin line between online persuading and online misleading in the ACM’s Guidelines on the protection of online consumers.

The ACM’s intensified enforcement actions coincide with the entry into application of the new EU Consumer Protection Cooperation (CPC) Regulation on 17 January 2020. The CPC Regulation aims to improve European cross-border cooperation between consumer authorities when dealing with violations of the consumer protection rules. The ACM will gain new powers: (i) the power to purchase goods or services as test purchases, where necessary, under a cover identity and (ii) the power to remove content or to restrict access to an online interface or to order the explicit display of a warning to consumers when they access an online interface.

Energy transition

The transition from fossil fuels to renewable energy sources is referred to as the ‘Energy transition’. One of the ACM’s goals in this focus area is to ensure that consumers can make well-informed choices about sustainable energy products and services. The ACM intends to investigate energy suppliers’ sustainability claims concerning green electricity. In addition, it will publish guidelines on sustainability and competition to provide more clarity on the leeway companies have under the competition rules when cooperating on sustainability initiatives.

Sustainability is also a topic for the ACM outside the designated focus areas. Its investigation into price differences between sustainable and non-sustainable products in the agricultural and food sector is still ongoing. This investigation was instigated by public concerns that farmers are not being offered sufficiently rewarding incentives to encourage them to switch to sustainable production.

Other 2020 activities

Other topics listed on the ACM’s 2020 activities list include:

  • Prescription drugs – the ACM will investigate whether excessive pricing of prescription drugs violates the prohibition of abuse of a dominant position (see also our December 2018 newsletter).
  • Employment terms in merger review – the ACM will assess the effects mergers have on competition between companies in terms of employment conditions of employees and self-employed workers. The ACM can block the merger if there are negative effects.

The intended focus on employment conditions seems to be in line with the ACM’s heightened protection of employees and self-employed workers in other contexts, such as the non-poaching and wage-fixing arrangements mentioned in its updated horizontal guidelines and its recent guidelines on price arrangements between self-employed workers.

Social side

The enforcement goals relating to the Digital Economy may not come as a big surprise. However, the assessment of the potential effects of mergers on labour conditions seems new. In addition, the ACM’s 2020 focus areas seem to have a more ‘social’ feel to them, with competition enforcement revolving around sustainability initiatives and (both employed and self-employed) worker protection, and with consumer protection issues receiving more attention. Companies will have to wait and see whether there is indeed a ‘social side’ to competition law.

 

This article was published in the Competition Newsletter of February 2020. Other articles in this newsletter:

 

 

 

 

 

Team

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