THE BOTTOM LINE
- Business Model Under Threat: Integrated digital platforms may need to fundamentally redesign their user interfaces and algorithms to ensure equal treatment for third-party competitors, potentially impacting core revenue streams.
- Increased Enforcement Risk: This opinion lowers the bar for regulators to prove anti-competitive behavior. Expect a new wave of antitrust investigations and private damages claims targeting “self-preferencing” practices.
- Broader Impact Beyond “Big Tech”: The legal principle is likely to extend beyond major search engines and app stores, affecting any dominant online marketplace or booking platform that also offers its own competing products or services.
THE DETAILS
In a highly anticipated opinion, Advocate General (AG) Campos Sánchez-Bordona has advised the Court of Justice that a dominant digital platform’s practice of favoring its own services over those of its rivals (“self-preferencing”) can, by its very nature, constitute an abuse of a dominant position. While the AG’s opinion is not legally binding, the Court follows such recommendations in a large majority of cases. This signals a potentially seismic shift in how EU competition law is applied to the digital economy, moving away from a complex analysis of market effects towards a more direct assessment of a platform’s conduct.
The core of the AG’s reasoning lies in the “special responsibility” held by companies with a dominant market position. He argues that for a gatekeeper platform, which acts as both a marketplace for others and a competitor on that same marketplace, there is an inherent conflict of interest. Prioritizing its own services leverages its structural power in one market to gain an unfair advantage in another. The opinion suggests that this conduct, in itself, is enough to distort competition, regardless of whether a direct, quantifiable negative effect on consumers or the market can be immediately proven.
Looking ahead, businesses operating dominant platforms must prepare for the final judgment, which is expected within the next year. This opinion serves as a clear warning shot. General Counsel and executive teams should proactively review their platform’s architecture, ranking algorithms, and terms of service for any form of preferential treatment. An internal audit to assess market dominance under EU criteria and to document the objective justifications for any differentiated treatment will be a critical defensive measure as both public and private enforcement actions are now likely to accelerate.
SOURCE
Source: Court of Justice of the European Union
