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How did you come to be interested in the regulation of digital markets?

I am a full-time professor in competition law at Bilgi University in Istanbul. I first became interested in the application of competition law in digital markets when a PhD student of mine, Cihan Dogan, wrote his PhD thesis on the topic in 2020. We later co-authored a book together (“Regulation of Digital Platforms in Turkish Law”). Ever since, I have been following these increasingly prominent issues closely.

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“What is an appropriate fee?” is among the key questions in the current conversation around Meta’s move to introduce paid subscription options with no ads on Facebook and Instagram. As I discussed previously, the EU’s highest court suggested that businesses may be allowed under the GDPR to offer their users a choice between (1) agreeing to personalised advertising and (2) “if necessary” paying “an appropriate fee” for an alternative service tier. In that text, I also raised some of the legal and economic difficulties in determining an appropriate fee. Eric Seufert followed with a thoughtful analysis. (By the way, don’t miss the next episode of Eric’s podcast in which we’ll discuss this and related issues.) Eric proposed two alternative “conditions for calculating whether a ‘pay-or-okay’ price point represents an ‘appropriate fee’”:

1. The price achieves, at most, overall ARPU parity between the pre-subscription and post-subscription periods, and;
2. The fee doesn’t materially exceed those charged by comparable services.

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Abstract

This article explains the system of judicial review of the decisions of the Spanish National Competition Authority on the application of the prohibitions of anticompetitive conduct under Articles 101 and 102 TFEU (and their national equivalents) and analyses the judgments of the Courts of Appeal from 1.5.2003 to 31.4.2021.

The decisions of the Spanish NCA give rise to a high level of litigation, which is illustrated by the large number of judgments in which individual appeals against them are decided (1390 judgments out of 274 decisions whose judicial review was completed during the period considered). As might be expected, the majority of challenges focus on fines, which are appealed in 95.5% of cases. In 62% of the judgments, the plaintiffs are wholly or partially successful, as a result of which the fines imposed in the reporting period were reduced by 43% (from € 1,670 million to € 738 million). The paper provides data on the grounds for full and partial annulment and illustrates the rigorous and intense judicial scrutiny to which the NCA’s decisions are subject.

ICLE Senior Scholar Lazar Radic took part in a digital panel on ex ante regulation of digital markets hosted by the Legal Grounds Institute. Video of the full event is embedded below.

Way back in May, I cracked wise about the Federal Trade Commission’s (FTC) fictional “Bureau of Let’s Sue Meta,” noting that the commission’s proposal (really, an “order to show cause”) to modify its 2020 settlement of a consumer-protection matter with what had then been Facebook—in other words, a settlement modifying a 2012 settlement—was the FTC’s third enforcement action with Meta in the first half of 2023. That seemed like a lot, even if we ignored, say, Meta’s European and UK matters (see, e.g., here on the EU Digital Markets Act’s “gatekeeper” designations; here on the Norwegian data-protection authority; here and here on the Court of Justice of the European Union, and here on the UK Competition Appeal Tribunal).

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Meta gave European users of Facebook and Instagram a choice between paying for a no-ads experience or keeping the services free of charge and with ads. As I discussed previously (Facebook, Instagram, “pay or consent” and necessity to fund a service and EDPB: Meta violates GDPR by personalised advertising. A “ban” or not a “ban”?), the legal reality behind that choice is more complex. Users who continue without paying are asked to consent for their data to be processed for personalized advertising. In other words, this is a “pay or consent” framework for processing first-party data.

I was asked by IAPP, “the largest privacy association in the world and a leader in the privacy industry,” to discuss this. I also thought that the text I wrote for them could use some additional explanations for this substack’s audience. What follows is an expanded version of the text published by IAPP. (If this text is too long, I suggest reading just the next section).

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ICLE Director of Competition Policy Dirk Auer joined as a panelist in a webinar organized by ECIPE on platform regulation and merger policy in the EU, and the implications for member states’ attractiveness for digital investment. Video of the full panel is embedded below.

In a widely discussed move, Meta gave Facebook and Instagram users the choice between paying for an ad-free experience or keeping the services free of charge using ads. The legal reality behind that choice is more complex. Users who continue without paying are asked to consent to the processing of their data for personalized advertising. In other words, this is a “pay or consent” framework for the processing of first-party data. 

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Reading comments (Ben Thompson, Eric Seufert) on the Meta-Amazon deal to let “shoppers buy Amazon products directly from ads on Instagram and Facebook” (Bloomberg) made me think: could it happen here (in the EU)? Would EU law block it? I don’t think so. Still, given that the deal means “more data for Meta” (and Amazon), we’ll likely see some knee-jerk critical reactions. So, I thought it would be interesting to think through this question. (To be clear: this is not a full legal analysis, just my quick thoughts).

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