Masaryk University, Faculty of Law

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Masaryk University, Faculty of Law Workgroup for
Law and ICT
JUDr. Radim Polcák radim.polcak_at_law.muni.cz www.l
aw.muni.cz ICQ 217-486-919
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Overview of lecture
ICT and legal definition of a market Specific
features of ICT market Negative effects of ICT
market dominance Abuse of market dominance in ICT
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Power of ICT and e-commerce
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EC Antitrust law
ICT antitrust law art. 81, 82 of the EC treaty
(defining cartels and abuse of market dominance)
Almost all antitrust cases hard cases
Legislature doctrine Caselaw doctrine
ICT antitrust doctrine Pitofsky, Killick,
Newberg, Veljanovski, Nocke, Peitz, Stahl ICT
antitrust EC caselaw (applicable) IMS
(C-418/01 IMS Health GmbH Co OHG v NDC Health
GmbH Co KG 2004 4 CMLR 28), Volvo (238/87
Volvo v Veng (UK) Ltd 1988 ECR 6211), Magill
(C-241 242/91P, 1995 ECR I-743) or Bronner
(C-7/97 Bronner 1998 ECR I-7791), Microsoft
(COMP/C-3/37.792)
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Internet as a marketplace
Market definition crucial relevancy in market
regulation

• Interchangeability of commodity
• Cross-elasticity of demand

Internet marketplace (not a single market)
Single commodity markets on the internet (instant
messengers, search engines, ) X Internet
marketplace as a part of a commodity
market (CD/DVD sales, pizza delivery services, )
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Specific features of Internet marketplaces
Effect of externality (Network effect)
Direct more users more market
value Indirect more users more services,
investment, individual initiative Negative
critical mass
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Specific features of Internet marketplaces
Technology platforms
Hardware platforms Operating systems File
formats Office applications Gaming devices
Control of technology platform control of
secondary market Barriers to entry - high
development costs x fast replacement
Pitofsky Consumer lock-in high costs of
migration Development clustering high costs,
special capacities Fast business periods
immediate changes, less permanency
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Market dominance negative effects
Negative effects of mere market dominance (not
contra legem) (Veljanovski)

• negative standardization primary market
• tipping (snowballing) secondary market

Preventive measures cartel antitrust,
concentrations
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Abuse of market dominance
Abuse of market dominance ICT specific examples

• Obstructions to development
• Discrimination
• Tying

OEM contracts prohibiting to develop for another
platforms Keeping OS specification secret OS
sold with browser, media player,
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Abuse of market dominance
Abuse of market dominance IP abuse IMS scale
Caselaw doctrine - Killick

• IP necessary to enter the market
• IP restriction restricts development of a
  product potentially acceptable
• by the market
• restrictions are not objectively reasonable
• restrictions is able to prevent competition on
  the secondary market

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Thanks for your attention
Further events organized by the
workgroup Summer School of ICT Law
(www.law.muni.cz) Cyberspace 2006
(www.cyberspace.muni.cz)