CN05 - Italian Competition Authority finds against Google

On 13 May 2021 the Italian Competition Authority ("ICA") published a decision fining and imposing behavioural remedies on Google for conduct deemed to constitute an abuse of a dominant position, by preventing Enel X from developing an app compatible with the Android Auto feature.

Key takeaways

• In line with the European Commission and other Member States authorities' approach, the ICA is paying close attention to the behaviour of big tech companies on the market.
• In refusal to deal cases, the ICA can impose highly specific behavioural remedies, affecting the market strategies of companies considered to be dominant.
  When assessing the seriousness of the conduct at issue for the purposes of quantifying the fine imposed, the ICA took into account the negative effects of the conduct on the development of e-mobility, which promotes environmental sustainability.
• There have been relatively few cases where competition authorities have applied the so-called 'essential facilities' doctrine, as the dominant undertaking's product or service must be considered indispensable in the downstream market. The application of this case law to interoperability information has interesting parallels with the Commission's Microsoft decision in 2004.

Background

In its decision of 27 April 2021, the ICA found that Google had unjustifiably prevented Enel X, a subsidiary of the Enel Group active in the e-mobility sector, from developing a version of its 'JuicePass' app compatible with Google's Android Auto feature, thereby hindering the development of a new product deemed to be necessary in the e-mobility sector. 

Android Auto is a specific Android feature (integrated in the most recent versions of Android) which allows drivers to access certain apps via the car's steering wheel controls, the car's display or using voice control while driving.

Enel X's JuicePass app provides drivers with a wide range of services for recharging electric vehicles, including identifying and booking charging stations and managing the charging session (e.g. processing payments). According to the ICA, JuicePass and Google Maps should be treated as competing products, as both provide services linked to searching for and providing information on charging stations (e.g. opening hours, availability etc.) and both allow operators to collect the user's data. The ICA also pointed to Google's development plans, aiming to enhance the charging station related services offered via Google Maps, such as recharge management and payment (services already provided by JuicePass). 

For these reasons, the ICA considered Google and Enel X to be competitors downstream. The ICA also found that Google holds a dominant position on upstream markets for the concession of licences for operating systems (through Android, of which Android Auto is an extension) and the sale of apps for Android (through Google Play).

The ICA's decision

Applying a broad interpretation of the essential facility doctrine, the ICA found that, by refusing access to interoperability information that would have enabled Enel X to develop an Android-Auto-compatible version of JuicePass, Google engaged in conduct constituting an abuse of a dominant position with the aim of preventing the development of a new product, partially competing with Google Maps. 

More specifically, the ICA found that Android Auto was indispensable in order to safely use JuicePass and therefore that the programming tools required to develop apps compatible with Android Auto were indispensable. By consequence, refusal to provide access to these tools in the absence of an objective justification was considered capable of hindering competition on downstream markets, including those for electric car recharging apps and navigation apps, as such conduct was deemed to inhibit the development of an alternative product (JuicePass), providing additional features to Google's product (Google Maps).

In its defence, Google argued that Android Auto could not be considered a "strategic product" and that Google Maps and JuicePass are not competing products as they are only partially substitutable. Google also argued that its decision not to support JuicePass was grounded in safety and liability concerns, both of which are important considerations when developing templates to allow apps to be published on Android Auto.

The ICA dismissed Google's defences and, in addition to a monetary fine of EUR 102 million, imposed highly specific behavioural remedies on Google, requiring the company to provide access to an up-to-date template third-parties can use to develop electric car recharging apps compatible with Android Auto.

Comment

The decision is interesting for a number of reasons. It will very likely pave the way to a new debate on the indispensability of certain services provided exclusively by certain companies in the tech sector (so-called "gatekeepers"). Moreover, the ICA also stressed the importance of the development of new sectors such as e-mobility and the transition to more environmentally sustainable modes of transport. 

With thanks to Sabina Pacifico of Ashurst for her contribution.