Digital Platform in Competition Law : Judgment of the Court of Justice in Case C-233/23 (Alphabet and Others)
1. Introduction
In Case C-233/23, the Court of Justice of the European Union (“the Court”) held that a dominant undertaking’s refusal to ensure the interoperability of its digital platform with an application developed by a third party may constitute an abuse of its dominant position. This may be the case even if the platform is not strictly indispensable for the commercial use of that application, provided the platform was developed to be made available to third parties and it thereby offers increased attractiveness for consumers.
2. Background of the Case – Application and Digital Platform
- Enel (Italy) introduced the JuicePass application in 2018, enabling drivers to locate and reserve charging stations for their electric vehicles.
- To facilitate navigation to these stations, Enel requested Google (which holds a dominant market position) to adapt the application for use with Android Auto, Google’s system that grants direct access to smartphone apps via a car’s dashboard screen.
- Google refused to take the measures necessary to enable interoperability between JuicePass and Android Auto. According to the Italian Competition Authority (AGCM), this refusal amounted to an abuse of Google’s dominant position.
- The AGCM therefore imposed a fine of over EUR 102 million on Google. Google appealed against this decision before the Italian Council of State (Consiglio di Stato), which referred several questions to the Court of Justice for a preliminary ruling.
3. The Court’s Assessment
3.1 Abuse of a Dominant Position by the Digital Platform
The Court found that a refusal by a dominant undertaking that developed a digital platform to ensure the interoperability of that platform with an application created by a third party can constitute an abuse of dominant position. Notably:
- It is not necessary for the digital platform to be indispensable for the operation of the third-party application.
- What matters is whether the platform was developed at least in part for third-party use, and whether access to that platform would make the application more attractive to consumers.
3.2 When is a Refusal in Breach of Competition Law?
A refusal can restrict competition even if the third party (and its competitors) remain present and active in the relevant market without such interoperability. The key question is whether the refusal could:
- Impede the maintenance or development of effective competition in the relevant market, taking into account all pertinent factual circumstances.
- Enhance or preserve the market power of the dominant undertaking by leveraging the platform’s appeal to end users.
4. Conditions for a Justified Refusal of Interoperability
The Court acknowledged that there may be legitimate reasons for refusing interoperability, namely:
- Non-existence of a suitable template for the category of the application in question, where providing such a template would jeopardize the security or integrity of the platform.
- Technical impossibility, if for objective reasons, interoperability cannot be achieved without disproportionate risks or costs.
5. Obligation of the Digital Platform to Develop a Template and Appropriate Compensation
If these justifications (security, integrity, or technical impossibility) do not apply, the dominant undertaking (in this case digital platform) must:
- Develop an appropriate template for the category of application concerned within a reasonable timeframe.
- Potentially require appropriate financial compensation that reflects the cost of developing the template and ensures a reasonable return. In this process, it is important to consider:
- The needs of the third party requesting such development.
- The actual costs the dominant undertaking incurs.
- The undertaking’s right to derive adequate benefit from its investment.
6. Conclusion
This latest judgment from the Court of Justice in Case C-233/23 further clarifies the rules on abuse of dominant position in the context of digital platforms. Dominant undertakings must carefully assess whether a refusal of interoperability is:
- Legitimately justified due to security, integrity, or technical impediments, or
- An unwarranted exclusion that harms competition and consumer welfare.
In situations where there are no valid security or technical grounds, a dominant undertaking must respond to requests for access promptly and under fair conditions, which may include developing new templates and charging an appropriate fee.
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