VEGAS LEX reviews headline-making antitrust and GDPR cases with global brands involved
On June 18, 2019, a business luncheon on the theme of "Multi-million fines in Europe: Antitrust and GDPR. Are the same precedents possible in Russia?" was held in the Moscow office of the VEGAS LEX law firm.
During the event, experts of VEGAS LEX analyzed notable cases tried by European courts involving international IT and e-commerce companies that had been held liable by way of imposing multi-million fines. Alexandra Vasyukhnova, Partner, Head of Technology and Investment group at VEGAS LEX, moderated the event.
Ksenia Podguzova, an associate of Commercial practice at VEGAS LEX, using the example of the Google AdSense* case, spoke of violations of competition laws in online advertising. In the said case, the European Commission accused Google of abuse of its dominant position. Contracts signed by Google with owners of websites that contained restrictive provisions on advert placing using tools of its rivals served the reason for disapproval by the Commission. Google was fined about 1.5 billion euros. According to Ksenia, such behavior for companies might entail signs of violation of the Russian antitrust laws as well. With the "fifth antitrust package" coming up, the example is especially interesting for digital market stakeholders.
Alina Zaytseva, an associate of Commercial practice at VEGAS LEX, enlarged on the case of violation by GUESS** of a prohibition of anticompetitive agreements. In particular, the company implemented a commercial strategy aimed to expand e-commerce. Due to this, the company included into distribution arrangements restrictive provisions in terms of online search advertising, online sales, cross selling, selling to end users located outside the allocated territory and independent determination of resale prices by distributors. GUESS decided to cooperate with the European Commission in investigation; owing to this, it obtained a 50% reduction in the fine that finally made almost 40 million euros. Alina assessed such actions according to the Russian competition and antitrust laws giving examples of certain cases.
Anastasia Cheredova, a senior associate of Commercial Practice at VEGAS LEX, touched upon a case of Qualcomm’s*** market dominance in LTE chipsets. The European Commission examined a contract between Qualcomm (the supplier) and Apple (the buyer), which prohibited the buyer from purchasing LTE chipsets from other suppliers threatening it with economic penalties. As a result, no alternative suppliers of LTE chipsets could be qualified for supplies of produce to Apple. According to Anastasia, such acts of a monopolist may be treated with regard to certain circumstances as imposing unfavorable contract terms or "another" anti-competition arrangement (if economic benefits of both the parties were identified).
Dmitry Borodin, a senior associate of Technology and Investment group at VEGAS LEX, delivered a speech devoted to a case associated with breach of GDPR**** provisions, total amount of fines under which for last year made 56 million euros. The expert dwelt upon Google’s French case, where a French regulator found the corporation to have violated requirements to inform users of collecting personal data. It also determined that some data were processed without a proper legal ground for it. Dmitry underlined that there are almost no similar cases available in Russia and the scopes of liability for those available are a far cry from the European ones. Despite this, the expert urged for monitoring changes in the Russian data protection legislation, since this sector continues developing at a fast pace.
*AdSense for Search is an advertising placement service of Google used as a platform designed as an intermediary between owners of websites with search engines and advertisers.
** The case against Guess?, Inc ; Guess? Europe, B.V; Guess Europe Sagl.
GUESS, a world-famous brand name and trademark that includes a wide range of such produce as clothing and accessories for men, women and children.
*** Qualcomm Inc. (USA) is the largest worldwide supplier of LTE chipsets.
****GDPR – General Data Protection Regulation.
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