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Competition Law

Future Mobility: EU Commission Shifts Gears

Posted by on 31 October 2019
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The automotive industry stands on the brink of a revolution that will affect not only automobile manufacturers and suppliers but also stakeholders in an expanding ecosystem including not only traditional players like automobile and component manufacturers, spare part and repair companies, and motor insurance and parking providers, but also a wide variety of companies not historically associated with the sector:  large online platforms, mobile communications patentholders, Internet of Things (IoT) players, Internet service providers (ISPs), app developers, and others.  Arthur D. Little comments that the “mobility landscape is being completely reshaped,” while PwC identifies five trends driving industry transformation:  electric cars, autonomous vehicles, shared mobility, connected cars and frequent updating.  A McKinsey study names four disruptive technology-driven trends driving the automotive revolution through 2030:  diverse mobility, autonomous driving, electrification and connectivity.

The European Union (EU) is an enthusiastic participant in the mobility revolution.  The flagship of the EU’s future mobility strategy is the May 2018 Third Mobility Package, which was introduced by a communication on “Sustainable Mobility for Europe: safe, connected, and clean,” with a strategic action plan on batteries for electric vehicles and a communication on “An EU strategy for the mobility of the future” (the Future Mobility Communication).  The Third Mobility Package followed a number of related initiatives, including notably the 2014 alternative fuels directive and follow-up; the 2016 European Strategy on Cooperative Intelligent Transport Systems (C-ITS) and selection of AUTOPILOT as a large-scale pilot project for autonomous vehicles in a connected environment; and the 2017 European Battery Alliance and report on access to in-vehicle data and resources.  The EU has also made available funds through its Horizon 2020 framework programme and otherwise, and will likely continue to do so under the new Horizon Europe programme.

Alongside these EU carrots, however, the mobility sector is poised to feel the stick of EU antitrust enforcement.  McKinsey notes that in “”a more complex and diversified mobility industry landscape, incumbent players will be forced to simultaneously compete on multiple fronts and cooperate with competitors.”  Indeed, the sector’s evolution involves an unprecedented level of cooperation to develop new products and services and create new technical standards.  New transport business models, such as car-sharing and ride-hailing, are evolving rapidly and reducing demand for traditional vehicle sales.  The new vehicles and services will necessitate the creation of new online platforms and generate vast amounts of data not only for platform owners but also for participants in adjacent markets, such as auto repairs, fueling/charging platforms, parking, motor insurance and others.

The future mobility sector thus pushes many of the hottest antitrust buttons:  big data; online platforms; information sharing; developing/setting standards; and cooperation up, down and across value chains.  Indeed, DG COMPETITION already has a number of future mobility cases under way or recently concluded.  With the start of a new EC mandate in December 2019, DG COMPETITION will likely take a new, more coordinated approach to the future mobility sector, potentially including a sector inquiry.  Indeed, President-Elect Ursula von der Leyen’s mission letter (the Mission Letter) to Commissioner-designate Vestager directs her to “consider using . . . sector inquiries into new and emerging markets” and to “proactively share any relevant general market knowledge within the Commission . . . [to] ensure new legislative proposals contribute to fair and open competition.”

This article briefly reviews the main areas in which the future mobility sector can be expected to raise antitrust issues – acquisitions and joint ventures; standard setting and licensing; big data, information sharing and technology pooling;  online platforms; and State aid – discussing ongoing and recent cases in the mobility sector.  This article then discusses the EC’s possible priorities in a future mobility sector inquiry.

Acquisitions and Joint Ventures

The mobility sector’s rapid evolution has generated significant M&A activity and can be expected to generate more in the coming years.  These transactions may take the form of acquisitions,  joint ventures (JVs) or other types of investment often bringing together competitors.

There are too many future mobility transactions to list.  A few examples include:

  • 2019: Daimler’s and Geely’s ride-hailing JV in China; Ford’s and Volkswagen’s investment in autonomous vehicle company Argo AI; Daimler’s, BMW’s and Audi’s partnership in driver assistance systems, automated driving on highways and automated parking; Toyota’s, Denso’s and Softbank’s investment in Uber’s self-driving car unit; Toyota’s and Denso’s collaboration in semiconductors and electronic components for electric cars; Toyota’s and Panasonic’s JV in automotive batteries; Waymo’s and Renault/Nissan’s transportation-as-a-service collaboration; Hyundai’s and Aptiv’s autonomous mobility JV; Jaguar Land Rover’s and BMW’s cooperation in electric motors, transmissions and power electronics; and Amazon’s investment in Aurora Innovation;
  • 2018: Jaguar Land Rover’s and Waymo’s collaboration on self-driving electric cars; Honda’s exclusive agreement with General Motors to develop a new kind of autonomous vehicle; Volkswagen’s purchase of 75.1% of WirelessCar Sweden from Volvo; Daimler’s and BMW’s car-sharing JVs (discussed further below); Audi’s, BMW’s, Robert Bosch’s, Continental’s, and Daimler’s investments in Here International (beginning in 2015); Toyota’s partnership with Aisin and Denso on automated driving software; Toyota’s and SoftBank’s acquisition of Monet Technologies; Volkswagen’s and Didi Chuxing’s JV in technologies for ride-hailing fleets in China; Denso’s and Aisin’s JV in integrated power trains for electric and hybrid vehicles; and Lyft’s and Aptiv’s collaboration to provide rides and collect data on rides with autonomous vehicles; and
  • 2017:  Volvo’s and Vioneer’s Zenuity JV; Volvo’s and Uber’s cooperation in autonomous vehicles; Hitachi’s and Honda’s JV in electric motors; Infineon’s and SAIC Motor’s JV in automotive power modules; and BMW’s, Daimler’s, Ford’s and Porsche’s Ionity JV in electric car charging infrastructure.

This non-exhaustive list of future mobility transactions shows a number of interesting features.  First, the pace of transactions in the sector seems to be increasing dramatically.  Second, future mobility transactions take many forms, from stock and asset acquisitions to equity JVs to looser cooperative relationships.  Third, the participants in future mobility cooperations may include any combination of traditional automotive and component manufacturers, mobility providers such as ride-hailing firms and software and big data players and online platforms not often associated with the mobility sector.  Fourth, many participants engage in multiple cooperative relationships simultaneously.

Acquisitions, JVs and other cooperative relationships raise a number of different antitrust issues.    Most notably, acquisitions and JVs often require approval under applicable merger control statutes.  Although merger notifications can be burdensome and lead to delays, they offer legal certainty for the parties, and published decisions may shine light on antitrust authorities’ approach to potential issues in the sector and thereby assist even parties to transactions that may not trigger merger filings.  Whether or not they trigger merger filings, cooperative relationships in the future mobility sector requires careful attention to other antitrust issues, in particular the risk of sharing competitively sensitive information.

Merger Control Issues

The first antitrust question in relation to a proposed transaction is often whether, and if so where, the transaction triggers notification under merger control statutes such as the EU Merger Regulation (EUMR).  Determining whether a filing is required can be difficult, particularly in the case of JVs.  For example, JVs are only notifiable in the EU if they qualify as “full function” (broadly, having their own independent market presence), but this requirement does not apply in China.  Brazil and China may both treat investments with lower levels of equity and/or less significant governance rights as potentially notifiable acquisitions of “control” than would be the case in the EU.  For example, Audi’s, BMW’s and Daimler’s 2015 acquisition of Nokia’s Here maps required notification in Brazil but not in the EU, and Robert Bosch’s and Continental’s follow-on 5.89% investments also triggered Brazilian merger notifications.

Merger control policy has become highly controversial in recent years, among other things as a result of the growth of digital giants, on the one hand, and pressure to take greater account of public policy and global trade issues in merger control, on the other.  While future mobility sector transactions have so far not been implicated in these controversies, they will be affected by policy changes in the coming years.  Set out below is a brief description of these trends and a summary of a key merger decision in the future mobility sector, Daimler/BMW.

Acquisitions of nascent competitors and other merger control trends. In recent years, antitrust authorities have focused increased attention on the phenomenon commonly (but erroneously) referred to as “killer acquisitions;” large companies paying high prices for companies with low turnover.  These acquisitions may escape notification because the target does not meet applicable turnover thresholds.  When notified, these transactions often raise no substantive issues under traditional antitrust theories, because the target is often active in different markets to the acquirer.  In any case, low turnover normally represents low market shares that arguably do not reflect the target’s real competitive significance.

To address these perceived shortcomings, antitrust authorities are taking a number of steps to ensure greater scrutiny of so-called “killer acquisitions”.  These include adding value-based triggers to existing notification thresholds to capture acquisitions of high-value targets with low turnover.  More substantively, authorities are looking more closely at the strategy behind proposed acquisitions and the rationale for high purchase prices to identify  potential competitive harms that might otherwise be missed.  They are also likely to explore different ways of looking at transactions’ competitive effects, such as defining broader markets to capture overlaps (market definition); assessing the potential for small targets to evolve into major competitors (potential competition); the risk of reducing innovation competition between buyers and targets (innovation competition); and the potential “conglomerate” and “portfolio” effects of large buyers adding new markets to their “ecosystems.”  All of these new approaches are likely to be tested in future transactions involving the future mobility sector.

Lessons from Daimler/BMW. A recent decision that nicely illustrates the relationships between mobility markets and authorities’ concerns is the EC’s November 2018 approval of Daimler’s and BMW’s JVs.  In its decision, the EC considered the relationships not only between different types of passenger services, but also those between passenger services and upstream and downstream services.

In relation to passenger services, the EC conducted a market study to test the relation between various private and public options, including all passenger transport services, at the broadest extreme, and “free-floating” (as opposed to station-based) car-sharing services, at the narrowest.  The EC’s market study showed a “large heterogeneity of substitution patterns of customers between different means of transport.”  In plain English, this means that new forms of passenger transport, such as car sharing and pooling, are blurring traditional market boundaries and making it more difficult for the EC to define antitrust markets.  “[M]arket definition in car sharing and market shares may be less precise indicators of competitive positioning,” the EC concluded, and “out-of-market constraints exerted by, in particular, the public transport services” need to be included in the competitive analysis.

The EC also considered the relationship between passenger transport services and a variety of traditional and emerging upstream and downstream markets: passenger cars (divided between manufacture and supply and distribution); leasing (divided between financial and operational); full fleet leasing; parking services (including hardware payment services and software/mobile technology); charging (including power supply, infrastructure, and support services); and applications (divided between development/sale of smartphone and multimodal applications and access to multimodal applications).

This list of traditional and emerging digital markets – and the EC’s unusual acknowledgment that traditional market definition tools didn’t yield clear results -- reflects the mobility sector’s state of flux.  Similarly, the geographic reach of the relevant markets, from the local city level for passenger transport services to the national, EEA-wide or global for other markets, reflects the complexity of modern mobility markets.

The EC concluded that the Daimler/BMW JVs raised antitrust concerns in five cities where both parties operated car-sharing services and in one vertically affected market, multimodal apps for free-floating car sharing.  The EC considered multimodal apps the “gateway to car sharing services” and the parties’ car-sharing fleet a “must-have” for competing multimodal apps in the overlap cities. As a condition to approval, the parties agreed that, for three years after closing, (i)  third-party aggregator app developers will have access to an application interface protocol (API) to enable those aggregators to offer the JV’s car-sharing services in the overlap cities; and (ii) third-party car sharing providers will be able to make their services visible on the JV’s app, in each case subject to conditions.  Interestingly, both remedies are designed to lower barriers to entry and increase market access; the parties were not required to divest overlapping businesses.

Although the Daimler/BMW decision is of course fact-specific, it highlights a number of themes that will apply in the EC’s analysis of acquisitions and JVs in the future mobility sector.  The EC will closely examine relations between different mobility solutions and analyse competitive effects on the narrowest potential markets; scrutinize the potential for cooperation to create barriers to entry in related markets; and may require access and interoperability remedies to lower barriers to entry and expansion.  The rules governing existing and planned cooperation, in particular in JVs not required to be notified under the EUMR, will likely be an important component of the expected sector inquiry.

Other Antitrust Issues

Joint ventures and other forms of cooperation that do not trigger merger notification requirements must in any event be assessed from an antitrust perspective.  Such cooperation in the future mobility sector will often be pro-competitive and not raise any antitrust red flags.  However, even competitively benign cooperation must be appropriately structured to avoid antitrust issues.  One of the most common issues, particularly prevalent in an environment where stakeholders are engaging in multiple, overlapping cooperative relationships, is the need to avoid the sharing of competitively sensitive information.  Information sharing issues are discussed further below.

Standard Setting and Licensing

The evolution of electric, autonomous and connected vehicle technologies entails the development of many new technical standards to permit interoperability across different types of vehicles and devices.  These standards are developed by a large number of organizations.  Like the cooperative relationships mentioned above, many of these organizations involve industry players, often competitors and often participating in multiple standard-setting organizations simultaneously.

Future Mobility Standard-setting Organisations

Stakeholders in the future mobility sector are engaged in a wide variety of standard-setting processes.  Examples include:

  • The CAR 2 CAR Communication Consortium for deploying cooperative Intelligent Transport Systems and Services (C-ITS).  Car 2 Car was founded in 2002 and includes leading European vehicles manufacturers, equipment suppliers and research institutions;
  • The  Car Connectivity Consortium (CCC), which develops technologies for smartphone-to-car connectivity solutions, including MirrorLink, an open standard for connecting apps between smartphones and cars; Digital Key, an open standard to allow smartphones to act as vehicle keys; and Car Data, which will create an ecosystem to link vehicle data to authorized data usage, such as pay-how-you-drive insurance, road monitoring, and fleet management. CCC includes a large number of stakeholders, including car OEMs, Tier-I suppliers, phone manufacturers, and app developers;
  • The C-ITS Deployment Platform, set up by the EC as a cooperative framework including national authorities, C-ITS stakeholders and the EC to develop a shared vision on the interoperable deployment of C-ITS. The C-ITS Platform adopted a final report in September 2017;
  • The Genivi Alliance, which develops open source software and standards for connected cars.  The Genivi Alliance includes a large number of Car OEMs; Tier-I suppliers; OSV, middleware, hardware and service suppliers; and “silicon” members;
  • The International Standards Organisation (ISO), which adopted Extended Vehicle (ExVe) standards in 2017 and 2018;
  • OneM2M, which develops technical specifications for a common M2M service layer that can be embeddered in various hardware and software.  OneM2M has almost 200 members, including a wide range of telecommunications, semiconductor, IT, online platform, and government members; and
  • The Open Connectivity Foundation (OCF), which develops interoperability standards for connected devices and includes over 400 members.

Many of these organizations involve multiple stakeholders and have overlapping membership.  Many also include competitors from across the mobility ecosystem.

Standard-setting, Licensing and EU Law

The creation of technical standards is typically pro-competitive, but the process must be carefully managed to avoid antitrust pitfalls.  TheEC’s 2010 horizontal co-operation guidelines (the Horizontal Guidelines) acknowledge that standards “normally increase competition and lower output and sales costs, benefiting economies as a whole. Standards may maintain and enhance quality, provide information and ensure interoperability and compatibility (thus increasing value for consumers).”  However, standard-setting can “also give rise to restrictive effects on competition by potentially restricting price competition and limiting or controlling production, markets, innovation or technical development.”  The EC’s 2014 guidelines on technology transfer agreements (the Technology Transfer Guidelines) also note that technologies in a pool often support de facto or de jure industry standards and warn that such pools can reduce innovation competition and foreclose alternative technologies.

The Horizontal Guidelines specify that the standard-setting process will not normally raise antitrust issues where “participation . . . is unrestricted[, . . .] the procedure for adopting the standard in question is transparent, [and] standardisation agreements . . . contain no obligation to comply . . . with the standard and provide access to the standard on [fair, reasonable and non-discriminatory (FRAND)] terms,” even if the standard creates market power.  Where a standard involves IPR, effective access may require participants whose IPR are included in the standard to provide a FRAND commitment and disclose their IPR that might be essential for the implementation of the standard under development.  These principles, while apparently clear in principle, have generated considerable disagreements in practice.  A November 2017 communication elaborated on the EU approach to such standard essential patents (SEPs), but many questions remain open.

An ongoing case relating to the licensing of Nokia patents essential for car communications illustrates the ways that the standard-setting process and SEP licensing conditions can raise issues in the modern mobility sector.  In Spring 2019, Daimler (followed by others) complained to the EC that Nokia was abusing a dominant position by insisting on licensing connected-car patents for the entire vehicle, rather than for individual components.  The level at which SEP holders must provide access to their patents was a key issue in the development of the September 2017 SEP communication.  In another ongoing case, the DG COMPETITION is investigating whether cooperation on emission cleaning technology outside the context of a formal standard setting process represented a scheme to limit innovation competition.

The future mobility sector will require the development of numerous new standards, for example relating to connected cars, autonomous vehicles, data collection and other issues.  While ongoing cases should clarify important issues relating to SEP licensing conditions and technical cooperation, other issues are highly likely to arise in the coming years.  The EC’s expected sector inquiry can also be expected to collect information on current and expected standard setting processes and stakeholders’ participation in them.

Big Data, Information Sharing and Technology Pooling

Like many industries, the future mobility sector will depend to an unprecedented extent on data, information and technology.  Connected cars will generate huge volumes of data that can be used to improve existing products and services and deliver new services, thereby unlocking enormous value. New and improved products and services are not limited to automobiles and components, but include the whole mobility ecosystem, including for example repairs, fueling/charging, parking and insurance.  To deliver these benefits, stakeholders across the ecosystem will need to cooperate, sharing information and pooling technologies and developing new technical standards to allow interoperability.  Mobility data collected by private companies, non-profits and public-private partnerships also offer significant benefits to public sector “customers”; examples include Uber’s Movement database and SharedStreets.

Future Mobility and Big Data

The most appropriate model for access to vehicle-generated data has already generated considerable controversy.  In a December 2016 position paper, the European Automobile Manufacturers Association (ACEA) supported open access based on the ISO’s ExVe standards through vehicle manufacturers’ servers or “neutral” servers based on B2B agreements between service providers, vehicle manufacturers and/or the operators of neutral servers.  In its position paper, however, the Fédération Internationale de l’Automobile Region I argued that this approach gives too much control to automobile manufacturers and called on the EC to mandate the use of a neutral server solution operated by a mixed consortium representing business and consumer interests.  As connected vehicles become more common and existing and new competitors seek access to the data they generate, the rules governing access to this data will be key.  As mentioned, the antitrust significance of big data is a key concern for antitrust authorities, including notably the EC.  Indeed, Commissioner Vestager recently met with ACEA and the European consumer rights organization, BEUC, and BEUC called for a sector inquiry on car data.

Big Data and EU Antitrust

The collection and use of big data raise two distinct types of antitrust concern.  On the one hand, authorities fear that big data can create market power for companies that control it and barriers to entry for others that need access to such data to compete.  The antitrust remedy could be an obligation for data controllers to share data with their competitors.  On the other hand, when companies share and pool big data and other information that constitutes competitively sensitive information, they risk distorting competition.

In relation to big data creating market power, Commissioner Vestager noted in a recent speech that “the huge quantities of information that some big businesses have can give them an edge that smaller rivals can’t match. And the importance of network effects can mean that it’s hard for smaller firms to compete, even with a better product, if they don’t have a critical mass of users.”  She has reflected that, “one thing we may need to do, to open up competition, is to require companies to give rivals access to their data”, while acknowledging that “there are some hurdles to overcome” when implementing such a requirement.

The potential for big data to confer market power was raised notably in a 2016 Franco-German study on competition law and data; the German government is now considering a proposal to include access to data as an element of the definition of dominant position in German antitrust law. However, an April 2019 report (the Special Advisors Report or the Report) acknowledged that “[t]he significance of data and data access for competition will . .  always depend on an analysis of the specificities of a given market, the type of data, and data usage in a given case” and urged caution in requiring dominant companies to grant competitors access to data.  The Report singled out mobility as a sector likely to be revolutionised by the use of big data.  The Report did not support a generally applicable right of access to data for competitors, but proposed a new analytical framework to make it easier for the EC to impose data access mandates, especially in relation to after- and complementary markets.

More specifically, the Report recommended moving away from the traditional “essential facilities” analysis, applying a more general interest-balancing test. The Report outlined several data access “scenarios” to identify situations in which data access mandates would be more or less likely to be appropriate.  Access mandates would more likely be appropriate  where the data controller holds a gatekeeper position (i.e., access to its data is essential for competing on one or more neighbouring markets) or data access requests are somewhat standardised.  Access mandates would be less appropriate where a firm requests data for the purpose of training algorithms for uses unrelated to the fields of activity of the data controller, although even in such case an access mandate could be imposed “where the dominant firm is a large player in data markets and has an infrastructure for data access requests in place.”

In relation to voluntary information sharing and pooling, current antitrust rules put industry in a difficult situation.  On the one hand, in a speech on big data, Commissioner Vestager  encouraged companies to pool connected car data to help car companies build better cars or develop better autonomous vehicles.  On the other hand, as explained in the Horizontal Guidelines, sharing of competitively sensitive information may be treated as a “by object” violation of EU antitrust rules and attract significant fines.  Similarly, while the Technology Transfer Guidelines acknowledge that technology pools can have pro-competitive effects, they also warn that pools can reduce competition and innovation and even amount to a price-fixing cartel.    The EC is reviewing its block exemption regulations for motor vehicles and vertical cooperation agreements and will shortly be consulting on the need for revisions to the Horizontal Guidelines.

The Special Advisors Report recognized that there is so far little experience in the efficiencies of data sharing and pooling and recommended that the EC develop new legal theories to make it easier to force companies to share data.  The Report further recommended revisiting the Horizontal Guidelines’ discussion of information sharing and suggested that the EC may need to contemplate adoption of a new block exemption regulation to provide a safe harbor for some information sharing.

An ongoing EC investigation into Insurance Ireland illustrates how data sharing and pooling issues can arise.  Insurance Ireland, a trade association for insurance companies active in Ireland, maintains a database called Insurance Link, to which member companies contribute insurance claims data to facilitate the detection of potentially fraudulent behaviour by insurance claimants and to ensure the accuracy of information provided by potential customers to insurance companies and/or their agents.  The EC does not challenge the legality of such data pooling arrangements per se.  Rather, the EC is investigating whether Insurance Ireland’s conditions for non-members to access the Insurance Link database may place companies at a competitive disadvantage on the Irish motor insurance market.  Although the Insurance Ireland case is not specific to future mobility, data access issues will be significant in many future mobility applications in which participants collect and use big data.

The Special Advisors Report suggested that “where [a] data pool has market power and gives its members a significant advantage, the pool may be under a duty to give access to others, perhaps on or similar terms.. .  The duty to give access should be proportional to the pool's market power, i.e. a group of smaller players pooling their data to gain a competitive advantage should not be forced to give their pooled data to a much larger player.”  While insurance companies’ practice of pooling data is well established, the growing importance of data pools in the future mobility sector will no doubt lead to more such cases assessing potential competitors’ access to data.

The Special Advisors Report is clearly correct in concluding that the EU rules on information sharing need to be updated and clarified.  Indeed, the rules on sharing and pooling information will be a key element of the EC’s review of the Horizontal Guidelines.   How information and technology are shared in the future mobility sector is also likely to be an important component of the expected sector inquiry.

Online Platforms

The future mobility sector will involve the creation of multiple online platforms, for instance to deliver new services to users of connected and autonomous vehicles, as well as platforms to improve traditional mobility-related services such as parking and charging/fuelling.  Many future mobility services, including in particular consumer-facing products, will be managed via smartphone apps.

The antitrust issues raised by online platforms are a key concern for the EC and other antitrust authorities.  As mentioned above, a key concern in the Daimler/BMW case concerned third-party access to their Moovel/Reach Now car-sharing app.  The EC is currently investigating Amazon to assess whether Amazon's use of sensitive data from independent retailers who sell on its marketplace is in breach of EU competition rules.

The Special Advisors Report noted that in some markets there might be room for only one or a few platforms, especially in the absence of multi-homing, protocol and data interoperability, or differentiation. The Report discussed ways to protect competition both “for the market” and “in the market,” arguing that platforms play a form of regulatory role as they determine the rules according to which their users interact, and, when they are dominant, have a responsibility to ensure that competition on their platforms is fair, unbiased, and pro-user.  More specifically, the Report argued that dominant platforms have a responsibility to ensure a level playing field. While non-dominant platforms also play a regulatory role, the Report argued, no far-reaching general rules would be needed for such platforms to the extent that they are disciplined by competition. The Report discussed several specific issues in the online platform context, including so-called “most favoured nation” (MFN) clauses, multi-homing, interoperability, transparency, leveraging and “self-preferencing”:

The EC’s focus on the role of online platforms in the future mobility sector can be expected to broaden, especially as proprietary apps such as Uber’s, Lyft’s and Moovel/Reach Now’s add features and evolve towards a one-stop-shop model and compete with small independent apps such as Whim (Finland) and Mobiliteit (Luxembourg).  At the other extreme, major technology platforms like Amazon, Apple and Google may also enter the mobility sector.

The role of online platforms can be expected to be a key focus of the expected sector inquiry.  In particular, the sector inquiry will likely collect information on online platforms in which stakeholders are involved; how they were developed; access conditions; and interoperabilty.   For stakeholders not participating in online platforms, the EC can be expected to request input on existing and expected future platforms to which those stakeholders need access to compete.

State Aid

The mobility sector has of course always been highly dependent on public investment in roads, bridges, signage and sector infrastructure.  The future mobility sector will interact with the public sector in considerably more complex ways. As mentioned, public sector “customers” may rely increasingly on privately generated databases such as Uber’s Movement.  The EU actively supports a wide range of mobility initiatives, from new battery technologies to electric car charging stations to connected and autonomous vehicles.  National and local authorities may provide support above and beyond that offered by the EU.  When they do, the EC may be required to determine whether the support constitutes State aid and if so whether it can be approved under the EU Treaty.

For example, in 2017 the EC approved German support for the installation and upgrading of electric charging infrastructure.  Germany sought to launch a uniform charging infrastructure with universal coverage so that electric vehicle users can recharge them anywhere in Germany.  Indeed, Directive 2014/94 requires Member States to deploy adequate charging infrastructure for densely populated areas by 2020.  Germany required a higher technical standard for the charging infrastructure and aimed to cover rural areas as well as densely populated ones.  The EC approved the aid, concluding that it contributed to a well-defined objective of common interest, there was a need for State intervention, the form of aid was appropriate, it would effectively incentivize investment in charging infrastructure, the aid level was proportionate to the need, and the measure avoided negative effects on competition and trade because aid will be available to all potential suppliers willing to invest in electric car charging infrastructure.  Similar cases involved the Netherlands (2015) and Czech Republic (2017).

State aid for electric car charging infrastructure is not controversial, but a number of elements will be relevant for future similar projects.  While an EU measure mandated minimum criteria for charging infrastructure, Germany established more demanding standards than required for the EU.  German charging infrastructure may thus differ from the infrastructure in other Member States, but it needs to be compatible with other Member States’ infrastructure to avoid fragmenting the EU market.  The process for developing such standards may be subject to the EU antitrust rules outlined above. However, aid must be made available to all potential suppliers on a non-discriminatory basis, not only those who participated in the standard-setting process.

The EC is conducting a general “fitness check” of the State aid rules adopted in 2012 and a more targeted consultation on State aid for environmental protection and energy.  Commissioner Vestager’s Mission Letter notes that EU State aid rules should support European businesses and make the most of so-called “Important Projects of Common European Interest,” while also targeting the “distortive effects of foreign state ownership and subsidies.” The role of public investment and State aid can also be expected to figure in the likely sector inquiry.

Sector Inquiries

Sector inquiries are investigations that the EC carries out into economic sectors and types of agreements when it believes that a market is not working as well as it should and where breaches of the competition rules might be a contributory factor.  The EC may use the information obtained to open specific investigations or to support the development of new legislative proposals.  Indeed, as noted, the Mission Letter instructs Vestager proactively to share information collected by DG COMPETITION with other branches of the EC.

Sector inquiries are among the EC’s most powerful tools.  We saw an example of how sector inquires can complement legislative initiatives during Vestager’s first mandate, when DG COMPETITION launched its 2015 sector inquiry into e-commerce in parallel with the Digital Single Market programme.  The EC sent questionnaires to a wide range of retailers, marketplaces, price comparison tools, payment system providers and manufacturers, receiving 1453 responses including 2605 agreements.  Two years later, the EC published a short final report and a 300-page accompanying staff working document.  The EC then launched a number of individual investigations leading to the imposition of fines.

The scale and duration of the e-commerce sector inquiry indicate how burdensome such inquiries can be.  A sector inquiry into the future mobility sector can be expected to be equally extensive, if not more so, considering the variety of industries and stakeholders involved and the complexity of the issues the EC will look at.  Questions the EC can be expected to ask include:

  • Identifying (and providing copies of) JV and other cooperative agreements stakeholders have entered, or expect to enter, into;
  • Technical standard setting processes in which stakeholders participate or that are relevant to their businesses, including the access and other conditions governing such processes;
  • Identifying SEPs and other important IPRs and conditions for licensing them;
  • Big data that stakeholders collect themselves or need access to for their businesses, as well as the conditions and barriers to obtaining such access;
  • Online platforms that stakeholders operate themselves or to which they need access for their businesses, as well as the conditions and barriers to such access; and
  • The role of public infrastructure and State aid in developing and offering current and envisaged future mobility products and services.


Automakers, suppliers and stakeholders in a wide variety of related markets face “tough, fundamental, or even existential questions,” according to McKinsey.  Far from signaling a decline, however, these developments will accelerate “growth in the personal mobility market . .  as new sources of recurring revenues supplement slowing growth from one-time vehicle sales.”  The EC and other authorities strongly support the mobility revolution.

However, some of the characteristics of this revolution --  the collection and use of big data; the use of online platforms to offer new services; the development of new technical standards for electric vehicle charging, connected cars, etc.; and widespread cooperation among an expanding ecosystem of stakeholders -- touch on some of the most sensitive topics in antitrust policy.

In the EU, these developments are taking place at a critical moment.  The EC starts a new five-year mandate in December 2019, with a re-appointed Competition Commissioner who is very focused on digital issues and will now have a second portfolio for digital policy-making.  Her tasks will include developing legislation on artificial intelligence, digital services and taxation of digital services, all of which will be important for the future mobility sector.

In parallel, the EC is conducting a far-reaching review of EU antitrust policy in relation to merger control, regulations exempting from the antitrust rules certain forms of cooperation in the motor vehicle sector and among non-competitors, the assessment of cooperation among competitors, and State aid rules.

On top of all this, the EC may launch a sector inquiry into the future mobility sector.  Such an inquiry could last two years or more, involve thousands of questionnaires and require production of thousands of agreements.  Once completed, a sector inquiry could lead to a further round of individual investigations into potential antitrust violations and would likely be highly influential in shaping future EU legislation.

Market revolutions and evolutions commonly attract antitrust scrutiny.  It may soon be the turn of the future mobility sector. A sector inquiry would entail not only a significant burden on stakeholders in the coming years, but could lead to important policy changes and potentially individual investigations.  Stakeholders participating in this burgeoning industry will need to be prepared. Although the EC seems to be taking the lead in considering antitrust issues in the future mobility sector, other authorities can be expected to follow suit.

Jay Modrall, Norton Rose Fulbright
Jay Modrall, Partner, Norton Rose Fulbright LLPJames R. Modrall is an antitrust and competition lawyer based in Brussels. He joined Norton Rose Fulbright LLP in September 2013 as partner, having been a resident partner in a major US law firm since 1986. A US-qualified lawyer by background, he is a member of the bar in New York, Washington, D.C. and Belgium.With 27 years of experience, he is a leading advisor for EU and international competition work, in particular the review and clearance of international mergers and acquisitions.Mr Modrall also has extensive experience with EU financial regulatory reform, advising the world’s leading private equity groups in connection with the new EU directive on alternative investment fund managers and leading banks and investment firms on EU initiatives including EU regulation of derivatives, EU reforms in financial market regulation and the creation of a new EU framework for crisis management, among others.Mr. Modrall’s native language is English, and he is fluent in Italian and proficient in Dutch and French.
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