Ride-sharing services and driverless car technology are very much in the news these days. The Uber app that enables mobile phone users to access ride-shares in cities around the world frequently attracts press comment – and not just comment, but full-scale rows as well.
For example, those of us resident in London will remember when our capital’s roads were temporarily shut down last summer by a taxi cabbie protest at proposals to license Uber.
And now the press has got het up again, this time over recent reports that, despite being one of its biggest investors, Google might be preparing to launch a ride-sharing service (perhaps associated with self-driving technology) in direct competition with Uber. This eventuality has reportedly been denied by Google; but what would be the legal implications if it were to happen? For, if a row over competition between former partners were to erupt, anti-trust law is unlikely to be far away.
From one point of view, of course, the arrival of new players on a market is regarded with favour by anti-trust law. The erection of barriers to market entry can all too easily infringe competition rules, so when entry barriers are low and new entrants arrive onto a market, competition law regulators will usually be satisfied.
But there is another side to the story, for what if a new entrant holds a dominant position on market A, which it then attempts to leverage onto market B in its own interests? The mere holding of a dominant position will not per se infringe EU competition law, but the abuse of that dominant position may well do, and can all too easily contravene the much-feared Article 102 of the Treaty on the Functioning of the European Union.
This is, after all, precisely what happened during the course of the long-standing warfare between the European Commission and Microsoft. The Commission ruled that Microsoft had infringed Article 102 by having leveraged its dominant position on the PC operating systems market onto the separate markets for media players and for work group server operating systems. The total fines imposed by the Commission since then on Microsoft for infringement of Article 102 have exceeded a cool €1.6bn.
Could something similar happen if Google were, at some point in the future, to launch its own road-hire service that was heavily reliant on Google Maps? For example, if Google were found to occupy a dominant position in the EU (or in an appreciable part of it) for the supply of online mapping services, it is not impossible to imagine a Microsoft-style argument being advanced to the effect that Google was somehow leveraging that position onto the market for the provision of ride-sharing services and, thereby, abusing its dominant position.
At the moment this is mere speculation; but, after all, filing a complaint with a competition law regulator costs little or nothing, and Google has no shortage of rivals who have already demonstrated that they are ready, willing and able to complain about it to the regulators. In that connection, it should be remembered that Google is already on the receiving end of Article 102 allegations: formal proceedings against it under Article 102 were instituted more than four years ago by the Commission, and movers and shakers within the EU have become increasingly restless at the lack of any conclusive outcome to date.
Finally, for those who are still unfamiliar with them, the provision of ride-sharing is a sort of “internet dating agency” whereby a passenger in need of a taxi ride and an unregulated commercial driver are linked up by a third-party “match-making service”, and driverless car technology will supposedly enable cars without steering wheels to navigate the streets more efficiently – and safely – than mere mortals.
Read more about Uber:
- Taxi app Uber declares it can create 50,000 jobs across Europe
- 5 things Uber can teach UK businesses about digital customer service
- Taxis vs Uber: Example of resistance to change
Whatever happens, it seems clear that driverless car technology (whether or not combined with ride-sharing services) is coming down the road towards us. But let’s not forget, in conclusion, that that technology is nothing new – indeed, it is nearly ninety years since the first driverless car demonstration was hosted by New York City, back in 1925. As the Americans say, what comes around goes around.
Jonathan Cornthwaite is partner and head of competition law at Wedlake Bell.
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