Android Auto: The end of the essential facilities doctrine as we know?

The Grand Chamber of the European Court of Justice’s (CJEU) recent decision in Android Auto marks a pivotal–and possibly final–chapter in the contentious evolution of the essential facility doctrine (EFD) [for a comprehensive analysis of the decision and its implications, see my working paper on “The EU essential facilities doctrine after Android Auto: a wild card without limiting principles?”].

As an exception to the general principle that businesses are free to decide whether to grant access to their facilities, the EFD debate fundamentally revolves around defining its boundaries. At its core, the doctrine seeks to balance fundamental rights with competition policy, as well as short-term and long-term competitive dynamics.

Navigating this delicate trade-off has shaped both the development and the divergent trajectories of the EFD in the U.S. and the EU. While U.S. Antitrust Law initially embraced this doctrine before rejecting it in the end, EU courts upheld it and only applied it in exceptional circumstances. As originally drafted in Magill, the exceptional circumstances arise when a refusal: (i) concerns a product that is “indispensable” for carrying out the business in question; (ii) lacks “objective justification”; (iii) is likely to eliminate “all competition in a secondary market”; and, (iv), prevents the emergence of ‘new products’ for which there is potential consumer demand. As originally crafted in

Magill

, the exceptional circumstances arise when a refusal: (i) concerns a product that is “indispensable” for carrying out the business in question; (ii) lacks “objective justification”; (iii) is likely to eliminate “all competition in a secondary market”; and (iv) prevents the emergence of a “new product” for which there is potential consumer demand.

Over time, however, the interpretation of these circumstances has expanded the doctrine’s reach, effectively reversing the original relationship between the general rule and its exception. The CJEU has gradually narrowed the circumstances in which the indispensability criteria is required. From indispensable to convenient: the gradual departure from Bronner

The EFD’s legal framework and the EU’s broader effort to balance competing interest hinges on the determination of whether a facility is indispensable. Indispensability is the threshold that distinguishes between a facility that is essential to competition and a facility that’s merely convenient for rivals, justifying antitrust interventions into a dominant firm’s freedom to operate business. To this aim, in Bronner, the CJEU stated that, to determine whether a product or service is indispensable for an undertaking’s operation in a specific market, it must be assessed whether alternative products or services exist–albeit less advantageous–and whether technical, legal, or economic obstacles would make it impossible or unreasonably difficult for an undertaking to create such alternatives, potentially in collaboration with others. For economic obstacles to be recognized, it must be demonstrated that creating these alternatives is not economically viable on a comparable scale to the undertaking controlling the existing product or service.

However, recent CJEU case law has narrowed the scope of the Bronner conditions, arguing that their imposition was justified by the specific circumstances of that case. Bronner is considered the pinnacle of antitrust law. It sets a high standard for determining an abusive practice. Concerns have been raised that a wider application of the Bronner criteria may undermine the EU Commission’s capacity to effectively address abusive practices. It has been suggested that Bronner criteria be limited to cases similar to the specific situation in Bronner. The first departure from Bronner is

Van den Bergh Foods where the CJEU decided that the indispensability criteria is only needed when antitrust intervention forces a dominant undertaking into transferring an asset or entering into agreements with parties with whom it has not agreed to contract. This was not the case in the decision at hand, as, unlike in Bronner, the assets were not reserved for the undertaking’s exclusive use but were voluntarily made available to independent players who paid for the right to use them.Following this reasoning, the primary exception to the indispensability criterion came in cases of margin squeeze, which under EU competition law, constitutes a standalone abuse. Specifically, in

TeliaSonera, the Court held that the indispensability condition from Bronner did not apply, distinguishing between an outright refusal to deal and a situation where a dominant undertaking grants access to its infrastructure but imposes unfair terms and conditions. In Slovak Telecom the CJEU extended its margin squeeze treatment to include non-price conduct. In Slovak Telekom, and in Lithuanian Rails the CJEU suggested that enforcers were relieved of having to prove indispensability if access to the facility was granted due to regulatory obligations. In such a case, the rationale for departing from Bronner rests on the assumption that the trade-off between the benefits and drawbacks of intervention has already been evaluated within the applicable regulatory framework.Moreover, in Lithuanian Railways, the CJEU identified two additional exceptions to Bronner, which pertain to cases where the infrastructure in question was financed not by investments specific to the dominant undertaking but by public funds, and situations where a dominant undertaking destroys an infrastructure. This justifies disregarding the Bronner requirement of indispensability, as there are no significant trade-offs when the facility was destroyed by the owner or developed using public funds. The owner of the facility cannot claim that competition law regulation of access terms would undermine investment incentives in either case, since it has either chosen to relinquish their asset or not taken on significant entrepreneurial risks during its development. However, even in cases involving public support, the investments made may be relevant as shown by the pending request for a preliminary ruling in

LUKOIL Bulgaria.Finally, a further narrowing of Bronner is again linked to the specific circumstances of that case as it is argued that the indispensability criterion is required only when a dominant undertaking refuses to grant rivals access to an infrastructure it has developed for the needs of its own business. The original formulation of “its own use” was found in Advocate General Jacobs’s opinion on Bronner. In Bronner, the conduct in question was described as a refusal by a newspaper publisher to allow access to a distribution network developed for its own newspaper business. This interpretation could have major implications, especially in digital markets. It may suggest that platforms, which are designed to be open and accessible to third parties due to their nature and business models, cannot use the lack of necessity to justify denying them access. This line of reasoning was specifically put forward by AG Kokott in Google Shopping and AG Melina in Android Auto.

Android Auto: The Italian proceedings

The case at issue revolves around Google’s refusal to integrate Enel X’s Recharge app (JuicePass) into Android Auto, an infotainment system that brings various Android device features to a car’s dashboard. JuicePass provides services for charging electric vehicles. These include locating charging stations and managing charging sessions. It competes with Google Maps which offers similar functionalities, but does not offer payment and reservation services. Google rejected Enel’s request to integrate JuicePass with Android Auto. They argued that only media apps and messaging apps are allowed as third-party integrations. Google also cited security concerns and the need to efficiently allocate development resources as reasons for its decision.

However, the

Italian Competition Authority

(ICA) argued that by obstructing and delaying the availability of JuicePass on Android Auto, Google was attempting to favor its own app, effectively reserving the full range of recharging services for Google Maps. The ICA’s reasoning is based on the fact Android Auto is a “competitive area” where service apps are competing against the additional functionality offered by Google’s proprietary Navigation app, either directly or indirectly. Google’s actions, therefore, were interpreted as a refusal of interoperability. This violated the principle of a fair playing field, and gave Google’s app a unfair advantage over Enel X. The ICA determined that Android Auto was an essential feature, despite drivers being able to access JuicePass via smartphones through both Google Play and App Store. According to the decision the indispensability criteria is met because Android Auto is the only alternative that offers the same level of convenience and safety. However, less advantageous alternatives could achieve similar results. According to the ICA, protecting competition on digital markets requires a consideration of their unique dynamics and characteristics. Therefore, to ensure effective competition protection and enhance consumer choice, the legal criteria typically applied in such cases should be used with flexibility.Due to Google’s gatekeeping position and the conflicts of interest arising from its dual role, the ICA required the company to ensure a fair level playing field for all service apps offering recharge services. Google was therefore required to create and maintain a standard template that would accommodate third-party applications for recharge, enabling them to be interoperable with Android Auto. The majority of questions concern whether mandating interoperability will require a redesign of a product. However, the first question, which is a prerequisite to addressing the technical issues of mandatory interoperability, concerns the potential adaption of the EFD for the features of digital market. The CJEU’s decision

Both the opinion of AG Medina as well as the decision of CJEU supported findings of the ICA. The Italian Council of State asked about the interpretation of Bronner’s indispensability test, but AG Medina, and the Court, focused on Bronner’s applicability to the case. The CJEU confirmed that the indispensability test should only be applied when the dominant company develops the infrastructure for its business needs, and reserves it exclusively for that company. This does not apply when the infrastructure is developed “with a view to enabling third-party undertakings to use it.” In such cases, requiring the company to provide access to third parties “does not fundamentally alter the economic model that applied to the development of that infrastructure.” Consequently, in response to the first question from the referring court, the CJEU held that when a digital platform is designed to be open to third-party undertakings, a refusal to ensure interoperability with a third-party app may constitute an abuse of a dominant position, even if the platform is not indispensable for the commercial operation of that app in the downstream market, but can make the app “more attractive to consumers.”

As a result, except in cases of technical impossibility or harm to the platform’s integrity or security, a dominant platform is obligated to develop (within a reasonable time frame and for appropriate financial compensation) a template to ensure interoperability with third-party apps. The absence of a template for a specific category of apps or the development challenges faced by the dominant undertaking cannot, by itself, serve as an objective justification for refusing to grant access. The European EFD after Android Auto

In the aftermath of Android Auto, European case law highlights a growing disconnect between the guiding principles of the EFD and its actual application.

Both the U.S. and EU case law have been shaped by similar limiting principles–chiefly, the need for a cautious approach to any duty to deal, which balances competitive concerns with the protection of fundamental rights, as well as the long-term benefits of competition and innovation against the risks of free riding. In the U.S., this balancing act was effectively ruled out by

Trinko, making it almost impossible to impose a sharing obligation on a dominant firm. Magill, on the other hand, sought to achieve an equitable balance by defining exceptional circumstances that would warrant such an obligation. In this context, the EFD was meant to be a measure of last resort, applicable only if these exceptional circumstances were met. The erosion of these criteria, especially the requirement of indispensability, has reversed this rule-exception relationship over time. Non-application of EFD is now the exception, not the norm. Android Auto’s decision to eliminate the Bronner indispensability criteria casts doubt on whether the EFD is still valid. In fact, the Magill test has been gradually weakened in all its requirements. The objective justification criteria is the only safeguard that can prevent rivals from gaining unfettered access dominant firms’ facilities. Android Auto has also left us with a deeply polarized antitrust landscape. While U.S. dominant firms are not required to allow access to their infrastructure, EU has adopted the doctrine of convenient facilities. In both jurisdictions however, neither achieves an equitable balance between fundamental rights, competition, or short-term versus long-term benefits.