Refusal to supply: A new test for digital platforms

On 25 February 2025, the Court of Justice (CJEU) handed down its eagerly anticipated decision in the Android Auto¹ case. The decision substantially lowers the bar for bringing a refusal to supply case against digital platforms which host third-party content.

 

Background

In 2021 Google was fined roughly EUR100 million by Italy's competition authority for refusing to let a third-party electric car charging navigation app called JuicePass (made by Enel X Italia (Enel)) integrate with its Android Auto platform (this is a form of Android operating system that runs in cars). Google's justification for refusal to grant interoperability data to Enel was that there was no template for the interoperability of this category of apps and its concerns over safety of drivers using cars with Android Auto (ie the risk of drivers being distracted). Enel and the Italian competition authority noted that Google had already granted interoperability to thousands of other apps available on Android Auto.

The Italian competition authority found that Google was dominant in the upstream market for operating systems for smart mobile devices and that the refusal to grant Enel's app interoperability with the Android Auto platform constituted an abuse of dominant position having at least potentially exclusionary effects downstream in violation of Article 102 TFEU.  

The Italian competition authority assessed this case under the classic refusal to supply test as set out in Magil and IMS Health, namely:

• There must be a refusal to supply an indispensable input;
• Which is likely to eliminate all competition in an adjacent market;
• The refusal is not justified by objective considerations; and
• When the refusal concerns IP rights, the refusal must also prevent the appearance of a new product.

This is widely accepted to be a very high bar to a party seeking to prove that there has been a refusal to supply. The rationale for this strict test is that there must be a balance between protecting competition on the one hand and on the other protecting the incentive to invest.

In the Android Auto case this raised questions over whether this case could meet the “indispensability” criteria, given that Enel's app was available on other platforms, despite not being interoperable with Android Auto.

Google sought to appeal the fine before the Regional Administrative Court but the action was dismissed in its entirety. Google therefore brought an appeal against the judgement before the Council of State, which suspended the proceedings and sought a preliminary ruling from the CJEU on the issue.

It is interesting to note that, prior to the CJEU's decision, this matter had already been commercially resolved as Google developed a template for electric car charging apps, which Enel subsequently went on to use.

 

CJEU Decision

The CJEU found that a dominant undertaking's refusal to ensure the interoperability of its digital platform with a third-party's software would be an abuse of dominance even where the platform in question is not indispensable for the commercial operation of the software (meaning that there is no actual or potential substitute) but can make a product more attractive to consumers.

The Court also dealt with the question whether the dominant undertaking could legitimately rely, as objective justification for its refusal, on there being no template making it possible to ensure that interoperability on the date in which the third-party requested interoperability or whether the dominant undertaking may be required to develop such template in order to enable the interoperability. The answer is that the fact that there is not a template of the category of apps concerned cannot constitute an objective justification for the refusal unless:

• Granting access would compromise security or integrity of the platform; or
• Access is technically impossible.

If none of these exceptions apply, the ruling states that the platform operator must fulfil the interoperability request within a “reasonable and necessary” period of time and the dominant undertaking can seek in return “appropriate” financial recompense, taking into account the need of the third-party request, the actual cost of the development and the right of the dominant undertaking to derive an appropriate benefit from it. This is clearly subject to interpretation and is likely to be an area of uncertainty.

The new test for refusal to supply is arguably more akin to the disruption to supply line of cases (ie Microsoft and Slovak Telekom). This will be an easier hurdle to overcome for competition authorities or claimants.

The difference in the test being applied was justified as the case concerns a digital platform which carries third-party apps and which is supposed to be an open platform. Therefore, what the third party was seeking access to was not something created just for the dominant company's own use. However, making this distinction in relation to digital platforms is difficult since these platforms nearly always support third-party software. Platforms are inherently designed to offer access to multiple third parties and would not function without this. Therefore, the new lower threshold for refusal to supply could apply to nearly all digital platforms which meet the test for dominance.

The Council of State must now rule of Google's appeal in light of the CJEU's decision.

 

Conclusion

The CJEU has substantially lowered the bar to bring refusal to supply cases in relation to digital platforms. This will make it easier for competition authorities and claimants to establish abuse in this context and can be seen as part of a pattern of cases where competition authorities and the courts are applying abuse of dominance in inventive and novel ways.

The case also raises interesting points in the interaction of competition law and the Digital Markets Act (DMA). Under the DMA providing interoperability data is one of the conduct requirements which is imposed on “gatekeepers”. Here however Google has not been designated as a gatekeeper under DMA for Android Auto but the competition regime stepped in to use ex post tools (namely abuse of dominance proceedings) to control what a company can do with its platform.

For companies that are or may be dominant in one of more business area, the business will need to be mindful of the guidance in this decision when considering interoperability requests. For businesses seeking interoperability, the decision provides a blueprint for applying pressure on a potentially dominant entity to seek open access, although there are still a number of potential areas for dispute.

Going forward, this increases the likelihood of abuse of dominance investigations and litigation. There is also a new avenue for disputes between businesses over what is appropriate financial recompense for the dominant undertaking. We anticipate that this will be hotly contested between alleged dominant undertakings and third parties seeking interoperability.  

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¹Case C 233/2 – Android Auto Case.