QUESTION Strawberry Inc is a multi-national technology company headquartered in Durban, South Africa. They specialize in the manufacture of mobile devices and software development. They are considered one of the biggest global players in the industry selling their mobile devices within and outside the EU.All of their devices run their own patented Strawberry operating system and they manage an online app store where third party developers are able to upload their applications and make them available to Strawberry device consumers for download. The Strawberry App Store terms of use require third party developers to make use of Strawberry App Store's payment facility for all purchases related to their applications and for each transaction Strawberry Inc deducts a 30% operating fee. A breach of this clause will result in immediate removal of a third-party app from the Strawberry App Store. Strawberry Inc also blocks the installation of applications downloaded from any other App Store on their devices. Their reasoning for this is that they seek to protect their consumers' privacy and security and allowing the installation of applications downloaded form a third-party store would make it extremely difficult to carry out this task which they argue is one of the main reasons why consumers prefer their brand. However, in a widely publicized leak by a hacktivist group known as Big Tech Sucks, Strawberry Inc was shown to be discussing what are known as "sweetheart deals" with two of the biggest global streaming sites, Hotflix and Glued2Screen . Under these deals, these two sites would be allowed to offer purchases related to their applications on their own payment mediums and they would only pay a 10% fee if the Strawberry payment platform was used. If these terms were agreed to Hotflix and Glued2Screen would provide their mobile applications exclusively on Strawberry devices and they would not be available on all other competing devices. The documents leaked show the CEO of Strawberry Inc explaining to the COO that these deals had become necessary because of the meteoric rise of online streaming during the COVID19 pandemic and Hotflix and Glued2Screen had threatened to remove their applications from the Strawberry platform if they did not secure a more favorable agreement. This caused an uproar in the developer community A consortium of developers known as Nerd Station demanded that Strawberry Inc provide clarity on what basis they grant such sweetheart deals and if these deals would be available to all developers. Strawberry Inc did not amend their general terms of use to explain these deals and refused to comment arguing that they had no obligation to disclose their private business practices. Furthermore, a former Strawberry Inc employee in an interview on a popular news channel had revealed that the CEO of Strawberry Inc was worried about consumers switching from their brand to a newer brand called ForThePeople based in Amsterdam which was a mobile development firm which ran an open source operating system called Liberty that allowed developers to offer in-app purchases using their own payment platforms and allowed the installation of applications from rival third party application stores. She revealed that the CEO had been engaging in talks on how to "put ForThePeople out of business before it became a real problem." In response to this interview, Strawberry Inc argued that the other big firms in the mobile device industry carried out similar practices and while Strawberry Inc did have a significant share in the market, they did not possess enough market power to run ForThePeople out of business therefore they did not violate competition law, they just came up with a superior business strategy. Eventually Nerd Station employed your law firm to build an anti-trust case against Strawberry Inc. You have been tasked with formulating a legal strategy outlining the violation of EU competition law by Strawberry Inc. Write down your arguments justifying them adequately with the relevant legal sources.Make it clear which rules Strawberry Inc is violating.

Question

Soru

QUESTION Strawberry Inc is a multi-national technology company headquartered in Durban, South Africa. They specialize in the manufacture of mobile devices and software development. They are considered one of the biggest global players in the industry selling their mobile devices within and outside the EU.All of their devices run their own patented Strawberry operating system and they manage an online app store where third party developers are able to upload their applications and make them available to Strawberry device consumers for download. The Strawberry App Store terms of use require third party developers to make use of Strawberry App Store's payment facility for all purchases related to their applications and for each transaction Strawberry Inc deducts a 30% operating fee. A breach of this clause will result in immediate removal of a third-party app from the Strawberry App Store. Strawberry Inc also blocks the installation of applications downloaded from any other App Store on their devices. Their reasoning for this is that they seek to protect their consumers' privacy and security and allowing the installation of applications downloaded form a third-party store would make it extremely difficult to carry out this task which they argue is one of the main reasons why consumers prefer their brand. However, in a widely publicized leak by a hacktivist group known as Big Tech Sucks, Strawberry Inc was shown to be discussing what are known as "sweetheart deals" with two of the biggest global streaming sites, Hotflix and Glued2Screen . Under these deals, these two sites would be allowed to offer purchases related to their applications on their own payment mediums and they would only pay a 10% fee if the Strawberry payment platform was used. If these terms were agreed to Hotflix and Glued2Screen would provide their mobile applications exclusively on Strawberry devices and they would not be available on all other competing devices. The documents leaked show the CEO of Strawberry Inc explaining to the COO that these deals had become necessary because of the meteoric rise of online streaming during the COVID19 pandemic and Hotflix and Glued2Screen had threatened to remove their applications from the Strawberry platform if they did not secure a more favorable agreement. This caused an uproar in the developer community A consortium of developers known as Nerd Station demanded that Strawberry Inc provide clarity on what basis they grant such sweetheart deals and if these deals would be available to all developers. Strawberry Inc did not amend their general terms of use to explain these deals and refused to comment arguing that they had no obligation to disclose their private business practices. Furthermore, a former Strawberry Inc employee in an interview on a popular news channel had revealed that the CEO of Strawberry Inc was worried about consumers switching from their brand to a newer brand called ForThePeople based in Amsterdam which was a mobile development firm which ran an open source operating system called Liberty that allowed developers to offer in-app purchases using their own payment platforms and allowed the installation of applications from rival third party application stores. She revealed that the CEO had been engaging in talks on how to "put ForThePeople out of business before it became a real problem." In response to this interview, Strawberry Inc argued that the other big firms in the mobile device industry carried out similar practices and while Strawberry Inc did have a significant share in the market, they did not possess enough market power to run ForThePeople out of business therefore they did not violate competition law, they just came up with a superior business strategy. Eventually Nerd Station employed your law firm to build an anti-trust case against Strawberry Inc. You have been tasked with formulating a legal strategy outlining the violation of EU competition law by Strawberry Inc. Write down your arguments justifying them adequately with the relevant legal sources.Make it clear which rules Strawberry Inc is violating.

Answer 1

Strawberry Inc. is in violation of EU competition law, specifically Article 101 of the Treaty on the Functioning of the European Union (TFEU), which prohibits agreements between undertakings that restrict competition. The company's exclusive deals with Hotflix and Glued2Screen, as revealed in the leaked documents, demonstrate a clear attempt to limit the availability of these streaming services to only Strawberry devices, thereby restricting competition in the market. Furthermore, Strawberry Inc.'s refusal to provide clarity on the basis of these sweetheart deals and their failure to amend their general terms of use to explain these deals further demonstrate a lack of transparency and an attempt to maintain an unfair advantage in the market. This behavior is in direct violation of Article 101(1) TFEU, which prohibits agreements that restrict competition. In addition to this, Strawberry Inc.'s actions may also be in violation of Article 102 TFEU, which prohibits the abuse of a dominant position. The company's blocking of third-party app installations on their devices and their attempt to put ForThePeople out of business, as revealed in the interview with the former employee, demonstrate a clear attempt to maintain a dominant position in the market and restrict competition. In conclusion, Strawberry Inc.'s actions are in clear violation of EU competition law, specifically Article 101 and Article 102 TFEU. The company's exclusive deals with Hotflix and Glued2Screen, their refusal to provide clarity on these deals, and their attempt to maintain a dominant position in the market all demonstrate a clear attempt to restrict competition and violate EU law.

Soru

Çözüm

Cevap