Regulating complex conduct in online markets – a comment on the Norwegian residential property market investigation and its significance to the Google investigations

Searching for competition: a comment on the Norwegian residential property market investigation

Andreas Themelis

LL.B (LMU); LL.M, Ph.D. (QMUL);
Junior Associate at Ballas, Pelecanos & Associates LPC, Athens, Greece.

© 2013 Andreas Themelis
First published in the Web Journal of Current Legal Issues

Views expressed are strictly and solely those of the author. At certain parts the article draws from parts of an unpublished thesis submitted for the degree of Ph.D. at Queen Mary University of London. The author would like to thank Professor Philip Leith at Queen’s University Belfast and the anonymous reviewer for the comments made.

1.      Introductory remarks

Online intermediation by virtual market agents has been attracting considerable attention following the two year-long investigation by the EU Commission (hereinafter the Commission) on the leading internet search engine’s (Google) practices. The Commission announced that it pursues as a priority the ‘settling’ of the identified problems created by Google’s practices and has been in an open dialogue with the company;(1) having examined its  commitments, and having entered into the phase of receiving feedback from other interesting parties and analyzing their responses –possibly, further concessions by the company will be required.(2) But besides the current media attention, such investigations cannot but raise further questions on the actual design and implementation of competition policy for these virtual and dynamic marketplaces and the actual aim that is being pursued out of intervening in this ‘virtual side’ of the market. This is a key concern for competition policy in this broader category of ‘new economy’ industries, that has been emphasized by Commission officials; for example, the DG for Competition Alexander Italianer who stated that,

“as law enforcers, we share on both sides of the Atlantic a desire to find well-tailored remedies that respond to our concerns and that arrive before the next innovation is already around the corner”.(3)

Importantly, such remedies must also blend coherently and systemically with the overall economic and social context, whilst in parallel, they must also promote technological development and the internet’s use to a wider spectrum. It should additionally be noted that this last element is expected to enhance conditions of competition and achieve the more holistic policy aims of restructuring and rejuvenating the EU on a more technologically-oriented approach, as part of the complex and multi-level plan towards the accomplishment of the 2020 Strategy.(4)

As part of the growing discussion on the topic of intermediaries and competition policy, the present article comments on the investigation by the Norwegian Competition Authority (NCA) into online advertising for residential property market between years 2008-2009, the adoption of the Regulation for online advertisement, and the follow-up studies by the NCA published in 2011 demonstrating the positive results out of this intervention. The aim is to provide certain useful insights on how the imposed remedies demonstrate the ability to improve conditions of competition (or particularly enhancing those elements that promote conditions of competition) within this virtual environment, while also achieving a wider positive impact, not merely confined to conditions of competition either in or for that specific virtual space. The central issue in the Norwegian case (and behind any such similar case) was that of establishing access to a ubiquitous virtual (and private) space/market, and from this perspective the discussion is also of current interest. Importantly, as an additional consideration, the results achieved in that case appear to further suggest that a blend of technology and competition policy (introduced in a pro-active manner) could be used to promote more workable and competitive market conditions and assist in achieving the future and wider technological, economic, and social targets pursued at a pan-European level.

2.      The Norwegian residential property market investigation

The case raising the issue of competitors’ exclusion at the intermediate market level by a dominant intermediary inside an online environment occurred in Norway and related to online advertising for the Norwegian residential property market; the facts are as follows:

In 2008, the Norwegian Competition Authority (NCA) initiated an investigation on the practices of the popular website ‘’. The website, which operates as a specialized type of search engine for various categories of products and services (e.g. houses, cars, jobs etc.), was the main source and primary online reference to all consumers searching for specialized information on residential property in Norway.(5) More specifically, following the initial investigation, the NCA identified that in order to make a sale of residential type of property in Norway, would actually require the seller to have access to a combination of products and services. These would include services such as the collection of various property information; property valuation and marketing; showings and organization of the property’s bidding; contract drafting and deed transfer; ownership insurance changes and settlement. All these services are either bundled together and are offered as one package by estate agents (these are offered ‘in-house’ and is the main supply option in the market) or are being subcontracted (outsourced) to other providers. In addition, other service providers offer packages which do not combine the entire package that estate agents provide. Generally, property sellers are not obliged to resort to estate agents to purchase the aforesaid total service bundle/combination. Instead, they may choose to either perform some tasks themselves or resort to the service providers for other tasks. Nonetheless, the NCA identified that a property seller has to rely on access to advertisement services, which is predominately made by the use of internet portals, with about 95 per cent of all residential properties sold via estate agents and lawyers being primarily advertised on the aforementioned ‘’ website.

The implication that triggered the investigation by the NCA for a potential breach of the relevant Norwegian competition rules came by way of the practice established by these internet portals to give permission for advertising residential property on their websites only to certain categories of undertakings; namely, only to estate agents, lawyers, and certain property developers. This practice resulted in the outright exclusion of all other independent sources that wanted to advertise, especially within that super-dominant internet portal (including individuals). As a result, all residential property sellers were essentially forced to resort to the –main option of- estate agents and to their service in order to advertise their property on the market through the internet. This meant that the market’s intermediate level (i.e. the online marketplace relied upon by consumers) was essentially foreclosed unless access was provided by the parties operating the arrangement.

2.1     Assessment and adoption of regulatory measures

According to the NCA’s examination and evaluation of the case, this practice had the result of restricting the level of competition between two sides, i.e. on the one hand the ‘block’ created between estate agents, lawyers and property developers, and on the other hand, all other service providers. As an additional consideration, the practice was found also to limit the purchasing power of property sellers vis-à-vis the estate agents.

The NCA assessed these practices under Sections 10 and 11 of the Norwegian Competition Act 2004;(6) however, it could not identify a basis according to which it could further intervene. The NCA did not provide any further explanation on its assessment for non-intervening on the basis of a competition law infringement. One could only theorize that this may have possibly been the case since on the one hand there may not have been any sufficient evidence for finding/establishing an agreement in operation with the purpose of excluding other market participants and directing all demand towards the estate agents’ ‘block’ (i.e. that would be assessed as a potential infringement of Art.101 TFEU and of Section 10 NCA) and on the other hand, neither was there any evidence that the relevant –dominant- portal was vertically integrated in the market, i.e. it did not compete ‘downstream’ the market, nor that –conversely- it was controlled or imposed such a type of exclusive dealing by the estate agents’ ‘block’, so as to provide a sufficient basis to intervene for an abusive of dominance conduct (either on the part of the portal of that of the agents), e.g. through refusal to supply/provide access or exclusivity (practices that would have been caught by Art.102 TFEU and the corresponding Section 11 NCA). Nonetheless, since it evaluated that this practice produced particular negative effects and it actually restricted competition in the market for the services of purchase and selling of residential properties, the NCA made a proposition to the Norwegian Ministry of Government Administration and Reform for the adoption of a regulation pursuant to Section 14 of the relevant Act, which is used to intervene into markets through regulatory measures aiming at re-establishing or promoting conditions of competition.(7) The regulatory proposal aimed at providing access to the internet portals to all potential actors to the residential property market thereby allowing new actors to offer their services to property sellers and consequently to increase competition by providing to property sellers the freedom to choose from new sources offering their services (i.e. the independent providers). An additional consideration deriving from the opening up of this virtual market and of the use of the internet portals was also the reduction of transactional costs, and hence, the reduction over the cost of residential properties in overall.

Following on from the market enquiry and the NCA’s proposals, the relevant Ministry adopted a Regulation requiring all internet portals to provide access to any residential property advertisements without any discriminatory conditions (i.e. access to online advertisement on a non-discriminatory basis) and without requiring the involvement of estate agents.(8) Hence, since the entry into force of the Regulation on the 1st of January 2010, all potential actors including individuals (end users) were able to advertise their residential property through the use of the internet, and particularly the popular intermediary portal ‘’, without these latter parties restricting access to the former. These new competitors are not required to possess a real estate license so as to advertise on the internet residential properties, thereby in this sense also bypassing a restrictive measure.

2.2     Evaluation, workability and social impact

After the enforcement of the new Regulation, the NCA stated that the new rules provide to those selling residential properties with a greater choice whilst boosting conditions of competition in the overall real estate market. As such, the positive effects from intervening into the specific sector of internet advertising residential properties brought direct advantages to consumers also within the offline market and enhanced conditions of competition therein particularly through an increase in the options of supply sources and the establishment of new firms, something that directly affects prices to the benefit of consumers and improves the quality –and also the diversity and perhaps also the novelty- of the relevant services they receive. This result reinforces the position of the internet as a tool and a mechanism that enhances conditions of competition throughout the economy, not merely within a segment of it, since it affects products/services in other associated/neighbouring markets. More specifically, the NCA provided with a number of categories of the positive effects produced by the implementation of the new Regulation and which demonstrate the abovementioned direct consumer benefit.(9)

Firstly, all market players have access to the online portals ensuring that their advertisements are both visible and searchable. Through the employment of competition policy principles based on market access which are embedded in the adopted Regulation, the NCA managed to intervene within the online marketplace (targeting of course the internet portal under consideration). Following the monitoring of these online spaces it engaged into a dialogue with them so as to ensure that discriminatory practices against customer groups were not taking place. Of great interest is the fact that the NCA, in cooperation with the relevant consumer authorities, asked from the relevant internet portals that specialized in this kind of information provision to make amendments to their technical solutions so as to balance the degree of the visibility and ability to search between advertisements produced by brokers and by private individuals. This took place by producing two categories of results according to their orientation (the broker and private options).(10) In this way the NCA made a significant alteration to both the method of operation and structure of all the intermediary internet portals. As a result this measure:

“ensured that the information on about the difference between a private, classified ad and an ad from a broker has changed and is now presented in an objective manner”.(11)

Secondly, through the new Regulation, the level of online intermediation (hence, of the access to the online content to the wider audience) becomes open thereby allowing increased options which contribute to increased competition. In particular, the new rules increase the options available to home sellers to advertise their property. In turn this translates in lowering costs also for the provision of the traditional –brokerage- services due to the enhanced competitive pressure that is achieved through the independent property providers.

Thirdly, and closely associated to the above benefit, the new Regulation strengthens competition as it has already allowed entry to the market for new providers hence establishing new firms.(12) These new market entrants could not previously compete with the licensed real estate agents. According to the NCA (which emphasizes its commitment to work further for implementing the Regulation with the internet portals), these new market entrants, although they do not provide the entire bundle of services as the real estate brokers, are now able to advertise their services thereby increasing the competition in the market and hence stabilizing an alternative supply option for end consumers.

Lastly, the NCA is able to prevent and avoid discriminatory practices implemented upon different customer groups. In particular, the NCA stated –in direct reference of the price discrimination issue falling under Art.102(c) TFEU and the corresponding Section 11(c) NCA- that large price differentials that could be employed by the internet portals –unless objectively justified by them- will in essence diminish the positive effects brought by the new Regulation as they will reduce the volume of the classified advertisements,(13) hence, becoming an indirect method of restricting access. The NCA has emphatically mentioned that it would monitor the portals’ operation in relation to the prices charged to individuals and non-licensed real estate companies vis-à-vis those prices charged to brokers for advertisements posted on them.

Following on from this, the next part provides with certain comments in relation to the central issue that arises out of the investigation by the NCA and certain policy considerations that emerge from the NCA’s decision to investigate these virtual markets. In addition, it offers an additional dimension to the discussion over the policy design from a ‘bundle’ of competition and technology perspective.

3.      A comment

3.1     Restoring information and enhancing overall competition in the market

As a very first comment, the targets achieved by the NCA demonstrate the essential positioning of these virtual intermediary operators nowadays, and the almost ‘quasi-market’ position that they can assume within the internet. Such specialized portals have in certain occasions (as in the present case) achieved a significant position in the operation of the market which indeed supplements and in many cases replaces the operation of the physical market for either the simple search for supply action or even the purchase of goods/services. For consumers, the web portal may be the only de facto place to find information for their options of supply (as also identified by the NCA, the importance in the use of the internet by consumers is notable during the last years,(14) whilst the 95 per cent of usage of the website for advertising of residential property by the estate agents’ block is also evidence of both the suppliers and the consumers’ switch and reliance towards the web portal market option). This element elevates the importance of these portals and, importantly, the importance of their content. In this sense the portals acquire such a ‘quasi-market’ position.

In turn, the regulatory measure that was adopted by the Norwegian Ministry reveals a decisive intervention on the part of the State within these specialized, private, and virtual marketplaces, which provides with an emphatic competition policy approach. This approach has certain aims. Firstly, it is to establish a sufficient degree of information i.e. all potential and available sources of information relevant to the specific topic/product/service in relation to supply, as it can be compared to the more limited option of supply only from the brokers’ block –or indeed to the more limited option that the consumer would have in reaching all available sources of supply in the physical market. This may also refer essentially to a notion of ‘real’ information in a technical sense. Obviously, in this particular case, this is a specialized intermediary, and this element renders the availability of such specialized information a priority for enhancing competition (e.g. as compared to a more general search engine that may present irrelevant information among the results it displays to consumers’ search queries). Hence, in this case, the issue of providing ‘real’ information is of an imperative nature, since all sources of availability are essentially either actual or potential competitors who were previously denied access from this main virtual marketplace created by the portal(s).

In this way, the intervention to enhance information availability within the portal assumes a direct competition policy interest, in establishing and maximizing those elements (i.e. complete market information) that promote conditions of competition. Moreover, another adjunct aim is to disseminate this enhanced information without any subsequent restrictions that could negate in practice the intervention and the ability of consumers to become aware of this ‘real’ information, i.e. the visibility issue. This measure also ensures that this enhanced market information is diffused to the public in a non-discriminatory manner and that each information provider is given a particular –and equal- virtual space to advertise his service/product.

In addition, this type of intervention evidently created and enhanced conditions of competition from a wider and a more systemic market perspective, i.e. the effects were neither merely confined in that specific market segment (i.e. the sale of property and associated services) nor only in that specific market environment (i.e. the internet). This is so since information will usually –and in this case it did- concern or affect further elements and actors in both this specific and other associated markets. Hence, there is also a systemic perspective in enhancing competition that far bypasses the strict operation of a website/portal, but which can only surface and be used in a pro-competitive manner through the advanced operation that internet technology provides (and of course the wider consumer/supplier reach this medium offers).

Furthermore, the positive results on the market deriving from the NCA’s adopted measures emphasize that the ubiquity of these private and virtual marketplaces can serve as a common ground for the fruition of competition within them, although, one must not disregard the fact that competition is initially and to a large extent enhanced by them.(15) This is also the logic behind intervening in such intermediary market level, i.e. not to impose a different market structure simply because it is dominated by one player, but to enhance the competitive nature of these successful platforms to the benefit of consumers by enhancing the availability of information within them. Hence, the returns from consumers that these agents receive (e.g. a significantly high market share; attracting more advertisement; ability to provide better matching results through consumer feedback, and the subsequent ability to develop a better system of producing and indexing results etc.) should not be treated as a competition problem in the first place.

The enhancement of competition within such platforms is not unknown to EU competition policy within technological markets in general. In Microsoft for example, although not related to internet marketplaces, the Commission’s Decision aimed at restoring competition for Media Players within the highly popular operating system of Windows.(16) Similarly to the Norwegian case, a significant issue (if not the essence) of Microsoft was also to establish a greater degree of information inside a dominant platform for the content that was able to ‘run’ inside that platform; it was not to impose a specific and competing product/service upon consumers.

The maintenance of a competitive market necessitates however a greater degree of responsibility by the operators of these marketplaces since they are important (if not ubiquitous) information agents, and since they acquire a different status than that of suppliers of a given product/service, vis-à-vis the consumers who entrust them with such degree of market power.(17) Being in such a crucial market position, their operation must be driven by the appropriate level of impartiality and as such they must act and generate a commercial space that operates under such objective rules. More importantly, such space must be open to all sources of competition especially since, as noticeable in the Norwegian case, the extent of their actions bypass the strict limit of their online operation and can also have effects to the more traditional –‘offline’-  market, thereby influencing a significant part of the economy within a given geographical area or beyond that. In essence, this is to a great extent also the stance and the policy approach adopted by the NCA, and this could also relate to a certain extent to the approach underpinning the Commission’s stance in Google, especially in relation to its investigation on the alleged abusive conduct of downgrading competing vertical services.(18)

Hence, the NCA imposed an operational restructuring of the relevant portals (the abovementioned technical solutions that were amended) so as to ensure more competitive private and virtual common environments. These conditions are achieved through reinforcing access and correspondingly by also enhancing information availability to the virtual ‘quasi-market’ that handles this information and diffuses it to end consumers. Essentially, this approach coincides with that followed by the Commission in Microsoft which aimed at enhancing conditions of competition inside a given marketplace, but not necessarily for that marketplace. This approach appears to be a more pragmatic and workable one, since it concentrates on present and actual market problems (i.e. direct foreclosure of actual or potential competitors). The ‘battle for the market’ is a possible development that may come in the future, depending on the technology involved; on the quality of service; and the available information that consumers have, or it may not come at all; or may be bypassed to another level of technology; still, this depends on the consumers’ evaluation of the market and of the products’ quality that can only take place under appropriate levels of information availability.

Thus, the NCA adopted an interventionist approach by imposing a regulation which resulted in strengthening the conditions of competition inside a privately construed and maintained market, acting in a manner that generated a constructive ‘tool’ to support competition in the web portals’ market (the target was undoubtedly the abovementioned super-dominant portal).

3.2     An issue of access and of effective access

Following from the above part, the NCA’s achievements serve as guidance for the handling of virtual markets and the layers of actors which are being active therein. In particular, it appears that the first and most important aspect in these kinds of investigations is the restructuring of the methodology of firstly allowing access, and subsequently diffusing information to the public through these well-established and private intermediaries. The method of operation of such key virtual marketplaces can generate problems to competition, especially (and directly) when it relates to that ‘first level’, i.e. of allowing entry/participation to the portal. Such access prohibition is also easier to conceptualize and therefore to establish.

Having said this however, the possibility of finding substantial competition oriented problems to the ‘second level’, i.e. of diffusing information, is respectively more troublesome to substantiate. This is so, especially when those conditions which are subject to objection through the use of competition rules (e.g. assume it is a competitor’s complaint for not appearing first in the list of results; not appearing second; not appearing highlighted; and anything that a competitor might think of), are to a great extent based on arguments that do not always present or even prove an anticompetitive conduct. Undoubtedly, they prove the difficulty of competing inside private, virtual, and dynamic markets which feature fierce conditions of competition and for which the challenge is to achieve consumer attention inside an entire environment that generates and diffuses all kind of information. In addition, by reason of not having a direct vertical involvement of the super-dominant in the provision of the relevant products/services, such claims would further have a major difficulty to support from a competition law perspective.(19) As such, the ‘path’ followed by the NCA and the Norwegian Ministry through the use of competition policy (the Regulation) sets a more useful instrument to create or enhance further conditions of competition in virtual markets.

Furthermore, the importance of the internet and of the information providers operating therein for consumers and for the process of competition necessitates (as the NCA’s findings show) that these places are open to all competition (and as aforesaid, to all information) no matter where this originates from, and that their operation safeguards that openness and competition. This may appear to resemble the notion of ‘net neutrality’.(20) But in effect, it arguably has a different target altogether and actually relates to and advocates for the ability of consumers to search for (hence to have the necessary information) and reach all potential sources of supply without these being excluded in the first place, i.e. it relates to the actual ability and the necessary autonomy of consumers to reach all and real information.(21) This ability does not suggest an imposition of which websites or content end users should or must necessarily see, since this would advocate the odd notion that consumers are incapable of appropriately searching or appropriately evaluating information themselves and it would furthermore suggest that consumers should be imposed to react in a given manner. In fact, this notion is invalidated by the studies of the NCA which identified that private, classified advertisements were visited by at least as many visitors to the portal(s) as those that visited the advertisements ‘posted’ by brokers.(22) Instead, it simply sets an open place for competition to take place to the direct benefit of consumers which would be able to reach more sources of supply and evaluate them according to their necessities. In addition, one must not disregard the fact that these crucial elements of access and enhanced information availability which were the particular targets in the Norwegian case, arose within a particular context, namely, the particular specialization of that virtual space, which in essence created a virtual market (the abovementioned ‘quasi-market’) for residential properties for both suppliers and consumers.

From another perspective, the necessity to create such an impartial space was evident in the Norwegian case, since the exclusion from the specialized web portal directly limited the numbers of competitors, i.e. it set a ceiling to the number/categories of companies that could develop competing products/services to those of brokers, and thereby had been technically reducing the competitive pressure in the market to the direct detriment of consumers who only had the ‘broker option’ of supply, whilst they also only had the product/services (and at prices for the entire bundle) offered by the latter. As noted above, in order to deal with this issue, the NCA imposed a different operation upon all of the relevant virtual portals by requesting them to amend their technical solutions in a manner that ensures such openness towards all sources of information/competitors. Information is therefore a key aspect and its purpose and handling are central to competition policy for these virtual markets, something that necessitates this intervention to protect it in the first place, so as to both set an appropriate level of competitive pressure as well as of consumers’ autonomy.

Having made this point however, from another perspective and in relation to the regulatory measure that was adopted by the NCA, the question that is subsequently raised relates to the degree of access control that is imposed upon the dominant company (i.e. to what extent the regulatory measures imposed, in essence control the actual method of operation of the portal), since there is certainly a boundary for the necessity to protect competition in the market (i.e. the degree of competition that takes place inside a given market) from imposing a different operation model upon the dominant intermediary altogether, i.e. something that directly interferes with the freedom of the company to choose and implement its own –successful- commercial strategy (provided of course that this success is not the result of an anticompetitive strategy). This actual issue is also one of the central concerns (and long debates) in the Google investigation (which can of course be distinguished from the NCA’s investigation). From this perspective, the imposition of an operation model that can/may interfere with the ability of the dominant undertaking to determine its course on the market; to determine its successful operation model; and to determine the method of using its innovation capabilities to its benefit and not to that of its competitors (i.e. there is no duty to aid a competitor) is obviously different from attempting to prevent anticompetitive conduct. Undoubtedly, the line as to where and when to interfere in such cases and in what way to do so is a fine one given the dynamic nature of the entire internet marketplace, since technological and consumer trends rapidly evolve. This balance of course becomes more complicated since there are also various policy considerations that may trigger an intervention to these marketplaces. But the Norwegian case could suggest that such State intervention that concentrates on the practical impact of access, takes its justification from the particular nature of that online intermediary, i.e. issues such as the portal’s particular market position (i.e. super-dominant); its considerable market specialization (i.e. it is not a general search engine that may present various and irrelevant search results); and obviously, the participation (or the exclusion) of homogeneous market participants (i.e. either of existing or potential competitors), are all elements that support that intervention. All these elements would more easily and clearly distinguish the relevant portal(s) from more general search engines where a number of actors and other non-relevant information blends together and is diffused within a non-targeted and non-specialized commercial space.

Hence, following on from this last comment, the major issue behind the Norwegian investigation is that of access to a specific, private, and virtual environment which has acquired a nearly monopolistic position in the provision of specialized information (i.e. specialized on a specific market category). This access problem took a direct form, since a number of (potential) competitors were directly prevented from entering the highly popular and market specialized (a commercial specialization) virtual space in order to advertise their properties or services. By reason of the practice that was operated , the web portal was open only to a specific group of suppliers (whereas other suppliers and other types of services were excluded) . This fact alongside the  high popularity and market specialization characteristics  of the web portal, supported the conclusion that the terms under which commercial content was to be allowed to be displayed on the portal and the methodology of displaying them (i.e. in order for residential property to be displayed on the web portal it had to originate from the estate agents’ block) had been of a restrictive of competition nature. This situation thereby necessitated the state’s intervention both to allow access to the specialized web portal as well as to provide a sufficient degree of visibility and ability to search for within that portal so as not to –in effect- diminish the implementation of the Regulation. Thus, it imposed certain conditions up to the level necessary to ensure access and certain technical measures upon were the consumer would be able to further perform his search and engage with the suppliers.

Further considering this last point, one could easily argue that access could have been achieved by directly imposing it to the web portals in a straightforward manner (i.e. allowing content to be included in the same search results list). This could have taken place without further engaging to the technical measures that also imposed a structural change to the web portal’s operation. However, the visibility criterion was apparently introduced and manifested in the additional ‘private’ search option in order to prevent measures that could negate the ability of consumers to easily view these results by independent providers, in the same way that potential price differentials could also have discriminated against these independent providers. This essentially takes the argument (and the effort) of providing access a step further, into providing effective access inside this specialized web portal. Hence, the remedy also had an additional structural dimension in ensuring that there is certain taxonomy in the provision of results, which could also ensure that competition is preserved and enhanced post-access. This measure ensured that consumers were given an additional and viable option for information on the particular market services they were searching for which was both visible and searchable, whilst it also gave the necessary and appropriate space (an equal footing between the broker and private options) for competition by independent providers to flourish.    

Beyond these considerations, this case has an additional interest from a policy design perspective. This relates to the use of competition principles/policy in a combined form with the capabilities offered by internet technology so as to ‘upgrade’ the operation of the market under both more competitive and more technological terms. This approach envisages the combined implementation of those elements necessary to create more efficient terms of the market’s operation. The discussion in the following part presents this policy concept and touches upon the basic points of its development.        

3.3     Beyond past market functionality

The effective linkage of the remedies from the online environment to that of the traditional market through a regulation inspired and rooted in competition principles, is also an issue requiring greater attention from a policy design perspective. Perhaps, in the Norwegian property market investigation this example was more clear and easier to perceive and materialize, i.e. the regulation for accessing the web portals assisted the property market in overall, not only the online aspect of it, since the product and services in question had a physical dimension, i.e. properties and associated advertised services. This element therefore assisted in creating a systemic remedy, i.e. one that had application to both online (the portal) and offline (the market) for this specific sector, whilst it cannot be excluded that additional and adjunctive sectors could also benefit out of it (also both online and ‘offline’).

Nonetheless, this example demonstrates that through the use of a combination of competition rules/policies alongside the actual capabilities offered by the involved internet technology, a wider spectrum of the economy was affected in a positive manner and received specific, positive, and consumer-targeted results (i.e. the immediate result of increasing conditions of competition, etc.). From the perspective of the involvement with the main intermediary on the internet, one could argue here a correlation with what could be the ‘driving force’ behind the Commission’s engagement to Google. This is that a powerful internet intermediary is a key aspect to the operation of the online marketplace, for the abovementioned described reason of controlling the ‘supply’ and diffusion of information. But besides this, these market agents are also a mechanism to enhance conditions of competition in any market that is using this medium or could be associated with it and take advantage of it.

Closely associated to the above issue of promoting more competitive market conditions then, the NCA’s example also points towards a more proactive approach in dealing with impediments that raise a competition interest across any sector of the economy, whether this refers to the online or the ‘offline’ aspect of it. This may not necessarily be concerned with a particular competition infringement (i.e. a cartel formation or an abusive of dominance practice), but can encompass and target less efficient methods of operation or any other type of impediment to the markets’ operation. It may as well point towards the actual necessity for the pursuit of enhancing conditions of competition in a systemic approach through the employment and use of the internet with close cooperation between participants at different levels of operation and market sectors. Such an approach could identify unnecessary impediments and restrictions or suggest a more competitive approach to the market’s structure and operation based on the use of internet technology.

For example, the problem in the Norwegian case was not only concerned with just a technical aspect of the web portals’ system architecture (i.e. it was not only a technical issue of how the web portals displayed the commercial content they received from the estate agents’ ‘block’). Hence, the technical arrangement that was imposed by the NCA upon the web portals was only the solution that was provided to an actual market operation  problem; a problem that appears it could have had a deeper root and cause, namely  that certain factors affected the market’s pattern of operation from performing in a more competitive manner, notwithstanding that the internet generates more competitive and efficient market conditions and these beneficial outcomes ought to have been fully developed through the relevant web portals.  In other words, although the internet promotes more competitive market conditions due to the wider consumer reach and the enhanced information ability that it offers to producers and consumers alike, and that this enhanced competitive condition should have materialized through these web portals; instead, the practices/arrangements that were established in that particular market sector by the main participants in the residential property (namely by estate agents’ block and by the web portals) were factors that in practice diminished these advantages. Hence, the presence of these factors (which were rooted and derived from –or for- considerations in the operation of the physical market –hence, under less efficient terms- and were also ‘transferred’ into the internet) was both unjustified and also restrictive of the actual ability to operate more efficiently through the use of the internet in a more competitive manner than what achievable in the physical market.

To elaborate further on this point, a number of factors can prove more burdensome to the operation of any market on more competitive and efficient terms which can  be conceived and materialized through the enhanced abilities offered to consumers and businesses by using the internet. As such, these factors will neither coincide with the actual consumer needs and abilities nor with those by other parties (e.g. potential competitors) as these are inspired, evolve and are realized due to the internet. Therefore, what takes place during this evolutionary period that is triggered by internet technology is actually a ‘race’ against the pastime and inefficient market formations and operations, i.e. it is a ‘race’ to promote more efficient market conditions than those that have existed or still exist in the physical market. In other words, a current form of a market’s (or a sector’s) operation can be causing impediments to the actual abilities of both consumers and of other parties to search/access and to provide more and better products/services respectively. This may also be the case for other smaller and current competitors. In actual terms, this inefficient operation factor may for example be a compulsory license in order to advertise certain services which restricts/prevents other providers, without any actual/pragmatic justification for the existence of such restriction or its maintenance within the internet environment;(23) or it may be a form of arrangement between various professional groups that is in place and which can restrict entry or further development; or the lack of legislation/regulation which prevents entry and development; or even the structure of the market which still follows norms and trends that have been long bypassed and could be restrictive, and so on. This may occur either in the physical market or, as seen in the Norwegian case, it can also appear in the internet, notwithstanding that this latter environment is seen as capable of providing more solutions and enhancing competition.

Therefore, this enhancement of the market’s operation can be argued to be the actual rationale triggering the NCA’s involvement in the case, which led to the adoption of both a more ‘competition-oriented’ and a more ‘internet-focused’ approach, i.e. a ‘bundle of policies’ to elevate the operation of the market on both competition and technological grounds, which places emphasis on the use of internet technology as a means of advancing more competitive conditions in the overall market. Hence, an important consideration that can derive out of this case and may necessitate further investigation is that traditional methods of operation of a number of sectors may be bypassed by consumers’ trends, needs, and abilities. They can also be bypassed by the pressure deriving out of potential competition emerging in a greater degree and bringing more positive effects through the abilities offered by the internet technology. The market restrictions as they appeared over the web portals in the Norwegian case, demonstrated market impediments and distortions or an already bypassed structure and function of that specific market, i.e. a less efficient market operation. In parallel though, the abilities offered by these web portals also highlighted a more competitive an efficient market formation that could be revealed/achieved. Hence, the adopted regulation targeted and achieved this elevation in the operation of the market, consequently implementing a more competitive and internet-oriented market operation.

Thus, what also emerges out of these considerations is that this approach (i.e. the aforesaid ‘bundle’ of a pro-competitive and pro-technological policy) could also be implemented in other sectors to solve market problems or mainly to achieve in enhancing their operation. In another sense, internet technology (in this case the virtual environment created by the internet) can act as the ‘hotbed’ for competition principles to manifest in an enhanced form and to be implemented with maximum results. This application may for example raise issues in relation to legislation in force; of market regulations; of arrangements and various ‘market traditions’; or even of structural issues, which could all point towards various impediments or a less competitive function of the market. Importantly, such approach may also point to solutions that overcome these impediments and enhance conditions of competition on the basis of a technological upgrade of both the economy and society. This ‘reorganization process’ can take place according to competition rules and principles that will be applied both at a design and operation level. Consequently, what is achieved in such process is that the problems of any sector’s present operation and its benefits from an ‘upgrade’ to its operation using the internet technology are identified. Solutions could subsequently be designed, proposed and implemented with the involvement of all market actors and the technological elements that can be involved.

From an EU perspective, such a review of the market’s operation (in any level and any sector) under the prism of both competition policies/rules and of the internet technology supports and further enhances the Commission’s plans of restructuring and ‘upgrading’ the European economy and society on technological foundations, as was introduced.(24) Undoubtedly then, the results already achieved by the NCA can be of assistance to the Commission’s initiatives, which in turn, could be of crucial importance for developing, re-organizing and rejuvenating the European economy.

4.       Concluding remarks

The Norwegian residential property market investigation is an example of a case that will increasingly appear in the context of competition law and policy in the future as the market (both the supply and demand) shifts towards the use of the internet technology. Indeed, the Google investigation and potential settlement with the Commission will also contribute further insights on this area and possibly may take the issue of access and effective access even further than what was determined and imposed by the Regulatory intervention in the Norwegian case. Nonetheless, the NCA’s and the Norwegian Government’s intervention and the various immediate positive results that manifested in the relevant market for consumers and other smaller and independent competitors, provided with an emphatic policy stance, i.e. that intervention in this dynamic industries is preferable to that of non-intervention. In addition, this case demonstrates that the necessity to create and maintain conditions of competition within such specialized virtual ‘quasi-markets’ will act to the benefit of the entire economy in a systemic fashion. Being so, it also generates a new challenge in combining together technological capabilities offered by that form of technology and competition policy in a pro-active approach that will enable to solve market deficiencies and to promote a more beneficial market environment. This proposal can also coincide and indeed become of assistance in achieving the other major plans in regenerating social and economic conditions within the EU and in boosting the use of the internet technology across the EU and particularly for various and medium/smaller actors.

(1) See Press Release by Commissioner Almunia SPEECH/12/967 “Statement by Vice President Almunia on the Google Investigation” (18/12/2012).

(2)  See the recent Commission’s Press Release IP/13/371 Antitrust: Commission seeks feedback on commitments offered by Google to address competition concerns (25/04/2013) and also the MEMO/13/383 Commission seeks feedback on commitments offered by Google to address competition concerns – questions and answers (25/04/2013); and more recently see Commissioner Almunia’s response in that Google will be asked to improve the proposals it had made see e.g. 

(3) See DG Italianer’s speech at the Fordham Competition Law Institute Conference 21 September 2012 “Innovation and Competition”, at p.9, available at:

(4) See the relevant Commission’s website at:; the reader can also refer to the Commission’s Communication COM(2010)2020, Europe 2020, A strategy for smart, sustainable and inclusive growth (3/3/2010). As part of the ‘roadmap’ towards the achievement of the 2020 Strategy the Commission operates a number of flagship initiatives which gradually attempt to fulfil this systemic plan. Of interest to the present discussion is the Digital Agenda for Europe which encompasses other targets such as the Digital Single Market objective. The aims are described in the Commission Communication COM (2011) 942, A Coherent Framework For Building Trust in the Digital Single Market for E-commerce and Online Services (2012), and in general they envisage the transformation and operation of the EU market (and society) based on the internet technology.

(5) “Advertising Residential Properties on the Internet” in the Norwegian Competition Authority 2008 Annual Report, (published 13/07/2009) at p.11, available at:; See also:  

(6) Section 10 and Section 11 of the Norwegian Competition Act 2004 are modelled and correspond to Article 101 and Article 102 TFEU respectively. The relevant legislation is available (in English) at:

(7) Section 14 of the Norwegian Competition Act 2004, titled ‘Measures to promote competition’, states: “If necessary to promote competition in the markets, the King may by regulation intervene against terms of business, agreements or actions that restrict or are liable to restrict competition contrary to the purpose of the Act.”

(8) See; the text of the Regulation on access to residential property advertising (in Norwegian) is available at: FOR-2009-09-09-1169Forskrift om tilgang til boligannonsering på Internett Forskrift om tilgang til boligannonsering på Internett’ (2009-09-09)

(9) The NCA made an online report on the positive outcomes which the new Regulation was designed to deliver, see

(10) One could see this distinction (broker/private) on the left side in the relevant URL (e.g. for sales of residential properties in Oslo):

(11) Above note 9; The NCA’s assessment over these arrangements with the dominant web portal demonstrated that the portals did not experience any major issues following these technical alterations and the entry of the new customer groups, while moreover, studies showed the equal treatment of the categories of advertisements by consumers.

(12) Above, note 9.

(13) Above, note 9.

(14) Above, note 5.

(15) This is since these portals enhance competition through the provision of information for the various participants on any given market, but not only that, since they also provide with other information that consumers may find appropriate for enhancing their understanding of products and their prices (also their comparison), thereby enhancing also consumer buyer power.

(16) See Case COMP/C-3/37.792 Microsoft (24/03/2004) at para.982 of the Decision, where the Commission states that in relation to the tying of the Windows Media Player to the Windows Operating System, “Microsoft’s conduct affects a market which could be a hotbed for new and exciting products springing forth in a climate of undistorted competition”. Of course, there was practically no other ‘market space’ than that of the Windows OS within which this market of “new and exciting products” (whether it referred only to the Media Players market or other software products markets) could have flourished, and for which the Commission though that access for competitors was blocked. The OS was therefore the actual market ‘arena’ inside which competition could be enhanced. The exact same issue also arose in relation to the Internet Explorer and the commitments to provide more choice of web browsers, a case that currently also has a new interest (see the Commission’s Press Release IP/12/1149 “Commission sends Statement of Objections to Microsoft on non-compliance with browser choice commitments” (24/10/2012) which summarises all the case’s history).

(17) Following the classic notion of the special responsibility that is found in various EU cases, see e.g.  Case 322/81 Michelin v. Commission [1983] ECR 3461, at para.57 “a finding that an undertaking has a dominant position is not in itself a recrimination but simply means that, irrespective of the reason for which it has such a dominant position, the undertaking concerned has a special responsibility not to allow its conduct to impair genuine undistorted competition in the common market.”

(18) See the relevant Press Release IP/10/1624 “Commission probes allegations of antitrust violations by Google” (30/11/2010). The Commission initiated an investigation on these claims and found that Google’s practices raised concerns of a potential anticompetitive conduct. The Commission identified that, a) the display manner of Google’s own results (i.e. of its own vertical search services) at a better positioning may raise an issue of preferential treatment over competing services; b) Google’s content copying from competing search services (e.g. user reviews on restaurants etc.) could reduce incentives to invest further in this area; c) Google’s de facto exclusivity agreements with websites which receive advertising from Google could have an impact on competitors and also impact on advertising services; and d) Google’s imposed contractual restriction upon software developers thereby preventing the portability of advertising campaigns from Google’s platform to competing ones.

(19) It is to be reminded that the NCA could not find a competition law infringement (neither from an anticompetitive agreement perspective nor from an abuse of dominant one).

(20) See mainly the work of Pasquale, e.g. Pasquale FA. (2008) “Internet Nondiscrimination Principles: Commercial Ethics for Carries and Search Engines” U. Chi. Legal. Forum 263, 298, available at

(21) See Grimmelmann, J., “Some Scepticism About Net Neutrality” in Szoka, B. & Marcus, A.(eds) The Next Digital Decade: Essays on the Future of the Internet (TechFreedom, Washington DC 2010) at p.435-460, who connotes the idea that the actual essence of the ability to search is to provide autonomy to the user; this autonomy is not in line with (or is indeed negatively affected by) structural interventions to impose a –dubious- ‘net neutrality’ concept that will in effect act against the user’s freedom; See also Manne, GA. “The Problem of Search Engines as Essential Facilities: An Economic & Legal Assessment” in Szoka, B. & Marcus, A. (cited above) at p.434.

(22) See above note 9, under the heading ‘Visible and Searchable’.

(23) In addition to the actual measure that was of concern to the NCA, it is to be noted that both in the case of Pierre Fabre (C-439/09 Pierre Fabre Dermocosmetique SAS v President de l’Autorite de la Concurrence (13/10/2011) and in the French Competition Authority’s Decision in Bang & Olufsen (Decision No.12-D-23 (12/12/2012)) the restriction of marketing goods over the internet was considered as a hardcore restriction of competition under Article 101 TFEU. In relation to the actual point made in the discussion in this part, in Pierre Fabre for example, the restrictive factor was the imposition by the producer –in its standard term contracts with distributors- of a term that the sales of cosmetics would have to take place in a physical establishment in the presence of an authorised pharmacist.

(24) See the particular aims in reaching the Digital Single Market objective, which are described in the Commission’s Communication on the Digital Single Market, cited above note 4. The Commission’s target is to essentially upgrade the socio-economic basis of the EU through the use and promotion of Internet technology across a number of sectors in the daily lives of EU citizens. The Commission is elucidative on how it sees the benefits of using the Internet (e-commerce etc.) in a wider spectrum. As it states in p.3:

“High-performance and innovative online services based on the high-speed communication networks they need have a unique capacity to stimulate growth and employment in Europe. No other technological, economic or social change currently offers the same level of potential in terms of increased efficiency, access to a wide range of choices, accessibility, practicality and innovation. Online services and highspeed communication networks can also contribute to greater productivity and innovation in education and lifelong learning and provide better ways to meet major societal challenges such as social and territorial cohesion or adapting to an ageing population and climate change.”