Amsterdam Court of Appeal rules online platform Funda did not abuse its dominant position

By Pauline Kuipers, Piet-Hein Eijssen, Manuela Cox

06-2020

On 26 May 2020, the Amsterdam Court of Appeal (“Court”) delivered its judgment in a dispute between the real estate association VBO Makelaars (“VBO”) versus the Dutch Association of Real Estate Agents (“NVM”) over the online real estate platform of Funda Real Estate (“Funda”). The Court assumed that Funda held a dominant market position but dismissed claims by VBO that Funda abused its dominant position by inter alia self-preferencing the ranking of advertisements of NVM members on the online platform and applying a higher tariffs and more limited website functionalities to VBO members.  

Funda operates the website www.funda.nl which serves as an online real estate platform in the Netherlands. The NVM is co-founder of the website and indirectly holds shares in Funda. VBO is a competing real estate agency of NVM and has agreements with Funda in order to allow its members to also post property advertisements on the Funda website. The property advertisements of NVM members receive however preferential treatment in terms of lower tariffs, more enhanced website functionalities and a higher ranking of property advertisements on the online platform. Furthermore, VBO argued it was also disadvantaged as it did not have access to a database of NVM which contains historic sales information of properties in the Netherlands which were sold by NVM-members in the past. 

The Court presumed on the basis of an earlier judgment by the District Court in first instance that Funda held a dominant position on the market for online real estate advertisements in the Netherlands. Relying on a judgment by the European Court of Justice in the case of MEO/Autoridade da Concorrência, the Court noted that VBO had to demonstrate that the alleged discriminatory conduct by Funda concerning its online platform had an actual negative effect on the competitive position of VBO on the downstream market for real estate agencies as mere discriminatory conduct by a dominant company is not sufficient to establish an abuse. To meet this standard the Court held that VBO had to establish the actual negative effects of the discriminatory conduct on the market structure (supply and demand side), barriers to entry and all other relevant factors.

The Court concluded that VBO had not shown that the discrimination in relation to the listing tariff or the more limited access to the online platform’s functionalities tended to distort its competitive position. In relation to the preferential treatment of NVM agents’ property listings on the platform, the Court considered that the comparison with the Commission decision in the Google Search (Shopping) case does not hold as the buying decision of potential real estate buyers will to a much lesser degree (or not at all) be guided by the ranking of an online advertisement than for buyers of consumer products. 

As a result, the Court ruled that Funda had not abused its dominant position. The Court also dismissed the claim by VBA that it should be granted access to the NVM database with historic real estate transaction information on equal terms as NVM members, as this database could only be considered to be an essential facility in the meaning of European competition law if access to the database is indispensable in order for VBA-members to compete with NVM-members on the market. According to the court, access to the NVM database on the same terms was not indispensable in order for VBA-members to compete successfully on the market.

The judgment is available in Dutch here

For more information contact Pauline Kuipers and Piet-Hein Eijssen.