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Valve v Commission: a (seemingly) straightforward case with some open questions of major significance

 |  October 16, 2023

By: Pablo Ibañez Colomo (Chillin Competition)

Earlier this week, the General Court issued its judgment in the Valve case. The case delved into legal aspects that the Court of Justice could not address in the Canal+ case, which was decided through a commitments decision and consequently didn’t allow a ‘definitive’ ruling on whether the disputed clauses restrict competition by object (see paragraph 54 of the Canal+ case).

Valve, similar to Canal+, revolves around limitations on the cross-border distribution of copyright-protected content within the European Union. Both cases stand out from typical market integration scenarios in two key aspects. Firstly, they involve the intangible exploitation of intellectual property, unlike cases where it is tangible, such as incorporating it into a product like a Hello Kitty t-shirt.

Secondly, these cases are not subject to the exhaustion doctrine. Consequently, as affirmed by the Court in Coditel I, a copyright holder (or its licensee) can enforce its exclusive rights to prohibit the cross-border distribution of content.

These distinctions can hold significance in specific cases. Since the copyright holder (or its exclusive licensee) can exercise its rights concerning every public communication, cross-border trade might be impeded by the intellectual property system itself, regardless of any existing agreement.

To elaborate, using the terminology found in Generics, in certain scenarios, the intellectual property system might constitute an ‘insurmountable barrier to entry,’ thereby hindering the cross-border provision of services.

Legal precedent, exemplified by cases like Toshiba and E.On Ruhrgas, illustrates that if the absence of competition (whether inter or intra-brand) is due to the regulatory framework rather than the conduct of firms, the agreement in question does not restrict competition, either by object or effect. This legal doctrine is aptly summarized in Advocate General Kokott’s Opinion in Generics…