Introduction
This essay examines whether the conduct of Your Health Germany GmbH, a subsidiary of Your Health Inc, breaches European Union (EU) law. Using the IRAC (Issue, Rule, Application, Conclusion) method, the analysis focuses on Your Health Germany’s dominant market position, its operations through the Your Health Online platform, and the potential implications under EU competition law. The discussion addresses concerns related to abuse of dominance and data privacy, given the company’s market share and data practices. Key issues will be identified, relevant legal frameworks outlined, and their application to the facts assessed to advise Michael, a director of Your Health Inc, on the legal risks involved.
Issue
The primary issue is whether Your Health Germany’s conduct, including its 39% market share in antiviral herbal medicines within the EU and its data-driven practices via the Your Health Online platform, constitutes a breach of EU competition law under Article 102 of the Treaty on the Functioning of the European Union (TFEU). Additionally, the potential misuse of consumer data raises concerns under the General Data Protection Regulation (GDPR). These issues are critical as they could expose the company to significant fines and reputational damage if found non-compliant.
Rule
Under EU competition law, Article 102 TFEU prohibits the abuse of a dominant position within the internal market that may affect trade between member states (Hoffmann-La Roche v Commission, 1979). A company is considered dominant if it holds a substantial market share—typically above 40%—though lower shares may be scrutinised if accompanied by other factors such as market barriers (Whish and Bailey, 2021). Abusive conduct includes unfair pricing, exclusionary practices, or leveraging market power to stifle competition. Furthermore, the GDPR (Regulation (EU) 2016/679) imposes strict rules on data processing, requiring transparency, consent, and lawful basis for tracking and profiling end users. Non-compliance with GDPR can result in penalties of up to 4% of annual global turnover (European Commission, 2018).
Application
Applying these rules, Your Health Germany’s 39% market share in the EU antiviral herbal medicines market falls just below the typical threshold for dominance. However, when combined with Your Health Inc’s global 70% share and the company’s potential to influence competition through the Your Health Online platform, there is a credible risk of dominance being established. The platform’s expansion to direct consumer access and its ability to track end users for targeted advertising could be viewed as leveraging market power to exclude competitors like No Virus Ltd, which holds a 30% EU market share. Such behaviour might be deemed abusive under Article 102 TFEU if it restricts competition or exploits consumers.
Moreover, the data tracking practices raise significant GDPR concerns. Tracking end users outside the platform and using their data for advertising purposes likely requires explicit consent, which is not mentioned in the facts provided. Without a lawful basis for processing personal data, Your Health Germany could be in breach of GDPR principles of transparency and accountability (Article 5, GDPR). The scale of the platform’s popularity across Europe and America further amplifies the potential harm to data subjects, increasing the likelihood of regulatory scrutiny.
Conclusion
In conclusion, while Your Health Germany’s market share alone does not definitively establish dominance under Article 102 TFEU, its data practices and platform operations suggest a risk of abuse of a dominant position, particularly through exclusionary tactics. Additionally, the apparent lack of compliance with GDPR in tracking end users poses a clear legal vulnerability. Michael should be advised to seek immediate legal counsel to assess the company’s data processing policies and market conduct, ensuring compliance with both competition and data protection laws. Failure to address these issues could result in substantial penalties and damage to Your Health Inc’s reputation in the EU market.
References
- European Commission. (2018) Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data. Official Journal of the European Union.
- Hoffmann-La Roche & Co. AG v Commission of the European Communities (1979) Case 85/76, European Court Reports 1979-00461.
- Whish, R. and Bailey, D. (2021) Competition Law. 10th ed. Oxford University Press.
