How can the concept of public blockchain fall under the definition of an undertaking as it is perceived by Article 101 TFEU?
The way society functions is significantly shaped by new technologies. Blockchain, arguably one of the most significant inventions since the Internet, is bringing drastic changes to the way people make transactions online and interact with one another. In that respect, it is apparent that this technology is capable of bringing both benefits and challenges to the status quo of the EU legal order.
Particularly, the rise of blockchain has created significant issues for the application of European competition law. Indeed, its core concepts need to be transposed to the digital realm, which is not a straightforward process. It is however imperative for the Union legislator to effectively tackle blockchain technology in order to prevent these entities from exploiting legislative loopholes
This paper presents the audience with the key notions surrounding blockchain and briefly explains which main regulatory issues this new technology brings to Article 101 TFEU application. Specifically, it underlines that being a decentralized network, blockchain does not currently fall within the definition of undertaking as seen by competition law. Hence, it presents a possible solution to make Article 101 TFEU applicable to such entities, namely the theory of granularity.
(1)Thibault Schrepel, Is Blockchain the Death of Antitrust law? The Blockchain Antitrust Paradox, 3 GEO. L. TECH. REV. 281, 282 (2019); Thibault Schrepel, The Theory of Granularity: A Path for Antitrust in Blockchain Ecosystems 16, 24 (2020).
(2) Jean Bacon et al., Blockchain Demystified: A Technical and Legal Introduction to Distributed and Centralised Ledgers, 25 RICH. J.L. & TECH. 1, 6-7 (2017); see also Christian Catalini and Joshua S. Gans, Some Simple Economics of the Blockchain 34 (2019).; Kevin Werbach, The Blockchain and the New Architecture of Trust 96 (2018); More on that topic, see: Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System (2008).
(3) Ittay Eyal and Emin Gün Sirer, Majority Is Not Enough: Bitcoin Mining Is Vulnerable 439 (2014); For a clear example of a fork creation, see: Adrian Zmudzinski, Battle for Bitcoin Cash Name Ends as BCH SV Backer Calls for ‘Permanent Split’, COINTELEGRAPH: THE FUTURE OF MONEY (November 24, 2018),
(4) Ittay Eyal and Emin Gün Sirer, Majority Is Not Enough: Bitcoin Mining Is Vulnerable 450 (2014)
(5) By analogy, see Albert O. Hirschman, Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States 21-22 (1970).
(6) OECD, Algorithms and Collusion: Competition Policy in the Digital Age 19-20 (2020). In that regard, an explicit collusion, or a cartel, has always been seen as the most dangerous practice for effective competition on the market; see: William E. Kovacic, The Value of Policy Diversification in Cartel Detection and Deterrence 2 (2013).
(7) United American Corp. v. Bitmain, Inc. Complaint, 1:18-cv-25106-KMW (2018); For more information about the case and its analysis, see: Konstantinos Stylianou, What can the first blockchain antitrust case teach us about the crypto-economy?, JOLT DIGEST (April 26, 2019), https://jolt.law.harvard.edu/digest/what-can-the-first-blockchain-antitrust-case-teach-us-about-the-crypto-economy; Unfortunately, this case has not yet been decided as the court of first instance dismissed it; See: Paddy Baker, US Judge Dismisses Bitcoin Cash ‘Hijack’ Lawsuit Against Bitmain, Kraken, COINDESK (February 5, 2020), https://www.coindesk.com/us-judge-dismisses-bitcoin-cash-hijack-lawsuit-against-bitmain-kraken.
(8) Thibault Schrepel, The Theory of Granularity: A Path for Antitrust in Blockchain Ecosystems 16, 28 (2020).
(9) Ronald Coase, The Nature of the Firm, 4 ECONOMICA 386, 388 (1937).
(10) Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System (2008).
(11) Thibault Schrepel, Is Blockchain the Death of Antitrust law? The Blockchain Antitrust Paradox, 3 GEO. L. TECH. REV. 281, 135 & 139-140. (2019).
(12) Thibault Schrepel, The Theory of Granularity: A Path for Antitrust in Blockchain Ecosystems 16, 34, 36 (2020).
(13) Thibault Schrepel, The Theory of Granularity: A Path for Antitrust in Blockchain Ecosystems 16, 34, 36 (2020).
Kirill Ryabtsev is an LL.M candidate with Honours in Law and Technology in Europe at Utrecht University. He graduated with Honours from LL.B in International and European Law at the University of Groningen. Kirill specialises in European Union Law and ICT law. Currently, he holds a position of a Student Assistant in Technology Law at Utrecht Law School and is working on a Blockchain for Societies project, organised by Utrecht University. Kirill is also an Editor-in-Chief at Groningen Journal of International Law.
Ines Garreau is an LL.M candidate in Law and Technology in Europe at Utrecht University and a Legal Privacy intern at Philips. She graduated with an LL.B in European Law with honours at Maastricht University. Ines specialises in intellectual property and European law.