Kate Pollock has commented in CDR News about the competition law aspects of the proposed Libra cryptocurrency, and whether the association behind it could be considered a cartel.
Libra is a blockchain digital currency proposed by Facebook. It involves a membership organisation made up of 28 companies across the payment, technology, telecommunication, online marketplace, venture capital and non-profit sectors. The project has faced criticism and opposition from central banks, and the association has faced accusations of cartel behaviour.
The article in CDR News states:
“Due to launch in 2020, the Facebook-associated Libra cryptocurrency, blockchain and smart contract offering has courted scrutiny, particularly around public trust; this week the European Central Bank added to its list of heavyweight opponents, with one top official likening Libra’s ecosystem to that of a cartel.”
Kate states that it all comes down to the intention of the participants. She explains:
“Cooperation between companies with the aim of improving innovation and increasing consumer welfare does not necessarily frustrate EU competition law, which is distinguishable from actionable cartel behaviour aimed at, or with the effect of, restricting innovation to the detriment of one’s customers and/or consumers.”
The article continues:
‘By way of example, Pollock points to the European Commission’s current investigation into German car manufacturers BMW, Daimler and VW (Volkswagen, Audi, Porsche), who are being investigated for allegedly restricting competition on the development of technology to clean the emissions of petrol and diesel passenger cars and adds that “even with altruistic intentions companies still face a risk, as collusion between competitors could inadvertently lead to anticompetitive behaviour”.’
To read the full article on CDR News website, please click here. This will be free to view until Thursday 12 September, after which it will be behind a paywall.
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