Hub & Spoke Practices in the Era of Digital Platforms: The CNMC Uber, Cabify, Bolt case

In recent years, hub and spoke practices have been a hot topic for competition authorities all around the world. In Spain, the National Commission on Markets and Competition (the “CNMC”) recently dismissed the claims accusing three ride-hailing vehicle platforms, Uber, Cabify and Bolt, of being involved in a hub and spoke cartel in its decision of 12 March 2025 S/005/20 Uber, Cabify, Bolt.

The Uber, Cabify, Bolt decision has received little attention from legal scholars, but it is quite relevant from a hub and spoke perspective. While it is not the first time that the CNMC has analysed and sanctioned similar practices (see the Proptech, Seguro Decenal and Concesionarios Nissan cases), this decision addresses a highly relevant and current topic: a cartel involving drivers who use ride-hailing vehicle platforms as facilitators.

Nonetheless, the decision still fails to address important issues, such as the horizontal element of hub and spoke practices and the classification of drivers as either undertakings or false self-employed.

This post will analyse the hub and spoke practices introduced by the CNMC decision and the additional issues not addressed by the CNMC.

The CNMC Decision

From February 2020 to May 2024, the CNMC received multiple complaints against the three ride-hailing vehicle platforms Uber, Cabify and Bolt. The complaints were filed by two taxi associations. Asociación de Taxis Plataforma Caracol and Taxi Project 2.0, as well as by a group of 137 taxi licence holders from Barcelona and Madrid. The complainants claimed that:

·         The three platforms coordinated their prices through their algorithms. At the same time, they were each facilitating a hub and spoke cartel between their own drivers, who did not compete between them. These practices breached Article 1 of the Spanish Competition Law (“LDC”) and Article 101 of the Treaty on the Functioning of the European Union (“TFUE”), from both a horizontal and a vertical perspective.

·         The three platforms were abusing their alleged dominant position by imposing excessive prices on clients and imposing unjustified and disproportionate conditions on drivers. This implied a breach of Articles 2 of the LDC and 102 of the TFUE.

·         The three platforms were engaging in unfair practices that affected the public interest and were therefore contrary to Article 3 LDC. These unfair practices included (i) setting prices below cost in order to drive traditional competitors (i.e. taxis, whose prices are set by law, and other operators) out of the market; and (ii) engaging in practices that are deceptive and contrary to good faith to make customers believe that prices were low and fixed in advance when, in reality, they were much higher.

The CNMC dismissed all complaints and closed the case, concluding that no evidence had been found to prove the alleged practices.

Having examined the pricing policy of the three platforms, the CNMC concluded that it was based on the calculation of an estimated price for each requested service, set algorithmically according to a series of characteristics and service requirements. Therefore, there was no misleading information that could constitute unfair practices or an abuse of a dominant position.

Regarding hub and spoke practices, the CNMC stated that price setting was largely beyond the control of individual drivers and that the platforms’ pricing system constituted an ancillary restriction to their business model. This is a fairly advanced and interesting approach within the framework of the possible application of Articles 1 of the LDC and 101 of the TFEU.

Hub and spoke practices

Hub and spoke practices are structures that combine horizontal relations (i.e. between competitors) and vertical relations (i.e. between companies operating at different levels of the production chain), making them one of the most complex concepts in competition law.

The CNMC defines hub and spoke cartels as a practice in which competitors with a horizontal relationship are able to coordinate through a common operator with whom they all have a vertical relationship. This entity is known as the “hub” and acts as the facilitator of the cartel without necessarily being a party to the agreement itself. According to the CNMC, the facilitator can be an upstream operator (such as a supplier) or a downstream operator (such as a distributor or client) (see page 23 of Uber, Cabify, Bolt).

Hub and spoke practices are complex cases, and it is sometimes unclear whether they should be classified as horizontal cartel practices between competitors or as vertical restrictive practices between a supplier and its distributors. These practices can be represented graphically as an inverted T, with a common operator/supplier (the vertical line of the T) coordinating the competitive behaviour of its direct customers/distributors (the horizontal line of the T), thereby restricting competition between them. This structure can be further complicated by inverted H situations, where several competing operators (located on one of the horizontal lines of the H) coordinate their respective distributors/resellers or suppliers to limit competition between them.

In Uber, Cabify, Bolt, the platforms were accused of acting as facilitators of a cartel (vertical element), allowing the drivers to coordinate with each other (horizontal element). In view of these accusations, the CNMC analyzed whether there were signs that the platforms “were each acting as a common provider with the respective drivers who use those applications, generating a ”hub and spoke“ cartel structure whereby drivers would set prices and not compete with each other on price when using the same application.” While the CNMC’s analysis methodology clearly distinguished between the vertical and horizontal elements of the relationship between platforms and drivers, its reasoning focused mainly on the vertical relationship. This leaves open the possibility that the horizontal elements of possible coordination among drivers could be analysed in greater depth in the future.

The vertical element: the relationship between the platforms and the drivers

Ride-hailing platforms are vertically integrated with drivers, to whom they provide intermediation services and on whom they impose, in practice, a resale price for the journeys. Except in exceptional cases involving one-time discounts, drivers cannot modify the price the platform sets.

From a competition law perspective, resale price maintenance is a particularly serious restriction under Regulation (EU) 2022/720. However, it is not an infringement per se if it is justified as a necessary condition for the effective operation of a business model. The CNMC considers that price fixing is an “ancillary restriction” that is indispensable to ensuring the immediacy and coordination inherent in the service in this case. The CNMC also states that it is justified by the normal operation of the business, as it allows supply and demand to be matched instantly.

The European Commission’s guidelines on the application of Article 81.3 of the Treaty (currently Article 101(3) of the TFEU) excludes infringements of Article 101(1) of the TFEU when a restriction is necessary and proportionate to achieve an efficient outcome. It is a type of counterfactual assessment similar to that carried out under Article 101(3) of the TFEU, but less stringent. Competition authorities have not routinely applied this assessment, preferring to analyse the worst-case scenario and determine whether the exemption requirements of Article 101(3) of the TFUE are met. In contrast, in this case, the CNMC has dared to bring forward the analysis to Article 101(1) of the TFEU and examined how these platforms operate.

The CNMC’s conclusion that the restraint is ancillary is logical: without price predictability within seconds and without coordination between drivers, it would not be possible to provide the service and match supply and demand. One could argue that there are alternative models, whereby eligible drivers in the area could offer visible discounts to customers, who could then choose their preferred driver. However, the decision does not consider this type of analysis, which is possibly too rigorous and more in line with the proportionality requirement established in Article 101(3) of the TFEU than in Article 101(1) of the TFEU.

Interestingly, other jurisdictions have also analysed the restrictive potential of these platforms and have concluded that vertical price fixing was essential for the app and business model to function properly. Furthermore, in some cases, the generation of efficiencies that meet the exemption requirements of Article 101(3) of the TFEU has even been analysed (see the decision of the Luxembourg competition authority of 7 June 2018 Webtaxi no. 2018-FO-01).

The horizontal element: the relationship between drivers

The horizontal element is represented by the drivers, who compete with each other to provide services to the final customers. In theory, an agreement or coordination to standardise prices could constitute a collusive practice, which is prohibited by Articles 1 of the LDC and 101 of the TFEU. However, the CNMC neither investigates the possible existence of a horizontal relationship between drivers nor concludes that they have reached an agreement among themselves. This approach leaves open the possibility of a more detailed future analysis of horizontal elements in platform operation.

According to CNMC practice, the existence of a facilitator or hub may be decisive in determining whether an infringement has been committed, if there is a causal link between the participants. As stated in the Industrias Lácteas 2, the role of a facilitator is inferred from the following circumstances: (i) the subject actively contributes to the implementation of the conduct; (ii) there is a sufficiently concrete and decisive causal link between their activity and the unlawful conduct; (iii) they are willing to participate in the restrictive practice; (iv) they are aware of the unlawful conduct of the other participants. This perspective could be relevant when analysing the possible liability of platforms for indirectly coordinating prices between drivers in the future.

Other relevant matters that the decision does not address

There are at least two interesting aspects of the relationship between platforms and drivers that the CNMC did not address and that merit a deeper consideration.

Firstly, the distinction between vertical resale price fixing and horizontal coordination through a third party (the hub) is not always clear. In practice, the dividing line depends on the origin of the imposition: if the price fixing originates with the supplier and there is no agreement between the drivers, it would be a vertical restriction. However, if the distributors themselves (in this case, the drivers) encourage the platform to intervene and align prices, this could constitute a hub and spoke practice with horizontal elements. This distinction is important because only horizontal cartel behaviour can benefit from leniency programmes and is presumed to cause harm in a damage claim.

In the Uber, Cabify, Bolt case, the CNMC concluded that the existence of horizontal coordination between drivers had not been confirmed. Drivers do not appear to have the ability to set prices, so an agreement on prices is not feasible. This line of reasoning is similar to that followed in other jurisdictions, such as the US, which have also dismissed this possibility. Notably, the American Arbitration Association’s decision of 22 February 2020 Meyer v. Uber Technologies no. 01-18-0002-1956 describes drivers as a diverse and unstable group with no contact with each other, supporting the conclusion that there is no agreement between them.

This reasoning has not been tested against contradictory arguments, such as the idea drivers have some (limited) room for manoeuvre in applying discounts (meaning full price alignment does not take place), or that drivers agree to join a system that intrinsically aligns downstream prices, thereby tacitly accepting such price alignment. The CNMC probably did not want to consider this kind of reasoning, as these restraints would also be necessary for the correct operation of the platform business model (i.e. they would also be ancillary restraints).

On the other hand, for a cartel to exist, its participants must be undertakings as defined by competition law. The platforms undoubtedly qualify, but the question is more controversial when it comes to drivers. Although they are formally self-employed, there is debate as to whether they act as truly independent entrepreneurs or as “false self-employed” or dependent workers. While the CNMC assumes that drivers are undertakings that compete with each other, the European Commission’s Guidelines on the application of competition law to solo self-employed persons (“Guidelines”) contemplate the possibility that, in certain circumstances, these workers may collectively negotiate minimum conditions (such as basic remuneration) without infringing Article of the 101 of the TFEU, provided they are in a similar position to salary workers. These Guidelines also clarify that, apart from collective bargaining on minimum wages/working conditions, agreements between these self-employed workers (e.g. to determine their resale prices) will continue to be subject to the principles of Article 101 of the TFEU, since, strictly speaking, they are still competing entrepreneurs. Therefore, the ability of drivers to collectively negotiate their remuneration from the platforms in the future would not necessarily imply their ability to collectively negotiate sales prices (i.e. how the prices are passed on to the final customer). This matter therefore remains open for interpretation.

Conclusion

The CNMC’s Uber, Cabify, Bolt decision highlights the complexity of the activities carried out by digital intermediaries between drivers and consumers of transport services. According to the CNMC, the platforms’ pricing algorithms do not breach competition law as they are considered an ancillary element of the service’s immediacy and operability, rather than collusive behaviour.

In this case, the CNMC concludes that the platforms’ operation does not lead to a hub and spoke infringement. However, the analysis can be much more complex in other cases, and the outcome will depend on a very detailed assessment of both the nature of the vertical relationship (price setting) and the possible horizontal coordination between drivers (i.e. a cartel).

The content of this work reflects solely the views of its author and does not constitute professional opinion or legal advice.