Abuse of a dominant positions - cases/facts Flashcards
Article 102
Abuse of a dominant position is prohibited
What are the 3 main elements of article 102
- Dominance (Market defined/ dominance of that market)
- Abuse
- Interstate trade
What are the 3 elements of a market definition?
Relevant product market (RPM)
Relevant geographical market (RGM)
Relevant temporal market (RTM)`
United Brands
Temporal market in terms of seasonality of fruit
Continental cans
Dominance of the market but for how long as relatively simple to copy. Length of dominance issue. In this case dominance was not a long term issue as a can is very easy to replicate
Benzine en Petroleum v Commission
ECJ prepared to assume that oil companies held a dominant position during OPEC oil crisis
What are the 3 elements of the product market?
Interchangeability/substitutability (Demand substituability and supply substitutability)
What 3 factors govern demand subsitutability/
Pricing
Intended use
Physical characteristics
What test did the Notice on the definition of the relevant market establish?
Small but significant Non-Transitory Increase in Price (SSNIP) - If the price rises by 5-10% will the customers stop buying that product? If not then it is its own market and is not interchangeable
United Brands (Product market)
Product not substitutable in the fruit market, only substitutable in the banana market
HIlti
Product not substitutable in the DIY market, but is substitutable in the nail gun market
Continental Can
Easy for rivals to produce a can, therefore less likely to be dominant
MIcrosoft
Business in particular are locked into Microsoft, all offices in Microsoft so for another company to replace them is very difficult. Therefore more likely to be dominant
Hugin
Made receipt rolls for tills, very specific part, so more likely to be dominant
What other factors effect the RPM?
Intended use, marketing strategies, market power, price, luxury/quality, brand name
Michelin (intended use)
Michelin tyres have more than one intended use, specialised use for each tyre. Not one tyre market many depending on use. Michelin were dominant in certain tyre markets
Boosey & Hawkes
Marketed to Northern brass bands. Affects market you are selling to, and therefore how dominant the company will be e.g. Nintendo Wii marketed to families so family is their market
BPB industries
How much capital you have. Size of the company. Indication of dominance
UNited Brands (Brand name)
Can become product in itself almost e.g. iphone
How does article 102 define the relevant share of the market?
Substantial
What is the united brands definition of relevant geographical market?
o An area where the objective conditions of competition applying to the product in question are the same for all traders