Art. 102 - Non-pricing practices

Question 1

Exclusive agreements (single branding)

Answer 1

Exclusive purchasing agreements
- Purchaser is prevented from purchasing competing products from anyone other than the dominant firm
- Agreement to purchase 80% or more is analouge to an exclusive purchasing agreement

No per se rule
- The dominant firm can always try to argue for an objective justification or efficiencies
- Wil be abusive if capable of forclosing an as efficient competitor and has no objective justificiation
- Looks to see if competitors are able to compete for a customers entire demand
- The longer duration –> greater forclosure effects

Defence - Objective justification
- Market/financial requirements matter
- If financial certainty is better served by e.g. a long term exclusive agreement this is accepted
- Client-specific investment
- Practical or technical explanations are also accepted

Does not matter that the customers don’t object
- It’s the foreclosure of competitors and competition we don’t accept

Market/financial requirements matter
- If financial certainty is better served by e.g. a long term exclusive agreement this is accepted
- Practical or technical explanations are also accepted

The form doesn’t matter
- De facto exclusivity (limitations of the use of freely supplied freezers)
- Long term supply agreement
- Minimum purchase requirements (carefully benchmarked against the expected total requirement)

Question 2

Tying

Answer 2

Supplier of one product requires the byer to also buy a seceond product

Different forms of tying
- Contractual tying
- Refusal to supply –> no supply of the tying product unless also the tied
- Withdrawal or withholding a guarantee
- Technical tying –> tied product physically integrated
- Bundling –> Two products sold as one at a single price

Arguments against
- Takes away the customers freedom of choice
- Might forclose competitors since the customer will by the tied products (better deal)
- Dominant form leverages its position with regard to the tied product (increases sales)

Assessment
- Dominant position in the tying market?
- Two distinct products tied together? –> does the product have a connection by nature or due to commercial use?
- Customer coerced to buy both products?
- Anti-competitve forclosure effects?
- Objective justification? –> fx savings in production or distribution

Question 3

Refusal to supply

Answer 3

No general obligations to supply nor license

Further any potential obligation must be strict
- Can discourage investments and development from dominant firms and competitors
- Must balance the undertakings right to choose trading partners against the possible forclosure of competitors

Horizontal forclosure
- Refuses to supply distributor who handles upstream competitors products
- Refusing to supply distributor downstream who is trying to enter upstream

Vertical forclosure
- Dominant firm in the upstream market, also present in downstream, refuses to supply existing or new customer downstream
- Worse to refuse supplying existing than a new customer

Refusal to supply
- Both outright refusal and offering supplies on terms that are unreasonable

Dominant
- Must be dominant in the upstream market

Assessement
- The disputed products must be indispensable –> Incapable of being duplicated or only with great difficulty. Physically, legally impossible or not economically viable.
- There is consumer demand for the end product
- No objective justifications for the refusal –> Bad debtor, use for illegal purposes
- The refusal would eliminate all competition –> Liable or likely to elimate all effective competition

Question 4

Abuses that are harmful to the Internal Market