Article 102 TFEU

Question 1

Question process (Art. 102)

Answer 1

Why Art. 102 is relevant
Dominant position
- RPM & RGM
- Demand and Supply Substitutability
- Market share
Abuse
-exploitative & anti-competitive
Consequences

Question 2

Role of Art. 102

Answer 2

Prohibits abuse of dominant position that may affect trade between Member States

Question 3

Dominance

Answer 3

A position of economic strength (market power) which allows undertaking to prevent effect competition in relevant market.
(United Brands)

Question 4

Test for dominance

Answer 4

Does undertakings economic strength allow it to behave independently of both its customers and competitors?

Question 5

Relevant Product Market (RPM)

Answer 5

All the products/services regarded as interchangeable by the consumer
(United Brands)

Question 6

Tests for RPM

Answer 6

Demand substitutability
- small but lasting increase in price of product A cause product As customers to switch to readily available substitute? (United Brands)
Supply substitutability
- could potential competitors switch to producing same product without incurring significant additional costs?

Question 7

Hugin Kassaregister AB

Answer 7

RPM may be very narrow, such as spare parts for Hugin cash registers

Question 8

Hoffman-La Roche

Answer 8

Often, very large market shares will be in themselves evidence of a dominant position

Question 9

Akzo Chemie

Answer 9

Share of 50% or more raises rebuttable presumption of dominance.
Share of below 35% are rarely dominant

Question 10

RGM

Answer 10

The area of the common market where the conditions of competition are homogenous (United Brands)

Question 11

Factors to consider for RGM (United Brands)

Answer 11

Transportation costs
Shipment patterns
Product characteristics
Location of plants

Question 12

Hilti AG

Answer 12

Start by assuming RGM is whole of EU

Question 13

Sea Containers/Stena Sealink

Answer 13

RGM may be geographically very small (but must be economically substantial)

Question 14

Other factors of dominance

Answer 14

Market shares of competitors are low in comparison
Barriers to entry
Undertaking in a strong position over a long period of time
Less likely if customers have buying power

Question 15

Abuse

Answer 15

An abuse occurs when a dominant firm in a market engages in conduct that is intended to exploit its dominant position.

Presence of dominant firm weakens degree of competition

Question 16

Types of abuse

Answer 16

Exploitative practices
- exploit persons dependent on undertaking
Anti-competitive practices
- impede competition by excluding competitors

Question 17

Examples of abusive practices

Answer 17

Unfair pricing
- exceedingly high (United Brands) [hard to prove]
- exceedingly low (Akzo Chemie)
Refusal to supply
- such as retaliation to helping other brand or to eliminate from market (Hugin)
Unjustifiable price discrimination (United Brands)
Tying Bundling (Hilti AG)

Question 18

Michelin

Answer 18

Dominant firm has special responsibility not to allow conduct to impair undistorted competition in common market

Question 19

Might abuse affect trade between Member States

Answer 19

Whenever the conduct brings about an ‘alteration in the structure of competition in common market’

Only need to be capable of effecting trade

Question 20

Consequence for undertaking (if abuse of position)

Answer 20

Commission may bring case against undertaking and fine them
- Can appeal to High Court following decision

Claimant can also bring case to national court
- Art. 102 has vertical and horizontal effect