Case Law - establishing an undertaking has a dominant position

Question 1

Akzo Chemie BV v Commission

Answer 1

Establishing Dominance

1) Through market share - >50% = holding a dominant position
2) Through wealth of capital and predatory pricing - Akzo reduced the price (made a loss on each of these sales but its intention was to drive the rival out of the market). ECJ: this amounted to predatory pricing and the Court of Justice agreed

Question 2

Tetra Pak

Answer 2

Establishing dominance -IPRs

The company had an exclusive patent license over the design of the relevant cartons

In this case, the respective IPRs made it difficult for other undertakings to enter into markets, and this reduced competition

(IPRs in establishing that an undertaking has dominance)

Question 3

Hoffmann - La Roche v Commission (Vitamins)

Answer 3

1) Establishing dominance- Superior Technology
2) Establishing dominance - sophisticated distribution and sales network - e.g. ‘English clause’ allowed Hoffmann-la Roches’ distributors to buy from rival suppliers when the rivals offered prices lower than Hoffmann-La Roche, provided that the distributors gave Hoffmann-La Roche the marketing information about its Rivals (which enabled Hoffmann-La Roche to match the lower prices). The commission argued successfully that the effect of the clause was to close the market to rivals

Question 4

Societa Italiano Vetro v Commission

Answer 4

A dominant position can be established through single undertakings, but also joint dominance

The commission maintained that three Italian undertakings operating in the flat glass industry had aggregate market shares of 79% and 95% in the non-automotive and automotive markets respectively and presented themselves on the market as a single economic entity – this was considered as sufficient evidence of collective dominance

The General Court however rejected the Commission’s approach. It held that collective dominance could not be established solely by the existence of economic links. Additional evidence was necessary in order to prove that the undertakings in question were ‘presented on the market as a single entity’.

Question 5

United Brands

Answer 5

1) Establishing dominance through Vertical integration - Vertical integration played a key role in United Brand’s ability to get its bananas across the world and in the hands of distributors in Europe as soon as possible

2) Establishing dominance through brand identification
- the commission established that consumers can come to associate bananas with the United Brand’s Chiquita trademark as a result of heavy marketing by United Brands