Case Law - Identifying the relevant market Flashcards
United Brands Co v Commission
1) Demand substitutability (RPM) and relevant market
ECJ looked at whether the banana that they sell had any peculiar or distinct features which prevented it from being interchangeable with other fruits
ECJ held that bananas consisted of their own market because they are available year round and soft, seedless and easy to handle.
2) RGM - RGM is a clearly defined geographic area in which the product is marketed and where the conditions of competition are sufficiently homogenous for the effect of the economic power of the undertaking concerned to be able to be evaluated
In this case RGM was found to cover 6 member states because in those states the conditions of competition were effectively the same for all traders and so the area was sufficiently homogenous to be considered in its entirety (France, Italy and The UK were excluded because they had special arrangements in relation to the banana trade with overseas territories) - Also ECJ noted that transport costs did not stand in the way of the six member states being considered a single market.
3) Dominant position
United Brands only had a 40-45% share of the relevant market in bananas. But this market was a fragmented market with the next nearest competitor having only a 17% share and 9%. ECJ held that United Brands had a dominant position, considering that its market share
Commission Notice on the definition of Relevant markets
Demand substitutability (RPM)
SSNIP Test
Looks at the effect of a small but significant (between 5-10%) non transitory (permanent) increase in the Price
If a sufficient enough number of consumers would switch to another product to make the price rise unprofitable, the identified relevant product market to which the test was applied will have been too narrowly defined. The RPM would be too small and will have to be widened to include more products. The process is repeated until the price rise is found to remain profitable.
Euroemballage Corn and Continental Can CO Ltd
Demand Substitutability (RPM)
Court held that light containers for meat, light containers for fish and metal closures for glass containers belonged to the more general market for light metal containers, rather than individual markets.
Nederlandsche Banden Industrie Michelin NV v Commission
1) Demand Substitutability (RPM) and relevant market
Court of justice rejected Michelin’s argument that there was a single market for replacement tyres
Held: there were two – one for heavy vehciles and a spate on for light vehicles
No demand substitutability because the tyres were used for different vehicles
No elasticity of supply – because the production plant would have to be modified in order to switch production between the two types of tyre which takes time and requires considerable investment
2) RGM - Customer demand another factor determining the RGM
One of the reasons why the RGM in Michelin was held to be the Netherlands was because dealers established in the Netherlands obtained their supplies only form suppliers operating in the Netherlands.
Microsoft
Held that PC operating systems, the work server operating systems and the streaming media players each constituted their own separate markets (because there was low supply substitutability between them)
Commission went on to find that Microsoft had a dominant position in the PC operating market which it had abused by including its Windows Media player with its Windows operating system. This induced users and software developers to rely solely on the player instead of other streaming
Hugin Kassaregister AB v Commission
1) (RPM) If aftermarket – an undertaking which is not dominant in the primary market may be dominant in the after market. Thus, the commission may look at the aftermarket to establish whether dominance exists in that market specifically.
2) (Dominant position) Hugin was the only company in the UK that manufactured spare parts for Hugin cash registers because the design for the cash registers was patented
Facts: Hugin held a 12-13% share of the cash register market. However, in the market for the repair of Hugin cash registers, it held a monopoly, for only its spare parts could be used to fix broken cash register,
Hugin refused to supply spare parts to indecent repairers (Liptons in this case) that could be used to fix broken register. Hugin was able to prevent them using other spare parts through asserting its design rights.
The commission held that there was a separate market for spare parts for Hugin cash registers, that Hugin was dominant in the market and that a refusal by Hugin to supply spare parts to the firms who hired out and maintained cash registers could amount to an abuse of a dominant position
Alsatel v Novasam
ECJ is reluctant to define a region of a MS as the RGM
ECJ held that the relevant market in which Alsatel operated was the market for the rental and maintenance of telephone installations in France as a whole and not, as Novasam had argued, the market for the region of Alsace-Lorraine (the competition were sufficiently homogenous throughout the whole of France as private installers had to be authorized by the French authorities and those authorisations applied throughout France
B&I Line plc v Sealink Harbours Ltd and Sealink Stena Ltd
Volume of trading also another important factor in determining ‘a substantial part’ of the EU
Nestle / Perrier
Customer demand also important factor in determining a substantial part of the EU
The RGM for mineral water was found to be restricted to France. This was because French consumers continued to privilege local products, despite the fact of the integration of the European market
Hilti
1) Hilti AG v Commission
- Tried to defend itself from infringing with Article 102 by suggesting that the product it manufactures (nail guns) belong to a larger market of industrial fasteners, rather than the market of ‘nail guns’.
- If this has been accepted, Hilti’s place in the overall market would have been relatively small and it could not have offended Article 102, as it would not have been dominant —- Court: rejected this argument – held that Hilti held a dominant position not only in nail guns, but also Hilti compatible cartridges and Hilti compatible nails
2) Transport costs and restriction may also affect the RGM
- Such costs may limit the geographical scope of the relevant market for bulky products of low value. In contrast, a product which is small and light may be considered capable of being supplied without any significant difficulty over a wide area of the EU
Benzine en Petroleum Handelsmaatschappij BV
Only case on RTM
The commission found that the sudden severe shortage (caused by the OPEC crisis) transformed the market in petrol for the duration of the crisis as firms found that they could not buy petrol on the world market and so became completely dependent on a few large suppliers with oil refineries in the Netherlands
The Commission held that one of these large suppliers, BP, had abused its dominant position by cutting back suppliers to ABG far more sharply than it had to other customers. The ECJ was prepared to accept the Commission’s analysis of the market conditions, although it held that BP had not abused its position
