Competition - Art.102 - Dominant Position

Question 1

Define Dominance

Answer 1

A position of economic strength (market power) which allows the undertaking to prevent effective competition in the relevant market

Question 2

Test for Dominance

Answer 2

Does the undertaking’s economic strength allow it to behave independently of both its customers and competitors

Question 3

Relevant Product Market (RPM)

Answer 3

All those products/services regarded as interchangeable by the consumer - EUROPEAN COMMISSION NOTICE (applied in UNITED BRANDS)

Question 4

Relevant Product Market (RPM) - Test 1

Answer 4

Demand Substitutability - Would a small but lasting increase in the price of product A cause product A’s customers to switch to a readily available substitute? - UNITED BRANDS

Question 5

Relevant Product Market (RPM) - Test 2

Answer 5

Supply Substitutability - Could potential competitors switch to producing the same products as the undertaking in question without incurring significant additional costs or risks?

Question 6

Relevant Geographic Market (RGM)

Answer 6

The area of the common market where the conditions of competition are homogenous - EUROPEAN COMMISSION NOTICE (applied in UNITED BRANDS)

Question 7

Relevant Geographic Market (RGM) - Assume the RGM is the whole of the EU (____) - Then work inwards (i.e.: ‘only in English-speaking countries’)

Answer 7

HILTI AG - Go on to consider factors highlighted in UNITED BRANDS - Transport costs, Product characteristics, Shipping patterns, Location of plants

Question 8

Does the figure raise a Presumption of Dominance?

(1) Very large market shares = Evidence of Dominant Position ____
(2) Share of >50% raise rebuttable presumption of dominance ____
(3) Shares

Answer 8

(1) HOFFMAN LA ROCHE

(2) AKZO CHEMIE

Question 9

Joint Dominance

Answer 9

ITALIAN FLAT GLASS - Several companies, if united by economic links, may hold a dominant position all together

Question 10

Define Abuse

Answer 10

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

Question 11

Abuse - The presence of a dominant firm weakening the degree of competition, hindering the maintenance or growth of that competition

Answer 11

HOFFMAN LA ROCHE

Question 12

Abuse - A dominant firm has a special responsibility not to allow its conduct to impair undistorted competition on common market

Answer 12

MICHELIN

Question 13

Abusive Practice - Unfair Pricing

(1) Excessively High Pricing
(2) Excessively Low Pricing

Answer 13

(1) UNITED BRANDS - Excessive profits by comparison to economic value of product
(2) AKZO CHEMIE - A strategy (‘vowed intention’) to drive out competitors

Question 14

Abusive Practice - Refusal to Supply

(1) Retaliation for Distributor helping a rival
(2) Eliminate Distributor from market

Answer 14

(1) UNITED BRANDS

(2) HUGIN

Question 15

Abusive Practice - Unjustifiable Price Discrimination between MS for same product

Answer 15

UNITED BRANDS

Question 16

Abusive Practice - Tying / Bundling - Buyer must purchase a scone, distinct product when purchasing the first

Answer 16

HILTI AG

Question 17

Abusive Practice - Abusive Discount Policies without corresponding Economic Efficiencies

Answer 17

HOFFMAN LA ROCHE

Question 18

Does the Abuse affect trade between MSs - It will if the conduct brings about…

Answer 18

An alteration in the structure of competition in the common market - COMMERCIAL SOLVENTS v COMMISSION

Question 19

Art.102 has Vertical and Horizontal Direct Effect - C may bring a private claim in the MS National Court

Answer 19

BRT v SABAM