Competition Law - Abuse of Dominant Position Flashcards
There are four questions that need to be answered to determine if a company has breached Art 102. What are they?
- What is the relevant market?
- Does the company have a dominant position?
- Has the company used their position in an abusive way?
- Has the abuse affected inter-state trade?
When asking what market a company is operating in, what are the three kinds of relevant markets that the Commission/NCA will be concerned with?
- Relevant Product Market
- Relevant Geographic Market
- Relevant Temporal Market
How does the court work out which RPM a certain product is in?
Interchangeability or product substitution
In United Brands what features of bananas led the court to decide it was in a market of its own?
Seasonal at all times of year,
Utility for all ages (babies to elderly),
Prices unaffected except in summer months,
Flexible imports and marketing
There are two ways of determining whether a product is interchangeable. What are they?
- Demand side substitutability - where the ‘consumer’ can switch products easily
- Supply side substitutability - where other competitors/suppliers are able to enter the market easily.
Normally cases involving Art 102 are against one company, but which case shows that more than company can be charged at the same time of abusing a dominant market position?
Societa Italiano Vetro v Commission (Italian Flat Glass)
How did Continental Can successfully defend themselves in their case?
They argued they only had dominance for a very short period of time and competitors were entering the market.
Which market did Hilti try to place themselves in? Which market did the CJ adjudge they were actually a part of?
Hilti tried to put themselves in the ‘industrial fasteners’ market. The CJ put them in the nail gun market.
What test has been developed to figure out demand substitutability?
SSNIP test. Does a 5-10% increase in price move consumers away from the product
How were Microsoft accused of abuse of a dominant market position?
They refused to make public their code for Windows Media Player
In which two cases was the spare parts market (consumables market) held to be separate from the primary goods market?
Hilti and Hugin
Give the two ways in which the CJ may decide on the RPM?
- Intended use of the product
2. Marketing strategies
In which case did the CJ decide on the RPM by looking at the intended use of the product?
Michelin
What product did the case of Michelin concern?
Tyres
What was Michelin’s argument on the tyre market?
There is only one tyre markey
How did the CJ deduce there was more than one tyre market?
There was no demand substitutability between different tyre products.
What had Michelin been doing to breach Art 102?
Handing financial rebates and bonuses to distributors.
In which case did the CJ look at companies’ marketing strategies to find the relevant RPM?
BBI/Boosey & Hawkes
What would the CJ do if RPM cannot be decided?
They would look at market power alone and decide on that basis.
In which case did the CJ ignore RPM because they couldn’t decide what it was and look at market power alone?
BPB Industries and British Gypsum
In which case did the CJ define RGM as ‘an area where the objective conditions of competition applying to the product in question [are] the same for all traders’?
United Brands
In Alsatel v Novasam what RGM dominance was required?
The whole of France
What was Sealink Ltd accused of doing by B&I?
Giving all the best ferry times and slots to its own ferries because it controlled the port
How might the cost of transporting goods affect the size of the RGM?
The less costly it is to transport goods the larger the RGM
How does the CJ define dominance and in what case?
‘a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition … by giving it the power to behave to an appreciable extent independently of its competitors, consumers and customers’ (United Brands)
What factors may be taken into account to determine dominance?
Share of the market Legal controls Technological controls Wealth Vertical integration Distribution controls Brand identification
At what percentage share of the market will the Court not need to look at any other factors to determine dominance?
+80%
In what market did Hoffman-La Roche & Co hold a dominant market position?
Vitamins
How did Akzo use their dominance to stave off competitors?
They undercut prices even selling at a loss when any competitor attempted to enter the market
How was the ‘English clause’ used by Hoffman-La Roche to stave off competition?
The English clause is a term in a contract that asks for competitors’ information. Hoffman-La Roche allowed its distributors to buy competitors’ products but then give them their marketing details so they could match or undercut their prices.
What was Intel fined 1.06bn euros for?
Offering rebates to manufacturers of PCs
What did Commercial Solvents Corporation do to infringe Art 102?
Refuse to supply a competitor
United Brands were caught for refusing to supply. What in particular were they doing?
There were terms in contracts with distributors only allowing bananas to be shipped on to companies until their shelf life was nearly over.
Which two companies were caught offering ‘tie-ins’?
Microsoft and Hilti
What four criteria according to Microsoft must you fulfill to be charged with bundling contrary to Art 102(d)?
- tied goods must not form part of the same product;
- undertaking must be dominant in the tying product;
- the customer must have no choice to disagree with the tie-in;
- the tying closes out competition
Which case tells us that an infringement of Art 102 that might affect inter-state trade is enough?
British Leyland v Commission
