Competition Law - Abuse of Dominant Position

Question 1

There are four questions that need to be answered to determine if a company has breached Art 102. What are they?

Answer 1

1. What is the relevant market?
2. Does the company have a dominant position?
3. Has the company used their position in an abusive way?
4. Has the abuse affected inter-state trade?

Question 2

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?

Answer 2

1. Relevant Product Market
2. Relevant Geographic Market
3. Relevant Temporal Market

Question 3

How does the court work out which RPM a certain product is in?

Answer 3

Interchangeability or product substitution

Question 4

In United Brands what features of bananas led the court to decide it was in a market of its own?

Answer 4

Seasonal at all times of year,
Utility for all ages (babies to elderly),
Prices unaffected except in summer months,
Flexible imports and marketing

Question 5

There are two ways of determining whether a product is interchangeable. What are they?

Answer 5

1. Demand side substitutability - where the ‘consumer’ can switch products easily
2. Supply side substitutability - where other competitors/suppliers are able to enter the market easily.

Question 6

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?

Answer 6

Societa Italiano Vetro v Commission (Italian Flat Glass)

Question 7

How did Continental Can successfully defend themselves in their case?

Answer 7

They argued they only had dominance for a very short period of time and competitors were entering the market.

Question 8

Which market did Hilti try to place themselves in? Which market did the CJ adjudge they were actually a part of?

Answer 8

Hilti tried to put themselves in the ‘industrial fasteners’ market. The CJ put them in the nail gun market.

Question 9

What test has been developed to figure out demand substitutability?

Answer 9

SSNIP test. Does a 5-10% increase in price move consumers away from the product

Question 10

How were Microsoft accused of abuse of a dominant market position?

Answer 10

They refused to make public their code for Windows Media Player

Question 11

In which two cases was the spare parts market (consumables market) held to be separate from the primary goods market?

Answer 11

Hilti and Hugin

Question 12

Give the two ways in which the CJ may decide on the RPM?

Answer 12

1. Intended use of the product

2. Marketing strategies

Question 13

In which case did the CJ decide on the RPM by looking at the intended use of the product?

Answer 13

Michelin

Question 14

What product did the case of Michelin concern?

Answer 14

Tyres

Question 15

What was Michelin’s argument on the tyre market?

Answer 15

There is only one tyre markey

Question 16

How did the CJ deduce there was more than one tyre market?

Answer 16

There was no demand substitutability between different tyre products.

Question 17

What had Michelin been doing to breach Art 102?

Answer 17

Handing financial rebates and bonuses to distributors.

Question 18

In which case did the CJ look at companies’ marketing strategies to find the relevant RPM?

Answer 18

BBI/Boosey & Hawkes

Question 19

What would the CJ do if RPM cannot be decided?

Answer 19

They would look at market power alone and decide on that basis.

Question 20

In which case did the CJ ignore RPM because they couldn’t decide what it was and look at market power alone?

Answer 20

BPB Industries and British Gypsum

Question 21

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’?

Answer 21

United Brands

Question 22

In Alsatel v Novasam what RGM dominance was required?

Answer 22

The whole of France

Question 23

What was Sealink Ltd accused of doing by B&I?

Answer 23

Giving all the best ferry times and slots to its own ferries because it controlled the port

Question 24

How might the cost of transporting goods affect the size of the RGM?

Answer 24

The less costly it is to transport goods the larger the RGM

Question 25

How does the CJ define dominance and in what case?

Answer 25

‘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)

Question 26

What factors may be taken into account to determine dominance?

Answer 26

Share of the market
Legal controls
Technological controls
Wealth
Vertical integration
Distribution controls
Brand identification

Question 27

At what percentage share of the market will the Court not need to look at any other factors to determine dominance?

Answer 27

+80%

Question 28

In what market did Hoffman-La Roche & Co hold a dominant market position?

Answer 28

Vitamins

Question 29

How did Akzo use their dominance to stave off competitors?

Answer 29

They undercut prices even selling at a loss when any competitor attempted to enter the market

Question 30

How was the ‘English clause’ used by Hoffman-La Roche to stave off competition?

Answer 30

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.

Question 31

What was Intel fined 1.06bn euros for?

Answer 31

Offering rebates to manufacturers of PCs

Question 32

What did Commercial Solvents Corporation do to infringe Art 102?

Answer 32

Refuse to supply a competitor

Question 33

United Brands were caught for refusing to supply. What in particular were they doing?

Answer 33

There were terms in contracts with distributors only allowing bananas to be shipped on to companies until their shelf life was nearly over.

Question 34

Which two companies were caught offering ‘tie-ins’?

Answer 34

Microsoft and Hilti

Question 35

What four criteria according to Microsoft must you fulfill to be charged with bundling contrary to Art 102(d)?

Answer 35

1. tied goods must not form part of the same product;
2. undertaking must be dominant in the tying product;
3. the customer must have no choice to disagree with the tie-in;
4. the tying closes out competition

Question 36

Which case tells us that an infringement of Art 102 that might affect inter-state trade is enough?

Answer 36

British Leyland v Commission