EU - Competition Art 102 Flashcards
Re Italian Flat Glass
+ 2 Cases
Undertaking definition same as art 101 -
Polypropelyne, and Hofner and Elser - Undertaking defined as an entity engaged in commercial activity, regardless of legal status and the way it is financed.
Collective Underdaking
CEWAL, Laurent Piau
- • No requirement for an agreement or other legal links
- • Oligopolies conduct may be caught.
- • Art 101 and 102 not mutually exclusive, claimant may raise both.
- • Also need abuse – more than parallel behaviour.
DOMINANCE
Continental Can
+ 2 steps
Only relevant to a particular market
- identify relevant market;
- assess undertaking’s position / power over market
Case 22/78 Hugin
No specific quantitative thresholds set out in TFEU, so necessary to consider case law re % market share
United Brands
Dominant position – refers to economic strength of undertaking which gives power to behave independently.
• Market Definition:
o Relevant product market, (RPM)
o Relevant geographical market (RGM)
o Temporal factors.
Market Share prorportions
- AKZO Chemie BV 50% considered very high, Rebuttable presumption of dominance.
- United Brands – 40-45% considered dominance taking into account other factors such as barriers to entry.
- Michelin – 57-65% Dominance if rest of the market is fragmented less than 10% shares.
- Hoffman La-Roche – must study over number of years.
Barriers to Entry Objective reality
- United Brands – Investment, Distribution / retail networks & customers, economies of scale.
- Hoffman La-Roche – Relationship accused undertaking and competitors, Technology, Sales network.
- Michelin And Sealink must be Substantial part of internal market – though this may be one state alone.
Art 102 – non exhaustive, can be any abuse.
Clearstream Banking AG – 3 Principles
- duty to market and consumers not to distort or harm.
- Refusing to supply or Discriminatory pricing.
- Firm may infringe art 102 without fault.
Abuse types:
- Exploitative – Imposes unfair conditions on consumers.
- Anti Competitive – Prevents or weakens competition – Actual or potential competitors
Excessive or Discriminatory Pricing:
- United Brands - rigid partitioning of national marktets and prices unrelated to economic value = abuse.
- T-Mobile + Vodafone – Roaming charges discriminatory on location.
Predatory Pricing
(4)
- AKZO Chemie – art 102 prohibits dominant undertaking from eliminating competitor and thereby strengthening position in competing on terms other than quality. Not all price competition legitimate.
- below av. Variable cost – Rebuttable Presumption Abuse
- below Av. Total – (fixed costs + variable) – Burden proof on EU
- Tetra Pak II held to have abused position in a market it was not dominant in where there was close associative links between the two.
Refusal to Supply
(3)
- Commercial Solvents – being in a position to control supply of chemicals or derivatives cannot refuse to supply unless there is objective justification.
- Contrast with BP v Commission – reducing supplies to an insignificant and irregular customer is permissiable.
- United Brands – Dominant firm cannot refuse a regular customer in usual practices.
Doctrine of Essential Facilities (copyright / IP)
- Radio Telefis Eireann v Commission [1995] – A dominant company must not carry out secretive conduct that goes beyond that necessary to fulfill business, particularly if business involved in essential facility.
- Oscar Bronner v Mediaprint. Access to a home delivery system for newspaper delivery not an essential facility, indispensable requirement to compete in the market. CJ added essential facility is that for which there is no substitute possible.
Tying Arrangements
(2)
- Microsoft (Commission Decision) – refusing to supply information to enable interfacing with other systems, and tying media player to its operating system.
- Commission Decision IBM Maintenance Services – IBM tied hardware and software on Mainframe computers, closed case after commitments.
Discounts and Rebates
(3)
• Hoffman LaRoche – fidelity rebates on basis or commitment to purchase all goods exclusively will amount to an abuse.
o Would deter new entrants and apply different prices to consumers for same quantities.
• Michelin France (II) – Rebate systems not permissible.
• Intel Corporation – Gave hidden rebates to manufacturers in return for fidelity commitment to purchase.
o Target and Loyalty = abuse.
Permissible Discounts
(1)
• Michelin France (II) – those based on volume of 1 transaction
4.
ABUSE MUST BE CAPABLE OF AFFECTING INTER MEMBER STATE TRADE
(3)
- Effect on market structure not enough to satisfy condition.
- Commercial Solvents - Similar to condition Art101
- Refer to commission notice on ‘effect of trade’ concept. (don’t need to explain just mention’
Summary
- 6 Stages
- Undertaking - one or more - Polypropelyne / CEWAL / Laurent Piau
- Dominant position - Relevant market (RPM>RGM>Temporal) - Market Share + barriers?
- Abuse contrary to art 102? - Non exhaustive.
- Potential effect on interstate trade?
- No exemptions - Onjective justification limited
- Consequences of breach - Enforcement.
