Abuse of Economic Dependence - The Centre for European Policy ...

100 A Gap in the Enforcement of Article 82
The answer to the question whether Article 82 should apply to non-dominant
conduct should be answered in the affirmative. The focus of the investigations
should be conduct of non-dominant firms that induces consumer
harm. By accurately enforcing Article 82 to such conduct, any inhibition of
innovation and R&D is likely to be minimal. The more legal certainty that
the Commission and the CFI/ECJ (through their approval of cases against
the conduct of non-dominant firms) can infiltrate in the legal and business
community, the less inhibiting is the enforcement of Article 82 going to be
for the innovation and R&D of non-dominant firms. As mentioned above,
the possibility of some Type I errors should not prevent the Commission
from having the ability to address anti-competitive conduct of non-dominant
firms. Through a less rigid application of the dominance test the
Commission may be able to reduce both Type I and Type II errors.
Answering these questions will ensure a competition enforcement system
where conduct significantly harming consumer welfare will be penalized
irrespective of whether the conduct is attributed to a dominant or a nondominant
firm. The conduct that should be subject to sanctions is the
conduct of firms enjoying market power, and as we illustrated in this book,
market power does not necessitate the highest market share as seems to be
the practical treatment of market power by the Commission and the
Courts.
We should reiterate ECJ’s definition of dominance in Hoffmann-La
Roche 7 where the ECJ defined the notion of dominance as ‘a position of
economic strength enjoyed by an undertaking, which enables it to behave
to an appreciable extent independently of its competitors, its customers and
ultimately of consumers’. This independence that the ECJ gives emphasis in
its definition of dominance does not necessitate the highest market share in
a market. It necessitates the ability to adopt anti-competitive conduct without
a credible threat of customer reaction (eg switching to the products of
rivals) that would prevent the adoption of such conduct. In such market
structures, that are analysed herein, conduct of non-dominant firms can
induce consumer harm and should become subject to Article 82.
This book has clearly illustrated the gap in the enforcement of Article 82.
The Commission is unable to capture the conduct that not only the Member
States can address with legislation on abuse of superior bargaining position/abuse
of economic dependence but conduct that the US FTC can
address by applying section 5 of the FTC Act. The Commission following
some of the analysis and means identified herein should attempt to address
this gap and improve the accuracy in the enforcement of Article 82.
7 Case 85/76, Hoffmann-La Roche & Co AG v Commission [1979] ECR I-461, § 38.