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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.
Conclusion 101 A. Further Areas of Research Further areas of research can include the examination of cases where the Commission examined a possible abusive conduct by an undertaking but did not sustain the allegation on the basis that the undertaking was not found to be dominant. If it can be proved that the conduct of this undertaking was harming consumer welfare to a significant extent then the Commission ought to be able to address it with sanctions. Unfortunately the Commission does not publish detailed decisions where it states that an abuse has not been substantiated. 8 In addition, it would be interesting to assess whether the cases that have been found in the Member States that have the ability to capture anti-competitive conduct of non-dominant firms could have been caught by the Commission. The identification of such cases would illustrate the consumer welfare harm that the Commission is not able to capture due to its inability to address the gap in the application of Article 82. This identification could even incorporate the detailed types of conduct of non-dominant firms that are likely to induce significant consumer harm. 9 Additionally, future research could focus on the issue of the cost, the availability and proportionality of remedies to rectify harm in the equilibrium status quo. Such research would provide interesting insights in the means of rectifying anti-competitive conduct of non-dominant firms. A relevant factor will also be the ease of monitoring and enforcing compliance notwithstanding the possibility of setting a compliance programme. The effectiveness of any remedy may be reduced if elaborate, and possibly costly, monitoring and compliance programmes are required. Ideally though, the Commission should ensure that it has the means to address such conduct and can use its discretion and expertise to identify proportionate remedies. In imposing the remedies the Commission should ensure it does not ‘over-correct’ and thus dampen innovation or the competitive process in general. Drawing a parallel from the enforcement of section 5 of the FTC Act, according to Creighton et al, 10 section 5 (which applies to conduct that is beyond Sherman Act applicability) should not, be allowed to impose antitrust liability for conduct that does not threaten these fundamental principles of antitrust—that is, the latitude that Congress built into section 5 should not be used to sacrifice efficient behavior for insignificant or illusory increases in consumer welfare or to shield competitors from the 8 Although following Regulation 1/2003, the Commission can publish such decisions. 9 In addition, the possibility of anti-competitive conduct by non-dominant firms in dynamic oligopolies with free entry and the impact of such conduct on long-term consumer harm also merit further research. 10 S Creighton et al, ‘Some Thoughts About the Scope of Section 5’ FTC Workshop on Section 5, 17 October 2008, www.ftc.gov, 2.
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Introduction The Treaty of Rome 195
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Introduction 3 tion of this concept
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CHAPTER 1 Objectives of Article 82
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Objectives of Article 82 7 economic
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Objectives of Article 82 9 Director
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Objectives of Article 82 13 product
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CHAPTER 2 Concept of Dominance The
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Concept of Dominance 17 The stateme
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Concept of Dominance 19 criticisms
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CHAPTER 3 Abuse of Superior Bargain
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Abuse of Superior Bargaining Positi
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CHAPTER 4 The Gap in the Applicatio
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