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

2 A Gap in the Enforcement of Article 82
‘(9) ... Member States may under this Regulation implement on their
territory national legislation that prohibits or imposes sanctions on acts
of unfair trading practice, be they unilateral or contractual. Such legislation
pursues a specific objective, irrespective of the actual or presumed
effects of such acts on competition on the market. This is particularly the
case of legislation which prohibits undertakings from imposing on their
trading partners, obtaining or attempting to obtain from them terms and
conditions that are unjustified, disproportionate or without consideration.’
Thus, the European Commission (‘Commission’) has acknowledged and
respected, in Regulation 1/2003, the ability of the Member States to apply
stricter rules than Article 82. These national laws in some EU jurisdictions
tackle the abuse of economic dependence. Abuse of economic dependence
relates to conduct by non-dominant firms, which induces significant harm
to consumers.
Article 82 is not applicable to firms that are not dominant, but as this
book will illustrate, there are instances where non-dominant firms have the
ability to behave independently of customers and competitors and adopt
conduct which will induce consumer harm. Such conduct cannot, however,
be addressed under Article 82. This gap in the application of Article 82
arises in all situations that the two biggest firms have close market shares,
their products are differentiated and although the biggest firm’s conduct
would be considered abusive, the second biggest 2 would not.
As the analysis herein will illustrate, there are two types of conduct that
cannot be addressed by Article 82 because the undertakings involved are
not dominant. One relates to conduct by non-dominant firms against other
firms in weaker bargaining positions. The concept of superior bargaining
position/abuse of economic dependence 3 typically includes conduct of
undertakings able to exercise market power only to a certain extent and in
relation to certain undertakings which are deemed to be capable of having
negative effects on competition. In some EU jurisdictions the concept
applies to non-dominant undertakings with relative market power in relation
to small and medium-sized suppliers or purchasers, and to non-dominant
undertakings with superior market power in relation to small and
medium-sized competitors. 4 In other EU jurisdictions the scope of applica-
2 Although throughout this book, reference will be made to the second biggest firm in the
market, the same arguments can be made for the firms with similar market shares in a differentiated
products market. Thus, if the third biggest firm’s market share is similar to the top
two, the same arguments as regards the consumer harm induced by adopting possible anticompetitive
conduct can be made.
3 The two terms will be used interchangeably.
4 Examples of conduct that constitutes abuse of superior bargaining position in Germany