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

Recommendations

Info

48 A Gap in the Enforcement of Article 82 Economic Advisory Group, traditional means of establishing dominance through information about market structure are proxies for the determination of dominance; they assess the ability to exert power and impose abusive behaviour on other market participants. 21 The factors that need to be present for dominance, inter alia, include: • large market shares; • no close competitors; • customers have limited possibilities of switching supplier; • competitors are capacity constrained; • firm is able to hinder expansion by competitors. All respondents to the ICN questionnaire for the ICN Report stated that they use a comprehensive set of criteria to assess dominance and generally consider market share and barriers to entry or expansion and durability of market power as the most important criteria. Market shares are used as an initial indicator or starting point for the market power analysis. Over half of the agency respondents note that their jurisdictions use market share thresholds as a rebuttable presumption of dominance and/or a safe harbour. 22 The following list provides an overview of the assessment factors in order of their importance: • market share of the firm and its competitors; • market position and market behavior of competitors; • barriers to entry or expansion; • buyer power; • economies of scale and scope/network effects; • access to upstream markets/vertical integration; • durability of market power; • market maturity/vitality; • access to essential facilities; • financial resources of the firm and its competitors; • high prices (at absolute or comparative level); • profits of the firm. Market shares provide useful first indications of the market structure and of the competitive importance of various undertakings active on the market. Many ICN jurisdictions have some form of market-share-based presumption 21 EAGCP Report 14. 22 See Annex 2 of this book. Annex 2 presents a table (taken from the ICN Report) of the most important criteria that countries use to assess single firm dominance/substantial market power.
The Gap in the Application of Article 82 49 of dominance. Such presumptions may lead to increased enforcement efficiency and legal certainty. Jurisdictions have presumptions of different sorts and employ varying market share levels for their presumptions. The Commission interprets market shares in the light of likely market conditions, for instance, whether the market is highly dynamic in character and whether the market structure is unstable due to innovation or growth. The benefits of using market shares as a first indication must be weighed against the risks, in particular potential over-emphasis on market shares and thus potential enforcement errors. The Commission in the Discussion paper states that: It is very likely that very high markets shares, which have been held for some time, indicate a dominant position. This would be the case where an undertaking holds 50 per cent or more of the market, provided that rivals hold a much smaller share of the market. In the case of lower market shares, dominance is more likely to be found in the market share range of 40 per cent to 50 per cent than below 40 per cent, although also undertakings with market shares below 40 per cent could be considered to be in a dominant position. However, undertakings with market shares of no more than 25 per cent are not likely to enjoy a (single) dominant position on the market concerned. 23 Monti argues that this passage indicates the Commission’s ability to apply Article 82 to conduct of firms having low market shares. 24 Monti further argues that the legal passages 25 that the Commission refers to in the Discussion Paper imply that dominance is as likely to be found with market shares below 40 per cent as it is to be found with higher market shares. 26 The lowest market share which substantiated a finding of dominance is just under 40 per cent in BA/Virgin. 27 The Commission and the courts have 23 The Commission in the Guidance Paper argues that there may be specific cases below that threshold where competitors are not in a position to constrain effectively the conduct of a dominant undertaking, for example where they face serious capacity limitations. In such cases the Commission may also investigate anticompetitive conducts. Although the Commission makes an attempt to apply Article 82 on firms having low market shares which are able though to adopt anticompetitive conducts, it does not liberate the analysis from the factor of dominance. Thus, non-dominant firms having low market shares in differentiated product markets or in markets where capacity constraints are significant, can still adopt anticompetitive conducts and harm consumer welfare. § 31. 24 G Monti, ‘The Concept of Dominance in Article 82’, [2006] European Competition Journal 31–52, 50. 25 Gøttrup-Klim ea Grovvareforeninger v Dansk Landbrugs Grovvareselskab AmbA C- 250/92 [1994] ECR I-5641, United Brands v European Commission C-27/76, [1978] ECR - 207. 26 G Monti, ‘The Concept of Dominance in Article 82’ [2006] European Competition Journal 31–52, page 50. 27 BA/Virgin [2000] OJ L 30/1.
Page 1 and 2: Introduction The Treaty of Rome 195
Page 3 and 4: Introduction 3 tion of this concept
Page 5 and 6: CHAPTER 1 Objectives of Article 82
Page 7 and 8: Objectives of Article 82 7 economic
Page 9 and 10: Objectives of Article 82 9 Director
Page 11 and 12: Objectives of Article 82 11 Virtual
Page 13 and 14: Objectives of Article 82 13 product
Page 15 and 16: CHAPTER 2 Concept of Dominance The
Page 17 and 18: Concept of Dominance 17 The stateme
Page 19 and 20: Concept of Dominance 19 criticisms
Page 21 and 22: CHAPTER 3 Abuse of Superior Bargain
Page 23 and 24: Abuse of Superior Bargaining Positi
Page 43 and 44: CHAPTER 4 The Gap in the Applicatio
Page 45 and 46: The Gap in the Application of Artic
Page 47: The Gap in the Application of Artic
Page 61 and 62: from the legal norm itself. Article
Page 63 and 64: In this book we are focusing on the
Page 79 and 80: CHAPTER 5 How to Rectify the Gap Ge
Page 81 and 82: How to Rectify the Gap 81 As Faull
Page 83 and 84: How to Rectify the Gap 83 of the co
Page 85 and 86: How to Rectify the Gap 85 An argume
Page 87 and 88: How to Rectify the Gap 87 departing
Page 89 and 90: How to Rectify the Gap 89 mentioned
Page 91 and 92: How to Rectify the Gap 91 proportio
Page 93 and 94: How to Rectify the Gap 93 Depending
Page 95: How to Rectify the Gap 95 cases is
Page 98 and 99:
98 A Gap in the Enforcement of Arti
Page 100 and 101:
100 A Gap in the Enforcement of Art
Page 102 and 103:
102 A Gap in the Enforcement of Art
Page 105 and 106:
Annex 1 REPORT PREPARED BY THE ICN
Page 107 and 108:
Annex 2 REPORT PREPARED BY THE ICN
Page 109:
Annex 4 Appendix C of the ICN Kyoto
Page 112 and 113:
112 Bibliography P Callol, P Pignat
Page 114 and 115:
114 Bibliography Guidance on the Co
Page 116 and 117:
116 Bibliography J Leibowitz, ‘Ta
Page 118 and 119:
118 Bibliography I Roudard (1989),
Page 120:
120 Bibliography The Distillers Com
show all

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

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?