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

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72 A Gap in the Enforcement of Article 82 Section 131(2) of the Act states that, for the purpose of a market investigation reference, a feature of a market in the United Kingdom shall be construed as: (a) the structure of the market concerned or any aspect of that structure; (b) any conduct (whether or not in the market concerned) of one or more than one person who, supplies or acquires goods or services in the market concerned; or (c) any conduct relating to the market concerned of customers of any person who supplies or acquires goods or services. Conduct includes any failure to act, whether intentional or not and any other unintentional conduct. The CC will have regard to any conduct of the firms in a market (whether sellers or buyers) that could, in the circumstances of the particular market, have an adverse effect on competition (whether in the market in which the firms themselves are engaged or in some other market, for example, the market of the sellers’ suppliers or customers). The Competition Commission may require remedial measures as it considers reasonable and practicable to mitigate or prevent the adverse effect on competition or any detrimental effects on customers. 77 A firm may have market power, and the capacity to act in ways that may prevent, restrict or distort competition, with a market share below that usually regarded as necessary to suggest dominance for the purposes of CA98. For example, the Competition Commission may assess the effects on competition of certain forms of discounts and rebates. In many cases, discounts and rebates are normal components of the competitive process and will, in general, not be a cause for concern. However, where a firm has market power then the CC will consider whether any discounts or rebates offered might have adverse effects on competition. Thus, the CC approach towards discounts and rebates encompasses the assessment of such conduct by firms having market power and which are not necessarily dominant. The Commission cannot address conduct involving discounts or rebates unless the undertaking is dominant, curtailing thus its ability to capture anticompetitive conduct by non-dominant firms. The ability to adopt anti-competitive conduct will depend upon the effectiveness of the constraints exerted by its competitors or its customers. Where there is no abuse of a dominant position but structural features of the market nevertheless appear to affect the competitive process adversely, then a market investigation reference will be a possibility. Thus, adverse effects on competition induced by conduct that does not involve either 77 Market Investigation References: Competition Commission Guidelines, www. competition-commission.org.uk.
The Gap in the Application of Article 82 73 agreements between undertakings or abuses of dominance, although beyond the reach of CA98 this can be addressed by market investigation references. Such conduct is likely to include competition problems arising from uncoordinated parallel conduct by several firms or industry-wide features of a market in cases where the OFT does not have reasonable grounds to suspect the existence of anti-competitive agreements or dominance. Thus, if the market structure is such that non-dominant firms can induce consumer harm, the OFT and the CC can address such conduct by conducting a market investigation and adopting measures that will rectify this harm. On the other hand the Commission does not have the ability to address such anti-competitive conduct of non-dominant firms, an inability which induces consumer welfare harm and exacerbates Type II errors (ie not capturing anti-competitive conduct of non-dominant firms) in competition enforcement. After presenting the UK approach in addressing conduct of non-dominant firms, the focus turns on the ability of the US competition authorities to address conduct which does not fall within the ambit of Sherman Act but which induce harm to consumers. The US FTC Act provides the clearest example of legislation that is able to address gaps similar to the gap in the enforcement of Article 82. The Section 5 of the FTC Act enables the Federal Trade Commission (FTC) to capture conduct that cannot be addressed by the Sherman Act. § 45. Unfair methods of competition unlawful; prevention by Commission (a) Declaration of unlawfulness; power to prohibit unfair practices; inapplicability to foreign trade (1) Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful. (2) The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, savings and loan institutions described in section 57a(f)(3) of this title, Federal credit unions described in section 57a(f)(4) of this title, common carriers subject to the Acts to regulate commerce, air carriers and foreign air carriers subject to part A of subtitle VII of title 49, and persons, partnerships, or corporations insofar as they are subject to the Packers and Stockyards Act, 1921, as amended (7 U.S.C. 181 et seq), except as provided in section 406(b) of said Act (7 U.S.C. 227(b)), from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce. (3) This subsection shall not apply to unfair methods of competition
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
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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 61 and 62: from the legal norm itself. Article
Page 63 and 64: In this book we are focusing on the
Page 71: The Gap in the Application of Artic
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
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