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

The Gap in the Application of Article 82 77
care intermediary markets, he argued that several intermediary markets are
very concentrated and have significant barriers to entry. Intermediaries can
use their power to foreclose competition through a wide variety of exclusionary
practices. He added that where the practices of the intermediaries are
not wholly transparent, there may be opportunities for deceptive conduct. A
related market where Balto thinks section 5 should apply to the pharmacy
benefit managers market as they adopt several types of conduct which can
harm consumer welfare. Finally, he adds that although the original purpose
of group purchasing organizations was to obtain better pricing on products
than hospitals could obtain individually, and to provide value-added
services, and such organizations may reduce purchase costs by giving hospitals
greater bargaining power, the growing consolidation in the market and
the resulting market power has increased the exclusionary potential of some
of group purchasing organizations. Balto’s examples are focused on US
markets, but we can draw several parallels with markets across the EU. Such
conduct of non-dominant firms cannot be addressed by Article 82.
Balto (2008) adds that to the extent that potential enforcement actions
against market share discounts, or other forms of de facto exclusivity seem
deficient for some element necessary for a Sherman Act challenge, section 5
may enable the FTC to overcome that deficiency.
We should emphasize Balto’s argument that the Congress that enacted
the FTC Act created section 5 to enable the FTC to utilize its expertise to
challenge practices that were not technical antitrust violations. He adds that
the FTC should begin to use those powers in a careful and prudent fashion,
bringing enforcement actions that will bring significant benefits to
consumers. The Commission unfortunately has no such ability neither to
address any of the above-mentioned kinds of anti-competitive conduct, nor
to address any conduct that may be adopted by a non-dominant firm and
induce harm to consumers.
Salinger (2008), 88 argues that section 5 can fill in gaps left by the other
statutes. As examples of such gaps he mentions invitations to collude, as
well as facilitating practices. He adds that because section 2 outlaws only
monopolization, another possible gap in the Sherman Act is anti-competitive
behavior that creates market power short of monopoly. This is very
similar to the gap in Article 82 due to its inability to apply to anti-competitive
conduct of non-dominant firms. He adds that when the FTC uses
section 5 alone, it should do so to attack anti-competitive behavior that falls
into gaps left by the Sherman and Clayton Acts. The Commission has no
such ‘tool’ to address the enforcement gaps left by the inability of applying
Article 82 to the anti-competitive conduct of non-dominant firms.
88 Remarks of Michael Salinger at the FTC Workshop on Section 5, 17 October 2008,
www.ftc.gov.