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

How to Rectify the Gap 89
mentioned there are likely to be a significant number of complaints alleging
abusive conduct of non-dominant firms. The authorities in order to be
pragmatic in the enforcement of such legislation must be in a position to
decide which complaints to take forward. The decision of initiating an
investigation of a conduct will depend on the priorities of the authority as
well as on an initial assessment of the harm resulting from the allegedly
anti-competitive conduct of the non-dominant firm.
In the context of the application of section 5, Creighton et al argue 33 that
section 5 is in fact a good vehicle for what Congress intended—to define
and proscribe forms of anti-competitive conduct, even if they are hard to
analyze under existing Sherman Act precedents. They add that in relation
to section 5 of the FTC Act, the question to be considered is whether the
conduct at issue have the same effect, from an economic perspective, as the
types of conduct that are subject to liability under the Sherman Act?
Similarly we can ask whether the anti-competitive conduct of a non-dominant
undertaking has the same effect, from an economic perspective, as the
types of conduct that are subject to liability under Article 82.
Similarly, FTC Commissioner Rosch argues that there must be some
limiting principles on the application of section 5, whether the challenge is
made under the ‘unfair act or practice’ prong of the statute (the abovementioned
N-Data) or the ‘unfair method of competition’ prong (N-Data 34 and
Valassis 35 ). 36
In Ethyl, the US court described an unfair method of competition as
requiring at least some indicia of oppressiveness, such as (1) evidence of
anti-competitive intent or purpose on the part of the producer charged; or
(2) the absence of an independent legitimate business reason for its
conduct. 37 In Boise Cascade the court argued that in the absence of per se
illegal conduct, proof of actual or incipient anti-competitive effect is also
required when the theory is that there is an unfair method of competition. 38
Rosch added that it may be that the effect element of the claim can be
inferred from clear evidence of anti-competitive intent (and lack of ‘objective
justification’). He adds though there must be some evidence, direct or
circumstantial, of actual or incipient anti-competitive effect. 39
33 S Creighton et al, ‘Some Thoughts About the Scope of Section 5’, FTC Workshop on
Section 5, 17 October 2008, www.ftc.gov.
34 In the Matter of Negotiated Data Solutions LLC, FTC File No 051 0094 (23 January
2008).
35 In the Matter of Valassis Communications Inc No 51-0008 (14 March 2006).
36 See further: Welcoming Remarks of Thomas Rosch, FTC Workshop on Section 5, 17
October 2008, www.ftc.gov.
37 Ethyl, 729 F.2d at 139.
38 Boise Cascade, 630 F.2d at paragraph 582.
39 Welcoming Remarks of Thomas Rosch, FTC Workshop on Section 5, 17 October 2008,
www.ftc.gov.