Abuse of dominanceDefinition of abuse of dominance
How is abuse of dominance defined and identified? What conduct is subject to a per se prohibition?
Section 5(1), first sentence of the CartA establishes a general prohibition of the abuse of a dominant position. The second sentence of section 5(1) of the CartA provides a non-exhaustive list of five examples of what may in particular constitute abusive behaviour:
- imposing purchase or selling prices or other trading conditions different from those prevalent under effective competition;
- limiting production, markets or technical development to the detriment of consumers;
- applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
- making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts; and
- selling goods below costs without objective justification.
The concept of abuse of dominance in Austrian law is generally considered as being largely identical in substance to the prohibition of abuse in article 102 of the TFEU, and the Austrian courts routinely refer to the case law of the EU courts in applying section 5 of the CartA. Similarly, the examples provided in section 5(1), Nos 1 to 4 of the CartA are largely identical to the four typical forms of abusive behaviour specified in article 102(a) to (d) of the TFEU. Accordingly, the concept of abuse is considered to be objective, and based on the idea that while a dominant position itself is not illegal and a dominant undertaking continues to be entitled to fully compete on the merits, it has a special responsibility to ensure that its conduct does not further distort competition. That responsibility may even extend to conduct by third parties, such as distribution agents, if the conduct can be imputed to the dominant undertaking (see Supreme Cartel Court in Fachverband Reisebüros v Lufthansa, 12 July 2018). Aspects where the Austrian law on abuse of dominance is stricter than EU competition law concern mostly procedural issues, such as the presumptions for dominance established by section 4(2) and (2a) of the CartA and rules on the burden of proof with regard to predatory pricing, as established by section 5(2) of the CartA.
Like article 102 of the TFEU, section 5 of the CartA is not based on per se prohibitions (at least not in the strict sense). The examples listed in section 5(1), Nos 1 to 5 of the CartA as well as other categories of abusive behaviour identified by case law only designate behaviour that is considered ‘typically’ anticompetitive, not ‘per se’. Hence, it is always possible to adduce additional circumstances or reasons for objective justification that might warrant an alternative assessment of a particular behaviour based on the specific circumstances of the case. However, section 5 of the CartA could be considered as following a ‘form-based’ approach insofar as at least some forms of behaviour are presumed to be anticompetitive unless the existence of special, justifying circumstances is established. In any event, as Austrian competition law is not based on a consumer welfare standard, relevant anticompetitive effects are not limited to consumer harm, but include also distortions of competition to the detriment of other market participants. In this regard, the Austrian courts emphasise the need to balance the legitimate interests of the dominant undertaking with the objective of protecting competition, namely, the possibility of other market participants to compete on the merits.Exploitative and exclusionary practices
Does the concept of abuse cover both exploitative and exclusionary practices?
Yes.Link between dominance and abuse
What link must be shown between dominance and abuse? May conduct by a dominant company also be abusive if it occurs on an adjacent market to the dominated market?
As a rule, conduct amounting to potentially abusive behaviour must occur on the market where the dominant position is being held. However, the Austrian case law has, in accordance with the case law of the EU courts, refused the necessity of a strict causality test. In exceptional cases, the conduct may therefore also occur on other markets. This may be the case either if the markets are closely linked, or if the conduct is otherwise liable to either reinforce the dominant position on the dominated market or to leverage the dominant position to the market where the conduct occurs.Defences
What defences may be raised to allegations of abuse of dominance? When exclusionary intent is shown, are defences an option?
A dominant undertaking may always invoke legitimate reasons for objective justification. For example, the Supreme Cartel Court recently held that tying the delivery of liquid natural gas with the renting of liquid natural gas tanks from the same undertaking is objectively justified, owing to the dangers connected with the services and because it had been established that when those services were provided separately, accidents were, although still rare, more likely.
Efficiency gains may provide a reason of objective justification as well, provided that the efficiencies gained are real, the conduct is strictly necessary to achieve those efficiencies, the efficiency gains for consumers outweigh other negative effects, and effective competition is not completely eliminated.
Whether exclusionary intent excludes the possibility to objectively justify an otherwise abusive behaviour has not been decided by the Austrian courts yet. Arguably, as the concept of abuse is objective in nature, the intent of the dominant undertaking ought to have only limited, if any, relevance for the legal assessment of the conduct. However, it is conceivable that competition authorities and courts might take an established exclusionary intent into account when assessing the credibility of exculpatory submissions and evidence. In practice, an established exclusionary intent may therefore diminish the chances of a successful defence.