Abuse of dominance

Definition of abuse of dominance

How is abuse of dominance defined and identified? What conduct is subject to a per se prohibition?

The Spanish Supreme Court has defined abuse in different resolutions (ie, 8 May 2003, Tandem Transportes and Ruta Sur) as an antisocial exercise of the exceptional economic freedom that a dominant position in the market grants.

The fundamental features of the notion of abuse would be:

  • typicality: conduct within the prohibition of article 2 of the SCA;
  • indeterminate legal concept: the conducts included in the SCA are exemplary and not exhaustive;
  • predictability: the qualification of the behaviour as abusive has to be predictable;
  • abuse is an objective concept that does not depend on intentionality or the causation of effects in the market; and
  • without reasonable economic justification.
Exploitative and exclusionary practices

Does the concept of abuse cover both exploitative and exclusionary practices?

The concept of abuse of dominance covers both exploitative and exclusionary practices. See below for the specific forms of abuse.

Abusive behaviour has traditionally been divided in Spain, as in other jurisdictions, according to the type of effect acts they are likely to produce. The classic debate arises over the ultimate goal of competition law in the matter of abuse, and whether it should be consumer protection, the process that involves effective competition or both.

Both types of abuse have been recognised by decision-making practice and jurisprudence, although in Spain the existence and pursuit of exploitative abuses due to excessive prices is more frequent than in other jurisdictions.

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?

If the concept of abuse is objective, it is not necessary to prove the connection of abusive behaviour with the exercise of market power. No causal link between the dominant position and its exploitation is required (ie, Astra Zeneca/Commission, decision of the EU Court of 6 December 2012).

Defences

What defences may be raised to allegations of abuse of dominance? When exclusionary intent is shown, are defences an option?

In addition to the legal exemptions of articles 4 and 5 of the SCA and the absence of any of the material requirements to which we refer in the answer to question 10, there are certain generic defences in Spain against the accusation of abusive behaviour:

  • objective and reasonable justification of the conduct;
  • compliance with a legal rule;
  • recognised illegality of the company victim of abuse;
  • sporadic nature of the practice;
  • consent or request of the client; and
  • indispensability or proportionality of behaviour.

It is perfectly possible to invoke, at any time and under any type of abuse, defences of objective necessity, the fact that conduct can be seen as a reasonable step by a dominant firm to protect its commercial interest or, more generally, efficiency enhancement effects of the conduct.