The European Commission has published a paper setting out guidance on its enforcement priorities in applying EC Treaty rules on abuse of a dominant market position. This guidance is intended to provide the framework to deal with abuses of a dominant position while at the same time protecting consumers’ interests and promoting innovation.
The paper confirms that when assessing whether a company is in a dominant position, the Commission will consider whether a firm holds substantial market power over a significant period of time. However, the paper does state that the Commission is unlikely to view a company as dominant if it has a market share of less than 40 percent.
The paper describes the analytical framework that the Commission will apply when deciding whether to investigate a suspected infringement. In the first instance, the Commission will assess how the alleged abusive conduct could restrict competition by looking at market conditions, including relevant barriers to entry, the market position of competitors, evidence of actual foreclosure, and any implementation of a targeted exclusionary strategy. The paper confirms that the focus of the Commission’s enforcement policy is on conduct that harms the competitive process rather than individual competitors. As a result, when looking at pricing conduct the Commission will examine whether the conduct, is likely to prevent competitors that are as efficient as the dominant undertaking from expanding or entering the market.
Once the Commission has completed its assessment, the firm suspected of dominance may rebut any finding of detrimental consumer harm by showing that the conduct is likely to create efficiencies that benefit consumers. As such, the paper suggests that the conditions for exemption of otherwise anti-competitive agreements under Article 81(3) can also be used by companies to justify conduct that is covered by Article 82, relating to the abuse of a dominant position.
Having set out the general principles that will be applied when assessing alleged abusive conduct, the paper goes on to examine specific abuses, including exclusive dealing and rebates, tying and bundling, predatory pricing, and refusals to supply.
The paper is an attempt to establish a more economics-based approach to assessing abusive behaviour by dominant companies. It is hoped that the guidance and these targeted enforcement priorities will help dominant companies to comply with the competition rules without the fear of unnecessary investigation.
