An extract from The Dominance and Monopolies Review - 7th edition
Market definition and market power
Article 9(2) of the PRCA defines 'a dominant position' as a position of an undertaking or several undertakings when they can, to a significant degree, act independently of competitors, clients or consumers. Such an approach follows the case law of the European courts.
The basic definition of a 'relevant market' is provided in Article 3 of the PRCA, which also reflects EU competition legislation and case law, and is the same as the one used for merger control purposes. A 'relevant market' means a market defined by the relevant product or service market and the relevant geographical market. The 'relevant product or service market' represents a market that, as a rule, comprises all products or services that are regarded as interchangeable or substitutable by the consumer or user given their characteristics, their prices or their intended use. In turn, 'relevant geographic market' is defined as a market that, as a rule, comprises an area in which competitors in the relevant product or service market compete in the sale or purchase of products or services, and an area in which the conditions of competition are sufficiently homogeneous and that can be distinguished from neighbouring areas because the competition conditions are substantially different. In determining the dominant position, the CPA takes into consideration, in particular:
- the market share;
- financial options;
- legal or actual entry barriers;
- access to suppliers or the market; and
- existing or potential competition.
Article 9(5) of the PRCA defines the market-share threshold for dominance as follows: 'An undertaking shall be deemed to have a dominant position on the market if its market-share within the market of the Republic of Slovenia exceeds a threshold of 40 per cent.'
Even though the market-share threshold creates a legal presumption, such a presumption may be rebutted, since market share is an important, although not crucial, indicator of dominance.
Article 9 covers collective dominance, although there are no details on the assessment of collective dominance prescribed in the PRCA except for its presumption when the collective market share reaches a threshold of 60 per cent on the relevant market.
Although economics play a key role in the application of the dominance provisions, there are only a few cases where economic expert witnesses as external experts have been used in proceedings before the CPA; the analytical procedure is mostly performed by CPA employees who have knowledge of economics. Nevertheless, economic analysis is becoming a crucial part of more complex dominance cases. Court reviews of the CPA's administrative decisions in the abuse of the dominant position cases show that the CPA will have to strengthen its economic analysis. In the Mobitel (Itak Džabest) telecoms case, the Supreme Court (2013) annulled the CPA's infringement decision since the CPA, inter alia, failed to establish and transparently present all the relevant elements on which its cost–price analysis was based. Moreover, in Geoplin (2015), the Administrative Court held that the CPA, inter alia, failed to carry out an economic analysis of factors that are necessary for defining the relevant market, and returned the case to the CPA for re-evaluation.