Criteria Applied In Delimiting Practice Of Dominant Position Abuse

AuthorOvidiu-Horia Maican
PositionLecturer, Ph. D, Law Department
Pages32-47
32 OVIDIU-HORIA MAICAN
CRITERIA APPLIED IN DELIMITING PRACTICE
OF DOMINANT POSITION ABUSE
Ovidiu-Horia MAICAN,
Academy of Economic Studies,
Bucharest, Romania
Abstract: Some undertakings enjoy such a strong position in a particular market and their
actions may result in the elimination of competition.
This is why art. 82 (formerly 86) EC seeks to deal with such strong undertakings by
prohibiting activities which could be regarded as an abuse of the undertaking’s dominant position
in a particular market.
In order to see if we are speaking about dominant position, we must see the presence of all
criteria (the relationship between the abuse and the dominant position, relevant geographic market,
relevant product market).
After the Treaty of Lisbon, the art. 82 EC is art. 102 TFEU. Even in such a situation, it
didn’t change too much in substance, like other provisions of the Treaty of Lisbon.
Keywords: European Union, Common Market, the relationship between the abuse and the
dominant position, relevant geographic market, relevant product market.
1. General aspects
Upon analyzing the contents of Art. 82 (formerly 86) EC, several elements
can be taken into consideration, leading to the configuration of the specific nature
of the practice of dominant position abuse in the context of competition.
First of all, the existence of a dominant position on a common market or on
an important part thereof is necessary1.
The Court of Justice defined the concept of dominant position referred to in
Art. 82 (formerly 86) EC as “a position of economic strength held by a company,
enabling it to prevent actual competition from being maintained on a relevant
market so that it acquires the discretion to behave independently of its
competitors, its clients and eventually, its consumers”.
E-mail: ovidiuszm@yahoo.com.
 Lecturer, Ph. D, Law Department.
1 See A. Fuerea, Community business law, Universul Juridic Publishing House, 2006, Bucharest,
p. 274.
Law Review vol. IV, issue 1, Januar
y
-June 2014, p. 32-47
Criteria applied in delimiting practice of dominant position abuse 33
Unlike the situation in which there is a monopoly or quasi-monopoly, “this
position does not impede a certain competition, but rather it allows the company
which takes advantage of such position if not to determine, then at least to have,
a considerable influence on the conditions under which such competition
develops and, in any case, to act by ignoring it as long as such conduct is not
detrimental to the company”2.
It was considered that holding a market share exceeding 60 per cent
constitutes sufficient evidence of a dominant position, without taking into
consideration exceptional circumstances. Even a smaller percentage can have
relevance in the case of a given significant difference, in respect of the share held
on the market of major competitors.
In any case, the existence of a dominant position was not admitted (save for
exceptional circumstances) if there is a share of 5 to 10 per cent held on the
market of highly technical products3.
A company may hold a dominant position even when it holds a market share
of 5 per cent, provided that the remainder of the market is occupied by much
smaller companies.
At the same time, it was considered that a company does not have to be big
in terms of its turnover; it is possible for fairly small-size companies, which
operate on specialized markets, to hold a dominant position, and also for distinct
companies, which by themselves are not dominant, to be placed in such position
jointly.
The market share held by a distinct company does not represent a decisive
criterion in order to have the market shares of some companies taken into
consideration, while the market share considered in itself provides only an
approximate clue to the market strength. It is necessary at the same time to
establish barriers upon entry of competitors on the market.
As the Court of Justice will have it, Art. 82 (formerly 86) EC refers to
practices likely to affect the structure of the market where the competition has
already been restricted as a result of the presence thereon of the dominant
company, and where, by using methods, other than those applied in the field of
normal competition regarding products or services on trader performance basis,
the consequence is the prevention of the preservation or development of the level
of competition still existing on the market.
In addition to owning a large market share, there are other relevant factors as
well, that prove the existence of a dominant position (the relation between the
positions held on the market by the companies involved and by the competitors
thereof, especially the competitors nearest to them, the fact that some companies
2 See D. Chalmers, C. Haddjiemmanuil, G. Monti., A. Tomkins, European Union Law,
Cambridge University Press, London, 2007, p. 1042.
3 See O. Manolache, Legal regime of competition in the community law, All Publishing House,
Bucharest, 1997, p. 139.
34 OVIDIU-HORIA MAICAN
are ahead of their competitors from a technological point of view, the existence of
a developed sale network, the absence of potential competition, the vertical
integration of a company, an upgraded commercial network, the reputation of a
trademark, membership in a group of companies operating all over Europe etc.)
Temporary lack of profit or even losses are not incompatible with the
presence of a dominant position. The fact that a price imposed by a company
does not constitute an abuse and that such prices are not higher does not support
the statement according to which there is no dominant position. In the same way,
the size, the financial strength and the diversity of the competitors of a company
at worldwide level cannot be deemed to deprive the company of a privileged
position, nor does this apply in consideration of the balance that may be
generated by the fact that the consumers of that product are experienced
commercial beneficiaries4.
A dominant position is not and must not be permanent, as the standing of a
company can fluctuate from a regular position to a dominant one and vice-versa,
in consistence with the changes on the relevant market or in the business
structure.
It is Art. 82 (formerly 86) EC again that shows a geographical market must be
defined in such a way so as to determine whether the respective company holds
a dominant position within the Community or within a substantial part thereof.
The defining of such geographical market implies an economic evaluation,
namely that it is formed of the territory on which traders operate in the same or
in fairly homogenous conditions of competition, to the extent it is concerned with
relevant products.
As a conclusion, it may be stated that it is not the geographical size of the
area, but rather its economic significance that is of relevance5.
The regional subdivision of a country may also be considered “a substantial
share” of the common market. In the same sense, we can apply a quality criteria
in considering this market or a substantial share of a market to be a competition
area involving many connections, often surpassing the boundaries of a certain
territory. Thus, the Court of Justice showed that when the holder of a dominant
position impedes the access of competitors on the market, it makes no distinction,
if such a conduct is limited to a single country or not.
A position held by a company that may be deemed as dominant can be
examined solely after having determined that the relevant market of its products
is distinct from other sectors of the general market. It is an idea that has also been
accepted.
The defining of the product market must take into consideration the entire
economic context, in such a way so as to make possible the evaluation of the
4 See D. Chalmers, C. Haddjiemmanuil, G. Monti, A. Tomkins, op. cit, p. 1042.
5 See O. Manolache, op. cit, p. 140.
Criteria applied in delimiting practice of dominant position abuse 35
actual economic strength of that company. In order to appreciate whether a
company is in the situation of conducting itself (to a considerable extent)
independently of its competitors, clients and consumers, it is necessary at first to
define the products which, though unlikely to be replaced with other products,
are fairly interchangeable with the products of that company, not only in terms of
the objective characteristics of such products but also in terms of the competition
conditions and offer-and-demand structure on the market6.
On the other hand, jurisprudence has taken into consideration the
consequences (outcomes) of a de facto monopoly on the Community market or
on a part thereof. It was considered that television companies are placed in a
dominant position when, due to a de facto monopoly over information regarding
the registration of their programs (programs received in most families in a
member country or in a substantial part of the number of families from an area
located in the vicinity of a member country), they are in the situation of impeding
the actual competition on the market of the weekly TV program magazines in the
territories considered.
Art. 82 (formerly 86) EC does not define the concept of dominant position,
unlike Art. 66, para. 7 CECO7.
In the United BRANDS case dated February 1, 1978, the Court of Justice
showed “…that the concept of dominant position contemplated by this article
refers to a position of economic power determined by a company which confers
it the discretion to prevent an actual competition from being maintained on that
market, making it possible for such company to conduct itself to a great extent
independently of its competitors, clients and, eventually, its consumers8.
A company is in a dominant position even if it does not hold monopolies and
even if a certain competition subsists on the market. According to the
Community jurisprudence, when the market shares held by the company
amount to 80 per cent or more, it is sufficient to prove the existence of a
dominant position. When the market shares amount to 40-50 per cent or more, it
is a serious indicator of the existence of a dominant position but in order to be
sure of it, other factors shall have to be taken into consideration, such as number
of competitors and the strength thereof. Criteria referring to conduct are used as
a complementary means.
Art. 82 (formerly 86) EC regards the Common Market or an important part
thereof. Even a country with a small area can constitute an important part of the
Common Market9.
6 See A se vedea Chalmers, Haddjiemmanuil, Monti., Tomkins, op. cit,, p. 1028.
7 See G. Druesne, Droit Materiel et politiques de la Commmunaute europeene, Publishing house
PUF, Paris, 1991, p. 191.
8 See A. Guedj, Practique du droit de la concurrence national et communautaire, Publishing house
LITEC, Paris, 2000, p. 76.
9 See Fuerea, op. cit, p. 274.
36 OVIDIU-HORIA MAICAN
This situation applies also to a region, provided that it is divided into
sections at this level. The Commission considers that the Brussels Airport, as a
Community component of trans-European airports, represents an important part
of the Common Market. The area is merely an element of assessment.
The market is the encountering point of demand and offer of products that
are identical or replaceable in terms of their utilization.
Substitution exists when consumers can buy the respective product from
different places because the quality and price of such products allow them to be
substituted.
A dominant position is evident of course when there is a de facto or legal
monopoly. It can also be the result of holding an important share of the
determined market. A 50 per cent market share is considered of utmost
importance. As a rule, structural criteria are being sought. This way a company
can be studied in order to see whether it is in a position of economic strength that
allows it to conduct itself independently of its competitors, clients and
consumers.
A dominant position can be held by one or several companies. There are
collective dominant positions. These are usually held by a group where the
companies that are part thereof do not have an actual autonomy. They can be
held by companies that are not part of a group but have economic relations10.
In the DIP Spa case dated October 17, 1995, the Court of Justice showed that
“in order to draw the conclusion that there is a collective dominant position, the
companies concerned would need to have sufficient relations with each other in
order to adopt a line of action on the market”11.
In the second place, the involvement of one or several companies would be
required (in order to describe the dominant position abuse). The Court of Justice
resorted to a comprehensive interpretation of the concept “company” as
addressee of the competition rules, thus including therein any unit carrying out
economic activities, irrespective of their legal form and funding nature12.
When we are dealing with more than one company, a distinction must be
made between the situations in which the companies have legal or factual
obligations towards one another (object of an agreement or of an actually
harmonized mutual conduct), and other situations that concern the parallel or
additional conduct of companies placed within an oligopoly (which implies a
small number of companies on the market and the existence of a parallel and
occult conduct).
In the first case, the provisions of Art. 81(formerly 85) EC apply, while
in the second case the provisions of Art. 82 (formerly 86) EC shall apply (as
there is a collective dominant position on the market). Since there is no
10 See Fuerea, op. cit., p. 275.
11 See Guedj, op. cit., p. 77.
12 See Manolache, op. cit., p. 141.
Criteria applied in delimiting practice of dominant position abuse 37
coordination between companies and parallel actions, they are deemed abusive
at individual level.
According to another assumption, when the conduct of two companies (of
which one is the controlling entity of the other and exercises it in fact) is
characterized by an evident unity of action in relation with third parties, then the
two companies must be deemed as an economic whole and the indicted conduct
is imputable thereto.
Third, there has to be a mutual relation between abuse and dominant
position. Taking into consideration that a certain practice carried out by one or
several companies is admissible because such companies do not hold a dominant
position, the same practice can become abusive if it is promoted by one or several
companies holding such position13.
In the same way, exclusivity (a natural commercial practice on a competition
market) can become an abuse of dominant position to the extent the company
placed in the dominant position has a special responsibility of not impairing an
actual and undistorted competition on the common market. At the same time,
while the existence of a dominant position does not deprive the company placed
in the dominant position of the right to defend its own commercial interests
(when they are not threatened) and while the company has the capability (to a
reasonable extent) of performing acts considered by it as appropriate for the
protection of its interests, still, a conduct aimed to strengthen its dominant
position and misuse such position are not admissible.
The situation in which a sale cooperative association in a dominant position
changed its statutes in the sense that it forbade its members to take part in other
cooperative organized forms competing with it, was not considered a situation of
dominant position abuse as long as such statutes provision was limited to what
was necessary in order to ensure proper operation of the cooperative society and
preservation of its contractual strength in relations with manufacturers.
In other conditions, the concept of dominant position depends also on the
abuse at stake, just like in the situation in which companies have shared
influence on an important part of the product or service market. Similarly, in case
certain companies resort to a selective reduction of prices, for the purpose of
removing exorbitant prices from the market, such action is grounded on the
financial strength sufficient to continue this practice in respect of competition,
thus a dominant position being imposed14.
There may be abusive price reductions or price increases (the Akzo Chemie
case).
In the US, abusive price reductions or price increases were considered to be a
form of antitrust liability by the 1945 judgment of the Court of Appeals for the
13 See S. Weathertill, P. Beaumont EU Law, Penguin Books London, 1999, p. 870.
14 See Guedj, op. cit, p. 77.
38 OVIDIU-HORIA MAICAN
Second Circuit in Alcoa. In this opinion, Judge Learned Hand ruled that a price
squeeze (abusive price reductions or price increases) infringes Section 2 of the
Sherman Act15.
In 2007, the European Commission fined a commercial policy practiced by
the Spanish company Telefónica. The Commission considered that a price squeeze
strategy is “a clear-cut abuse”. The Commission said that the reason for the
prohibition of price squeezes is the “disproportion between an upstream and a
downstream price”.
In April 2008, in the Deutsche Telekom judgment, the Court of First Instance
considered that price squeeze is a separate infringement of Article 82 EC.
Thus, a first approach characterizes abuse as a result abuse, i.e. it views
abnormal conduct. In a second approach, there is a structure abuse (the
Hoffman-La Roche case) whereby abuse is “an objective concept regarding the
conduct of a company in a dominant position, meant to influence the structure of
the market in which the extent of competition is already low as a result of the
presence of that company, and resulting in the prevention, by resort to means
other than those governing a normal competition of products and services based
on the performance of then economic operators, of the preservation of the extent
of competition still existing on the market or of the development thereof”.
In this case, the effect on the market is to be considered. Any additional
restriction of the competition, reduced because of a dominant position,
constitutes an abuse.
Abusive utilization can occur on a market other than the market that
constitutes the object of domination.
The Community law does not specifically provide for situations of economic
dependence abuse.
However, the Court of Justice admitted that television companies, due to the
fact that they hold monopoly on the information referring to programs, are in
dominant position and misuse this situation preventing the companies on the
market from absorbing weekly TV guides, having access to programs (the Radio
Telefis Eirean case of 1995)16.
2. The relationship between the abuse and the dominant position
The relation between abuse and a dominant position can be direct or
indirect17.
The relation is direct when the abuse occurs within the same market on
which the dominant position is held (such as unjustified refusal to supply
merchandise to competitors who cannot purchase it elsewhere).
15 See G. Faella, R. Pardolesi, Squeezing price squeeze under EC Antitrust Law, European
Competition Journal, Volume 6, Number 1, 2010, p. 260.
16 See Guedj, op. cit, p. 78.
17 See Manolache, op. cit, p. 134.
Criteria applied in delimiting practice of dominant position abuse 39
The relation is indirect when a company misuses its dominant position on
the market for the purpose of obtaining competition advantages on another
market (for instance, the purchase of certain goods is subject to the condition of
purchasing other goods).
The issue of the cause relation existing between abuse and dominant position
is not important because the strengthening of the dominant position of a
company can constitute an abuse and can be prohibited by Art. 82 (formerly 86)
EC, notwithstanding the means and procedure by which it is obtained, as long as
the effect is the substantial diminishing of competition.
In other respects, there is the possibility that forms of abuse be associated
with various interpretations of the concept of dominant position.
Thus, a company has, in a given situation, a dominant position if it is capable
of committing the respective abuse only because of its position on the market,
which could explain the necessity to show the prejudice elements caused to
buyers and manufacturers in each single case presented by Art. 86 lett. a)-d).
When the purchasers have alternatives to purchase from other competitors, we
are not dealing with an abuse, and we can therefore conclude that the respective
companies do not have a dominant position.
The concept of abuse may be constructed also from the perspective of the
creation of a common market and implementation of a non-distorted competition
system. The competition restriction permitted under the Treaty because of the
necessity to harmonize its objectives is limited in certain conditions by the
requirements of such legal regulations, and surpassing this limits presents the
risk of an incompatibility between competition attenuation and the objectives of
the Common Market.
Consequently, the abuse interdiction must guarantee the fact that companies
in dominant positions must not distort the dominant position in the direction of
obtaining certain advantages which could not be obtained by actual and
workable competition.
Actual and workable competition shall ensure that all markets, irrespective
of the number of participants, shall be subject to competitive action of existing or
potential competitors. Such markets shall be placed between two defining
models of the economic theory18:
- perfectly competitive market , where small companies compete in the
supply of a single product and no company has enough strength to have an
impact on the market price19;
- monopoly market, where one company alone, in charge of the supply of the
entire product, has the discretion to control the price. The company shall
maximize its profit up to the point in which, even in conditions of perfect
18 See J. Tillotson, European Community Law. Textes, Cases and Materials, CPL Publishing House,
London, 1996, p. 312.
19 See J. Tillotson, op. cit, p. 312.
40 OVIDIU-HORIA MAICAN
competition, it shall be able to impose a high monopoly price, if the demand
exceeds the offer 20.
Art. 82 (formerly 86) EC lists as examples such advantages, all of which
represent elements detrimental to beneficiaries.
The concept of abuse is defined by the Court of Justice as “an objective
concept referring to the conduct of a company in a dominant position, meant to
influence the structure of the market on which the competition extent is
attenuated as result of the presence of the respective company, and having as
outcome the prevention of the preservation of the competition extent still existing
on the market or of the development thereof, by resorting to methods other than
those which condition normal competition regarding products and services
object of transactions between commercial parties involved21.
The Court of Justice pointed out that a company is forbidden to adopt a
conduct that would have effects on the maintenance or increase of the degree of
competition existing on a market, where competition is attenuated as a result of
the presence of such company.
For this reason, the conduct of such a company can be classified and
sanctioned in accordance with the provisions of Art. 82 (formerly 86) EC.
The outcome of an anti-competition conduct is the distortion and lack of a
workable and efficient competition, as well as prejudices caused to beneficiaries
and competitor suppliers.
Because the list of dominant position abuses is not comprehensive, Art. 86
refers not only to practices that are directly detrimental to beneficiaries, but also
practices harmful to beneficiaries due to the impact thereof on the structure of
efficient competition22.
We are dealing with the latter category when a company in a dominant
position strengthens such position, in such a way that the domination level
attained substantially affects competition, which means that on the market shall
remain companies the conduct of which depends on a dominant one.
The Court of Justice stated that when a company acquires an interest
participation in a competing company, such can be deemed an abuse of
dominant position solely when such participation results in the actual control of
the other company or at least in a certain influence on its trade policy.
As far as the concept of abuse is concerned, the Court (Continental Can case)
sees abuse not solely as a result of the conduct of dominant companies, but also
as a result of the structural modifications that can reduce or eliminate the already
threatened competition. Therefore, it can be established that there is a situation of
dominant position intensification from the moment in which the domination
commences to set obstacles standing in the way of competition.
20 See Manolache, op. cit., p. 135.
21 See Manolache, op. cit., p. 136.
22 See Manolache, op. cit., p. 137.
Criteria applied in delimiting practice of dominant position abuse 41
Abuse can be horizontal (referring to the competitors of the company) or
vertical (referring to suppliers or users).
In the fourth and last instance, in order to assess the existence of a dominant
position abuse, it is necessary to assert the possibility of trade between member
countries being affected by an anti-competition conduct prohibited under the
Treaty.
This element does not differ substantially from the one provided by Art. 81
(formerly 85), para. 1, EC., the only difference (without any application effect)
lying in the use of the expression “to the extent it can affect…”.
The interdiction of dominant position abuse must be construed and applied
in view of the provisions of Art. 2 and Art. 3 lett. g) of the Rome Treaty, with
regard to a regime that will not distort competition on the internal market, and
the promotion of a harmonic and balanced development within the Community
overall23.
In order to estimate the possibility of trade being affected by such abuse, not
only practices directly causing prejudices to beneficiaries must be taken into
consideration, but also practices that affect them indirectly by alteration of the
actual competition structure.
In a certain case, the Commission determined by way of decision that the La
Roche company holds a dominant position on the market of vitamins, misusing
such position and violating Art. 82 (formerly 86) EC. Such violation occurred as
of 1964 whereby agreements were signed with 22 buyers. The agreements
provided the obligation of the buyers to purchase the entire or the largest part of
the necessary vitamin quantity exclusively or preferentially from this company in
exchange for a loyalty discount that would offer them a stimulant.
In case the holder of a dominant position (established on the common
market) tends to eliminate a competitor from the same market by abusively using
such position, it does not matter whether such conduct refers to its export
activities or to the activities carried out within the actual common market as long
as it becomes evident that such elimination shall have persistent effects on the
competition structure within the common market. No distinctions shall be made
with respect to the consequences of the abusive practices dependent on the fact
that an affected company exports mainly to third countries, as long as it is proven
that such abuse affects the structure of competition inside the common market24.
It was also considered that the difference between prices, which can be paid
by various clients of the company (by means of loyalty discounts) and which
varies depending on the consent or lack of consent of such clients to procure
from the company all they request, is of such nature that it places the clients at a
competitive disadvantage. This means that a certain buyer is deprived of, or
23 See Manolache, op. cit., p. 142.
24 See Manolache, op. cit., p. 143.
42 OVIDIU-HORIA MAICAN
restricted in, its possibility to choose its procurement sources, while other
producers are refused access to the market25 .
The conduct we are discussing here can be explained as the conduct of a
company in a dominant position on a market where the competition structure
has been affected and, as such, any additional impact on the competition
structure may constitute a dominant position abuse.
On the other hand, it is not necessary to prove that an abusive conduct
materially and significantly affected trade between the member countries but
only that it is likely to produce this effect.
Finally, it was admitted that Community law applies to a transaction that
influences the conditions of the market inside the Community, irrespective of the
fact that the company is located on the territory of one of the member countries.
The procedure whereby offenses in cases of dominant position abuses are
ascertained and ceased, is largely the same applied to covenants.
The possibility of the Commission to exercise its authority whereby it can
take provisional measures or decisions is identical to that provided by Art. 85 of
the Treaty, identical to that granted when a negative attestation is issued or a
decision adopted in view of putting a stop to an offense. However, the
Commission cannot grant exonerations from abusive utilization interdiction,
which accounts for the lack of notification formalities.
3. The relevant market
The concept of relevant market should be analyzed. A relevant market
represents the environment (framework) inside which commercial competition
actually takes place26.
The characteristics of the relevant market were defined for the first time by
the courts of law in the USA. Later, the concept was debated within the doctrine
of several countries, but a unity of opinion was not attained27.
A French author (J. Azema) defined it as “the place of confrontation between
demand and offer of certain products or services, that in the buyers’ opinion can
be substituted one for the other but cannot be substituted with other goods or
services offered”28.
In its turn, OCDE (Organization for Economic Development and Research)
adopted a similar description, which means that “the definition of the market
takes into consideration both the demand and the procurement. In terms of
demand, the products need to be substitutable from the buyer’s standpoint. In
terms of procurement, the market includes solely sellers who make the relevant
25 See S. Weathertill, P. Beaumont, op. cit., p. 872.
26 See Fuerea, op. cit., p. 272.
27 See O. Cpân, The notion of relevant market in commercial competition law “Romanian
Commercial Law Review”, nr. 4/1998, p. 7.
28 See Cpân, op. cit., p. 7.
Criteria applied in delimiting practice of dominant position abuse 43
product or can easily modify their production in order to provide substitution
products or related products”.
Taking into consideration such definitions, the concept of relevant market
proves to be a complex character which includes two components (the product
market and the geographical market).
The product market has two correlated sides, demand and offer29.
From the point of view of demand, a relevant market includes all products
(services) considered by consumers as possible to be substituted or interchanged,
because of characteristics, price and utilization.
The substitution possibility signifies the virtual existence of some alternatives
available to consumers, The difficulty derives from the fact that there are seldom
perfect substitutes. In practices, it is not necessary for alternative products
(services) to have identical physical or functional features or identical prices.
In order to delimit a certain relevant market, merchandise composition and
structure are used as indicators30.
Usually, products of same physical nature can be substituted with one
another. In opposition, differences of material nature between products (services)
show that they are not interchangeable, thus belonging to different relevant
markets31.
In spite of the above, occasionally the criterion of final utility supersedes the
material nature of the product. In this sense, the jurisprudence of the USA
Supreme Court of Justice showed that metal recipients and glass recipients
belong to the same relevant market, as they can be substituted with one another,
although they are made of different substances.
In a report in 1992, the Competition Council of France showed that the
technical analysis of product characteristics is not sufficient in determining the
control of a relevant market. This is owed to the fact that such analysis does not
reveal the potential conduct (reaction) of consumers (buyers)32.
The exclusive utilization of a purely technical examination has two
disadvantages.
The first disadvantage is then abusive simplification, starting from the
consideration of the product organic function alone.
The second disadvantage is that of excessive diversification.
The reaction of consumers towards the price differences of similar products
can represent an important clue in the delimitation of the relevant market.
If the price differences of similar products are maintained for a longer period
of time, it can be said that substitution does no longer apply. In this respect, the
29 See Cpân, op. cit., p. 8.
30 See Cpân, op. cit., p. 9.
31 See Chalmers, Haddjiemmanuil, Monti., Tomkins, op. cit., p. 1033.
32 See Cpân, op. cit., p. 10.
44 OVIDIU-HORIA MAICAN
French Competition Council stressed the fact that the price difference should
reach a level of 5 per cent in order to be taken into consideration33.
Another important influence is the one exercised by the consumer
preferences34.
In other words, the relevant market includes current sellers of the product as
well as potential sellers thereof. Potential sellers can be convinced to offer
substitute or related products if the product is attractive. The existence of
potential sellers, capable of moving from one relevant market to another has
benefic effects on the consumers, narrowing the maneuver margin of the already
existing manufacturers who tend to increase prices35.
The relevant geographic market comprises the location area of economic
agents engaged in the delivery of products or performance of services offered on
the respective relevant market.
In the process of defining the relevant geographic market it becomes
imperative to take into consideration the type and characteristics of the products
(services), the existence of barriers upon entry, consumer preferences, differences
in the market shares of economic agents in neighboring geographical areas, as
well as the level of expenditure determined by transportation.
If the transportation price exceeds a nominal threshold, the cost determines
the separation of certain relevant geographic markets. Consequently, the relevant
market of some products coincides, most of the times, with the national market.
The geographical unavailability of some products acts in the same way; due
to their fragility, easily alterable character or very large volume, such products
do not offer convenient access conditions to an area other than that of origin.
The relevant geographic market does not necessarily imply the manufacture
of goods in the same locality or in neighboring localities. What matters is
accessibility of all the concerned products (services) for the same buyers, so that
each single one of them represents an actual economic alternative, as compared
to similar offers within the relevant market36.
Geographical delimitation must be based on objective criteria. In this respect,
simple local specificity (for example the customs of buyers from a certain region)
or local manufacturing traditions cannot constitute factors for the individuali-
zation of an independent relevant market.
In 1997, the Commission published for the first time a Notification regarding
the defining of the market within community competition law (JOCE C no. 371
dated December 9, 1997)37.
33 See Cpân, op. cit., p. 11.
34 See Chalmers, Haddjiemmanuil, Monti., Tomkins, op. cit., p. 1031.
35 See Cpân, op. cit., p. 12.
36 See Cpân, op. cit., p. 13.
37 See Chalmers, Haddjiemmanuil, Monti., Tomkins, op. cit., p. 1037.
Criteria applied in delimiting practice of dominant position abuse 45
With regard to the market delimitation criteria, the Commission, though it
acknowledges the necessity to make a distinction between the delimitation of
product or service market and the delimitation of geographical markets, believes
the principles are identical in both situations.
For the delimitation of a market, it is necessary to take into account,
simultaneously, the substitutable character of the demand and of the offer as well
as the potential competition.
If the utilization of potential competition has a determining character in the
field of concentration control, the situation is not the same in cases of
anti-competitive practice control, where there is an issue of assessing past
conducts.
With regard to the delimitation of product or service market, the situation
must be analyzed not only in respect of the respective product or service, but also
in respect of the substitutable products or services38.
Although the Commission refers to the preferences of the client and the way
it perceives the respective product or services, they are hardly taken into
consideration by the Commission. The Commission does not revisit the
substitutable character of the offer, the necessity of this criterion being stressed
by the Court of Justice.
Certain reservations can be formulated with respect to the criteria proposed
for the purpose of the delimitation of the geographical market39.
The Commission considers prices of utmost importance, referring also to the
movement of orders towards other areas, the clients’ and consumers’ opinion as
well as the localization of purchased products.
The notification lists a series of interesting ideas regarding evidence of
market identity40.
For example, because competition law is a quasi-repressive law, normally
and logically who is assigned to give the proof task must also present proof of
the grounded character of the market analysis, an analysis he uses in his
reasoning.
The study of the notification shows that the Commission’s reasoning was
based on the practice used for assessing operations subject to notification, both in
situations of concentration operations and in the situation of certain applications
for individual exemption41.
The Commission underlines the fact that it particularly relies on information
provided by the parties. At the same time, the Commission shows that it shall not
38 See P. M. Cosmovici, R. Munteanu, The agreements between undertakings, Romanian Academy
Publishing House, Bucharest, 2001, p. 342.
39 See P. M. Cosmovici, R. Munteanu, op. cit., p. 343.
40 See See P. M. Cosmovici, R. Munteanu, op. cit., p. 344.
41 See P. M. Cosmovici, R. Munteanu, op. cit., p. 344.
46 OVIDIU-HORIA MAICAN
continue the analysis unless it is proven that different points of view on market
delimitation can have an effect on the appreciation of the merits.
After the Treaty of Lisbon, it was adopted on 3 December 2008 a Guidance
Communication on the Commission’s Enforcement Priorities in Applying Article
82 of the EC Treaty to Abusive Exclusionary Conduct by Dominant Undertakings
(the ‘Communication’ or the ‘Commission’s Guidance’).
According to paragraph 20 of the Communication, the Commission must
observe the position of the dominant undertaking, the conditions on the relevant
market, the position of the dominant undertaking’s competitors, the position of
the customers or input suppliers, the extent of the allegedly abusive conduct, and
direct evidence of exclusionary strategy42.
The status of the final document as a statement of enforcement priorities,
rather than guidelines on interpretation of art.102, reflects the tension between an
approach focused on real competitive harm that is the hallmark of the paper and
the traditional and more permissive approach to proving and finding abuse that
is part of the existing case law of the courts43.
4. Conclusion
What should be pointed out with respect to the effect dominant position
abuse or other anti-competition practices have on trade is that the market on
which such commercial activity is carried out should be taken into consideration.
Taking into consideration the EU jurisprudence, it can be asserted that it was
necessary to determine the areas where the conditions of competition are
homogenous.
The 2008 Guidance Communication incorporates the “more economic
approach” to art. 102 TFEU set out in the Commission’s 2005 Discussion Paper.
The legal regulation of dominant positin abuse is the same after the Treaty of
Lisbon.
References
Cpân, O. (1998) Noiunea de pia relevant în dreptul concurenei comerciale, Revista
de Drept Comercial, nr. 4, Bucureşti, (april, 1998), pp. 7-12.
Chalmers, D. Haddjiemmanuil, C. Monti., G. Tomkins, A. (2007) European Union Law,
Cambridge University Press.
Cosmovici, P. M. & Munteanu, R. (2001) Înelegerile între întreprinderi, Bucureşti, Ed.
Academiei Române.
42 See N. Petit, From Formalism to Effects? The Commission’s Communication on Enforcement
Priorities in Applying Article 82 EC, World Competition 32, no. 4/2009, Kluwer Law International,
2009, p. 496.
43 See J. Kallaugher, A. Weitbrecht, Developments under the Treaty on the Functioning of the
European Union, articles 101 and 102, in 2008/2009, European Competition Law Review, Issue 8,
Londra, Sweet & Maxwell, 2010, p. 310.
Criteria applied in delimiting practice of dominant position abuse 47
Couiu, A. Sabu, V. G (2008) Drept român şi comunitar al concurenei, Ed. C.H. Beck.
Druesne, G. & Kremlis, G. , (1990) La politique de concurrence de la Commmunaute
Economique Europeene, Paris, Presses Universitaires du France
Faella, G. & Pardolesi, R (2010) Squeezing price squeeze under EC Antitrust Law ,
European Competition Journal, Volume 6, Number 1, April 2010, pp. 255-284
Fuerea, A. (2006) Drept comunitar al afacerilor, Bucureşti, Ed. Universul Juridic
Guedj, A. (2000) Praqtique du droit de la concurrence national et communautaire, Paris,
LITEC,
Kallaugher, J. & Weitbrecht, A. (2010) Developments under the Treaty on the Functioning of
theEuropean Union,articles 101 and 102, in 2008/2009, European Competition Law Review,
Issue 8, Londra, Sweet & Maxwell, pp 307-316
Lazr, L. (2013) Abuzul de poziie dominant. Evoluii şi perspective în dreptul european şi
naional al concurenei, Ed. CH. Beck
Manolache, O. (1997) Regimul juridic al concurenei în dreptul comunitar, Bucureşti Ed.
All,
Petit, N. (2009) From Formalism to Effects? The Commission’s Communication on
Enforcement Priorities in Applying Article 82 EC, World Competition 32, no. 4/2009, Kluwer
Law International, Netherlands,pp 485-504
Tillotson, J. (1996) European Community Law. Texts, cases and materials, Londra, CPL
Ungureanu, D. (2010) Dreptul Uniunii Europene în domeniul concurenei.
Jurisprudena recent a Curii de la Luxembourg, Ed. C.H. Beck.
Weathertill, S. & Beaumont, P. (1999) EU Law, Londra, Penguin Books.

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT