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Abuse
The abuse can be inferred as ‘conduct that is not competing on the merits and is likely to impair effective competition’.

There is no legal definition of abuse provided by the Treaty or any legislation. Article 102 was interpreted as to supervise the dominant undertaking’s ‘special responsibility not to allow its conduct to impair undistorted competition’. Conducts will be eligible for infringing Article 102 if they take methods ‘different from those which condition in products or services on the basis of the transaction of commercial operators’, which usually referred to as ‘not competing on the merits’. The Commission provides examples of ‘merits’

in its Guidance as ‘lower prices, better quality and a wider choice of new or improved goods and services’.

In the procedure, an effect-based analysis will normally be required in finding an abuse while the Commission retains the right to conclude the existence of consumer harm without carrying a detailed assessment. Some conducts like rebates are presumptively unlawful because the consumer’s harm is so likely to be felt on the market. The alleged party is allowed to respond with supporting evidence that the conduct in question was not capable of restricting competition. It is notable that ‘the room for the Commission to avoid effect analysis shall be, and has been reduced’.

Types of abuse
With regards to abuse, it is possible to identify three different forms that have been recognized: Exploitative, Exclusive and Single market. As was stated in case Continental Can the categories are not closed. Also, there is no rigid demarcation between exploitative and exclusive abuses.

Exploitative abuses

This type occurs whereby a dominant firm using dominant position to exploit consumers without losing them through conduct like price increase and production limitation. There is no legal definition of ‘exploitative abuse’ under Article 102 but it can be taken as ‘any conduct that directly causes harm to the customers of the dominant undertaking’. Without barriers to entry, the market is likely to be self-corrected by competition because monopoly profits will attract new competitors to enter the market. However, the Guidance does suggest that the Commission will intervene where the conduct is directly exploitative of consumers (for example, charging excessively high prices). Some examples of exploitative conduct include:


 * Unfair trading conditions

Imposition of conditions on its customers that directly harm them. Such as exploitation of copyrights imposes unnecessary obligations on its members. The Commission also condemned ticket selling arrangement which was held to be unfair to consumers who are not French.


 * Excessive price

Price set significantly above the competitive level. Article 102 explicitly bans unfair pricing which has been understood as to cover the excessive pricing. The charged price must be excessive and unfair to be abusive. The test used was stated in the United Brands case that whether the charged price has no reasonable relation to the economic value of the product supplied and exceeds what the dominant undertaking would have obtained in a normal and sufficiently competitive market.


 * Collecting societies

Organization with the authority to licence copyrights collects royalties from users of the copyright and distributes them to copyright owners for a fee. Abusive behaviour that has been banned by the Commission under Article 102 includes discriminating undertakings from other member states; charging excessive royalties; unreasonably restricting an author’s unilateral behaviour by clauses.

Exclusionary abuses
It can be defined as practices that has the effect of excluding competitors from the relevant market. The conduct will either ‘competes on the downstream market and is acting to foreclose that market to its own advantage’ or ‘distorts competition on the upstream market between itself and its competitors by introducing exclusive purchasing obligation. Some examples of exclusionary conduct include:


 * Exclusive dealing agreements

Includes exclusive supply obligation where the supplier is obliged to supply only one specific downstream customer, and exclusive purchasing obligation where a downstream customer can only acquire products from a specific supplier. Exclusive supply obligation is not usually a concern since it often represents commercial practice which is lawful. The EU courts in case Hoffman explicitly banned exclusive purchasing agreements but the agreement may be justified as this was mentioned in Para 46 Commission’s Guidance.


 * Tying    Main article:  Tying (commerce) 

Under Article 102(d) "tying" is defined as "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." Tying one product into the sale of another can be considered abuse too, being restrictive of consumer choice and depriving competitors of outlets. An unlawful tie may also be condemned even though it is connected with the commercial contract.


 * Bundling

Selling two or more products in a bundle with less price, which may in effect similar to tie-in agreement.


 * Refusals to supply

A refusal on the part of a dominant firm to supply goods or services. It may result in vertical foreclosure where the dominant undertaking which exists in both upstream and downstream market refuses to supply other downstream customers. Such behaviour ‘risks eliminating all competition on the part of this customer’ therefore is abusive.


 * Exclusivity rebates

Conditions on the consumer only buying from the dominant undertaking, which in effect equivalent to exclusive purchasing obligation. In case Intel v Commission, the exclusivity rebates were held to be presumptively unlawful.


 * Predatory pricing    Main article:  Predatory pricing 

Setting the price level below the cost with the effect of either disciplining existing competitors or foreclosing new entrant by potential competitors, thereby leading to consumer harm. Price competition is lawful thus what price could be predatory thereby leading to infringement of Article 102 remains uncertain.


 * Margin squeezing

Where the upstream dominant undertaking leaves an insufficient margin between the prices of its upstream and downstream products therefore allows the downstream undertaking to compete as efficient as the dominant firm. Margin squeezing without any objective justification is in itself capable of constituting an abuse under Article 102. The anti-competitive effect must be proved to establish that the margin squeeze is abusive.


 * Price discrimination    Main article:  Price discrimination 

The dominant undertaking applies dissimilar condition to equivalent transactions which places some trading parties at a competitive disadvantage. Price discrimination in itself cannot constitute an infringement of Article 102(2)(c). The dissimilar condition applied by the dominant undertaking has to ‘hinder the competitive position of some of the business partners of that undertaking in relation to others’.


 * Refusals to license intellectual property rights

Refusal by the dominant undertaking who holds the patent to licence a third party. The EU court in the Magill and the IMS cases concluded that refusal to license can result in eliminating new product which there was a potential customer demand.

Single Market

Abusive behaviour that is harmful to the EU single market. Such as excessive pricing that impedes parallel imports and exports; Rebates that impede imports and exports. Refusing to supply thereby discourage parallel imports; Geographical price discrimination which can not be explained in economic terms without any objective justification. __NOINDEX__ __NONEWSECTIONLINK__