User:Franmollie1998/sandbox

= Market Dominance = The European Court in United Brands v Commission (1978) defined a dominant market position as“a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers”.

Article 102 TFEU
In the EU, unilateral or ‘dominant’ firm conduct is governed by Article 102 TFEU, previously Article 82 EC.

Article 102 TFEU prohibits undertakings which hold a dominant position within the EU or a substantial part of it from abusing that dominant position, in so far as it may affect trade between Member States.

It can be difficult to distinguish at what point a company is 'dominant' for the purposes of EU competition law. Dominance does not necessarily entail having a majority share of the market but a company with a share of 50% will typically be presumed dominant. Unless a company has been involved in previous competition law cases or findings of dominance in a merger context, it may be uncertain as to whether it is dominant as a matter of law.

Article 102 TFEU can be a controversial area as it is normal to try and succeed and be better and more successful than your competitors as this is a necessary part of a healthy competitive market.

It is this driving force that helps to achieve many of the consumer benefits that arise through a competitive market, such as lower prices and better quality, therefore the commission and courts have a diff task to distinguish at what point does competitive behaviour amount to an abuse of a dominant position.

Defining 'Abuse'
there is no comprehensive definition of abuse, however the Court of Justice in the case of Hoffman-La Roche v Commission (1979) provided a clear meaning of what abuse of dominance can amount to, stating that it is "an objective concept relating to the behaviour of an undertaking in a dominant position which is such as to influence the structure of a market where, as a result of the very presence of the undertaking in question the degree of competition is weakened and which, through recourse to methods different from those which condition normal competition in products or services on the basis of the transaction of commercial operators, has the effect of hindering the maintenance of the degree of competition still existing in the market or the growth of that competition."

Furthermore, the Commission and EU courts have applied article 102 TFEU and found abuse to come in many different practises that are not referred to by article 102 TFEU itself. this can be observed in AstraZeneca AB v Commission (2010) where the General Court held that the firm has abused its dominant position, despite the behaviour mentioned not being subject to article 102 TFEU.

Types of Abuse
The three main types of abuse to consider are exploitive abuse, exclusionary abuse and single market.

Exclusionary Abuse
Abuse categorised as ‘exclusionary’ is conduct engaged in by a dominant undertaking which is capable of preventing competitors, in whole or in part, from profitably entering or remaining active in a given market. Exclusionary practices are characteristically perceived as the most harmful type of abuse. This is because they can undermine the competitive process over the longer term, stopping small or new competitors becoming possible challengers to a dominant firm and thus repudiating customers the opportunity to benefit from better choice and competition.


 * predatory pricing (AKZO Chemie BV v Commission)
 * refusal to deal.
 * enforcing patent rights.

Exploitative Abuse
This type of abuse targets competitors and, thereby, harm consumers indirectly, due to exclusion of competitors and a consequent reduction in competitive offerings.


 * Dominant company charges excessive prices to its customers.
 * Charging different prices or offering different terms to similarly placed customers in circumstances where these differences cannot be justified by differences in the cost of serving those customers.

Single market Abuse
Conduct by a dominant company that obstructs and hinders the workings of the Single Market.


 * by restricting the flow of goods across national borders.

Objective justification
Certain abusive conduct will not violate Article 102 TFEU if the dominant company can ascertain an ‘objective justification’ for its actions. To prove this the dominant company will need to show that the conduct achieves a legitimate objective. This could entail protecting or enhancing a public interest.

An  ‘objective justification’ can only be considered not an exemption process parallel to the treatment of restrictive agreements under Article 101(3) TFEU.

Efficiency
Another possible defence is that the commission may consider a dominant undertaking to be justifiable if there is sufficient evidence that no net harm will come to consumers. With regard to this, a dominant undertaking will be expected to demonstrate, with a sufficient degree of probability, on the basis of verifiable evidence, that the following cumulative conditions are fulfilled.

It was made clear in Microsoft that the burden of proof “is for the dominant undertaking concerned, and not for the Commission, before the end of the administrative procedure, to raise any plea of objective justification and to support it with arguments and evidence. It then falls to the Commission, where it proposes to make a finding of an abuse of a dominant position, to show that the arguments and evidence relied on by the undertaking cannot prevail and, accordingly, that the justification cannot be accepted”.

Consequences of Breach
The Commission has the power to pursue unlimited financial penalites and custodial sentences of up to five years against individuals, although these must be imposed by a court. Companies and individuals may also be subject to confiscation orders.

Criminal sanctions apply only to those individuals who set up and maintain hardcore cartels i.e. agreements between competitors to fix prices, share markets, limit production, and rig bids (horizontal agreements). The offence is committed regardless of whether the agreement in question is implemented or not.