Abuse of Dominance
Article 102 of the EC Treaty imposes restrictions on the conduct that dominant companies can undertake. The application of Article 102 requires dealing with the following issues:
- What is the relevant antitrust market?
- Does a company enjoy a dominant position?
- Is the practice under scrutiny able to foreclose rivals?
- Will foreclosure be likely to entail damage to consumers?
- Is the practice necessary to obtain efficiencies that will improve social welfare?
The review of Article 102 and the Guidance Paper issued by the DG Competition of the European Commission makes it clear that an in-depth economic analysis is essential to answer all these questions.
Commercial practices, such as discounts, tying and bundling, exclusive contracts and price discrimination are no longer considered abusive as a result of a mere formal analysis. A breach of Article 102 can now be found only if clear and convincing economic evidence exists that the practice is likely to exclude rivals and damage consumers, either in the short or in the long run.
We have considerable experience in employing micro-economic theory and advanced empirical tools to support firms in their ex-ante compliance with these provisions, as well as in their ex-post defense against allegations of anticompetitive behavior. We can help your company find the exact boundaries of your freedom to compete without imposing unnecessary restrictions to those initiatives that will allow you to gain new customers and improve your business.
Over the few last years, we have been involved in a large number of investigations into alleged abuses of a dominant position. Relevant cases we have worked on concern allegations of: refusal to supply and excessive pricing of an input for the production of active pharmaceutical ingredients (API), refusal to supply spare parts and maintenance services for elevators, excessive airport charges, foreclosure and discrimination in the mobile telecoms sector, and exclusive contracts in the TV market.
If your company needs advice for assessing whether one of your business practices or the behavior of your competitors may be in breach of Article 102, contact us.
Latest Engagements
Assessment of potential exclusionary conduct in the Slovenian fixed telecom market
Lear, together with Analysis Mason, assisted one of the major fixed telecom operator in the Slovenian market by evaluating the potential exclusionary effects of a proposed discount wholesale scheme. The analysis was mainly aimed at assessing whether the discount could alter competition in the retail market by discriminating retail operators’ access to the scheme.
Assessment of anti-competitive effects of conditional multi-product discounts to mass-market retailers
Lear assisted one of the biggest non-food consumer products manufacturer in assessing the potential effects on competition of a programme of conditional multi-product discounts to mass-market retailers for personal care products. Lear’s analyses followed closely the EU Guidance for the assessment of exclusionary conduct with regard to the conditional and multi-product rebates in a product […] Read more
Alleged abuse in the retail electricity market
The Italian Competition Authority started an investigation into Enel to ascertain whether certain practices by Enel could distort the competitive dynamics resulting from the full liberalisation of the market. Enel, as the only vertically integrated operator, allegedly leveraged on its upstream operations to foreclose competitors from the downstream market. Lear developed an analysis aimed at […] Read more
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