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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

Alleged abuse in the retail electricity market

The Italian Competition Authority (ICA) 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 […] Read more

Alleged abuse of dominance in the italian copyright sector

The Italian Competition Authority claims that SIAE (the Italian collective rights management organizations) lacks transparency in the collection of royalties and discriminates among users, abusing its dominant position. Lear has supported SIAE by providing economic arguments in favor of SIAE’s legal monopoly and showing the inefficiencies that would be brought about by a departure from […] Read more

Alleged abuse of dominance in the market for maritime freight transport

Lear assisted Moby and CIN, which is fully owned by Moby, in proceedings before the Italian Competition Authority (ICA). The ICA claimed that Moby/CIN was abusing its dominant position in the market for maritime freight transport to and from Sardinia, with the aim of foreclosing rivals. Lear’s analysis highlighted the weaknesses of the ICA’s approach […] Read more

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