Thursday, November 1, 2007
Abuse Below the Threshold of Dominance? Market Power, Market Dominance, and Abuse of Economic Dependence
Posted by D. Daniel Sokol
Pranvera Këllezi of the University of Geneva Faculty of Law adds to the literature on Article 82 with her analysis Abuse Below the Threshold of Dominance? Market Power, Market Dominance, and Abuse of Economic Dependence.
ABSTRACT: This article discusses the case law in the European Union as it relates to the concept of dominant position in connection with dependency relationships. To answer the question whether the concept of economic dependence is covered by Article
82 EC, this article discusses first the economic definition of market power and the relation to market shares. It follows with the concept of economic dependence in competition laws of some European countries. It shows that economic dependence relates to market power that does not result from a paramount market position. Other factors and forms of market power are responsible for the dependence of particular customers to their suppliers or buyers. Then the concept of economic dependence is compared with the definition of dominant position under European competition law, focusing on the relevant case law. We conclude that economic dependence of customers on the dominant undertaking constitutes one of the factors that can be taken into account for the assessment of the dominant position. In relation to market shares, economic dependence is an additional element that could complete the analysis of the dominant position, in particular when the undertaking under investigation has low market shares.
Finally, the article examines the abusive conduct and remedies. It concludes that while the extension of the concept of the dominant position may allow for the covering of more types of market power and reducing in that way the importance of market shares, the wide interpretation of abuses and the regulatory nature of remedies in cases of economic dependence increase the risk of over-intervention.