Thursday, February 19, 2009
The European Commission Formulates its Enforcement Priorities as Regards Exclusionary Conduct by Dominant Undertakings
Posted by D. Daniel Sokol
Philip Lowe (European Commission, DG Competition) has written an essay on The European Commission Formulates its Enforcement Priorities as Regards Exclusionary Conduct by Dominant Undertakings.
ABSTRACT: During the past 50 years, the enforcement of Article 82 of the EC Treaty—which prohibits abuse of dominance—has been a cornerstone of the European Commission's competition policy. Investigations based exclusively on Article 82 currently make up one quarter of the Commission's ongoing antitrust cases. Taking into account cases involving both Article 81—which prohibits anticompetitive agreements—and Article 82, between one third and one half of our recent cases involve Article 82.
The text of Article 82 has remained untouched since 1957 despite several amendments to the Treaty. However, the context in which Article 82 has been applied has changed enormously. As a result, the Commission's interpretation of Article 82 has evolved over the years, under the supervision of the EU Courts. This context includes, of course, the furthering of EU integration and the Single Market, but also profound changes in the environment in which companies operate and developments in our understanding of how markets work, informed by evolving economic evidence and theory.
In 2005 DG Competition launched a review of its policy on Article 82 by publishing a Staff Discussion Paper. The purpose was to promote clarity and predictability, and to bring Article 82 policy in line with the effects-based approach, developed under Article 81 and mergers since the late 1990s, and already present in individual Article 82 cases.
The Discussion Paper sparked a wide ranging debate, both within and outside the Commission, on the objectives and enforcement principles that should guide the application of Article 82. The review resulted in the Commission adopting, on December 3, 2008, guidance on its enforcement priorities in applying Article 82 to abusive exclusionary conduct by dominant undertakings.