Monday, October 12, 2009
Posted by D. Daniel Sokol
John Temple Lang (Cleary Gottlieb Steen & Hamilton LLP, Trinity College) explains Article 82 EC – The Problems and The Solution.
ABSTRACT: The Commission's Guidance paper on exclusionary abuse under Article 82 EC is open to three fundamental criticisms. First, it leads to less legal certainty, because the rules suggested are vague and imprecise, because dominant companies will not have the information needed to apply them, and because the Commission is trying to change the law, which it has no power to do. Second, it would lead to some anticompetitive effects, because in practice it discourages price competition, by discouraging individualised price negotiations and retroactive rebates, and by suggesting that the Commission will protect not-yet-as-efficient competitors from price competition. Third, it leads to too many "false positives", i.e., findings of exclusionary abuse that are not justified in economics or law. The solution is to return to the test in the Treaty as interpreted by the Court of Justice: an exclusionary abuse must involve limiting the p! roduction, marketing or technical development of competitors of the dominant company, if harm is caused to consumers.