Tuesday, February 5, 2013
Posted by D. Daniel Sokol
Hans Wolfgang Friederiszick, ESMT European School of Management and Technology, E.CA Economics and Linda Gratz, E.CA Economics, Ludwig Maximilians University of Munich - Munich Graduate School of Economics (MGSE) describe Dominant and Efficient – On the Relevance of Efficiencies in Abuse of Dominance Cases.
ABSTRACT: The European Commission’s policy on the relevance of efficiency considerations in abuse of dominance cases (Article 102 TFEU) is not well settled. In an attempt to give guidance on that matter we address that topic from two different angles: First, we review EC soft law provisions and recent decisions. Based on this review we find that efficiency defences are of limited importance under the current practice. They are of relevance in the growing number of IT related cases but not in others. Second, for the example of low price strategies, we then explore business practitioners’ views on the relevance of pro- and anti-competitive motives. Based on a survey among EMBA students we find that low price strategies are indeed frequently used. The motives are diverse though, often procompetitive and in line with antitrust compliance, i.e. low price strategies are rarely considered advisable for leading firms. Policy conclusions are drawn.