Tuesday, August 22, 2017
Relative Dominance and the Protection of the Weaker Party: Enforcing the Economic Dependence Provisions and the Example of Greece
Emmanuela N. Truli, Athens University for Economics and Business describes Relative Dominance and the Protection of the Weaker Party: Enforcing the Economic Dependence Provisions and the Example of Greece.
ABSTRACT: A number of EU counties have adopted specific rules on the abuse of economic dependence: Germany, France, Italy, Portugal, Czech Republic and Greece. In most countries the economic dependence provisions are included in the respective competition act and are more or less conceptually associated with the notion of abuse of dominance. Indicatively, in the case of Germany, Section 20 (2) of the Competition Act applies to companies enjoying market power (not reaching that of the classical dominant position) in bilateral relations vis a vis their suppliers and/or buyers.
By contrast, a number of other countries have enacted equivalent provisions, not in their competition acts but in their fair trade legislation or other, whereby competency for the enforcement of the economic dependence rules may or may not be entrusted to a competition authority.
In Greece, the provisions regarding economic dependence formed part of the former Competition Act, Law No. 703/1977. The Hellenic Competition Commission (HCC) received, in the 12 years of its competency for the enforcement of said provision, numerous complaints and issued over forty economic dependence decisions - mostly dismissing the respective claims.
Due to this burden on the authority, and also because it was too often invoked by enterprises with only minor impact on competition and, more often than not, involved private disputes which could have easily been resolved by civil courts, it was abolished from the Competition Act in the year 2009. Voices from the legal theory had seconded this development expressing concerns about the private interests of the weaker party which the provision sought to protect, unlike the main goals of competition law. As a result, the economic dependence provision was transferred to Law 146/1914 on Unfair Competition Practices, as Section 18a thereof.
When a particular provision changes position, it is interesting to see what the effect on its application may be. Possible changes include changes in the requirements of a provision, its legal consequences (sanctions, commitments etc.), protection scope, and other conditions of enforcement. In this regard, the paper builds on the Greek example to touch upon a number of points of interest for European law enforcement, and in particular: How does the inclusion or exclusion of a particular provision from the competition act affect its enforcement? Which would be an optimal allocation of responsibilities between private parties, the courts and competition authorities in relative abuse of dominance cases? Is the division between unfair trade practices and competition law entirely clear? And finally, how does the aim of competition law to protect competition versus competitors affect the application of the respective provisions?