Article 102 - Competition Law Flashcards
United Brands v Commission
United Brands, the importer of Chiquita bananas, accused of abusing its dominant position via unfair pricing, price discrimination, refusal to supply etc; held that the relevant product limited to bananas as they were sufficiently distinct (unaffected by prices of other fruits and with distinct physical characteristics); France, Italy and UK excluded from the geographic market because these countries mainly consumed bananas from ex-colonies; found to be dominant even though had 40-45% market share because strong evidence it was difficult for anyone else to enter; abused dominant position by refusing to supply to distributors in retaliation for helping a rival brand and charging customers in Germany higher prices than in Ireland despite the cost being the same )but unable to prove they were pricing unfairly)
RATIO:
Dominance is a position of economic strength sometimes referred to as market power, which allows undertakings to prevent effective competition in the relevant market
The relevant product market is all those products and/or services which are regarded as interchangeable or substitutable by the consumer, by reason of the product’s characteristics, intended use and price.
The relevant geographic market is the area in which the undertaking is involved in the supply and demand of products or services, in which the conditions of competition are sufficiently homogenous and which can be distinguished from neighbouring areas because the conditions of competition are appreciably different in those areas.
Continental Can v Commission
Merger accused by the Commission of being anticompetitive; Commission argued relevant product market was metal containers; Continental Cans argued supply substitutability was low and other supplies could easily enter market; held that Commission failed in showing that the RPM did not actually extend to plastic and glass containers
RATIO:
Where it is not difficult for a supplier of another product to enter the market following a price increase, the relevant product market will include the other product as well
Hugin Kassaregister
Hugin was a Swedish manufacturer of cash registers; Liptons was a company based in London which services registers, including Hugin’s; Hugin wanted to start servicing its own machines and stopped supplying to Lipton’s; held that product market was spare parts for Hugin cash registers only because no other spare parts could be used with Hugin registers.
RATIO:
The relevant product market may be very small in cases of low supply substitutability
Abuses of a dominant position will include refusal to supply a distributor in order to eliminate them from the market
Abuse need only be capable of having an effect for Commission to have jurisdiction.
Hilti AG v Commission
Hilti had a dominant position in nail cartridges; obliged buyers of nail cartridges to buy its own nails even though competitor’s nails were also compatible; argued that this was necessary for reliability/safety but failed
RATIO
Where products can compete on equal terms and products can be transported at no extra cost, one should begin by assuming that the RGM is the EU as a whole.
Tying of products will amount to an abuse of a dominant position.
Sea Containers/Stena Sealink
Sea Containers wanted to provide a rapid ferry service; Stena Sealink refused to grant them access to the port of Holyhead, which enabled the formers ferry service to be protected from competition; Port Holyhead held to be a substantial part of the internal market due to its economic significant as a gateway between Great Britain and Ireland.
RATIO:
The internal market may be very small geographically.
Akzo Chemie v Commission
ECS only produced benzonyl peroxide for the flour market but wanted to expand to the plastic market; AZKO responded by lowering its prices in the flour market to below costs of production; intention to eliminate competitor was therefore predatory
RATIO
There is a presumption of dominance where the market share is 50% or more
Abuse of a dominant position includes excessively low prices (predatory pricing)
Italian Flat Glass
Three Italian companies which produced flat glass jointly enjoyed a degree of independence from competitive pressures such as they were able to impede effective competition (on other grounds decision was reversed on appeal, but General court confirmed principle still valid)
RATIO:
A dominant position can be held by several undertakings together; there is nothing to prevent more than one entity from holding a dominant position.
Hoffmann-La Roche
Hoffman La-Roche had a near monopoly on sale of vitamins; imposed unfair conditions for clients relating to exclusionary fidelity rebates whereby all vitamins must be purchased from them.
RATIO:
Save in exceptional circumstances, very large market shares will in themselves be evidence of existence of a dominant position
Abuse is where the presence of an undertaking weakens the degree of competition through recourse to methods different from those which condition normal competition; which has the effect of hindering the maintenance of the degree of competition still existing in the market or growth of that competition
Discounts based on purchasing all/most needs from one supplier and which are unrelated to volume are abusive discounts and amount to maket abuse.
Michelin v Commission
Michelin accused of abuse of a dominant position with regards to abusive discounts, tying sales etc
RATIO:
A dominant firm has a special responsibility not to allow its conduct to impair undistorted competition on the common (now internal) market.
Intel v Commission
If the dominant undertaking is able to show evidence that the discounts are not capable of affecting competition, it is necessary to carry out an investigation into the effect on competition.
Post Denmark II
the ECJ clarified that some rebates are ‘prima facie’ legal, and will not violate competition rules. These are the rebates which are purely
(1) based on volumes purchased, and
(2) individualised per order, ie not applied to all the orders of one purchaser.
For other rebate schemes, the court ruled that the regulator must assess ‘all the circumstances’ of the rebate scheme. This includes whether
- the dominant undertaking is in a strong position on the market,
- all the rules and criteria applying to the rebate and, particularly,
- whether the rebate is retroactive, ie whether a purchaser would get a rebate on their previous purchases after reaching a certain volume.
This last type of rebate, especially if it applies over orders covering a long period of time, is highly likely to be anti-competitive.
Commercial Solvents v Commission
Manufacturer of a raw product was found to have abused a dominant position by refusing to continue to supply a downstream competitor, which would have effectively remove competition altogether.
RATIO:
Abuse is deemed to have affected trade wherever the conduct brings about an alteration in the structure of competition in the common (not internal) market.
BRT v SABAM
Case concerned abuse of position with regards to copyrights; court held that initiation of proceedings by the Commission did not deprive national courts of their jurisdiction
RATIO:
Articles 101 and 102 have direct horizontal and vertical effect: they by their very nature produce direct effects in relations between individuals and create direct rights in respect of the individuals concerns which national courts must safeguard
Garden Cottage Foods v Milk Marketing Board
Company purchased and resold 90% of its butter from export from the Board, which produced 75% of all butter in England and Wales; sales to the company ceased; held it was an abuse of a dominant position and that damages would be an adequate remedy for the losses incurred
RATIO:
Damages should be available in principle as a remedy for breach of competition law (tort of breach of statutory duty) (101 and 102)
