Abuse of a dominant positions - cases/facts

Question 1

Article 102

Answer 1

Abuse of a dominant position is prohibited

Question 2

What are the 3 main elements of article 102

Answer 2

1. Dominance (Market defined/ dominance of that market)
2. Abuse
3. Interstate trade

Question 3

What are the 3 elements of a market definition?

Answer 3

Relevant product market (RPM)
Relevant geographical market (RGM)
Relevant temporal market (RTM)`

Question 4

United Brands

Answer 4

Temporal market in terms of seasonality of fruit

Question 5

Continental cans

Answer 5

Dominance of the market but for how long as relatively simple to copy. Length of dominance issue. In this case dominance was not a long term issue as a can is very easy to replicate

Question 6

Benzine en Petroleum v Commission

Answer 6

ECJ prepared to assume that oil companies held a dominant position during OPEC oil crisis

Question 7

What are the 3 elements of the product market?

Answer 7

Interchangeability/substitutability (Demand substituability and supply substitutability)

Question 8

What 3 factors govern demand subsitutability/

Answer 8

Pricing
Intended use
Physical characteristics

Question 9

What test did the Notice on the definition of the relevant market establish?

Answer 9

Small but significant Non-Transitory Increase in Price (SSNIP) - If the price rises by 5-10% will the customers stop buying that product? If not then it is its own market and is not interchangeable

Question 10

United Brands (Product market)

Answer 10

Product not substitutable in the fruit market, only substitutable in the banana market

Question 11

HIlti

Answer 11

Product not substitutable in the DIY market, but is substitutable in the nail gun market

Question 12

Continental Can

Answer 12

Easy for rivals to produce a can, therefore less likely to be dominant

Question 13

MIcrosoft

Answer 13

Business in particular are locked into Microsoft, all offices in Microsoft so for another company to replace them is very difficult. Therefore more likely to be dominant

Question 14

Hugin

Answer 14

Made receipt rolls for tills, very specific part, so more likely to be dominant

Question 15

What other factors effect the RPM?

Answer 15

Intended use, marketing strategies, market power, price, luxury/quality, brand name

Question 16

Michelin (intended use)

Answer 16

Michelin tyres have more than one intended use, specialised use for each tyre. Not one tyre market many depending on use. Michelin were dominant in certain tyre markets

Question 17

Boosey & Hawkes

Answer 17

Marketed to Northern brass bands. Affects market you are selling to, and therefore how dominant the company will be e.g. Nintendo Wii marketed to families so family is their market

Question 18

BPB industries

Answer 18

How much capital you have. Size of the company. Indication of dominance

Question 19

UNited Brands (Brand name)

Answer 19

Can become product in itself almost e.g. iphone

Question 20

How does article 102 define the relevant share of the market?

Answer 20

Substantial

Question 21

What is the united brands definition of relevant geographical market?

Answer 21

o An area where the objective conditions of competition applying to the product in question are the same for all traders

Question 22

RTE (Volume of trade)

Answer 22

Volume of trade in Ireland very high, so monopolistic in country. Abused position by failing to give schedule advice to competitors

Question 23

Will dominance in 1 part of MS cconstitute dominance?

Answer 23

Continental can - No
Hugin - No
Alsatel - NO
B & I v Sealink - Yes

Question 24

B & I v Sealink

Answer 24

Sealink had best sailing times from Hollyhead to Ireland. Held to be dominant as in terms of the 1 port they were dominant as they had the only good sailing times. Sufficient geographical area.

Question 25

Will dominance of 1 MS count as dominance?

Answer 25

Yes - BT, Michelin

Question 26

The ease of transport will affect the RGM, case?

Answer 26

Hilti - If product can be transferred all over Europe easily then affects size of market. Can be transported easily so market is whole of europe

Question 27

What factors are there in establishing dominance of the market?

Answer 27

``` Share of market Legal factors Technology Vertical integration Distribution systems Brand identification Wealth of capital ```

Question 28

Shares of market

Answer 28

``` Tetrapak -90% Continental can - 70-80% Intel - 70% Akzo (over 50%) United Brands (40-45%) ```

Question 29

What companies have dominated the market through legal factors such as patents?

Answer 29

Hugin Tetrapak Microsoft

Question 30

Hoffman-La-Roche

Answer 30

Only technology which can create product, with sophisticated distribution systems including legal tie-ins. Also abused position with rebates.

Question 31

BPB industries

Answer 31

How much capital you have. Size of the company. Indication of dominance

Question 32

Akzo

Answer 32

Wealth of capital

Question 33

United brands (vertical integration)

Answer 33

Own whole supply chain so know what production costs and an control market

Question 34

Hoffman La Roche (Legal distribution systems)

Answer 34

Legal contractual set ups , who is bound to sell your product. Buy this vitamin b1, but also have to buy b2

Question 35

Intel Corp

Answer 35

Loyalty rebates to computer manufacturers when chip re-bought

Question 36

Commercial Solvents Corporation

Answer 36

ICI wanted to buy Commercial Solvents Corporation, but CSC didn’t want to be bought. ICI stopped supplying them, so CSC was bought out at lower price

Question 37

United Brands (abuse)

Answer 37

Companies which didn’t negotiate supply, didn’t get supply and just supplied other shops.

Question 38

BRT v SABAM

Answer 38

Unfair conditions

Question 39

Societa Italiana Vetro Italian Flat Glass (abuse)

Answer 39

- Caught under Art 102 abusing dominant market position

Question 40

What are some tie in cases?

Answer 40

o Hoffman LR – Sell vitamin B1, if also buy B2 o Microsoft – Bundling of software o Hilti – If you buy the guns you also have to buy the cartridges, this a tie in so is abuse

Question 41

United Brands (excessive pricing)

Answer 41

Extortinoate pricing due to lack of competition

Question 42

Tetrapak (predatory pricing)

Answer 42

Dropped prices till other company could not sustain a challenge

Question 43

Discounts/Bonuses

Answer 43

o Michelin – Gave bonuses to make sure companies stayed with supplier

Question 44

How can companies abuse market position?

Answer 44

Anti competitive behaviour, refusal to supply, unfair conditions, price fixing, supplementary obligations, excessively high pricing, predatory pricing, discounts and bonuses

Question 45

British Leyaland

Answer 45

Potential to abuse is enough - Had monopoly in England, but did not really sell to Europe, still had capacity for abuse of position

Question 46

What regulation governs enforcement of EU regulations regarding abuse of a dominant position?

Answer 46

R 17/62

Question 47

Garden Cottage Foods v MMB

Answer 47

National courts can take role judging decisions of NCAs concering enforcement of competition law

Question 48

What was the effect of R1/2003?

Answer 48

Reduced role of commission, ending opportunity of companies to go to comission for comfort letter etc. Greater for role of domestic authorities

Question 49

What is the role of the EU Ombudsman

Answer 49

Allow MS to have recourse agaisnt competition comission decisions

Question 50

O2

Answer 50

Used EU Ombudsman to challenge EU decision not to allow access to all files in case. Ombudsman approved challenge, but ruled that the commission was not guilty of maladministration

Question 51

Ryan Air

Answer 51

Failure to enforce confidentiality proceedings in acquisition of Aer Lingus

Question 52

British American Tobaco

Answer 52

- Art 101(1) used to catch anti-competitive mergers

Question 53

Airtours

Answer 53

Commission blocked merger. Conditions for collective dominance: Market must be sufficiently transparent so each member of oligopoly can monitor how other members are behavingMust be adequate punishment mechanisms to ensure members compliance over time. Foreseeable reaction of consumers and current/future competitors could not hazard the policy.

Question 54

Independent Music Publishers

Answer 54

- Commission made objective grounds in favour of merger