Abuse of a dominant positions - cases/facts Flashcards Preview

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Flashcards in Abuse of a dominant positions - cases/facts Deck (54):
1

Article 102

Abuse of a dominant position is prohibited

2

What are the 3 main elements of article 102

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

3

What are the 3 elements of a market definition?

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

4

United Brands

Temporal market in terms of seasonality of fruit

5

Continental cans

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

6

Benzine en Petroleum v Commission

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

7

What are the 3 elements of the product market?

Interchangeability/substitutability (Demand substituability and supply substitutability)

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What 3 factors govern demand subsitutability/

Pricing
Intended use
Physical characteristics

9

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

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

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United Brands (Product market)

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

11

HIlti

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

12

Continental Can

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

13

MIcrosoft

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

14

Hugin

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

15

What other factors effect the RPM?

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

16

Michelin (intended use)

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

17

Boosey & Hawkes

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

18

BPB industries

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

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UNited Brands (Brand name)

Can become product in itself almost e.g. iphone

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

Substantial

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What is the united brands definition of relevant geographical market?

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

22

RTE (Volume of trade)

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

23

Will dominance in 1 part of MS cconstitute dominance?

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

24

B & I v Sealink

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.

25

Will dominance of 1 MS count as dominance?

Yes - BT, Michelin

26

The ease of transport will affect the RGM, case?

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

27

What factors are there in establishing dominance of the market?

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

28

Shares of market

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

29

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

Hugin
Tetrapak
Microsoft

30

Hoffman-La-Roche

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

31

BPB industries

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

32

Akzo

Wealth of capital

33

United brands (vertical integration)

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

34

Hoffman La Roche (Legal distribution systems)

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

35

Intel Corp

Loyalty rebates to computer manufacturers when chip re-bought

36

Commercial Solvents Corporation

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

37

United Brands (abuse)

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

38

BRT v SABAM

Unfair conditions

39

Societa Italiana Vetro Italian Flat Glass (abuse)

- Caught under Art 102 abusing dominant market position

40

What are some tie in cases?

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

41

United Brands (excessive pricing)

Extortinoate pricing due to lack of competition

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Tetrapak (predatory pricing)

Dropped prices till other company could not sustain a challenge

43

Discounts/Bonuses

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

44

How can companies abuse market position?

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

45

British Leyaland

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

46

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

R 17/62

47

Garden Cottage Foods v MMB

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

48

What was the effect of R1/2003?

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

49

What is the role of the EU Ombudsman

Allow MS to have recourse agaisnt competition comission decisions

50

O2

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

51

Ryan Air

Failure to enforce confidentiality proceedings in acquisition of Aer Lingus

52

British American Tobaco

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

53

Airtours

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.

54

Independent Music Publishers

- Commission made objective grounds in favour of merger