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Antitrust: consumer welfare at heart of Commission fight against abuses by dominant undertakings

Commission Européenne - IP/08/1877   03/12/2008

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IP/08/1877

Brussels, 3rd December 2008

Antitrust: consumer welfare at heart of Commission fight against abuses by dominant undertakings

The European Commission has published guidance on its enforcement priorities in applying EC Treaty rules on abuse of a dominant market position (Article 82) to abusive exclusionary conduct by dominant undertakings. Such conduct aims to exclude actual competitors from expanding or would-be competitors from entering a market, thereby potentially depriving customers of more choice, more innovative goods or services and/or lower prices. The guidance sets out the Commission's determination to prioritise those cases where the exclusionary conduct of a dominant undertaking is liable to have harmful effects on consumers.

Competition Commissioner Neelie Kroes said: “The paper provides guidance by setting out an approach to deal with abuses of a dominant position by companies. This is in line with our approach to restrictive business practices and merger control, and to recent individual cases of abuses of dominant position. It will ensure that the Commission's intervention is effective, and should leave dominant undertakings in no doubt that they will find the Commission in their way wherever their conduct risks increasing prices, limiting consumer choice or dissuading innovation. Clear rules protecting consumers and promoting innovation are all the more important in times of economic difficulty such as these."

The guidance paper sets out an economic and effects-based approach to exclusionary conduct under EC antitrust law. Such an approach has already been used in recent Article 82 cases, including Wanadoo (see IP/03/1025), Microsoft (see IP/04/382 and MEMO/04/70) and Télefonica (see IP/07/1011 and MEMO/07/274). This document provides for the first time comprehensive guidance to stakeholders, in particular the business community and competition law enforcers at national level, as to how the Commission uses an effects-based approach to establish its enforcement priorities under Article 82 in relation to exclusionary conduct.

The guidance paper outlines the analytical framework that the Commission employs when assessing the most commonly encountered forms of exclusionary conduct, such as exclusive dealing, rebates, tying and bundling, predatory practices, refusal to supply and margin squeeze.

The main principles of the effects-based approach to Article 82 are the following:

  • fair and undistorted competition is the best way to make markets work better for the benefit of EU business and consumers. Healthy competition, including by dominant undertakings, should be encouraged
  • the focus of the Commission's enforcement policy should be on protecting consumers, on protecting the process of competition and not on protecting individual competitors
  • the Commission does not need to establish that the dominant undertaking's conduct actually harmed competition, only that there is convincing evidence that harm is likely
  • since the focus of the Commission's enforcement policy is on conduct that harms the competitive process rather than individual competitors, for pricing conduct the Commission examines whether the conduct is likely to prevent competitors that are as efficient as the dominant undertaking from expanding on or entering the market and that can be expected to be most relevant to consumer welfare.
  • since the focus of the Commission's enforcement policy is on the likely effects of a dominant undertaking's conduct on consumers, the Commission will examine claims put forward by dominant undertakings that their conduct is justified on efficiency grounds – as is already the case under Article 81 and for merger control.

The Commission will fully apply the approach set out above to future cases.

Background

In December 2005, the Commission's Directorate-General for Competition published a staff discussion paper on the application of Article 82 of the Treaty to exclusionary abuses by dominant undertakings (see IP/05/1626). More than one hundred submissions were received. A public hearing was organised in June 2006 and was followed by more public debate.

Based on these comments and further internal reflection, a draft guidance paper was prepared. This document has been discussed with Member States' national competition authorities within the European Competition Network (ECN).

The guidance paper is available at:

http://ec.europa.eu/competition/antitrust/art82/index.html.

This is considered a draft text. The text will be formally adopted in all Union languages, after legal linguistic revision, and will be published in the Official Journal.

See also MEMO/08/761.


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