Market power is a central concept in EU competition law. This chapter considers what is meant by market power and how it is assessed in EU law using market definition and barriers to entry analysis. It discusses how markets are defined in EU law by looking at demand substitution, supply substitution, and potential competition. It explains that markets may have both a product and a geographic dimension. The chapter examines the Commission Notice on the definition of the relevant market, the decisional practice of the Commission, and the case law of the EU Courts on market definition, and it discusses what tests may be employed in the definition of markets, particularly the SSNIP test. The chapter then considers how the power of a firm on a market is affected by barriers to entry. It discusses the definition of a barrier to entry and considers barriers to entry such as sunk costs, structural barriers, and strategic barriers,
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Article 102 TFEU deals with the unilateral conduct of undertakings with substantial market power. It thus prohibits one or more undertakings which hold a dominant position in the internal market or a substantial part of it abusing that position insofar as it may affect inter-Member State trade. This chapter discusses the role of Article 102 and the controversy attending its application, and introduces the elements which must be established before the prohibition applies. The Commission’s review of Article 102 and the publication of its Guidance Paper on enforcement priorities, and the relationship between Article 102 and Article 101, are also considered. The chapter then explores in detail one of the principal limbs of the Article 102 prohibition, namely the concept of an undertaking holding a ‘dominant position’ in a relevant market. The definition of a dominant position in the case law of the Court is discussed, alongside its relation to the concept of substantial market power, including the Commission’s treatment in the Guidance Paper. The chapter then considers how dominance is established, addressing, inter aliai, the definition of the relevant market for the purposes of Article 102; the role of market share in establishing dominance; barriers to entry and other factors indicating dominance; and dominant positions in the digital economy. Article 102
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This chapter explores the free movement of goods, which lies at the very heart of the internal market. The idea of the free movement of goods was the starting point that the EEC Treaty aimed for, and remains one of the greatest achievements of the EU to date. However, as with everything in EU law, there are a lot of legal rules underpinning a fairly straightforward concept. The Treaty contains two separate sets of provisions that address matters of taxation when it comes to trade in products. The first relates to border taxation, while the second relates to internal taxation. With regard to non-taxation issues, the primary issue is quantitative restrictions: situations where a Member State either blocks a specific volume of products from entering its market, or outlaws/bans a product altogether. The chapter then considers the exceptions to free movement of goods, and assesses how Brexit may impact on the free movement of goods between the UK and the EU.
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This chapter considers abusive non-pricing practices under Article 102 TFEU and the Chapter II prohibition in the Competition Act 1998. It deals in turn with exclusive dealing agreements; tying; refusals to supply; abusive non-pricing practices that are harmful to the single market; and miscellaneous other non-pricing practices which might infringe Article 102 or the Chapter II prohibition. Reference is made to the case-law of the Court of Justice and the Commission’s Guidance on the Commission’s Enforcement Priorities in Applying Article [102 TFEU] to Abusive Exclusionary Conduct by Dominant Undertakings
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This chapter considers abusive pricing practices under Article 102 TFEU and the Chapter II prohibition in the Competition Act 1998. It first discusses various cost concepts used in determining whether a price is abusive. It then deals in turn with excessive pricing; conditional rebates; bundling; predatory pricing; margin squeeze; price discrimination; and practices that are harmful to the single market. This taxonomy is over-schematic, in that the categories overlap with one another: for example price discrimination may be both exploitative and exclusionary, and an excessively high price may in reality be a way of preventing parallel imports or of excluding a competitor from the market; nevertheless this division may provide helpful insights into the way in which the law is applied in practice. In each section the application of Article 102 by the European Commission and by the EU Courts will be considered first, followed by cases in the UK. Reference will be made where appropriate to the Commission’s Guidance on the Commission’s Enforcement Priorities in Applying Article [102 TFEU] to Abusive Exclusionary Conduct by Dominant Undertakings.
