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Cover Competition Law

18. Abuse of dominance (2): pricing practices  

This chapter considers abusive pricing practices under Article 102 TFEU and the Chapter II prohibition in the Competition Act 1998. It discusses cost concepts used in determining whether a price is abusive and deals with excessive pricing; conditional rebates; bundling; predatory pricing; margin squeeze; price discrimination; and practices harmful to the single market. Price discrimination may be both exploitative and exclusionary and an excessively high price may be a way of preventing parallel imports or excluding a competitor from the market; but the 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 the EU Courts is considered, followed by cases in the UK. Where appropriate, reference is made to the Commission’s Guidance on the Commission’s Enforcement Priorities in Applying Article [102 TFEU] to Abusive Exclusionary Conduct by Dominant Undertakings.

Chapter

Cover Jones & Sufrin's EU Competition Law

7. Article 102 TFEU: Conduct Which Can be an Abuse  

Alison Jones, Brenda Sufrin, and Niamh Dunne

This chapter discusses the difficult concept of what constitutes an ‘abuse’ of a dominant position for the purposes of Article 102. It considers the case law of the EU Courts, the decisional practice of the Commission, and the Commission’s Guidance Paper on enforcement priorities, and the problem of distinguishing competition on the merits from illegitimate conduct. The chapter looks at the different classifications of abuse, particularly exclusionary and exploitative abuses; the distinction between form- and effects-based approaches to types of abuse; the leveraging of market power between distinct markets as a theory of harm; the objective justification defence; and general issues in respect of abuses concerning prices, including the ‘as efficient competitor’ test. The chapter then examines the application of Article 102 to various forms of conduct, including: price discrimination; predatory pricing; selective low pricing; margin squeeze; exclusive dealing; tying and bundling; refusal to supply; self-preferencing; malicious pursuit of legal proceedings; ‘regulatory gaming’; discrimination abuses; unfairly high and low pricing; and hindering inter-Member State trade.

Chapter

Cover Jones & Sufrin's EU Competition Law

7. Article 102 TFEU: Conduct Which Can Be an Abuse  

This chapter discusses the difficult concept of what constitutes an ‘abuse’ of a dominant position for the purposes of Article 102 and whether conduct should be condemned on account of the form it takes or only for its effects. It considers the case law of the EU Courts, the decisional practice of the Commission, and the Commission’s Guidance Paper on enforcement priorities, and the problem of distinguishing competition on the merits from illegimate conduct. The chapter looks at the different classifications of abuse, particularly exclusionary and exploitative abuses; the distinction between form- and effects-based approaches to types of abuse; the leveraging of market power between distinct markets as a theory of harm; the objective justification defence; and general issues in respect of abuses concerning prices, including the ‘as efficient competitor’ test. The chapter then examines the application of Article 102 to various forms of conduct, including: price discrimination; predatory pricing; selective low pricing; margin squeeze; exclusive dealing;; tying and bundling; refusal to supply; self-preferencing; malicious pursuit of legal proceedings; ‘regulatory gaming’; discrimination abuses; unfairly high and low pricing; hindering inter-Member State trade; and more novel claimed abuses within the digital economy.

Chapter

Cover Competition Law

18. Abuse of dominance (2): pricing practices  

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.