Article 102: Abuse of Dominant Position
Article 102 TFEU (ex Article 82)
Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial
part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between
Member States.
1) Does the undertaking have a dominant position?
Dominance is defined by ECJ as “a position of economic strength, sometimes referred to as ‘market power’, which allows
an undertaking to prevent effective competition in the relevant market... behave independently of both its customers
and its competitors” (United Brands v Commission)
1.Relevant Market (RM = RPM + RGM):
*Commission will always try to argue for a narrow RPM + RGM, whilst defendant will argues argue for wide to reduce their
chances of being in a dominant position.
Relevant Product Market (RPM): Commission defines this as Relevant Geographical Market (RGM): “the
“all those products or services regarded as interchangeable substantial part of the common market in which
or substitutable by the consumer by reason of product competitors conditions are homogenous” (UB case)
characteristics, prices, or intended use” • “area of the common market” can include:
• Demand substitution ◦ One member state (Michelin)
◦ How willing would a consumer be to purchase another ◦ Part of a state e.g. regions (Continental Cans)
product if the product in question could not be ◦ One particular port (Sealink)
obtained • “conditions are homogeneous”, conditions to
◦ Small but Significant Non-Transitory Increase in consider (Hilti - start by assuming RGM = EU then
Price (SSNIP) test: whether a small but lasting increase narrow down where below factors apply):
in price would result in consumers switching to readily ◦ Transport costs - how expensive is it to
available subs (Commission Notice) transport the product?
‣ e.g. UB was restricted to banana market rather ◦ Product characteristics (e.g. perishable) - is it
then fruit because bananas were soft, seedless possible to be transported?
fruit that were essential for children, the sick and ◦ Shipment and retail patterns - where are the
denture wearers (low cross-elasticity in fruit products being sold?
market) ◦ Location of plants - where are the
• Supply substitution manufacturing facilities located?
◦ How easily could a competitor switch to producing the • Commission notice: initially look at market shares
product in question? and pricing to determine RGM, this will later be
‣ e.g. cans were deemed to be highly substitutable tested national tendencies, product brands and host
(Continental Cans case) whereas computer of other factors to decide if businesses in other
operating systems were deemed to have low areas of EU constitute a real alternative
substitutability (Microsoft)
• RPM can be very narrow e.g. spare parts for cash registers
were in their own market and not the cash register market
(Hugin)
2.Market Power:
• Large market share is the typical indicator: >50% are presumed dominant (AKZO Chemie) + general rule is <35 is not
• Other considerations need to be taken (UB):
◦ Relative market share: what were the market shares of the two next largest competitors?
‣ UB had only 40% but the next competitions had 16% and 10%, therefore dominant
◦ Length of time: undertakings duration of dominance will also be considered
◦ Barrier to entry: high barriers to entry in the market will be considered, e.g. high start-up costs, technical expertise,
EOS, copyright/patents, vertical integration, brand identification
◦ (Joint dominance: companies are dominant together (Joint Flat Glass case) - not examinable, if Q will have 2
companies it will always be Art.10)
Article 102 TFEU (ex Article 82)
Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial
part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between
Member States.
1) Does the undertaking have a dominant position?
Dominance is defined by ECJ as “a position of economic strength, sometimes referred to as ‘market power’, which allows
an undertaking to prevent effective competition in the relevant market... behave independently of both its customers
and its competitors” (United Brands v Commission)
1.Relevant Market (RM = RPM + RGM):
*Commission will always try to argue for a narrow RPM + RGM, whilst defendant will argues argue for wide to reduce their
chances of being in a dominant position.
Relevant Product Market (RPM): Commission defines this as Relevant Geographical Market (RGM): “the
“all those products or services regarded as interchangeable substantial part of the common market in which
or substitutable by the consumer by reason of product competitors conditions are homogenous” (UB case)
characteristics, prices, or intended use” • “area of the common market” can include:
• Demand substitution ◦ One member state (Michelin)
◦ How willing would a consumer be to purchase another ◦ Part of a state e.g. regions (Continental Cans)
product if the product in question could not be ◦ One particular port (Sealink)
obtained • “conditions are homogeneous”, conditions to
◦ Small but Significant Non-Transitory Increase in consider (Hilti - start by assuming RGM = EU then
Price (SSNIP) test: whether a small but lasting increase narrow down where below factors apply):
in price would result in consumers switching to readily ◦ Transport costs - how expensive is it to
available subs (Commission Notice) transport the product?
‣ e.g. UB was restricted to banana market rather ◦ Product characteristics (e.g. perishable) - is it
then fruit because bananas were soft, seedless possible to be transported?
fruit that were essential for children, the sick and ◦ Shipment and retail patterns - where are the
denture wearers (low cross-elasticity in fruit products being sold?
market) ◦ Location of plants - where are the
• Supply substitution manufacturing facilities located?
◦ How easily could a competitor switch to producing the • Commission notice: initially look at market shares
product in question? and pricing to determine RGM, this will later be
‣ e.g. cans were deemed to be highly substitutable tested national tendencies, product brands and host
(Continental Cans case) whereas computer of other factors to decide if businesses in other
operating systems were deemed to have low areas of EU constitute a real alternative
substitutability (Microsoft)
• RPM can be very narrow e.g. spare parts for cash registers
were in their own market and not the cash register market
(Hugin)
2.Market Power:
• Large market share is the typical indicator: >50% are presumed dominant (AKZO Chemie) + general rule is <35 is not
• Other considerations need to be taken (UB):
◦ Relative market share: what were the market shares of the two next largest competitors?
‣ UB had only 40% but the next competitions had 16% and 10%, therefore dominant
◦ Length of time: undertakings duration of dominance will also be considered
◦ Barrier to entry: high barriers to entry in the market will be considered, e.g. high start-up costs, technical expertise,
EOS, copyright/patents, vertical integration, brand identification
◦ (Joint dominance: companies are dominant together (Joint Flat Glass case) - not examinable, if Q will have 2
companies it will always be Art.10)
