The Commission published a 72-page discussion paper yesterday on
the application of Article 82 of the EC Treaty, the Article that
prohibits the abuse of a dominant market position. It is seeking
comments by 31st March 2006.
The Commission says its discussion paper is designed to promote
a debate as to how EU markets are best protected from dominant
companies’ exclusionary conduct, conduct which risks weakening
competition on a market.
The paper sets out a possible methodology for the assessment of
some of the most common abusive practices, such as tying, and
rebates and discounts. Other forms of abuse, such as discriminatory
and exploitative conduct, will be the subject of further work by
the Commission in 2006.
Competition Commissioner Neelie Kroes said:
“I will rigorously enforce the Treaty’s prohibition on abusive
conduct. Dominant companies should be allowed to compete
effectively. Putting this policy objective into a consistent legal
and economic framework is an ambitious project, but it is
worthwhile for the clarity it will give to companies and their
advisers.
"Our fundamental aim is to ensure that the EU’s powers to
intervene against monopoly abuses are applied consistently and
effectively, not only by the Commission but also by national
competition agencies and courts throughout the EU which also now
apply EU competition law. This discussion paper is the first step,
and I want a wide discussion before taking a firm view on the
proposals in the paper and before deciding how best to apply the
results of these discussions.”
The proposed framework
The paper describes a general framework for analysing abusive
exclusionary conduct by a dominant company. Where a dominant
company is present on a market, competition on that market is
already weak. The concern of the competition rules is therefore to
prevent conduct by that dominant company which risks weakening
competition still further, and harming consumers, whether that harm
is likely to occur in the short, medium or long term.
For price-based conduct, such as rebates, the paper sets out
arguments as to whether only that conduct which would risk the
exclusion of equally efficient competitors should be considered as
abusive.
The paper also considers whether efficiencies should be taken
into account under Article 82, and, if so, how. If taken into
account the claimed efficiencies would have to outweigh the
restrictive effect of the conduct in question.
The Commission wants to concentrate its resources on those
anti-competitive practices that are most likely to cause harm to
consumers. As a result it has recently increased its enforcement
activities against cartels. The proposals made in the discussion
paper on Article 82 would in a similar way imply a strong focus on
those abuses of dominant positions most likely to harm
consumers.
