Art 102 TFEU

Article 102 TFEU

• Keywords
  • abusive behavior
  • one or more undertakings
  • dominant position on relevant market
  • affect trade between member states
  • affect trade on competition
• abuse is an effect concept → intention does not matter
• influence to structure of a market
• enforced by European Commission + 27 national competition authorities
• enforced Ex post

Effect on Trade

• in one or more member states
• there are “Guidelines on the effect on trade concept”

Effect on Competition

• same us under Article 101 TFEU

Relevant Market

• how to define the relevant market?
  • product market and geographic market
  • product market → interchangeable products (demand/supply substitutes)
  • geographic market → geographic reach of company (local to whole Europe)
    • not just where companies are, but also where they could be in 1 year
• Market Definition Notice (2024) - European Commission

Dominant Position

• presumed from market shares of 50% (AKZO Case)
  • in very dynamic markets even 80% may not be dominant (e.g. nobody uses Skype anymore)
  • lowest dominant position by market share was 39% → lower is possible
• other indicators:
  • Economies of scale/scope
  • fixed costs (R&D, marketing)
  • IPRs
  • structural barriers (digital ecosystems)
  • no countervailing buyer power

Abusive Behavior

• unfair purchase/selling prices

• limiting production, markets, or technical development

• dissimilar conditions to equivalent transactions

• exploitative abuse vs exclusionary abuse

  • exploit → let them live and benefit off of their lower market power
  • exclusion → e.g. predatory pricing → goal to eliminate competitors

• Rebates

• Tying and bunding

• Predatory Pricing

• refusal to supply & Margin Squeeze

  • dominant players might be forced to supply everyone

Cases

Microsoft 2004 Case (Tying)

• market: PC operating systems (Windows)
• effect on the market: tying media player to OS
  • basically pre-installed app with further barriers to installing new ones
  • status-quo bias
• justification: no objective proof that media player is better than others
• fine: 497 million

Broadcom 2019 (Predatory Pricing)

• market: global baseband chipsets
• effect on the market: preventing competition, stifling innovation, reducing consumer choice
• fine: 242 million

Consequences

• fines of up to 10% of previous year’s turnover

  • normally at 0.1% located → much higher fines possible

• order to stop infringing behavior

• damage claims

• loss in reputation

• Additional Markets Act → dealing with Gatekeepers