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When the refusal to deal becomes an abuse of a dominant position - A study of how article 82 EC Treaty limits the freedom of action for undertakings in a dominant position

Fredriksson, Sara (2001)
Department of Law
Abstract
In my paper I have emanated from the question when a refusal to deal by an undertaking in a dominant position constitutes an abuse according to article 82 EC Treaty. Article 82 of The Consolidated version of the Treaty establishing the European Community, signed in Rome 1957, incorporating the changes made by the Treaty of Amsterdam on 2 October 1997, OJ 1997 C340, pp. 173-308, hereafter referred to as ''The Treaty''. Under the scope of my paper I have summarised the current legal situation by examining case law. In conclusion I have found that article 82 imposes a special responsibility on undertakings in a dominant position not to allow their conduct to impair competition. The dominant undertaking's refusal to deal constitutes an abuse... (More)
In my paper I have emanated from the question when a refusal to deal by an undertaking in a dominant position constitutes an abuse according to article 82 EC Treaty. Article 82 of The Consolidated version of the Treaty establishing the European Community, signed in Rome 1957, incorporating the changes made by the Treaty of Amsterdam on 2 October 1997, OJ 1997 C340, pp. 173-308, hereafter referred to as ''The Treaty''. Under the scope of my paper I have summarised the current legal situation by examining case law. In conclusion I have found that article 82 imposes a special responsibility on undertakings in a dominant position not to allow their conduct to impair competition. The dominant undertaking's refusal to deal constitutes an abuse when it affects the structure of the market and differs from normal competitive behaviour. According to case law, this is the case when the refusal is not objectively justified. The Court does not define the meaning of normal behaviour, but it is clear that article 82 does not hinder dominant undertakings to look after their commercial interests. A dominant undertaking is allowed to make profitable decisions and according to the Court of Justice of the European Communities, Hereafter referred to as ''The Court'', so is the case even if these decisions harm competitors. However, case law states that conduct can be considered as an infringement of article 82 if the intention of the dominant undertaking is to eliminate competitors. Being dominant is not contrary to article 82 and neither is the use of economic power in order to grow on the market where the dominant position is held. However, in case law it has been established that if an undertaking is dominant on one market, it is contrary to article 82 to use the strength on that market to enter another. In these cases the dominant undertaking can be forced to deal in order to let other competitors on the market. If the dominant undertaking supplies a raw material or controls an essential facility, its actions are more likely to impair competition. The structure of the market and the position of the dominant undertaking are decisive for the effect the conduct amounts to. Therefore, the freedom of action is different depending on in which market the dominant undertaking is acting. From the case of Bronner from 1997, Case C-7/97, Oscar Bronner GmbH &amp&semic Co. KG v. Mediaprint Zeitungs- und Zeitschriftenverlag GmbH &amp&semic Co. KG and Others, 26 November 1998, [1998] ECR I-7791. it follows that the duty to supply a service can be broken down into three criteria to show an abuse: 1. the conduct of the dominant undertaking must be likely to eliminate competition in the market. 2. the refusal cannot be justified objectively, and 3. the product in question must be indispensable, inasmuch as there is no actual or potential substitute in existence. These criteria can be useful when determining if a conduct infringes article 82, but are only to be seen as guidelines for the dominant undertaking. When determining if a refusal to deal by a dominant undertaking constitutes an abuse, each case must still be viewed separately. (Less)
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author
Fredriksson, Sara
supervisor
organization
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
Konkurrensrätt, EG-rätt
language
English
id
1557581
date added to LUP
2010-03-08 15:55:21
date last changed
2010-03-08 15:55:21
@misc{1557581,
  abstract     = {In my paper I have emanated from the question when a refusal to deal by an undertaking in a dominant position constitutes an abuse according to article 82 EC Treaty. Article 82 of The Consolidated version of the Treaty establishing the European Community, signed in Rome 1957, incorporating the changes made by the Treaty of Amsterdam on 2 October 1997, OJ 1997 C340, pp. 173-308, hereafter referred to as ''The Treaty''. Under the scope of my paper I have summarised the current legal situation by examining case law. In conclusion I have found that article 82 imposes a special responsibility on undertakings in a dominant position not to allow their conduct to impair competition. The dominant undertaking's refusal to deal constitutes an abuse when it affects the structure of the market and differs from normal competitive behaviour. According to case law, this is the case when the refusal is not objectively justified. The Court does not define the meaning of normal behaviour, but it is clear that article 82 does not hinder dominant undertakings to look after their commercial interests. A dominant undertaking is allowed to make profitable decisions and according to the Court of Justice of the European Communities, Hereafter referred to as ''The Court'', so is the case even if these decisions harm competitors. However, case law states that conduct can be considered as an infringement of article 82 if the intention of the dominant undertaking is to eliminate competitors. Being dominant is not contrary to article 82 and neither is the use of economic power in order to grow on the market where the dominant position is held. However, in case law it has been established that if an undertaking is dominant on one market, it is contrary to article 82 to use the strength on that market to enter another. In these cases the dominant undertaking can be forced to deal in order to let other competitors on the market. If the dominant undertaking supplies a raw material or controls an essential facility, its actions are more likely to impair competition. The structure of the market and the position of the dominant undertaking are decisive for the effect the conduct amounts to. Therefore, the freedom of action is different depending on in which market the dominant undertaking is acting. From the case of Bronner from 1997, Case C-7/97, Oscar Bronner GmbH &amp&semic Co. KG v. Mediaprint Zeitungs- und Zeitschriftenverlag GmbH &amp&semic Co. KG and Others, 26 November 1998, [1998] ECR I-7791. it follows that the duty to supply a service can be broken down into three criteria to show an abuse: 1. the conduct of the dominant undertaking must be likely to eliminate competition in the market. 2. the refusal cannot be justified objectively, and 3. the product in question must be indispensable, inasmuch as there is no actual or potential substitute in existence. These criteria can be useful when determining if a conduct infringes article 82, but are only to be seen as guidelines for the dominant undertaking. When determining if a refusal to deal by a dominant undertaking constitutes an abuse, each case must still be viewed separately.},
  author       = {Fredriksson, Sara},
  keyword      = {Konkurrensrätt,EG-rätt},
  language     = {eng},
  note         = {Student Paper},
  title        = {When the refusal to deal becomes an abuse of a dominant position - A study of how article 82 EC Treaty limits the freedom of action for undertakings in a dominant position},
  year         = {2001},
}