Well-written and well-argued but ultimately unconvincing view taken from the law'n'economics mainstream on competition law.
Thursday, April 14, 2011
Sunday, April 03, 2011
Note - this refers to conduct dating to April 2000! Court (First Chamber) hereby rules:
In the absence of any objective justification, the fact that a vertically integrated undertaking, holding a dominant position on the wholesale market in asymmetric digital subscriber line input services, applies a pricing practice of such a kind that the spread between the prices applied on that market and those applied in the retail market for broadband connection services to end users is not sufficient to cover the specific costs which that undertaking must incur in order to gain access to that retail market may constitute an abuse within the meaning of Article 102 TFEU.
When assessing whether such a practice is abusive, all of the circumstances of each individual case should be taken into consideration. In particular:
– as a general rule, primarily the prices and costs of the undertaking concerned on the retail services market should be taken into consideration. Only where it is not possible, in particular circumstances, to refer to those prices and costs should those of competitors on the same market be examined, and
– it is necessary to demonstrate that, taking particular account of whether the wholesale product is indispensable, that practice produces an anti-competitive effect, at least potentially, on the retail market, and that the practice is not in any way economically justified.
The following factors are, as a general rule, not relevant to such an assessment:
– the absence of any regulatory obligation on the undertaking concerned to supply asymmetric digital subscriber line input services on the wholesale market in which it holds a dominant position;
– the degree of dominance held by that undertaking in that market;
– the fact that that undertaking does not also hold a dominant position in the retail market for broadband connection services to end users;
– whether the customers to whom such a pricing practice is applied are new or existing customers of the undertaking concerned;
– the fact that the dominant undertaking is unable to recoup any losses which the establishment of such a pricing practice might cause, or
– the extent to which the markets concerned are mature markets and whether they involve new technology, requiring high levels of investment.