Short Reads

European Court of Justice provides guidance on assessing discriminatory pricing

European Court of Justice provides guidance on assessing discriminato

European Court of Justice provides guidance on assessing discriminatory pricing

01.05.2018 NL law

On 19 April 2018, the European Court of Justice clarified when the application of discriminatory prices with regard to trading partners by a dominant firm amounts to abuse of dominance.

In its judgment, the Court answered several questions that had been referred by a Portuguese court in proceedings concerning the prices charged by GDA, a Portuguese collective rights management organisation, to MEO, a television distributor. In essence, MEO argued that it was charged higher prices than its main competitor and consequently it was put at a competitive disadvantage leading to an infringement of Article 102 TFEU.

Going beyond the specifics of the case, the Court seized the opportunity to clarify two aspects of Article 102(2)(c) TFEU. First, the Court held that simply applying dissimilar conditions to trading partners is not always capable of distorting competition. This behaviour must have the effect that a trading partner is placed at a competitive disadvantage, i.e. there is a deterioration of its competitive position compared to its competitors on the downstream market. However, providing proof of actual and quantifiable deterioration of its competitive position is not required. Instead, all of the relevant circumstances of the case must be examined to determine the actual or potential competitive effect of the conduct. Second, the Court confirmed that while there is no minimum threshold for the purposes of determining whether the behaviour is abusive, not all behaviour has an anticompetitive effect.

Having set out the general framework, the Court gave the referring court several pointers to assess whether MEO was placed at a competitive disadvantage. (i) The downstream market was heavily concentrated and consisted of a duopoly of MEO and another provider, leading to significant negotiating power against GDA. (ii) The specific price charged to MEO was the result of a binding statutory arbitration between MEO and GDA. (iii) MEO actually gained a significant market share in the years the discriminatory prices were in place. The Court also observed that where the effect on the profitability of the trading partner is not significant, that fact may point towards the finding that the tariff differentiation is not capable of having any effect on the competitive position of that entity. (iv) In situations where the prices concern a downstream market on which the dominant firm is not active, the dominant firm has in principle no interest in excluding one of its trade partners from that downstream market. While the first three circumstances are quite case-specific, the Court's last observation seems to have a broader scope of application, for example if the dominant firm is vertically integrated.

In a recent private enforcement case, the Amsterdam District Court anticipated the Court's judgment by relying on Advocate General Wahl's opinion in MEO and applied a similar effects test [see our March 2018 Newsletter]. Seemingly, the Court's judgment in MEO provides welcome guidance to competition authorities and courts on the examination of discriminatory pricing by a dominant firm.

This article was published in the Competition Law Newsletter of May 2018. Other articles in this newsletter:

  1. Germany did not err in extraditing an Italian citizen to the US for a competition law infringement
  2. European Commission imposes record fine on Altice for premature implementation of PT Portugal acquisition
  3. European Commission proposes draft Regulation on online platforms and search engines
  4. District Court of Amsterdam rules on requests for pre-procedural hearings
  5. Rotterdam District Court quashes cartel fines imposed by the ACM on cold storage operators

Team

Related news

18.02.2019 BE law
Plan-MER voor Vlaams windturbinekader? Raad voor Vergunningsbetwistingen te rade bij Europa

Articles - Het wordt stilaan een traditie van de Belgische rechter om het Hof van Justitie te bevragen over de milieueffectenbeoordeling en -rapportage (MER). Na de Raad van State en het Grondwettelijk Hof is het de beurt aan de Raad voor Vergunningsbetwistingen. In een tussenarrest van 4 december 2018 heeft de Raad voor Vergunningsbetwistingen aan het Hof van Justitie een lijst met prejudiciële vragen gesteld over de plan-MER-plicht van het Vlaamse kader voor de uitbating van windturbines. Mogen we ons verwachten aan een juridische saga "d'Oultremont pt.II"?

Read more

07.02.2019 NL law
Follow-on cartel damages claim dismissed: don't bury courts under paper work

Short Reads - A recent ruling by the Dutch Court of Appeal confirmed that claimants will need to sufficiently substantiate their claim that they suffered loss due to a cartel, even in follow-on cases. Despite a presumption that sales or service contracts concluded during the cartel period have been affected by the cartel, claimants will still need to provide the courts with concrete, detailed and uncluttered information showing (i) which party purchased (ii) which products from (iii) which manufacturer for (iv) which amount, preferably with copies of the relevant agreements.

Read more

18.02.2019 NL law
Brexit and data protection: preparing for a 'no-deal'

Short Reads - As it stands, the UK will exit the European Union at midnight on 29 March 2019. Therefore, businesses within the UK, or with trade relations with the UK, would be best advised to assume that a no-deal Brexit is inevitable. The exchange of personal data  within the EU is governed by the General Data Protection Regulation (GDPR). In a no-deal Brexit, the GDPR will cease to be applicable in the UK upon its EU exit.

Read more

07.02.2019 NL law
The need for speed in mergers is no reason to ignore rights of defence

Short Reads - On 16 January 2019, the European Court of Justice clarified the procedural guarantees the European Commission needs to provide to merging parties during merger reviews. According to the Court of Justice, the General Court (GC) had rightly annulled the Commission's decision to prohibit the merger of UPS and TNT. UPS's right of defence had been infringed because the Commission had failed to share the final version of the econometric model with UPS before adopting its prohibition decision.

Read more

07.02.2019 NL law
The ACM follows EU approach in its first pharmaceutical merger

Short Reads - The Dutch Authority for Consumers and Markets (ACM) recently reviewed its first merger between two pharmaceutical companies. In its conditional clearance of Aurobindo's acquisition of certain European Apotex assets, the ACM followed the European Commission's approach in assessing the merger's impact on competition. Companies will welcome the news that pharma mergers will be reviewed in a similar fashion, irrespective of whether the ACM or the European Commission conducts the review.

Read more

07.02.2019 EU law
Digitisation and competition law: past, present and future

Short Reads - It is nearly time for the European Commission to reveal its course of action in digitisation and competition law. Feedback from a public consultation and the recent conference on 'Shaping competition policy in the era of digitisation' together with the upcoming expert panel's report on the future challenges of digitisation for competition policy are likely to shape the Commission's course of action.

Read more

Our website uses cookies: third party analytics cookies to best adapt our website to your needs & cookies to enable social media functionalities. For more information on the use of cookies, please check our Privacy and Cookie Policy. Please note that you can change your cookie opt-ins at any time via your browser settings.

Privacy – en cookieverklaring