Dominant and Efficient – On the Relevance of Efficiencies in Abuse of Dominance Cases

60 Pages Posted: 23 Dec 2012 Last revised: 23 Jan 2013

Hans Wolfgang Friederiszick

E.CA Economics; ESMT European School of Management and Technology

Linda Gratz

E.CA Economics; Ludwig Maximilian University of Munich - Munich Graduate School of Economics (MGSE)

Date Written: December 19, 2012

Abstract

The European Commission’s policy on the relevance of efficiency considerations in abuse of dominance cases (Article 102 TFEU) is not well settled. In an attempt to give guidance on that matter we address that topic from two different angles: First, we review EC soft law provisions and recent decisions. Based on this review we find that efficiency defences are of limited importance under the current practice. They are of relevance in the growing number of IT related cases but not in others. Second, for the example of low price strategies, we then explore business practitioners’ views on the relevance of pro- and anti-competitive motives. Based on a survey among EMBA students we find that low price strategies are indeed frequently used. The motives are diverse though, often procompetitive and in line with antitrust compliance, i.e. low price strategies are rarely considered advisable for leading firms. Policy conclusions are drawn.

Keywords: antitrust policy, efficiency defence, predatory pricing, business view, survey

JEL Classification: K21, L21, L40

Suggested Citation

Friederiszick, Hans Wolfgang and Gratz, Linda, Dominant and Efficient – On the Relevance of Efficiencies in Abuse of Dominance Cases (December 19, 2012). ESMT White Paper No. WP-12-01. Available at SSRN: https://ssrn.com/abstract=2191492

ESMT European School of Management and Technology ( email )

Schlossplatz 1
Berlin, 10178
Germany

HOME PAGE: http://www.esmt.org/hans-w-friederiszick

Linda Gratz

E.CA Economics ( email )

Schlossplatz 1
Berlin, 10178
Germany
+49 30 21231 7087 (Phone)
+49 30 21231 7099 (Fax)

Ludwig Maximilian University of Munich - Munich Graduate School of Economics (MGSE)

Kaulbachstrasse 45
München, 80539
Germany

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