Hidden Efficiencies: On the Relevance of Business Justifications in Abuse of Dominance Cases

40 Pages Posted: 12 Sep 2013

See all articles by Hans Wolfgang Friederiszick

Hans Wolfgang Friederiszick

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

Linda Gratz

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

Date Written: September 10, 2013

Abstract

This article assesses the relevance of efficiencies and other justifications in recent Article 102 TFEU cases. Based on a review of all EU decisions and openings between 2009 and mid 2013 we find that procompetitive justifications still play a mediocre role in the EU Commission’s evaluations, except in IT related abuse cases. This stands in contrast to the policy goals expressed during the reform phase (2005 to 2009), the Guidance Paper and the increasing relevance of efficiency considerations in merger proceedings. We argue that this is due to a malfunctioning of the balancing test, i.e., the weighting of pro- and anticompetitive effects, as pro- and anticompetitive effects are often non-separable and non-monotone in Article 102 TFEU cases. In addition, the increasing practice of commitment decisions reduces transparency; little guidance regarding dynamic efficiencies further diminishes the relevance of business justifications in Article 102 TFEU cases. Policy options are discussed.

Keywords: European competition policy, abuse of dominance, efficiency defense

JEL Classification: K21, L21, L40

Suggested Citation

Friederiszick, Hans Wolfgang and Gratz, Linda, Hidden Efficiencies: On the Relevance of Business Justifications in Abuse of Dominance Cases (September 10, 2013). ESMT Working Paper No. 13-10. Available at SSRN: https://ssrn.com/abstract=2324133 or http://dx.doi.org/10.2139/ssrn.2324133

Hans Wolfgang Friederiszick (Contact Author)

E.CA Economics ( email )

Schlossplatz 1
Berlin, 10178
Germany

HOME PAGE: http://www.e-ca.com/our-team/#hans-w-friederiszick

ESMT European School of Management and Technology ( email )

Schlossplatz 1
Berlin, 10178
Germany

HOME PAGE: http://faculty-research.esmt.berlin/person/hans-w-friederiszick/bio

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 (LMU) - Munich Graduate School of Economics (MGSE)

Kaulbachstrasse 45
München, 80539
Germany

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