Abuse of Dominance: Exclusionary Pricing Abuses

Abstract

This chapter examines the way that EU competition law applies to exclusionary pricing abuses, focusing on predatory pricing, selective low pricing, margin squeeze, rebates and other forms of price discrimination. It considers whether the evolution in the jurisprudence reflects a less formalistic approach to Article 102 and a trend towards a more economic one, based on a consumer welfare objective. The Chapter concludes that in seeking to identify unlawful exclusionary behaviour, the judgments of the EU Courts seem, to date, to prefer a construction of Article 102 that will ensure that the process of competition and rivalry between firms is preserved and protected. The anti-competitive effects of a dominant firm’s conduct thus tend to be assumed where that conduct is capable of excluding equally efficient competitors or is liable to remove or restrict a buyer’s freedom to choose its sources of supply, to bar competitors from access to the market, to apply dissimilar conditions to equivalent transactions with other trading parties or to strengthen the dominant position by distorting competition. Critics complain that the EU rules in this area may, in consequence, be over-inclusive and may unduly deter pro-competitive low cost pricing by dominant firms. Although the Commission, in its Guidance Paper and more recent decisions, has sought to meet this criticism, promising to focus more closely on the question of whether a pricing practice will exclude equally efficient competitors and cause consumer harm, it is too early to determine to what extent this new policy will result in a concomitant evolution in the jurisprudence of the Court of Justice.

Keywords: Article 102, abuse, exclusionary pricing practices, price discrimination