Abuses of Dominant and Non-Dominant Position. A Tale of (Ir)Reconcilable Views?

Fabiana Di Porto and Ruprecht Podszun (eds) Abusive Practices in Competition Law, Ascola Series, Edward Elgar, 2018, Forthcoming

18 Pages Posted: 5 Jun 2018 Last revised: 24 Feb 2019

See all articles by Fabiana Di Porto

Fabiana Di Porto

University of Salento ; Luiss Guido Carli University; Law Faculty, Hebrew University

Date Written: May 22, 2018

Abstract

In this paper I both review expert contributions from different jurisdictions pertaining to norms on abuse of dominance and norms on abuse of non-dominance, and assess to what extent these two families of dispositions are theoretically and practically reconcilable.

As a matter of comparative law, the first question that arises is the risk of regulatory drift in the application of norms on abuse of dominant position. That happens, for instance, with commitment decisions (which I prefer to term ‘para-regulatory’ decisions), and with the particularly aggressive attitude toward the enforcement of exploitative ‘unfair’ prices (Article 102 lit. a) TFEU), by some national competition agencies. The latter may require them to (unduly) set, and thus regulate, ‘fair’ prices. To avoid that, a proposal is made to reinterpret the norm as prohibiting only supra-monopolistic prices (as effectively exclusionary, rather than exploitative). My conclusion on this is that such a reinterpretation would unreasonably eliminate any difference between a monopolistic price that is ‘exceptionally justified’ because it is welfare-enhancing and one that is not.

On the side of norms on abuse of non-dominance, although differently constructed (as situations of economic dependence or of superior bargaining power), the core difference among jurisdictions resides on whether the abuse also amounts (as in Japan and North Korea) to an infringement of competition laws (ie has an effect on the relevant market), or not. In the latter case, unilateral conducts by non-dominant firms may still be scrutinized if the relevant market is defined in a very narrow fashion (and consequently dominance is ascertained). The two hypothesis taken together, however, risk transforming the competition agency into a regulator for policing detailed contractual terms and fairness.

One might thus question whether intervening to protect weaker economic partners makes sense at all from a general welfare standpoint; or, on the contrary, it is legitimate to enforce the weaker party’s ‘right’ or freedom to compete in the market.

On a normative ground, in order to reconcile norms on abuse of dominance and of non-dominance, I suggest for those jurisdictions that keep abuse of non-dominance within the realm of competition laws (by requiring an effect on the relevant market to be ascertained), either to remove this latter requirement or to expressly establish flexible thresholds of non-dominance.

Keywords: superior bargaining power, abuse of dominant position, abuse of economic dependence, exploitative prices, commitment decisions, Article 102 TFEU, platforms, unfair prices, conglomerates, unilateral conduct, Section 2 Sherman Act, unconscionable conduct

JEL Classification: K21, K42

Suggested Citation

Di Porto, Fabiana, Abuses of Dominant and Non-Dominant Position. A Tale of (Ir)Reconcilable Views? (May 22, 2018). Fabiana Di Porto and Ruprecht Podszun (eds) Abusive Practices in Competition Law, Ascola Series, Edward Elgar, 2018, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3183146

Fabiana Di Porto (Contact Author)

University of Salento ( email )

Via per Monteroni
Lecce, Lecce 73100
Italy

Luiss Guido Carli University

Viale Romania
Rome, Roma 00100
Italy

Law Faculty, Hebrew University ( email )

Mount Scopus
Mount Scopus, IL 91905
Israel

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