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The EU courts, followed by the EU Commission have created the possibility that firms can present objective justification for conduct that appears to abuse a dominant position.
While not provided for in the language of Article 102 TFEU or the Competition Act 1998, s 18, it is clear from case law that firms can only abuse a dominant position where there is no objective necessity for the conduct in question, see e.g. Case 311/84 Centre Belge d'Etudes de Marché Télémarketing v. CLT [1985] ECR 3261.
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In the EU, unilateral or ‘dominant’ firm conduct is governed by Article 102 TFEU. In particular, Article 102 TFEU prohibits undertakings that (individually or collectively) hold a dominant position within the internal market or a substantial part of it from abusing their dominance (without objective justification) insofar as it may affect trade between Member States. This provision is mirrored in the national competition laws of EU Member States.Article 102 TFEU places a ‘special responsibility’ on dominant undertakings—aiming to ensure that powerful firms do not distort markets, act unfairly towards customers or reduce the threat of competition by excluding rivals, in particular by:•directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions•limiting production, markets or technical development to the prejudice of consumers•applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage, or•making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which by their nature or according to commercial usage have no connection with the...
Predatory pricing is a well recognised ‘exclusionary’ abuse under Article 102 TFEU—namely, conduct engaged in by a dominant undertaking which specifically targets competitors and aims to eliminate or weaken their position as viable rivals (either by forcing them out of the market or by deterring market entry). In particular, this is achieved by a dominant firm forgoing profits in the short term in order to drive out or discourage competitors. Once the dominant firm has successfully excluded existing competitors or potential entrants, the dominant undertaking will have strengthened its position and be free, in theory, to charge supra-competitive prices and/or degrade its downstream offerings without consequence.While predation is conceptually easy to recognise and appreciate, distinguishing between a predatory price and legitimate price competition under Article 102 TFEU is by no means straight-forward as:•even dominant firms may lower their prices for totally legitimate and consumer beneficial reasons•even where concerns turn out to be genuine, initial indications of predation can often appear pro-competitive—ie low prices are, intuitively, a good thing and indeed...
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An introduction to competition law compliance—a guide for staff What is competition law? Competition benefits both businesses and consumers. It shows companies where they need to improve and encourages organisations to strive for greater efficiency, become more innovative, more productive, and ultimately be better businesses.Competition law is designed to protect businesses and consumers from anti-competitive behaviour, and safeguard effective competition.All businesses must comply with competition law and there can be serious consequences for businesses and individuals, including directors, for non-compliance. These can include heavy fines, prison sentences, director disqualifications and reputational damage. When is it an issue? Competition law may become an issue for organisations in three main contexts:cartels—these are usually based on horizontal arrangements where two or more businesses agree, whether in writing or otherwise, not to compete with each other. Cartels are the most serious type of anti-competitive agreements. They include agreements to fix prices, engage in bid-rigging, limit production and share customers or markets. A cartel may also arise where there is a...
Competition law compliance—dominant position guide for staff 1 What is dominance? 1.1 As a rough rule of thumb, once a business consistently has a market share in excess of 40%, it is likely to be in a dominant position. That market share typically needs to have been maintained for at least two years. However, market share is not the only factor in determining whether a business is dominant—it will be dominant if it can act, to an appreciable extent, independently of its competitors, customers and consumers in the relevant market. 1.2 When an organisation occupies a position of dominance, it has a ‘special responsibility’ not to allow its conduct to impair genuine competition. Failure to adhere to the special responsibility puts a business at risk of abusing a dominant position. Determining what might be abusive is not always clear-cut. 2 Why market dominance is a concern 2.1 Dominant businesses have a special responsibility to ensure their conduct does not distort competition. 2.2 Dominant companies should constantly assess their conduct in...
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In a fixed-term employment contract, does the notice period for terminating the contract have to be the same length for both employer and employee, or can the contract require the employee to give a longer period of notice than the employer? When it comes to notice periods for terminating a contract of employment, the Employment Rights Act 1996 (ERA 1996): • requires a worker’s written statement of employment particulars (to which most workers are entitled, and which can take the form of an employment contract) to include, among other things, particulars of: • the length of notice which the worker is obliged to give and entitled to receive to terminate their contract, and • in the case of a fixed-term contract, the date the fixed-term contract is to end • provides for minimum periods of notice (in relation to employees who qualify for the right) that must be complied with for an employer, and an employee, to bring a contract to an end (ERA 1996, s 86). If...
Can an employer stop providing life assurance benefits to employees at an age higher than 65 under age discrimination legislation? Paragraph 14(2) of Schedule 9 to the Equality Act 2010 provides that it is not an age contravention for an employer to make arrangements for, or afford access to, the provision of insurance or a related financial service to or in respect of only such employees as have not attained whichever is the greater of the age of 65 and state pension age. The wording of the exception means that it only applies to employers who stop providing insurance benefits to employees as soon as they reach the age of 65 (or state pension age if greater). This means that, to fall within the exception, the
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Employment analysis: There was no need for the claimant’s dismissal claim to be remitted to the employment tribunal as the tribunal would be bound on the particular facts to find that the claimant’s dismissal was not objectively justified and, accordingly, that it constituted unlawful discrimination under the Equality Act 2010. The claimant’s beliefs that gender is binary and that same-sex marriage cannot be equated with marriage between a man and a woman are protected beliefs. Even if it was assumed that the respondent was entitled to take objection to the posts she had made on Facebook which expressed these beliefs (eg because the language was gratuitously offensive to gay and/or trans people and used in the context of sex education in schools which made it relevant to the claimant’s work), the dismissal was unquestionably a disproportionate response, according to the Court of Appeal.
Competition analysis: In Alphabet and Others before the Court of Justice, Advocate General Laila Medina issued an Opinion (the ‘Opinion’) on 5 September 2024 concerning the interpretation of the prohibition against abuse of a dominant position under Article 102 TFEU. The case concerns Google's refusal to facilitate the interoperability of its Android Auto platform with JuicePass, an app which offers features for navigating to, and using, electric car charging stations. The Opinion proposes that dominant undertakings may be required to grant access to their digital platforms, even if the Bronner conditions (being that (i) the refusal is likely to eliminate all competition in the market; (ii) the refusal is incapable of being objectively justified; and (iii) the service is indispensable to carrying out that person's business) are not met. The Opinion, if followed by the Court of Justice, would have significant implications for the technology and digital markets sectors, requiring developers of digital platforms to consider third-party access. It also has the potential to directly affect competition for digital services...
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