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  • Print publication year: 2009
  • Online publication date: June 2012

Introduction

Summary

The first two chapters consider cases where there is a single firm that can be identified as dominant in the market. Each was engaging in identifiable business practices that rivals considered to be an abuse of economic power. The two dominant firms in question could claim that they achieved their dominance by success in the competitive process of giving customers what they wanted. The core economic issue was whether the practices in question went beyond consumer satisfaction. Did they entrench dominance and stifle the competition that would be necessary for consumers to continue to be given what they wanted at a reasonable price?

Both cases were investigated by the European Commission under Article 82 of the EU Treaty which prohibits the abuse of a dominant position. Both cases were also appealed unsuccessfully to the CFI. Article 82 is not specific as to what is an abuse but it provides a number of examples, including ‘unfair purchase or selling prices’ and price discrimination that leaves trading parties at a ‘competitive disadvantage’. If a firm is found to have broken the prohibition, it can be fined up to 10 per cent of its turnover and be required to comply with remedies that eliminate the identified problem. Article 82 has almost exclusively been applied to business practices that exclude rivals and not to directly exploitative high prices.