Sistemas de Avantica para la gestión del personal

Having defined the main features of a dominant position, it is now necessary to explore what constitutes an abuse of dominant position. Article 102 of the TFEU exemplifies that abuse of dominant position may consist of:

“(a) directly or indirectly imposing unfair purchase or selling prices or other

658 Van Bael and Bellis, Op. Cit. p. 118.

659 European Commission. London European-Sabena. OJ 1988. L317/47, pp. 13-15. 660 Van Bael and Bellis, Op. Cit. p. 119.

139

unfair trading conditions; (b) limiting production, markets or technical development to the prejudice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) 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 subject of such contracts.”662

This list is not exhaustive and there can be other types of conduct which can be treated as abuse of dominant position.

Depending on the number of undertakings involved, dominant position can be either individual or collective. Individual dominant position, as its name suggests, occurs when one company has a dominant position in a given market. As far as a collective dominant position is concerned, in Airtours plc v Commission663 the Court reveals the conditions necessary to establish it. In particular, the Court points out that, in order to create a collective dominant position, the following conditions should be met: (1) each member of the dominant oligopoly should be able to know how other members are behaving so as to monitor whether they adopt a common policy; (2) tacit coordination should be sustainable over time; (3) the anticipated reaction of current and future competitors would not jeopardise the results expected from the common policy.664 If at least one of these conditions is not met, it is almost impossible to establish a collective dominant position. Thus, in Impala v Commission665 the Court found no collective dominant position because a lack of market transparency did not allow the market participants to monitor each other’s conduct so as to monitor whether they had adopted a common policy.

In a word, a collective dominant position can be defined as a position sustained over time, maintained by two or more undertakings that are able to monitor each other’s behaviour in order to control the adoption of a common policy, and safe against the reaction of current and future competitors.

Legal cases (critical discussion of significant legal cases)

662 The Treaty on the functioning of the European Union of 2010. Article 102.

663 Airtours plc v Commission of the European Communities. (Competition) [2002] EUECJ T-342/99

664 United Brands Company and United Brands Continental BV v Commission of the European Communities. [1976] EUECJ C- 27/76R

140

After the theoretical dimensions of dominance have been pointed out, it is possible to critically discuss some noteworthy cases involving abuses of dominance. One such case is the United Brands case. In the United Brands case, the European Commission arrived at the conclusion that the United Brands had contravened Article 82 of the TEC (currently Article 102 of the TFEU) by way of charging, among other things, redundant prices for the branded Chiquita bananas in the Netherlands, Luxembourg, Germany and Belgium.666

The decision of the European Commission in the aforesaid case was underpinned by the following arguments: a) the comparison of prices charged by United Brands in Ireland and other countries showed a very big discrepancy which proved that United Brands had produced a “very substantial profit”; b) the differential between the two grades of bananas was not justifiable under the criteria of cost and quality differences; c) the Commission found out that the prices of competing brands were much lower than those of Chiquita bananas.

As a result, the United Brands case is based on the comparative analysis of different brands and competitors leading to the finding that the dominance of United Brands infringed on the competition in the market of bananas. The European Commission correctly determined that United Brands had abused its dominant position. At first, the Commission defined the relevant market in order to prove that United Brands occupied the dominant position in that market - the market for bananas. Second, the prices of various competitors were compared in order to show that United Brands charged 100 per cent higher prices than other companies producing bananas of the same quality. In the ultimate analysis, it should be conceded that the European Commission’s decision on the abuse of United Brands corresponds with Article 102 of the TFEU, which clearly articulates that an abuse of a dominant position particularly consists in direct or indirect imposition of unfair purchase or selling prices or other unfair trading conditions.667

Despite this, the European Court of Justice ruled against the decision of the European Commission in the United Brands case. The decision of the Court was based on the finding that there was no evidential support for the Commission’s claim that United Brands had gained a “very substantial profit” as United Brands suffered losses in Ireland. Also, the Court mentioned that the differences in prices between Member States can be presented as

666 European Commission. Chiquita. OJ 1976 L 95/1. 667 TFEU, Op. Cit. Article 102.

141

evidence of unfair pricing only if the markets in the Member States are objectively comparable.668 Thus, the concept of “objective comparability” became a new criterion for the assessment of a dominant position.

The aforementioned decision of the European Court of Justice seems to be dubious and uncertain. The term “objective comparison” does not settle the issue in question but gives birth to new uncertainties and encourages further abuses of dominance. The Court meant that it would not be unfair if the company could justify excessive prices with pertinent and objective divergences in the management in one Member State as compared to other Member States. However, the Court failed to acknowledge that Article 102 of the TFEU had no legal provision concerning management of pricing but unconditionally emphasised both direct and indirect imposition of unfair prices.

Another instance of the abuse of a dominant position may be exemplified with the European Union Microsoft competition case. This case started as a complaint from Novell over Microsoft’s practices of licensing in 1993. The decision was reached in 1994, bringing to an end some of Microsoft’s licence practices.669 _{Afterwards, Sun Microsystems raised a}

complaint concerning the lack of disclosure of certain interfaces to Windows NT. The examination of streaming media technologies and their integration with Windows widened the case. The main specificity of the Microsoft case is the fact that it involved the trilateral negotiations between Microsoft, the US federal authorities and the EU authorities. The case unfolded the shortcomings of cooperation between the US and EU.670 Another peculiarity of the Microsoft case was the fact that this case involved two jurisdictions and thus two systems of competition law: the EU competition law and US competition law.

The abuse of a dominant position by Microsoft consisted in the lack of disclosure of the interfaces to Windows NT, which prevented other competitors from creating alternative competing networking software to fully interact with Windows servers and desktops.671 _As

a result, the European Union ruled against Microsoft, ordering it to pay €497 million as a fine. In light of this, it is possible to agree with the European Commission that Microsoft jeopardised open source and open standards in the domain of information technologies.

668 United Brands Company and United Brands Continental BV v Commission. [1976]. ECR 425

669 Lamia, A.-H. Microsoft investigated in Europe. CNET News.com. [Online] Available from: http://news.cnet.com/2100-1023_3- 204317.html [Accessed: 9 March 2013].

670 European Commission. Microsoft. Case C-3/37.792.

671 Fried, I. EU closes in on Microsoft penalty. CNET News.com. [Online] 2003. Available from: http://news.cnet.com/2100-1016_3- 5060463.html[Accessed: 6 March 2013].

142

Moreover, the EC correctly stated that Microsoft had abused its dominant position by limiting the ability of other competitors to innovate in Windows. The actions of Microsoft were prohibited under Article 102 of the TFEU as an abuse limiting technical development to the detriment of consumers. The main drawback of the EC’s decision in the case was the restriction of dominant companies to innovate.

It should be noted that, unlike anti-competitive agreements and practices, such violation as abuse of dominant position does not have exemptions. Thus, in Tetra Pak Rausing SA v Commission672 _{the Court clearly stated that the exemptions provided by}

Article 101 (3) are not applicable to the abuse of dominant position. In particular, the Court observed that article 102 “by reason of its very subject-matter (abuse), precludes any possible exception to the prohibition it lays down.”673 _{In this case the Court ruled that when}

a block exemption is granted on the basis of Article 101 (3), Article 102 still applies. In a word, the block exemption obtained pursuant to Article 101 (3) does not exempt the company from the liability for abuse of dominant position.