Once dominance is established, the key question becomes: has the firm abused that position? Article 102 TFEU does not prohibit dominance itself – only conduct that distorts competition or harms consumers.
This post explains the two major categories of abuse, how EU courts distinguish legitimate competition from unlawful exclusion, and why digital markets are reshaping the doctrine.
What Counts as an Abuse?
The classic definition comes Hoffmann-La Roche:
Conduct that is not based on competition on the merits and has the effect of hindering the maintenance or growth of competition.
Three elements matter:
- The firm is dominant
- The conduct is not competition on the merits
- The conduct harms the competitive process
The Two Categories of Abuse
EU law recognises two broad types:
(a) Exclusionary abuses
Intent is not required – effects matter.
Conduct that pushes rivals out, raises their costs, or prevents entry.
Examples include:
- Exclusive dealing
- Rebates and loyalty schemes
- Predatory pricing
- Margin squeeze
- Refusal to supply
- Tying and bundling
- Self-preferencing (in digital markets)
(b) Exploitative abuses
Conduct that harms customers directly.
Examples include:
- Excessive pricing
- Unfair trading conditions
- Discriminatory terms
Exclusionary abuses dominate enforcement because they harm the competitive structure not just individual customers.
Exclusionary Abuse: The Modern Effects-Based Approach
Historically, some practices were treated as almost per se unlawful – especially Intel (C-443/14P) – requires a more economic, effects-based assessment.
Authorities must consider:
- The dominant firm’s ability to foreclose
- The extent of foreclosure
- The conditions of competition
- The dominant firm’s incentives
- Evidence of actual or likely harm
This shift is especially important for rebates, exclusivity, and platform conduct.
Key Exclusionary Abuses Explained
(1) Exclusionary Dealing & Loyalty Rebates
Classic cases: Hoffmann-La Roche, Intel
These can foreclose rivals by tying customers to the dominant firm.
(2) Predatory Pricing
Classic case: AKZO
Pricing below cost to eliminate rivals, followed by recoupment.
(3) Margin Squeeze
Classic cases: Deutsche Telekom, Telefonica
Occurs when vertically integrated dominant firm sets wholesale and retail prices so close that rivals cannot compete profitably
(4) Refusal to Supply / Interoperability
Classic cases: Commercial Solvents, Bronner, Microsoft
Refusal becomes abusive only when access is indispensable and refusal eliminates effective competition.
(5) Tying & Bundling
Classic case: Microsoft
Occurs when customers are forced to take a tied product, foreclosing rivals.
(6) Self-Preferencing
Modern example: Google Shopping
Platforms favour their own services over rivals, distorting visibility and traffic.
Exploitative Abuse: The Sleeping Giant
Exploitative abuse is less common but increasingly relevant in digital and consumer markets.
Excessive Pricing
Classic case: United Brands
A price is excessive if it bears no reasonable relation to economic value.
Unfair Terms
Examples include discriminatory conditions or unfair contract clauses.
The Commission is showing renewed interest in exploitative abuse in sectors like pharmaceuticals, energy, and digital platforms.
Abuse in Digital Markets: A New Frontier
Digital markets introduce new forms of dominance and new types of abuse:
- Algorithmic self-preferencing
- Data-driven foreclosure
- App store restrictions
- Default settings and pre-installation
- Ecosystem tying
- Gatekeeper control over ranking and visibility
Cases like Google Shopping, Android and Apple App Store show a shift toward ecosystem-level analysis, not just product-level conduct.
Competition on the Merits vs Abuse
EU courts distinguish legitimate competition from abuse by asking:
- Does the conduct improve the product?
- Does it reflect efficiency, innovation, or investment?
- Or does it rely on leveraging dominance to distort competition?
Competition on the merits include:
- Innovation
- Better quality
- Lower prices
- Investment in capacity
- Genuine efficiency gains
Abuse involves:
- Leveraging dominance
- Excluding rivals without efficiency justification
- Distorting the competitive process
Why Abuse Matters
Abuse of dominance cases shape:
- Platform governance
- Access to data
- Interoperability
- Consumer choice
- Innovation incentives
- Market structure
Understanding abuse is essential.
Conclusion
Article 102 TFEU is not about punishing size – it is about preventing firms with substantial market power from distorting competition, The modern approach is increasingly effects-based, economically grounded, and sensitive to digital ecosytems.
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