The Law of Abuse - A more economic approach to article 82

Abstract: This thesis examines the objectives of Article 82 and the enforcement by the Commission and Court. The discrepancies are then analysed with reference to leading legal scholars. Finally, possible outlooks are scrutinized and weighed against the criticism towards the former application. In December 2005, the DG Competition presented its Discussion Paper on the application of Article 82 of the Treaty to exclusionary Abuses, which is part of the present review of Article 82 and an important factor for the modernisation of the law of abuse. Earlier in 2005, the Economic Advisory Group for Competition Policy presented its views on a more economic approach to Article 82, which concluded much of the criticism pointed at the previous application. The policy on the application of article 82 of the EC Treaty has been subject to, above all, economical critique for some time. There has been a lack of consistency in the case law and the reasoning of the Court and the Commission has occasionally been difficult to follow. It has also been confusion on who is to be protected - consumers or competitors, and critical voices have said that it is actually dominance that is forbidden and that competition on merits is not possible. In order to turn the EC market into one of the most competitive and customer-orientated markets of the world, the Commission has decided to review and clarify its approach to Article 82. There are essentially two approaches to the assessment of abuse of a dominant position. One is the form-based approach, which builds upon separate scrutiny of a previously defined practice. The other approach is the effects-based approach, in which the authorities focus on the specific circumstances of each case. Many economists advocate the effects-based approach, since it could lead to a more efficient application from an economic perspective. The main critique towards such an approach is that it might lead to a high degree of legal uncertainty and deprive Article 82 of legal status. The Commission seems to, to some extent, have chosen the more effects-based economic approach, advocated by many economists. Such a new approach would be welcomed by many dominant companies, since where the Commission in the past has deemed a conduct as abusive where it just potentially would restrict competition, it will now as it seems, apply a more detailed analysis on the effects on the market of such conduct. In particular in the area concerning rebates, there seem to be a move away from the per se regulation which has been more or less the case in the past. New is also the view that the dominant company should have possibilities of objectively justifying its behaviour. Many of the difficulties of the application of Article 82, however, seem to remain, for instance the problems of requiring necessary information on cost/price-calculation for the assessment of the efficiency of the undertaking.