Business Strategy or Abuse of Dominance : An Analysis of Different Approaches Towards Self-Preferencing Within the Meaning of Article 102 TFEU

Abstract: An undertaking enjoying a dominant position on the internal market has many possibilities to flourish and develop. One way of increasing market power is to expand business activities to downstream markets. An undertaking that is dominant on the upstream market can thus take advantage of its dominance when engaging in business conduct on the downstream market. However, taking advantage of such a position can in some circumstances lead to an infringement of Article 102 TFEU. Recent cases from the EU courts and the EU Commission have, however, demonstrated uncertainties concerning the ways in which the article should be applied.   The purpose of the thesis has been to examine different approaches towards the application of Article 102 TFEU in situations where vertically integrated dominant undertakings are favouring their own downstream operations to the prejudice of competitors. The research question concerns whether there exists a general duty for vertically integrated dominant undertakings not to discriminate in favour of their own downstream operations.   The overall theme of the thesis is the difficulties in drawing a line between legitimate business strategies and abusive business conduct. When intervening against businesses, competition authorities have an important task in balancing the potentially conflicting interests of free competition and counteracting market imperfections. While it is important to encourage business development and innovation, it is also vital to ensure the functioning of the internal market. Discussions concerning these ideas are being held with reference to case law from the EU courts as well as from decisions and statements from the European Commission.   The findings of the thesis show that there has been a noteworthy inconsistency in the application of Article 102 TFEU. A discrepancy in the approaches towards the article has been found, both concerning the main goals of the article as well as the circumstances in which it should be applied. The conclusion is that it is not possible to state that there is a general duty not to discriminate in favour of an undertaking’s own downstream operations. Nevertheless, indications in the direction of such a duty do exist. Finally, the outcome of the analysis suggests that the inconsistency and ambiguities in the law enforcement can result in an infringement of legal certainty.