Dominance within the meaning of Article 82 EC

Abstract: It can be read from the EC treaty that the European Community shall have as its task to promote competition throughout the Community. Competition law exists to ensure competition in a free market, as competition is believed to bring such benefits as efficiency, low prices and innovation. Article 82 EC is meant to promote competition and is also meant to prevent anti-competitive behaviour. For Article 82 EC to be applicable several requisites must be met and one of them is that the undertaking must be in a dominant position. It is no easy task to establish dominance and there are no clear guidelines as how to do so. In the United Brands case the ECJ provided a definition of dominance stating that dominance was economic strength enjoyed by an undertaking which enabled it to prevent effective competition and to behave to an appreciable extent independently. Subsequently, in Hoffman La Roche it was stated that some competition does not prevent the undertaking from being dominant. One important element in the assessment of dominance is the market share data. However, mere numbers cannot determine dominance and other factors must be taken into account. It is the effect on the market the undertaking has that is of interest and not merely its market share. Such factors may strengthen or weaken the undertaking’s market position. Important to note is that there is no exhaustive list of factors the Community authorities could take into consideration when assessing dominance. Through the years, there has been much criticism directed against the application of Article 82 EC and several commentators have argued that it is applied too arbitrary, and that there is no formalistic approach. The Commission has acknowledged the fact that the current case law under Article 82 EC is controversial and is currently working on a review of the provision. It is however doubtful whether the review will have much impact considering that the Commission is bound by existing case law, but possibly it could encourage a development in the future.