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Archive for October 6th, 2010

Ties that bind

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In Tomra sytems and others v. Commission the General Court explained that there is no de minimis abuse:

the foreclosure by a dominant undertaking of a substantial part of the market cannot be justified by showing that the contestable part of the market is still sufficient to accommodate a limited number of competitors. … the customers on the foreclosed part of the market should have the opportunity to benefit from whatever degree of competition is possible on the market and competitors should be able to compete on the merits for the entire market and not just for a part of it.”

This is not entirely new. Yet, taken to extremes, this reasoning entails that a firm unlawfully abuses when it forecloses 1% of the market (as rivals cannot compete for the entire market). Also, this means that a dominant firm cannot offer exclusivity (or other ties) to any of its existing customer base.

This principle is clearly at odds with §145 of the Discussion Paper, where the Commission rightly noted, in relation to single branding that:

“The potential negative effects will in general depend on the size of the tied market share”

But this is also at odds with the de minimis doctrine under Article 101 TFEU, where exclusivity agreements fall short of Article 101 when the market share of the producer and purchaser is<15%. The de minimis doctrine considers that there is nothing to care about when an agreement ties les than 15% of a market.

Of course, the EU case-law outranks those instruments. Yet, Tomra is not fully in line with the GC’s own precedents  such as Van den Bergh Foods Ltd. v . Commission, T-65/98  (in particular its §160 which seemed to imply – a contrario – that a 6% foreclosure would have been de minimis).

(Picture possibly subject to copyrights – am a great fan of this band)

Written by Nicolas Petit

6 October 2010 at 5:49 pm

Posted in Case-Law