[2] Dominant position, actual and potential competitors Dominance of an undertaking is examined firstly by its size within the relevant market. The guidance on Article 102 provides that a market share of less than 40% market is unlikely to be dominant market share holding, though, safe for special circumstance where there in capacity constraint, thereby making it necessary to review the threshold downward.[3] Although, the EU Court established threshold of 50% in AKZO; yet, it may be that the Court of Justice (The Court) found that it may be necessary to review the threshold in a special circumstance. Thus, in British Airways, 39.7 percent was considered a dominant market share.[i] [ii] The needs to inquire on potential market position was emphasised in the Guidance on Article 102 Enforcement Priorities; para 16 noted the needs to consider impact on expansion on both existing and potential competitors. In its emphasis of this, it noted the barriers of expansion could be in many forms, including legal barriers, economies of scale and scope, technologies or sales network.[4] Economic advantages A dominant undertaking is likely to have access to infrastructures that could constitute barriers to expansion or entry. [5] Many decided cases have proven that existing essential facilities, superior technology and access to international capital market,[6] could constitute economic advantage, and thus, in the context of the decision in Hoffman-La-Roche v Commission, could confer a dominance position. The elasticity of demand of the product within the relevant market using Small but Significant and Non-transitory Increase in Price could help to determine the influence that undertaking could have on the market.[7] Yet, the difficulty of moving away from the undertakings product could be a constraint that confers dominance. In Microsoft, it was considered that its position on market gave rise to a self-reinforcing and degree of dominance is overwhelming.[8] Also, self-asserted statement of goal that implicitly expressed the undertaking as meant to be occupying dominance,[9] and offering of special sales that could be interpreted as special discriminatory discount or rebate would be considered to constitute a barrier entry.[10][iii] In addition to above characters of undertakings dominance, it must be established that its dominance position is in the whole or substantial part of the internal market.[11] It is worth of note that the objective of Article 102 is to prevent abuse of dominance position and not against undertakings that are in dominance position and thereby protecting competition to the advantage of consumers. Whish and Bailey noted this by quoting Neelie Kroes,[12] but, what constitute abuse is yet to be definitive and exhaustive. Defense Lack of definition of abuse creates uncertainty on what to look out for and thus, we need to turn to jurisprudence in search for possible defense. It has been established that objective justification is an allowable plea, even if there exist dominance, though subject to proportionality of the objective. Undertakings that are caught under article 102 could plea on the ground of efficiency and protecting its own commercial interest [13]. A plea on the ground of property rights may fail as it was in Microsoft v Commission, and decision in Frankfurt Airport that full use of property rights may be restricted in pursuance of public interest.[14] The onus is on the undertaking to proof the justification by supplying relevant facts while the onus shifts to the Commission thereafter. Conclusion Application of Article 102 is subject to jurisprudence interpretation, such interpretation in some cases has been a subject of controversy. Scholars too have argued on the approach-based to employ.[15][iv] For instance, the decision that rebate falls under article 102 exclusivity has been criticised as the premise of the decision seemed inaccurate; other undertakings that are not in dominant position could offer such special rebate and the purpose is not always anti-competitive.[16][v] It is therefore undisputable that further clarification is needed in application of not just Article 101, but also Article 102 TFEU.[17] [1] Soda-ash /Solvay OJ [1991] L 152/21 [2] Continental Can v Commission [1973] ECR 215 cited inn Richard Whish and David Bailey [3] Communication from the Commission Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings section III para 14. Available online: https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52009XC0224(01) [4] Ibid para 17 [5] Ibid para 20 [6] United Brands v Commission cited in Whish and Bailey. [7] University of Liverpool COMP LW Week 67 Lecture Note [8] Richard Whish and David Bailey Competition Law, Oxford University Press, page 196, 198 [9] Tomra Systems ASA v Commission [2010] ECR II – 4361 [10] Michelin v Commission [1983] ECR 3461 [11] N 8 page 199 [12] ibid page 206 [13] Ibid page 222 – 223 [14] Cases cited in Richard Whish and David Bailey Oxford University Press, page 226 [15] P?nar Akman he Reformed of the Application of Article 102 TFEU: Mission Accomplished? Available online: https://www-americanbar-org.liverpool.idm.oclc.org/content/dam/aba/publishing/antitrust_law_journal/at_journal_81i1_akman.pdf [16] Pablo Ibez Colomo Intel and Article 102 TFEU Case Law: Making Sense of a Perpetual Controversy. LSE Law, Society and Economy Working Paper 29/2014. Available online: https://eprints.lse.ac.uk/60585/1/WPS2014-29_Colomo.pdf [17] P?nar Akman The Tests of Illegality Under Articles 101 and 102 TFEU The Antitrust Bulletin 2016, Vol. 61(1) 84-104
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