European Union Competition Policy

7 Pages 1863 Words

may have an effect on trade between member states. “Forms of abuse of dominant position include unfair pricing, exclusion or limitation of supply, and discrimination among trade partners” . The rules of competition regulating monopolistic behavior are outlined in Article 82 (formerly Article 86) of the EC treaty. It reads: “Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market in so far as it may affect trade between Member States” . Although Article 86 does not define what a ‘dominant position’ is, past decisions by the Commission suggest that a firm with less than 40% of the market will not be regarded as dominant . ‘The Commission’ refers to The European Commission, who police EU competition rules. In cases of possible monopolistic activity, the Commission must assess the degree of market dominance by deciding the boundaries of the relevant market both in terms of the products involved and its geographic extent. The boundaries are ambiguous at times as high market share does not automatically give monopoly power. However, the dominant position itself is not illegal, only the abuse of dominance . Abuse of dominance is formally defined as, the conduct of a firm that may influence the structure of the relevant market or its degree of competition, even if such conduct is favored by a provision of national law . Those found guilty of abusing dominant position, can receive a penalty from the Commission, which may consist of various fines or dividing the company. Before t...