Law and Economics EU/EC Competition Law Professional Career Programme (PCP) Yoshiharu, ICHIKAWA 2011/12/17

What we learned at the last session BA/Virgin as a case study - which standard was applied in this case? - protective scope of Article 82/102 Excluding rivals - various categories …introducing latest economics for understanding Harm to other market participants

Introduction to today’s session We will move into the detailed studies on Article 82/102 (continued) Understanding this Article is essential for learning EU competition law Student’s presentation

Chapter 6: Abuse of a dominant position Introduction – Article 82/102 (again) Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States. Such abuse may, in particular, consist in: (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; (b) limiting production, markets or technical development to the prejudice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

Chapter 6: Abuse of a dominant position Introduction – Article 81/101 (again) 1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which: (a) directly or indirectly fix purchase or selling prices or any other trading conditions; (b) limit or control production, markets, technical development, or investment; (c) share markets or sources of supply; (d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. 2…. 3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:…

Market-partitioning abuses abuse extends to core values (market integration) - Market disintegration as an aggravating factor market partitioning effect … no reference to adverse effects in some cases Chapter 6: Abuse of a dominant position

Market-partitioning abuses abuse extends to core values (market integration) - Market disintegration as the reason for the finding of abuse politics of integration has a profound effect on the interpretation …to facilitate the integration of the common market - strategic Chapter 6: Abuse of a dominant position

Defences No justification for Article 82/102? - Economic justification distribution agreements…proper rebate system - Meeting competition lawful when it is applied in order to meet competition from other firms Chapter 6: Abuse of a dominant position

Defences No justification for Article 82/102? - Economic efficiency Commission’s discussion paper rebate and tying abuses - Public Policy Article 86(2)/106(2); public interest consideration Chapter 6: Abuse of a dominant position

Conclusion: Article 82 redux - Novel policy directions equal access to the market is ‘a right valuable in itself’ …disciplined capitalism →shift to…two challenges (economic paradigm, institution) - A unifying economic paradigm? How to avoid type 1 (false positive), type 2 errors (false negative)? Chapter 6: Abuse of a dominant position

Question: Google case If EU competition law is applied, do you think Google abuses it dominant position? How about US antitrust law? Chapter 6: Abuse of a dominant position

EU Competition Law: Law and Economics Foundation Legal Enforcement Ordoliberal Market Integration Refined, Coherent Advanced Economics US Market matured

EU Competition Law: Law and Economics Foundation Legal Enforcement Ordoliberal Market Integration Refined, Coherent Advanced Economics US Market matured Economics: Economic Freedom (Germany) ‘right’ ‘special responsibility’…Pluralism Law: → abuse of a dominant position (Article 82/102)

EU Competition Law: Law and Economics Foundation Legal Enforcement Ordoliberal Market Integration Refined, Coherent Advanced Economics US Market matured Market Integration itself is one of the objective: but, market was matured. Market access has become non-political matter

EU Competition Law: Law and Economics Foundation Legal Enforcement Ordoliberal Market Integration Refined, Coherent Advanced Economics US Market matured ‘rights-based approach’ is difficult to apply on the ground… → need to develop quantitative measures…consumer welfare

EU Competition Law: Law and Economics Foundation Legal Enforcement Ordoliberal Market Integration Refined, Coherent Advanced Economics US Market matured

Course web site: My webpage: You can download the presentation I used in the session. Contact address: or from my Facebook page

Course Schedule [updated] 11/10/01 Chapter 2-1, 2 [student A( TAKABAYASHI )] 11/10/08 Chapter 2-3, 4, 5, 6 [student B( Lecturer )] 11/10/15 Chapter 3-1, 2, 3, 4, 5 [student C( MERCKEN, CASTELLANE)] 11/10/22 Chapter 3-6, 7, 8 [student D( decided )] 11/10/29 class cancellation 11/11/05 Chapter 5-1, 2, 3 [student E( OSAWA, KIKUCHI )]

11/11/12 class cancellation (Sorry! I attend the international conference.) 11/11/19 class cancellation (Mita Festival) 11/11/26 - Chapter 5-4, 5, 6, 7 [student F( SAKAMOTO, TAKEDA )] - Mid-term examination (open-book) * pre-condition for qualification of this class --- if you are absent, please contact me. 11/12/03 class cancellation 11/12/10 Chapter 6-1, 2, 3, 4 [student G( Taiki, Takaaki)] 11/12/17 Chapter 6-5, 6, 7 [student H( Junichiro, Kenmei)] Course Schedule [updated]

11/12/24 Enforcement – Watch the movie ‘Informant!’ * I will tell you the theme of the take-home exam. 12/01/14 Chapter 11-1, 2, 3 At the same day, Submission of take-home exam and final discussion Course Schedule [updated] NEXT Session