Abuse of Dominance and Monopolisation 1996
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Abuse of Dominance and Monopolisation 1996 The OECD Competition Committee debated abuse of dominance and monopolisation in February 1996. This document includes an analytical note by Ms. Sally Van Siclen for the OECD Secretariat, written submissions from Ms. M. Janow and Mr. A. Fels, contributions from Canada, the European Commission, Germany, Ireland, Italy, Japan, Portugal, Spain, Sweden, the United Kingdom, the United States and BIAC, as well as an aide-memoire of the discussion. The competition laws of many OECD countries contain a concept of single firm exploitation of market power or use of improper means of attaining or retaining market power. Some laws also contain the concept of “joint dominance”, distinct from multiple firms acting pursuant to an agreement. Topics covered include how observed conduct, notably exclusionary conduct, interacts with finding whether a firm has a dominant position; economic dependency; abusive conduct; whether abuse of dominance can give rise to market access problems; and appropriate relief. Remedies and Sanctions in Abuse of Dominance Cases (2006) Competition on the Merits (2005) Policy Brief: Preserving Competition: Keeping Predators at Bay (2005) Predatory Foreclosure (2004) Predatory Pricing (1989) General Distribution OCDE/GD(96)131 Cancels & replaces the same document: distributed 09-Sep-1996 ABUSE OF DOMINANCE AND MONOPOLISATION ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Paris 1996 42291 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format Copyright OECD, 1996 Applications for permission to reproduce or translate all or part of this material should be made to: Head of Publications Service, OECD, 2 rue André-Pascal, 75775 - Paris Cedex 16, France. Copyright OCDE, 1996 Les demandes de reproduction ou de traduction totales ou partielles doivent être adressées à : M. le Chef du Service des Publications, OCDE, 2 rue André-Pascal, 75775 Paris Cedex 16, France 2 FOREWORD This document comprises proceedings in the original languages of a roundtable on Abuse of Dominance which was held by the Committee on Competition Law and Policy in February 1996. It is published as a general distribution document under the responsibility of the Secretary General of the OECD to bring information on this topic to the attention of a wider audience. This compilation is one of several published in a series named “Competition Policy Roundtables.” PRÉFACE Ce document rassemble la documentation, dans la langue d’origine dans laquelle elle a été soumise, relative à une table ronde sur “l’abus de position dominante” qui s’est tenue en février 1996 dans le cadre du Comité du droit et de la politique de la concurrence. Il est mis en diffusion générale sous la responsabilité du Secrétaire général de l’OCDE afin de porter à la connaissance d’un large public, les éléments d’informations qui ont été réunis à cette occasion. 3 4 TABLE OF CONTENTS BACKGROUND NOTE (by Sally Van Siclen, OECD Secretariat)...................................................... 7 NOTE DE REFERENCE (par Sally Van Siclen, Secrétariat de l’OCDE)............................................ 19 INTERNATIONAL PERSPECTIVES ON ABUSE OF DOMINANCE (by Merit E. Janow).............. 33 L’ABUS DE POSITION DOMINANTE DANS UNE OPTIQUE INTERNATIONALE (par Merit E. Janow)........................................................................................................................... 59 NATIONAL CONTRIBUTIONS: Canada................................................................................................................................ 89 Germany............................................................................................................................ 113 Ireland............................................................................................................................... 121 Italy................................................................................................................................... 125 Japan................................................................................................................................. 131 Portugal............................................................................................................................. 143 Portugal............................................................................................................................. 145 Spain................................................................................................................................. 149 Sweden............................................................................................................................. 153 The United Kingdom......................................................................................................... 155 The United States.............................................................................................................. 161 Commission of the European Union, part I........................................................................ 173 Commission de l’Union européenne, partie I..................................................................... 185 Commission de l’Union européenne, partie II.................................................................... 197 Commission of the European Union, part III...................................................................... 203 CONTRIBUTION BY PROFESSOR ALAN FELS......................................................................... 207 CONTRIBUTIONS FROM BIAC: Article 86 EC: Abuse of Dominance, by Christopher Bright.............................................. 219 Abuse of dominance in the United States, by Joseph J. Simons......................................... 225 Abuse of dominant position under the Canadian Competition Act, by Calvin S. Goldman and Crystal L. Witterick.................................................................................................... 233 5 AIDE-MÉMOIRE OF THE DISCUSSION...................................................................................... 247 AIDE-MÉMOIRE DE LA DISCUSSION........................................................................................ 267 OTHER TITLES IN THE SERIES ROUNDTABLES ON COMPETITION POLICY...................... 288 6 BACKGROUND NOTE (by Sally Van Siclen) The competition laws of many OECD countries contain a concept of single firm exploitation of market power or use of improper means of attaining or retaining market power.1 These concepts are variously called "abuse of dominant position" or "monopolisation" or "misuse of market power," or some similar term. Competition laws may also contain a related concept, called "joint dominance" in some jurisdictions, which involves multiple firms but which is a distinct concept from firms acting pursuant to an "agreement." Typically, an analysis of an abuse of dominance involves two distinct parts, determining the status of the firm or firms and then evaluating the behaviour.2 This note will briefly examine some of these concepts. The first part will discuss the similarities of the various definitions of dominant position or monopoly. The second part concerns some of the conduct that is condemned. The third part discusses remedies and the last part is a conclusion. Before turning to definitions of specific legal concepts, however, the economic concept of "dominance" should be discussed. A useful definition would anticipate the objective of the competition law and policy that will use it. One possible definition is, "circumstances in which single firm strategies may" -- or, perhaps, "are likely to" -- "have adverse effects on welfare." (Ordover and Saloner, p. 539) This definition anticipates a welfare maximisation objective without clarifying the relative weights of static and dynamic efficiencies. An alternative is the definition of dominant position provided by the European Court of Justice: "a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers" (United Brands v Commission, Case 27/76 [1978] ECR 207, [1978] 1 CMLR 429). This definition contains two elements -- an ability to prevent effective competition and an ability to behave independently of three sets of market actors. While the definition cannot be taken as its dictionary meaning -- even a pure monopolist must take into account the alternative opportunities of its customers -- it could perhaps mean that such a firm's strategies do not change much with changes in the strategies of the other market actors. This might anticipate an objective like "equalisation of bargaining power." A better understanding of just what the legal standards try to measure would improve, in turn, the legal standards themselves. We turn now to those standards, bearing in mind the economic concept(s) and objective(s) towards which they are employed. Definitions This section contains a discussion of the status of the firms with which we are concerned in this note, i.e., the definitions of "dominant position." Despite the broad similarity of terms and concepts, distinct concepts appear to be involved. It is perhaps useful first to suggest commonalities. 7 Determining whether a firm has a dominant position is done with reference to a defined market. That is, the firm