Abuse of Dominant Position

An abuse of dominant position consists in the unlawful exploitation by one or more undertakings of their market power resulting in the exploitation of customers or the exclusion of competitors.

Abuse of dominant position

An abuse of dominant position consists in the unlawful exploitation by one or more undertakings of their market power resulting in the exploitation of customers or the exclusion of competitors.

In order to determine the existence of an abuse of dominant position, it is necessary, firstly, to determine whether the allegedly dominant undertaking holds a dominant position in a relevant market.

Definition of the relevant market and determination of the existence of a dominant position

In order to determine the existence of a dominant position of one (single dominance) or more (collective dominance) undertakings in a given market, the relevant product (or service) and geographic markets must be identified.

Once the relevant market is defined, an undertaking is deemed to be in a dominant position where it is ascertained that, due to its position of economic strength, it has the ability to behave to an appreciable extent independently of its competitors, its suppliers, its clients and ultimately of consumers. This is the case where the undertaking holds a position in the market of such relevance that it does not need to take into account the reaction of other economic players when deciding on its commercial policy. This position may be due to the characteristics of the undertaking (its market share, financial capacity or vertical integration) and/or to market characteristics (barriers to entry or expansion, network effects or legal obstacles to entry).

Abuse

An undertaking abuses its dominant position when it behaves in such a manner which is likely to influence the structure of a market where, as a direct result of its presence, competition has already been weakened and which, through recourse to methods different from those governing normal competition in products or services based on traders’ performance, have the effect of hindering the maintenance or development of the degree of competition still existing in the market.

There are two main categories of abuse. Exploitative abuses (in which the dominant undertaking exploits its market dominance at the expenses of other market players) which comprises, for instance, excessive prices, unfair conditions or discrimination and exclusionary abuses (i.e., leading to the exclusion of competitors from the market) which includes, for instance, refusal to supply, predatory pricing or margin squeeze.

In accordance with European case-law, holding a dominant position confers on the undertaking concerned a special responsibility, the scope of which must be considered in light of the case’s specific circumstances.

Therefore, even conduct that would be deemed lawful when carried out by a non-dominant undertaking may constitute an infringement when adopted by a dominant undertaking where, for instance, it leads to the exclusion of competitors from the market.

Notwithstanding, it is important to clarify that competition law protects competition and not competitors.

Anti-competitive object or effect

According to the Competition Act (Article 11 of Law No. 19/2012 of 8 of May) and Article 102 of the Treaty on the Functioning of the European Union, any abuse by one or more undertakings of a dominant position having an anticompetitive object or effect shall be prohibited. The existence of such an abuse depends on the specific circumstances of each case.

Associated Documents

Title Tipo Tamanho
.pdf 864 Kb