COMPETITION • EUROPEAN AND FRENCH LAW • ANTICOMPETITIVE EFFECT
The “club effect” consists in inciting consumers who are victims of the abuse of a dominant position to coordinate their choice within the group to which they belong (family, undertaking, friends etc.) in order to concentrate their subscriptions within the dominant undertaking’s network. These “club effects” often occur in mobile telephony when the dominant operator’s rates in favor of calls made by its customers within its own network (“on net” calls), as opposed to calls made outside the network (“off net” calls) incite consumers who can coordinate their choice to concentrate their subscriptions on the largest of the networks, while portraying competitors unfavorably as expensive networks. Since it mechanically strengthens the operator controlling a large customer base to the detriment of competitors with a smaller network or potential entrants who have difficulty establishing a durable position in the market and reaching the required critical size to avoid suffering from the network effect, the “club effect” has an anticompetitive effect.
