COMPETITION • EUROPEAN LAW • ABUSE OF DOMINANT POSITION
Article 102 TFEU prohibits “[a]ny abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it”. A dominant position can be individual or collective since the text indicates “one or more undertakings”. Traditionally, a finding of collective dominant position requires links between undertakings enabling them to adopt the same course of action in the market.
At first, the concept of links between undertakings was relatively strictly construed and only covered links drawn from the corporate structure of the undertakings, like the existence of joint managers or cross shareholding. The concept of link has gradually slackened to be reduced to mere “connecting factors”: commercial links, such as exclusive supply commitments or systematic exchanges of products between the undertakings in question, or even purely “economic” links, such as patent licensing agreements, or even the creating of a grouping may now constitute such links.
In this very broad conception of link, the behavioral condition naturally becomes decisive: any link between undertakings suffices to establish a collective dominant position where it allows the adoption of a joint commercial strategy. The object of the control is therefore gradually moving away from the relations existing between the undertakings in question, to the market on which these undertakings appear as a “single entity”.
To what extent can a collective dominant position be a result of the structure of the market? To date, the EU authorities do not seem to have transposed the principle laid down in the Gencor judgment regarding concentrations, to abuse of dominant position. In that judgment, the EU court clearly asserted that collective dominance could be an instrument of control of oligopolistic market situations: “there is nothing, in principle, to prevent two or more independent economic entities from being united by economic links in a specific market and, by virtue of that fact, from together holding a dominant position vis-à-vis the other operators on the same market”. However, it added “that conclusion is all the more pertinent with regard to the control of concentrations” than with regard to abuse of dominant position. The reason is simple; the control of concentrations is a purely structural control whereas control of abuse of dominance is behavioral by its nature. In fact, as part of a behavioral control one should not be satisfied with merely an “unintentional” link resulting from the structure of the market through identifying the economic link to the relationship of inter-dependence existing between the members of an oligopoly.