COMPETITION • FRENCH LAW • ABUSE OF DOMINANT POSITION
The Competition Authority considers all the dominant undertaking’s conduct justified by “objective necessity” to be lawful. This rule of reason consists in balancing the legitimate interest of the undertaking and the anticompetitive effects resulting from its behavior. If an exclusivity clause is not illegal in itself, it becomes so when it is disproportionate and extends to markets other than those in which the dominant firm operates. Conversely, the provision of a quality after-sales service may justify an abuse of a dominant position.
The most recent rulings in this area reflect the regulators’ willingness to give greater weight to the economic impact of behavior as part of this assessment. Automatic convictions for abuses of dominant position have gradually given way to an effects-based approach that allows firms to objectively justify their behavior or to highlight efficiency gains that can offset the anticompetitive effects observed on the market. In its guidance on abusive exclusionary conduct, the Commission acknowledges that efficiency gains can compensate for the abuse. It does however impose four conditions which must all be fulfilled: i) the efficiencies must have been, or are likely to be, realized as a result of the conduct, ii) the conduct must be indispensable to the realization of those efficiencies and there must be no less anticompetitive alternatives, iii) the likely efficiencies brought about by the conduct must outweigh any likely negative effects on competition, and iv) the conduct must not eliminate effective competition on the market at issue.
