effects or first mover advantages that later entrants can not be expected to match even if they were able to achieve the same production volumes as the dominant company.
Decision need not follow order of DP 68. Where in later sections the different steps of the assessment of certain conduct is described, these steps do not necessarily need to be followed in that order in a particular case. In particular in view of the difficulties that may arise in a case to establish cost levels, the Commission may decide for reasons of administrative efficiency to address cost issues only at a late stage of its dealing with a case.
5.3 HORIZONTAL VERSUS VERTICAL FORECLOSURE
Distinguish whether foreclosure of competitors (horizontal) or down stream (Different level of supply chain) 69. When analysing exclusionary behaviour by a dominant company it is in addition useful to distinguish whether the dominant company is attempting to exclude an upstream or a downstream rival. The abuses analysed in the following sections can be divided in two groups. The first group consists of predatory pricing, single branding and rebates, and tying and bundling. The second group consists of refusal to supply.
Horizontal Foreclosure 70. The abuses in the first group have in common that the possible foreclosure effect arises from a dominant company attempting to exclude, discipline or marginalise a rival at its
own level in the supply chain by foreclosing its access to customers (horizontal foreclosure).53 The terms “upstream” and “downstream” market are often used to distinguish between two different levels: the closer to the final consumer a market is, the further “downstream” it is.54
For ease of exposition the term “exclude” should in the following be understood also to cover “marginalise”. That is, “exclude” should not be understood in the literal sense of complete exclusion but also covers situations where a dominant company impairs the ability of a rival to compete in an effective way so that it becomes “marginalised”. The terminology “upstream” and “downstream” may not always be completely appropriate in that the two markets may in some ways be considered as equally “close” to the final consumer. However, in such a case, for a competitive concern to arise, it will be the case that one market (which is then called the “upstream” market) will provide an input to the other market (the “downstream” market).