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EUROPEAN COMMISSION DG Competition - page 39 / 113





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Where all four conditions are fulfilled the net effect of such conduct is to promote the very essence of the competitive process, namely to win customers by offering better products or better prices than those offered by rivals.

Domco must show: (1) 85. The dominant company must thus in the first place be able to show that the conduct is undertaken to contribute to improving the production or distribution of products or to promote technical or economic progress, for instance by improving the quality of its product or by obtaining specific cost reductions or other efficiencies. The Commission considers any substantiated efficiency claim in the overall assessment of the conduct, possibly along other defences put forward by the dominant company. Such claim may for instance concern the protection of client-specific investments made by the dominant company.

  • (2)

    Indispensable – burden of proof

  • 86.

    The dominant company must in the second place show that the conduct is

indispensable to achieve the alleged efficiencies. It is for the dominant company to demonstrate that there are no other economically practicable and less anticompetitive alternatives to achieve the claimed efficiencies, taking into account the market conditions and business realities facing the dominant company. The dominant company is not required to consider hypothetical or theoretical alternatives. The Commission will only contest the claim where it is reasonably clear that there are realistic and attainable alternatives. The dominant company must explain and demonstrate why seemingly realistic and less restrictive alternatives would be significantly less efficient.

  • (3)

    Efficiencies outweigh negative effects on competition & consumers

  • 87.

    In order to fulfill the third condition the dominant company needs to show that

efficiencies brought about by the conduct concerned outweigh the likely negative effects on competition and therewith the likely harm to consumers that the conduct might otherwise have. This will be the case when the Commission on the basis of sufficient evidence is in a position to

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