X hits on this document

PDF document

EUROPEAN COMMISSION DG Competition - page 45 / 113





45 / 113

special rights granted to the dominant company and while it does not need predation to protect its dominant position the concern is here the prevention of cross subsidisation (see below paragraph 125). Predatory pricing by a dominant company in an unrelated market where it is not dominant and where the predation will only have effects in this unrelated market will normally not be an abuse under Article 82.67

Domco can usually price above total cost 102. Under most market conditions a dominant company is unlikely to have to price below average total cost and make a loss. Its market share, the importance of its product on the market, the entry barriers, competitive constraints being absent or weak and its resulting power over the price usually enable the dominant company to price well above average total cost and thus to avoid making losses. If therefore a dominant company reacts to entry or to competition from a smaller company in the market by lowering its price and making a loss, in general or on

certain specific sales, there may be good reasons for the Commission to look into such


Cost Benchmarks 103. In its assessment the Commission may use certain cost benchmarks, below which there is more reason to assume predation may take place and/or below which no additional proof may need to be brought by the authority because predation can be presumed. These cost benchmarks are normally applied using cost data of the dominant company. Where however reliable information on the dominant company’s costs is not available, the Commission may instead use cost data of apparently efficient competitors. In addition, where in general no reliable information on cost data is available to the Commission, it may nonetheless be able to build on other arguments a credible case of predatory abuse. Where the case is argued on the basis of cost data of competitors, the dominant company may rebut by showing that it is or was actually not pricing below the appropriate cost benchmark (see also paragraph 67).

67 The Court followed the Commission to prohibit predatory pricing that took place and had its effect only in a non- dominated market in Case T-83/91 Tetra Pak II, cited in footnote 58. The case can however be considered exceptional because the markets of aseptic and non-aseptic cartons were strongly linked and the Court and Commission considered that due to the quasi monopolistic position of Tetra Pak on the aseptic markets and its leading position on the closely associated non-aseptic markets it enjoyed a quasi dominant position also on the latter markets.

Document info
Document views532
Page views532
Page last viewedSat Jan 21 16:15:11 UTC 2017