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EUROPEAN COMMISSION DG Competition - page 53 / 113





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the future than it otherwise would have had and can it thus recoup its losses? This does not require that the dominant company will be able to increase its prices above the level persisting in the market before the predation. For recoupment it is sufficient that the predation avoids or delays a decline in prices that would otherwise occur as a result of the increased competition that would have come from the companies that are now eliminated, disciplined or whose entry is

prevented. It may often be impossible to exactly quantify the likely price and profit effects.73 It will in general be sufficient to show the likelihood of recoupment by investigating the entry barriers to the market, the (strengthened) position of the company and foreseeable changes to

the future structure of the market. As dominance is already established this normally means that entry barriers are sufficiently high to presume the possibility to recoup. The Commission does therefore not consider it is necessary to provide further separate proof of recoupment in order to find an abuse.74 In case it is observed that the dominant company’s price that was lowered upon entry is again increased after exit or disciplining of the entrant, this may be an indication that

recoupment is likely and can help to convincingly show the existence of a predatory strategy. In case of disciplining it should then be observed that also the entrant is raising its price after the dominant company’s lowering of price.

Presumption Refutable 123. Where the Commission argues a case of predatory abuse, the dominant company may rebut it by establishing that its conduct is wrongly assessed as predatory, for instance by

showing that it has not and will not have the alleged exclusionary effect or that recoupment will never be possible and consumers are not and will not be harmed.



One particular problem with quantifying recoupment is that predation may be applied by the dominant company not just to exclude an identified rival but also in order to build up an aggressive reputation with effect further into the future and on other markets.


This was confirmed in Case T- 83/91 Tetra Pak II, upheld on appeal to the ECJ in Case C-333/94 P Tetra Pak International SA v Commission [1996] ECR I-5951, where the Court stated that proof of actual recoupment is not required. More in general, as predation may be more difficult than expected, the total costs to the dominant company of predating could outweigh its later profits and thus make recoupment impossible while it may still be rational to decide to continue with the predatory strategy that it started some time ago. See also COMP/38.233 (Wanadoo Interactive) Commission Decision of 16 July 2003.

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