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EUROPEAN COMMISSION DG Competition - page 64 / 113





64 / 113

demand exceeds the capacity of an individual competitor or entrant and it is costly for customers to have more suppliers.

Scheme of this section 147. The remainder of this section will first deal with the way in which single branding obligations and rebate systems may have a market distorting foreclosure effect. This must not be seen as an effort to describe an exhaustive list of the various forms that these obligations and systems may take. The purpose is to describe the key elements of such obligations and systems that will in general influence and determine the capability and likelihood to foreclose. The text concludes with a section on possible defences.


Capable of foreclosing, likely to foreclose

148. Single branding obligations, because they require the buyer to purchase all or a significant part of its requirements from the dominant supplier, have by their nature the capability to foreclose. The obligation may for instance require the buyer to purchase a significant percentage of its total requirements or a minimum amount which constitutes a significant percentage of its total requirements from the dominant supplier. The higher the percentage the stronger the foreclosure potential. Such an obligation may lead to market distorting anti-competitive effects even if only a modest part of market demand is affected by the obligation. The dominant position already enables the dominant company to prevent effective competition to be maintained or to emerge in the market and it thus becomes particularly important to protect the limited degree of competition still existing in the market and the growth of that residual competition.93

Where Domco applies single branding to a good part of buyers 149. Where the dominant company applies a single branding obligation to a good part of its buyers and this obligation therefore affects, if not most, at least a substantial part of market


As indicated above this is not an exhaustive list of single branding obligations. Obligations such as cooler exclusivity or stocking requirements may become single branding obligations to the extent that they effectively require the buyer to purchase all or a significant part of its requirements from the dominant supplier and possibly even lead to outlet exclusivity. See T-65/98 Van den Bergh Foods cited in footnote 89.

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