demand, the Commission is likely to conclude that the obligation has a market distorting foreclosure effect and thus constitutes an abuse of the dominant position. In its assessment the Commission will however not only look at the capability of the obligation, the degree of
dominance and the level of the tied market share, but will also take into account evidence why for particular reasons no market distorting foreclosure effect may result. For instance, whereas in general a short duration or a right to terminate the single branding obligation does not limit its likely foreclosure effect, under particular circumstances a short duration or right to terminate
at short notice may make a market distorting foreclosure effect unlikely.94 Such may be the case where the product is a homogeneous good and competitors are not capacity constrained. In case the dominant company does not apply the single branding obligation to a good part of its buyers but only selectively to some and not to others, the Commission will investigate whether or not these selected buyers are of particular importance for the possibilities of entry or expansion of competitors.
‘English Clauses’ 150. The Commission will apply the same approach to so-called ‘English clauses’,
requiring the buyer to report any better offer and allowing it only to accept such an offer when the supplier does not match it. They can be expected to have the same effect as a single branding obligation as the dominant company will only have to lower its price where there is a risk that customers switch. The foreclosure effect may be especially strong when the buyer has to reveal who makes the better offer, as this may discourage competitors to make competing offers to the dominant companies’ customers.95
7.2.2 CONDITIONAL REBATE SYSTEMS
In general the European Courts have not considered duration of single branding obligations to be of relevance for their assessment under Article 82. There are indeed good reasons to ignore duration as the dominant position implies that for a good part of demand on the market there are no proper substitutes to the dominant supplier’s product, because for instance its brand is a ‘must stock item’ preferred by many final consumers or because the capacity constraints on the other suppliers are such that a good part of demand can only be provided for by the dominant supplier. In such a case a short duration or the right to terminate the obligation are found to be illusory by the European Courts, see Case T-65/89 BPB Industries, cited in footnote 62, paragraph 73. See in the context of Article 81 BP Kemi (Commission Decision 79/934) OJ L 286, 14/11/1979 p. 32–52, paragraphs 64-65; In the context of Article 82, see IRI/ AC Nielsen Company, reported in the XXVIth Report on Competition Policy 1996, paragraph 64. See Case – 85/76 Hoffmann-La Roche, cited in footnote 5, paragraphs 104-108.