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EUROPEAN COMMISSION DG Competition - page 90 / 113

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Objective justification (see 5.3.1 above) 204. The dominant company may argue that it is an objective necessity to tie products for reasons of quality or good usage of the products necessary to protect the health or safety of the customers. The general framework for analysis of such arguments is given in section 5.3.1. It is, however, worth recalling that it is not the task of a dominant company to take steps on its own initiative to eliminate products which it regards, rightly or wrongly, as dangerous or inferior to

its own products.

Efficiency Defence 205. The dominant company may also invoke an efficiency defence. Tying and bundling may help to produce savings in production, distribution or transaction costs. Combining two

independent products into a new, single product may be an innovative way to market the

product(s). Such combinations are more likely to be found to fulfil the conditions for an efficiency defence than is contractual tying or bundling.125

Conditions for Efficiency Defence in section 5.3.3 206. For tying not to be abusive, it must be shown that all of the conditions described in

section 5.3.3 are fulfilled. For instance, tying would be considered abusive when a retailer is able to obtain, on a regular basis, supplies of the same or equivalent products on the same or better conditions than those offered by the supplier which applies the tying practice, as evidently the pass on is not realised. In many cases contractual tying may not be indispensable to achieve the efficiencies and the price incentive contained in mixed bundling normally needs only to reflect the effective cost efficiency that is realised. Similarly, for a claimed efficiency effect of tying helping to ensure a certain uniformity and quality standardisation, it needs to be demonstrated that the positive effects cannot be realised equally efficiently by requiring the buyer to use or resell products satisfying minimum quality standards, without requiring the buyer to purchase these from the supplier or someone designated by the latter.

9. REFUSAL TO SUPPLY

125 A persuasive argument that it is so efficient to combine the two products into one that the whole industry in the future will offer the integrated product instead of two separate products may lead to the conclusion that the two products are no longer distinct (see paragraph 187).

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