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EUROPEAN COMMISSION DG Competition - page 99 / 113

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competitor may have a special effect on competition, for instance if it follows a different business model than the established competitors on the market, while the exclusion of a competitor similar to the established competitors may not have the same negative effect on competition.

Impact on new market 233. The exclusion may also have a negative impact on competition in a new and not yet existing downstream market, if the owner of the indispensable input refuses access to a buyer that would use the input to manufacture a new product or provide a new service in such a not yet existing market.

        • 9.2.2.5

          POSSIBLE DEFENCES: OBJECTIVE JUSTIFICATIONS AND EFFICIENCIES Examples of Objective Justifications

  • 234.

    It may be an objective justification for a refusal to start supplying that an

undertaking seeking access is not able to provide the appropriate commercial assurances that it will fulfil its obligations. In the case of an essential facility, access may be denied if the facility is

capacity constrained or if granting access would lead to a substantial increase in cost that would jeopardize the economic viability of the facility holder. Access may also be denied if the undertaking seeking access is not technically able to use the facility in a proper manner.

Incentives to invest in sunk costs may justify exclusion for a time 235. In the assessment of a refusal to supply it must also be kept in mind that the indispensable input, be it a raw material, an essential facility or an intellectual property right, often is the result of substantial investments entailing significant risks. In order to maintain incentives to invest and innovate, the dominant firm must not be unduly restricted in the exploitation of valuable results of the investment. For these reasons the dominant firm should normally be free to seek compensation for successful projects that is sufficient to maintain investment incentives, taking the risk of failed projects into account. To achieve such

compensation, it may be necessary for the dominant firm to exclude others from access to the input for a certain period of time. The risks facing the parties and the sunk investment that must be committed may thus mean that an dominant firm should be allowed to exclude others for a

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