company that is alleged to be dominant. Indeed, if the internal correspondence of the company confirms the allegation of dominance then this may be material evidence for the alleged dominance.
The Competition Law not only prohibits the abuse of dominance by a single firm, but also the collective abuse of dominance by several different firms. Collective dominance generally exists in narrow oligopolistic markets and certain practices of collectively dominant firms might also fall within the scope of Article 6 of the Competition Law.
Special responsibility of dominant firms
Precedents in competition law practice show that dominant firms have a special responsibility in their relevant market. Dominant firms must not allow their conduct to distort competition in the market. This responsibility is open to discussion. A dominant firm will, by definition, have the means and the strength to act independently of the market. From a commercial point of view, it is not sensible to say that dominant firms should think of preserving competition and competitors in the market to the detriment of their own interests. Nevertheless, this special responsibility can be defined as not intentionally preventing or eliminating competition. The following section on the abuse of dominant position illustrates how a dominant firm can eliminate or prevent competition on the relevant market and what conducts should not be adopted under the scope of the special responsibility.
Every successful company aims to increase its market share. In many cases (except legal monopolies), a dominant position shows the success of that company. Dominant positions are not forbidden, but to abuse that position is subject to scrutiny and sanctions by the Competition Authority. Once a company is found to be dominant, it has a special responsibility not to allow its conduct to distort competition. The competition rules call this the prohibition of an abuse of a dominant position.
The Competition Law does not define the notion of abuse. Article 6 gives examples of the abuse of dominant position, however, this list is not exhaustive. In addition, decisions of the Competition Authority and the case law of the Council of State should also be taken into consideration. The following are the examples of abusive practices of a dominant firm:
• any tie-in or requirement contracts that oblige a customer to purchase other goods or services that by their nature or their commercial usage have no connection with such product or service;
• a refusal to supply to a customer on normal terms, especially if the customer is a longstanding one, unless there is objective justification (such as non-payment or safety considerations) for refusal to supply;
• pricing practices that have a tying effect, such as loyalty rebates and target discounts;
• predatory pricing that is, selective price cuts below average variable cost with the effect of eliminating a specific competitor;
• excessive pricing that is, applying excessive prices to customers;
• any discrimination between customers, that is, treating customers differently under similar conditions with regards to prices, discounts, and terms of supply;
• unusual long-term supply or purchase arrangements excluding competitors from a substantial portion of the market (as opposed to normal commercial considerations).