The European Commission's Guidance on Article 102TFEU: From Inferno to Paradiso?
| Date | 01 July 2010 |
| Author | Pιnar Akman |
| Published date | 01 July 2010 |
| DOI | http://doi.org/10.1111/j.1468-2230.2010.00810.x |
LEGISLATION AND REPORTS
The European Commission’s Guidance on Article
102TFEU: From Inferno to Paradiso?
Dr Pinar Akman
n
The European Commission has for the ¢rst time issued a document expressing its o⁄cial
position on the enforcement of Article 102TFEU which prohibits the abuse of a dominant
position on the Common Market. The Commission Guidance on enforcement priorities in
applying Article 102TFEU to exclusionary abuses (adopted in December 2008) has ended a
reviewof about four years. Giventhe increased enforcement of Article 102TFEU at the European
level and the fact that many national provisions in the EU on unilateral conduct are modelled
after Article 102TFEU, how the Commission intends to enforce Article 102TFEU is crucial
for the application of competition law and the undertakings subject to it under European
and/or national laws. The review period was preceded by severe criticisms of the Commission’s
approach to Article 102TFEU for protecting competitors i nstead of competition and for
being insu⁄ciently grounded in modern economic thinking. At the heart of the review
and the discussions surrounding it lay the question of the objective of Article 102TFEU.
Some, including the DirectorateG eneral for Competition claimed the objective to be ‘consumer
welfare’, whereas some argued that ‘consumer welfare’ cannot be adopted as the objective
at the expense of the protection of the competitive process. This article critically reviews
the Commission Guidance, with an eye to assessing the ultimate objective of and the test
of harm under Article 102TFEU. After discussing whether the Guidance indeed sets priorities,
it examines the general approach of the Guidance to exclusionary conduct. It points out that
despite there being some welcome novelties in the Guidance, there are also suggestions therein
whose legitimacy and legality are questionable. Re£ecting on the Guidance as a soft-law
instrument, the article argues that although regarding the objective of Article 102TFEU, the
Commission’s apparent tendency towards ‘consumer welfare’is not un lawful,the reform of Arti-
cle 102TFEU to bring it more in line with modern economic and legal thinking seems to be far
from complete.
INTRODUCTION
The European Commission has ¢nally spoken. After almost ¢fty years of enfor-
cing Article102 ofthe Treatyon the Functioning of the European Union (TFEU)
(ex Article 82 of the Treaty establishing the European Community), the Com-
mission has issued, for the ¢rst time, adocument expressing its o⁄cial stance on
the enforcement of the provisionwhich prohibits the abuse of a dominant posi-
tion on the Common Market. The Guidance adopted in December 2008 con-
n
Lecturer in Law,The Norwich LawSchool and ESRCCentre for Competition Policy, University of
East Anglia.The author would like to thank PeterWhelan, Michael Harker, Morten Hviid, Giorgio
Monti and the anonymous referees for veryhelpful comments and suggestions.The errors remain hers.
The author can be contacted at p.akman@uea.ac.uk.
r2010The Author. Journal Compilationr2010 The Modern Law ReviewLimited.
Published by BlackwellPublishing, 9600 Garsington Road,Oxford OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA
(2010)73(4) 605^630
cerns the Commission’s ‘enforcement priorities’ in applying Article102TFEU to
so-called ‘exclusionary’ conduct by dominant undertakings.
1
The thus far absence of a soft-lawnotice providing guidance on the interpretation
of Article 102TFEU is surprising given that in other areas of competition law enfor-
cement (eg anti-competitive agreements and mergers) the Commission has issued
numerous documents clarifying substantive and procedural matters. Coupled with
the fact that Article102TFEU is aprovisionwith an unde¢ned objective and a non-
exhaustive list of ‘abusive’practices which require de¢nition and interpretation, the
lack of Commission guidance left undertakings subject to the provision’s control in
the dark, on ly to be enlightene d to a degree with developing c ase-law. The need for
some clari¢cation has become increasingly necessary as the Commission has lately
increased its enforcement of this provision, and has recently imposed the highest
antitrust ¢ne ever on a single undertaking for an infringement of Article102TFEU.
2
In fact, Article 102TFEU cases made up one quarter of the Commission’s competi-
tion cases in 2009 and this ratio increases up to one half of all recent cases when one
includes cases involving both Article 101TFEU (prohibiting anti-competitive agree-
ments) and Article 102TFEU.
3
Thus, how the Commission intends to enforce Arti-
cle 102TFEU is crucial for the application of EU competition law and for the
undertakings subject to it.The importance of the Guidance is enhanced by the fact
that many nationalprovisions on unilateral conduct in EU Member States are mod-
elled after Article102TFEU, and it is very likely that national authorities and courts
will look to the Guidance when e nforcing their national provisions.
The Commission had been rethinking its approach to Article 102TFEU for
about four years before the Guidance. This rethinking was preceded by severe
criticism directed at the Commission for ‘protecting competitors, not competi-
tion’ when enforcing Article 102TFEU and for not having a su⁄ciently eco-
nomic, e¡ects-based approach.
4
The approach to abuse of dominance had
arguably fallen behind the modernised approach adopted in the context of both
1‘Guidance on the Commission’s EnforcementPriorities i n Applying Article 82 of the EC Treaty
to Abusive Exclusionary Conduct by Dominant Undertakings’[2009] OJ C45/7 (hereafter‘Gui-
dance’).‘Exclusionary’ abuses refer tothose practices of a dominant undertaking where the e¡ects
are primarily on the structure of the market, whereas ‘exploitative’abuses are aimed at harming
customers directly; J.Goyder and A.Albors -Llorens,Goyder’s ECCompetitionLaw (Oxford:Oxford
University Press, 5
th
edn, 2009) 315. The Guidance is limited to abuses committed by a single
undertaking holding a dominant position, although Article102TFEU also applies to abuses by
two or more undertakings collectively holding a dominant position as well; Guidance [4].
2See‘Commission imposes ¢ne of h1.06bn on Intel for abuse of dominant position; orders Intel to
cease illegal practices’13 May 2009, PressRelease IP/09/745.
3See P. Lowe, ‘The European Commission Formulates its Enforcement Priorities as Regards
Exclusionary Conduct by Dominant Undertakings’ (2009) (February-I) Global Competition
Poli cy 2.
4For criticisms see amongst others E. M. Fox, ‘Monopolization and Dominance in the United
States and the European Community:E⁄ciency, Opportunity, and Fairness’(1986) 61 Notre
DameLaw Review 981,1004; P.Jebsen and R. Stevens,‘Assumptions, Goals and DominantUnder-
takings:The Regulation of Competition Under Article 86 of the European Union’(1996) 64
AntitrustLaw Journal 443; B. Sher,‘The Last of Steam-Powered Trains:Modernising Article 82’
(2004) 25 ECLR 243;J. Kallaugherand B. Sher,‘Rebates Revisited:Anti-CompetitiveE¡ects and
ExclusionaryAbuse under Article 82’(2004)25 ECLR 263; D.Waelbroeck,‘MichelinII :APer Se
Rule Against Rebates by Dominant Companies?’(2005) 1(1) Journal of Competition Law and
Economics 149.
Guidance on Article 102TFEU
606 r2010The Author. Journal Compilation r2010The Modern Law ReviewLimited.
(2010) 73(4) 605^630
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