What Is an Undertaking under Article 102 of the Treaty on the Functioning of the European Union

Determining dominance requires a two-step process. [40] First, the relevant market on which the company operates must be taken into account: both the relevant product market and the relevant geographic market. [41] Second, once the market has been identified, the Commission must determine whether the company holds a dominant position on the market in question. A fine for dominance results from a combination of several factors. Point 12 of the Commission Guidelines highlights three factors which the Commission will take into account: (3) the constraints arising from the bargaining power of the undertakings` customers. Conduct that is not based on merit is abusive conduct and the company is prohibited from engaging in such practices. The Commission`s guidelines provide an example of merits such as „lower prices, better quality and a wider choice of new goods and services“. Competition that is not based on merit can cause harm to customers. In IMS,[156] the General Court followed Bronner, supra. The court must consider whether the refusal of the licence „excluded all competitors in a secondary market“ and „prevented the emergence of a new product“. [157] The Tribunal found that the refusal of a licence by a dominant undertaking does not in itself constitute an abuse if the following conditions are not met: the dominant position of an undertaking must be exercised in a substantial part of the internal market. It is the recognition of the geographical scope of the establishment of domination. In order to determine whether an area constitutes a `substantial part of the internal market`, it is necessary to assess an undertaking`s consumption and volume of production of that product, as well as the habits and economic opportunities of sellers and buyers.

Any abuse by one or more undertakings of a dominant position in the internal market or in a substantial part thereof shall be prohibited as incompatible with the internal market in so far as it is likely to affect trade between Member States. This is used as advocacy when a dominant company denies access to its property or property rights and may also include denial of access to its intellectual or physical property. A dominant undertaking may exercise this objection if it can demonstrate that the restriction was necessary to protect competition. There could be companies that have „super dominance.“ Although there is no particular legal definition of what „super-domination“ is, it is usually taken when a firm`s position in a particular market is so strong that residual competition is marginal at best. On this basis, some have suggested that such a company (with a very high market share and obvious economic strength) has an even greater „responsibility“ to the market. Prevention of false positives/type 1 errors – It states that abuse should not be identified in such a way as to prevent dominant undertakings from competing effectively for the benefit of consumers, even if it harms competitors. In the present case, De post-La Poste abused its dominant position by means of a tied selling policy, in which the undertaking, which has a legal monopoly on the general letter post service, submits to the adoption of an additional contract in which they cover a new service between the undertaking and the undertaking. This policy of linking one service to another was considered an abuse. In order to determine that likelihood, the Commission must assess whether such expansion or entry is profitable for the competitor or market participant and should take into account the obstacles to such expansion or market entry, the likely reactions of the allegedly dominant undertakings and the risks and costs of default.

A The undertakings referred to in Article 102 are undertakings which hold a `dominant position` on the market or in which two or more undertakings `exercise a collective dominant position`. In Hofner v. Elser, the Court of Justice of the European Communities has ruled that an „undertaking“ includes any entity that carries out an economic activity, regardless of its legal form and the way in which it is financed. In the present case, the Court of Justice of the European Communities has held that an abuse is committed when a dominant undertaking reserves, without objective necessity, an ancillary activity which could be carried out by another undertaking on a neighbouring but distinct market, with the possibility of eliminating competition from such an undertaking. .