Abusive Practices in Competition Law
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Abusive Practices in Competition Law

Edited by Fabiana Di Porto and Rupprecht Podszun

Abusive Practices in Competition Law tackles the difficult questions presented to competition lawyers and economists regarding abusive practices: where and when is the red line crossed in competitive advances? When is a company explicitly dominant? How do you handle those who hold superior bargaining power over others but are not classed as dominant?
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Chapter 8: Abuse without dominance in competition law: abuse of economic dependence and its interface with abuse of dominance

Mor Bakhoum

Abstract

This chapter investigates the interface between abuse of dominance and abuse of economic dependence. When dealing with abuse-of-dominance cases there is a fundamental requirement that competition in the relevant market be affected. This approach does not address relative dominance in cases when abuse occurs without dominance and may affect competition. This happens in situations where a relatively dominant market participant enjoys a superior bargaining position with respect to its business partners and uses this position to its own advantage. Taking the example of the distribution sector, the chapter showcases how competition may be affected by an undertaking without a dominant position using a network of contracts. This situation can be illustrated in cases where a network of contracts is created by a relatively dominant firm whose sole objective is to lock in smaller or economically weaker business partners in a network and thereby limit their possibility to shift. Such networks of contractual relationships may hinder not only the economic freedom of the weaker party (vertical dimension), but may also strengthen the market power of the relatively dominant firm (horizontal dimension). As a consequence, the relevant market may be affected although the undertaking does not have a dominant position. Hence, there is a close link between economic dependence, freedom of contract and competition law. Situations of abuse by non-dominant firms are not captured by the requirements that the undertaking enjoy a dominant position and the relevant market be affected in abuse-of-dominance cases. This shows the limits of the concept of abuse of dominance as a legal tool used to protect competition in the relevant market. This chapter argues that, in addition to abuse of dominance, there is the potential to use the concept of relative dominance (by sanctioning abuses of economic dependence) to protect not only the freedom of competition of the market participants, but also competition itself.

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