Article 82 (abuse of a dominant position)

Article 82 EC prohibits the abuse of a dominant position insofar as it may affect trade between Member States.

This article is numbered 82 in the 1997 consolidated version of the EC Treaty. It was Article 86 in the 1957 Treaty of Rome.

The full text of Article 82 is as follows:

"Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market insofar as it may affect trade between Member States.
Such abuse may, in particular, consist in:
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
(b) limiting production, markets or technical development to the prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts."

Council Regulation 1/2003 provides for the application of this prohibition.

This page provides links related to the DG Competition review of Article 82 enforcement, related statutory provisions, official guidance, and cases covered on the Reckon website and other Reckon links.

Review of Article 82 enforcement

DG Competition of the European Commission is currently conducting a review of the way in which it enforces Article 82.

DG Competition discussion paper

In December 2005, DG Competition published a discussion paper (72 pages, PDF) on the application of Article 82 of the EC Treaty to exclusionary abuses.

The paper sets out "possible principles" for the Commission's enforcement of Article 82 in cases of conduct by a dominant undertaking that could impede actual or potential competitors' ability to compete in a market. The paper does not address exploitative or discriminatory abuses; nor does it consider the application of Article 82 in conjunction with Article 86. The paper puts forward a number of ideas as to how the Commission might approach the investigation. These include an explanation of the relevance of a profit sacrifice test for the assessment of predation, and a suggestion as to how conduct by a dominant undertaking might be examined under an "efficiency defence".

The discussion paper has no enforcement status and the Commission recognises that it is without prejudice to how the CFI and ECJ may interpret Article 82. The paper is part of a public consultation. Comments should be sent to the Commission by Friday 31 March 2006.

The Commission has also published an FAQ on the discussion paper.

Other papers and speeches

A few statements about the process for the review were made by Philip Lowe, the Director General of DG Competition. In a March 2005 speech (13 pages, PDF), he announced that DG Competition will produce working papers on some of the central issues of Article 82 — dominance and some of the major abuses such as predation, bundling, refusals to deal and loyalty rebates. Another lecture by Philip Lowe in June 2005 provided an update on progress and on the approach taken to the review.

Reckon comment: see Philip Lowe lecture 24 June 2005 | viewpoint: Franck.

A further update was provided by Neelie Kroes, the Commissioner in charge of DG Competition, in a speech on 23 September 2005. This confirms the limited scope of the exercise and the focus on explaining theories of abuse for the most frequent types of abusive behaviour that have "market distorting" effects. Exploitative abuses will apparently be considered in a second phase.

Reckon comment: It may seem a little surprising that Mrs Kroes did not discuss the potential complementary of private and public enforcement, especially in the light of the proposed prioritisation for public enforcement of exclusionary abuses which are not "simply the foreclosure of one or two competitors" — which are also the cases least suitable for private relief (e.g. injunctions). On technical matters, the speech does not provide sufficient details of the thinking within DG Competition to establish whether new analytical approaches to matters such as possible "efficiency" justifications for otherwise abusive conduct have been included in the (confidential) draft currently under review by national competition authorities.

As part of this review, the Commission has also published in July 2005 a report (53 pages, PDF) of the anti-trust subgroup of the Economic Advisory Group for Competition Policy, a "group of distinguished academic economists advising DG Competition and the Commissioner for Competition". This is covered by a DG Competition introduction and disclaimer (2 pages, PDF).

Reckon comment: Although the report raises some useful points, the overall approach and particular recommendations advanced are so far removed from established EC law on abuse of a dominant position that it is difficult to see how the European Commission will be able to reflect the report in any guidelines that it produces about Article 82 enforcement.

Related statutory provisions

Article 81 (agreements and concerted practices)
Article 86 (public services and fiscal monopolies)

Competition Act 1998
UK statute extending the Article 81 and Article 82 prohibitions to cases which only affect trade within the United Kingdom.

Official guidance

European Commission 1998 notice (27 pages, PDF) on the application of the competition rules to access agreements in the telecommunications sector

Commission notice on the effect on trade concept contained in Articles 81 and 82 (16 pages, PDF)
This notice issued in 2004 sets out the Commission's understanding of the law as to whether EC competition law or national competition law (if there is any) is applicable to any particular conduct or agreement, drawing on case law showing that the effect on cross-border trade within the European Union has to be appreciable for EC law to apply. There is no equivalent appreciability requirement under Article 87, reflecting the fact that there is no need to choose between domestic and EC law in the context of State aids. This concept of appreciability for the purpose of determining the applicability of EC law is not the same as the application of the de minimis non curat lex doctrine.

Cases covered on the Reckon website

Court of Justice of the European Communities (including CFI)

Akzo
Dominant position; predatory abuse.

Bronner
Essential facility; exclusionary refusal to supply.

Commercial Solvents
Exclusionary refusal to supply.

Fenin
Concept of undertaking.

General Motors
Excessive prices.

IMS Health
Essential facility; abuse of copyright.

Hoffmann-La Roche
Concept of abuse; prejudice to consumers.

Magill
Essential facility; abuse of copyright.

Telemarketing
Abuse of State-sponsored dominant position.

United Brands
Dominant position; several types of abuse including discriminatory abuse and exploitative abuse.

Volvo v Veng
Spare parts.

UK courts (including Competition Appeal Tribunal)

Burgess
Margin squeeze; application to smaller businesses.

Genzyme
Margin squeeze.

Napp
Exclusionary abuse; exploitative abuse.

Water access CAT cases
Margin squeezes, exclusionary refusals to supply, excessive prices.

Administrative decisions

Microsoft: the EC abuse of dominance case
European Commission: exclusionary abuse; media players and server protocols.

Disposal of landfill leachate | viewpoint: Franck
UK Ofwat: exclusionary abuse; price squeeze.

ORR decision on testing of track lubricants | viewpoint: Franck
UK ORR: exclusionary abuse.

Article 82 (abuse of a dominant position)

Review of Article 82 enforcement

Related statutory provisions

Official guidance

Cases covered on the Reckon website

Other Reckon links