Firm Dominance in EU Competition Law: The Competitive Process and the Origins of Market Power

International Competition Law Series Volume 83

Firm Dominance in EU Competition Law explores the role of dominant firms in the competitive process, proposing that conduct should be scrutinized differently depending on the source of market power, rather than using the same approach for all dominant undertakings. There have been various high-profile investigations at national, international, and supranational levels, with the complexity of the tech issues adding to the many questions about effective enforcement. This has led to an increased focus on the effectiveness of rules intended to prevent abuse of dominance. How does it come about that a certain firm dominates a market? Can an understanding of this process lead to more effective enforcement of competition law? That is the question approached in this compelling book. The author reviews the European Union’s (EU’s) Article 102 case law, comparing it with United States (U.S.) provisions, demonstrating that new ways of looking at market power are needed—today’s tech giants differ from older monopolies.

What’s in this book:

Supporting his contention that the legal consequences that derive from holding a dominant position cannot be disassociated from the sources of that market power—that a dynamic understanding of dominance requires looking both forward and backward in time—the author proposes categorization of seven origins of firm dominance, and how abuse of dominance rules should apply such sources of dominance as the following:

• statutory dominance derived from explicit protectionist measures or subtler geo-economic strategies;
• legacy firms such as the telecommunications or transport industries;
• natural monopolies, e.g., the exploitation of a mine;
• investment efforts undertaken in a competitive environment;
• intangible resources such as timing, reputation, experience, innovation capabilities, or managerial processes;
• lucky monopolies; and
• anticompetitive behavior on the road to dominance.

Drawing insights from EU and U.S. case law, industrial organization scholarship, and strategic management literature, this book resolves questions related to the role that the origins of market power have played and should play in the enforcement of EU competition rules against dominant firms. It concludes with a list of policy recommendations bringing the application of Article 102 TFEU against dominant firms more in line with the objective of protecting the competitive process.

How this will help you:

With its focus on how EU competition law enforcement should be fine-tuned to adequately incorporate the origins of firm dominance into the analysis of single-firm behavior, this book makes a major contribution to the comprehensive analysis of anticompetitive effects. Practitioners, competition authorities, and academics in competition law will greatly appreciate the book’s combination of legal analysis and recommendations for policy reform.