Oligopoly behaviour as abuse of collective dominance in EU competition law

Abstract

Abuse of collective dominance under Article 102 TFEU is a bit of a blind spot in European competition law. The concept has been relatively well developed for the purpose of merger control and serves to support the Commission in blocking a concentration that could facilitate tacit coordination of strategic behaviour between competitors in an already concentrated market. Case law and literature agree that tacit collusion in a tight oligopoly may also subject companies to theduties and prohibitions of Article 102 even in the absence of individual dominant market power, but little has been written about when such abuse might occur. The possible application of Article 102 to "oligopoly behaviour" remains an abstract theory with little practical applicability. That is dangerous, given the fact that the doctrine laid down in merger cases Airtours and Impala gives lots of discretion to a competition authority determined to remedy suboptimal markets by sanctioning oligopolists for abuse of collective dominance. This dissertation presents a novel approach to the application of the concept of abuse of collective dominance to behaviour by interdependent companies in a concentrated market. Rather than trying to catch tacit collusion or supracompetitive oligopoly prices, the focus of enforcing Article 102 in oligopoly should be on practices by which one or more incumbents exclude outsiders (newcomers, innovators and fringe competitors) to the benefit of the incumbent 'insiders' of the oligopolistic equilibrium. Doctrinally, this approach necessitates a breach with the objective concept of abuse as used in cases of single dominance, because it requires the demonstration of a causal link between market power and abuse. The resulting test for abuse of collective dominance in oligopolistic markets is a tough one to satisfy, but considering that oligopoly is still infinitely more dynamic than monopoly, that may just be the right outcome.