Definition
Abuse of a dominant position refers to anti-competitive business practices by large corporations that hold significant market power, often defined as having a market share of at least 40% in at least one member state of the European Union. These actions, contrary to Article 102 of the Treaty on the Functioning of the European Union (TFEU) and analogous provisions in national laws like the UK Competition Act 1998, include practices such as refusing to supply products to existing customers or engaging in predatory pricing designed to push competitors out of the market.
Examples and Regulatory Actions
Consider, if you will, the corporate titan who, instead of fostering a vibrant marketplace of ideas and goods, decides to build a moat of economic malpractice around its castle. Examples of such rapscallion behavior include:
- Refusal to Supply: Akin to a mean kid not letting others play with his toys, this involves denying products or services to a market that sorely needs them.
- Predatory Pricing: This involves temporarily slashing prices—to levels lower than the cost of a half-eaten baguette in Paris—not to clear out inventory, but to crush the competition like grapes in a vintner’s barrel.
In emblematic enforcement, the European Commission, the sheriff in this economic Wild West, and national authorities like the UK’s Competition and Markets Authority, can fine companies up to 10% of their annual worldwide group turnover. An overwhelming fine of €899 million was famously imposed on Microsoft in 2008—an amount that even Scrooge McDuck might balk at.
Related Terms
- Market Dominance: Essentially the big fish in a small pond, this is when a company holds a significant share of the market.
- Antitrust Laws: The rule book ensuring companies play fair in the marketplace.
- Predatory Pricing: Selling at loss-leader prices to sideline competitors followed by price hikes once competitors are eliminated.
- Regulatory Compliance: Adhering to the rules set by governmental bodies to prevent abuses of market power.
Suggested Books for Further Studies
- “Competition Law” by Richard Whish and David Bailey - A rigorous exploration of European and UK competition laws.
- “The Antitrust Paradox” by Robert Bork - A critical analysis of the development of U.S. antitrust regulations, with lessons applicable worldwide.
- “Global Competition Law and Economics” by Einer Elhauge and Damien Geradin - A comprehensive guide to international competition law.
Remember, wielding great market power comes with great regulatory responsibility! As you navigate the treacherous waters of competition law, may your corporate strategies always be both successful and lawful. Stay competitive, but play nice in the marketplace—or prepare to part with a treasure trove as a penalty!
