Abusive behaviour

In the EU, unilateral or ‘dominant’ firm conduct is governed by Article 102 TFEU. In particular, Article 102 TFEU prohibits undertakings that (individually or collectively) hold a dominant position within the EU, or a substantial part of it, from abusing their dominance (without objective justification) insofar as it may affect trade between Member States.

This provision is mirrored in the national competition laws of EU Member States and can apply even where an effect on inter-state trade is not established (see further: Effect on trade).

Article 102 TFEU places a ‘special responsibility’ on dominant undertakings—aiming to ensure that powerful firms do not distort markets, act unfairly towards customers or reduce the threat of competition by excluding rivals, in particular by:

  1. directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions

  2. limiting production, markets or technical development to the prejudice of consumers

  3. applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage, or

  4. making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which

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Latest Competition News

UK Competition Appeal Tribunal issues rare judgment on application of competition law to online sales restrictions (Up & Running v Deckers)

Competition analysis: In this judgment, the Competition Appeal Tribunal (CAT) examined the compatibility with UK competition law of action taken by a brand operating a selective distribution system (Deckers) against one of its authorised retailers (UP & Running) to prevent it selling the brand’s products online at a discount. The judgment provides important guidance on the extent to which a brand may exercise its discretion when deciding when to eject a retailer from its selective distribution system; the steps that a brand can legitimately take to control a retailer’s online sales; and the extent to which a brand can manage sales of out of season products to avoid its retail margins being undermined. The case is also an interesting example of the CAT’s fast-track procedure in action, with the case proceeding from issuance of claim to final judgment in only a year. The CAT’s conclusion that the brand’s actions had infringed competition law, by unlawfully restricting the retailer’s ability to set its own prices and to use the internet, followed well-established precedent, as well as extensive EU and UK guidance. In reaching this conclusion, the CAT took care to emphasise that Deckers infringed the law because its selective distribution system was ‘incomplete and flawed in its design and operation’, rather than because selective distribution is inherently anticompetitive. Written by Becket McGrath, a partner at Euclid Law Ltd.

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