Competition law—abuse of a dominant position
Competition law—abuse of a dominant position

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Competition law—abuse of a dominant position
  • Undertaking
  • Dominant position—market power
  • Market share
  • Product market
  • Geographic market
  • Abuse
  • Landlords
  • Defences
  • Consequences and penalties

The current competition regime (Competition Act 1998) prohibits:

  1. anti-competitive agreements (Chapter I)

  2. abuse of a dominant position (Chapter II)

Chapter II applies (and has always applied) to the property sector in the same way as to business in general. It enacts the provisions of the EC Treaty, which prohibits the abuse of a dominant position by one or more undertakings if it may affect trade between member states of the EU, in the national context. Chapter II applies if trade is affected within the UK.

Undertaking

The term undertaking includes any natural or legal person carrying on any commercial or economic activity in relation to goods or services.

Dominant position—market power

To be regarded as dominant, an undertaking must possess a substantial level of market power. The European Court of Justice (ECJ) has defined dominant position as ‘a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by giving it the power to behave to an appreciable extent independently of its competitors, customers and ultimately its consumers.’

The Competition and Markets Authority (CMA) considers the principal factors in ascertaining whether an undertaking has a dominant position as:

  1. the market share of the undertaking and its competitors

  2. any barriers to entry to the market, and

  3. buying power