The following Competition practice note Produced in partnership with Suzanne Rab provides comprehensive and up to date legal information covering:
Article 102 TFEU prohibits undertakings which hold a dominant position within the EU or a substantial part of it from abusing that dominant position, in so far as it may affect trade between Member States.
It is often unclear whether a company is 'dominant' for the purposes of EU competition law. Dominance does not necessarily entail having a majority share of the market but a company with a share of 50% will typically be presumed dominant. Unless a company has been involved in previous competition law cases or findings of dominance in a merger context, it may be uncertain as to whether it is dominant as a matter of law.
See further, Abuse by dominant undertakings—an introduction.
The test for establishing dominance has been set out by the Court of Justice 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 of its consumers'.
The concept of independence of action means that competitive constraints are insufficiently effective and that the dominant company enjoys substantial market power over a sustained period of time (see further 'Assessment of dominance' below).
For practical purposes this means that, due to a lack of effective competition, a dominant company could profitably raise
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