Abuse of a dominant position

All private or public undertakings must respect free competition and ensure they do not engage in anti-competitive practices.

Holding a dominant position is not inherently reprehensible. Only abusive behaviour by undertakings in a dominant position is prohibited.

An undertaking is in a dominant position if it enjoys a position of economic strength that enables it to hinder the maintenance of effective competition on the relevant market because it can act to a significant extent independently from its competitors and customers.

An undertaking in a dominant position on a market therefore has a particular responsibility towards its competitors, suppliers and customers. As competition is already weakened, it must not abuse its position by engaging in unlawful conduct.

A dominant position is generally held individually by an undertaking enjoying such a position of economic strength on its own. However, in certain specific circumstances a dominant position can be held collectively by several undertakings that, while in principle being independent, act as a single entity on the market.

Any undertaking or association of undertakings that believes it has been harmed by anti-competitive behaviour can file a complaint with the Competition Authority.

Relevant market

To establish whether a dominant position exists, the relevant market on which undertakings are in competition must first be determined.

The relevant market is defined, on the one hand, on the basis of the products or services concerned and, on the other, on the basis of the territory on which these products or services are supplied.

A relevant market covers all products or services that customers regard as interchangeable and that are supplied in a geographical area with homogeneous conditions of competition.

Competitive structure

Once the relevant market has been determined, the competitive structure of this market must be assessed and the question of whether an undertaking holds a dominant position addressed. The Authority generally bases this assessment on the following information:

• the size of the market share held by the undertaking in question, how it has developed over time and how it compares to the market shares held by competing undertakings;
• the existence of barriers to entry or expansion, whether legal (administrative approval, regulations, etc.) or economic (costs, technologies, network effects, etc.);
• the degree of competitive pressure by customers, if they have sufficient bargaining power.

Exclusionary abuse are practices that have the effect of excluding or preventing a competitor from entering or expanding on a market by means other than competition on the merits.

Predatory pricing

The law prohibits an undertaking in a dominant position from adopting a policy of setting abnormally low prices with the aim of eliminating its competitors from the market.

By pursuing a predatory pricing policy, the dominant undertaking could temporarily sacrifice part of its profits to eliminate competitors who are unable to match its prices, allowing it to capture the entire customer base before raising its prices again.

Loyalty discounts

The law prohibits an undertaking in a dominant position from granting its customers loyalty discounts in return for customers committing to purchase exclusively or almost exclusively from it, where such discounts have the effect of creating barriers to entry and excluding competitors from the market.

Tying

The law prohibits a dominant undertaking from making the conclusion of contracts conditional upon the acceptance by the contracting parties of additional services which, by their nature or according to commercial practices, are unrelated to the object of the contract.

An undertaking in a dominant position could use such practices to compel a buyer of a given product ('tying product') to purchase a second product ('tied product') to prevent its competitors from accessing the market for the tied product.

Exploitative abuse refers to practices that allow an undertaking in a dominant position to exploit the competitive advantage that it holds in its dealings with its customers.

Excessive pricing

The law prohibits an undertaking in a dominant position from abusing this position by setting excessive prices that bear no reasonable relation to the economic value of the product or service supplied.

Refusal to supply

The law prohibits an undertaking in a dominant position from refusing to supply:

• without objective justification,
• to an undertaking on a neighbouring or downstream market,
• a good or service (raw materials, licence, patent, access to facilities etc.) that is essential to access this downstream market (manufacture a product, carry out an activity, etc.).

Discriminatory practices

The law prohibits an undertaking in a dominant position from treating trading partners differently in objectively similar situations or, conversely, treating them similarly in objectively different situations, for example by applying:

• different prices depending on the partner;
• terms of sale that are more favourable for certain partners than others.