Introduction

The European competition rules, in particular in Article 102 FEU Treaty, protect against the abuse of a dominant position by firms with monopolistic market power. Monopolists or other undertakings holding significant market power are less restrained in their business decisions than firms operating in a competitive environment. Dominant firms may consequently have the ability to raise prices profitably above competitive levels, or deliver a poorer quality of products.

Neither a dominant position, nor the concept of abuse is well defined in EU competition law. The meaning of the concepts has instead continuously developed over case law: Commission decisions and the rulings of the European Courts. This development has not always been in line with mainstream economic thinking, which has been at the root of controversy and hotly debated abuse cases.

The definition of dominance employed by the ECJ in several judgments is based on two prerequisites: independence and prevention of effective competition. The ECJ provides a definition of dominance as a position of economic strength enabling a firm to prevent the maintenance of effective competition on the market and to act independently of competitors, customers, and consumers. Complete independence from customers and consumers is hard to imagine. After all, even a monopolist is constrained by the demand curve it faces. The concept of independence from competitors is more useful as a benchmark.