CJEU on the concept of "competitive disadvantage" point c, second paragraph of Article 102 of the TFEU
25-04-2018 Print this page
Interpretation concept of “competetive disadvantage” (subparagraph (c) of the second paragraph of Article 102 TFEU) where a dominant undertaking applies discriminatory prices to trade partners on the downstream market, it covers a situation in which that behaviour is capable of distorting competition between those trade partners. Finding of “competitive disadvantage” does not require proof of actual quantifiable detoriation in the competitive situation but must be based on an analysis of all the relevant circumstances of the case leading to the conclusion that that behaviour has an effect on the costs, profits or any other relevant interest of one or more of those partners, so that that conduct is such as to affect that situation.
MEO provides in paid television signal transmission service and television content. In 2014, MEO, lodged a complaint with the Portuguese competition authority alleging that GDA (a non-profit organisation which manages the rights of artists and performers - the sole body responsible for the collective management of related rights in Portugal) had abused its dominant position. It claimed that that abuse arose from the fact that GDA had been charging excessive prices for the rights related to copyright and that GDA had also been applying to MEO different terms and conditions from those which it had applied to another entity providing the paid television signal service and television content, NOS Comunicações SA (‘NOS’). On 19 March 2015, the competition authority opened an investigation which led to a decision of 3 March 2016 to take no further action on the ground that there was no evidence of sufficiently probative value of an abuse of a dominant position. MEO brought an action before the Tribunal da Concorrência, Regulação e Supervisão (Competition, Regulation and Supervision Court, Portugal), the referring court, against the competition authority’s decision of 3 March 2016 to take no further action, claiming that that decision is vitiated by an error of law, inasmuch as, rather than assessing the criterion of competitive disadvantage, as interpreted in the case-law of the Court, it examined whether there had been any significant and quantifiable distortion of competition. MEO claims that, in accordance with that case-law, the competition authority should have examined whether the conduct at issue was capable of distorting competition.
By its questions, which should be examined together, the referring court asks, in essence, whether the concept of ‘competitive disadvantage’, for the purposes of subparagraph (c) of the second paragraph of Article 102 TFEU, must be interpreted to the effect that it requires an analysis of the specific effects of differentiated prices being applied by an undertaking in a dominant position on the competitive situation of the undertaking affected and, as the case may be, whether the seriousness of those effects should be taken into account.
In view of the foregoing, the answer to the questions referred is that the concept of ‘competitive disadvantage’, for the purposes of subparagraph (c) of the second paragraph of Article 102 TFEU, must be interpreted to the effect that, where a dominant undertaking applies discriminatory prices to trade partners on the downstream market, it covers a situation in which that behaviour is capable of distorting competition between those trade partners. A finding of such a ‘competitive disadvantage’ does not require proof of actual quantifiable deterioration in the competitive situation, but must be based on an analysis of all the relevant circumstances of the case leading to the conclusion that that behaviour has an effect on the costs, profits or any other relevant interest of one or more of those partners, so that that conduct is such as to affect that situation.
“24. In accordance with the case-law of the Court, the specific prohibition of discrimination under subparagraph (c) of the second paragraph of Article 102 TFEU is intended to ensure that competition is not distorted in the internal market. The commercial behaviour of the undertaking in a dominant position may not distort competition on an upstream or a downstream market, in other words, between suppliers or customers of that undertaking. Co-contractors of such undertakings must not be favoured or disfavoured in the area of the competition which they practise amongst themselves (judgment of 15 March 2007, British Airways v Commission, C‑95/04 P, EU:C:2007:166, paragraph 143). Thus, it is not necessary that the abusive conduct affects the competitive position of the dominant undertaking itself on the same market in which it operates, compared with its own potential competitors.
31. When it carries out the specific examination referred to in paragraph 28 above, the competition authority or the competent national court is required to take into account all the circumstances of the case submitted to it. It is open to such an authority or court to assess, in that context, the undertaking’s dominant position, the negotiating power as regards the tariffs, the conditions and arrangements for charging those tariffs, their duration and their amount, and the possible existence of a strategy aiming to exclude from the downstream market one of its trade partners which is at least as efficient as its competitors (see, by analogy, judgment of 6 September 2017, Intel v Commission, C‑413/14 P, EU:C:2017:632, paragraph 139 and the case-law cited).”
IPPT20180419, CJEU, Meo v Autoridade da Concorrencia
