RBB Publications

Brief 13: The special responsibility of dominant firms under Article 82: don’t compete on price 15.02.04

In the last six months the CFI has issued two long-awaited judgments on dominant firm pricing behaviour. In both cases – Michelin II and British Airways (BA) – the CFI has upheld
the Commission’s earlier finding that these firms had pursued price and rebate schemes that amounted to an abuse of a dominant position.

These judgments come at a critical time, because the Commission’s policy in this area has come under intense criticism in recent years, and DG COMP has committed to a review of policy that may lead to the publication of enforcement guidelines providing a more coherent economic approach to the analysis of Article 82 cases.2 However, by endorsing the formalistic approach that the Commission has taken, the CFI has almost certainly hindered the prospects for much-needed reform in this area.

This Brief examines some of the economic issues behind the two cases.

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