EU TFEU: Competition law: Abuse of dominant position

Yesterday we saw that agreements to distort competition continue to be prohibited in the internal market. In the same way the EU Treaty of Lisbon bans the abuse of a dominant position by a firm.


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Article 102 of the Treaty on the Functioning of the European Union (TFEU) is found in the consolidated version of the Treaty on European Union and the Treaty on the Functioning of the European Union, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/89:

Part Three ‘Policies and internal actions of the Union’

Title VII Common rules on competition, taxation and approximation of laws

Chapter 1 Rules on competition

Section 1 Rules applying to undertakings

Article 102 TFEU
(ex Article 82 TEC)

Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.

Such abuse may, in particular, consist in:

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

(b) limiting production, markets or technical development to the prejudice of consumers;

(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

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In Article 2, point 75 of the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) laid out the specific amendments to Article 80 TEC and point 76 amended Article 85 TEC. Thus, no specific amendments were made to Article 82 TEC (OJ 17.12.2007 C 306/68).

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The TFEU table of equivalences tells us that Article 82 TEC first became Article 82 TFEU (ToL) in the original Treaty of LIsbon, but later renumbered Article 102 TFEU in the consolidated version (OJ 17.12.2007 C 306/211).

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The current Article 82 of the Treaty establishing the European Community (TEC) is found under Title VI ‘Common rules on competition, taxation and approximation of laws’, Chapter 1 ‘Rules on competition’, Section 1 ‘Rules applying to undertakings’, in the latest consolidated version of the treaties in force (OJ 29.12.2006 C 321 E/74–75).

The only change made by Article 102 TFEU was to replace, twice, the words ‘common market’ by ‘internal market’ in the first paragraph, according to horizontal amendment 2(g). Cf. above and OJ 17.12.2007 C 306/41.

Therefore, Article 82 TEC is not reproduced here.

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For the sake of a systematic comparison, we look at the Article during the previous treaty reform stages.

First, we turn to the European Convention, which located the provisions on competition in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter I ‘Internal market’, Section 5 ‘Rules on competition’, with Subsection 1 ‘Rules applying to undertakings’.

In Article III-51 of the draft Treaty establishing a Constitution for Europe the words ‘internal market’ were used in the first paragraph instead of ‘common market’, and the provision was exactly the same as the future Article 102 TFEU (OJ 18.7.2003 C 169/36).

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The location and wording of Article III-162 of the Treaty establishing a Constitution for Europe was the same as for the corresponding provision of the draft (OJ 16.12.2004 C 310/69).

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We have seen that Article 102 TFEU is almost exactly the same as the current Article 82 TEC, the only difference being the systematic use of ‘internal market’ instead of the older expression ‘common market’.

Two reminders:

First, according to Article 3(1)(b) TFEU the EU has exclusive competence in ‘the establishing of the competition rules necessary for the functioning of the internal market’.

Second, yesterday’s posting looked at the discussion caused by the disappearance of ‘free and undistorted’ competition from the objectives of the European Union between two intergovernmental conferences.

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What has been said about Article 102 TFEU?


United Kingdom

Professor Steve Peers covered the Treaty of Lisbon in a number of Statewatch Analyses. ‘EU Reform Treaty Analysis no. 3.3: Revised text of Part Three, Titles I to VI of the Treaty establishing the European Community (TEC): Internal Market and competition’ (Version 2, 23 October 2007) includes the current Title VI Common rules on competition, taxation and approximation of laws.

Peers highlighted the amendment to Article 82 TEC and TFEU (ToL), to be renumbered Article 102 TFEU in the consolidated version, without comment (page 24–25).

The analysis 3.3 and other useful Statewatch analyses are available through:

http://www.statewatch.org/euconstitution.htm

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The Foreign and Commonwealth Office (FCO) offers a convenient source of brief annotations on Lisbon Treaty amendments in ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command Paper 7311, published 21 January 2008). It offers the following comment on Article 102 TFEU, Article 82 TFEU (ToL) in the original Lisbon Treaty (page 11):

“Unchanged from Article 82 TEC.”

The FCO comparative table is available at:

http://www.official-documents.gov.uk/document/cm73/7311/7311.asp

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The UK House of Commons Library Research Paper 07/86 ‘The Treaty of Lisbon: amendments to the Treaty establishing the European Community’ (published 6 December 2007) discussed competition on page 57 to 60. It commented on Article 81 TEC (the subject of yesterday’s posting) and Article 82 TEC on page 58:

“Present Article 81 TEC prohibits agreements, decisions and concerted practices (“anticompetitive agreements”) which prevent, restrict or distort competition. As one of the EU’s two main competition provisions, a substantial body of case law surrounds the interpretation of this Article. It forms the basis in the Competition Act 1998 for the Chapter I Prohibition of the UK’s domestic competition regime (ss.2, 9). Article 82 TEC is the other main competition article, prohibiting abuse of a dominant position (i.e. monopolistic abuse), which forms the basis for section 18 of the Competition Act 1998. There are no significant changes to either of these provisions in the TFEU.”

The Library Research Paper 07/86 is available at:

http://www.parliament.uk/commons/lib/research/rp2007/rp07-086.pdf

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The House of Lords European Union Committee report ‘The Treaty of Lisbon: an impact assessment, Volume I: Report’ (HL Paper 62-I, published 13 March 2008) discussed the internal market and competition on pages 218 and 219.

The main discussion centred around concerns about the removal of ‘free and undistorted competition’ (according to Article I-3(2) of the Constitutional Treaty objectives), but the Committee offered the following statement on the contents of the competition provisions (page 218):

“9.14. The rules on competition contained in previous treaties would be unchanged by the Lisbon Treaty. Articles 101–103 of the TFEU are the same as Articles 81–83 of the TEC. They give the EU power to legislate to combat practices “which have as their object or effect the prevention, restriction or distortion of competition”.

The report is accessible at:

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/62/62.pdf

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Sweden

The consultation paper of the government of Sweden, ‘Lissabonfördraget; Statsrådsberedningen, Departementsserien (Ds), Ds 2007:48’ published 20 December 2007, deals with the internal market on pages 261 to 269, ’22.1 Inre marknaden’. On pages 265 to 266 the consultation paper explains the amendments to the competition rules (Konkurrensregler), but there are no specific comments on Articles 81 and 82 TFEU (ToL).

The consultation paper ’Lissabonfördraget’ is available at:

http://www.regeringen.se/content/1/c6/09/49/81/107aa077.pdf

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Finland

The Finnish ratification bill, ‘Hallituksen esitys Eduskunnalle Euroopan unionista tehdyn sopimuksen ja Euroopan yhteisön perustamissopimuksen muuttamisesta tehdyn Lissabonin sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 23/2008 vp), includes only a short comment on the unchanged nature of Article 82 TFEU (ToL), renumbered Article 102 TFEU (on page 207):

”82 artiklaa (uusi 102 artikla), joka koskee määräävän markkina-aseman väärinkäyttöä, ei muuteta.”


The Finnish ratification bill is available at:

http://www.finlex.fi/fi/esitykset/he/2008/20080023.pdf

The Swedish language version of the ratification bill ‘Regeringens proposition till Riksdagen med förslag om godkännande av Lissabonfördraget om ändring av fördraget om Europeiska unionen och fördraget om upprättandet av Europeiska gemenskapen och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen’ (RP 23/2008 rd), offers the same brief observation about Article 82 TFEU (ToL), the future Article 102 TFEU, on page 210:

”Artikel 82 (blivande artikel 102), som gäller missbruk av en dominerande ställning på marknaden, ändras inte.”

The ratification bill in Swedish can be accessed at:

http://www.finlex.fi/sv/esitykset/he/2008/20080023.pdf



Ralf Grahn