Collective dominance Definition

GLOSSARY

Published by a ��˾��ҹ�� Competition expert

What does Collective dominance mean?

article 102 TFEU and section 18 of the Competition Act 1998 prohibits the abuse of a dominant position 'by one or more undertakings' giving rise to the possibility that distinct undertakings may together hold a collectively dominant market position as a result of close economic links between them, or if the market structure enables the undertakings to present themselves or act together on the market as a collective entity.

Oligopolistic markets can have certain characteristics enabling separate undertakings to act as one through tacit collusion. A collectively dominant position is achieved when each member of the dominant entity has the ability to know how other members are behaving in order to monitor compliance with the common policy (i.e. market transparency), there must be incentives against departing from the common policy so that tacit coordination is sustainable, and the foreseeable reaction of other market participants cannot jeopardise the results expected from the common policy. See the ruling of the General Court (formerly CFI) in Case T-193/02 Laurent Piau v. Commission [2005] ECR II-209.

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Collective dominance and oligopolies

Competition concerns relating to collective dominance and oligopolies may be dealt with in various ways under EU competition law, namely under:•Article 101 TFEU•Article 102 TFEU•the EU Merger Regulation (EUMR).This Practice Note addresses collective dominance and oligopoly issues outside of Article 101 TFEU.The concept of collective dominance has been developed through case law relating to Article 102 TFEU and the EUMR. The case law suggests that this concept is the same under the two provisions, however, there are important differences between the analysis in each context.Collective dominance and Article 102 TFEUArticle 102 TFEU prohibits abuses by one or more undertakings of a dominant position (see further, The prohibition on abuse of dominance).EU case law has established that Article 102 TFEU extends to abuses of a dominant position held collectively by multiple undertakings that may not separately hold a dominant position.In order for there to be an abuse of collective dominance in breach of Article 102 TFEU, it needs to be established that:•a collective position is held between separate undertakings•that collective position...

Dominant position under Article 102 TFEU

Article 102 TFEU prohibits undertakings which hold a dominant position within the EU or a substantial part of it from abusing that dominant position, in so far as it may affect trade between Member States.It is often unclear whether a company is 'dominant' for the purposes of EU competition law. Dominance does not necessarily entail having a majority share of the market but a company with a share of 50% will typically be presumed dominant. Unless a company has been involved in previous competition law cases or findings of dominance in a merger context, it may be uncertain as to whether it is dominant as a matter of law.This Practice Note considers in further detail what constitutes a ‘dominant position’.The legal testThe test for establishing dominance has been set out by the Court of Justice as:'a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by giving it the power to behave to an appreciable extent independently of...

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A round-up of EU competition law developments, including (amongst other things) the Commission launches a consultation on draft guidelines on exclusionary abuses of dominance.

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This week's edition of EU Law weekly highlights includes analysis on AI companies facing civil liabilities over their AI models, the Council of the EU's notification of the EU's withdrawal from the Energy Charter Treaty and the European Council's nominations for key EU roles. Further, the European Commission has sent requests for information (RFIs) to Temu and Shein under the EU Digital Services Act (EU DSA) and has found Meta in breach of the EU Digital Markets Act (EU DMA) based on its 'pay or consent' model. This week, the EU Net Zero Industry Act, the EU Ecodesign Regulation, the reform of the EU electricity market, the EU Trans-European Transport Network Regulation have been published in Official Journal of the EU.

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