Abuse of Dominance – Exploitative Abuses

Posted by Social Science Research Network

Abuse of Dominance – Exploitative Abuses–  Michal S. Gal (University of Haifa)

Abstract: Article 102 TFEU has been interpreted as prohibiting not only exclusionary abuses, but also exploitative ones. In particular, sub-section (a), which prohibits ‘directly or indirectly imposing unfair purchase or selling prices’ by a dominant firm, has been understood as proscribing not only unfair low prices (predatory prices) but also unfair high prices per se, that is without need of proof of anti-competitive conduct or intent.

The prohibition against excessive prices is one of the most intriguing competition law prohibitions. Its analysis involves a moral, economic and sociological exploration, with long historical roots. Such regulation encapsulates issues such as the goals and the underpinnings of competition law; the equilibrium point which is adopted to balance between the forces of Darwinian capitalism and those of social justice; the role of government regulation; the balance between practical problems and theoretical principles; and the assumptions regarding the relative administerability of various types of regulation. Monopoly pricing regulation is thus, in many ways, a microcosm of competition law. Accordingly, this chapter analyzes the rationales of the prohibition as well as its ability to achieve them in practice. It combines a doctrinal analysis with a critical one.