Collective dominance Definition

Case studies

"We rely on ��˾��ҹ�� to give us a definitive answer, quickly and reliable every time so that we can be confident in the advice we use to help our clients."

Shelter

Access all documents on Collective dominance

GET ACCESS NOW

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.

Speed up all aspects of your legal work with tools that help you to work faster and smarter. Win cases, close deals and grow your business–all whilst saving time and reducing risk.

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...

Discover our 2 Practice Notes on Collective dominance

Top

Trial

��˾��ҹ��

GLOSSARY