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Florian Wagner-von Papp

This contribution addresses two questions, one of a descriptive-comparative nature and one of a normative nature. As a matter of descriptive-comparative law, I revisit the question how Japan, Germany and the United States approach unilateral conduct of firms below the threshold of dominance on the relevant market from a functional-comparative perspective. My conclusion in the descriptive-comparative part of the chapter is that all three jurisdictions, including the US, apply rules to unilateral conduct of non-dominant firms, often in similar situations. With regard to the normative question, I conclude that unilateral conduct of non-dominant firms should not be subjected to competition law scrutiny. However, in some cases in which today the rules on non-dominant firms are applied, the firm in question may actually be dominant. The rules on unilateral conduct of non-dominant firms could serve two useful functions: first, they may alert the competition authority to the possibility that some consumers may be locked in, so that the market may be narrower than it may at first appear; and secondly, they may overcome difficulties in proving dominance. The appropriate response, however, is that the rules on dominance are generally sufficient if the enforcer is careful in defining the relevant market, taking into account any locked-in consumers (but also whether marginal consumers sufficiently protect these locked-in consumers). If the procedural difficulties of determining dominance are a concern, the rules on unilateral action of non-dominant firms should be downgraded from prohibitions to rebuttable presumptions.