This chapter investigates the interface between abuse of dominance and abuse of economic dependence. When dealing with abuse-of-dominance cases there is a fundamental requirement that competition in the relevant market be affected. This approach does not address relative dominance in cases when abuse occurs without dominance and may affect competition. This happens in situations where a relatively dominant market participant enjoys a superior bargaining position with respect to its business partners and uses this position to its own advantage. Taking the example of the distribution sector, the chapter showcases how competition may be affected by an undertaking without a dominant position using a network of contracts. This situation can be illustrated in cases where a network of contracts is created by a relatively dominant firm whose sole objective is to lock in smaller or economically weaker business partners in a network and thereby limit their possibility to shift. Such networks of contractual relationships may hinder not only the economic freedom of the weaker party (vertical dimension), but may also strengthen the market power of the relatively dominant firm (horizontal dimension). As a consequence, the relevant market may be affected although the undertaking does not have a dominant position. Hence, there is a close link between economic dependence, freedom of contract and competition law. Situations of abuse by non-dominant firms are not captured by the requirements that the undertaking enjoy a dominant position and the relevant market be affected in abuse-of-dominance cases. This shows the limits of the concept of abuse of dominance as a legal tool used to protect competition in the relevant market. This chapter argues that, in addition to abuse of dominance, there is the potential to use the concept of relative dominance (by sanctioning abuses of economic dependence) to protect not only the freedom of competition of the market participants, but also competition itself.
Michal S. Gal and Mor Bakhoum
Their Implications for Competition Law
Edited by Michal S. Gal, Mor Bakhoum, Josef Drexl, Eleanor M. Fox and David J. Gerber
There is ongoing debate as to what competition law and policy is most suitable for developing jurisdictions. This book argues that the unique characteristics of developing jurisdictions matter when crafting and enforcing competition law and these should be placed at the heart of analysis when considering which competition laws are judicious. Through examining different factors that influence the adoption and implementation of competition laws in developing countries, this book illustrates the goals of such laws, the content of the legal rules, and the necessary institutional, political, ideological and legal conditions that must complement such rules. The book integrates development economics with competition law to provide an alternative vision of competition law, concluding that ‘one competition law and policy size’ does not fit ‘all socio-economic contexts'.
Edited by Josef Drexl, Mor Bakhoum, Eleanor M. Fox, Michal S. Gal and David J. Gerber
The book provides insights on the regional integration experiences in developing countries, their potential for development and the role of competition law and policy in the process. Moreover, the book emphasizes the development dimension both of regional competition policies and of competition law. Although it holds many promises for developing countries, some challenges must be overcome for the process of creating a regional market and applying a competition law, to be successful. This timely book delivers concrete proposals that will help to unleash the potential of regional integration and regional competition policies, and help developing countries fully enjoy the benefits deriving from a regional market.