Comments on Draft Article 102 Guidelines

Article 102 is a pillar of EU competition law. It broadly prohibits “abuse” of a dominant market position. The European Commission enforces Article 102, and rule of law demands that the Commission make enforcement clear and predictable. 

To that end, the Commission recently released draft guidelines on potentially exclusionary conduct. These Comments, submitted in the Commission’s public consultation on the draft, details what Article 102 guidelines should do and how the draft falls short.

Article 102 guidelines should set out the general principles and specific standards governing the Commission’s administration of Article 102, and, most importantly, they should articulate meaningful limits to the concept of “abuse” and to the Commission’s enforcement. But the draft guidelines identify few limits. 

The failure to articulate limits is striking in the treatment of dominance. Rather than state that a firm accounting for less than half of a market would never be found dominant, the draft states the opposite and then adds: “Market shares below 10% exclude the existence of dominance save in exceptional circumstances.”

The failure to articulate limits is also evident in the treatment of potentially exclusionary conduct. For example, the draft does not state that it is lawful to introduce a new product or improve an existing one, even if rivals are harmed. Most importantly, the draft does not articulate a principle upon which a company can ground a defense. 

The draft identifies categories of practices that might be exclusionary but does not acknowledge that the practices have benign uses and can be procompetitive. Nor does the draft articulate standards that reliably identify only those instances in which the practices in each category harm competition.