By Helen Kean
This blog follows on from Econex’s participation in a recent Abuse of Dominance workshop at the Barcelona Graduate School of Economics, held over March 2018 and led by Professors Massimo Motta, Chiara Fumagalli, Lorenzo Coppi and Simon Roberts.
The event brought a selected team of global economists and lawyers up to date with the latest abuse of dominance cases from around the world, whilst providing a full review of relevant frameworks in the field. The specific abuse of dominance practices that were covered included predatory pricing, exclusive dealing, rebates and discounts, tying and bundling, vertical foreclosure, and excessive pricing.
Following review of the economic frameworks in respect of each of these, significant time was spent critically debating application to recent cases and current questions. These debates covered topics such as the Google Shopping case, the tension between intellectual property rights and competition policy, and the study of abuse of dominance in developing countries (with significant focus on South Africa).
Further critical discussion was also had over global trends and approaches in abuse of dominance cases. This included inter alia discussion regarding the move toward an effects-based (rather than a form-based) approach for abuse of dominance assessments (as most recently indicated by the opinion from Advocate General Wahl relating to the alleged abuse of dominance by Intel).
Importantly and in consideration of the above, it goes without saying that dominance itself is not a competition issue. The prospect of this is indeed what drives fierce innovation and growth. Rather, what is of interest to competition economists and lawyers is the abuse of dominance, in such a way that prevents rivals from contesting market power, therefore hindering the functioning of a market and the natural selection of the most competitive firms.
Further blogs will unpack some of the above-mentioned practices and debates with respect to particular South African cases. This is also expected to be an area to watch going forward: South Africa’s current Competition Amendment Bill (read Econex’s summary here) indicates a strong focus on tackling concentration in the South African economy. Alongside this it is pointed out (p. 14) that Section 8 of the Competition Act (dealing with abuse of dominance) “is a key provision for addressing anti-competitive conduct in concentrated markets” given that “dominant firms axiomatically arise in concentrated markets” (p. 9).
Further information and review by Econex may be found here:
Author/s: Helen Kean
Nothing in this publication should be construed as advice from any employee of Econex and should be seen as general summaries of developments or principles of interest that may not apply to specific circumstances.