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Dominant position (Commercial) meaning

What does Dominant position (Commercial) mean?
In practice, a dominant position describes a level of market power on a defined relevant market that enables an undertaking to act to a significant extent independently of competitors, customers and consumers, thereby undermining effective competition. The concept is defined in case law: the Court of Justice of the EU’s classic formulation is widely applied and informs UK and Irish practice. In the UK, the Chapter II prohibition in the Competition Act 1998 (enforced by the CMA and the Competition Appeal Tribunal) addresses abuse of a dominant position in UK markets. In Ireland, Section 5 of the Competition Act 2002 and Article 102 TFEU (enforced by the CCPC and the courts) prohibit abuse of dominance. Across England & Wales, Scotland, Northern Ireland and Ireland, usage is broadly consistent: dominance itself is not unlawful, but abusing it is. Assessment is case-specific and centres on market definition and evidence of market power. Key indicators include: the undertaking’s and rivals’ market shares (and their stability over time); barriers to entry or expansion; and countervailing buyer power. Authorities also considers factors such as network effects, access to essential inputs, vertical integration and switching costs. Dominance can be single-firm or collective (joint dominance).
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NEWS
AGCM scrutinises Ryanair’s OTA distribution agreements; Statement of Objections expected in Italian abuse of dominance investigation

The Ryanair’s fresh arrangements with online travel agents permitting them to retail seats on its services have prompted queries from Italy’s competition regulator in the country, which is still examining whether the Irish low-cost carrier has exploited a dominant position, MLex understands to date. Since 2023, the Italian competition authority has been probing allegations that Ryanair sought to shut out OTAs by stopping them from marketing tickets for its flights on their platforms and within the wider market. After protracted run-ins and court skirmishes, the airline this year clinched deals with a series of OTAs spanning On The Beach through to Expedia. In August it also revealed an accord with Booking, stating it now holds arrangements with almost all leading OTAs. This month it added an agreement with Skyscanner as well. Yet that has not closed the Italian authority’s investigation into the carrier’s conduct...

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NEWS
MGA liable for abuse of dominance but no damages: High Court of England and Wales dismisses Cabo’s £90m claim as Worldeez unviable; IP litigation threats unjustified

High Court judge Kelyn Bacon dismissed a claim by startup toy company Cabo Concepts Ltd (Cabo) seeking up to £90m in damages, finding that its Worldeez collectables would not have turned a profit even if MGA, which was already marketing the hit rival range LOL Surprise, had not abused a dominant position. In a 148-page ruling, Bacon J observed that Cabo’s founders were ‘naive and inexperienced, and lacked the operational capabilities that would have been needed to give a better prospect of commercial success’. She said Cabo began trading on ‘hopelessly unrealistic financial projections’ and would have remained loss-making without ‘extraordinarily high sales volumes’. Cabo further contended that MGA’s chief executive, Isaac Larian, regarded Worldeez as a threat to LOL Surprise after first learning about it back in 2017...

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NEWS
EU law weekly briefing: cross-sector regulatory and enforcement updates—digital identity wallet, forced labour ban, Apple fine, DMA, GDPR, energy, environment, IP, aviation, cyber, AI—7 March 2024

In this issue: Commercial Competition and state aid Corporate Data protection and cyber security Dispute Resolution Financial services Energy Environment IP Life sciences Regulatory TMT International trade LexTalk®EU Law: a Lexis®Nexis community Daily and weekly news alerts New and updated content Trackers Commercial European Parliament adopts text to establish EU-wide digital wallet The European Parliament has approved the text of a proposal to amend Regulation (EU) No 910/2014 (the eIDAS Regulation) to create a European Digital Identity framework, building on the 2023 provisional deal struck with the Council of the EU on a pan-European digital identity scheme. Use of the EU wallet will be optional. During the talks, MEPs won safeguards to uphold individuals’ rights and to ensure inclusion by preventing any disadvantage to those who choose not to adopt the wallet. The measure also ensures EU wallet holders can access free ‘qualified electronic signatures’, which...

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PRACTICE NOTES
Tying and bundling under Article 102 TFEU: dominance, foreclosure and efficiencies in digital markets—Commission approach and case law (Microsoft, Google, Meta, Teams)

Tying and bundling Within EU competition law, tying and bundling are chiefly examined as forms of abusive dominance. Article 102(d) TFEU expressly refers to tying, describing it as requiring counterparties to accept supplementary obligations that, by their nature or according to commercial usage, are unconnected with the subject of the contract. Numerous EU investigations have flagged tying and bundling by firms holding market power (i.e., dominance). These include prominent matters in traditional goods and services, and in newer technology markets, exemplified by cases concerning Microsoft’s integration of its media player and browser with its operating system. In recent years, the free provision of digitised, internet-based products and services has increasingly been cast as anti-competitive tying or bundling, particularly in complaints aimed at Google and Meta. This trend has prompted questions over whether the established approach of competition authorities to tying and bundling is well-suited to tackling potential foreclosure concerns in emerging markets...

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PRACTICE NOTES
Post Danmark II (CJEU, 2015): AEC test not required and no appreciability threshold for dominant undertakings' rebate schemes under Article 102 TFEU

CASE HUB ARCHIVED This archived case hub sets out the position as at the judgment of 6 October 2015 and is not being maintained. For further details, see: timeline, commentary and related/relevant cases. Case facts Outline A reference from Denmark’s Sø- og Handelsret (the national maritime and commercial court) was submitted to the Court of Justice seeking a preliminary ruling under Article 267 TFEU. Among other matters, it asked whether, when assessing the anti-competitive character of rebate schemes under Article 102 TFEU, the law requires a price/cost evaluation comparing the dominant undertaking’s conduct with that of an equally efficient competitor (the ‘as-efficient-competitor’ test), and also whether any exclusionary effect arising from the rebate arrangement must be ‘appreciable’ in order to fall within Article 102 TFEU...

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PRACTICE NOTES
EU merger control: Commission prohibits Hyundai Heavy Industries/Daewoo Shipbuilding & Marine Engineering merger over dominance in large LNG carriers (M.9343); appeal pending before the General Court (T-156/22)

CASE HUB NOTE—appeal filed before the General Court in Case T-156/22. ARCHIVED—this hub records the position as at the decision date of 13/01/2022 and is not being updated. See also timeline and commentary. Case facts Outline of the European Commission’s merger review into Hyundai Heavy Industries Holding’s planned purchase of Daewoo Shipbuilding & Marine Engineering Co Ltd (Case M.9343). The deal featured horizontal overlaps across multiple global markets for cargo shipbuilding. Latest developments On 13 January 2022, the Commission blocked the deal. It found that combining HHI and DMSE would grant the merged entity a dominant position and lessen competition in the worldwide market for constructing large liquefied gas carriers. The parties did not submit formal remedies to address the Commission’s concerns, indicating that the merger would have resulted in fewer suppliers and increased prices for large vessels transporting liquefied gas. Parties Hyundai Heavy Industries Holding (HHI): HHI is a privately held South Korean company mainly active in shipbuilding. It...

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